Does the Amtrak statute violate pretty much all of separation of powers? Justice Alito's take

|The Volokh Conspiracy |

On Monday, I wrote about the Department of Transportation v. Association of American Railroads case that the Supreme Court handed down that morning. (I participated in that case as an amicus.)

The majority opinion by Justice Kennedy, speaking for himself plus seven other Justices, resolves the case for now, but in a way that I don't think is all that interesting—the D.C. Circuit had held that Amtrak was private and therefore couldn't be the recipient of delegated regulatory power; the Supreme Court reversed, holding that Amtrak is actually governmental. So the resolution was pretty Amtrak-specific—the majority also refers to the "unique features" of Amtrak that compelled the result. There remain a bunch of challenges to the statute, but they're left for later litigation in the D.C. Circuit.

The more interesting opinions are the two separate ones: Justice Alito's concurrence, and Justice Thomas's concurrence in the judgment (which Eugene excerpted from yesterday). I'll write about Justice Thomas's opinion later; today I'll talk about Justice Alito's opinion. (Note: I clerked for Justice Alito during the 2005 Term.)

Justice Alito's concurrence has one big theme: "Liberty requires accountability." Congress can't delegate regulatory power to someone who lacks certain basic guarantees of constitutional accountability. What does this principle imply about the Amtrak statute, going forward? First, some initial points:

  1. Officers of the United States—defined as those who exercise significant authority of the United States—have to have sworn an oath and received a commission from the President. Amtrak's board members haven't done that.
  2. The scheme that Amtrak is involved in—under which Amtrak participates in developing metrics and standards for measuring the performance and quality of railroad operations—is regulatory, because private railroads have to incorporate these standards into their agreements with the government "whenever practicable." This language has coercive effect—"whenever practicable" language has been held to impose actual legal duties in other contexts—so there's no escaping the conclusion that there's regulatory power here.
  3. If Amtrak and the Federal Railroad Administration can't agree on standards, an arbitrator gets to do so. But the appointment of this arbitrator seems to be unconstitutional.

This is the first conclusion so far that something is unconstitutional, so let's spend some time on it. The challengers argued that the arbitrator could be private, and that a private arbitrator would be unconstitutional in this context; the government argued that the Court could read the statute instead to allow for a public arbitrator. Let's go with the challengers' argument first.

A private non-delegation doctrine?

Justice Alito writes: "If the arbitrator can be a private person, this law is unconstitutional."

This part of the opinion seems to be clearly based on the non-delegation doctrine. Justice Alito continues:

Even the United States accepts that Congress "cannot delegate regulatory authority to a private entity." [Cite to D.C. Circuit opinion.] Indeed, Congress, vested with enumerated "legislative Powers," Art. I, § 1, cannot delegate its "exclusively legislative" authority at all. [Cite to Wayman v. Southard, a 19th-century non-delegation opinion by Justice Marshall.] The Court has invalidated statutes for that very reason. [Cites to Schechter Poultry and Panama Refining, two decisions from 1935 striking down statutes under the non-delegation doctrine; see also Mistretta (citing the Benzene Case).] The principle that Congress cannot delegate away its vested powers exists to protect liberty. . . .

On a first reading, this paragraph seems to accept that there's a prohibition against "delegat[ing] regulatory authority to a private entity." Maybe this reading is the correct one. On the other hand, the second sentence, with its "Indeed," seems to imply that this is just a special case of the general prohibition against Congressional delegations of legislative power to anyone, public or private. Wayman v. Southard involved a delegation to the federal judiciary, as did Mistretta. The Benzene Case involved a delegation to a traditional federal agency. Schechter Poultry and Panama Refining involved delegations to the President. Certainly, these citations don't support anything about a special doctrine for private delegates.

It's true that Schechter Poultry seems to have language disapproving of private delegations. As I write in my recent Harvard Journal of Law and Public Policy article, The New Private-Regulation Skepticism: Due Process, Non-Delegation, and Antitrust Challenges, the Schechter Court wrote the following:

But would it be seriously contended that Congress could delegate its legislative authority to trade or industrial associations or groups so as to empower them to enact the laws they deem to be wise and beneficent for the rehabilitation and expansion of their trade or industries? Could trade or industrial associations or groups be constituted legislative bodies for that purpose because such associations or groups are familiar with the problems of their enterprises? . . . The answer is obvious. Such a delegation of legislative power is unknown to our law and is utterly inconsistent with the constitutional prerogatives and duties of Congress.

But this was dictum. Moreover, the language doesn't question private delegation as such, only extremely broad private delegation. Because the case went on to strike down the delegation based entirely on the overly-broad delegation to the President (without reference to the participation of private industry), it's not clear that the public-private distinction played any role.

Thus, when Justice Alito writes that "[e]ven the United States accepts that Congress 'cannot delegate regulatory authority to a private entity,'" one possibility is that he's just saying that Congress can't delegate legislative power to a private entity, just like it can't delegate legislative power to anyone else. (Justice Alito is citing the D.C. Circuit's opinion, which says the government made such a concession—but I don't have the briefs, so I don't know exactly what the government conceded before that court.)

Now the non-delegation doctrine does allow delegations of power, just not of legislative power. So, current non-delegation doctrine says that delegations are O.K.—that a delegation of power doesn't become a delegation of legislative power—whenever the delegation is accompanied by an "intelligible principle." When Justice Alito writes that "[i]f the arbitrator can be a private person, this law is unconstitutional," that seems solid under this understanding, since the statute doesn't say what principles the arbitrator should follow in resolving the differences between Amtrak and the FRA.

