Supreme Court Sides With Amtrak, With Some Distaste.
The Supreme Court on Monday unanimously handed Amtrak an interim victory in a lawsuit challenging the power it wields over competitors. The ruling was a setback for a trade group that had challenged a 2008 federal law giving Amtrak, which carries passengers, a role in setting standards for freight railroad companies.
The Supreme Court focused on a threshold question in the case: Was Amtrak a government agency or a private company?
In 2013, the United States Court of Appeals for the District of Columbia Circuit ruled that Amtrak was private, relying on a federal law that said it “is not a department, agency or instrumentality of the United States government” and “shall be operated and managed as a for-profit corporation.” That meant, the appeals court said, that in 2008 Congress had improperly delegated legislative authority to Amtrak.
Justice Anthony M. Kennedy, in a majority opinion joined by seven other justices, said the appeals court had gotten the threshold question wrong by placing too much emphasis on a “statutory label” rather than examining the ways in which Amtrak acts like the government in practice. For purposes of the standards at issue in the 2008 law, he concluded, “Amtrak is a governmental entity.”
But that is not the end of the matter, Justice Kennedy said, listing a number of constitutional issues raised by the Supreme Court’s ruling in the case, Department of Transportation v. Association of American Railroads, No. 13-1080. The Supreme Court sent the case back to the appeals court for reconsideration under the premise that Amtrak is public.
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Tuesday, April 07, 2015
Written by Kevin M. Sheys, Nossaman LLP, for Railway Age
On March 9, 2015, the United States Supreme Court issued its decision in Department of Transportation v. Association of American Railroads, No. 13-1080, 575 U.S. ___ (2015) (DOT v. AAR), a case closely watched in the railroad industry and by those interested in the Constitutional separation of powers issues posed by the case.
The Court held that Amtrak is a governmental entity for purposes of determining the validity of the metrics and standards under Section 207 of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA). Justice Anthony Kennedy wrote the opinion joined by seven other Justices, including Justice Samuel Alito, who concurred with a separate opinion. Justice Clarence Thomas concurred in the result, but not the reasoning and offered a lengthy concurring opinion with a free-ranging separation of powers discussion.
The Court reversed a District of Columbia Court of Appeals decision holding that Amtrak was a private entity and invalidating the Section 207 metrics, but remanded the case to the lower court for an initial determination of issues not previously decided there, provided the lower court first determines the issues are properly before it.
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The Supreme Court decision
The Supreme Court said the D.C. Circuit’s conclusion that Amtrak was a private entity relied principally on the fact that (by statute) Amtrak is not a department, agency or instrumentality of the government and is operated and managed as a for-profit corporation. DOT v. AAR, slip op. at 6-7. The Supreme Court noted that “Congressional pronouncements, though instructive as to matters within Congress’ authority to address, are not dispositive of Amtrak’s status as a governmental entity for purposes of separation of powers analysis under the Constitution.” Id. at 7. (Citations omitted). The Court began its analysis by reviewing Amtrak’s ties with the government. Among other things, the Court noted that Amtrak’s Board composition suggested that Amtrak was controlled by the government (6). It said the “political branches exercise substantial, statutorily mandated supervision over Amtrak’s priorities and operations (7).” The Court noted that Congress conducts frequent oversight hearings of Amtrak and that Amtrak depends on annual federal financial support. Id. at 8-9. The Court concluded that “Amtrak was created by the Government, is controlled by the Government, and operates for the Government’s benefit.”
