Richard Deweese v. National Railroad Passenger Corporation Amtrak

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 09-1569
_____________
RICHARD DEWEESE
v.
NATIONAL RAILROAD PASSENGER CORPORATION
(AMTRAK);
SOUTHEASTERN PENNSYLVANIA TRANSPORTATION
AUTHORITY;
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF TRANSPORTATION
Southeastern Pennsylvania Transportation Authority,
Appellant
_______________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. 06-cv-4455)
District Judge: Honorable Thomas J. Rueter
_______________
Argued November 2, 2009

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2
Before: SCIRICA, Chief Judge, JORDAN and
GREENBERG, Circuit Judges.
(Filed: December 22, 2009 )
_______________
Thomas S. Biemer [ARGUED]
Matthew A. Foley
Dilworth Paxson
1500 Market Street , Suite #3500E
Philadelphia, PA 19102
Counsel for Appellant Southeastern Pennsylvania
Transportation Authority (“SEPTA”)
William G. Ballaine [ARGUED]
Landman, Corsi, Ballaine & Ford
120 Broadway - 27 Fl.th
New York, NY 10271-0079
Paul F.X. Gallagher
Gallagher & Rowan
1800 John F. Kennedy Blvd., Suite #1000
Philadelphia, PA 19103
Counsel for Appellee National Railroad Passenger
Corporation
_______________
OPINION OF THE COURT
_______________

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3
JORDAN, Circuit Judge.
The Southeastern Pennsylvania Transportation Authority
(“SEPTA”) appeals from an order of the United States District
Court for the Eastern District of Pennsylvania granting summary
judgment to the National Railroad Passenger Corporation
(“Amtrak”) on its cross-claim against SEPTA. The District
Court determined that SEPTA’s state-law sovereign immunity
defense is preempted by Amtrak’s federal enabling statute and
that an indemnity contract between SEPTA and Amtrak is
therefore enforceable. For the following reasons, we will
affirm.
I. Background
A. The Accident
This dispute arises out of an accident on October 28,
2004, in which plaintiff Richard Deweese was struck by an
Amtrak train. The day of the accident, Deweese was waiting
for a Philadelphia-bound SEPTA train at the Crum Lynne,
Pennsylvania train station, which is adjacent to tracks used by
both Amtrak and SEPTA. Someone at the station told Deweese
that the platform from which to board the Philadelphia-bound
trains was located on the opposite side of the tracks. Rather
than using the stairs available to him to safely cross to the other
side, Deweese took it upon himself to descend from the platform
and walk directly across the tracks. While doing so, he was
struck by an oncoming Amtrak train. Deweese filed suit in state
court against Amtrak, SEPTA, and the Commonwealth of
Pennsylvania to recover damages resulting from injuries he

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Not knowing the full details of the accident and the1
railroads’ decision to settle with Deweese, a reader may be left
bewildered by this brief synopsis, but the underlying lawsuit is
irrelevant to the dispute presently before us.
4
sustained as a result of the accident. Amtrak removed the action
to federal court, and the Commonwealth was subsequently
dismissed as a defendant. Prior to trial, Deweese settled his
claims with SEPTA and Amtrak for $200,000, with each
defendant paying Deweese $100,000. The settlement left1
unresolved Amtrak’s cross-claim against SEPTA for contractual
indemnity, which was based on two separate indemnity
agreements between Amtrak and SEPTA.
B. The Indemnity Agreements
Amtrak owns the Crum Lynne train station as well as the
adjacent tracks. SEPTA leases the station from Amtrak
pursuant to a 1987 agreement entitled “Lease Agreement
between National Railroad Passenger Corporation and
Southeastern Pennsylvania Transportation Authority Covering
47 Commuter Stations in southeastern Pennsylvania” (the
“Lease Agreement”). The Crum Lynne station is serviced
exclusively by SEPTA, although SEPTA shares use of the
railroad tracks with Amtrak pursuant to a 1982 agreement called
the “Agreement between National Railroad Passenger
Corporation and Southeastern Pennsylvania Transportation
Authority for Northeast Corridor Access and Services” (the
“NEC Agreement”).

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Paragraph 25 of the Lease Agreement states the2
following:
Lessee shall indemnify, save and hold harmless
and defend Lessor ... against and from any and all
claims and suits for, and any and all liability, loss
or expense arising from or incidental to or in
connection with, damage to or loss of property of
Lessor, Lessee, or of agents, servants, licensees,
contractors, invitees or employees of either, or of
any other person, and against and from any and all
claims and suits for, and any and all liability, loss,
or expense arising from or incidental to or in
connection with, injury to or death of persons,
including agents, servants, contractors, licensees,
5
Both the Lease Agreement and the NEC Agreement
contain indemnity provisions. Section 5 of the NEC Agreement
includes a “Risk of Liability” clause stating that,
SEPTA agrees to indemnify and save harmless
Amtrak, its officers, agents, employees, and
subsidiaries, irrespective of any fault of Amtrak
or such persons, for all damage or for liability for
personal injury or property damage which would
not have been incurred but for the existence of the
commuter service provided for SEPTA ... .
(App. at A155.) The Lease Agreement contains similar
language.2

