A three-judge panel of the U.S. Court of Appeals for the District of Columbia today unanimously ruled that Congress improperly delegated power to Amtrak when it allowed the private corporation to fine Class I carriers for causing delays in its passenger service, Bloomberg reports.
Amtrak, a publicly funded service managed as a for-profit corporation, had been authorized to set on-time performance standards in collaboration with the Federal Railroad Administration under the Passenger Rail Investment and Improvement Act of 2008. The standards could have resulted in investigations of freight railroads by the Surface Transportation Board if they obstructed or slowed down Amtrak trains.
The Association of American Railroads sued the Department of Transportation and the Federal Railroad Administration in 2011 on behalf of the top seven railroads operating in the U.S., arguing that the standards forced freight railroads to alter their business operations, at times delaying their own freight traffic. The lawsuit, AAR v. DOT, 12-5204, stated that Amtrak is a “financially interested private party that stands to directly benefit from violations of the rules it created” when it levies complaints against carriers to the Surface Transportation Board.
“Though the federal government’s involvement in Amtrak is considerable, Congress has both designated it a private corporation and instructed that it be managed so as to maximize profit,” said U.S. Circuit Judge Janice Rogers Brown in the ruling.
AAR has applauded the court’s decision:
“Freight railroads recognize Amtrak wants to run trains on time, and they work closely with Amtrak to help make this happen,” said Edward R. Hamberger, AAR president and CEO, in a written statement. “However, freight railroads believe setting and measuring schedules and on-time performance metrics should not be done through a one-size-fits all approach at the federal level, but addressed jointly through private bilateral contracts that take into account the facts and circumstances of particular routes.”
“We are pleased with the court’s unanimous finding that Section 207 of the Passenger Rail Investment and Improvement Act of 2008 is unconstitutional,” Hamberger concluded. “We are continuing to review the decision to determine what will be the resulting next steps.”