Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-12-05204/USCOURTS-caDC-12-05204-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 19, 2013 Decided July 2, 2013

No. 12-5204

ASSOCIATION OF AMERICAN RAILROADS,

APPELLANT

v.

UNITED STATES DEPARTMENT OF TRANSPORTATION, ET AL.,

APPELLEES

Appeal from the United States District Court

for the District of Columbia

(No. 1:11-cv-01499)

Thomas H. Dupree, Jr. argued the cause for appellant. 

With him on the briefs was Louis P. Warchot.

Michael S. Raab, Attorney, U.S. Department of Justice, 

argued the cause for appellees. With him on the brief were 

Stuart F. Delery, Acting Assistant Attorney General, Ronald 

C. Machen Jr., U.S. Attorney, Mark B. Stern and Daniel 

Tenny, Attorneys, Paul M. Geier, Assistant General Counsel 

for Litigation, U.S. Department of Transportation, Peter J. 

Plocki, Deputy Assistant General Counsel for Litigation, and 

Joy Park, Attorney.

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Before: BROWN, Circuit Judge, and WILLIAMS and 

SENTELLE, Senior Circuit Judges.

BROWN, Circuit Judge: Imagine a scenario in which 

Congress has given to General Motors the power to coauthor, 

alongside the Department of Transportation, regulations that 

will govern all automobile manufacturers. And, if the two 

should happen to disagree on what form those regulations will 

take, then neither will have the ultimate say. Instead, an 

unspecified arbitrator will make the call. Constitutional? The 

Department of Transportation seems to think so.

1

Next consider a parallel statutory scheme—the one at 

issue in this case. This time, instead of General Motors, it is 

Amtrak (officially, the “National Railroad Passenger 

Corporation”) wielding joint regulatory power with a 

government agency. This new stipulation further complicates 

the issue. Unlike General Motors, Amtrak is a curious entity 

that occupies the twilight between the public and private 

sectors. And the regulations it codevelops govern not the 

automotive industry, but the priority freight railroads must 

give Amtrak’s trains over their own. Whether the Constitution

permits Congress to delegate such joint regulatory authority to 

Amtrak is the question that confronts us now.

Section 207 of the Passenger Rail Investment and 

Improvement Act of 2008 empowers Amtrak and the Federal 

Railroad Administration (FRA) to jointly develop 

performance measures to enhance enforcement of the 

statutory priority Amtrak’s passenger rail service has over 

 1 Counsel for the Appellees embraced precisely this position at 

oral argument, albeit with some preliminary hemming and hawing. 

See Oral Arg. 30:20–33:00.

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other trains. The Appellant in this case, the Association of 

American Railroads (AAR), is a trade association whose 

members include the largest freight railroads (known in the 

industry as “Class I” freight railroads), some smaller freight 

railroads, and—as it happens—Amtrak. Compl. ¶ 10, at 4. 

Challenging the statutory scheme as unconstitutional, AAR 

brought suit on behalf of its Class I members against the four 

Appellees—the Department of Transportation, its Secretary, 

the FRA, and its Administrator (collectively, the 

“government”). Id. ¶¶ 14–17, at 6–7. We conclude § 207 

constitutes an unlawful delegation of regulatory power to a 

private entity.

I

A

To reinvigorate a national passenger rail system that had, 

by mid-century, grown moribund and unprofitable, Congress 

passed the Rail Passenger Service Act of 1970, Pub. L. No.

91-518, 84 Stat. 1327. See Nat’l R.R. Corp. v. Atchison, 

Topeka & Santa Fe Ry. Co., 470 U.S. 451, 453–54 (1985). 

Most prominently, the legislation created the passenger rail 

corporation now known as Amtrak, which would “employ[] 

innovative operating and marketing concepts so as to fully 

develop the potential of modern rail service in meeting the 

Nation’s intercity passenger transportation requirements.”

Rail Passenger Service Act, § 301, 84 Stat. at 1330. The act 

also made railroad companies languishing under the prior

regime an offer they could not refuse: if these companies 

consented to certain conditions, such as permitting Amtrak to 

use their tracks and other facilities, they could shed their 

cumbersome common carrier obligation to offer intercity 

passenger service. See Nat’l R.R. Corp., 470 U.S. at 455–56.

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Pursuant to statute, Amtrak negotiates these arrangements 

with individual railroads, the terms of which are enshrined in 

Operating Agreements.

