On Friday, I wrote about my amicus brief supporting the cert petition in DOT v. Ass’n of American Railroads. Here’s a link to the actual brief, written by the Emory Law School Supreme Court Advocacy Project. In Friday’s post, I reproduced the basic argument of why, as Currin v. Wallace (1939) shows, there’s no special non-delegation doctrine for when the delegates are private, and why Carter v. Carter Coal Co. (1936) isn’t to the contrary. Today, I’ll reproduce the rest of the argument: why the Due Process Clause applies to Amtrak, which (according to Lebron) is a state actor, and why the Due Process Clause is a good way of analyzing the issues of bias that emerge when a financially self-interested party is also a regulator.
II. Amtrak is a state actor subject to the Due Process Clause.
Under both the Fifth and Fourteenth Amendments, only state action is subject to the limitations imposed by constitutional due process. Civil Rights Cases, 109 U.S. 3, 11 (1883). A private entity can engage in state action when it undertakes a function that is traditionally and exclusively done by the state, commonly called a “public function.” Jackson v. Metropolitan Edison Co., 419 U.S. 345, 352 (1974). If it is a state actor, a private entity is subject to the same restrictions as a government entity. This case is properly considered under the Due Process Clause because Amtrak is a state actor.
In spite of this well-developed state action doctrine, the D.C. Circuit unnecessarily created a separate, ad hoc private–public distinction. The D.C. Circuit held that Amtrak was a private corporation that had been given unconstitutional regulatory power. Ass’n of Am. Railroads, 721 F.3d at 669. It analyzed the structure, statutory description, operations, and case history of Amtrak. The court concluded that Amtrak was a private corporation because (1) Congress designated it a private corporation; and (2) Congress instructed it to maximize profit. Id. at 677. This reasoning is not compelling. This Court has previously held that Amtrak, as a corporation created by the government for the furtherance of governmental objectives, is a government entity for constitutional purposes. Lebron v. Nat’l R.R. Passenger Corp., 513 U.S. 374, 383 (1995).
In Lebron, Amtrak rejected an advertisement based on its policy that it would not display political advertising. This Court concluded that Amtrak was a governmental agency for the purposes of individual rights guaranteed by the Constitution, and therefore was subject to First Amendment restrictions. Id. at 399–400 (“We hold that where, as here, the Government creates a corporation by special law, for the furtherance of governmental objectives, and retains for itself permanent authority to appoint a majority of the directors of that corporation, the corporation is part of the Government for purposes of the First Amendment”).
Because the United States created Amtrak in order to further governmental objectives, it makes no difference that this case arises in a Due Process Clause context rather than a First Amendment context. As this Court has determined that Amtrak is subject to First Amendment restrictions, it follows that the rest of the Bill of Rights applies to Amtrak as well.
Compared to Lebron, Amtrak’s actions in this case are even more consistent with those actions generally reserved for the government. The Passenger Rail Investment and Improvement Act of 2008 gives Amtrak equal authority with the Federal Railroad Administration to develop performance standards and metrics for quality of passenger train operations. 49 U.S.C § 24101. The creation of regulatory standards is state action typically reserved for government agencies. See Metropolitan Edison, 419 U.S. at 352.
Amtrak’s proposed standards are consistent with this axiom for two reasons: (1) they were published for public comment, and criticism was reflected in the final version of the metrics and standards—similar to how federal agencies regulate through a notice and comment period; and (2) the STB may impose fines based on failure to comply with specific regulations imposed by Amtrak. Amtrak’s equal status with the FRA in imposing national regulations shows Amtrak is a state actor for purposes of analysis under due process.
III. Analyzing Congress’s grant of authority to Amtrak under due process would better protect accountability.
Due process is a better avenue for scrutinizing delegation to private parties for three reasons: (1) Unlike the non-delegation doctrine, due process restrictions on delegation apply against the states through the Fourteenth Amendment; (2) by analyzing cases like the instant case under the Due Process Clause rather than the non-delegation doctrine, prevailing plaintiffs will be able to recover damages; and (3) it makes more sense that issues of bias or fairness should be analyzed under due process rather than a principle rooted in separation of powers.
