The Supreme Court debated Monday whether Amtrak has the authority to write the standards under which it should be judged.
The government created the for-profit corporation in 1970 and in 2008 told it to work with government agencies to develop “metrics and standards” to better judge its performance in providing passenger rail service.
The rub is that Amtrak runs on freight train rails, and the new standards gave Amtrak a tool with which to force freight railroads to delay their own traffic to benefit Amtrak’s on-time performance.
A panel of the U.S. Court of Appeals for the District of Columbia Circuit agreed with the freight industry that the 2008 law was unconstitutional because Congress cannot give a private company the right to develop regulations.
That was the backdrop for a rather dense hour-long argument at the Supreme Court, where justices expressed varying degrees of unease with the situation. But it was not clear whether any five of the nine had the same concerns.
Assistant Deputy Solicitor General Curtis E. Gannon, representing the federal government and Amtrak, said the lower court was wrong that Amtrak should be considered a private entity and that the standards were regulations.
Chief Justice John G. Roberts Jr. seemed to disagree. He noted that if Amtrak fell short of the standards, it could initiate an investigation by the Surface Transportation Board to see whether a lack of cooperation from the freight industry was the cause.
“That’s a significant regulatory impact — to tell railroads I, a private party, get to start a governmental proceeding and you have to show up to defend it,” Roberts said. He noted that after the appeals court struck down the standards, Amtrak’s performance dropped “dramatically.”
“Seems kind of regulatory,” Justice Elena Kagan agreed.
But she pressed Washington lawyer Thomas H. Dupree Jr., representing the Association of American Railroads, about his claim that Congress could not delegate authority to Amtrak because it is a private interest.
“Congress, the president and Amtrak itself have repeatedly declared to the public in explicit terms that Amtrak is not the government,” Dupree said.
Kagan replied that Amtrak is “subject to the policy control of Congress, which Congress exercises pretty much on a routine basis, it’s entirely funded by Congress, all the members of the board are appointed by the president with the advice and consent of the Senate, save one.”
She wondered what “other than this label” suggests it is not governmental.
Justice Antonin Scalia had a different concern. If Amtrak is “given the last word on some regulatory matters that disadvantage its competitors,” he said, that’s a violation of due process.
But Justice Ruth Bader Ginsburg noted that the appeals court had not decided that question and suggested that could not be the basis of the Supreme Court’s resolution of the case.
Justice Stephen G. Breyer had yet another concern. The Supreme Court has not struck down a statute on the grounds that Congress had improperly delegated authority to a private entity since 1936, and Breyer worried about the implications of doing it now.
“It seems to me there are hundreds, maybe thousands of organizations that set standards for the industry,” Breyer said, including the regulation of Internet domain names.
If the court were to rule against Amtrak, “I have a feeling — this is what I want assurance on that I’m wrong — that it would work havoc, possibly with the Internet, possibly with industry throughout the United States, I know not where, possibly in communications, possibly with the 200 or so organizations regulated by treaty.”
Breyer was not satisfied with Gannon’s answer: “I think it depends upon how broad the court’s ruling is.”
The case is Department of Transportation v. Association of American Railroads.