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NEW JERSEY TRANSIT; JOHN DOE SUPERVISORS #1-50 ____________ Appeal from the United States District Court for the District of New Jersey (Nos. 3:14-cv-04429 & 3:14-cv-4104) District Judge: Hon. Mary L. Cooper __________ Argued: January 26, 2017 Before: CHAGARES, RESTREPO, and ROTH, Circuit Judges __________ (Filed: January 11, 2018) John M. Bloor, Esq. [ARGUED]
Drinker Biddle & Reath
18th and Cherry Streets
One Logan Square, Suite 2000
Philadelphia, PA 19103 F. Michael Daily, Jr., Esq.
216 Haddon Avenue
Sentry Office Plaza, Suite 106
Westmont, NJ 08108 Counsel for Appellants 2 Jennifer J. McGruther, Esq. [ARGUED]
Stephen R. Tucker, Esq.
Benjamin H. Zieman, Esq.
Office of Attorney General of New Jersey
Department of Law & Public Safety
Division of Law
Richard J. Hughes Justice Complex
25 Market Street, P.O. Box 112
Trenton, NJ 08625 Counsel for Appellees ____________ OPINION ____________ CHAGARES, Circuit Judge. Don Karns and Robert Parker filed civil rights actions
against the New Jersey Transit Corporation (“NJ Transit”) and
NJ Transit Officers Kathleen Shanahan and Sandra McKeon
Crowe in their official and individual capacities, alleging
violations of the First, Fourth, and Fourteenth Amendments.
Officers Shanahan and Crowe arrested Karns and Parker for
defiant trespass and obstruction of justice after Karns and
Parker refused to vacate the NJ Transit train platform on which
they were preaching without the required permit. The District
Court granted the defendants’ motion for summary judgment
on Eleventh Amendment immunity and qualified immunity 3 grounds. This consolidated appeal followed. For the reasons
that follow, we will affirm the District Court’s judgment. I. Karns and Parker are evangelical Christian ministers
who regularly preach the Christian gospel. At around 6:00 a.m.
on June 26, 2012, Karns and Parker were loudly preaching on
the railway platform at the Princeton Junction station, which is
owned by NJ Transit. They also carried signs with Bible verses
on them. Parker had previously been informed that a permit
was required to preach on NJ Transit property pursuant to N.J.
Admin. Code § 16:83-1.1, which provides that persons wishing
to engage in non-commercial speech on NJ Transit property
are required to obtain a non-commercial certificate of
registration.1 Appendix (“App.”) 118. Karns was apparently
unaware of this requirement. App. 244–45. Neither Karns nor 1 Permits are available on a first-come, first-served basis. App.
241. All permits are approved as long as the applicant executes
the permit and states his or her understanding of the relevant
regulations. App. 243. NJ Transit typically issues ten to
twenty permits weekly. App. 243. Indeed, the record shows
that between June 2012 and July 2012, NJ Transit received
forty-six permit requests, including thirty from religious
organizations or entities and fifteen from political campaigns
or entities. App. 116; 118–19. Only two of these requests were
denied, either because the permit was returned too late or not
at all. App. 119–20. Permit holders are required to remain at
specific locations within the station as determined by the
station manager to ensure the safety of NJ Transit customers
and permit holders. App. 241–42. 4 Parker applied for or obtained such a permit during the period
leading up to the incident giving rise to this lawsuit. Officers Shanahan and Crowe are law enforcement
officers who are NJ Transit employees. NJ Transit maintains
a policy that its officers be familiar with and uniformly enforce
the permitting regulations, and all NJ Transit officers were
instructed on this policy. App. 136; App. 470–71; App. 858.
This policy was communicated in an email dated May 6, 2010
from NJ Transit Deputy Chief Joseph Kelly. App. 136. The
email instructed that in the event a NJ Transit officer observes
an individual engaging in non-commercial speech without a
permit, the officer should explain the permitting rules and
provide information about the permit application process.
App. 136. The email directed that the officer shall take
“appropriate enforcement action” if the individual has been
made aware of the application process and permit requirement
and continues to engage in non-commercial expression. App.
