March 09, 2015

Supreme Court Decides Dept. of Transportation et al v. Ass'n of Am. Railroads

On March 9, 2015, the Supreme Court decided Dept. of Transportation et al v. Ass’n of Am. Railroads No. 13-1080, holding that, based on the federal government’s control and supervision of Amtrak, Amtrak may act as a governmental entity for separation of powers purposes and may exercise joint authority with the Federal Railroad Administration to issue metrics and standards addressing the performance and scheduling of passenger railroad services. 

In 1970 Congress created the National Railroad Passenger Corporation, which is known as Amtrak. Concerned by poor service, unreliability, and delays caused by freight traffic congestion, Congress passed the Passenger Rail Investment and Improvement Act in 2008. This act granted Amtrak and the Federal Railroad Administration (FRA) joint authority, in consultation with the Surface Transportation Board (STB), to issue “metrics and standards” that address the performance and scheduling of passenger railroad services.

In May 2010, Amtrak and the FRA issued metrics and standards that addressed Amtrak’s on-time performance and train delays caused by host railroads. For delays attributable to host railroads (the railroads along whose tracks Amtrak trains travel), the standards provide that “[d]elays must not be more than 900 minutes per 10,000 Train-Miles.” The Association of American Railroads filed suit in the District of Columbia, seeking a declaration that Amtrak and the FRA’s action was unconstitutional and invalidation of the metrics and standards. The association claimed that the metrics and standards violated the nondelegation doctrine and separation of powers principle “by placing legislative and rulemaking authority in the hands of a private entity [Amtrak] that participates in the very industry it is supposed to regulate.” The Association also argued that the metrics and standards violate the Fifth Amendment Due Process Clause by “[v]esting the coercive power of the government” in Amtrak, an interested private party.

The District of Columbia granted summary judgment in Amtrak’s favor on the grounds that the FRA, the STB, and the political branches exercised sufficient control over promulgation and enforcement of the metrics and standards to make them constitutional. The Court of Appeals for the District of Columbia reversed as to the nondelegation and separation of powers claim, reasoning that Amtrak could not constitutionally be granted regulatory power because it is a private corporation.

The Supreme Court vacated and remanded, holding that Amtrak is a governmental entity for purposes of determining the validity of its metrics and standards. The Court found that Congress’ statutory command that Amtrak “is not a department, agency, or instrumentality of the United States Government, codified at 49 U.S.C. §24301(a)(3), is not dispositive of Amtrak’s status as a governmental entity for purposes of a constitutional separation-of-powers analysis. Conducting an “independent inquiry” into Amtrak’s status, the Supreme Court found that the federal government controls most of Amtrak’s stock and its board of directors, most of whom are appointed by the President, confirmed by the Senate, and may be removed by the President without cause. The federal government’s political branches also exercise substantial, statutorily mandated supervision over Amtrak’s priorities and operations, and Congress conducts frequent oversight hearings into Amtrak’s budget, routes, and prices. Amtrak also is dependent on federal financial support. Given the combination of these unique features and significant ties to the government, the Court found that Amtrak is not an “autonomous private enterprise.” The Court concluded that the practical reality of federal control and supervision prevails over Congress’ disclaimer of Amtrak’s governmental status. Thus, Amtrak acted as a governmental entity for purposes of the Constitution’s separation of powers provisions in its joint issuance of metrics and standards with the FRA.  

Justice Kennedy delivered the opinion for the Court, in which Chief Justice Roberts and Justices Scalia, Ginsburg, Breyer, Alito, Sotomayor and Kagan joined. Justice Alito and Justice Thomas each filed separate concurring opinions.   

Download Opinion of the Court.

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