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invitees or employees of Lessor or of Lessee, or
any other person, which such damage, loss, injury
or death shall arise in any manner, directly or
indirectly, out of or incidental to or in connection
with this lease ... .” (App. at A133-A134, ¶ 25.)
The docket entries and the District Court opinion refer3
to Amtrak’s cross-claim as an amended cross-claim. The
record, however, does not indicate how Amtrak’s cross-claim
has been amended. Thus, for ease of reference, we refer to
Amtrak’s amended cross-claim as simply a cross-claim.
6
Relying on both the Lease Agreement and the NEC
Agreement, Amtrak, as already noted, filed a cross-claim3
against SEPTA in the lawsuit that Deweese brought. Amtrak’s
claim, consistent throughout this litigation, is that SEPTA is
obligated to indemnify Amtrak for its settlement payment to
Deweese. SEPTA responded by asserting sovereign immunity,
stating in its reply to the cross-claim that “[a]ny obligations on
SEPTA’s part under the applicable [L]ease [A]greement and
[NEC Agreement] to indemnify, save and hold harmless
AMTRAK from plaintiff’s claims are limited, restricted, and
conditioned by, and subject to, SEPTA’s immunity as a
Commonwealth party ... .” (App. at A29.)
Amtrak and SEPTA both moved for summary judgment.
SEPTA argued in its summary judgment motion that, despite its
clear contractual indemnity obligation to Amtrak under the NEC

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SEPTA acknowledges that the NEC agreement is4
applicable to the present action but does not concede the
applicability of the Lease Agreement. Argument and analysis in
the case have thus naturally centered on the NEC Agreement.
We too focus on that particular agreement, though our
conclusions are equally applicable to the Lease Agreement.
SEPTA has not invoked sovereign immunity under the5
Eleventh Amendment of the United States Constitution; it only
invokes sovereign immunity under Pennsylvania state law. Cf.
Cooper v. SEPTA , 548 F.3d 296, 311 (3d Cir. 2008) (holding
that “SEPTA is not entitled to Eleventh Amendment
immunity”).
7
Agreement, it is barred from indemnifying Amtrak because of4
the sovereign immunity conferred upon it by Pennsylvania state
statute, 1 Pa. Cons. Stat. Ann. § 2310 and 42 Pa. Cons. Stat.
Ann. § 8521-25. SEPTA conceded that, were it not for its5
state-law sovereign immunity defense, it would be required
under the NEC Agreement to “hold [Amtrak] harmless against
plaintiff’s claims.” (App. at A168.)
In its own motion for summary judgment, Amtrak
contended that any state-law sovereign immunity defense
proffered by SEPTA is preempted by Amtrak’s enabling statute,
49 U.S.C. § 28103, enacted as part of the Amtrak Reform and
Accountability Act of 1997 (the “Reform Act”). The Reform
Act states, among other things, that “a provider of rail passenger
transportation may enter into contracts that allocate financial
responsibility for claims.” 49 U.S.C. § 28103(b). To support its

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SEPTA further argued that it lacks the power to contract6
away its sovereign immunity and that Amtrak’s claims do not
fall within any of the statutorily enumerated exceptions to that
immunity. Amtrak conceded that SEPTA does not have the
power to waive its sovereign immunity through contract and,
thus, despite the NEC Agreement, did not waive the opportunity
to claim immunity. Amtrak instead argued that SEPTA’s
sovereign immunity confers protection only against claims
sounding in tort and that the instant matter, which implicates the
NEC Agreement, presents a contract dispute to which sovereign
immunity is inapplicable. SEPTA responded that Amtrak was
collaterally estopped from litigating the applicability of
SEPTA’s sovereign immunity to contractual obligations because
that issue had been previously adjudicated in SEPTA’s favor in
a lawsuit called Apfelbaum v. National R.R. Pass. Corp., 2002
WL 32342481 (E.D. Pa. Oct. 17, 2002).
Because we hold that § 28103(b) preempts SEPTA’s
sovereign immunity defense, and that holding wholly disposes
of the case, we need not address the parties’ arguments as to
whether state-law sovereign immunity actually applies to the
present action, nor need we address whether Amtrak is
8
position, Amtrak relied on a recent decision from the United
States Court of Appeals for the Second Circuit, O&G Industries,
Inc. v. National R.R. Passenger Corp., 537 F.3d 153 (2d Cir.
2008), which held that the Reform Act preempted a Connecticut
state statute governing indemnity contracts, to the extent that the
two laws conflicted. SEPTA argued in response that Congress,
in enacting 49 U.S.C. § 28103, did not intend “to preclude the
application of state law on indemnity clauses.” (App. at A185.)6

