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Law School Case Brief

Lebron v. Nat'l R.R. Passenger Corp. - 513 U.S. 374, 115 S. Ct. 961 (1995)

Rule:

Where the government creates a corporation by special law, for the furtherance of governmental objectives, and retains for itself permanent authority to appoint a majority of the directors of that corporation, the corporation is part of the government for purposes of U.S. Const., amend. I

Facts:

The National Railroad Passenger Corporation, commonly known as Amtrak, was created by the Rail Passenger Service Act of 1970 (RPSA), 45 U.S.C.S. § 501 et seq., to further a congressional finding that the public convenience and necessity required the continuance and improvement of railroad passenger service. Under the RPSA, six of Amtrak's eight externally named directors were appointed directly by the President of the United States, four of those directors, were appointed with the advice and consent of the Senate. However, an RPSA provision declared that Amtrak would not be an agency or establishment of the United States Government. After Amtrak refused to display an artist's political advertisement on a billboard in Amtrak's Pennsylvania Station in New York City, the artist filed suit with District Court against Amtrak and the company that managed the leasing of the billboards in the station. The District Court, in granting injunctive relief to the artist, ruled that Amtrak was a government actor because of its close ties to the government and Amtrak's rejection of the proposed advertisement had violated the First Amendment. On appeal, the United States Court of Appeals reversed, holding that Amtrak was not a government entity by the terms of the RPSA and concluding that the government was not so involved with Amtrak that Amtrak's decisions could be considered federal action. Petitioner artist sought review.

Issue:

Can Amtrak--the National Railroad Passenger Corporation that was created by federal legislation-- be considered a federal governmental entity, as an agency or instrumentality of the US, that is subject to the constraints of the Constitution?

Answer:

Yes

Conclusion:

Upon a writ of certiorari, the Supreme Court of the United States held that the government created Amtrak--a corporation--by special law for the furtherance of governmental objectives and retained permanent authority to appoint its directors. Therefore, it was part of the government for the purposes of U.S. Const., amend. I and it was proper for the Supreme Court to consider the contention that Amtrak was a federal governmental entity, even though the artist had expressly disavowed the contention in the courts below and had first explicitly presented the contention in his brief on the merits after certiorari was granted. It explained that a corporation is a part of the government for purposes of the First Amendment, where the government (a) creates the corporation by special law for the furtherance of governmental objectives, and (b) retains for itself permanent authority to appoint a majority of the corporation's directors. The Supreme Court expressed no opinion as to whether Amtrak's refusal to display the artist's advertisement violated that the Firsts Amendment; instead, it was for the Court of Appeals to decide. Accordingly, the Supreme Court reversed the judgment of the Court of Appeals is reversed and remanded the cases for further proceedings. 

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