136. While on patrol on the morning of June 26, 2012,
Officers Shanahan and Crowe received a radio dispatch
informing them that individuals were preaching loudly on the
Princeton Junction station platform. This was not the first
incident of loud preaching on NJ Transit property. Rather,
there had been several incidents involving “[c]ommuters
complaining of loud preaching at different stations” throughout
the NJ Transit system. App. 470. In response to the dispatch call, Officers Shanahan and
Crowe approached the Princeton Junction station. The officers
were able to hear shouting emanating from the platform from
as far as the parking lot beside the station. Once on the train 5 platform, Officers Shanahan and Crowe approached Karns and
Parker, noticing that Parker’s behavior “was not the normal
behavior of a commuter” and that he “was shaking
uncontrollably.” App. 208. Officer Crowe indicated that she
“wasn’t paying attention to what [the plaintiffs] were saying”
as she approached them. App. 197. Karns and Parker ceased
preaching as the officers approached them. Parker took out his
cell phone to record the encounter, but Officer Shanahan
requested that he put it away. Parker eventually complied. The
officers then asked Karns and Parker whether they had a permit
to speak at the station. They responded that they did not.
Officer Shanahan informed them that a permit was required,
but Parker responded that he had been preaching at the station
for years without any form of permit. The officers then asked Parker to provide identification.
Parker produced an expired college identification card. Karns
refused to provide any form of identification. Believing that
Karns and Parker were interfering with their investigation by
failing to produce sufficient identification, the officers then
arrested Karns and Parker and charged them each with one
count of obstruction under N.J. Stat. Ann. § 2C:29-1(a) and
one count of obstruction under N.J. Stat. Ann. § 2C:29-1(b).
Karns and Parker were also each charged with one count of
defiant trespass in violation of N.J. Stat. Ann. § 2C:18-3(b) on
the basis of the officers’ belief that engaging in non-
commercial expression on NJ Transit property without a
permit constitutes trespassing. Karns was ultimately acquitted of all charges. The
obstruction of justice charges against Parker were dismissed,
but he was convicted of defiant trespass. That charge was
ultimately reversed by the New Jersey Superior Court. 6 On June 26, 2014, Karns and Parker jointly filed a
complaint against NJ Transit and Officers Shanahan and
Crowe in their official and individual capacities. The District
Court ordered Karns to file an amended complaint and Parker
to file a separate complaint. On July 14, 2014, Karns and
Parker filed individual complaints, each alleging violations of
the First, Fourth, and Fourteenth Amendments. The actions
were consolidated for discovery purposes, and NJ Transit and
the officers moved for summary judgment. On March 31,
2016, the District Court granted summary judgment in favor of
all of the defendants and against Karns and Parker. Karns and Parker filed this timely appeal. II. The District Court had jurisdiction pursuant to 28
U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. §
1291. We exercise plenary review over a grant of summary
judgment and apply the same standard as the District Court.
Goldenstein v. Repossessors Inc., 
815 F.3d 142
, 146 (3d Cir.
2016); Beers–Capitol v. Whetzel, 
256 F.3d 120
, 130 n.6 (3d
Cir. 2001). We review de novo the legal grounds underpinning
a claim of qualified immunity or sovereign immunity. Halsey
v. Pfeiffer, 
750 F.3d 273
, 287 (3d Cir. 2014); Blanciak v.