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collaterally estopped from litigating that issue. See United
States v. Sanchez, 562 F.3d 275, 279 n.5 (3d Cir. 2009) (court
need not decide an issue when there is an alternative and
dispositive basis for decision).
Ordinarily, deciding the scope of a statute would be
preferable to addressing a conflict between federal and state law.
However, we decide this case on preemption grounds because,
first, preemption is the basis of decision chosen by the District
Court and it is what the parties have emphasized in their briefs;
second, the scope of Pennsylvania’s statute is an important state-
law issue, better addressed by Pennsylvania’s courts in the first
instance; and, finally, and most importantly, the issues presented
in this appeal are not confined to Pennsylvania. As indicated by
both the Second Circuit’s O&G Industries case and the Reform
Act’s legislative history, there is an inclination for regional rail
carriers to seek shelter from liability, despite the contractual
obligations they have undertaken. See infra, pages 20-21. Thus,
because the conflict between federal and state law implicated
here is farther reaching than Pennsylvania’s sovereign immunity
statute, it is appropriate for us to resolve the case on a broader
basis.
9
C. The District Court Opinion
The District Court granted Amtrak’s motion for summary
judgment and denied SEPTA’s, finding that SEPTA’s state-law
sovereign immunity defense was preempted by the Reform Act
under the doctrine of implied conflict preemption. The Court
began by noting that Supreme Court precedent dictates a finding
of preemption when “the challenged state law stands as an

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Because the Court found that SEPTA’s sovereign7
immunity defense was preempted by the Reform Act, it did not
address whether SEPTA’s state-law sovereign immunity defense
was valid under Pennsylvania state law, nor did not it discuss
whether Amtrak was collaterally estopped from litigating that
issue. See supra, note 6.
Amtrak removed the present action from state court to8
federal court under 28 U.S.C. § 1441. The District Court
exercised jurisdiction pursuant to 28 U.S.C. § 1331. Our
jurisdiction arises under 28 U.S.C. § 1291. A district court’s
grant of summary judgment is subject to plenary review. Horn
v. Thoratec Corp., 376 F.3d 163, 165 (3d Cir. 2004); see also
Levy v. Sterling Holding Co., 544 F.3d 493, 501 (3d Cir. 2008)
(“We review de novo the grant or denial of summary judgment
by a district court.”) (citation omitted). More particularly, we
10
obstacle to the accomplishment and execution of the full
purposes ... of Congress.” (App. at A16-A17.) The Court then
explained that, because the Reform Act was enacted in part to
ensure the enforceability of indemnification agreements between
Amtrak and other parties, a state-law sovereign immunity
defense stood as an impermissible obstacle to that objective.
The Court supported its holding by analogizing to the Second
Circuit’s reasoning in O&G Industries, 537 F.3d at 153, and
concluded that, “[t]o the extent that the Pennsylvania sovereign
immunity statute conflicts with the Reform Act, it is
preempted.” (App. at A17.)7
II. Discussion8

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also exercise plenary review over a preemption determination,
as it is a question of law. Horn, 376 F.3d at 166.
11
SEPTA presents a two-fold argument, focused on the
breadth of the preemption effected by the District Court’s
decision and what it contends is an improperly retroactive
consequence of such preemption in this case. In advancing its
argument, SEPTA, recognizing the importance of the Second
Circuit’s O&G Industries opinion in the District Court’s
analysis, frames its discussion around issues addressed in that
opinion and asserts that the District Court failed to account for
two critical distinctions between that case and this one. First,
SEPTA argues, the Pennsylvania sovereign immunity statute is
a law of general applicability, whereas the Connecticut statute
preempted in O&G Industries was a law specifically enacted to
govern the enforceability of indemnification contracts, voiding
indemnification agreements to the extent they would cover gross
negligence by the party seeking to be indemnified. Thus,
SEPTA says, preempting the application of Pennsylvania’s
statute would result in a dramatically broader application of
preemption than occurred in O&G Industries.
Second, SEPTA argues that, even if such a broad
application of preemption were warranted in general, it cannot
be justified in this particular case because allowing preemption
here would give retroactive effect to the Reform Act. While the
indemnity agreement in O&G Industries was implemented after
the passage of the Reform Act, the NEC Agreement was
executed a decade prior to the passage of the Reform Act. By
SEPTA’s reasoning, applying the Reform Act to indemnity

