July 25, 2018

Last Friday, a federal appeals court issued a new ruling in the seemingly never-ending saga of the railroad industry’s legal fight against metrics for on-time performance of Amtrak trains developed in 2009 by the Federal Railroad Administration and by Amtrak itself.

In its July 20 opinion, the U.S. Court of Appeals for the District of Columbia Circuit ruled that section 207(d) of the 2008 federal passenger rail authorization law, which gave the Surface Transportation Board the option to settle disputes over on-time performance metrics and standards by appointing an arbiter to perform binding arbitration, was unconstitutional but that the rest of section 207, relating to how such metrics were to be developed, was not. The arbitration section was therefore severed from the rest of the section, clearing the way for the Federal Railroad Administration and Amtrak to develop the on-time performance metrics called for by Congress almost ten years ago.

The opinion (which has several cute puns like “Congress went off the constitutional rails” and “We at long last come to the end of the tracks in this lengthy litigation”) sends the case back down to the U.S. District Court for the District of Columbia for a final order enforcing the decision. That court voided an earlier set of metrics and standards for on-time performance in a March 2017 ruling, which the D.C. Circuit has now reversed. It is does not appear that the District Court has the authority to simply put the old standards (finalized in May 2010) back in service, but it can clear the way the FRA and Amtrak to develop new standards.

It is also unclear whether or not AAR will appeal the latest ruling and how they might do so. They have the option of asking the D.C. Circuit for a full en banc review of last Friday’s decision by a three-judge panel, or of appealing the new ruling directly to the U.S. Supreme Court. But neither of those options is a sure thing. Circuit courts are generally reluctant to grant full en banc reviews because if they grant every single en banc request, what’s the point of breaking up the workload and having cases heard by three-judge panels in the first place? And asking the Supreme Court to hear an appeal is always a long shot.

Because of the long duration and complicated nature of this dispute, we couldn’t really put the latest ruling into context without assembling a timeline, which is shown below and which will hopefully be of help. Links to court opinions and rulemaking documents are included where available.

Timeline: The Saga of AAR v. DOT and the PRIIA On-Time Performance Metrics

October 16, 2008 – Congress enacts section 207 of Division B of Public Law 110-432. Section 207(a) directs Amtrak and the Federal Railroad Administration (FRA) jointly, in consultation with the Surface Transportation Board (STB) and other railroads, to issue develop metrics and minimum standards for intercity passenger rail operations. Section 207(b) requires quarterly reporting of data on the same by FRA. Section 207(c) requires Amtrak and host railroads to incorporate the metrics and standards into their access and service agreements. Section 207(d) requires disputes between parties in the development of the metrics to be settled by the STB via binding arbitration. Section 213 of the law gives the STB the authority to punish railroads that fail to meet the section 207 metrics.

March 13, 2009 – Amtrak and FRA jointly issue draft metrics and request public comment.

May 6, 2010 – After receiving public comments, including those of the Association of American Railroads (AAR) (which allege that the standards would “require massive additional investment to expand capacity, as well as increased expenditures for maintenance and administration), Amtrak and FRA jointly issue the final metrics.

August 19, 2011 – AAR files a lawsuit against USDOT alleging that the metrics and the way they were developed is unconstitutional. The complaint alleges two different constitutional grounds: “nondelegation” (Amtrak is a private entity, not a department, agency, or instrument of the government, and the government cannot delegate to a private party the power to regulate the conduct of other private parties) and “due process” (giving Amtrak, a private entity, coercive power over other railroads violates their due process rights). Both AAR and the government file for summary judgment.

May 31, 2012 – The U.S. District Court for the District of Columbia issues an opinion dismissing AAR’s case on two grounds: because, it said, Amtrak is considered to be a governmental entity for the purpose of due process claims, and that it was governmental enough to avoid the nondelegation issue.  AAR appeals.

