Appeals court invalidates Amtrak on-time standards

OREANDA-NEWS. May 04, 2016. A 2008 federal law improperly allowed Amtrak to play a role in setting on-time performance standards that apply to freight railroads, a federal appeals court ruled today in a case remanded from the US Supreme Court.

Today's ruling favors the Association of American Railroads (AAR), an industry group that had argued Amtrak could not play a role in setting standards benefiting itself. The standards, which have been in force while the case was under review, have the effect of forcing freight railroads to delay their own trains to ensure that Amtrak and commuter trains run on-time.

The US Court of Appeals in Washington, DC, had previously invalidated provisions in the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) as an unconstitutional delegation of regulatory power to Amtrak, which the court deemed a private entity. PRIIA gave authority to the Federal Railroad Administration (FRA) and Amtrak to develop standards for judging on-time performance of trains.

But the Supreme Court remanded the decision back to the lower court, saying that although Amtrak is designated as a for-profit corporation, that does not mean the court could not also consider it a governmental entity.

"We conclude PRIIA violates the Fifth Amendment's due process clause by authorizing an economically self-interested actor to regulate its competitors," the appeals court said today. PRIIA "violates the appointments clause for delegating regulatory power to an improperly appointed arbitrator," the court said.

The standards in question require Amtrak trains to be on-time 80pc of the time for two consecutive quarters. Freight railroads could be fined for such delays.

AAR said that it felt there was a fundamental constitutional flaw in allowing Amtrak to regulate freight railroads. Amtrak is also a member of AAR.

"Despite the AAR's challenge to the metrics and standards, the association and its freight rail members recognize the importance of Amtrak and are committed to a reliable passenger rail service while meeting the shipping needs of freight customers," AAR said.

In its ruling, the appeals court said it viewed its review as de novo, or starting from the beginning.

The court declined to address AAR's claim that Amtrak has no regulatory power because its board of directors is only partially comprised of members appointed by the President.

Judge Janice Rogers Brown, who wrote today's opinion, and other Judges Stephen Williams and David Sentelle, are Republican appointees.