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12
agreements entered into prior to the enactment of that statute
would give the statute an impermissible retroactive effect
because Congress did not expressly provide for retroactive
application.
Amtrak responds that the District Court properly found
preemption because “Congressional history makes abundantly
clear that [the Reform Act] ... applies broadly to assure that
Amtrak’s indemnity agreements with any other party are fully
enforceable without regard to any state law or public policy.”
(Appellee’s Ans. Br. at 12.) Amtrak further argues that finding
preemption will not, in fact, result in an impermissible
retroactive application of the Reform Act because the important
event for purposes of a retroactivity analysis is not the parties’
execution of the NEC Agreement in 1992 but rather the accrual
of Amtrak’s right to indemnification for the Deweese claim in
2004, which occurred several years after the Reform Act was
passed in 1997.
A. Preemption
The primary focus of the parties’ attention, as it was of
the District Court opinion, is whether Pennsylvania’s sovereign
immunity statute, 1 Pa. Cons. Stat. Ann. § 2310 and 42 Pa.
Cons. Stat. Ann. §§ 8521-25, is preempted by Amtrak’s federal
enabling statute, 49 U.S.C. § 28103.
The Supremacy Clause, found in Article VI of the United
States Constitution, provides that the laws of the United States
“shall be the supreme Law of the Land; ... any Thing in the
Constitution or Laws of any State to the Contrary

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13
notwithstanding.” U.S. Const. art. VI, cl. 2. Under that clause,
Congress has the power “to preempt state legislation if it so
intends.” Hi Tech Transp., LLC v. N.J. Dep’t of Envtl. Prot.,
382 F.3d 295, 302 (3d Cir. 2004) (internal quotation omitted);
see also Gade v. Nat’l Solid Waste Mgmt. Ass’n, 505 U.S. 88,
108 (1992) (“[U]nder the Supremacy Clause, from which our
pre-emption doctrine is derived, any state law, however clearly
within a State’s acknowledged power, which interferes with or
is contrary to federal law, must yield.”); Gibbons v. Ogden, 22
U.S. 1, 82 (1824) (stating that “acts of the State Legislatures ...
[that] interfere with, or are contrary to, the laws of Congress”
must be invalidated, and that “the law of the State, though
enacted in the exercise of powers not controverted, must yield
to [the federal law]”). While the Supremacy Clause plainly
provides Congress with the constitutional power to preempt
state law, the challenge for courts has been deciding when a
conflict between state and federal law requires application of
that power. See Hines v. Davidowitz, 312 U.S. 52, 67 (1941)
(acknowledging that there is not “an infallible constitutional test
or an exclusive constitutional yardstick” for the application of
preemption).
The Supreme Court has identified three types of
preemption: express preemption, field preemption, and implied
conflict preemption. Hillsborough County, Fla. v. Automated
Med. Labs., Inc., 471 U.S. 707, 713 (1985); Bruesewitz v.
Wyeth, Inc., 561 F.3d 233, 238-39 (3d Cir. 2009). The first,
express preemption, exists when Congress includes in a statute
explicit language stating an intent to preempt conflicting state
law. Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 541 (2001)
(“State action may be foreclosed by express language in a

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We sometimes call this “implied obstacle preemption.”9
Holk v. Snapple Beverage Corp., 575 F.3d 329, 334 (3d Cir.
2009).
14
constitutional enactment.”). The second, field preemption,
occurs when a state law impinges upon a “field reserved for
federal regulation.” United States v. Locke, 529 U.S. 89, 111
(2000). This form of preemption exists “either ... [where] the
nature of the regulated subject matter permits no other
conclusion, or [where] the Congress has unmistakingly so
ordained.” Fl. Lime & Avocado Growers, Inc. v. Paul, 373 U.S.
132, 142 (1963). Lastly, and most significantly for the present
case, implied conflict preemption exists when, “under the
circumstances of [a] particular case, [the state law] stands as an
obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.” Hines, 312 U.S. at 67.9
In analyzing a potential conflict between federal and state
law, we must be “guided ... ‘by the rule that the purpose of
Congress is the ultimate touchstone in every preemption case.’”
Id. at 575 F.3d at 334 (citing Altria Group, Inc. v. Good, 129
S.Ct. 538, 543 (2008)). We are required to consider “the entire
scheme of the [federal] statute” and identify “its purpose and
intended effect.” Crosby v. Nat’l Foreign Trade Council, 530
U.S. 363, 373 (2000). Only then can we determine whether the
opposing state law presents a “sufficient obstacle” such that it
requires preemption. Id. at 374 n.8. While there is a recognized
presumption against preemption, Cipollone v. Ligget Group,
Inc., 505 U.S. 504, 516 (1992), and we seek to avoid it when
possible, Bates v. Dow Agrosciences LLC, 544 U.S. 431, 432,

