Dep't of Transp. v. Ass'n of Am. Railroads

• Decision Date: 09 March 2015
• Docket Number: No. 13–1080.,13–1080.
• Parties: DEPARTMENT OF TRANSPORTATION, et al., Petitioners v. ASSOCIATION OF AMERICAN RAILROADS.
• Court: U.S. Supreme Court

575 U.S. 43

135 S.Ct. 1225

191 L.Ed.2d 153

DEPARTMENT OF TRANSPORTATION, et al., Petitioners

v.ASSOCIATION OF AMERICAN RAILROADS.

No. 13–1080.

Supreme Court of the United States

Argued Dec. 8, 2014.

Decided March 9, 2015.

Curtis E. Gannon, for Petitioners.

Thomas H. Dupree, Jr., Washington, DC, for Respondent.

Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, Department of Justice, Washington, DC, for Petitioners.

Louis P. Warchot, Daniel Saphire, Association of American Railroads, Washington, DC, Thomas H. Dupree, Jr., Counsel of Record, Amir C. Tayrani, Lucas C. Townsend, Gibson, Dunn & Crutcher LLP, Washington, DC, for Respondent.

Kathryn B. Thomson, General Counsel, Paul M. Geier, Assistant General Counsel for Litigation, Peter J. Plocki, Deputy Assistant General Counsel for Litigation, Joy K. Park, Trial Attorney, Department of Transportation, Washington, DC, Melissa Porter, Chief Counsel, Zeb G. Schorr, Deputy Assistant Chief Counsel, Federal Railroad Administration, Washington, DC, Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, Stuart F. Delery, Assistant Attorney General, Edwin S. Kneedler, Deputy Solicitor General, Curtis E. Gannon, Assistant to the Solicitor General, Mark B. Stern, Michael S. Raab, Daniel Tenny, Patrick G. Nemeroff, Attorneys, Department of Justice, Washington, DC, for Petitioners.

Justice KENNEDY delivered the opinion of the Court.

In 1970, Congress created the National Railroad Passenger Corporation, most often known as Amtrak. Later, Congress granted Amtrak and the Federal Railroad Administration (FRA) joint authority to issue "metrics and standards" that address the performance and scheduling of passenger railroad services. Alleging that the metrics and standards have substantial and adverse effects upon its members' freight services, respondent—the Association of American Railroads—filed this suit to challenge their validity. The defendants below, petitioners here, are the Department of Transportation, the FRA, and two individuals sued in their official capacity.

Respondent alleges the metrics and standards must be invalidated on the ground that Amtrak is a private entity and it was therefore unconstitutional for Congress to allow and direct it to exercise joint authority in their issuance. This argument rests on the Fifth Amendment Due Process Clause and the constitutional provisions regarding separation of powers. The District Court rejected both of respondent's claims. The Court of Appeals for the District of Columbia Circuit reversed, finding that, for purposes of this dispute, Amtrak is a private entity and that Congress violated nondelegation principles in its grant of joint authority to Amtrak and the FRA. On that premise the Court of Appeals invalidated the metrics and standards.

Having granted the petition for writ of certiorari, 573 U.S. ––––, 134 S.Ct. 2865, 189 L.Ed.2d 805 (2014), this Court now holds that, for purposes of determining the validity of the metrics and standards, Amtrak is a governmental entity. Although Amtrak's actions here were governmental, substantial questions respecting the lawfulness of the metrics and standards—including questions implicating the Constitution's structural separation of powers and the Appointments Clause, U.S. Const., Art. II, § 2, cl. 2 —may still remain in the case. As those matters have not yet been passed upon by the Court of Appeals, this case is remanded.

I

A

Amtrak is a corporation established and authorized by a detailed federal statute enacted by Congress for no less a purpose than to preserve passenger services and routes on our Nation's railroads. See Lebron v. National Railroad Passenger Corporation, 513 U.S. 374, 383–384, 115 S.Ct. 961, 130 L.Ed.2d 902 (1995) ; National Railroad Passenger Corporation v. Atchison, T. & S.F.R. Co., 470 U.S. 451, 453–457, 105 S.Ct. 1441, 84 L.Ed.2d 432 (1985) ; see also Rail Passenger Service Act of 1970, 84 Stat. 1328. Congress recognized that Amtrak, of necessity, must rely for most of its operations on track systems owned by the freight railroads. So, as a condition of relief from their common-carrier duties, Congress required freight railroads to allow Amtrak to use their tracks and facilities at rates agreed to by the parties—or in the event of disagreement to be set by the Interstate Commerce Commission (ICC). See 45 U.S.C. §§ 561, 562 (1970 ed.). The Surface Transportation Board (STB) now occupies the dispute-resolution role originally assigned to the ICC. See 49 U.S.C. § 24308(a) (2012 ed.). Since 1973, Amtrak has received a statutory preference over freight transportation in using rail lines, junctions, and crossings. See § 24308(c).