A. Analyzing under the Due Process Clause allows for damages actions.
In civil suits for deprivation of rights, 42 U.S.C. § 1983 gives courts the ability to award damages when a plaintiff brings a proper cause of action for violation of constitutional rights by the State. For federal violations of constitutional rights, a remedy is available under Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 391 (1971). The protection afforded in Bivens was specifically extended to violations of due process under the Fifth Amendment in Davis v. Passman, 442 U.S. 228 (1979).
By making a remedy available, both § 1983 and Bivens are consistent with the principle that “the very essence of civil liberty . . . [is] the right of every individual to claim the protection of the laws, whenever he receives an injury.” Bivens, 403 U.S. at 397 (quoting Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163 (1803)).
B. Bias is the issue.
This Court has consistently analyzed issues of bias or fairness under the Due Process Clause. In examining bias, the Court will look to a state actor that “occupies two practically and seriously inconsistent positions” where one is subject to bias, particularly financial bias, and the other is regulatory. Ward v. Village of Monroeville, 409 U.S. 57, 60 (1972). As a general matter, government employees are presumed to be impartial in the execution of their authority; when a state actor has a “direct, personal, substantial pecuniary interest” in the result, however, he has a motivation to act in his own interest. Id. (quoting Tumey v. Ohio, 273 U.S. 510, 523 (1927)). Thus, when there is a substantial pecuniary interest at stake, there is a high likelihood that the delegation can be found unconstitutional.
For example, during Prohibition in the 1920s, an Ohio statute stated that judges in cases of violation of the prohibition law would receive a portion of any resulting fines. One Ohio mayor served as a judge, and the only way for the mayor and other official parties involved in the arrest to receive their portion of the fine was if the accused were found guilty. Tumey, 273 U.S. at 521–23. Due process was violated because a criminal defendant’s liberty and property was subjected to a court where the judge had a “direct, personal, substantial pecuniary interest” in a particular outcome. Id. at 523.
In a similar case, a substantial part of the income of the village of Monroeville, Ohio, was derived from fines obtained from violations of certain ordinances and traffic offenses. The Mayor of Monroeville acted as a judge in this case as well, and although the mayor did not benefit financially from the resulting fines, the Court held that the situation still introduced a substantial pecuniary bias that prevented the mayor from acting as an impartial judge. Ward, 409 U.S. at 60. The Court in Ward suggested that the test for bias in these cases is whether the situation “is one which would offer a possible temptation to the average man… which might lead him not to hold the balance nice, clear, and true” between the competing interests. Id.
In Aetna Life Ins. Co. v. Lavoie, an Alabama Supreme Court justice was the deciding vote on a 5-4 decision regarding punitive damages on a bad-faith claim against Blue Cross-Blue Shield of Alabama. The justice was also a party in a pending lawsuit against Blue Cross-Blue Shield of Alabama, and the decision of the Alabama Supreme Court would be binding in that case. Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813, 816–17 (1986). The decision “had the clear and immediate effect of enhancing both the legal status and the settlement value of [the justice’s] own case,” and this Court found clear bias and a violation of due process. Id. at 823–24.
When compared to government employees, the bias of a private party may be found even greater—particularly if delegation to private parties allows those parties unconstrained discretion. The private-public distinction, however, is not significant as long as the party is a state actor for the purpose of due process, and this Court has unequivocally stated that Amtrak is a state actor for this purpose. Thus, the important factors for consideration of Respondent’s due process challenge should instead be the existence of bias by the actor and the extent of that bias.
For the foregoing reasons, the Petition for a Writ of Certiorari to the United States Court of Appeals for the District of Colombia Circuit should be granted, and the decision below vacated and remanded to be considered under the Due Process Clause of the Fifth Amendment.