delivered the opinion of the Court.
The question presented in these cases is whether Congress violates the Due Process Clause of the Fifth Amendment by requiring private railroads to reimburse the National Railroad Passenger Corporation (Amtrak) for rail travel privileges that Amtrak provides to the railroads’ employees and former employees, and their dependents.
I
A
From the middle of the 19th century, the railroad passenger coach played a significant and sometimes romantic role in American cultural and economic life. By the middle of this century, however, “this time-honored vehicle” threatened to “take its place in the transportation museum along with the
The Rail Passenger Service Act of 1970 (Act or RPSA), 84 Stat. 1327, 45 U. S. C. §501
et seq.
(1970 ed.), which took effect on May 1, 1971, was Congress’ effort to “revive the failing intercity passenger train industry and retain a high-quality rail passenger service for the Nation.”
4
On concluding that a reorganized and restructured rail passenger system could be successful, Congress established the National Railroad Passenger Corporation, a private, for-profit corporation that has come to be known as Amtrak.
5
The corporation is not “an agency or establishment” of the Government but is authorized by the Government to operate or
To obtain relief from their common carrier obligations, the railroads had to agree to several conditions. First, “[i]n consideration of being relieved of this responsibility,” a railroad was to pay Amtrak an amount equal to one-half of that railroad’s financial losses from intercity passenger service during 1969. § 561(a)(2). Participating railroads also were to provide Amtrak with the use of tracks, other facilities, and services at rates to be agreed upon by the parties or, in the event of disagreement, to be set by the ICC. §§561, 562. The Act also included a labor protection provision requiring the railroads to “provide fair and equitable arrangements to
Finally, in §301 of the Act, 45 U. S. C. §541 (1970 ed.), Congress “expressly reserved” its right to “repeal, alter or amend this Act at any time.”
All but five private railroads offering intercity passenger service took up the option provided by the Act and entered into contracts, known as “Basic Agreements,” with Amtrak. 9 The participating railroads made the required payments to Amtrak and shed their intercity rail passenger obligations. On May 1, 1971, Amtrak began rail passenger service.
The Basic Agreements between the railroads and Amtrak mirrored the provisions of the Act. For example, §2.1 of each Basic Agreement, entitled “Relief from Responsibility,” relieved the signatory railroad “of its entire responsibility for the provision of Intercity Rail Passenger Service.” App. 13. The Agreements also required the railroads to make services, tracks, and facilities available and to protect employees who would be affected by a discontinuance of passenger service.
Section 7.5 of each Basic Agreement, entitled “Transportation Privileges,” spelled out the rights of the railroads and their employees to make use of Amtrak trains. The fifth paragraph, which concerned the rights of railroad employees to travel on Amtrak trains for free or at reduced fares, provided that “[transportation privileges, if any, with respect to business and personal travel of Railroad personnel shall be as
Shortly after Amtrak began operation, considerable controversy arose over Amtrak’s decision to cut back employee pass privileges pursuant to the discretion accorded in this provision. The result of that controversy has given rise to this action, and we turn to consider the evolution of this dispute.
B
Since the 1880’s, railroad employees and retirees, and their dependents, have been able to ride passenger trains for free or at reduced rates. Before Amtrak assumed operation, the private railroads often permitted current and retired employees and their dependents to travel on the employees’ home lines for free or at reduced rates, and many railroads had reciprocal agreements permitting employees and dependents of other railroads to travel at reduced rates as well. 10
At the time Amtrak was created, between 1.4 million and 2 million rail-travel passes were outstanding. 11 Exercising its discretion under §7.5 of the Basic Agreements, the corporation decided to confine pass privileges to employees of the railroads that operated trains for Amtrak, and to limit those privileges to half-rate fares. As a result, all railroad employees lost their pre-Amtrak access to. completely free transportation, and employees of some railroads lost their pass privileges entirely. Amtrak then was faced with vehement protests from the railroads, which continued to operate both freight trains and some passenger service, and which asserted that the withdrawal of free transportation privileges for their employees threatened to produce severe labor problems for them. 12 The corporation thereafter restored some, but not all of the canceled privileges.