Allegheny Ludlum Corp., 
77 F.3d 690
, 694 (3d Cir. 1996). III. Karns and Parker first argue that the District Court erred
by concluding that NJ Transit was an “arm of the state” entitled
to claim immunity from suit in federal court under the Eleventh 7 Amendment. They relatedly argue that NJ Transit is liable for
damages under 42 U.S.C. § 1983 for maintaining
unconstitutional policies relating to the permitting scheme. We
have considered Karns’s and Parker’s arguments and, for the
following reasons, we will affirm the District Court’s
judgment. A. The Eleventh Amendment to the United States
Constitution provides: “The Judicial power of the United
States shall not be construed to extend to any suit in law or
equity, commenced or prosecuted against one of the United
States by Citizens of another State, or by Citizens or Subjects
of any Foreign State.” U.S. Const. amend. XI. The Supreme
Court in Hans v. Louisiana, 
134 U.S. 1
 (1890), “extended the
Eleventh Amendment’s reach to suits by in-state plaintiffs,
thereby barring all private suits against non-consenting States
in federal court.” Lombardo v. Pa., Dep’t of Pub. Welfare, 
540 F.3d 190
, 194 (3d Cir. 2008) (emphasis omitted). Immunity
from suit in federal court under the Eleventh Amendment is
designed to preserve the delicate and “proper balance between
the supremacy of federal law and the separate sovereignty of
the States.” Alden v. Maine, 
527 U.S. 706
, 757 (1999). The
Eleventh Amendment serves two fundamental imperatives:
safeguarding the dignity of the states and ensuring their
financial solvency. See Hess v. Port Auth. Trans-Hudson
513 U.S. 30
, 52 (1994) (identifying “States’ solvency
and dignity” as the concerns underpinning the Eleventh
Amendment). It is “well established that even though a State is not
named a party to the action, the suit may nonetheless be barred 8 by the Eleventh Amendment.” Edelman v. Jordan, 
415 U.S. 651
, 663 (1974).2 The Eleventh Amendment immunizes from
suit in federal court both non-consenting states and those
entities that are so intertwined with them as to render them
“arms of the state.” Bowers v. Nat’l Collegiate Athletic Ass’n,
475 F.3d 524
, 545 (3d Cir. 2007), amended on reh’g (Mar. 8,
2007). Eleventh Amendment immunity does not, however,
extend to counties and municipalities despite their status as
political subdivisions of a state. See Bolden v. Se. Pa. Transp.
953 F.2d 807
, 813 (3d Cir. 1991) (en banc). In
determining whether an entity is entitled to immunity, we must
consider “the provisions of state law that define the agency’s
character,” but the ultimate question of “whether a particular
state agency [is] . . . an arm of the State, and therefore ‘one of
the United States’ within the meaning of the Eleventh
Amendment, is a question of federal law.” Regents of the
Univ. of Cal. v. Doe, 
519 U.S. 425
, 430 n.5 (1997). We apply a fact-intensive three-part test to determine
whether an entity is an “arm of the state” for Eleventh
Amendment purposes. Fitchik v. N.J. Transit Rail Operations,
873 F.2d 655
, 659 (3d Cir. 1989) (en banc) (citing Urbano
v. Bd. of Managers, 
415 F.2d 247
, 250–51 (3d Cir. 1969)). We 2 As we have discussed in other contexts, “the Eleventh
Amendment does not define the scope of the States’ sovereign
immunity; it is but one particular exemplification of that
immunity.” Lombardo, 540 F.3d at 195 (quoting Fed. Mar.
Comm’n v. S.C. State Ports Auth., 
535 U.S. 743
, 753 (2002)).
This case principally concerns only immunity from suit in
federal court — Eleventh Amendment immunity — and not
immunity from liability, and thus we address only that aspect
of sovereign immunity herein. 9 examine the following factors: “(1) whether the payment of
the judgment would come from the state; (2) what status the
entity has under state law; and (3) what degree of autonomy
the entity has.” Bowers, 475 F.3d at 546. Subsequent to
“identifying the direction in which each factor points, we
balance them to determine whether an entity amounts to an arm
of the State.” Maliandi v. Montclair State Univ., 
845 F.3d 77
84 (3d Cir. 2016). We historically considered the first factor — the state-
treasury factor — as “most important.” Fitchik, 873 F.2d at
659; see also Bolden, 953 F.2d at 818. Hence, in Fitchik itself,
we concluded that because the funding factor disfavored
immunity and because the remaining two factors — status
under state law and the degree of autonomy — only “slightly”
favored a finding of immunity, NJ Transit was not entitled to
claim Eleventh Amendment immunity. 873 F.2d at 664. Since
our decision in Fitchik, however, we have “recalibrated the