2 See 49 U.S.C. § 24308(a). Today, 

freight railroads own roughly 97% of the track over which 

Amtrak runs its passenger service. 

Naturally, sharing tracks can cause coordination 

problems, which is why Congress has prescribed that, absent 

an emergency, Amtrak’s passenger rail “has preference over 

freight transportation in using a rail line, junction, or 

crossing.” Id. § 24308(c). More recently, this same concern 

prompted enactment of the Passenger Rail Investment and 

Improvement Act of 2008 (“PRIIA”), Pub. L. No. 110-432, 

Div. B, 122 Stat. 4848, 4907. At issue in this case is the 

PRIIA’s § 207, which directs the FRA and Amtrak to

“jointly . . . develop new or improve existing metrics and 

minimum standards for measuring the performance and 

service quality of intercity passenger train operations, 

including cost recovery, on-time performance and minutes of 

delay, ridership, on-board services, stations, facilities, 

equipment, and other services.” PRIIA § 207(a), 49 U.S.C. 

§ 24101 (note). If Amtrak and the FRA disagree about the 

composition of these “metrics and standards,” either “may 

petition the Surface Transportation Board to appoint an 

arbitrator to assist the parties in resolving their disputes 

through binding arbitration.” Id. § 207(d), 49 U.S.C. § 24101 

(note). “To the extent practicable,” Amtrak and its host rail 

carriers must incorporate the metrics and standards into their 

Operating Agreements. Id. § 207(c), 49 U.S.C. § 24101 

(note).

 2 If the parties cannot reach agreement, the Surface 

Transportation Board (STB) will “order that the facilities be made 

available and the services provided to Amtrak” and “prescribe 

reasonable terms and compensation.” 49 U.S.C. § 24308(a).

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Though § 207 provides the means for devising the

metrics and standards, § 213 is the enforcement mechanism. If

the “on-time performance” or “service quality” of any 

intercity passenger train proves inadequate under the metrics 

and standards for two consecutive quarters, the STB may 

launch an investigation “to determine whether and to what 

extent delays or failure to achieve minimum standards are due 

to causes that could reasonably be addressed by a rail carrier 

over whose tracks the intercity passenger train operates or 

reasonably addressed by Amtrak or other intercity passenger 

rail operators.” PRIIA § 213(a), 49 U.S.C. § 24308(f)(1). 

Similarly, if “Amtrak, an intercity passenger rail operator, a 

host freight railroad over which Amtrak operates, or an entity 

for which Amtrak operates intercity passenger rail service” 

files a complaint, the STB “shall” initiate such an 

investigation. Id. (emphasis added). Should the STB 

determine the failure to satisfy the metrics and standards is

“attributable to a rail carrier’s failure to provide preference to 

Amtrak over freight transportation as required,” it may award 

damages or other relief against the offending host rail carrier. 

Id. § 24308(f)(2). 

B

Following § 207’s mandate, the FRA and Amtrak jointly 

drafted proposed metrics and standards, which they submitted

to public comment on March 13, 2009. See Metrics and 

Standards for Intercity Passenger Rail Service Under Section 

207 of Public Law 110-432, 74 Fed. Reg. 10,983 (Mar. 13, 

2009). The proposal attracted criticism, with much vitriol 

directed at three metrics formulated to measure on-time 

performance: “effective speed” (the ratio of route’s distance to 

the average time required to travel it), “endpoint on-time 

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performance” (the portion of a route’s trains that arrive on 

schedule), and “all-stations on-time performance” (the degree 

to which trains arrive on time at each station along the route).

AAR, among others, derided these metrics as “unrealistic”

and worried that certain aspects would create “an excessive 

administrative and financial burden.” The FRA responded to 

the comments, and a final version of the metrics and standards

took effect in May 2010. See Metrics and Standards for

Intercity Passenger Rail Service Under Section 207 of the 

Passenger Rail Investment and Improvement Act of 2008, 75 

Fed. Reg. 26,839 (May 11, 2010). 

AAR filed suit on behalf of its Class I freight railroad 

members, asking the district court to declare § 207 of the 

PRIIA unconstitutional and to vacate the promulgated metrics 

and standards. The complaint asserted two challenges: that

§ 207 unconstitutionally delegates to Amtrak the authority to 

regulate other private entities; and that empowering Amtrak to 

regulate its competitors violates the Fifth Amendment’s Due 

Process Clause. Compl. ¶¶ 47–54, at 16–17. The district court 

rejected these arguments, granting summary judgment to the 

government and denying it to AAR. See AAR v. Dep’t of 

Transp., 865 F. Supp. 2d 22, 35 (D.D.C. 2012). AAR renews 

these constitutional claims on appeal.

