In the latest twist of an ongoing saga now in its 11th year, the Supreme Court of the United States (SCOTUS) has denied an Association of American Railroads (AAR) petition for a writ of certiorari* (a request that SCOTUS order a lower court to send up a case record for review) regarding whether Congress may vest a for-profit government corporation—in this case, Amtrak—with regulatory authority over its private-sector “competitors”—Amtrak’s host freight railroads. AAR has been battling with USDOT and Amtrak in court since 2011.
In question is whether Amtrak and the U.S. Department of Transportation (Federal Railroad Administration) should have the legal authority to establish on-time performance metrics and standards for Amtrak trains operating over freight railroad-owned and -dispatched rights-of-way.
In July 2018, the U.S. Court of Appeals for the District of Columbia Circuit ruled that section 207(d) of PRIIA (Passenger Rail Investment and Improvement Act)—the 2008 legislation that gave the Surface Transportation Board the option to settle disputes over on-time performance metrics and standards by appointing an arbiter to perform binding arbitration—was unconstitutional. But the appeals court ruled that the remainder of section 207—how such metrics were to be developed—was retained. The ruling held that “the constitutional violations … can be fully remedied by excising the binding-arbitration provision … Without an arbitrator’s stamp of approval, Amtrak cannot unilaterally impose its metrics and standards on objecting freight railroads. No rule will go into effect without the approval and permission of a neutral federal agency. That brings the process of formulating metrics and standards back into the constitutional fold.” This cleared the way for FRA and Amtrak to develop on-time performance metrics—but they are still null and void.
“While AAR and the freight railroad industry are disappointed that the Supreme Court denied our petition for a writ of certiorari regarding metrics and standards for Amtrak schedule performance, we are pleased that the metrics and standards remain invalidated,” said AAR President and CEO Ian Jefferies. “Freight railroads are committed to providing efficient and reliable service to all their customers and tenant railroads, and we will work with the FRA and Amtrak in a way that recognizes the importance of moving increased freight volume to help support the U.S. economy.”
“Notwithstanding the Supreme Court’s refusal to consider this case, the previously formulated metrics and standards are invalid, and must be reformulated by Amtrak and the FRA,” notes Railway Age Capitol Hill Contributing Editor Frank N. Wilner. “If, after a reformulation is accomplished, which could take many months, railroads remain unsatisfied, there are additional options, meaning this matter is far from resolved. That would mean new regulatory and court challenges that likely would chew up another half decade or longer, as the current challenges began in 2011.
“Beyond that, railroads could challenge whether the metrics and standards rise to an unconstitutional taking of private property, absent appropriate compensation. In fact, there has yet to be a dispositive ruling on ‘reasonable compensation’ to remedy freight railroad delays, and if such compensation even is recoverable.
“For fans of Charles Dickens, think of his novel Bleak House, and the excruciating decades-long case of Jarndyce v. Jarndyce. Indeed, should the fat lady finally sing, she is clearly quite slim at present.”
* Writ of certiorari: A type of writ (a form of written command in the name of a court or other legal authority to act, or abstain from acting, in some way), meant for rare use, by which an appellate court decides to review a case at its discretion. The word certiorari comes from Law Latin and means “to be more fully informed.” A writ of certiorari orders a lower court to deliver its record in a case so that a higher court may review it. “Parties who are not satisfied with the decision of a lower court must petition the U.S. Supreme Court to hear their case,” according to uscourts.gov. “The primary means to petition the court for review is to ask it to grant a writ of certiorari. This is a request that the Supreme Court order a lower court to send up the record of the case for review. The Court usually is not under any obligation to hear these cases, and it usually only does so if the case could have national significance, might harmonize conflicting decisions in the federal Circuit courts, and/or could have precedential value.”
Timeline: The Saga of AAR vs. DOT and PRIIA On-Time Performance Metrics (courtesy Jeff Davis, Senior Fellow and Editor, Eno Transportation Weekly)
- October 16, 2008 – Congress enacts section 207 of Division B of Public Law 110-432. Section 207(a) directs Amtrak and the Federal Railroad Administration (FRA) jointly, in consultation with the Surface Transportation Board (STB) and other railroads, to issue develop metrics and minimum standards for intercity passenger rail operations. Section 207(b) requires quarterly reporting of data on the same by FRA. Section 207(c) requires Amtrak and host railroads to incorporate the metrics and standards into their access and service agreements. Section 207(d) requires disputes between parties in the development of the metrics to be settled by the STB via binding arbitration. Section 213 of the law gives the STB the authority to punish railroads that fail to meet the section 207 metrics.
- March 13, 2009 – Amtrak and FRA jointly issue draft metrics and request public comment.
- May 6, 2010 – After receiving public comments, including those of the Association of American Railroads (AAR) (which allege that the standards would “require massive additional investment to expand capacity, as well as increased expenditures for maintenance and administration), Amtrak and FRA jointly issue the final metrics.