The metrics and standards at issue here are the result of a further and more recent enactment. Concerned by poor service, unreliability, and delays resulting from freight traffic congestion, Congress passed the Passenger Rail Investment and Improvement Act (PRIIA) in 2008. See 122 Stat. 4907. Section 207(a) of the PRIIA provides for the creation of the metrics and standards:

"Within 180 days after the date of enactment of this Act, the Federal Railroad Administration and Amtrak shall jointly, in consultation with the Surface Transportation Board, rail carriers over whose rail lines Amtrak trains operate, States, Amtrak employees, nonprofit employee organizations representing Amtrak employees, and groups representing Amtrak passengers, as appropriate, develop new or improve existing metrics and minimum standards for measuring the performance and service quality of intercity passenger train operations, including cost recovery, on-time performance and minutes of delay, ridership, on-board services, stations, facilities, equipment, and other services." Id., at 4916.

Section 207(d) of the PRIIA further provides:

"If the development of the metrics and standards is not completed within the 180–day period required by subsection (a), any party involved in the development of those standards may petition the Surface Transportation Board to appoint an arbitrator to assist the parties in resolving their disputes through binding arbitration." Id., at 4917.

The PRIIA specifies that the metrics and standards created under § 207(a) are to be used for a variety of purposes. Section 207(b) requires the FRA to "publish a quarterly report on the performance and service quality of intercity passenger train operations" addressing the specific elements to be measured by the metrics and standards. Id., at 4916–4917. Section 207(c) provides that, "[t]o the extent practicable, Amtrak and its host rail carriers shall incorporate the metrics and standards developed under subsection (a) into their access and service agreements." Id., at 4917. And § 222(a) obliges Amtrak, within one year after the metrics and standards are established, to "develop and implement a plan to improve on-board service pursuant to the metrics and standards for such service developed under [§ 207(a) ]." Id., at 4932.

Under § 213(a) of the PRIIA, the metrics and standards also may play a role in prompting investigations by the STB and in subsequent enforcement actions. For instance, "[i]f the on-time performance of any intercity passenger train averages less than 80 percent for any 2 consecutive calendar quarters," the STB may initiate an investigation "to determine whether and to what extent delays ... are due to causes that could reasonably be addressed ... by Amtrak or other intercity passenger rail operators." Id., at 4925–4926. While conducting an investigation under § 213(a), the STB "has authority to review the accuracy of the train performance data and the extent to which scheduling and congestion contribute to delays" and shall "obtain information from all parties involved and identify reasonable measures and make recommendations to improve the service, quality, and on-time performance of the train." Id., at 4926. Following an investigation, the STB may award damages if it "determines that delays or failures to achieve minimum standards ... are attributable to a rail carrier's failure to provide preference to Amtrak over freight transportation." Ibid. The STB is further empowered to " order the host rail carrier to remit" damages "to Amtrak or to an entity for which Amtrak operates intercity passenger rail service." Ibid.

B

In March 2009, Amtrak and the FRA published a notice in the Federal Register inviting comments on a draft version of the metrics and standards. App. 75–76. The final version of the metrics and standards was issued jointly by Amtrak and the FRA in May 2010. Id., at 129–144. The metrics and standards address, among other matters, Amtrak's financial performance, its scores on consumer satisfaction surveys, and the percentage of passenger-trips to and from underserved communities.

Of most importance for this case, the metrics and standards also address Amtrak's on-time performance and train delays caused by host railroads. The standards associated with the on-time performance metrics require on-time performance by Amtrak trains at least 80% to 95% of the time for each route, depending on the route and year. Id., at 133–135. With respect to "host-responsible delays"—that is to say, delays attributed to the railroads along which Amtrak trains travel—the metrics and standards provide that "[d]elays must not be more than 900 minutes per 10,000 Train–Miles." Id., at 138. Amtrak conductors determine responsibility for particular delays. Ibid., n. 23.

In the District Court for the District of Columbia, respondent alleged injury to its members from being required to modify their rail operations, which mostly involve freight traffic, to satisfy the metrics and standards. Respondent claimed that § 207 "violates the nondelegation doctrine and the separation of powers principle by placing legislative and rulemaking authority in the hands of a private entity [Amtrak] that participates in the very industry it is supposed to regulate." Id., at 176–177, Complaint ¶¶ 51. Responden...