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Argument preview: A doctrinal trip back to the 1930s?

At 11 a.m. Monday, the Supreme Court will explore the constitutional limits on Congress’s authority to hand off some of its power to make national policy to others.   In Department of Transportation v. Association of American Railroads, the federal government will be represented by Curtis E. Gannon, an assistant to the U.S. Solicitor General.  Arguing for the trade group of U.S. railroads will be Thomas H. Dupree, Jr., of the Washington, D.C., office of the law firm of Gibson, Dunn & Crutcher.  Each attorney will have thirty minutes of time.


The last time the Supreme Court struck down a federal law because Congress had delegated its legislative powers to someone else came nearly eight decades ago — in May 1936, at the height of the constitutional struggle between the Court and the Franklin Roosevelt administration over the “New Deal.”  The famous ruling in Carter v. Carter Coal Co. nullified a Depression-era law aimed at stabilizing wages and hours in the coal-mining industry; the Court ruled that Congress had wrongly turned over to the mining companies themselves the policy task of setting wage and hour standards.

The so-called non-delegation doctrine, though perhaps neglected, still exists, and the Court next week considers whether there should be a modern sequel to Carter.  A federal appeals court last year invalidated a 2008 law giving the operator of the nation’s passenger railroad service — Amtrak — a significant role in writing standards for performance of passenger trains.  Whether that ruling will be allowed to stand is the issue in Department of Transportation v. Association of American Railroads.

A generation after World War II had ended, the nation’s once-mighty railroad industry — it had helped open the Western states, and it had hauled troops and goods to two wars — had fallen on hard times.  It was still making money carrying freight, but not enough to cover its mounting losses from passenger service, as more Americans opted to travel by car and plane.

The nation actually faced the prospect, by the 1960s, of losing the rail car as a travel alternative.  The industry wanted out of that line of business, but could not just walk away from it because they were “common carriers” with a legal duty to provide the service until relieved of it by either a federal agency, the Interstate Commerce Commission, or state regulatory agencies.

Congress came to passengers’ rescue in 1970, passing the Rail Passenger Service Act, which created the National Rail Passenger Corp. — a private corporation now known popularly by its nickname, Amtrak — to continue to operate passenger trains.

Congress made a deal with the existing railroads: in return for letting them exit the passenger business, they had to allow Amtrak trains to run on their tracks and use their operating facilities, with the railroads to get paid at rates worked out by federal officials.  Three years later, Congress added another condition: unless federal officials indicated otherwise, Amtrak had to be given priority — except in an emergency — to use railroad tracks and facilities ahead of freight rail service.  Amtrak gets money every year from Congress to help keep the passenger trains running; the total amount of funds now runs above $40 billion.

A basic change in the federal role came with a 2008 law, setting up a regulatory regime that is now under review by the Supreme Court.  Congress told Amtrak and a government agency, the Federal Railroad Administration, in consultation with another agency (the Surface Transportation Board), to write standards for passenger service performance.  The result would be ways to measure on-time departure and arrival performance and riders’ use of the service, and standards governing the quality of on-board service and the use of depots and other facilities.

Congress decreed that, if such measures were not finished within 180 days, anyone affected by the regime’s actions could ask the Surface Transportation Board to act as an arbitrator to work out the dispute, making binding decisions.   The Board also was given authority to investigate compliance with the measures and standards, with the power to award money damages for violations.   Any money collected that way would go to Amtrak to cover expenses on the routes where there were delays.

In 2008, Amtrak and the FRA issued a draft of new “metrics and standards” and invited public comments.  A final version came out in May 2010.

In August 2011, the Association of American Railroads — the trade group of the freight railroads whose tracks and facilities are used by Amtrak — sued to challenge the final regulatory standards.  The group made two claims: first, that Amtrak’s role in the new regime violated the doctrine that Congress may not hand off its authority to others — especially, a private entity like Amtrak; and, second, that the government’s role in the regime would allow it to exercise “coercive power” over the railroads, in violation of their constitutional right to due process.

A federal trial judge in Washington, D.C., rejected both challenges, but the U.S. Court of Appeals for the District of Columbia Circuit ruled that the 2008 law and the “metrics and standards” that had emerged under that regime violated the non-delegation doctrine.  The appeals court ruled that Amtrak was a private entity, at least for the purposes of its role in setting standards.  Because of that ruling, the appeals court said it had no need to rule on the AAR’s due process challenge.

The D.C. Circuit decision wiped out the “metrics and standards” that Amtrak had helped draft.   A request by the federal government for rehearing en banc was denied, lacking a majority of the full circuit.

