If you ride Amtrak and care about getting places on time, then the Supreme Court heard a case of great interest to you on Monday. Though the same could be said for anyone who enjoys cheap goods that arrive in an expeditious manner. Or even just those of you who savor thick cuts of constitutional law. Pretty much anyone who isn't a hermetic anti-consumer nihilist has a skin in the game.
In most of the United States, with the notable exception of the all-important Northeast Corridor between Washington and Boston via New York, Amtrak's passenger trains run on tracks owned by private freight companies. Congress has granted Amtrak "preference" to use these tracks since 1973—the better to get people places on time—but that rule lacked much bite until 2008.
That year, Congress passed a passenger rail act that asked Amtrak and the Federal Railroad Administration to jointly establish "metrics and standards" for Amtrak's performance: an on-time rate above 80 percent, generally speaking. If Amtrak failed to meet these standards for two straight quarters, a complaint could be filed with the Surface Transportation Board. The board would then investigate and had the power to award damages to Amtrak if the freight railroads were deemed responsible for the delays.
The new rules improved Amtrak's performance enormously, but the freight carriers—represented in court by the Association of American Railroads—took exception to the fact that one of their competitors (in the sense of track space, not passengers or cargo) held too much power over the rules of the game. After an initial ruling in Amtrak's favor, an appeals court found against Amtrak in July 2013, and on-time rates immediately plummeted. Amtrak hopes the Supreme Court will reverse that ruling and return the leverage that helped its trains run on time.
The case largely hinges on whether Amtrak is a private service or a government entity. That's not as clear a matter as it might seem: on one hand, the federal government created Amtrak and funds it with taxpayer money; on the other hand, it operates as a for-profit business. If the high court takes Amtrak to be part of the private sector instead of the government, then it could rule that Amtrak has improperly assumed regulatory power over its own industry (a facet of the case known as "non-delegation doctrine") or that it has created an unfair advantage over its competitors (a matter of due process under the Fifth Amendment).
The Supreme Court's ruling is expected in June. In the meantime, with some guidance from SCOTUSblog, we've reviewed the hearing with an eye for key moments that might reveal which way the court is leaning. (From a lay perspective, it seems fairly split, with Justices Kennedy, Ginsburg, Kagan, and perhaps Sotomayor inclined toward Amtrak's side, and the others either against Amtrak or undecided.) Something to read as you wait for the train.
1. Chief Justice Roberts on a "significant regulatory impact."
Amtrak can then force a proceeding at which the freight carriers will have to defend, right? …
Well, that's a significant regulatory impact, to tell railroads I, a private party, get to start a governmental proceeding and you have to show up to defend it. …
And, by the way, if I don't — it's triggered if I don't comply with standards that I get to set.
Here the Chief Justice is entertaining the idea that Amtrak is operating as a private party while also regulating its own industry in the style of a government agency—seemingly favoring the freight side in the case. Not only did Amtrak write the "metrics and standards" that dictate operating practices, says Roberts, but it can raise a grievance with anyone who defies those standards. Curtis Gannon, who argued the case for Amtrak (technically, for the Department of Transportation), responded that private parties initiate government investigations all the time without that being seen as "delegation of legislative power."
2. Justice Breyer worries about the magnitude of the decision.
But once this Court starts down the road — and it would be starting, because I am aware of no precedent — once we start down the road of saying Congress cannot tell even a private agency to go and make some standards, which we all know will be followed, once we start down that road there is no stopping place …
Here Justice Breyer voices a concern he reiterated many times throughout the hearing: that private agencies create standards under the auspices of government all the time. As a case in point, he mentioned ICANN, a technically private organization that nonetheless works closely with government to manage the Internet's domain system. With that analogy in mind, Breyer seems to be siding with the idea that Amtrak—regardless of whether or not it's a private entity—is doing nothing out of the ordinary in establishing performance standards for an industry.
3. Justice Kennedy offers a hypothetical.
Suppose that the government together with auto manufacturer A made standards, but then auto manufacturers B and C had to follow them. That seems wrong. Why is this different?
Justice Kennedy raised this hypothetical toward the end of Gannon's oral argument, drawing a parallel between what Amtrak has done with its "metrics and standards" and what some car maker might do in a similar situation. Kennedy's thoughts carry considerable weight, given his role as frequent swing vote, so his skepticism here might be telling. Gannon concedes that such a scenario seems wrong, but says the case with Amtrak is different, because Congress itself established the original track standards—referring to the 1973 law that gives Amtrak "preference" over freight carriers—and says the Federal Railroad Administration had a hand in the stronger 2008 metrics.
4. Justice Kagan wonders "what about Amtrak is not governmental."
Thomas H. Dupree, lawyer for the freight railroads:
And here you have a situation where Congress, the President and Amtrak itself have repeatedly declared to the public in explicit terms that Amtrak is not the government.
Do you think that's dispositive? Because I've always thought that the labels that Congress decides to put on these things is not of particular relevance. ...
I mean, I guess I'm just wondering what about Amtrak is not governmental other than the label.
In this exchange, Justice Kagan manages to take a shot at both Congress and the freight railroad's case at the same time. She clearly doesn't buy the idea that Amtrak is a private entity simply because Congress says Amtrak is a private entity. On the contrary, she says later, "there is government all over this at every step." Amtrak is supervised by the government; Amtrak worked with the Federal Railroad Administration on the 2008 metrics and standards; and the federal Surface Transportation Board has ultimate power to enforce those standards. "So there is, like, no place at which a private actor can do something itself in this scheme, it would seem to me," says Kagan—a strong indication that she favors Amtrak's case.
5. Justice Scalia pushes back on due process.
[W]hat difference does it make whether it's a governmental entity or not, so long as it is operating on a for-profit basis and is giving — is given the last word on some regulatory matters that disadvantage its competitors, there's a violation of due process. I — I don't see how it makes any difference whether you call it governmental or not.
Here Justice Scalia contends that the whole debate about whether or not Amtrak is a government entity is besides the point: the government can violate due process, too. The freight railroad attorney Dupree responds that he agrees "a hundred percent." That would seem to put Scalia squarely against Amtrak in this case, though to be fair, there are other moments during the hearing where he entertains Amtrak's side. For instance, when considering whether a private party can bring an enforcement action—as Amtrak can with the Surface Transportation Board when it doesn't get track preference—Scalia says he considers that "perfectly constitutional."