Department of Transportation v. Association of American Railroads

Supreme Court of the United States · 2015 · Administrative Law

Administrative LawSeparation of PowersNondelegationFederal Actor StatusAmtrakgovernmental entityprivate entityseparation of powers

Facts

Congress created Amtrak in 1970 and later gave Amtrak and the FRA joint authority under PRIIA §207(a) to develop metrics and standards for measuring the performance and service quality of intercity passenger rail operations. Those metrics and standards include on-time performance requirements and limits on host-responsible delays affecting freight railroads whose tracks Amtrak uses. The Association of American Railroads alleged that the metrics and standards harmed its members' freight operations and argued they were invalid because Congress unconstitutionally allowed a private entity, Amtrak, to exercise joint authority in issuing them. Amtrak's stock, board structure, reporting obligations, statutory mission, operational priorities, and federal funding all reflect extensive federal creation, control, supervision, and support.

Issue

For purposes of determining the validity of the PRIIA metrics and standards, should Amtrak be treated as a private entity or as a governmental entity under the Constitution's separation-of-powers framework? If Amtrak is governmental, the court also had to decide the proper disposition of the D.C. Circuit's contrary ruling.

Rule

Congress's statutory label describing an entity as not a government agency or instrumentality is not dispositive for constitutional separation-of-powers analysis. Instead, courts must make an independent inquiry into the practical reality of federal creation, control, supervision, mission, and funding; where the Government created the entity, controls it, supervises its operations, and the entity operates for the Government's benefit, the entity is governmental for purposes of determining the constitutionality of its actions.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Congress creates Great Lakes Passenger Mobility Corporation to coordinate intercity ferry service in Michigan and Wisconsin. The statute says the corporation "is not a department, agency, or instrumentality of the United States" and must be "managed as a for-profit corporation," but the Secretary of Transportation holds its stock, most directors are presidential appointees confirmed by the Senate, and the entity receives annual federal subsidies.

A shipping association challenges performance standards jointly issued by the corporation and a federal agency, arguing the corporation is private because Congress labeled it that way. How should a court analyze the corporation's status for separation-of-powers purposes?

Explanation. The majority held that congressional pronouncements are not dispositive for constitutional separation-of-powers analysis. Courts must independently examine practical reality, including governmental creation, control of stock and board, supervision, public mission, and federal funding. A disclaimer of governmental status and for-profit language do not control where federal control and supervision predominate. (Derived from Department of Transportation v. Association of American Railroads (n.d.).)