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Law School Case Brief

DOT v. Ass'n of Am. R.R. - 135 S. Ct. 1225 (2015)

Rule:

Given the combination of its unique features and its significant ties to the federal Government, the National Railroad Passenger Corporation (Amtrak) is not an autonomous private enterprise. Among other important considerations, its priorities, operations, and decisions are extensively supervised and substantially funded by the political branches. A majority of its board of directors is appointed by the President and confirmed by the Senate and is understood by the Executive to be removable by the President at will. Amtrak was created by the federal government, is controlled by the federal government, and operates for the federal government’s benefit. Thus, in its joint issuance of the metrics and standards with the Federal Railroad Administration, Amtrak acted as a governmental entity for purposes of the United States Constitution’s separation of powers provisions. And that exercise of governmental power must be consistent with the design and requirements of the Constitution, including those provisions relating to the separation of powers. 

Facts:

In 1970, Congress created the National Railroad Passenger Corporation (Amtrak). Congress has given Amtrak priority to use track systems owned by the freight railroads for passenger rail travel, at rates agreed to by the parties or, in case of a dispute, set by the Surface Transportation Board. In 2008, Congress gave Amtrak and the Federal Railroad Administration (FRA) joint authority to issue “metrics and standards” addressing the performance and scheduling of passenger railroad services, including Amtrak's on-time performance and train delays caused by host railroads. Respondent, the Association of American Railroads, sued petitioners--the Department of Transportation, the FRA, and two officials--claiming that the metrics and standards must be invalidated because it is unconstitutional for Congress to allow and direct a private entity like Amtrak to exercise joint authority in their issuance. Its argument rested on the Fifth Amendment Due Process Clause and the constitutional provisions regarding separation of powers. The District Court rejected respondent's claims, but the District of Columbia Circuit reversed as to the separation of powers claim, reasoning in central part that Amtrak is a private corporation and thus cannot constitutionally be granted regulatory power under § 207. Petitioners sought further review.

Issue:

Did the lower court err in its premise that Amtrak was to be treated as a private entity?

Answer:

Yes

Conclusion:

On certiorari, the Supreme Court of the United States vacated the appellate decision because it was based on the flawed premise that Amtrak should be treated as a private entity. The Court held that the National Railroad Passenger Corporation (Amtrak) was a governmental entity, not a private one, for the purposes of determining the validity of the metrics and standards. Although Amtrak’s actions here were governmental, the Court remanded because substantial questions respecting the lawfulness of the metrics and standards—including questions implicating the Constitution’s structural separation of powers and the Appointments Clause, U.S. Const. Art. II, § 2, cl. 2, may still remain. 

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