The 1972 amendment also required the railroads to pay for “such costs as may be incurred” by Amtrak in providing the pass privileges mandated by § 405(f). As the Senate
In 1979, however, Congress decided that the ICC’s reimbursement rate resulted in inadequate compensation to Amtrak. Accordingly, in the Amtrak Reorganization Act of 1979, Pub. L. 96-73, §.120 (a), 93 Stat. 547 (Reorganization Act), Congress amended the § 405(f) pass-rider provision to require that the railroads prospectively reimburse Amtrak for pass-rider service at the rate of “25 percent of the systemwide average monthly yield per revenue passenger
At the same time, Congress also directed the Comptroller General to conduct a study and, “taking into account the value of the services being provided,” § 120(b), to make recommendations on the appropriate way to reimburse Amtrak for the cost of providing pass-rider transportation. In 1980, the General Accounting Office submitted a report to Congress that analyzed in detail two methods of reimbursement. GAO Report, App. 42-86. The report first considered reimbursing Amtrak for its incremental cost in providing the service, and second, for the value to the pass rider of the service being provided, which would be less than the fare charged a regular passenger, but which the report otherwise declined to quantify. Neither approach was necessarily the correct one, GAO decided: “Amtrak’s costs to provide transportation to pass riders are debatable, and we did not find adequate analytical evidence to support one position over another or to recommend a specific means to reimburse Amtrak.” Id., at 43. The report therefore concluded that the choice between the two cost reimbursement formulas was “a policy decision that the Congress should make,” id., at 80; instead of offering an answer, the report simply outlined the available options. Ibid.
C
The cases we consider began in 1980 when five railroads, each of which had taken advantage of the RPSA and discontinued passenger service, filed suit against Amtrak in the United States District Court for the Northern District of Illinois challenging the constitutionality of § 405(f) of the Act. 19 They argued that the requirement that they reimburse Amtrak for the pass travel of their employees, former employees, and dependents violated the Due Process Clause of the Fifth Amendment.
The railroads based this claim on four theories. First, they claimed they had a contractual right against the United States, derived from the RPSA and the Basic Agreements, to be free from the obligation to provide intercity rail passenger service. They asserted that § 405(f), which had been added to the Act in 1972, therefore impaired an obligation of the United States under this statutory contract because pass privileges constituted the “intercity rail passenger service,” from which the railroads had been relieved of their “entire responsibility” in the RPSA. Thus, since Congress had contracted in the RPSA to relieve the railroads of intercity rail passenger service, and the railroads had fulfilled their obligations under the contract, they had a right to be free from the responsibility to provide pass privileges. Congress, they claimed, was impairing its contractual obligation through passage of §405. Next, the railroads claimed that even if the Act itself were not a contractual obligation, the Basic
The railroads filed a motion for summary judgment, and Amtrak filed a cross-motion for summary judgment. The United States then intervened as a defendant under 28 U. S. C. § 2403 and filed a motion to dismiss or, in the alternative, for summary judgment. The District Court entered an order granting summary judgment in favor of Amtrak and the United States.
Finally, the court rejected the railroads’ argument that Congress’ reimbursement formula violated due process by requiring the railroads to pay more than the incremental cost to Amtrak of transporting the pass riders. “Having determined that the Congress acted constitutionally in requiring the railroads to reimburse Amtrak for the pass rider service, this court will not second-guess the legislative branch on its selection of a particular mathematical formula for reimbursement, absent a showing that the formula was selected in an arbitrary or irrational manner.”
The Court of Appeals for the Seventh Circuit affirmed in part and reversed in part.
Amtrak appealed to this Court under 28 U. S. C. § 1252, arguing that the reimbursement formula in § 405(f) is constitutional, and we noted probable jurisdiction.
