The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) changed the law governing Amtrak. In the past, Amtrak was at the mercy of freight rail companies because most of its trains run on tracks owned by freight rail corporations, despite the fact that Amtrak does have priority over freight trains. With PRIIA, Amtrak and the Federal Railroad Administration could then create binding standards, and penalize freight rail corporations who did not comply. This would increase Amtrak’s notably abysmal on-time performance.
It worked too. Thanks to the new rules created by Amtrak in conjunction with FRA, delays plummeted on many routes, such as the Texas Eagle and the Missouri Flyer for example. Ridership increased as a result (although some of both the increased on-time performance and ridership may be functions of the then declining economy and high gas prices.)
A trade group representing the freight rail industry has said “what gives?” and they have sued. They won their suit in 2013 in the DC Circuit Court and the case then moved on to SCOTUS, where it was argued on December 8, 2014. Does Amtrak have the right to write standards for the performance of passenger trains that are binding on the freight industry? Because in the trade group’s view, Amtrak is not an arm of the Federal government (or Congress) but is a profit-seeking private entity. The DC Circuit agreed. (There was a 5th Amendment Due Process issue here as well.)
Sounds ridiculous, right? Well…it sort of isn’t. Amtrak’s providence is both simple and complicated at the same time.
The rail industry wanted out of the passenger market, its long fall beginning in the late 1940s. They could not; they were legally required to provide the service. This caused waves of bankruptcies. When faced with the imminent collapse of the national private-sector passenger rail market in the 1960s, Congress came to its rescue and “nationalized” it.
Amtrak was born as a publically funded for-profit corporation, very much like a P3 (public-private partnership). Private sector railroads were able to divest their hemorrhaging passenger lines at the expense of having to allow those same trains run over their lines (and later, be given priority). Twenty of the then twenty-six major railroads took Congress up on the offer.
It is this status that has the freight carriers saying “what gives?” and the case that was argued before the Court on 12/8 seems to hinge on whether a profit-making corporation has the right to exercise powers that belong in Congress. That Amtrak has never posted a profit and survives on government subsidy apparently was irrelevant (as was a prior SCOTUS case, from 1995, where Amtrak was considered to be an arm of the government.)
This is the “non-delegation doctrine,” its constitutionality being part of Article 1, Section 1 of the Constitution. SCOTUS has not found an unconstitutional delegation in almost 80 years—back during the height of the New Deal. In theory, delegation can never happen from Congress to a private entity and if Amtrak is a private entity (or more accurately, a P3), then perhaps Congress delegated too much of its authority in making rules and regulations. This is what the DC Circuit determined happened in its ruling in 2013, suggesting that Amtrak’s rulemaking set up in PRIAA was akin to “General Motors having authority to help write government regulations that would govern all the other automakers.”
The justices seemed split along their usual ideological lines according to Lyle Dennison of SCOTUSBlog. One point that came up was that private actors are already legally allowed to make standards. If Amtrak is not allowed to, what happens then?
We’ll see what happens later this spring or summer.
The case is the Department of Transportation vs Association of American Railroads. Read up on it here, and follow it at SCOTUSBlog.