factors,” Maliandi, 845 F.3d at 84, in light of the Supreme
Court’s intervening precedent in Regents of the University of
California v. Doe. In Regents of the University of California,
the Supreme Court recognized that “it is the entity’s potential
legal liability, rather than its ability or inability to require a
third party to reimburse it, or to discharge the liability in the
first instance, that is relevant” to the Eleventh Amendment
inquiry. 519 U.S. at 431. The Court emphasized that the
inquiry into immunity from suit in federal court is not merely
“a formalistic question of ultimate financial liability.” Id.; see
also Cooper v. Se. Pa. Transp. Auth., 
548 F.3d 296
, 302 (3d
Cir. 2008). The Supreme Court’s holding in Regents of the
University of California has led us to depart from the analytical 10 framework articulated in Fitchik, and we thus “no longer
ascribe primacy to the [state-treasury] factor.” Benn v. First
Judicial Dist. of Pa., 
426 F.3d 233
, 239 (3d Cir. 2005). Under
this evolved approach, none of the three Fitchik factors is
“predominant.” Cooper, 548 F.3d at 301. Rather, each of the
factors is considered “co-equal,” Benn, 426 F.3d at 240, and
“on the same terms,” Cooper, 548 F.3d at 302. We emphasize
that courts should not simply engage in a formulaic or
mechanical counting up of the factors, nor do we do so
here. Rather, each case must be considered on its own terms,
with courts determining and then weighing the qualitative
strength of each individual factor in the unique factual
circumstances at issue. See Maliandi, 845 F.3d at 84
(explaining that each cases requires a “fresh analysis” and
“‘individualized determinations’ for each entity claiming
Eleventh Amendment immunity” (quoting Bowers v. Nat’l
Collegiate Athletic Ass’n, 
475 F.3d 524
, 546 (3d Cir.
2007))). While the Fitchik Court’s analysis of each individual
factor “remains instructive,” Cooper, 548 F.3d at 302, we
consider and weigh each factor on the record before us today. Notwithstanding this fundamental shift in our approach
to Eleventh Amendment immunity analysis, Karns and Parker
argue that the balancing analysis we conducted in Fitchik must
control the outcome of this case. Karns and Parker specifically
maintain that NJ Transit is collaterally estopped3 from raising 3 Collateral estoppel, also known as issue preclusion, prohibits
relitigation of an issue that has been fully and fairly litigated
previously. The elements for collateral estoppel are satisfied
when: “(1) the issue sought to be precluded [is] the same as
that involved in the prior action; (2) that issue [was] actually
litigated; (3) it [was] determined by a final and valid judgment; 11 an Eleventh Amendment immunity defense because in Fitchik
we determined that the three factors, on balance, weighed
against affording Eleventh Amendment immunity to NJ
Transit. See Karns and Parker Br. 14–15. This argument
overlooks the significant evolution of Supreme Court
jurisprudence and our own conforming law in this area since
Fitchik. Contrary to Karns’s and Parker’s suggestion,
collateral estoppel is not appropriate when the “controlling
facts or legal principles have changed significantly since the
[prior] judgment.” Montana v. United States, 
440 U.S. 147
155 (1979); see also Duvall v. Att’y. Gen. of United States, 
436 F.3d 382
, 391 (3d Cir. 2006) (“[Collateral estoppel] . . . will
not preclude relitigation of the issue when there is . . . a material
intervening change in governing law.”). Collateral estoppel,
then, does not preclude us from reconsidering our balancing of
the Fitchik factors in light of intervening Supreme Court
precedent. Our Internal Operating Procedures also do not prevent
us from revisiting the balancing analysis conducted in Fitchik.
Pursuant to those procedures, “the holding of a panel in a and (4) the determination [was] essential to the prior
judgment.” Nat’l R.R. Passenger Corp. v. Pa. Pub. Util.
342 F.3d 242
, 252 (3d Cir. 2003) (alterations in
original) (quoting Nat’l R.R. Passenger Corp. v. Pa. Pub. Util.
288 F.3d 519
, 524–25 (3d Cir. 2002)). Karns and
Parker here invoke a variant of this doctrine, known as
offensive non-mutual collateral estoppel, in which “a plaintiff
[seeks] to estop a defendant from relitigating the issues which
the defendant previously litigated and lost against another
plaintiff.” Parklane Hosiery Co., Inc. v. Shore, 
439 U.S. 322
329 (1979). 12 precedential opinion is binding on subsequent panels.” 3d Cir.
I.O.P. 9.1. We are therefore generally obligated to follow our
precedent absent en banc reconsideration. United States v.
