Posts Tagged ‘U.S. District Court’

Supreme Court Won’t Intervene in On-time Case

February 27, 2018

The U.S. Supreme Court has rejected a request by Amtrak to review a lower court decision that found the Surface Transportation Board cannot assume regulatory authority that is granted to Congress.

The high court’s decision means that a last effort by the federal government to revive the delegated authority will be decided by the U.S. District Court for the District of Columbia.

In a July 2017 decision, the Eighth Circuit Court of Appeals decided that the STB lacked the authority to establish regulatory standards for “on-time performance” in exercising its power to require freight railroads to give “preference” to Amtrak trains. See, Union Pacific Railroad Co. v. Surface Transportation Board, 863 F.3d 816 (8th Cir. 2017).

The Union Pacific case was one of two in which courts considered challenges to a portion of the Passenger Rail Investment and Improvement Act of 2008.

That law delegated to the Federal Railroad Administration and Amtrak the joint power to establish metrics and standards to define “on-time performance,” and gave the STB power to penalize railroads that fail to meet the standards.

The other case was Association of American Railroads vs. U.S. Department of Transportation.

In the latter case, the railroad trade organization challenged the joint FRA/Amtrak authority as an unconstitutional delegation of governmental power to Amtrak because it is a for profit entity.

The appellate court in that case sided with the AAR, ruling that the law constituted a violation of the Fifth Amendment’s due process clause to give Amtrak, “an economically self-interested actor,” the power to regulate its competitors.

Following that decision, the STB sought to establish the on-time standards itself, which led to the Union Pacific case.

The district court in Washington has set oral arguments for March 5 in what remains of the AAR case.

During that hearing, the federal government and Amtrak will be seeking to have the court reinstate the joint rule-making authority of the FRA and Amtrak by narrowing the court’s previous decision and striking down only a portion of the offending PRIIA provision.

Court Sides With Freight Railroads in Amtrak Dispute

March 25, 2017

In the end Amtrak’s freight railroads prevailed in court.

A federal judge ruled in their favor by ruling that Section 207 of the 2008 Passenger Rail Investment and Improvement Act is unconstitutional and thus the metrics and standards that the Federal Railroad Administration had issued in 2011 in terms of evaluating on-time performance have now been struck down.

The ruling was made by Judge James E. Boasberg based on the due process clause of the U.S. Constitution against the taking of life, libery or property without due process of law.

The Association of American Railroads had filed suit challenging the legality of Section 207.

Boasberg’s ruling was made after the case had been remanded court by the U.S. Supreme Court with instructions as to how to proceed in the case.

Therefore, observers say, it is unlikely that the U.S. Department of Transportation will appeal the ruling.

In his ruling, the judge relied on a precedent set in an 1886 Supreme Court ruling involving Southern Pacific that found that rights granted to people by the Constitution are also granted to corporations.

The court ruled that the regulatory authority of the federal government rests only with individuals appointed by the president and confirmed by the U.S. Senate, which is also known as the appointments clause.

The AAR had challenged Section 207, in part, because it allowed Amtrak to have some regulatory power even it is a part of the industry that is being regulated.

In July 2013, the U.S. Court of Appeals found that Amtrak is a private company that may not be granted regulatory powers, overturning a May 2012 ruling by the District Court that Amtrak is a governmental entity.

A unanimous Supreme Court in March 2015 ruled that for the purposes of the constitutional clauses in question, Amtrak is a part of the government.

In sending the case back to the district court, the Supreme Court instructed it to rule further on the questions of due process and appointments.

The latest court ruling means that although Congress may lawfully create companies that act commercially within an industry and may also create regulatory bodies, it cannot create entities that do both at the same time.

AAR had asserted that Section 207 allowed Amtrak to do that.