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15
449 (2005), conflicts that are implied by operation of state law
are “of no less force than that which is expressed.” Crosby, 530
U.S. at 373 (“If the purpose of the act cannot otherwise be
accomplished ... the state law must yield to the regulation of
Congress within the sphere of its delegated power.”) (citations
omitted). Thus, in deciding whether the Reform Act preempts
the sovereign immunity that SEPTA claims, we must scrutinize
the effect of the state law interpretation pressed by SEPTA and
“ascertain Congress’s intent in enacting the federal statute at
issue.” Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 95 (1993).
The specific statutory provision at issue here is §
28103(b) of the Reform Act, which reads as follows:
(b) Contractual obligations—A provider of rail
passenger transportation may enter into contracts
that allocate financial responsibility for claims.
49 U.S.C. § 28103(b). The language is neither complex nor
ambiguous. A plain reading of that single sentence reveals that
the Act grants Amtrak power to enter into binding contracts that
allocate financial responsibility for claims against it. Such a
reading is confirmed by looking to other language in the statute,
particularly the description of congressional findings, which
include that “(1) intercity rail passenger service is an essential
component of a national intermodal passenger transportation
system; (2) Amtrak is facing a financial crisis, with growing and
substantial debt obligations severely limiting its ability to cover
operating costs and jeopardizing its long-term viability; and (3)
immediate action is required to improve Amtrak’s financial
condition if Amtrak is to survive.” 49 U.S.C. § 24101; see also

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This approaches express preemption but does not10
qualify as such because the language of § 28103(b), while clear
in its implication, is not explicit about preemption. “Express
preemption occurs when Congress ‘explicitly state[s]’ that it
intends a statute to have that effect. Jones v. Rath Packing Co.,
430 U.S. 519, 525 (1977). Such preemption is thus generally
found only when Congress has used language that expressly
precludes state regulation in a given area. See St. Thomas-St.
John Hotel & Tourism Ass’n, Inc. v. Gov’t of the United States
Virgin Islands, 218 F.3d 232, 238 (3d Cir. 2000) (holding that
express preemption only “arises when there is an explicit
16
Amtrak Reform Act, Pub. L. 105-134, 105th Congress, 1st
Session, 111 Stat. 2570, 2571, § 2.
The broad wording of § 28103(b), combined with those
findings, shows that subsection (b) was enacted to facilitate
Amtrak’s entering into contracts to transfer liability risk to
entities like SEPTA. Pennsylvania’s sovereign immunity
statute, if applied as SEPTA urges, would be a complete
obstacle to Amtrak’s ability to enter into such contracts because
it would directly prevent Amtrak from being able to allocate
financial responsibility to SEPTA. Permitting the invocation of
sovereign immunity would thus have the impermissible impact
of preventing Amtrak from doing exactly what the Reform Act
says Amtrak can do, thereby moving Amtrak towards the
financial instability that the Reform Act sought to avoid.
Therefore, based on the plain language of the statute, we
conclude that the Reform Act preempts the application of
Pennsylvania’s sovereign immunity statute.10

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statutory command that state law be displaced”); see also Rush
Prudential HMO, Inc. v. Moran, 536 U.S. 355, 364 (describing
the “express preemption” language in ERISA); Sprietsma v.
Mercury Marine, 537 U.S. 51, 62-63 (“Because the [Federal
Boat Safety Act] contains an express pre-emption clause, our
task of statutory construction must in the first instance focus on
the plain wording of the clause ... .”).
17
If the plain language of the statute were not clear enough
to demonstrate congressional intent, the legislative history of the
Reform Act is. See United States v. Gregg, 226 F.3d 253, 257
(3d Cir. 2000) (“To determine a law’s plain meaning, we begin
with the language of the statute. If the language of the statute
expresses Congress’s intent with sufficient precision, the inquiry
ends there ... . Where the statutory language does not express
Congress’s intent unequivocally, a court traditionally refers to
the legislative history... .”). That history only serves to
strengthen the conclusion of implied conflict preemption.
A Senate Report explains that the Reform Act was
designed to “enable Amtrak to increase efficiencies, reduce
costs, and [to] permit changes to its liability.” S. Rep. No. 105-
85 at 1, Committee on Commerce, Science, and Transportation,
105th Congress, 1st Session (Sept. 24, 1997) (“Senate Report”).
The Report highlights the importance of the railroads in this
region of the country and cautions that, if the Reform Act failed
to become law, bankruptcy could occur, because “Amtrak is
staking the future of the national system on the projected
financial success of highspeed rail service in the Northeast
Corridor.” Id. at 2-3; see also id. at 12 (explaining the “urgent

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18
need for immediate action to improve Amtrak’s financial
condition and eliminate its dependency ... .”). With regard to §
28103(b) in particular, the Senate Report explains that the
purpose behind that subsection is to “clarif[y] that
indemnification agreements related to the provision of rail
passenger service entered into by Amtrak and other parties
would be enforceable.” Id. at 5; see also id. at 14 (“Subsection
(b) ... clarifies that rail passenger indemnification agreements
entered into by Amtrak and other parties are enforceable.”). In
fact, the Report outlines a scenario closely analogous to what is
at issue here:
As long as there is the possibility that state laws
governing indemnification contracts may make
those contracts unenforceable, Amtrak and a
freight railroad may find themselves litigating
with each other. Amtrak believes that such
litigation inevitably would not only adversely
impact business relationships between Amtrak
and the host freight railroads, but it would also
lead to significantly higher outlays in settlements
and judgments to plaintiffs.
Id. at 5.
A report from the House of Representatives similarly
emphasizes that “indemnity contracts ... are fully enforceable
without regard to any other law or public policy.” H.R. Rep.
No. 105-251 at 15, Committee on Transportation and
Infrastructure, 105th Congress, 1st Session (Sept. 17, 1997)
(“House Report”). The House Report is explicit that “a crucial

