09 March 2015

Law in Plain English: Department of Transportation v. Association of American Railroads

This is one in a series of posts designed to describe court decisions in plain English. For more detail and background on the legal issues, see the link to the case below. For similar posts, click here.

SCOTUSblogDepartment of Transportation v. Association of American Railroads

Argument: Dec 3 2014 (Aud.)

Background: Section 207 of the Passenger Rail Investment and Improvement Act of 2008 empowers Amtrak and the Federal Railroad Administration (FRA) to jointly develop performance measures to enhance enforcement of the statutory priority Amtrak's passenger service has over other trains. The Association of American Railroads, a trade association who members include the largest freight railroads, challenged the statutory scheme as unconstitutional. The district court rejected these claims, but the D.C. Circuit reversed. The panel found that Amtrak was a private corporation with respect to Congress's power to delegate regulatory authority, and as such § 207 constituted an unlawful delegation of regulatory power to a private entity.

Issue: The question before the Court is whether Section 207 of the Passenger Rail Investment and Improvement Act of 2008, which requires the Federal Railroad Administration (FRA) and Amtrak to “jointly...develop” the metrics and standards for Amtrak’s performance that will be used in part to determine whether the Surface Transportation Board (STB) will investigate a freight railroad for failing to provide the preference for Amtrak’s passenger trains that is required by federal law, and provides for the STB to appoint an arbitrator if the FRA and Amtrak cannot agree on the metrics and standards within 180 days, effects an unconstitutional delegation of legislative power to a private entity.

Holding: In a 9-0 decision, the Supreme Court ruled that for purposes of determining the validity of the metrics and standards, Amtrak is a governmental entity. The Court found that congressional pronouncements are not dispositive of Amtrak’s status as a governmental entity for purposes of separation of powers analysis under the Constitution, and as a result, the Court remanded the case  for determination of substantial questions respecting the lawfulness of the metrics and standards—including questions implicating the Constitution’s structural separation of powers and the Appointments Clause.
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