II

AAR’s argument takes the following form: Delegating 

regulatory authority to a private entity is unconstitutional. 

Amtrak is a private entity. Ergo, § 207 is unconstitutional. 

This proposed syllogism is susceptible, however, to attacks on 

both its validity and soundness. In other words, does the 

conclusion actually follow from the premises? And, if it does, 

are both premises true? Our discussion follows the same path.

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A

We open our discussion with a principle upon which both 

sides agree: Federal lawmakers cannot delegate regulatory 

authority to a private entity. To do so would be “legislative 

delegation in its most obnoxious form.” Carter v. Carter Coal 

Co., 298 U.S. 238, 311 (1936). This constitutional prohibition 

is the lesser-known cousin of the doctrine that Congress 

cannot delegate its legislative function to an agency of the 

Executive Branch. See U.S. CONST. art. I, § 1 (“All legislative 

Powers herein granted shall be vested in a Congress of the 

United States . . . .”); see A.L.A. Schechter Poultry Corp. v. 

United States, 295 U.S. 495, 529 (1935). This latter

proposition finds scarce practical application, however, 

because “no statute can be entirely precise,” meaning “some 

judgments, even some judgments involving policy 

considerations, must be left to the officers executing the law 

and to the judges applying it.” Mistretta v. United States, 488 

U.S. 361, 415 (1989) (Scalia, J., dissenting). All that is 

required then to legitimate a delegation to a government 

agency is for Congress to prescribe an intelligible principle 

governing the statute’s enforcement. See J.W. Hampton, Jr., & 

Co. v. United States, 276 U.S. 394, 409 (1928). 

Not so, however, in the case of private entities to whom 

the Constitution commits no executive power. Although 

objections to delegations are “typically presented in the 

context of a transfer of legislative authority from the Congress 

to agencies,” we have reaffirmed that “the difficulties sparked 

by such allocations are even more prevalent in the context of 

agency delegations to private individuals.” Nat’l Ass’n of 

Regulatory Util. Comm’rs v. FCC (“NARUC”), 737 F.2d 

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1095, 1143 (D.C. Cir. 1984) (per curiam). 3 Even an

intelligible principle cannot rescue a statute empowering 

private parties to wield regulatory authority. Such entities 

may, however, help a government agency make its regulatory 

decisions, for “[t]he Constitution has never been regarded as 

denying to the Congress the necessary resources of flexibility 

and practicality” that such schemes facilitate. Pan. Ref. Co. v. 

Ryan, 293 U.S. 388, 421 (1935). Yet precisely how much 

involvement may a private entity have in the administrative 

process before its advisory role trespasses into an 

unconstitutional delegation? Discerning that line is the task at 

hand.

Preliminarily, we note the Supreme Court has never 

approved a regulatory scheme that so drastically empowers a

private entity in the way § 207 empowers Amtrak. True, § 207 

has a passing resemblance to the humbler statutory 

frameworks in Currin v. Wallace, 306 U.S. 1 (1939), and

Sunshine Anthracite Coal Co. v. Adkins, 310 U.S. 381 (1940).

In Currin Congress circumscribed its delegations of 

 3 At least one commentator has suggested that the “doctrine 

forbidding delegation of public power to private groups is, in fact, 

rooted in a prohibition against self-interested regulation that sounds 

more in the Due Process Clause than in the separation of powers.” 

A. Michael Froomkin, Wrong Turn in Cyberspace: Using ICANN 

To Route Around the APA and the Constitution, 50 DUKE L.J. 17, 

153 (2000). Carter Coal offers some textual support for this 

position, describing the impermissible delegation there as “clearly a 

denial of rights safeguarded by the due process clause of the Fifth 

Amendment.” 298 U.S. at 311. While the distinction evokes 

scholarly interest, neither party before us makes this point, and our 

own precedent describes the problem as one of unconstitutional 

delegation. See NARUC, 737 F.2d at 1143 n.41. And, in any event, 

neither court nor scholar has suggested a change in the label would 

effect a change in the inquiry.

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administrative authority—in that case, by requiring two thirds 

of regulated industry members to approve an agency’s new 

regulations before they took effect. See 306 U.S. at 6, 15.

