Department of Transportation v. Association of American Railroads
Whether Amtrak is a governmental entity for purposes of the Constitution's separation-of-powers principles, including the non-delegation doctrine, despite a federal statute declaring it is not a government agency or instrumentality.
The Decision
9-0 decision · Opinion by Anthony Kennedy · 2015
Majority Opinion— Anthony Kennedyconcurring ↓
The Supreme Court ruled unanimously, 9–0, in favor of the Department of Transportation. Justice Anthony Kennedy wrote the opinion of the Court. The Court reversed the D.C. Circuit's decision and held that Amtrak is a governmental entity for purposes of the Constitution's separation-of-powers analysis, meaning the D.C. Circuit was wrong to strike down PRIIA's metrics-and-standards provision on the theory that it unconstitutionally delegated power to a private entity.
The core of the Court's reasoning was that Congress cannot define away constitutional constraints simply by labeling an entity 'private.' The Court emphasized that for purposes of determining the constitutional boundaries of governmental power, courts must look at the substance and practical reality of an entity's structure, not just its statutory label. Justice Kennedy wrote that 'an independent inquiry into Amtrak's status' reveals it to be governmental in nature.
The Court pointed to multiple features demonstrating Amtrak's governmental character. Congress created Amtrak by special statute to achieve the governmental purpose of preserving and improving national passenger rail service. The federal government owns the majority of Amtrak's stock. The President of the United States appoints most of Amtrak's board members, who must be confirmed by the Senate. And Amtrak's operations are subject to extensive governmental oversight and control. Taken together, these features made Amtrak governmental in the ways that matter for constitutional analysis.
Importantly, the Court did not resolve every constitutional question in the case. It sent the case back to the D.C. Circuit to consider other challenges AAR had raised — including whether the metrics-and-standards scheme violated the Appointments Clause or due process — which the lower court had not addressed because it had decided the case entirely on the private delegation issue. The Court's holding was limited: Amtrak is governmental for purposes of the non-delegation analysis, and the D.C. Circuit erred by treating it as private.
Concurring Opinions
Justice Samuel Alito wrote a concurring opinion expressing concern about the broader implications of entities like Amtrak that blur the line between public and private, warning that such arrangements can evade constitutional accountability. Justice Clarence Thomas wrote a separate opinion concurring only in the judgment, using the case as an occasion to call for a fundamental rethinking of the Court's non-delegation doctrine, arguing the modern approach is far too permissive in allowing Congress to hand off its lawmaking power to the executive branch and to entities like Amtrak.
Background & Facts
Amtrak — the National Railroad Passenger Corporation — was created by Congress in 1970 to take over the nation's declining passenger rail service. Although Congress labeled Amtrak as a private, for-profit corporation and explicitly stated that it is 'not a department, agency, or instrumentality of the United States Government,' the federal government has always been deeply involved in its operations. The government owns a majority of Amtrak's stock, and the President of the United States appoints most of Amtrak's board of directors.
In 2008, Congress passed the Passenger Rail Investment and Improvement Act (PRIIA), which directed Amtrak and the Federal Railroad Administration (FRA) — a traditional government agency within the Department of Transportation — to jointly develop 'metrics and standards' for evaluating the performance and scheduling of Amtrak's passenger rail service. These metrics and standards would have real-world regulatory consequences: if Amtrak's on-time performance fell below the established benchmarks, the Surface Transportation Board could investigate the freight railroads whose tracks Amtrak shares and impose penalties. If Amtrak and the FRA could not agree on the metrics and standards, the law provided for a binding arbitration process.
The Association of American Railroads (AAR), a trade group representing the nation's major freight railroads, challenged this arrangement. The freight railroads were worried because they share tracks with Amtrak, and the new metrics and standards could be used to penalize them. AAR argued that giving Amtrak — which it characterized as a private company — the power to co-author binding regulations affecting its competitors was an unconstitutional delegation of governmental power to a private entity.
The U.S. Court of Appeals for the D.C. Circuit agreed with AAR. The appellate court accepted the statutory label that Amtrak is a private corporation and held that Congress had unconstitutionally delegated regulatory authority to a private entity. The court struck down the relevant provision of PRIIA.
The Department of Transportation, along with Amtrak, petitioned the Supreme Court to review the case. The Supreme Court agreed to hear it to resolve the fundamental question of whether Amtrak should be treated as a governmental or private entity when analyzing constitutional separation-of-powers issues.
The Arguments
The Department of Transportation argued that Amtrak is a governmental entity for constitutional purposes, regardless of Congress's statutory label calling it a private corporation. Because Amtrak is effectively governmental, having it collaborate with the FRA to develop metrics and standards does not amount to an unconstitutional delegation of power to a private party.
- Congress created Amtrak by statute to fulfill the governmental objective of preserving national passenger rail service.
- The federal government owns the vast majority of Amtrak's preferred stock, and the President appoints most members of Amtrak's board of directors.
- Congressional labels about Amtrak's corporate status should not control the constitutional analysis; the Court should look at the reality of Amtrak's governmental structure and character.
AAR argued that Amtrak is a private corporation, as Congress itself declared, and that giving a private company the power to jointly author regulatory standards affecting its competitors in the railroad industry is an unconstitutional delegation of governmental power and violates due process.
- Congress explicitly stated in Amtrak's enabling statute that Amtrak is 'not a department, agency, or instrumentality of the United States Government,' and this designation should be respected.
- Allowing Amtrak to co-write binding performance metrics gives it regulatory power over the freight railroads with which it competes for track access, creating an obvious conflict of interest.
- The private delegation doctrine — which prohibits Congress from handing regulatory power to private entities — should apply because Amtrak operates as a for-profit corporation with private commercial interests.