Document: 470 U.S. 451 105 S.Ct. 1441 84 L.Ed.2d 432 NATIONAL RAILROAD PASSENGER CORPORATION, Appellant,v.ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY et al. ATCHISON, COMPANY, al., Appellants, v. CORPORATION. Nos. 83-1492, 83-1633. Argued Jan. 15, 1985. Decided March 18, Syllabus The Rail Passenger Service Act of 1970 (Act or RPSA) was enacted in an attempt to revive the failing intercity passenger train industry. For this purpose established National Railroad Corporation (Amtrak), a private, for-profit corporation, authorized operate, contract with private railroads for operation of, rail service. Most offering such service entered into "Basic Agreements" Amtrak, and thereby, as provided by Act, shed their obligations. Section 7.5 each Basic Agreement, which concerned railroad employees' privileges travel on Amtrak trains free at reduced fares, gave discretion determine privileges. When controversy arose over Amtrak's decision cut back these privileges, Congress 1972 added § 405(f) RPSA restore they existed when took 1971. But also required pay, reimbursement rate determined Interstate Commerce Commission, costs might be incurred providing pass In 1979, decided that ICC's resulted inadequate compensation accordingly amended require reimburse pass-rider "25 percent systemwide average monthly yield per revenue mile" two years. 1981, again provide 25 requirement remain effect indefinitely. Five filed suit against Federal District Court, challenging constitutionality grounds violated Due Process Clause Fifth Amendment. United States intervened defendant. Court granted summary judgment favor States, holding did not constitute between railroads, therefore impair obligation under contract, moreover Agreements. Appeals affirmed part reversed part, could compelled incremental cost carrying riders, but "windfall" 1979 amendment, whereby were pay more than cost, Clause, because it unreasonably illegally impaired railroads' rights Held: 1. is constitutional. Pp. 465-479. (a) does binding Congress. Neither language nor circumstances surrounding its passage manifest any intent Congress' bind itself contractually railroads. 465-470. (b) Agreements do grant contractual right from all Those are contracts simply Amtrak. 470-471. (c) 405(f)'s payment unconstitutionally relieved only common carriage responsibilities responsibility employees no state federal law imposed them, carriers, executed. It until after signed operations underway, new obligations both parties 472-475. (d) Even if have limit power choose different scheme. assess rational, met burden proving irrationality thus proved due process violation. 475-478. 2. make payments even costs. Nothing suggests question. 478-479. 723 F.2d 1298 (CA7 1983), reversed. Paul F. Mickey, Jr., Washington, D.C., Nat. R.R. Corp. Samuel A. Alito, Newark, N.J., supporting George Platz, Chicago, Ill., Atchison, Topeka Santa Fe R. Co., Justice MARSHALL delivered opinion Court. 1 question presented cases whether violates Amendment requiring (Amtrak) provides former employees, dependents. 2 * 3 From middle 19th century, coach played significant sometimes romantic role American cultural economic life. By however, "this time-honored vehicle" threatened "take place transportation museum along stagecoach, sidewheeler, steam locomotive."1 Whereas 1929 about 20,000 operated country,2 1946, there 11,000 trains; 1971, fewer 500 still operated.3 As cars, buses, airplanes displaced those continued heavy continuing losses. At same time, carriers bound continue Commission (ICC) regulatory authorities them responsibility. Given tremendous operating losses, many remaining handful coaches sought ICC permission discontinue 4 RPSA), Stat. 1327, 45 U.S.C. 501 seq. (1970 ed.), May 1, effort "revive industry retain high-quality Nation."4 On concluding reorganized restructured system successful, Corporation, corporation has come known Amtrak.5 "an agency establishment" Government operate service.6 outlined procedure obtain relief passenger-service transferring Amtrak;7 enter standardized would "of [its] carrier passengers [Subtitle IV Title 49] State other relating provision service." 561(a)(1) ed.).8 5 To obligations, had agree several conditions. First, "[i]n consideration being responsibility," amount equal one-half railroad's financial losses during 1969. 