July 2, 2013 – The U.S. Court of Appeals for the D.C. Circuit reverses the lower court ruling. Its opinion holds that section 207 “constitutes an unlawful delegation of regulatory power to a private entity.” The government appeals.

December 19, 2014 – Despite the fact that the section 207 metrics are on hold pending the appeal of the AAR v. DOT lawsuit, the STB rules that it can enforce on-time performance standards anyway, without the metrics. Several railroads ask the STB to develop its own definitions of on-time performance through a rulemaking.

March 8, 2015 – The U.S. Supreme Court reverses the D.C. Circuit. Its opinion holds that “for purposes of determining the validity of the metrics and standards, Amtrak is a governmental entity” but that “substantial questions respecting the lawfulness of the metrics and standards— including questions implicating the Constitution’s struc­tural separation of powers and the Appointments Clause…may still remain in the case.” The case is remanded back to the D.C. Circuit for a re-hearing.

May 15, 2015 – The STB initiates its own rulemaking to set its own standards of on-time performance for section 213 enforcement.

December 28, 2015 – The STB proposes its own definition of on-time performance for the purposes of section 213 enforcement.

April 29, 2016 – The D.C. Circuit issues its second ruling. The opinion holds that section 207 violates the Due Process clause: “Because PRIIA endows Amtrak with regulatory authority over its competitors, that delegation violates due process.” The opinion also holds that the arbitration clause in section 207(d) violates the Appointments Clause: “Without providing for the arbitrator’s direction or supervision by principal officers, PRIIA impermissibly vests power to appoint an arbitrator in the STB.” The government does not appeal, and case was then sent back down to the U.S. District Court for a remedy.

August 8, 2016 – The STB publishes its final rule for its own standards of on-time performance for section 213 enforcement. Several railroads ask the U.S. Court of Appeals for the Eighth Circuit to review the STB rule.

March 23, 2017 – The U.S. District Court for the District of Columbia issues its second ruling. The short opinion holds that section 207 “is DECLARED void and unconstitutional” and declares that the May 2010 final metrics are void and vacated. The government appeals the part of the opinion that holds section 207 unconstitutional but does not appeal the part that voids the May 2010 final metrics.

July 12, 2017 – The Eighth Circuit issues a ruling overturning the STB’s definition of on-time performance. The opinion says that “Congress likely did not give the FRA/Amtrak and the Board separate authority to develop two potentially conflicting on-time performance rules” and that “In any event, on-time performance in § 213(a) means on-time performance as developed by the FRA and Amtrak under § 207(a).” Amtrak appeals to the Supreme Court.

January 12, 2018 – The Justice Department, on behalf DOT and STB, files a response brief to Amtrak’s appeal of the Eighth Circuit decision. They agree with Amtrak that the Eighth Circuit was wrong to deny the STB’s authority to set its own on-time performance standards, but ask that the Supreme Court deny the writ of certiorari until after the D.C. Circuit rules again in AAR v. DOT. The brief says that if the D.C. Circuit simply severs the section 207(d) arbitration provision from the rest of section 207, “the FRA and Amtrak would thus be able to develop new metrics and standards for evaluating Amtrak’s performance and service quality” but if the D.C. Circuit kills all of section 207, they would appeal the whole thing back to the Supreme Court again.

February 20, 2018 – The Supreme Court declines to hear an appeal of the Eighth Circuit decision by denying certiorari in cases 17-600 and 17-714.

July 20, 2018 – The D.C. Circuit issues its third ruling. Its opinion reverses the District Court in part, holding that “the constitutional violations previously identified by this court can be fully remedied by excising the binding-arbitration provision in Section 207(d) of the 2008 Rail Act, and that Section 207(d) is properly severable…Without an arbitrator’s stamp of approval, Amtrak cannot unilaterally impose its metrics and standards on objecting freight railroads. No rule will go into effect without the approval and permission of a neutral federal agency. That brings the process of formulating metrics and standards back into the constitutional fold.” But the May 2010 metrics and standards are still void.