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19
feature of the liability reform provision is the affirmation of the
right of owners of ... passenger operators to indemnify by
contract.” Id. at 17.
In short, legislative history reveals that giving Amtrak the
freedom to negotiate agreements with other carriers to allocate
the financial consequences of liability was a key component of
the Reform Act, and § 28103(b) was specifically needed to
eliminate “the possibility that state laws can nullify [Amtrak’s]
indemnification contracts.” Senate Report, at 14. The
Pennsylvania sovereign immunity statute, to the extent it could
nullify the NEC Agreement, stands as a direct obstacle to that
goal, and, as such, is preempted.
SEPTA offers several arguments for not giving
preemptive effect to the Reform Act. Each is unpersuasive.
First, SEPTA notes that § 28103(b) states that Amtrak “may”
enter into indemnity contracts.” SEPTA then says that the
statutory language is “merely permissive” and so is insufficient
to “justify such a broad preemption of state law.” (Appellant’s
Op. Br. at 13.) However, it cites no precedent to support its
contention that a statute has less preemptive force because it
authorizes rather than compels certain acts. Moreover, it does
not explain how the Reform Act can be reasonably read to give
Amtrak the option to enter into indemnity contracts while
simultaneously giving entities like SEPTA the prerogative to
ignore those same contracts.
Second, relying on the principle that preemption analysis
should attempt to “reconcile the operation of both statutory
schemes with one another,” Hi Tech Transp., 382 F.3d at 302,

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As summarized by the District Court, 42 Pa. Cons. Stat.11
Ann.§ 8522(b) states that
[T]he defense of sovereign immunity shall not be
raised to claims caused by: (1) the operation of
any motor vehicle in the possession or control of
a Commonwealth party; (2) acts of health care
employees of Commonwealth agency medical
facilities or institutions or by a Commonwealth
party who is a doctor, dentist, nurse or related
health care personnel; (3) the care, custody or
control of personal property in the possession or
control of Commonwealth parties; (4) a
dangerous condition of Commonwealth agency
real estate and sidewalks; (5) a dangerous
condition of highways under the jurisdiction of a
Commonwealth agency created by potholes or
sinkholes or other similar conditions created by
natural elements; (6) the care, custody or control
of animals in the possession or control of a
Commonwealth party; (7) the sale of liquor at
Pennsylvania liquor stores; (8) acts of a member
of the Pennsylvania military forces; or (9) the
administration, manufacture and use of a toxoid
20
SEPTA suggests that its state-law sovereign immunity and the
Reform Act can be reconciled because there are enumerated
exceptions to the immunity. While there are, as SEPTA says,
nine enumerated exceptions to its sovereign immunity, they are
narrow and have no impact on SEPTA’s indemnity obligation11

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or vaccine.
(App. at A8 (citing 42 Pa. Cons. Stat. Ann. § 8522(b)).)
Subsection (a) preempts state law with respect to12
punitive damages and aggregate liability. 49 U.S.C. § 28103(a).
See supra, n.10.13
21
to Amtrak. Indeed, it is surely only because they have no impact
here that SEPTA cites them, for, if they did accommodate the
purpose of the Reform Act, they would run counter to SEPTA’s
effort to escape liability. Contrary to what SEPTA suggests, it
is not possible to reconcile the claim of state-law sovereign
immunity with the express purpose of the Reform Act.
Third, SEPTA argues that Congress could not have
intended § 28103(b) to have preemptive effect because Congress
chose to include an explicit statement of preemption in another
subsection of the statute, § 28103(a). Congress knew how to12
broadly preempt state law if it so intended, SEPTA argues, and
Congress did not intend to do so by subsection (b). We
acknowledge that § 28103(b) does not contain an express
preemption clause. However, even though subsection (b) is13
not expressly preemptive, it is still quite clear. The preemptive
consequences of its language are sufficiently plain for us to say
that Congress intended to obviate all obstacles to the
enforceability of contracts to indemnify Amtrak. Further, the
expression of preemption in one subsection does not mean that
preemption was not intended by the language of another