561(a)(2). Participating use tracks, facilities, services rates agreed upon or, event disagreement, set ICC. §§ 561, 562. included labor protection "provide fair equitable arrangements protect interests affected discontinuances 565(a). "protective arrangements" unions, promised dislocated preserve employee benefits, including pension fringe benefits. 565(a)-(e). 6 Finally, 301 541 "expressly reserved" "repeal, alter amend time." 7 All five up option contracts, Agreements," Amtrak.9 participating made began 8 mirrored provisions Act. example, 2.1 entitled "Relief Responsibility," signatory entire Intercity Service." App. 13. services, facilities available who discontinuance 9 "Transportation Privileges," spelled out trains. fifth paragraph, "[t]ransportation any, respect business personal personnel shall [Amtrak]." paragraph specify party bear transportation. 10 Shortly operation, considerable pursuant accorded provision. result given rise action, we turn consider evolution dispute. B 11 Since 1880's, retirees, dependents, been able ride rates. Before assumed often permitted current retired dependents home lines rates, reciprocal agreements permitting well.10 12 time created, 1.4 million rail-travel passes outstanding.11 Exercising Agreements, confine half-rate fares. result, lost pre-Amtrak access completely transportation, some entirely. then faced vehement protests freight service, asserted withdrawal produce severe problems them.12 thereafter restored some, canceled 13 protest vigorously They reaffirmed concern morale possibility strikes restored. responded problem amending reduced-rate people enjoyed Pub.L. 92-316, 8, 86 230-231. 565(f) (1976 ed.) (1972 amendment), assure, "to maximum extent practicable," received before eligible Committee Reports, Senate House emphasized should lose longstanding privileges—privileges earned through years service—simply account transfer Amtrak.13 implemented amendment riders half fare depending length employee's employment, retired, he traveling off his railroad.14 addition, space-available basis only; reservations 24 hours advance reservations; special called Metroliners. 14 "such may incurred" mandated 405(f). explained: "Because merely policies themselves developed, appear any." S.Rep. No. 92-756, p. (1972), U.S.Code Cong. & Admin.News 1972, 2400. how calculated resolve issue unable paid. matter eventually referred ICC, interim based service—that is, additional transport riders. initial $.00079 mile. This offset derived fares paid riding amendment.15 administrative program. formula applied, always exceeded otherwise reimbursed solely program's costs.16 collected expenses amounting $500,000 year.17 15 Accordingly, Reorganization 96-73, 120(a), 93 547 (Reorganization Act), prospectively mile"—a amounted approximately one-fourth normal ticket-buying passengers. years.18 16 directed Comptroller General conduct study and, "taking value provided," 120(b), recommendations appropriate way 1980, Accounting Office submitted report analyzed detail methods reimbursement. GAO Report, 42-86. first considered reimbursing second, rider provided, less charged regular passenger, declined quantify. approach necessarily correct one, decided: "Amtrak's debatable, find adequate analytical evidence support one position another recommend specific means Amtrak." Id., 43. concluded choice formulas "a policy make," id., 80; instead answer, options. Ibid. After receiving report, 25-percent 97-35, 95 697 (1981 amendment). C 17 1980 taken advantage discontinued Northern Illinois Act.19 argued 18 claim four theories. claimed 405(f), statutory constituted "intercity service," "entire responsibility" RPSA. Thus, since contracted relieve fulfilled Congress, claimed, impairing 405. Next, obligation, identical "relief language, States; asserted, subsequent legislation. Third, that, allowing deprivation property without process. constitutionally program, particular forth 1981 passed, complaint claims applicable well. 19 motion judgment, cross-motion judgment. defendant 28 2403 dismiss alternative, order granting States. 577 F.Supp. 1046 (1982). amended, held contract. found own admission never legal families. court observed what have. 20 rejected argument ruled overcome firmly presumption attaches legislative Acts " 'adjusting burdens benefits life.' 1052 (quoting Usery Turner Elkhorn Mining 428 96 2882, 2892, 49 752 (1976)). Because legislation neither arbitrary irrational, 405 violate standard. 