The railroads argue that the RPSA and the Basic Agreements created a contractual obligation on the part of the United States not to reimpose any rail passenger service responsibilities on those railroads that entered into Basic Agreements, and that the pass-rider amendments to the Act unconstitutionally impair the “contract” into which the United States entered. Thus, the railroads conclude, the Court of Appeals correctly held that the 1979 and 1981 amendments substantially impaired their contractual rights and violated due process, but incorrectly ruled that the 1972 amendment, which required only that the railroads pay for the incremental cost to Amtrak of the pass riders, was constitutional. In making these arguments, the railroads argue first that the United States entered into a contractual relationship with the railroads, either through the RPSA or the Basic Agreements, and second that the scope of the contractual agreements encompassed reimbursement for pass-rider privileges. But, the railroads assert that, even if their contractual rights were only private ones with Amtrak, those private contractual agreements created a right to be free from paying for pass-rider privileges. They maintain that the 1979 and 1981 amendments, as well as the 1972 assessment of incremental costs, therefore unconstitutionally impaired those private contractual rights. We consider, and reject, each of these arguments in turn.
A
The first question we address is whether the RPSA constituted not merely a regulatory policy but also a contractual arrangement between the United States and the railroads that entered into Basic Agreements. For many decades, this Court has maintained that absent some clear indication
In determining whether a particular statute gives rise to a contractual obligation, “it is of first importance to examine the language of the statute.”
Dodge
v.
Board of Education, supra,
at 78. See also
Indiana ex rel Anderson
v.
Brand, supra,
at 104 (“Where the claim is that the State’s policy embodied in a statute is to bind its instrumentalities by contract, the cardinal inquiry is as to the terms of the statute supposed to create such a contract”). “If it provides for the execution of a written contract
on behalf of the state
the case for an obligation binding upon the state is clear.”
The language of the RPSA discloses absolutely no congressional intention to have the United States enter into a private contractual arrangement with the railroads. By its terms, the Act does not create or speak of a contract between the United States and the railroads, and it does not in any respect provide for the execution of a written contract on behalf of the United States. Quite to the contrary, the Act expressly established the National Railroad Passenger Corporation as a nongovernmental entity, 45 U. S. C. §541, and it used the term “contract” not to define the relationship of the United States to the railroads, but instead that of the new, nongovernmental corporation to the railroads. The statute states clearly that “the Corporation is authorized to contract and, upon written request therefor from a railroad, shall tender a contract. . . ,” 45 U. S. C. § 561(a), and that, “[u]pon its entering into a valid contract . . . , the railroad shall be relieved of all its responsibilities. . . .” Ibid. We simply cannot agree with the railroads that the frequent usage in a statute of the language of contract, including the term “contract,” evidences an intent to bind the Federal Government contractually. Legislation outlining the terms on which private parties may execute contracts does not on its own constitute a statutory contract, but is instead an articulated policy that, like all policies, is subject to revision or repeal. Indeed, lest there be any doubt in these cases about Congress’ will, Congress “expressly reserved” its rights to “repeal, alter, or amend” the Act at any time. 45 U. S. C. §541. This is hardly the language of contract. 22
This atmosphere of pervasive prior regulation leads to several conclusions. For one, Congress would have struck a profoundly inequitable bargain if, in exchange for the equivalent of a half year’s losses, it had entered into a binding contract never to impose on the railroads — which would continue to operate their potentially profitable freight services — any rail passenger service obligations at all.
23
Congress simply
The railroads argue nevertheless that the RPSA created a contractual obligation “closely analogous to the statutory covenant” at issue in
United States Trust,
“which this Court held to be a contractual obligation of a State subject to the Contract Clause.” Brief for Appellees in No. 83-1492, p. 18. Far from recognizing the similarity, we find that the statute at issue in
United States Trust Co.
v.
New Jersey
highlights the difference between the RPSA and a true statutory contract. In
United States Trust,
the Court held that New Jersey could not retroactively alter a statutory bond covenant relied upon by bond purchasers. The covenant in that case was a part of the bistate legislation authorizing the Port Authority of New York and New Jersey to acquire, construct, and operate the Hudson
&
Manhattan Railroad and the World Trade Center in New York City. The statute read in part: “The 2 States covenant and agree with each other and with the holders of any affected bonds, as hereinafter defined, that so long as any of such bonds remain
To the contrary, here the statute does not contain a provision in which the United States “covenants] and agree[s]” with anyone to do anything, and in fact the United States expressly declined to offer assurances about future activity when it reserved the right to revoke or repeal the Act. We therefore are not persuaded by the railroads’ proffered analogy.