Adkins, meanwhile, affirmed a modest principle: Congress

may formalize the role of private parties in proposing 

regulations so long as that role is merely “as an aid” to a 

government agency that retains the discretion to “approve[], 

disapprove[], or modif[y]” them. 310 U.S. at 388. Like the 

private parties in Currin, Amtrak has an effective veto over

regulations developed by the FRA. And like those in Adkins, 

Amtrak has a role in filling the content of regulations. But the 

similarities end there. The industries in Currin did not craft

the regulations, while Adkins involved no private check on an 

agency’s regulatory authority. 4 Even more damningly, the 

agency in Adkins could unilaterally change regulations 

proposed to it by private parties, whereas Amtrak enjoys 

authority equal to the FRA. Should the FRA prefer an 

alternative to Amtrak’s proposed metrics and standards, § 207 

leaves it impotent to choose its version without Amtrak’s 

permission. No case prefigures the unprecedented regulatory 

powers delegated to Amtrak.5

 4 For what it is worth, Currin also involved the collective 

participation of two thirds of industry members, and the regulations 

in Adkins arose from district boards comprising multiple members of 

the regulated industry. Neither upheld a statute that favored a single

firm over all its market rivals.

5 The government also cites various decisions from other 

Circuits that purportedly support its position. All are 

distinguishable. Several upheld schemes like that in Currin in which 

the effect of regulations was contingent upon the assent of a certain 

portion of the regulated industry. See Ky. Div., Horsemen’s 

Benevolent and Protective Ass’n v. Turfway Park Racing Ass’n, 20 

F.3d 1406, 1416 (6th Cir. 1994); Sequoia Orange Co. v. Yeutter, 

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The government also points out that the metrics and 

standards themselves impose no liability. Rather, they define 

the circumstances in which the STB will investigate whether 

infractions are attributable to a freight railroad’s failure to 

meet its preexisting statutory obligation to accord preference 

to Amtrak’s trains. See PRIIA § 213(a), 49 U.S.C. § 24308(f).

We are not entirely certain what to make of this argument. 

Taken to its logical extreme, it would preclude all 

preenforcement review of agency rulemaking, so it is probably 

unlikely the government is pressing so immodest a claim.6 If 

 

973 F.2d 752, 759 (9th Cir. 1992). The others resemble Adkins

insofar as they approve structures in which private industry 

members serve in purely advisory or ministerial functions. See 

Pittston Co. v. United States, 368 F.3d 385, 394–97 (4th Cir. 2004);

United States v. Frame, 885 F.2d 1119, 1128–29 (3d Cir. 1989), 

abrogated on other grounds by Glickman v. Wileman Bros. & 

Elliott, Inc., 521 U.S. 457 (1997); Sorrell v. SEC, 679 F.2d 1323, 

1325–26 (9th Cir. 1982); First Jersey Sec., Inc. v. Bergen, 605 F.2d 

690, 697 (3d Cir. 1979); Todd & Co. v. SEC, 557 F.2d 1008, 

1012–13 (3d Cir. 1977); R.H. Johnson & Co. v. SEC, 198 F.2d 690, 

695 (2d Cir. 1952). In none of these cases did a private party stand 

on equal footing with a government agency.

6 AAR’s Reply Brief treated this argument as an ordinary 

ripeness challenge. See Br. 18–21. If that is what the government 

intended, then we are not persuaded. As a purely legal question, 

§ 207’s constitutionality is appropriate for immediate judicial 

resolution. See Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967), 

overruled on other grounds by Califano v. Sanders, 430 U.S. 99 

(1977). And depriving AAR of review at this stage would result in 

considerable hardship. See United Christian Scientists v. Christian 

Sci. Bd. of Dirs., First Church of Christ, Scientist, 829 F.2d 1152, 

1160 n.29 (D.C. Cir. 1987). The record is replete with affidavits 

from the freight railroads describing the immediate actions the 

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the point is merely that the STB adds another layer of 

