Today at SCOTUS: Did Congress Delegate Illegal Regulatory Powers to Amtrak?


Credit: Slambo / Foter.com / CC BY-SA

Article 1, Section 1 of the U.S. Constitution vests "all legislative powers" in the hands of Congress. Yet in 2008 Congress placed vast regulatory powers in the hands of Amtrak, a private railroad corporation charted by Congress in 1970 under the mandate that it "shall be operated and managed as a for-profit company." Thanks to that 2008 power grant, Amtrak now enjoys the privilege of developing federal regulations that directly impact both its own economic success and that of its competitors in the freight rail sector. Today the U.S. Supreme Court will hear oral argument on whether or not Congress overstepped its constitutional bounds when it gave Amtrak the power to set federal rules governing the entire railroad industry.

At issue today in Department of Transportation v. Association of American Railroads is the Passenger Rail and Improvement Act of 2008. Among other things, that law instructs Amtrak and the Federal Railroad Administration (FRA) to "jointly develop" metrics and regulatory standards governing timetables, on-time performance, equipment, and other crucial aspects of the railroad business. Should Amtrak and the FRA fail to reach consensus, a private arbitrator may be summoned to settle the matter. In other words, federal law lets a private arbitrator affirm the rule-making judgment and authority of a private corporation over that of a federal agency.

Unsurprisingly, Amtrak's competitors filed suit. According to the Association of American Railroads, whose members include freight rail companies that own roughly 97 percent of the track which Amtrak uses (and who also compete with Amtrak for track space and priority), the federal metrics developed by Amtrak in 2009 impose ruinous costs on freight carries. Furthermore, the railroads argue, because Amtrak is a private entity, it had no business writing any sort of federal regulations in the first place.

That argument prevailed at the U.S. Court of Appeals for the District of Columbia Circuit, which overruled Congress and came down against Amtrak in July 2013. Writing for a unanimous 3-judge panel of the D.C. Circuit, Judge Janice Rogers Brown chastised the federal government for bestowing "unprecedented regulatory powers" on a private firm. The Obama administration's defense of the contested scheme, Brown argued, violates the non-delegation doctrine and "vitiates the principle that private parties must be limited to an advisory or subordinate role in the regulatory process."

Judge Brown got it right. According to federal law, Amtrak "is not a department, agency, or instrumentality of the United States." It is a private entity seeking to maximize profit. Congress therefore had no lawful right to delegate any legislative power to this self-interested railroad corporation. The D.C. Circuit should be affirmed. Amtrak and its federal enablers should lose.

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