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22
subsection on another topic. See Bruesewitz, 561 F.3d at 239 (“
[I]mplied preemption may exist even in the face of an express
preemption clause.”); see also Freightliner Corp. v. Myrick, 514
U.S. 280, 288 (1995) (noting that an express preemption clause
in a statute does not “foreclose [the] possibility of implied pre-
emption”). Again, “the purpose of Congress is the ultimate
touchstone in every preemption case,” Holk 575 F.3d at 334,
and, as discussed above, the purpose here is not in doubt: §
28103(b) was passed to “clarif[y] that rail passenger service
indemnification agreements entered into by Amtrak and other
parties are enforceable.” Senate Report at 14.
Fourth, SEPTA contends that its sovereign immunity
defense should not be preempted because “Congress was
certainly aware of SEPTA’s status with respect to liability yet it
chose not to expressly preempt that status.” (Appellant’s Op.
Br. at 16.) This argument, put forward with no support, rests
on the peculiar proposition that Congress knew that SEPTA
would enter into indemnity contracts with no intent or capacity
to honor them. It is true that Congress was aware that state laws
existed “to protect the taxpayers who ultimately bear the costs
of tort liability incurred in providing the public transportation.”
House Report, at 21. In fact, recognizing the threat those laws
posed to the viability of indemnity agreements, the House
warned that “[w]ithout the confirmation that indemnity
agreements will be upheld in court, [Amtrak] will be placed in
jeopardy as [it] resists taking on what is increasingly viewed as
an unacceptable and uncompensated liability exposure.” Id.
But that does not mean that Congress was “certainly aware” of
the sovereign immunity position that SEPTA would take when
reneging on its indemnity obligations. Even if Congress had

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23
been aware of SEPTA’s bait-and-switch position, however, the
intent of the Reform Act remains clear in its commitment to the
enforcement of those obligations.
Finally, SEPTA argues that Congress, in enacting §
28103(b), only intended to preempt state laws expressly
governing the enforceability of indemnity contracts, and, more
specifically, state laws that prohibit indemnification when there
is a finding of gross negligence. Accordingly, SEPTA reasons,
the Reform Act should preempt only that specific kind of state
law, and not a law of general applicability like Pennsylvania’s
sovereign immunity statute. A finding of preemption in the
present case, says SEPTA, would be far too “vast,” and would
“wipe away all principles of state contract law that may be
utilized as a defense to contractual liability and/or contract
formation.” (Appellant’s Op. Br. at 13.)
The Reform Act was indeed intended to preempt state
laws of the sort described by SEPTA. In fact, subsection (b)
was passed in part to supersede National R.R. Passenger Corp.
v. Consolidated Rail Corp., 698 F. Supp. 951 (D.D.C. 1988)
(overruled on other grounds), which held that an indemnification
agreement between Amtrak and ConRail violated District of
Columbia public policy because it allowed indemnification in
the context of gross negligence. See House Report, at 33-44;
see also O&G Indus., 537 F.3d at 166-67 (“[I]t was precisely the
doubts cast by the [Consolidated Rail] decision over the validity
of indemnity agreements by railroad parties that prompted
Congress to enact § 28103(b).”). It does not follow, however,
that that was the limit of congressional intent. To the contrary,
it would be odd to suppose that Congress meant to eliminate a

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The Second Circuit finds preemption in three scenarios:14
“(1) where Congress expressly states its intent to preempt; (2)
where Congress’s scheme of federal regulation is sufficiently
comprehensive to give rise to a reasonable inference that it
leaves no room for the state to act; and (3) where state law
actually conflicts with federal law.” O&G Industries, 537 F.3d
at 161. In O&G Industries, the Second Circuit found
24
specific obstacle to its purpose of protecting Amtrak’s ability to
spread risk but had no concern with a broader obstacle having
the same effect. The Reform Act’s legislative history
demonstrates that Congress intended to override any and all
state laws that might interfere with the enforceability of
Amtrak’s contracts, not only those state laws specifically
enacted to govern indemnity agreements. See House Report, at
13 (“[I]ndemnity contracts ... are fully enforceable without
regard to any other law or public policy.”) (emphasis added); cf.
O&G Indus., 537 F.3d at 160-63 (rejecting the argument that §
28103(b) only applies to indemnity contracts with freight
railroads, and holding that the Reform Act was meant “to ensure
the enforceability of indemnity agreements Amtrak concludes
with any other party.”)
The Second Circuit’s opinion in O&G Industries supports
that conclusion. In O&G Industries, the Second Circuit held
that § 28103(b) preempted a Connecticut statute which, on
public policy grounds, voided any indemnity provision
contained in construction-related contracts, if the provision
purported to indemnify a party against its own negligence. 537
F.3d at 158; see also Conn. Gen. Stat. § 52-572k(a). The14

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preemption under its third category, conflict preemption, id.,
which is analogous to our finding of implied conflict
preemption.
25
Court rejected O&G Industries’ argument that there was a
limitation on the kinds of conflicting state laws preempted by
the Reform Act, stating that
[t]he goal of the Reform Act was to shield all of
Amtrak’s indemnity arrangements from legal
attacks on their validity. [In enacting § 28103(b)],
Congress ... encouraged all providers of rail
passenger transportation to enter into contracts
that allocate financial responsibility for claims ... .
Congress also affirmed the enforceablity of
contracts that include indemnification obligations.
O&G Indus., 537 F.3d at 162 (citation omitted) (original
emphasis).
Thus, as our sister circuit decided, Congress intended
with the passage of the Reform Act, and, more specifically, with
the passage of § 28103(b), that all of Amtrak’s indemnity
agreements should be enforceable, regardless of the kind of
conflicting state law that might be erected. SEPTA’s state-law
sovereign immunity assertion directly conflicts with the
enforcement of its indemnity contract with Amtrak and thus
presents an irreconcilable obstacle to the objectives of

