Posts Tagged ‘U.S. Supreme Court’

Supreme Court Declines to Take Case in Florida County’s Bid to Block Brightline Extension

October 10, 2020

The U.S. Supreme Court declined to hear the county’s appeal of an appellate court decision that gave Brightline the approval to use tax-exempt private activity bonds to fund construction of a line to Orlando.

Local news reports said the court’s decision not to take the case was expected, but county officials made the appeal because they felt they had to exhaust every opportunity to try and block the rail expansion.

The county has spend $3.8 million in public money since 2014 fighting the line extension and local residents donated $200,000 to help finance the case.

Brightline spokesman Ben Porritt said in a statement that the high court’s decision “closes out the county’s repeated and baseless attempt to disrupt our efforts of connecting Florida by passenger rail.”

High Courts Urged to Reject Brightline Case

September 2, 2020

Brightline, the U.S. Department of Transportation, and the Federal Railroad Administration have filed a brief with the U.S. Supreme Court asking the court not to take a case brought by Indian River County, Florida, over the use of private activity bonds to fund a Brightline expansion to Orlando.

The Florida county has fought the extension for years and lost in lower court rulings that upheld the issuance of the bonds.

AAF Holdings, which owns Brightline, has argued that it is allowed by federal law to issue the $2.1 billion in bonds.

It said use of the bonds is permitted under language in the law that allows them for use to finance “qualified highway or surface freight transfer facilities.”

U.S. DOT has argued that the bonds may be used for any project that benefits from highway funds.

In this case, the Brightline project includes grade-crossing improvements that fit that description.

Florida County to Appeal to U.S. Supreme Court

May 26, 2020

A Florida County that has long opposed the efforts of Brightline to build an extension to Orlando is making a last ditch appeal to the U.S. Supreme Court.

Indian River County contends that Virgin Trains USA, which operates the Brightline service, should not be eligible for $2.7 billion of tax-exempt private activity bonds.

The bonds are being used to finance construction of the Orlando extension.

The Florida county argues that there is an open question about whether a federal agency can interpret the law and whether courts should defer to that interpretation.

In a legal brief, the county said the matter is “critical to the separation of powers” between agencies and the courts.

Indiana River County has been fighting and losing in the courts for years in its efforts to thwart Brightline.

It’s most recent setback was a federal appeals court ruling that Virgin can use the bonds as intended for expansion.

County officials have approved $200,000 to make one appeal to the Supreme Court.

High Court Won’t Hear AAR Passenger Rules Appeal

June 4, 2019

Amtrak and the Association of American Railroads are both claiming victory in the wake of a decision by the U.S. Supreme Court to decline to review an appeals court ruling in the long-running battle over the authority of federal regulators to established on-time standards for passenger trains.

The latest action by the high court means that a ruling by the U.S. Court of Appeals for the District of Columbia that Amtrak and the Federal Railroad Administration may work together to establish on-time metrics to be applied to Amtrak’s host railroads will stand.

The Supreme Court in 2015 had ruled 9-0 that the two could collaborate on those metrics.

However, the DC appeals court has also ruled that part of the 2008 Passenger Rail Investment and Improvement Act was unconstitutional.

The Supreme Court has not overturned that ruling, which was made in July 2018.

The appeals court ruled unconstitutional part of section 207, which gave the U.S. Surface Transportation Board the ability to settle disputes over on-time performance metrics and standards by appointing an arbiter to perform binding arbitration.

The court objected to the use of binding arbitration and said Amtrak could not unilaterally impose metrics and standards on a host railroad over its objections.

That same decision upheld the remainder of section 207, which dictated how on-time metrics could be developed.

It was that part of the appeals court decision that AAR appealed to the Supreme Court.

In reaction to the most recent development, Amtrak said in a statement that it is pleased with the decision and looks forward to working with FRA “to develop clear, efficient and impactful metrics that will lead to better on-time performance for Amtrak customers and the entire rail system.”

The AAR in a statement express disappointment with the high court’s refusal to accept its appeal but said it was pleased that the provision pertaining to metrics and standards remains invalidated.

“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,” the AAR said.

The legal battle over the on-time standards dates to 2011 when AAR commenced litigation.

The essence of the latest outcome means that although the previous on-time standards are not longer valid, Amtrak and the FRA will have the opportunity to try again to come up with a different set of standards.

That process is expected to take several months and Amtrak’s host railroads may still be dissatisfied with them and seek to have then struck down in court.

Railway Age Washington reporter Frank N. Wilner said the resulting regulatory proceedings and any subsequent litigation could take up another half a decade.

