Amtrak vs. freights: A messy MRSA

If you’re passionate about on-time performance of Amtrak passenger trains traversing freight railroad tracks, you’d best pray for the health of RBG—the increasingly frail 85-year-old Supreme Court Justice Ruth Bader Ginsburg.

If you share with Amtrak’s landlord that Amtrak has become a misbehaving tenant seeking upgrades at no increase in rent, and Ginsburg is present to cast a vote, then hope the freight railroads have a sufficiently strong legal theory to win over Ginsburg or another of the Court’s four liberal-wing justices, who otherwise likely will side with Amtrak.

What this head-counting brainteaser is about is a still nagging, decade-old constitutional question that is primed to return a second time to the Supreme Court. At issue is a provision of the 2008 Passenger Rail Investment and Improvement Act (PRIIA) intended to remedy an abysmal 42% on-time performance (OTP) for Amtrak long-distance passenger trains hosted on freight railroad-owned track.

PRIIA Section 207 empowered Amtrak and the Executive Branch Federal Railroad Administration (FRA) jointly to establish minimum performance standards to assess OTP of Amtrak intercity passenger trains hosted by freight railroads. Section 213 allows the Surface Transportation Board to investigate poor Amtrak OTP and prescribe damages for delays attributable to host railroads.

In a late-January filing, freight railroads represented by the Association of American Railroads (AAR) petitioned the Supreme Court to accept and schedule the case for its session beginning in October 2019.

The AAR seeks to challenge before the Supreme Court a July 2018 District of Columbia Circuit Court of Appeals ruling that Amtrak may lawfully collaborate with the FRA to set passenger train performance standards that would be binding on privately owned freight railroads. That July 2018 appellate court decision was on remand from the Supreme Court following an earlier AAR challenge.

Alas, this enduring kerfuffle has become a legal equivalent of that pesky staph infection, MRSA (Methicillin-Resistant Staphylococcus Aureus). It just won’t go away. That’s why we previously tagged it “a hereditary emolument for involved attorneys.”

If the Court grants the AAR petition to hear this latest challenge to the constitutionality of the PRIIA provision at issue—and it could be 2020 before the case is even argued—then Ginsburg, deeply rooted in the court’s dwindling liberal wing, could determine the outcome.

Why? With newly seated Justice Brett Kavanaugh recused—as an appellate court judge he was briefly involved at an earlier stage of this case—there is expectation of a 4-4 liberal vs. conservative deadlock, assuming Ginsburg votes. If so, the AAR appeal would fail as an evenly split Supreme Court decision effectively upholds the ruling of the lower court. But should the now-ailing Ginsburg not vote, the AAR would be expected to prevail by a 4-3 margin (Kavanaugh, also, not voting).

As for the freight railroads, their core argument is that it is patently absurd for Congress to transfer to Amtrak, chartered as a for-profit corporation, power to collaborate with the FRA to regulate the actions of freight railroads when Amtrak is, in fact, competing for the freights’ scarce track capacity.

In its petition to the Supreme Court, the AAR compared the situation to Congress “empowering Coca-Cola to regulate Pepsi.” That federally owned Amtrak is chartered as a for-profit corporation does not change the situation, the AAR said, hypothetically comparing it to a “for-profit Government Cola Corp. [empowered] to regulate Coke and Pepsi.”

But the District of Columbia Circuit Court of Appeals, in a 2-1 split decision, rejected that argument last July. The appellate court held that so long as a PRIIA provision for third-party binding arbitration—where Amtrak and the FRA disagree on the performance standards—is severed from the statute, the FRA, as a disinterested party, would hold Amtrak in check.

That split decision is what brought the freights to the Supreme Court after the AAR was denied a rehearing before the entire nine-member appellate court.

In its instant petition seeking another Supreme Court review, the AAR says that severing that arbitration clause does not cure the constitutional defect. The appellate court’s reasoning is “inconsistent” with the Constitution, says the AAR. Moreover, the AAR says, the government waived the severability argument years ago by failing to raise it in prior litigation.

Bolstering the AAR’s petition for a Supreme Court review is the dissent written by Appellate Court Judge David S. Tatel, a Clinton nominee confirmed by the Senate to Ginsburg’s former seat. He said the majority was wrong to consider the FRA as a disinterested party, and since Amtrak is “an economically self-interested actor,” there is a Due Process Clause violation that has not been cured.

For those preferring a Cliff Notes version, and who probably should have started reading this story here, if the AAR’s petition for certiorari* is granted, and the AAR prevails at hearing, the litigation finally will end and the problematic PRIIA provisions will be moot. That would take a majority vote of the justices.

But if the AAR petition for certiorari is rebuffed, or if the AAR is on the losing end of a Supreme Court vote (which includes, recall, a tie vote), then Amtrak and the FRA will have free rein jointly to establish performance standards for Amtrak passenger trains that bind the host freight railroads.

As for that free rein, never underestimate freight railroad legal departments. Should the freights not cotton to joint Amtrak-FRA performance standards—and it is unlikely they will be smitten—it will be back to the federal courts. That challenge would be the performance standards themselves, rather than the underlying statute.

Oh, did we previously mention a hereditary emolument for involved attorneys?

Frank N. Wilner is author of six books, including Amtrak: Past, Present, Future; Understanding the Railway Labor Act; and Railroad Mergers: History, Analysis, Insight, all published by Simmons-Boardman Books. Wilner earned undergraduate and graduate degrees in economics and labor relations from Virginia Tech. He has been assistant vice president, policy, for the Association of American Railroads; a White House appointed chief of staff at the Surface Transportation Board; and director of public relations for the United Transportation Union. He is a past president of the Association of Transportation Law Professionals. Wilner drafted the railroad section of the Heritage Foundation’s Mandate for Leadership (Volumes I and II), which were policy blueprints for the two Reagan Administrations; and was a guest columnist for the Cato Institute’s Regulation magazine.

*A writ or order by which a higher court reviews a decision of a lower court.