A majority on the Supreme Court appeared to support the Obama administration's contention that Congress didn't delegate too much authority to Amtrak for drafting standards that apply to the entire rail industry.
At issue in Department of Transportation v. Association of American Railroads are standards for on-time performance and other metrics issued by DOT in 2010 after "jointly" developing them with Amtrak.
The freight rail industry claims the standards were too favorable to Amtrak, which operates most of its routes on tracks owned by freight companies. Amtrak and freight operators compete for limited capacity -- a tension dating to Congress' creation of Amtrak in 1970 (Greenwire, Oct. 31)
The freight companies sued, challenging a provision of the 2008 Passenger Rail Investment and Improvement Act, which aimed to address Amtrak's struggles with on-time performance by cutting delays caused by freight traffic.
The law, they said, granted Amtrak too much leverage to negotiate standards that would apply to the entire industry.
A federal appeals court agreed, ruling in July 2013 that the law delegated too much authority to Amtrak -- which is supposed to be run as a for-profit entity (Greenwire, July 2, 2013).
Most of the justices today appeared unwilling to rule for the first time in 80 years that Congress had violated the "non delegation doctrine," which prohibits giving lawmaking authority to a private entity.
Curtis Gannon, an assistant to the solicitor general, argued that Amtrak alone didn't issue the standards; federal agencies did after overseeing the entire process.
"The federal government's fingerprints" are all over the standards, he said. He further contended that the metrics were not, in fact, regulations.
That seemed to gain traction with Justice Elena Kagan and other liberal members of the court.
There is "no place where a private actor can do something itself under this scheme," Kagan said.
Justice Stephen Breyer, moreover, appeared concerned about the ramifications of the court ruling against the standards.
There are thousands of groups that set standards that apply to various industries, he said, such as those that set performance standards for Internet providers.
Breyer called the case a "wild goose chase" and said that "once we start down that road, there is no stopping point."
Aside from the delegation issue, however, there were other significant concerns about the standards.
Chief Justice John Roberts and Justice Antonin Scalia zeroed in on an arbitrator provision that granted Amtrak the authority to force the government to hire an independent arbitrator if the two sides could not come to agreement. The arbitrator's decision would then have the full force of the government.
Scalia indicated that provision would violate the due process rights of other participants in the marketplace -- such as freight operators.
The arbitrator, Scalia said, is "supervised by nobody" and would be setting government policy.
Thomas Dupree of Gibson Dunn & Crutcher, representing the freight companies, agreed, arguing that the provision "gave Amtrak the pen."
The case also gave the justices the opportunity to delve into the murky issue of whether Amtrak is private or public.
Despite Dupree's arguments that it is a private actor in the marketplace, Kagan and Justice Ruth Bader Ginsburg seemed unwilling to budge.
"What about Amtrak is not governmental, other than the label?" Kagan asked.
A ruling in the case is due by June 30.
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