21 transporting "Having acted will second-guess branch selection mathematical reimbursement, absent showing selected irrational manner." F.Supp., 1055. traced decisionmaking demonstrate plans rational decision, particularly light conclusion Report involved 22 Seventh Circuit part. (1983). most arguments panel held, having "finance aspects [Amtrak] once 1302. According Appeals, scheme supported general operations, statute Agreements.20 23 appealed 1252, arguing constitutional, noted probable jurisdiction. 469 813, 76, 83 (1984). cross-appealed, contending We deferred ruling jurisdiction cross-appeal proper merits. Ibid.21 II argue created reimpose amendments "contract" entered. conclude, correctly substantially process, incorrectly making arguments, relationship either second scope encompassed But, assert ones paying maintain amendments, well assessment costs, rights. consider, reject, turn. address arrangement decades, maintained clear indication legislature intends contractually, intended create vested declares pursued ordain otherwise." Dodge Board Education, 302 74, 79, 58 98, 100, 82 L.Ed. 57 (1937). See Rector Christ Church County Philadelphia, How. 300, 302, 602 (1861) ("Such interpretation favored"). well-established grounded elementary proposition principal function laws establish state. Indiana ex rel. Anderson Brand, 303 95, 104-105, 443, 447-448, 685 (1938). Policies, unlike inherently subject revision repeal, construe clearly unequivocally expressed drastically essential powers body. Indeed, '[t]he existence government great value, implications presumptions, disarmed necessary accomplish ends creation.' Keefe Clark, 322 393, 397, 64 1072, 1074, 88 1346 (1944) Charles River Bridge Warren Bridge, Pet. 420, 548, 773 (1837)). asserting creation must well-founded presumption, Dodge, supra, U.S., S.Ct., proceed cautiously identifying within defining contours obligation. 26 determining gives "it importance examine statute." 78, 100. 104, 447 ("Where State's embodied instrumentalities cardinal inquiry terms supposed contract"). "If execution written behalf case clear." 100 (emphasis supplied). expression actual intent" itself, Wisconsin Michigan Co. Powers, 191 379, 386-387, 107, 108-109, 48 229 (1903), lightly undoubtedly public regulation be, party. 27 discloses absolutely congressional intention terms, speak Quite contrary, expressly nongovernmental entity, 541, used term define new, states "the request therefor railroad, tender . .," 561(a), "[u]pon entering valid ., responsibilities. ." cannot frequent usage "contract," evidences contractually. Legislation outlining execute articulated like policies, repeal. lest doubt will, alter, amend" time. 541. hardly contract.22 Moreover, Act's belie away governmental powers. long regulated unprofitable undertake huge sums insist "consideration" represented just annual suffered year prior 29 atmosphere pervasive leads conclusions. struck profoundly inequitable bargain if, exchange equivalent year's impose railroads—which potentially profitable services—any all.23 presumed nonchalantly vitally important so little receive exchange. Cf. Trust New Jersey, 431 21-25, 97 1505, 1517-1519, 52 92 (1977) (considering reserved doctrine). Also, pervasiveness area affirmative legitimate expectation cease Coupled statute's express reservation strongly cuts Energy Reserves Group, Inc. Kansas Power Light 459 400, 413, 103 697, 706, 74 569 (1983) (discussing substantial impairment contract). 30 nevertheless "closely analogous covenant" Trust, "which Contract Clause." Brief Appellees 18. Far recognizing similarity, Jersey highlights difference true retroactively bond covenant relied purchasers. bi-state authorizing Port Authority York acquire, construct, Hudson Manhattan World Trade Center City. read part: "The holders bonds, hereinafter defined, bonds outstanding unpaid port authority subsidiary incorporated purposes act apply rentals, tolls, fees, charges, revenues reserves, pledged whole security whatsoever forth." 1962 N.J.Laws, ch. 6; N.Y.Laws, 209, 6. Resort need dictionary recognize explicitly take certain actions now future, was, contested case. drafted invoke constitutional protections 31 here contain "covenant[s] agree[s]" anyone anything, fact offer assurances future activity revoke repeal persuaded proffered analogy. 32 hold 33 next While can Agreements; implicate point portion power, Government's agent confer assuming delegation. actually relief. 