government “oversight” to Amtrak’s exercise of regulatory 

power, this precaution does not alter the analysis. Government 

enforcement power did not save the rulemaking authority of 

the private coal companies in Carter Coal, nor the power of 

private landowners in Washington ex rel. Seattle Title Trust 

Co. v. Roberge, 278 U.S. 116 (1928), to impose a zoning 

restriction on a neighbor’s tract of land. As is often the case in 

administrative law, the metrics and standards lend definite

regulatory force to an otherwise broad statutory mandate. See, 

e.g., Whitman v. Am. Trucking Ass’ns, 531 U.S. 457, 465 

(2001). The preference for Amtrak’s traffic may predate the 

PRIIA, but the metrics and standards are what channel its 

enforcement. Certainly the FRA and Amtrak saw things that 

way, responding to one public comment by noting the STB “is 

the primary enforcement body of the standards.” J.A. 63

(emphasis added). Not only that, § 207 directs “Amtrak and 

its host carriers” to include the metrics and standards in their 

Operating Agreements “[t]o the extent practicable.” PRIIA 

§ 207(c), 49 U.S.C. § 24101 (note). The STB’s involvement is 

no safe harbor from AAR’s constitutional challenge to § 207.

As far as we know, no court has invalidated a scheme like

§ 207’s, but perhaps that is because no parallel exists. 

Unprecedented constitutional questions, after all, lack clear 

and controlling precedent. We nevertheless believe Free 

Enterprise Fund v. Public Co. Accounting Oversight Board, 

130 S. Ct. 3138 (2010), offers guidance. There the Supreme 

Court deemed it a violation of separation of powers to endow 

inferior officers with two layers of good-cause tenure

 

metrics and standards have forced them to take. See Decl. of Paul E. 

Ladue ¶¶ 6–9, at 3–5; Decl. of Mark M. Owens ¶ 9, at 4; Decl. of 

Virginia Marie Beck ¶¶ 9–11, at 4–6; Decl. of Peggy Harris ¶¶ 

8–14, at 3–5.

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insulating them from removal by the President. See id. at 

3164. Two principles from that case are particularly resonant.

To begin with, just because two structural features raise no 

constitutional concerns independently does not mean 

Congress may combine them in a single statute. Free 

Enterprise Fund deemed invalid a regime blending two

limitations on the President’s removal power that, taken 

separately, were unproblematic: the establishment of 

independent agencies headed by principal officers shielded 

from dismissal without cause, see Humphrey’s Ex’r v. United 

States, 295 U.S. 602, 629–31 (1935), and the protection of

certain inferior officers from removal by principal officers 

directly accountable to the President, see Morrison v. Olson, 

487 U.S. 654, 691–93 (1988). See 130 S. Ct. at 3146–47. So 

even if the government is right that § 207 merely synthesizes 

elements approved by Currin and Adkins, that would be no 

proof of constitutionality.

As for the second principle, Free Enterprise Fund also 

clarifies that novelty may, in certain circumstances, signal 

unconstitutionality. That double good-cause tenure, for 

example, lacked an antecedent in the history of the 

administrative state was one reason to suspect its legality:

“Perhaps the most telling indication of the 

severe constitutional problem with the PCAOB 

is the lack of historical precedent for this 

entity. Neither the majority opinion nor the 

PCAOB nor the United States as intervenor has 

located any historical analogues for this novel 

structure. They have not identified any 

independent agency other than the PCAOB that 

is appointed by and removable only for cause 

by another independent agency.”

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Id. at 3159 (quoting Free Enter. Fund v. Pub. Co. Accounting 

Oversight Bd., 537 F.3d 667, 699 (D.C. Cir. 2008) 

(Kavanaugh, J., dissenting)); accord Nat’l Fed’n of Indep. 

Bus. v. Sebelius, 132 S. Ct. 2566, 2586 (2012). In defending 

§ 207, the government revealingly cites no case—nor have we 

found any—embracing the position that a private entity may 

jointly exercise regulatory power on equal footing with an 

administrative agency. This fact is not trivial. Section 207 is 

as close to the blatantly unconstitutional scheme in Carter 

Coal as we have seen. 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. Appellee’s Br. 19. 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.

To make matters worse, § 207 fails to meet even the 

government’s ad hoc standard. Consider what would have 

happened if Amtrak and the FRA could not have reached an 

agreement on the content of the metrics and standards within 

180 days of the PRIIA’s enactment. Amtrak could have 

“petition[ed] the Surface Transportation Board to appoint an 

arbitrator to assist the parties in resolving their disputes 

through binding arbitration.” PRIIA 207(d), 49 U.S.C. 

§ 24101 (note). And nothing in the statute precludes the 

appointment of a private party as arbitrator.7 That means it 

 7 The government notes § 207’s arbitration provision does not 

require the arbitrator be a private party. This is irrelevant. “[A]n 

agency can[not] cure an unlawful delegation of legislative power by 

adopting in its discretion a limiting construction of the statute.” 

