U.S. Department of Transportation v. Association of American Railroads

PETITIONER: U.S. Department of Transportation, et al.
RESPONDENT: Association of American Railroads
LOCATION: U.S. District Court for the District of Columbia

DOCKET NO.: 13-1080
DECIDED BY: Roberts Court (2010-2016)
LOWER COURT: United States Court of Appeals for the District of Columbia Circuit

CITATION: 575 US (2015)
GRANTED: Jun 23, 2014
ARGUED: Dec 08, 2014
DECIDED: Mar 09, 2015

ADVOCATES:
Curtis E. Gannon - Assistant to the Solicitor General, Department of Justice, for the petitioner
Thomas H. Dupree Jr. - for the respondent

Facts of the case

In 1970, Congress created the National Railroad Passenger Corporation (Amtrak) through the Rail Passenger Service Act and gave them the priority to use track systems owned by freight railroads for passenger travel. In 2008, Congress gave Amtrak and the Federal Railroad Administration (FRA) joint authority to issue metrics and standards addressing scheduling, including on-time performance and train delays. The Association of American Railroads (AAR) sued the Department of Transportation, the FRA, and two officials alleging that the metrics and standards are unconstitutional. The AAR alleged that allowing a private entity, like Amtrak, to exercise joint authority in their issuance violated the Fifth Amendment Due Process Clause by vesting the coercive power of government in an interested private party, and also violated the constitutional provisions regarding separation of powers by placing legislative authority in a private entity.

The district court rejected the AAR’s argument, but the U.S. Court of Appeals for the District of Columbia reversed holding that Amtrak is a private corporation and Congress violated the constitutional provisions regarding separation of powers.

Question

Are the metrics and standards invalid because Congress gave a private entity, Amtrak, the authority to create them?

Media for U.S. Department of Transportation v. Association of American Railroads

Audio Transcription for Oral Argument - December 08, 2014 in U.S. Department of Transportation v. Association of American Railroads

Audio Transcription for Opinion Announcement - March 09, 2015 in U.S. Department of Transportation v. Association of American Railroads

John G. Roberts, Jr.:

Justice Kennedy has our opinion this morning in case 13-1080 Department of Transportation v. the Association of American Railroads.

Anthony M. Kennedy:

In 1970, Congress created the National Railroad Passenger Corporation.

It is most often known as Amtrak.

Congress declared that Amtrak shall be operated and managed as a for-profit corporation.

So the statute says Amtrak is not a department, agency, or instrumentality of the United States government.

Later Congress granted Amtrak in the federal railroad administration joint authority to issue metrics and standards, and in May 2010 Amtrak and the FRA did jointly issue metrics and standards.

Now metrics and standards address Amtrak's on time performance and train delays caused by other rail carriers.

Federal Law requires that to the extent practicable, Amtrak and other rail carriers shall incorporate the metrics and standards in their service agreements.

Federal Law further prescribes that Amtrak must use the metric and standards to develop a plan to improve onboard service and the metrics and standards also play a role in investigations by the Surface Transportation Board or government agency and in enforcement actions.

The Association of American Railroads is the respondent here and it represents for the most part fake rail carriers.

The Association alleges that the metrics and standards caused injury to its members because it forced them to modify their rail operations.

Respondent claimed that Amtrak is a private entity so had argued that Amtrak's involvement in the issuance of metrics and standards violated the Due Process Clause and the separation of powers.

The Court of Appeals for the District of Columbia Circuit concluded that Amtrak is a private entity, from this premise it held that Congress violated non-delegation principles and its grant of joint authority to Amtrak and the FRA and the Court of Appeals did not reach the respondent's Due Process Claim.

This court now vacates the judgment of the Court of Appeals.

The court holds that for purposes of determining the validity of metrics and standards, Amtrak is a governmental entity.

On this starting premise the Court of Appeals erred in treating Amtrak as private.

In determining whether Amtrak is a governmental entity it is appropriate to begin with its ownership and corporate structure. The Secretary of Transportation holds all of Amtrak's preferred stock and most of its common stock. All but one of Amtrak's Board Members are appointed by the President and confirmed by the Senate.

In addition to controlling Amtrak's stock and Board of Directors, the political branches of the government exercise substantial statutorily mandated supervision over Amtrak’s priorities, rather than advance its own private economic interest, Amtrak is required to meet a number of requirements for routes and fares all directed by the government.

Amtrak has received Federal subsidies for ever year of its existence, and Congress conducts frequent oversight hearings into Amtrak's budgets, routes, and prices.

In short, Amtrak was created by the government; it is controlled by the government and operates for government's benefits.

So when it is joint issuance of the metrics and standards Amtrak operates as a governmental entity.

Respondent argued in earlier stages of this litigation that even if Amtrak is a governmental entity, there are still serious constitutional problems with its joint issuance of the metrics and standards.

Respondents for instance claimed that Amtrak's Board violates the Appointments Clause.

To the extent these issues are properly before the Court of Appeals they may be addressed on remand.

The case is remanded for proceedings consistent with this opinion.

Justice Alito has filed a concurring opinion.

Justice Thomas has filed an opinion concurring in the judgment.