Academic journal article Harvard Law Review

Passenger Rail Investment and Improvement Act - Nondelegation

Academic journal article Harvard Law Review

Passenger Rail Investment and Improvement Act - Nondelegation

Article excerpt

Railroads around the time of the mid-twentieth century found themselves in a quandary. Passenger rail service had become unprofitable, yet common carriers were legally obliged to provide it. (1) With the Rail Passenger Service Act of 1970, (2) Congress struck a compromise. The National Railroad Passenger Corporation, also known as Amtrak, would assume the railroads' common-carrier obligations; in exchange, Amtrak would use the railroads' tracks and facilities (3) and gain preference over freight traffic. (4) In 2008, Congress passed the Passenger Rail Investment and Improvement Act (5) (PRIIA), [section] 207(a) of which directs Amtrak and the Federal Railroad Administration (FRA) jointly to develop metrics and standards with which to evaluate the performance of intercity passenger trains. (6) If Amtrak and the FRA cannot agree on metrics and standards, [section] 207(d) allows the Surface Transportation Board (7) (STB) to appoint an arbitrator to resolve the dispute. (8) Last Term, in Department of Transportation v. Association of American Railroads (9) (Amtrak), the Supreme Court held that Amtrak is a governmental, not a private, entity for purposes of determining the validity of the metrics and standards created under [section] 207. The Court's answer to the narrow question presented was unremarkable, but Amtrak illustrates courts' unsettled approach to analyzing the constitutionality of nontraditional agencies at the public-private border.

In May 2010, Amtrak and the FRA jointly issued a set of metrics and standards. (10) The Association of American Railroads (AAR), a trade group whose members would have to modify their operating agreements with Amtrak in order to incorporate the metrics and standards, (11) promptly sued the Department of Transportation and the FRA, asking the District Court for the District of Columbia to declare [section] 207 unconstitutional and to invalidate the metrics and standards. (12) AAR claimed two constitutional deficiencies: first, that [section] 207 violated the nondelegation doctrine by placing legislative power "in the hands of a private entity [Amtrak]"; second, that it violated the Fifth Amendment Due Process Clause by "[v]esting the coercive power of the government" in an "interested private part[y]." (13) The district court rejected both constitutional challenges and granted the government's motion for summary judgment. (14) AAR appealed.

The Court of Appeals for the District of Columbia Circuit reversed the nondelegation ruling and declined to decide the due process claim. (15) Writing for a unanimous panel, (16) Judge Brown set out a simple syllogism. First, she maintained, Congress cannot delegate legislative power to private entities. (17) Under the conventional version of the nondelegation doctrine, Congress can assign powers that resemble lawmaking to an agency of the Executive Branch only if it supplies an "intelligible principle" to guide the agency's discretion. (18) Under a precept Judge Brown termed the "lesser-known cousin" of that doctrine, even an intelligible principle cannot save a scheme that assigns such powers to private bodies. (19) She acknowledged that private parties may serve an "advisory role" in the lawmaking process, but argued that the PRIIA contemplates more by granting Amtrak "authority equal to the FRA," along with effective veto power, in issuing metrics and standards. (20) Second, based primarily on Congress's denomination of Amtrak as a "for-profit corporation," (21) Judge Brown found Amtrak to be a private entity. (22) Thus, she concluded, [section] 207 effects an unconstitutional delegation of power to Amtrak.

The Supreme Court reversed and remanded. In a crisp opinion for the Court, Justice Kennedy (23) explained that the decision below rested on a flawed premise: that Amtrak is a private entity for purposes of the constitutional questions presented. (24) Justice Kennedy began with Amtrak's distinctive ownership and corporate structure. …

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