Today, the Supreme Court decided Department of Transportation v. Association of American Railroads. The decision was 9-0, with an opinion by Kennedy, a concurrence by Alito, and a concurrence in the judgment by Thomas. I filed an amicus brief in the case, both on cert and at the merits stage, with the help of Emory Law School’s Supreme Court Advocacy Project (ELSSCAP).
I also wrote about this and similar issues in my article in the Harvard Journal of Law and Public Policy, The New Private-Regulation Skepticism: Due Process, Non-Delegation, and Antitrust Challenges. Here’s what I wrote about the case earlier in my Reason.org blog post:
Amtrak, formally called the National Railroad Passenger Corporation, was created by statute in 1970. Faced with competition from other modes of transport, railroads that offered passenger service had been incurring heavy losses; many of these railroads had petitioned the Interstate Commerce Commission, which at the time regulated railroads, for permission to stop providing passenger service. With the passage of the statute, a railroad could transfer its passenger service responsibilities to Amtrak if it agreed to a number of conditions, one of which was to grant Amtrak the use of its tracks and other facilities. The statute provides that, except in an emergency, an Amtrak passenger car has precedence over another railroad’s freight car when they both need to use the same facilities. Most railroads agreed to these conditions, which were enshrined in a series of bilateral operating agreements.
Fast forward a few decades, to when Congress passed the Passenger Rail Investment and Improvement Act of 2008. One section of the new statute, § 207, required the Federal Railroad Administration (FRA) and Amtrak to “jointly . . . develop new or improve existing metrics and minimum standards for measuring the performance and service quality of intercity passenger train operations, including cost recovery, on-time performance and minutes of delay, ridership, on-board services, stations, facilities, equipment, and other services.” These performance measures aren’t of merely academic interest. Amtrak and its contractual partners are required to incorporate the measures into their operating agreements “[t]o the extent practical.” Perhaps more seriously, if “on-time performance” or “service quality” is substandard for two consecutive quarters, the Surface Transportation Board (STB), an independent agency housed in the Department of Transportation, is allowed to start an investigation (and is required to do so, if a complaint is filed) to check whose fault it is, and can assess damages against the host railroad if the problems are due to the railroad’s failure to grant preference to Amtrak trains.
These metrics and standards are supposed to be developed “jointly” by Amtrak and the FRA. If they can’t agree, they can petition the STB to appoint an arbitrator, whose decision will be binding. Amtrak thus has equal authority with the FRA on this issue; the FRA has to get Amtrak’s consent in developing the metrics and standards (or it has to abide by the decision of an arbitrator, who might also end up being private). The Association of American Railroads sued, charging that this sort of private delegation is invalid; and the D.C. Circuit agreed.
The Supreme Court reversed the D.C. Circuit, holding that Amtrak is actually a governmental entity, not a private actor. Therefore, any holding of the D.C. Circuit’s about the non-delegation doctrine that rests in any way on Amtrak’s being a private party is invalid, and the D.C. Circuit should do it over.
- The Amtrak statute does admittedly state that Amtrak “is not a department, agency, or instrumentality of the United States Government” and demands that Amtrak be “operated and managed as a for profit corporation.” But that labeling is irrelevant. (Compare with the labeling-is-irrelevant analysis in another recent Justice Kennedy opinion, in N.C. Dental Examiners.) Amtrak’s governing board is largely made up of presidential appointees, Amtrak’s stock is mostly government-owned; Amtrak is substantially controlled by the government, which also provides substantial financial support; and Amtrak was created to further particular federal objectives. So, in issuing the performance metrics, “Amtrak acted as a governmental entity for separation of powers purposes.”
- This analysis is very similar to the analysis in Lebron v. Nat’l Railroad Passenger Corp. (1995), which held, for very similar reasons, that Amtrak was a “state actor” for purposes of constitutional rights (e.g., First Amendment, Due Process, Equal Protection).
- Therefore, the D.C. Circuit’s opinion, which concluded that Amtrak was private and applied a per-se rule against delegation of power to a private actor, is incorrect. On remand, the D.C. Circuit should resolve any remaining issues, like whether this is an invalid delegation to a governmental agency, whether the delegation violates Due Process, whether the appointments of Amtrak officials violated the Appointments Clause, etc.
Now, I had written earlier about various interesting aspects of the D.C. Circuit’s opinion:
The main problem with the D.C. Circuit’s private non-delegation doctrine argument, though is that… there is no private non-delegation doctrine. It doesn’t exist. The Supreme Court uses the same non-delegation doctrine regardless of whether the delegate is public or private. The case the D.C. Circuit used to support a special doctrine that would be more skeptical of private delegations — Carter v. Carter Coal Co. (1936) — is actually a Due Process case, not a non-delegation case. My view is that this delegation violates due process, not non-delegation, so the D.C. Circuit got it right for the wrong reason.
Moreover, it makes a big difference which theory we adopt: a due process rationale also applies against the states, and due process challengers can get damages under § 1983 or Bivens, which they can’t if the basis for the opinion is the non-delegation doctrine.
I argued in my brief that, regardless whether Amtrak is public or private, the delegation is fine under conventional non-delegation doctrine: Currin v. Wallace (1939) validated a delegation to a private actor, and so the usual “intelligible principle” test applies. Under that test, the delegation is valid because Amtrak’s power is sufficiently constrained by the requirement that it act to maximize profits. However, under Due Process, the delegation might be invalid because of the possibility that Amtrak would abuse its regulatory position for profit-making purposes.
This line of reasoning is still available on remand, but the Supreme Court chose not to deal with it at all. This is classic minimalism: deciding the case based on the boringest, most Amtrak-specific grounds. Is there a different non-delegation doctrine for private parties? Currin v. Wallace, from 76 years ago, remains the latest (implicit) word on the subject, though some circuit court decisions seem to go the other way. Does this delegation violate Due Process? Wait for remand.
Justice Alito’s concurrence is interesting and deserves a separate post. Justice Thomas’s concurrence in the judgment provides the complete rethinking of the non-delegation doctrine on originalist grounds that he promised in his Whitman v. American Trucking Ass’ns concurrence; that, too, deserves its own post. (But in the meantime, note that Eugene blogs an excerpt about it here.)