577 F.3d 533
, 541 (3d Cir. 2009). Nonetheless, a panel
may revisit a prior holding of the Court “which conflicts with
intervening Supreme Court precedent.” In re Krebs, 
527 F.3d 82
, 84 (3d Cir. 2008); see also Council of Alt. Political Parties
v. Hooks, 
179 F.3d 64
, 69 (3d Cir. 1999) (observing that
reconsideration of an issue decided by another panel of our
Court in a prior appeal is appropriate when there has been an
intervening change in law). Indeed, we are “compelled to
apply the law announced by the Supreme Court as we find it
on the date of our decision.” Tann, 577 F.3d at 541 (quoting
United States v. City of Philadelphia, 
644 F.2d 187
, 192 n.3
(3d Cir. 1980)); see also Mennen Co. v. Atl. Mut. Ins. Co., 
147 F.3d 287
, 294 n.9 (3d Cir. 1998) (observing that our Court’s
Internal Operating Procedures must “give way when the prior
panel’s holding is in conflict with Supreme Court precedent”).
Our respect for the uniformity of decisions within this Court
therefore must succumb when a prior holding of our Court —
even an en banc decision — conflicts with a subsequent
Supreme Court holding. See United States v. Singletary, 
268 F.3d 196
, 202 (3d Cir. 2001). Adherence to our holding in Fitchik here must yield in
light of the Supreme Court’s Regents of the University of
California decision, which unquestionably presents an
intervening shift in the applicable Eleventh Amendment
immunity analytical framework. Further, a reflexive
application of our original Fitchik framework here would be at
odds with the analytical approach employed by our esteemed
colleagues in many other Eleventh Amendment cases, thus
generating a potentially fractured body of jurisprudence. 13 Compare Cooper, 548 F.3d at 301, Febres v. Camden Bd. of
445 F.3d 227
, 235–36 (3d Cir. 2006), and Benn, 426
F.3d at 239, with Fitchik, 873 F.2d at 664. In these
circumstances, we are not bound to follow our prior balancing
of factors in Fitchik. We must instead examine each of the
three Fitchik factors, balancing them equally, to determine
whether NJ Transit’s relationship with the state entitles it to
immunity under the “holistic analysis” compelled by the
Regents of the University of California decision, see Benn, 426
F.3d at 241, and to which we have adhered in our subsequent
case law. 1. Turning to the analysis of whether an entity is an arm of
the state, we first ask “[w]hether the money that would pay the
judgment would come from the state,” which includes
considering “whether payment will come from the state’s
treasury, whether the agency has the money to satisfy the
judgment, and whether the sovereign has immunized itself
from responsibility for the agency’s debts.” Fitchik, 873 F.2d
at 659. Our Court has observed that the “crux of the state-
treasury criterion” is not whether the state will be the principal
source of any funding, but rather whether the state is “legally
responsible for the payment of [the] judgment.” Febres, 445
F.3d at 233. The Fitchik Court concluded that NJ Transit is
financially independent from the state. See Fitchik, 873 F.2d
at 660–62 (reviewing relevant financial details and observing
that NJ Transit’s “money does not come predominantly from
the state”). The parties have not offered updated financial
information to undermine this assessment. NJ Transit instead 14 argues that because it relies on state funds to meet its operating
deficit, an adverse judgment would have the practical effect of
impacting the state treasury. NJ Transit Br. 27–32. NJ Transit,
in support of this position, relies upon two cases in which
Courts of Appeals have deemed transit operations arms of the
state: Alaska Cargo Transportation, Inc. v. Alaska R.R. Corp.,
5 F.3d 378
 (9th Cir. 1993) and Morris v. Washington
Metropolitan Area Transit Authority, 
781 F.2d 218
 (D.C. Cir.