- August 19, 2011 – AAR files a lawsuit against USDOT alleging that the metrics and the way they were developed is unconstitutional. The complaint alleges two different constitutional grounds: “nondelegation” (Amtrak is a private entity, not a department, agency, or instrument of the government, and the government cannot delegate to a private party the power to regulate the conduct of other private parties) and “due process” (giving Amtrak, a private entity, coercive power over other railroads violates their due process rights). Both AAR and the government file for summary judgment.
- May 31, 2012 – The U.S. District Court for the District of Columbia issues an opinion dismissing AAR’s case on two grounds: because, it said, Amtrak is considered to be a governmental entity for the purpose of due process claims, and that it was governmental enough to avoid the nondelegation issue. AAR appeals.
- July 2, 2013 – The U.S. Court of Appeals for the D.C. Circuit reverses the lower court ruling. Its opinion holds that section 207 “constitutes an unlawful delegation of regulatory power to a private entity.” The government appeals.
- December 19, 2014 – Despite the fact that the section 207 metrics are on hold pending the appeal of the AAR v. DOT lawsuit, the STB rules that it can enforce on-time performance standards anyway, without the metrics. Several railroads ask the STB to develop its own definitions of on-time performance through a rulemaking.
- March 8, 2015 – The U.S. Supreme Court reverses the D.C. Circuit. Its opinion holds that “for purposes of determining the validity of the metrics and standards, Amtrak is a governmental entity” but that “substantial questions respecting the lawfulness of the metrics and standards— including questions implicating the Constitution’s structural separation of powers and the Appointments Clause…may still remain in the case.” The case is remanded back to the D.C. Circuit for a re-hearing.
- May 15, 2015 – The STB initiates its own rulemaking to set its own standards of on-time performance for section 213 enforcement.
- December 28, 2015 – The STB proposes its own definition of on-time performance for the purposes of section 213 enforcement.
- April 29, 2016 – The D.C. Circuit issues its second ruling. The opinion holds that section 207 violates the Due Process clause: “Because PRIIA endows Amtrak with regulatory authority over its competitors, that delegation violates due process.” The opinion also holds that the arbitration clause in section 207(d) violates the Appointments Clause: “Without providing for the arbitrator’s direction or supervision by principal officers, PRIIA impermissibly vests power to appoint an arbitrator in the STB.” The government does not appeal, and case was then sent back down to the U.S. District Court for a remedy.
- August 8, 2016 – The STB publishes its final rule for its own standards of on-time performance for section 213 enforcement. Several railroads ask the U.S. Court of Appeals for the Eighth Circuit to review the STB rule.
- March 23, 2017 – The U.S. District Court for the District of Columbia issues its second ruling. The short opinion holds that section 207 “is DECLARED void and unconstitutional” and declares that the May 2010 final metrics are void and vacated. The government appeals the part of the opinion that holds section 207 unconstitutional but does not appeal the part that voids the May 2010 final metrics.
- July 12, 2017 – The Eighth Circuit issues a ruling overturning the STB’s definition of on-time performance. The opinion says that “Congress likely did not give the FRA/Amtrak and the Board separate authority to develop two potentially conflicting on-time performance rules” and that “In any event, on-time performance in § 213(a) means on-time performance as developed by the FRA and Amtrak under § 207(a).” Amtrak appeals to the Supreme Court.
- January 12, 2018 – The Justice Department, on behalf DOT and STB, files a response brief to Amtrak’s appeal of the Eighth Circuit decision. They agree with Amtrak that the Eighth Circuit was wrong to deny the STB’s authority to set its own on-time performance standards, but ask that the Supreme Court deny the writ of certiorari until after the D.C. Circuit rules again in AAR v. DOT. The brief says that if the D.C. Circuit simply severs the section 207(d) arbitration provision from the rest of section 207, “the FRA and Amtrak would thus be able to develop new metrics and standards for evaluating Amtrak’s performance and service quality” but if the D.C. Circuit kills all of section 207, they would appeal the whole thing back to the Supreme Court again.
- February 20, 2018 – The Supreme Court declines to hear an appeal of the Eighth Circuit decision by denying certiorari in cases 17-600 and 17-714.
- July 20, 2018 – The D.C. Circuit issues its third ruling. Its opinion reverses the District Court in part, holding that “the constitutional violations previously identified by this court can be fully remedied by excising the binding-arbitration provision in Section 207(d) of the 2008 Rail Act, and that Section 207(d) is properly severable…Without an arbitrator’s stamp of approval, Amtrak cannot unilaterally impose its metrics and standards on objecting freight railroads. No rule will go into effect without the approval and permission of a neutral federal agency. That brings the process of formulating metrics and standards back into the constitutional fold.” But the May 2010 metrics and standards are still void.