Wilner speculated that the railroad industry might argue in future court cases that the standards amount to an unconstitutional taking of private property without appropriate compensation.

He said the court have yet to rule on what constitutes a reasonable compensation to remedy freight railroad delays and if such compensation even is recoverable.

AAR Appeals to U.S. High Court

February 4, 2019

The Association of American Railroads is again asking a court to invalidate a rule making process pertaining to on-time standards for Amtrak trains.

The railroad trade association last week asked the U.S. Supreme Court to overturn an appeals court decision issued last summer that upheld a federal law allowing Amtrak and the Federal Railroad Administration to set on-time standards for the carrier’s host railroads.

The 2-1 decision by the Court of Appeals for the District of Columbia Circuit found that a lower court erred in invalidating parts of the 2008 Passenger Rail Investment and Improvement Act.

The appeals court agreed that the U.S. Surface Transportation Board can set and enforce on-time standards.

AAR took its appeal to the Supreme Court after the full DC Circuit Court of Appeals declined to review the decision by the three-judge panel.

The trade group has argued that Amtrak is a for-profit corporation and giving it authority to work with the FRA to set OTP standards gives it an unfair competitive advantage over its host railroads.

That interpretation gained currency when the Eighth Circuit interpreted the law as meaning that Amtrak “competes” with its host railroads for track space.

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.

NARP Wants High Court Review of Passenger Ruling

November 15, 2017

The Rail Passengers Association, the new name for the National Association of Railroad Passengers, and the Environmental Law & Policy Center have asked the U.S. Supreme Court to review an appeal court decision that reduced the authority of the Surface Transportation Board to set on-time standards for passenger trains.

In the petition, the groups content that without defined standards, freight will be systematically given preference over passenger trains, leading to chronic delays for long distance riders.

NARP is seeking to overturn the appeals court decision that applied a narrow interpretation of the Passenger Rail Investment and Improvement Act.

The case grew from a challenge to a section of that law by the Association of American Railroads that was first ruled upon by a Federal District Court for the District of Columbia.

“When the D.C. Circuit nullified Section 207 last year, it took away FRA’s power to develop on-time performance standards. Then the Eighth Circuit this summer interpreted Section 213 in a way that eviscerated the power of the Surface Transportation Board, which was the only agency left to carry out Congress’ assignment to improve on-time performance. The two courts’ moves together have left no agency remaining to fulfill Congress’ statutory mandate in PRIIA to enforce those standards,” said Jim Mathews, NARP president.

Matthews said these decisions have thwarted congressional intent in PRIIA and leaves passengers without any recourse.

The Eighth Circuit Court of Appeals rejected an STB interpretation that Section 213 of PRIIA, which created two separate “triggers,” each of which require the STB to investigate sub-standard on-time performance.

NARP noted that the AAR had in 2015 asked the STB to create the regulation that defined on-time performance.

NARP said that after the STB sided with passenger group, the railroad industry trade association challenged STB’s authority to regulate the issue.

“This fight has gone on long enough,” Mathews said. “For decades, rail passengers have been left waiting for freight trains to clear the rails. Even acts of Congress haven’t been able to budge them out of the way. We need the courts to now recognize and allow Congress’ goal to be carried out. The law creating Amtrak in the early 1970s codified a deal these railroads made with the American taxpayer: we’ll relieve you of your common-carrier responsibility for passenger service, and in exchange you’ll ensure those passenger trains get where they need to go on time. It has been a battle ever since.”

 

Appeals Court Strikes down STB On-time Standards

July 17, 2017

Another federal court has struck a blow at the efforts of the U.S. Surface Transportation Board to establish on-time standards for Amtrak trains.

The Eighth U.S. Circuit Court of Appeals found the STB standards to be unconstitutional, saying that the STB had “exceeded its authority” in creating the standards.

The appeal court ruling came in the wake of a similar U.S. Supreme Court ruling that development of on-time metrics by the Federal Railroad Administration and Amtrak as directed by Section 207 of 2008’s Passenger Rail Investment and Improvement Act was unconstitutional.

In the Eighth Circuit ruling, Chief Judge Lavenski R. Smith acknowledged that the absence of such on-time standards would make it impossible for the STB to investigate or adjudicate disputes brought by Amtrak against host railroads in the event that punctuality fell below 80 percent for two consecutive quarters.

However, the court in essence decided that the STB’s inability to measure on time performance is not a problem for the judiciary to solve.

There are two cases pending before the STB in which Amtrak alleges that host railroads needlessly delayed Amtrak trains.

One case involve the handling by Canadian National of the Saluki and Illini between Chicago and Carbondale, Illinois, while the other regards Norfolk Southern’s handling of the Capitol Limited west of Pittsburgh.