Whitman, 531 U.S. at 472. Nor does the canon of constitutional 

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would have been entirely possible for metrics and standards to 

go into effect that had not been assented to by a single 

representative of the government. Though that did not in fact 

occur here, § 207’s arbitration provision still polluted the 

rulemaking process over and above the other defects besetting 

the statute. As a formal matter, that the recipients of illicitly 

delegated authority opted not to make use of it is no antidote. 

It is Congress’s decision to delegate that is unconstitutional.

See Whitman, 531 U.S. at 473. As a practical matter, the 

FRA’s failure to reach an agreement with Amtrak would have 

meant forfeiting regulatory power to an arbitrator the agency

would have had no hand in picking. Rather than ensuring 

Amtrak would “function subordinately” to the FRA, Adkins, 

310 U.S. at 399, this backdrop stacked the deck in favor of 

compromise. Even for government agencies, half an apple is 

better than none at all.

We remain mindful that the Constitution “contemplates 

that practice will integrate the dispersed powers into a 

workable government.” Youngstown Sheet & Tube Co. v. 

Sawyer, 343 U.S. 579, 635 (1952) (Jackson, J., concurring). 

But a flexible Constitution must not be so yielding as to 

become twisted. Unless it can be established that Amtrak is an 

organ of the government, therefore, § 207 is an 

unconstitutional delegation of regulatory power to a private 

party.

B

 

avoidance offer a solution. The statute’s text precludes the 

government’s suggestion that we construe the open-ended language 

“an arbitrator” to include only federal entities. The constitutional 

avoidance canon is an interpretive aid, not an invitation to rewrite 

statutes to satisfy constitutional strictures. Reno v. ACLU, 521 U.S. 

844, 884–85 (1997).

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Now the crucial question: is Amtrak indeed a private 

corporation? If not—if it is just one more government 

agency—then the regulatory power it wields under § 207 is of 

no constitutional moment. 

Many of the details of Amtrak’s makeup support the 

government’s position that it is not a private entity of the sort 

described in Carter Coal. Amtrak’s Board of Directors 

includes the Secretary of Transportation (or his designee), 

seven other presidential appointees, and the President of 

Amtrak. See 49 U.S.C. § 24302(a). The President of 

Amtrak—the one Board member not appointed by the 

President of the United States—is in turn selected by the eight 

other members of the Board. See id. § 24303(a). Amtrak is 

also subject to the Freedom of Information Act. See id.

§ 24301(e). Amtrak’s equity structure is similarly suggestive. 

As of September 30, 2011, four common stockholders owned 

9,385,694 outstanding shares, which they acquired from the 

four railroads whose intercity passenger service Amtrak 

assumed in 1971. BDO USA, LLP, NATIONAL RAILROAD 

PASSENGER CORPORATION AND SUBSIDIARIES (AMTRAK)

CONSOLIDATED FINANCIAL STATEMENTS: YEARS ENDED 

SEPTEMBER 30, 2011 AND 2010, at 18 (2011) (J.A. 351). At 

the same time, however, the federal government owned all 

109,396,994 shares of Amtrak’s preferred stock, each share of 

which is convertible into 10 shares of common stock. Id. at 17 

(J.A. 350). And, all that stands between Amtrak and financial 

ruin is congressional largesse. See id. at 6 (J.A. 339).

That being said, Amtrak’s legislative origins are not 

determinative of its constitutional status. Congress’s power to 

charter private corporations was recognized early in our 

nation’s history. See McCulloch v. Maryland, 17 U.S. (4 

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Wheat.) 316, 409 (1819). And, as far as Congress was 

concerned, that is exactly what it was doing when it created 

Amtrak. As Congress explained it, Amtrak “shall be operated 

and managed as a for-profit corporation” and “is not a 

department, agency, or instrumentality of the United States 

Government.” 49 U.S.C. § 24301(a). We have previously 

taken Congress at its word and relied on this declaration in 

deciding whether the False Claims Act applies to Amtrak. See 

United States ex rel. Totten v. Bombardier Corp., 380 F.3d 

488, 490 (D.C. Cir. 2004) (“Amtrak is not the Government.”); 

id. at 491 (“Amtrak is Not the Government.”); id. at 502 

(“Amtrak is not the Government.”). Amtrak agrees: “The 

National Railroad Passenger Corporation, also known as 

Amtrak, is not a government agency or establishment [but] a 

private corporation operated for profit.” NAT’L R.R.