Because neither the language of the statute nor the circumstances surrounding its passage manifest any intent on the part of Congress to bind itself contractually to the railroads, we hold that the RPSA does not constitute a binding obligation of Congress.
B
We turn next to consider whether the Basic Agreements into which the railroads entered with Amtrak grant the railroads a contractual right
against the United States
to be free from all obligation to provide passenger service. While there can be no doubt that the Basic Agreements are contracts, they are contracts not between the railroads and the United States but simply between the railroads and the nongovernmental corporation, Amtrak. The United States was
Because, as we have demonstrated, neither the Act nor the Basic Agreements created a contract between railroads and the United States, our focus shifts from a case in which we confront an alleged impairment, by the Government, of its own contractual obligations, to one in which we face an alleged legislative impairment of a private contractual right. We therefore have no need to consider whether an allegation of a governmental breach of its own contract warrants application of the more rigorous standard of review that the railroads urge us to apply. 24 Instead, we turn to consider
C
To prevail on a claim that federal economic legislation unconstitutionally impairs a private contractual right, the party complaining of unconstitutionality has the burden of demonstrating, first, that the statute alters contractual rights or obligations. See
United States Trust Co.
v.
New Jersey,
The only right that the railroads obtained under the Basic Agreements was the right to be relieved of the pre-existing responsibilities they had as regulated common carriers. The RPSA expressly permitted the railroads to divest themselves of, and authorized Amtrak to assume, all the railroads’ “responsibilities as a common carrier of passengers by rail in intercity rail passenger service
under [Subtitle IV of Title [9] or any State or other law relating to the provision of intercity rail passenger service.”
45 U. S. C. §561(a)(1) (1970 ed.) (emphasis added). In turn, the Basic Agreements relieved the railroads of their “entire responsibility for the provision of Intercity Rail Passenger Service.” §2.1, App. 13. Thus the statute and the Basic Agreements together relieved the
The railroads do not and could not allege that as common carriers they ever had the responsibility, by statute or regulation, to provide free passes or reduced fares for their employees and their dependents. Here, as in the lower courts, they describe the provision of passes as a “gratuitous undertaking, like providing a ‘Christmas turkey.’”
We therefore find that the Basic Agreements in no respect relieved the railroads of the “responsibility” to provide their employees with pass privileges, for no state or federal law imposed that “responsibility” on them, in connection with intercity rail passenger operations, when the contracts were
D
The Court of Appeals concluded that, while the Basic Agreements might not expressly have relieved the railroads of the obligation to reimburse Amtrak for pass riders, they did relieve the railroads of all responsibility — both operational and financial — for intercity rail passenger service.
Initially, it is far from evident that the railroads have a private contractual right to be free from all obligations
Even were the Court of Appeals correct that the railroads have a private contractual right not to pay more than the incremental cost of the passes, we disagree with the Court of Appeals’ conclusion that the Due Process Clause limited Congress’ power to choose a different reimbursement scheme in these cases. Under the Fifth Amendment’s Due Process Clause, Congress remained free to “ ‘adjus[t] the burdens and benefits of economic life,”’ as long as it did so in a manner
Had it applied the correct standard, the Court of Appeals would have found that the railroads have not met their burden of proof. In passing § 405(f), Congress rationally required Amtrak to honor the expectations of the railroads’ past and present employees and their dependents. It rationally took this step to maintain employee morale and labor peace, and it rationally required the railroads to pay at least a portion of the cost of the privileges, both because the railroads, rather than the taxpayers, were responsible for the creation of the moral obligation to the railroad employees and retirees, and because the railroads benefited from labor peace and continued employee morale.