That's one possibility for what Justice Alito is saying. But the discussion that follows suggests that Justice Alito agrees with the D.C. Circuit's reasoning (but as to the private arbitrator, not as to Amtrak): that the non-delegation doctrine prevents any delegation to someone private. He writes that delegations to other branches of the federal government are hard to police because "the other branches of Government have vested powers of their own that can be used in ways that resemble lawmaking. . . . When it comes to private entities, however, there is not even a fig leaf of constitutional justification," because private entities lack any legislative or executive power. "By any measure, handing off regulatory power to a private entity is 'legislative delegation in its most obnoxious form'" (citing Carter Coal, a 1936 case striking down a delegation to private parties).

Under this view, Congress would be unable to delegate to private parties, state governments, or international bodies. I have three problems with this view, though, as I explain in my article and in my amicus brief:

  1. It seems to conflict with current precedent. As I write in my article, Currin v. Wallace (1939) upheld a delegation to private parties by citing the caselaw upholding delegation to the President. (In Currin, private industry held an on-off switch that would make regulation active or inactive, which is similar to the on-off switch held by the President in Panama Refining (1935). In Panama Refining, the Court struck down the delegation to the President because it was insufficiently constrained; but the important point is that on-off switches are powers that are subject to non-delegation analysis. The Currin Court upheld the private delegation by saying it was no greater than the delegation to the President upheld in Field v. Clark (1892), which if anything was a greater delegation.) Justice Thomas, in his separate opinion, suggests that Currin is no longer good law; I'll discuss that in a later post, but in any event the case has never been repudiated.
  2. The structure of non-delegation doctrine suggests that it should be irrelevant whether the recipient of the delegation is public or private: the focus is whether Congress has given up too much power, not to whom it's given the power.
  3. It's true that Carter v. Carter Coal (1936) said that a delegation to a portion of private industry of "the power to regulate the affairs of an unwilling minority" was "legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons whose interests may be and often are adverse to the interests of others in the same business." But that doesn't mean Carter Coal is a non-delegation decision. Lots of delegations can be invalid without invoking the non-delegation doctrine of Article I, § 1. For instance, Larkin v. Grendel's Den says governments can't delegate governmental power to religious bodies, but that's an Establishment Clause decision, and (since that case concerned a state government) clearly not a non-delegation doctrine decision. In this case, the Carter Coal court continued: "The delegation is so clearly arbitrary, and so clearly a denial of rights safeguarded by the due process clause of the Fifth Amendment, that it is unnecessary to do more than refer to decisions of this court which foreclose the question." So Carter Coal was a Due Process Clause decision, not a non-delegation doctrine decision.

Admittedly, Carter Coal is ambiguous—for one thing, it cites relevant Due Process cases, but it also cites Schechter Poultry, which is indisputably a non-delegation case. Lots of cases commingle these two doctrines, though really, it's important to keep them separate: for instance, non-delegation only applies against the federal government while Due Process applies against all governments; and non-delegation can't support a § 1983 or Bivens suit (with possible attorney fees under § 1988) while Due Process can. But the most recent cases (e.g., Mistretta and American Trucking Ass'ns) do characterize Carter Coal correctly, as a purely Due Process case. (And in fact, I believe that the statute does in fact violate Carter Coal, though for a different reason: because it gives Amtrak, a financially interested party, the power to impose fines on other market participants.)

So I think that, to the extent Justice Alito is suggesting that the non-delegation doctrine would bar a delegation to a private arbitrator, this is incorrect. But, for reasons I discuss below, that's probably a harmless error: delegation to a private arbitrator would in any event be unconstitutional under the Appointments Clause.

Appointments Clause considerations: the arbitrator

Justice Alito goes on to the government's constitutional avoidance theory: that the Court should read the reference to an arbitrator to refer to a governmental arbitrator. As Justice Alito points out, that's not necessarily a great reading of the statute, because the term "arbitrator" is frequently taken to refer to a private party. But even if one could appoint a private arbitrator, this would still be invalid, because such an arbitrator—by resolving the impasse between Amtrak and the FRA—would be exercising significant power under the laws of the United States, and would thus be an Officer of the United States—not only that, but a principal officer, since he has no supervisor. And principal officers must be appointed by the President with Senate confirmation, which the statute doesn't provide for.

That, I think, is the true reason why any arbitrator, under this statute, would be invalid: the appointment of the arbitrator would violate the Appointments Clause. And this is true whether the arbitrator is private or public.

Appointments Clause considerations: Amtrak itself

Justice Alito goes on to other Appointments Clause problems: the president of Amtrak is selected by the Amtrak board; but while the Amtrak board is properly selected, the president isn't. The president seems like a principal officer (since he can cast tie-breaking votes and has no supervisor), but he's not appointed by the President with Senate confirmation. And even if he were an inferior officer, Congress may vest the appointment of inferior officers only in the President, Courts, or Department Heads, and it's not clear whether Amtrak is a Department.

Anyway, that's Justice Alito's opinion, which seems to make a lot of persuasive points that the D.C. Circuit ought to take into account on remand. Assuming that the case goes to the same panel on remand, that seems sort of likely. I only hope that the D.C. Circuit doesn't accept the reasoning on the existence of a private non-delegation doctrine to strike down the private arbitrator, which seems to go against Currin v. Wallace, misinterpret Carter Coal, and be in tension with the underlying structure of a doctrine based on Article I, § 1.