PASSENGER CORP., FREEDOM OF INFORMATION ACT 

HANDBOOK 1 (2008). And, somewhat tellingly, Amtrak’s 

website is www.amtrak.com—not www.amtrak.gov. 

How to decide? Since, in support of its claim that Amtrak 

is a public entity, the government looks past labels to how the 

corporation functions, it is worth examining what functional 

purposes the public-private distinction serves when it comes 

to delegating regulatory power. We identify two of particular 

importance. First, delegating the government’s powers to 

private parties saps our political system of democratic 

accountability. See Mich. Gaming Opposition v. Kempthorne, 

525 F.3d 23, 34 (D.C. Cir. 2008) (Brown, J., dissenting in 

part). This threat is particularly dangerous where both 

Congress and the Executive can deflect blame for unpopular 

policies by attributing them to the choices of a private entity. 

See NARUC, 737 F.2d at 1143 n.41; cf. New York v. United 

States, 505 U.S. 144, 169 (1992) (“[W]here the Federal 

Government directs the States to regulate, it may be state 

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officials who will bear the brunt of public disapproval, while 

the federal officials who devised the regulatory program may 

remain insulated from the electoral ramifications of their 

decision.”). This worry is certainly present in the case of 

§ 207, since Congress has expressly forsworn Amtrak’s status 

as a “department, agency, or instrumentality of the United 

States Government.” 49 U.S.C. § 24301(a)(3). Dislike the 

metrics and standards Amtrak has concocted? It’s not the 

federal government’s fault—Amtrak is a “for-profit 

corporation.” Id. § 24301(a)(2).

Second, fundamental to the public-private distinction in 

the delegation of regulatory authority is the belief that 

disinterested government agencies ostensibly look to the 

public good, not private gain. For this reason, delegations to 

private entities are particularly perilous. Carter Coal

specifically condemned delegations made not “to an official 

or an official body, presumptively disinterested, but to private 

persons whose interests may be and often are adverse to the 

interests of others in the same business.” 298 U.S. at 311. 

Partly echoing the Constitution’s guarantee of due process, 

this principle ensures that regulations are not dictated by those 

who “are not bound by any official duty,” but may instead act 

“for selfish reasons or arbitrarily.” Roberge, 278 U.S. at 122.

More recent decisions are also consistent with this view. See 

Pittston Co., 368 F.3d at 398; NARUC, 737 F.2d at 1143–44; 

Sierra Club v. Sigler, 695 F.2d 957, 962 n.3 (5th Cir. 1983). 

Amtrak may not compete with the freight railroads for 

customers, but it does compete with them for use of their 

scarce track. Like the “power conferred upon the 

majority . . . to regulate the affairs of an unwilling minority” 

in Carter Coal, § 207 grants Amtrak a distinct competitive 

advantage: a hand in limiting the freight railroads’ exercise of 

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their property rights over an essential resource. 298 U.S. at 

311.

Because Amtrak must “be operated and managed as a 

for-profit corporation,” 49 U.S.C. § 24301(a)(2), the fact that 

the President has appointed the bulk of its Board does nothing 

to exonerate its management from its fiduciary duty to 

maximize company profits. Also consistent with this purpose, 

“Amtrak is encouraged to make agreements with the private 

sector and undertake initiatives that are consistent with good 

business judgment and designed to maximize its revenues and 

minimize Government subsidies.” Id. § 24101(d). Yet § 207

directs Amtrak and its host carriers to incorporate the metrics 

and standards in their Operating Agreements. See id.

§ 24101(c) note. So to summarize: Amtrak must negotiate 

contracts that will maximize its profits; those contracts 

generally must, by law, include certain terms; and Amtrak has

the power to define those terms. Perverse incentives abound. 

Nothing about the government’s involvement in Amtrak’s 

operations restrains the corporation from devising metrics and 

standards that inure to its own financial benefit rather than the 

common good. And that is the very essence of the 

public-private distinction when a claim of unconstitutional 

delegation arises.

No discussion of Amtrak’s status as a private or public 

institution would be complete, however, without an 

examination of the Supreme Court’s decision in Lebron v. 

National Railroad Passenger Corp., 513 U.S. 374 (1995).8

 8 Strangely, the government’s brief places almost no emphasis 

on Lebron. Perhaps this indicates the government’s agreement with 

AAR’s reading of the case. Whatever the reason for this 

near-silence, we think it important to address the Supreme Court’s 

most explicit discussion of Amtrak’s status.

