Tags

, , , , , ,

After the Supreme Court decision, what’s next for the Amtrak case?

On March 9, the U.S. Supreme Court published three opinions. The controlling opinion was written by Justice Anthony Kennedy, with the support of seven of the remaining eight justices. Justice Samuel Alito wrote a separate, concurring opinion indicating he would have gone farther than the controlling opinion regarding questioning the constitutionality of the Passenger Railroad Investment and Improvement Act of 2008 (PRIIA). In the separate third lengthy opinion, Justice Clarence Thomas concurs with the Court’s ultimate decision but criticizes the Court for its history of repeatedly incorrectly ruling on issues involving the separation of powers under the Constitution.

The controlling opinion resolved the single issue of whether Amtrak is a governmental entity or a private entity. The Court then identified and remanded three constitutional issues to the Court of Appeals.

Is Amtrak a Governmental Entity?

In its March 9 controlling opinion, the U.S. Supreme Court overturned the U.S. Court of Appeals for the District of Columbia Circuit’s February 19, 2013, decision that Amtrak was a private entity, and, thus, the metrics developed pursuant to PRIIA impermissibly delegated regulatory authority to a private entity, Amtrak. The U.S. Supreme Court found that Amtrak is a governmental entity, not a corporation acting in a private capacity.

While the Court of Appeals had relied heavily on Congress’ statutory pronouncements that Amtrak “is not a department, agency, or instrumentality of the United States Government” and that Amtrak “shall be operated and managed as a for-profit corporation” (49 U.S.C. §24301(a)(2) and (3)), the U.S. Supreme Court looked to Amtrak’s ownership and corporate structure, the governmental regulation and control of Amtrak, and its dependency on federal financial support. All of the results of the U.S. Supreme Court’s in-depth analysis weighed in favor of finding that Amtrak is a governmental entity.

For example, the Court found that the Secretary of Transportation holds all of Amtrak’s preferred stock and most of its common stock and sits on Amtrak’s Board of Directors; the political branches exercise regular and substantial statutorily-mandated control over Amtrak’s priorities and operations; and, in its 43 years of operation, Amtrak has received more than $41 billion in federal subsidies.

The Court remanded the case to the Court of Appeals to decide three constitutional issues.

Deciding Three Constitutional Issues

First, having found Amtrak to be a governmental entity, the Court of Appeals must determine whether the appointment of Amtrak’s president violates constitutional law requiring election of governmental officials.

Second, the Court of Appeals must examine whether the Due Process Clause is violated by PRIIA in that it grants Amtrak the power to control the freight trains.

Finally, the Court of Appeals must decide whether the current arbitrator selection procedures for settling disputes regarding the standards for use of railroad facilities violate the constitutional rule that Congress cannot delegate its own legislative powers and whether such procedures additionally violate the constitutional requirements for electing officials exercising governmental powers.

As a threshold matter, the Court of Appeals will have to determine whether all of these issues were properly preserved by the parties.

What Is Next?

In light of the U.S. Supreme Court’s remand of the constitutional issues, the Court of Appeals will likely address these issues in the next year to two years. Given the gravity of the outcome for both Amtrak and the freight trains, it is likely that the losing side will appeal the decision and this matter will again be in front of the U.S. Supreme Court. Thus, a final decision regarding the constitutionality of PRIIA is at least two years away.

However, if Congress heeds the U.S. Supreme Court’s concerns regarding PRIIA and makes the necessary legislative changes to PRIIA and Amtrak’s governance, the issue could be resolved in a more timely manner.