WASHINGTON (CN) - The Supreme Court agreed Monday to consider a law that lets Amtrak and the Federal Railroad Administration govern freight railroads.
A trade group known as the Association of American Railroads brought the challenge
at issue in 2011, claiming that the Passenger Rail Investment and Improvement Act (PRIIA) gave excessive regulation power to a private corporation with a "historically poor record of on-time performance and (a) chronic inability to generate revenue sufficient to cover its operating costs."
Though U.S. District Judge James Boasberg upheld
the law in 2012, the D.C. Circuit reversed last year after finding that the challenged provision, Section 207, "constitutes an unlawful delegation of regulatory power to a private entity."
likens the scheme to one that the Supreme Court invalidated in the 1936 case Carter v. Carter Coal Co.
"Section 207 is as close to the blatantly unconstitutional scheme in Carter Coal
as we have seen," the decision states. "The government would essentially limit Carter Coal
to its facts, arguing that '[n]o more is constitutionally required' than the government's 'active oversight, participation, and assent' in its private partner's rulemaking decisions. This proposition - one we find nowhere in the case law - vitiates the principle that private parties must be limited to an advisory or subordinate role in the regulatory process."
The court deemed Amtrak a private company because it must "be operated and managed as a for-profit corporation."
"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," the decision states.
In taking up the case Monday the Supreme Court did not issue any comment, as is its custom.