In both cases, Amtrak contends that dispatching decisions made by the host railroads are delaying its trains.

The STB had contended that it had the legal right to establish on-time standards “by virtue of its authority to adjudicate complaints brought by Amtrak. Any other result would gut the remedial scheme, a result Congress clearly did not intend.”

Supporting the STB’s position were 13 intervenors, including the National Association of Railroad Passengers and its state affiliates along with the U.S. Conference of Mayors.

Challenging the STB were Union Pacific, CSX, CN and the Association of American Railroads.

They argued that the “gap-filling rationale does not allow one agency to assume the authority expressly delegated to another.”

The court found that the only place in federal law where the 80 percent standard was spelled out was in section 207, which the Supreme Court ruled unconstitutional because Amtrak had a hand in developing it.

Although the court let stand Congress’ setting a statutory right of passenger train “priority” over freight trains, the practical effect of the court decision is that Amtrak has no way to challenge a host railroad’s systematic denial of that right.

Instead, the only motivation for railroads to keep Amtrak trains on time are the proprietary and confidential incentive contracts Amtrak has been able to negotiate with its host railroads pertaining to on-time handling.

The only action Amtrak can take against a host railroad would be to refuse to make incentive payments due to non-performance under the terms of its operating contracts with a host railroad.

The court rulings do suggest that Congress could give the FRA a mandate to establish on-time standards provided that Amtrak was not a participant in the writing of those standards.

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.

Court Sides With AAR in On-Time Rules Dispute

May 3, 2016

A federal appeals court ruled last week that a 2008 law unconstitutionally gave Amtrak regulatory power over its contract railroads.

The U.S. Court of Appeals for the District of Columbia sided with the Association of American Railroads in saying that the Passenger Rail Investment and Improvement Act of 2008 gave Amtrak too much power when it comes to writing regulations pertaining to on-time performance metrics.

It was the second time that the appeals court has ruled in favor of the AAR.

Amtrak logoAn earlier decision was overturned by the U.S. Supreme Court which sent the case back to the appeals court for further review.

AAR had brought suit against the U.S. Department of Transportation in an effort to invalidate Section 207 of the 2008 PRII law.

In its latest ruling, the appeals court said the law’s giving Amtrak the authority to write regulations that affect its host railroads is in violation of the Constitution’s Due Process clause.

The court also knocked down the clause that gives the Surface Transportation Board the authority to appoint a mediator to arbitrate disputes between Amtrak and a host railroad over on-time performance.

The case has a long history that began with a federal district court siding with the U.S. DOT in favor of the law.

AAR appealed that decision to the appeals court, which said in July 2013 that Amtrak is a private company.

The Supreme Court ruled unanimously in March 2015 that Amtrak must be considered a governmental entity but instructed the appeals court to decide the question of the propriety of a government entity that is a participant in a private marketplace being able to regulate that marketplace.

However, concurring opinions by justices Samuel Alito and Clarence Thomas noted that the situation might violate a host railroad’s right to due process.

Those opinions said that regulators must be “disinterested” government bodies rather than competitors in the business.

In its latest ruling, the appeals court cited the Alito and Thomas’s opinions, but conceded that Amtrak and its contract railroads are not competing for the same customers.

They are, however, the court said, competing for the same scarce railroad route capacity and therefore must be considered economic competitors.

As for the STB’s authority under the 2008 law to appoint an arbitrator, the appeals court said that an independent arbitrator appointed by the STB cannot make final regulations because he or she is not a duly appointed or sworn Officer of the United States, as the Constitution requires.

The AAR originally filed suit acted after the U.S. DOT began to promulgate regulations under Section 207 if the PRII with the railroad trade group arguing that the law was an unconstitutional delegation of rule-making to a private company.

In briefs to the court, the AAR relied on the congressional proclamation of the Rail Passenger Service Act of 1970 creating the National Railroad Passenger Corporation (Amtrak) not be treated as a government entity but instead be operated as a for-profit business.

Although the appeals court last week struck down Section 207, it left the rest of the 2008 PRII intact and did not disturb Amtrak’s statutory rights to access of freight railroad tracks on an incremental cost basis.

Nor did the appeals court set aside laws that give Amtrak trains “preference over freight transportation.”

Congress could revise the 2008 law to grant the U.S. DOT the sole power to write on-time performance metrics and standards, in consultation with Amtrak and other others.

In doing so, Congress could give the authority to mediate between Amtrak and a contract railroad to the STB, whose members are duly sworn Officers of the United States, appointed by the president with the advice and consent of the Senate.

The court did not say that it was improper for the federal government to promulgate on-time performance regulations.