Department of Transportation v. Association of American Railroads, 575 U.S. 43

Background

Congress created Amtrak in 1970 and later, in the 2008 PRIIA, directed Amtrak and the Federal Railroad Administration (FRA) to jointly develop metrics and standards for intercity passenger rail performance and service quality; the Surface Transportation Board (STB) may investigate/enforce related delays.
PRIIA §207(a) required joint issuance of metrics (including on-time performance and host-responsible delay limits); §207(d) authorized petitioning the STB to appoint an arbitrator for binding arbitration if Amtrak and FRA could not agree.
The Association of American Railroads sued, claiming §207 unconstitutionally vests regulatory power in Amtrak (a private entity by statute), violating nondelegation/separation of powers and the Due Process Clause because Amtrak would exercise coercive governmental authority over private rail carriers.
The D.C. District Court upheld the metrics; the D.C. Circuit reversed on nondelegation grounds, treating Amtrak as private and concluding Congress could not delegate regulatory authority to a private entity.
The Supreme Court vacated the D.C. Circuit decision, holding that Amtrak must be treated as a governmental entity for constitutional purposes (relying on factors like federal ownership of stock, presidentially appointed and Senate‑confirmed board members, statutory directives and supervision, FOIA/IG coverage, and extensive federal subsidies), and remanded for further consideration of unresolved separation‑of‑powers, Appointments Clause, and due process questions.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Status of Amtrak (governmental vs. private)	Amtrak is a private, for‑profit corporation by statute and thus cannot be delegated regulatory authority	Statutory labels not dispositive; Amtrak is controlled, funded, and supervised by the federal government	Court: Amtrak acts as a governmental entity for constitutional analysis (Lebron controlling)
Nondelegation / Separation of powers re §207(a) metrics	Congress impermissibly delegated regulatory power to Amtrak (a private actor) to make standards that coerce private carriers	Petitioners: FRA/STB and political branches retained sufficient control; metrics are not pure private delegation	Court: Remanded — holding Amtrak governmental removes one barrier to the nondelegation challenge; lower court to evaluate remaining separation‑of‑powers questions in light of that instruction
Arbitration provision (§207(d)) and private arbitrator risk	Binding arbitration by a private arbitrator would be an unconstitutional delegation of regulatory power to a private actor	Govt: Statute can be read to require a public arbitrator (constitutional avoidance) or other limiting interpretations	Concurrence (Alito): If arbitrator may be private, provision likely unconstitutional; lower courts should analyze on remand
Appointments Clause / Amtrak president & board appointment structure	Amtrak president not appointed by President/Senate creates Appointments Clause problems; board structure may be inconsistent with ‘Heads of Departments’ exception	Govt: Amtrak president is an inferior officer; board configuration permissible	Court: Raises unresolved Appointments Clause questions; remand for appellate consideration (Alito and Thomas concurring highlight serious Appointments concerns)

Key Cases Cited

Lebron v. National Railroad Passenger Corp., 513 U.S. 374 (1995) (statutory disclaimer of agency status does not control constitutional status; federal control can make a corporation a federal actor)
Carter v. Carter Coal Co., 298 U.S. 238 (1936) (delegation of regulatory power to private parties condemned as "most obnoxious form")
Bennett v. Spear, 520 U.S. 154 (1997) (agency action that has coercive effect can be reviewable as the exercise of governmental power)
Free Enterprise Fund v. Public Co. Accounting Oversight Bd., 561 U.S. 477 (2010) (structural separation and presidential control in appointment/removal context)
Whitman v. American Trucking Ass'ns, 531 U.S. 457 (2001) (intelligible principle standard governs permissible delegations to the executive)
Marbury v. Madison, 5 U.S. 137 (1803) (importance of commissions and constitutional constraints on officials exercising governmental power)
J. W. Hampton, Jr. & Co. v. United States, 276 U.S. 394 (1928) (intelligible principle rationale supporting some delegations tied to factual contingencies)
INS v. Chadha, 462 U.S. 919 (1983) (bicameralism and presentment requirements and limits on congressional self‑delegation)
A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935) (invalidating overbroad legislative delegations)