Kramer v. New Castle Area Transit Authority

GARTH, Circuit Judge,

concurring.

While unquestionably the history and operation of the New Castle Area Transit Authority differs from the history and operation of the Long Island Railroad, the Supreme Court’s analysis in United Transportation Union v. Long Island Railroad, - U.S. -, 102 S.Ct. 1349 , 71 L.Ed.2d 547 (1982) clearly indicates that the Authority is subject to the provisions of the Fair Labor Standards Act. Even though the Authority, a state instrumentality, has operated the bus system which is the subject of this action since 1958, in terms of Hodel v. Virginia Surface Mining and Reclamation Association, Inc., 452 U.S. 264 , 101 S.Ct. 2352 , 69 L.Ed.2d 1 (1981) and LIRR, supra, it is apparent that the Authority is not providing a service which has “traditionally” been performed by state governments.

I prefer resting my decision in this case on the ultimate, and I think more definitive, test announced in LIRR. In my opinion, the crucial standard by which the Authority’s immunity from FLSA must be measured is, do “the federal regulations affect basic state prerogatives in such a way as would be likely to hamper the state government’s ability to fulfill its role in the union and endanger its ‘separate and independent existence.’ ” - U.S. at -, 102 S.Ct. at 1354 .

Chief Justice Burger writing for the majority in LIRR, held that the application of the Railway Labor Act to New York’s operation of the Long Island Rail Road, would not have the effect of endangering New York’s “separate and independent existence” as a state. In so holding, it appears to me that the Supreme Court has now virtually restricted the rule of National League of Cities, 426 U.S. 833 , 96 S.Ct. 2465 , 49 L.Ed.2d 245 (1976) to the particular and peculiar facts of that case. I find it almost impossible to hypothesize very many other circumstances in which federal regulations would endanger the separate and independent existence of a state. 1 Thus, it seems to me that while different conclusions, each of which may be valid in its own right, might be reached as to whether a particular state function is a “traditionaf’ function, there can be little dispute in my opinion, as to whether a state’s very existence will be endangered by a particular federal Statute or Regulation. In effect therefore, the “endangering” test announced by the Court, whatever its wisdom, appears to me to have the undeniable virtue *312 of being more certain in application than the “traditional function” test. By being more certain in application, it will undoubtedly have the effect of forestalling disputes of the type presented by the instant case.

Having been instructed that subjecting the Long Island Rail Road to the Railway Labor Act would not threaten the “separate and independent existence” of New York as a state, I can hardly maintain otherwise with respect to the application of the FLSA to the operation of the New Castle Area Transit Authority. Thus, tested by the standard of “endangering a state’s separate and independent existence,” I agree with Judge Gibbons that the order of the district court granting summary judgment for the Authority, must be reversed.

. In New York v. United States, 326 U.S. 572 , 66 S.Ct. 310 , 90 L.Ed. 326 (1945), the Supreme Court held that the State of New York could be taxed by the federal government on the sale of mineral waters taken from Saratoga Springs and therefore New York was not immune from taxation under § 615(a)(5) of the 1939 Internal Revenue Act which imposed a tax on mineral waters.

Chief Justice Stone in his concurring opinion stated:

But in view of our former decisions we could hardly say that a general non-discriminatory real estate tax (apportioned), or an income tax laid upon citizens and States alike could be constitutionally applied to the State’s capital, its State-house, its public school houses, public parks, or its revenues from taxes or school lands, even though all real property and all income of the citizen is taxed.

* * * * * *

Only when and because the subject of taxation is State property or a State activity must we consider whether such a non-discriminatory tax unduly interferes with the performance of the State’s functions of government. If it does, then the fact that the tax is nondiscriminatory does not save it.

The Chief Justice qualified his opinion by quoting from Metcalf & Eddy v. Mitchell, 269 U.S. 514, 523-24 , 46 S.Ct. 172, 174 , 70 L.Ed. 384 :

But neither government may destroy the other nor curtail in any substantial manner the exercise of its powers. Hence the limitation upon the taxing power of each, so far as it affects the other, must receive a practical construction which permits both to function with the minimum of interference each with the other; and that limitation cannot be so varied or extended as seriously to to impair either the taxing power of the government imposing the tax ... or the appropriate exercise of the functions of the government affected by it. Metcalf & Eddy v. Mitchell, supra, 523-24, 46 S.Ct. at 174 .