The federal government took the case to the Supreme Court in March, raising the single question whether the 2008 law “effects an unconstitutional delegation of legislative power to a private entity.”  The Court granted review on June 23.

Briefs on the merits

The federal government’s merits brief made an array of arguments, including that: Amtrak is not really a private entity and that Congress did not settle that question simply by calling it a private, for-profit corporation in 1970; the “metrics and standards” are really not binding on the freight railroads; federal officials play a crucial role in the standards-setting process and oversight of Amtrak; any concern for profitability is beside the point because the federal government is the dominant Amtrak stockholder and thus would reap the profits; and the limited grant of authority to Amtrak — even if it is a private entity — is nothing like the wholesale delegation of congressional power that was struck down in the Carter Coal ruling.

All of the government’s specific arguments were apparently crafted to take the 2008 regulatory regime out of the reach of the non-delegation doctrine, at least as understood in the Carter Coal case.   If the government were able to persuade the Justices to treat Amtrak as a semi-public entity, that presumably would satisfy the doctrine.  So would a finding that Amtrak’s role is essentially surrounded by official limitations, including significant oversight by federal officials — including the president, who names eight of its nine directors, and those eight pick the head of Amtrak.

But, even if the Court were to conclude that Amtrak is a private entity, the government’s merits filing argued that the Court has previously allowed Congress to set up programs in which private input is essential to the success of a federal program.  And, the brief went on, even if Amtrak is private, it has not been given anywhere near the decisive role in the standards-setting process as the coal industry had under the New Deal legislation.

The government also sought to rely upon the Court’s 1995 decision in Lebron v. National Railroad Passenger Corp., declaring that Amtrak was a part of the government at least for purposes of deciding whether it had violated an individual’s First Amendment free-speech rights by refusing to allow him to display his art work in an Amtrak railroad station in New York City.  That precedent could be helpful to the government if the Court should show any interest in the AAR’s due process argument about the government and Amtrak being in position to trample on its rights.  (Indeed, AAR raised its due process challenge as a separate question in its brief on the merits.)

The railroad trade group’s brief sought to make maximum use of Congress’s explicit declaration, in setting up Amtrak in 1970, that the passenger service firm was “not a department, agency, or instrumentality of the United States Government” but rather was a “private, for-profit corporation.”  And yet, the brief went on, Congress in 2008 gave that entity “the power to co-author regulations governing private freight railroads.”   That role violates the non-delegation doctrine, and the entire 2008 mandated regime violates due process, the association contended.

The AAR filing, before getting to its constitutional points, laid out much of the factual detail of this controversy, including commenting that the “metrics and standards” that Amtrak helped devise add to the burdens that already exist on the freight railroads because of their basic obligation “to host Amtrak trains.”   Many freight trains, it argued, would be delayed if those mandates went into effect, making it less able to serve its freight-shipping customers.

Its constitutional argument rested in significant part upon the suggestion that “the principle recognized” by the Court in the Carter Coal decision “remains good law today.”  It added: “Although private companies may perform an advisory or ministerial role in rulemaking, they must function subordinately to the government.”  Amtrak’s role is much broader than that, it asserted, because it was given “co=equal rulemaking power.”

Turning to the Supreme Court’s Lebron decision, AAR’s filing argued that the opinion in that case strongly suggested that Amtrak is not a part of the government “for purposes of the government’s inherent powers,” such as its power to write rules to govern railroad operations.

On the due process question, on which it lost in the federal district court (the Circuit Court did not rule on it), the AAR brief said the 2008 law gives a private corporation the authority to regulate other companies in its own industry, which means that it would not be acting as a “disinterested regulator.”  If the Court were to uphold the 2008 regime, the brief argued, “businesses will face the chilling prospect of a for-profit market competitor endowed with the sovereign law-making authority of the United States and a mandate to regulate other companies in the same industry for its own commercial benefit.”

The Department of Transportation has drawn the support of only one amicus brief, filed by four groups that advocate for intercity rail passenger travel.  Those groups asserted that, after the court of appeals nullified the “metrics and standards,” Amtrak’s on-time record began to falter, and that this has resulted in declining ridership.

The railroad industry is supported by a half-dozen amicus briefs, ranging from other railroad operating companies to rail freight customers, conservative or business-oriented legal advocacy groups, and an Emory University law professor, Alexander Volokh, who urged the Court to send the case back to the D.C. Circuit for a ruling on the AAR’s due process challenge.





Recommended Citation: Lyle Denniston, Argument preview: A doctrinal trip back to the 1930s?, SCOTUSblog (Dec. 6, 2014, 12:07 AM),