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There the Court held that Amtrak “is part of the Government 

for purposes of the First Amendment.” Id. at 400. Otherwise, 

the majority cautioned, the government could “evade the most 

solemn obligations imposed in the Constitution by simply 

resorting to the corporate form.” Id. at 397. What the Court 

did not do in Lebron was conclude that Amtrak counted as 

part of the government for all purposes. On some 

questions—Does the Administrative Procedure Act apply to 

Amtrak? Does Amtrak enjoy sovereign immunity from 

suit?—Congress’s disclaimer of Amtrak’s governmental 

status is dispositive. See id. at 392; Totten, 380 F.3d at 

491–92. This makes sense: Congress has the power to waive 

certain governmental privileges, like sovereign immunity, that 

are within its legislative control; but it cannot circumvent the 

Bill of Rights by simply dubbing something private.

Whether § 207 effects an unconstitutional delegation is a 

constitutional question, not a statutory one. But just because 

Lebron treated Amtrak as a government agency for purposes 

of the First Amendment does not dictate the same result with 

respect to all other constitutional provisions. To view Lebron

in this way entirely misses the point. In Lebron, viewing 

Amtrak as a strictly private entity would have permitted the 

government to avoid a constitutional prohibition; in this case, 

deeming Amtrak to be just another governmental entity would 

allow the government to ignore a constitutional obligation. 

Just as it is impermissible for Congress to employ the 

corporate form to sidestep the First Amendment, neither may 

it reap the benefits of delegating regulatory authority while 

absolving the federal government of all responsibility for its 

exercise. The federal government cannot have its cake and eat 

it too. In any event, Lebron’s holding was comparatively 

narrow, deciding only that Amtrak is an agency of the United 

States for the purpose of the First Amendment. 513 U.S. at 

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394. It did not opine on Amtrak’s status with respect to the 

federal government’s structural powers under the 

Constitution—the issue here. 

This distinction is more than academic. When Lebron

contrasted “the constitutional obligations of Government” 

from “the ‘privileges of the government,’” it was not drawing 

a distinction between questions that are constitutional from 

those that are not. Any “privilege” of the federal government 

must also be anchored in the Constitution. Id. at 399. As our

federal government is one of enumerated powers, the 

Constitution’s structural provisions are the source of 

Congress’s power to act in the first place. See United States v. 

Lopez, 514 U.S. 549, 552 (1995); THE FEDERALIST NO. 45 

(James Madison). And, generally speaking, these provisions

authorize action without mandating it. Congress’s power to 

regulate interstate commerce, for example, does not dictate 

the enactment of this or that bill within its proper scope. By 

contrast, individual rights are “affirmative prohibitions” on 

government action that become relevant “only where the 

Government possesses authority to act in the first place.” 

Nat’l Fed’n of Ind. Bus., 132 S. Ct. at 2577. While often 

phrased in terms of an affirmative prohibition, Congress’s 

inability to delegate government power to private entities is 

really just a function of its constitutional authority not 

extending that far in the first place. In other words, rather than 

proscribing what Congress cannot do, the doctrine defines the 

limits of what Congress can do. And, by designing Amtrak to 

operate as a private corporation—to seek profit on behalf of 

private interests—Congress has elected to deny itself the 

power to delegate it regulatory authority under § 207. Cf. 

Religious Freedom Restoration Act of 1993, 42 U.S.C. 

§§ 2000bb to bb-4 (requiring, beyond what the Constitution 

mandates, that the federal government “not substantially 

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burden a person’s exercise of religion even if the burden 

results from a rule of general applicability” unless the 

restriction satisfies strict scrutiny). 

We therefore hold that Amtrak is a private corporation 

with respect to Congress’s power to delegate regulatory 

authority. 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. In deciding Amtrak’s status for purposes of 

congressional delegations, these declarations are dispositive.

Skewed incentives are precisely the danger forestalled by 

restricting delegations to government instrumentalities. And 

as a private entity, Amtrak cannot be granted the regulatory 

power prescribed in § 207.

III

We conclude § 207 of the PRIIA impermissibly delegates 

regulatory authority to Amtrak. We need not reach AAR’s 

separate argument that Amtrak’s involvement in developing 

the metrics and standards deprived its members of due 

process. Accordingly, the judgment of the district court is

Reversed.

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