Court Sides With Railroads in Amtrak Dispute

In the end Amtrak’s freight railroads prevailed in court.

A federal judge ruled in their favor by ruling that Section 207 of the 2008 Passenger Rail Investment and Improvement Act is unconstitutional and thus the metrics and standards that the Federal Railroad Administration had issued in 2011 in terms of evaluating on-time performance have now been struck down.

The ruling was made by Judge James E. Boasberg based on the due process clause of the U.S. Constitution against the taking of life, libery or property without due process of law.

The Association of American Railroads had filed suit challenging the legality of Section 207.

Boasberg’s ruling was made after the case had been remanded court by the U.S. Supreme Court with instructions as to how to proceed in the case.

Therefore, observers say, it is unlikely that the U.S. Department of Transportation will appeal the ruling.

In his ruling, the judge relied on a precedent set in an 1886 Supreme Court ruling involving Southern Pacific that found that rights granted to people by the Constitution are also granted to corporations.

The court ruled that the regulatory authority of the federal government rests only with individuals appointed by the president and confirmed by the U.S. Senate, which is also known as the appointments clause.

The AAR had challenged Section 207, in part, because it allowed Amtrak to have some regulatory power even it is a part of the industry that is being regulated.

In July 2013, the U.S. Court of Appeals found that Amtrak is a private company that may not be granted regulatory powers, overturning a May 2012 ruling by the District Court that Amtrak is a governmental entity.

A unanimous Supreme Court in March 2015 ruled that for the purposes of the constitutional clauses in question, Amtrak is a part of the government.

In sending the case back to the district court, the Supreme Court instructed it to rule further on the questions of due process and appointments.

The latest court ruling means that although Congress may lawfully create companies that act commercially within an industry and may also create regulatory bodies, it cannot create entities that do both at the same time.

AAR had asserted that Section 207 allowed Amtrak to do that.

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