1986). In Alaska Cargo Transportation, Inc., the Court of
Appeals for the Ninth Circuit afforded Eleventh Amendment
immunity to the Alaska Railroad Corporation. Although the
state disclaimed liability for it by statute, Alaska still provided
it a “financial safety net of broad dimension,” largely because
federal law effectively required Alaska to keep the railroad
operational. Alaska Cargo Transp., Inc., 5 F.3d at 381
(“Significantly, federal law further provides that, until 1994,
the State of Alaska must continue to provide rail carrier
services across its system.”). Similarly, in Morris, Eleventh
Amendment immunity was afforded to the Washington
Metropolitan Area Transit Authority (“WMATA”), an
interstate transit system created by a congressional compact
whose signatories were Maryland, Virginia, and the District of
Columbia. 781 F.2d at 219. The Court of Appeals for the
District of Columbia Circuit determined that the practical
result of any judgment against WMATA would be against the
treasuries of Maryland and Virginia. Id. at 225–26. As in
Alaska Cargo Transportation, Inc., the Morris Court’s
conclusion was premised on the fact that congressional funding
for the system was contingent on the states’ agreement to meet
WMATA’s operating deficits. Id. NJ Transit maintains that
both cases are applicable here, yielding the conclusion that the
state-treasury factor likewise favors immunity for NJ Transit. 15 We do not agree, and NJ Transit’s reliance on both cases
is misplaced. We have consistently observed that both Alaska
Cargo Transportation and Morris are inapplicable when
Congress has not “put a proverbial ‘gun to the head’ of the
State to sustain the entity even without a legal obligation.”
Maliandi, 845 F.3d at 87 n.7; see also Cooper, 548 F.3d at 305
(discussing but rejecting reliance on both cases because of the
lack of congressional coercion); Febres, 445 F.3d at 235 n.9
(distinguishing the cases to the “limited circumstances” under
which federal law essentially requires the state to keep afloat
the agency claiming immunity). That is plainly not the case
here, where the state is under no legal or other obligation to pay
NJ Transit’s debts or to reimburse NJ Transit for any
judgments that it pays. See N.J. Stat. Ann. § 27:25-17. Indeed,
this case is much more similar to the Cooper case, where the
state treasury factor did not favor immunity because the
transportation agency claiming immunity could “satisfy the
deficit itself by raising fares, reducing service, and/or laying
off employees.” Cooper, 548 F.3d at 305. Moreover, New
Jersey may choose to appropriate funds to help NJ Transit
cover its operating deficit, but it is not obligated to do so. To
this end, NJ Transit concedes that it is not entirely reliant on
state funds but rather that it receives a “combination of federal,
state, and local funds” to balance its budget. NJ Transit Br. 31.
We therefore reject NJ Transit’s suggestion that the “practical
effect” of a judgment would be equivalent to a “legal
obligation” sufficient to satisfy the funding factor. See
Maliandi, 845 F.3d at 87 n.7. The state-treasury factor, as a
result, does not favor a finding of immunity in this case. 2. 16 We turn next to the second Fitchik factor, which
requires consideration of the status of the agency under state
law. Considerations include “how state law treats the agency
generally, whether the entity is separately incorporated,
whether the agency can sue or be sued in its own right, and
whether it is immune from state taxation.” Fitchik, 873 F.2d
at 659. We have also considered “the entity’s authority to
exercise the power of eminent domain, application of state
administrative procedure and civil service laws to the entity,
the entity’s ability to enter contracts and make purchases on its
own behalf, and whether the entity owns its own real estate.”
Maliandi, 845 F.3d at 91. The Fitchik Court concluded that
“[b]ecause [NJ Transit’s] status under New Jersey law is
uncertain, the analysis of this factor does not significantly help
in determining whether [NJ Transit] is entitled to immunity
from suit in federal court.” Fitchik, 873 F.2d at 662. In the
twenty-eight years since our Court’s decision in Fitchik,
however, it has become much more apparent that New Jersey
law regards NJ Transit as an arm of the state. The state law
factor therefore weighs strongly in favor of immunity. There is considerable indication that New Jersey law
considers NJ Transit an arm of the state. First, consistent with
the New Jersey Constitution, NJ Transit is “allocated within
the Department of Transportation,” N.J. Stat. Ann. § 27:25-4,
which is a principal department within the Executive Branch
of the State of New Jersey, N.J. Stat. Ann. § 27:1A-2. NJ
Transit, moreover, is statutorily “constituted as an
instrumentality of the State exercising public and essential
governmental functions.” N.J. Stat. Ann. § 27:25-4. Although
NJ Transit can sue and be sued, N.J. Stat. Ann. § 27:25-5, this
is not dispositive. Cf. Coll. Sav. Bank v. Fla. Prepaid
Postsecondary Educ. Expense Bd., ...