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Lest there be any misunderstanding, we emphasize that15
this does not constitute a general preemption or invalidation of
Pennsylvania’s sovereign immunity statute. We hold only that
SEPTA’s effort to invoke that statute to escape the
consequences of its indemnity obligations to Amtrak cannot be
permitted, for the reasons stated.
26
§ 28103(b). Accordingly, that invocation of sovereign immunity
is preempted under principles of implied conflict preemption.15
B. Preemption and Retroactivity
SEPTA also argues that, even if some claims of
sovereign immunity are preempted by § 28103(b), there can be
no preemption here without giving the Reform Act an
impermissible retroactive effect. The NEC Agreement was
executed a decade prior to the passage of the Reform Act. By
SEPTA’s reasoning, applying the Reform Act to an indemnity
agreement entered into prior to the enactment of that statute is
untenable because Congress did not expressly provide for
retroactive application.
Before asking whether Congress intended the Reform
Act to have any retroactive effect, we must first ask whether the
statute even has such an effect. A statute “has retroactive effect
when it ‘takes away or impairs vested rights acquired under
existing laws, or creates a new obligation, imposes a new duty,
or attaches a new disability, in respect to transactions or
considerations already past.’” Id. at 227 (citing Landgraf v. USI
Film Prods., 511 U.S. 244, 269 (1994)). Analyzing whether a

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27
statute operates retroactively “is not always a simple or
mechanical task.” Id. at 268. The analysis requires a
“commonsense, functional judgment as to whether a statute
attaches new legal consequences.” Atkinson v. Att’y Gen., 479
F.3d 222, 231 (3d Cir. 2007). In seeking that commonsense
answer, we can “be guided by considerations of fair notice,
reasonable reliance, and settled expectations.” Id. (emphasis
omitted). Moreover, “[a] statute does not operate retrospectively
merely because it is applied in a case arising from conduct
antedating the statute’s enactment.” Landgraf, 511 U.S. at 269
(citation omitted). “Rather, the statute’s temporal reach
becomes unacceptable only when its retroactive application
would significantly impair existing rights and thereby disappoint
legitimate expectations.” Dinnall v. Gonzales, 421 F.3d 247,
252 (3d Cir. 2005) (citation omitted).
In deciding whether a statute has a retroactive effect, a
court must determine the “important event” to which the statute
allegedly attaches new legal consequences. See Atkinson, 479
F.3d at 230 (stating that the defendant’s conviction was the
“important event” to which the federal statute attached a new
legal consequence). In the present case, the important event is
not the execution of the NEC Agreement in 1982, as SEPTA
asserts, but is rather the Deweese accident in 2004, after which
Amtrak had the right to indemnity from SEPTA for that
accident. SEPTA did not owe Amtrak any indemnity obligation
for the Deweese accident until it occurred on October 28, 2004,
and, thus, SEPTA’s alleged sovereign immunity defense did not
arise until Amtrak filed its cross-claim for indemnity.
Therefore, the Reform Act, passed in 1997, did not attach any
new “legal duties” to events at issue here, which took place long

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after it was enacted. Because Amtrak’s right to indemnity for
the 2004 accident did not accrue until 2004, and the Reform Act
was passed seven years before, SEPTA’s argument that there is
impermissible retroactivity lacks merit.
Moreover, SEPTA had “fair notice” of the Reform Act’s
effects well before Amtrak first invoked its contractual
indemnity right in 2004 and so has no basis for claiming
“reasonable reliance” on its sovereign immunity defense. See
Atkinson, 479 F.3d at 231 (stating that in retroactivity analysis,
“a court can certainly be guided by considerations of fair notice,
reasonable reliance, and settled expectations”) (emphasis
omitted). Between 1997, when the Reform Act was passed
specifying that all of Amtrak’s indemnity contracts would be
upheld, and 2004, when the accident occurred, SEPTA had
ample time to seek termination of the NEC Agreement or to
renegotiate its indemnity obligations, if it wished to limit them.
III. Conclusion
Section 28103(b) of the Reform Act reflects Congress’s
unequivocal support for indemnity agreements such as the ones
between Amtrak and SEPTA. The plain meaning of the statute
is confirmed by legislative history, which specifically notes
Congress’s intent to eliminate “the possibility that state laws can
nullify [Amtrak’s] indemnification contracts.” Senate Report at
14. Because SEPTA cannot be allowed to use Pennsylvania’s
sovereign immunity statute to frustrate the goals of the Reform
Act, we will affirm the judgment of the District Court.

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