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13-1080 DEPT. OF TRANSPORTATION V. ASSOCIATION OF AMERICAN RAILROADS DECISION BELOW: 721 F.3d 666 CERT. GRANTED 6/23/2014 QUESTION PRESENTED: Section 207(a) of the Passenger Rail Investment and Improvement Act of 2008, Pub. L. No. 110-432, Div. B, 122 Stat. 4916, requires that the Federal Railroad Administration (FRA) and Amtrak "jointly * * * develop" the metrics and standards for Amtrak's performance that will be used in part to determine whether the Surface Transportation Board (STB) will investigate a freight railroad for failing to provide the preference for Amtrak's passenger trains that is required by 49 U.S.C. 24308(c) (Supp. V 2011). In the event that the FRA and Amtrak cannot agree on the metrics and standards within 180 days, Section 207(d) of the Act provides for the STB to "appoint an arbitrator to assist the parties in resolving their disputes through binding arbitration." 122 Stat. 4917. The question presented is whether Section 207 effects an unconstitutional delegation of legislative power to a private entity. LOWER COURT CASE NUMBER: 12-5204
The case Department of Transportation (DOT) v. Association of American Railroads (AAR), 2014, revolved around the constitutionality of a federal law that allowed Amtrak, a government-owned corporation, to regulate its competitors in the rail industry. The AAR argued that this violated the Fifth Amendment's Due Process Clause because it gave regulatory power to an entity with private interests. Initially, a district court ruled in favor of DOT but on appeal, the D.C Circuit Court reversed this decision stating that Amtrak was indeed a private entity and thus could not be granted regulatory powers by Congress. However, when brought before the Supreme Court in 2015 they unanimously disagreed with the circuit court’s characterization of Amtrak as purely private; instead asserting it is governmental for purposes related to determining constitutional issues due to its creation and control by Congress. However, they did not fully resolve whether or not allowing such regulation was unconstitutional - sending it back down for further proceedings regarding if sufficient safeguards existed against potential abuses from delegating these powers.
In the dissenting opinion for DOT v. ASS'N OF AM. R.R., 2014, Justice Alito disagreed with the majority's interpretation of Amtrak as a governmental entity rather than a private corporation. He argued that Congress had intended to create a for-profit corporation when it established Amtrak and therefore should not be considered part of the government in terms of rule-making authority. The justice also expressed concerns about potential violations of non-delegation principles if such an organization were allowed to regulate other industry participants, which could set dangerous precedents for future cases involving similar public-private entities. Furthermore, he criticized the majority's decision on procedural grounds, arguing that they should have remanded back to lower courts instead of making their own determinations regarding constitutional issues.