Similarly, after reasonably requiring the railroads to reimburse Amtrak for benefits received, Congress acted wholly rationally in selecting the value to the passholders — as opposed to the cost to Amtrak — as the proper reimbursement amount, and in settling on the 25-percent figure to quantify the value received. It commissioned a study by the GAO, which concluded that several different computations of cost made sense, and that the selection of no one cost-spreading scheme was more inherently rational or fair than any other. App. 80-81. At this point, the decision was uniquely one for Congress, which had absolutely no obligation to select the scheme that a court later would find to be the fairest, but simply one that was rational and not arbitrary. Congress
Having concluded that the Basic Agreements relieved the railroads only of the direct and onerous responsibilities they had borne as common carriers, and having further concluded that the provision of free and partial-fare passes was not among those responsibilities, we conclude that the 1979 and 1981 amendments to the Act did not impair private contractual rights acquired by the railroads as parties to the Basic Agreements. The amendments imposed new obligations on the railroads and in no respect infringed the railroads’ existing contractual rights. But even if the payment of more than the incremental cost of pass privileges indirectly subsidizes Amtrak operations in violation of a private contractual right, Congress’ decision to assess the railroads is rational and reasoned, and the railroads have failed to demonstrate a due process violation. We therefore reverse the Court of Appeals insofar as it ruled to the contrary.
HH I
The foregoing analysis
a fortiori
requires us to reject the railroads’ argument on cross-appeal that they have a contractual right to be free from the obligation to make any payments to Amtrak, even for incremental costs. Absolutely nothing in the RPSA or the Basic Agreements suggests that the railroads were relieved of the responsibility to reimburse Amtrak for the costs of providing to the railroads’ employees
HH <
Accordingly we hold that § 405(f) of the RPSA is constitutional, and we reverse the Court of Appeals insofar as it held that the 1979 and 1981 amendments to the Act contravened the Due Process Clause.
It is so ordered.
Notes
Hosmer, Examiner, Report and Recommended Order, Railroad Passenger Train Deficit, ICC Docket No. 31954, p. 69 (1958) (as quoted in G. Hilton, Amtrak: The National Railroad Passenger Corporation 9 (1980)).
P. Dorin, Amtrak: Trains & Travel 14 (1979).
H. R. Rep. No. 91-1580, pp. 2-3 (1970).
GAO, Comptroller General, Nos. B-196907, CED-80-83, Report to the Congress, How Much Should Amtrak Be Reimbursed for Railroad Employees Using Passes to Ride Its Trains? (GAO Report), App. 48.
H. R. Rep. No. 91-1580, at 5. Initially the corporation was to be named “Railpax.” The corporation instead independently adopted the official nickname “Amtrak,” which is a contraction of “American” and “Track.” N. Y. Times, Apr. 20, 1971, p. 86, col. 7.
H. R. Rep. No. 91-1580, at 5.
Railroads that chose not to discontinue passenger service remained subject to the obligation to provide that service imposed on common carriers by the Interstate Commerce Act (ICA), 49 U. S. C. §§ 10908 and 10909. Section 404 of the RPSA, 45 U. S. C. § 564 (1970 ed.), declared a 5-year moratorium on the discontinuance of any intercity passenger train by any railroad that had not transferred its responsibilities to Amtrak, but authorized those railroads to seek discontinuances, through the procedures of the ICA, at the end of the 5-year period. See 49 U. S. C. § 13a (1970 ed.), recodified at 49 U. S. C. §§ 10908, 10909. In addition, all railroads remained subject to common carrier obligations to transport freight. 49 U. S. C. § 10903 et seq.
The Act originally referred to the common carrier obligations under Part I of the ICA, see 84 Stat. 1328, 1334; that provision of the ICA was recodified in 1978 as Subtitle IV (§ 10101 et seq.) of Title 49, which is entitled “Interstate Commerce.”
The five nonparticipating railroads were Southern Railway Co., Denver & Rio Grande Western Railroad, Chicago, Rock Island & Pacific Railroad, Georgia Railroad, and Canadian Pacific Railway Co.. GAO Report, App. 48.
See GAO Report, App. 47.
Affidavit of Roger Lewis, App. 40.
Ibid.
See S. Rep. No. 92-756, pp. 11-12 (1972) (“The Committee believes that employees who were entitled to free or reduced-rate transportation before the advent of Amtrak should not lose such privileges on account of the transfer of passenger service from the railroads to Amtrak”); see also H. R. Rep. No. 92-905, p. 11 (1972).
See GAO Report, App. 53-54.
