Academic journal article Journal of Corporation Law

Changing Signals: A New Approach to the Enforcement of Rail Passenger Traffic Preference in Response to the Passenger Rail Investment and Improvement Act of 2008

Academic journal article Journal of Corporation Law

Changing Signals: A New Approach to the Enforcement of Rail Passenger Traffic Preference in Response to the Passenger Rail Investment and Improvement Act of 2008

Article excerpt


Rising oil prices and increasing concerns about transportation sustainability has renewed the drive for effective rail passenger travel.1 The Obama Administration has touted high-speed intercity passenger rail travel as the answer to a number of economic and environmental problems.2 Amtrak, the sole national passenger carrier, celebrated its 40th anniversary in 2011 with a special exhibition train and celebrations in major cities across the United States.3 The passenger carrier went on to serve a record 31.2 million passengers in 2012.4 These landmark events, record figures, and federal attention suggest that Amtrak is an integral part of the nation's infrastructure planning.

It is all the more troubling then that Amtrak has long struggled to provide reliable service.5 This struggle is in part because Amtrak must rely on the charity of freight railroads to operate outside of its limited holdings in the Northeast Corridor.6 Federal law mandates that freight railroads give Amtrak traffic priority over all freight traffic, but the private freight railroads have long ignored this requirement.7 Instead, the freight railroads allow their own trains to continue unimpeded while sidetracking Amtrak traffic, a practice that results in significant delays for passenger trains that must stop to let the freight traffic pass.8 This Note proposes federalizing dispatch service to ensure compliance with federal law.

Part II of this Note describes why the federal government took the responsibility of passenger service from the private carriers, how it did so, the severe problems passenger and freight carriers face in sharing the same infrastructure, the proposed solution of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), and the private carriers' critique of the Act. Part III discusses the legal validity and practical consequences of the PRIIA solution. Part IV suggests a new approach to enforcement of the federal mandate via federal dispatch personnel, with a comparative paradigm drawn from a similar mode of mass transit-the airline industry.


Dramatic increases in passenger and freight traffic in the late 19th century caused the railroad business to grow quickly.9 Despite the substantial increase in each business line, the railroads were initially slow to serve their customers' needs.10 Freight and passengers often traveled together on the same train.11 The inconvenience waiting passengers experienced when traveling with freight resulted in demand for travel that was exclusively passenger oriented.12

Though people and freight would soon separate, regulation remained unified.13 Congress and the states established single regulatory agencies for the purpose of regulating both passenger and freight travel.14 After all, freight and passenger traffic ran over the same rails, used the same switches, and were provided by the same carriers.15 Today, interstate passenger service responsibility has been lifted from private carriers and is provided by the federal government. As a result, two separate services occupy a rail infrastructure that was intended for only single carrier control.16 This competition for rail usage introduced a new problem after over a century of privately provided, unified service.17

A. The First Regulatory Era 1880-1920: Who's Running the Railroads?

In 1876, the Supreme Court opened the door for state regulation of corporate activities and, with it, state regulation of railroads. The Court's decision in Munn v. Illinois18 began an inconsistent (four-decade) period where power and governance shifted between state and federal government and gave broader and narrower deference to carriers.19 In Munn, the Supreme Court confronted an Illinois regulation requiring inspection of grain elevators.20 In upholding the regulation, the Court held that states have a right to regulate corporate activities within their borders.21 The decision permitted states to promulgate regulations for railroads regarding track usage, connections, and the charged rates for passenger and freight travel. …

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