Determination of Cost Reimbursement Under Section h05(f) of the Rail Passenger Service Act, No. 27194, as amended, Dec. 21, 1972, App. 23-38 (unamended decision reported at 347 I. C. C. 325 (1972)).
GAO Report, App. 51.
After the amendment, Amtrak billed the railroads at rates from .02067 cents to .02343 cents per passenger mile. Ibid. In the first 10 months of operation under the 1979 amendment, the railroads represented to the Court of Appeals that they paid the following additional sums: Santa Fe, $336,249.82; Burlington Northern, $490,344.72; Chesapeake & Ohio and Baltimore & Ohio, $76,345.34; and Union Pacific, $287,784.66. Id., at 1300, n. 2. Of course, as the years go by, the number.of eligible pass riders declines because of employee and retiree deaths. Whereas amendment of the RPSA in 1972 gave free or reduced rate transportation to about 2.83 million people, in December 1979 only about 1.05 million eligible pass riders remained. GAO Report, App. 56.
The five railroads are Atchison, Topeka, and Santa Fe Railway Co., Burlington Northern, Inc., Chesapeake and Ohio Railway Co., Baltimore and Ohio Railroad Co., and Union Pacific Railroad Co.
The court did not expressly state whether the statute impaired a private obligation between Amtrak and the railroads, or as the railroads maintained, a contract to which the United States was a party as well.
We now find that jurisdiction over the cross-appeal is proper. The railroads filed their jurisdictional statement on cross-appeal within 30 days of their receipt of appellant’s jurisdictional statement, as required by this Court’s Rule 12.4. If the filing was properly a cross-appeal, then this procedure was jurisdictionally sound. We hold that the filing was properly a cross-appeal.
Title 28 U. S. C. § 1252 provides that “[a]ny party may appeal to the Supreme Court from an interlocutory or final judgment, decree or order of any court of the United States . . . holding an Act of Congress unconstitutional in any civil action ... to which the United States or any of its agencies ... is a party.” In
Regan
v.
Taxation With Representation of Washington,
In the
Sinking Fund Cases,
We also reject the'railroads’ argument that this clause reserved only the power to repeal, alter, or amend the National Railroad Passenger Corporation’s corporate charter. The clause expressly reserved the right to change “this Act,” and we see no ground to support the railroads’ attempt to limit this term merely to a single aspect of the Act.
The Act also required the railroads to enter into agreements with the new corporation to provide operational assistance and facilities at rates to be set by contract (or the ICC in the event of disagreement), 45 U. S. C. § 562 (1970 ed.), and to enter into arrangements to protect the interests of employees disadvantaged by the discontinuance of passenger service. § 565(a). These requirements either were consistent with the railroads’ continuing obligations as common carriers, or easily might have been imposed as conditions by the ICC if it granted the railroads’ petition to discontinue rail passenger service. See 49 U. S. C. §§ 10903(a)(2), 11101. Far from analogous to consideration, these ongoing regulatory obligations
This Court once observed:
“There is a clear distinction between the power of the Congress to control or interdict the contracts of private parties when they interfere with the exercise of its constitutional authority, and the power of the Congress to alter or repudiate the substance of its own engagements.... To say that the Congress may withdraw or ignore that pledge is to assume that the Constitution contemplates a vain promise, a pledge having no other sanction than the pleasure and convenience of the pledgor. This Court hasgiven no sanction to such a conception of the obligations of our Government.” Perry v. United States, 294 U. S. 330 , 350-351 (1935).
Thus, the Court has observed that in order to maintain the credit of public debtors, see
Lynch
v.
United States,
When the court reviews state economic legislation the inquiry will not necessarily be the same. As we made clear in
Pension Benefit Guar
We address first the 1979 and 1981 amendments, the issue raised on appeal, and postpone to Part III discussion of the 1972 amendment, the issue raised on cross-appeal.
The RPSA established that contracts entered into by the corporation would be governed by the law of the District of Columbia. In the District of Columbia, courts determine as a matter of law whether a contract or its provisions are ambiguous — that is, whether they are reasonably susceptible of different interpretations.
Kass
v.
William Norwitz Co.,