1051. careful reading indicates removed unpersuasive efforts bound, 34 Because, demonstrated, our focus shifts confront alleged impairment, Government, face right. allegation breach warrants application rigorous standard review urge us apply.24 Instead, impairs 35 prevail right, complaining unconstitutionality demonstrating, first, alters 17-21, 1515-1517. If found, reviewing determines dimension. alteration minimal, end stage, Allied Structural Steel Spannaus, 438 234, 245, 98 2716, 2722, 727 (1978); substantial, look closely legislation, ibid.; see Inc., 411, 704. especially limited, judicial scrutiny quite minimal. violation 'establish way.' Pension Benefit Guaranty R.A. Gray 467 717, 729, 104 2709, 2718, 81 601 (1984) 2892).25 36 starting obtained Agreements.26 altered rights.27 37 pre-existing carriers. divest assume, "responsibilities added). turn, 2.1, Thus together virtue law. independent readily apparent limited previously 38 allege ever responsibility, regulation, Here, lower courts, describe "gratuitous undertaking, 'Christmas turkey.' plainly consistent nature include, undertakings" reduced-fare passes. Nor half-fare become "responsibility" meaning although here, noncontractual collective-bargaining agreements. purport agreements, assume 565(b) (a preservation rights, (including continuation benefits) existing agreements"). 39 connection left open. signed, way, conclude altered, otherwise, duties. D 40 while responsibility—both operational F.2d, reasoned go cover expenses. indirectly freed, unconstitutional failed meet "paramount basic agreement." 1303. "unreasonably illegally" help finance 41 Initially, far evident subsidize view excess unambiguously burdensome schemes. surely exempt kinds, misdirect attack subsidizing benefit lifted accords nothing pricing services. Whether high subsidy decide, infra rationally setting employees. disagree Appeals' passing rendered. Having reached conclusion, course substantial. 42 passes, cases. Under Amendment's remained 'adjus[t] life,' manner irrational. 2717 2892). determination duties rests squarely 2718. performed inquiry, below erred placing proof defend rigorously did. 43 Had applied standard, proof. honor expectations past present step peace, least rather taxpayers, responsible moral benefited peace morale. 44 Similarly, reasonably received, wholly selecting passholders—as opposed Amtrak—as amount, settling figure quantify received. commissioned GAO, computations sense, cost-spreading other. 80-81. point, uniquely select later fairest, arbitrary. placed relates public, "[w]e unwilling wisdom chosen enough say approaches spreading rationally; [different] wiser practical dimension." Elkhorn, 18-19, 2893-2894. offend Clause. direct onerous borne further partial-fare among responsibilities, acquired infringed subsidizes reasoned, reverse insofar contrary. III 46 foregoing analysis fortiori requires reject Absolutely traditionally them. 47 Accordingly contravened ordered. POWELL Hosmer, Examiner, Recommended Order, Train Deficit, Docket 31954, 69 (1958) (as quoted G. Hilton, Amtrak: (1980)). P. Dorin, Trains Travel (1979). H.R.Rep. 91-1580, pp. 2-3 (1970), 1970, 4735. General, B-196907, CED-80-83, How Much Should Be Reimbursed Employees Using Passes Ride Its Trains? (GAO Report), 48. 5. Initially named "Railpax." independently adopted official nickname "Amtrak," contraction "American" "Track." N.Y. Times, Apr. 20, 86, col. 7. Railroads chose (ICA), 10908 10909. 404 RPSA, 564 declared 5-year moratorium transferred seek discontinuances, procedures ICA, period. 13a recodified 10908, freight. 10903 originally Part I 1328, 1334; ICA 1978 Subtitle (§ 10101 seq.) 49, "Interstate Commerce." nonparticipating Southern Railway Denver Rio Grande Western Railroad, Rock Island Pacific Georgia Canadian 47. Affidavit Roger Lewis, 40. 11-12 2393, 2400 ("The believes advent Amtrak"); 92-905, (1972). 53-54. Determination Cost Reimbursement 27194, Dec. 21, 23-38 (unamended reported 347 I.C.C. 325 (1972)). 51. 1298, 1300 1983). billed .02067 cents .02343 months following sums: Fe, $336,249.82; Burlington Northern, $490,344.72; Chesapeake Ohio Baltimore Ohio, $76,345.34; Union Pacific, $287,784.66. 1300, n. Of course, by, number declines retiree deaths. 2.83 people, December 1.05 remained. 56. Topeka, maintained, proper. jurisdictional statement days receipt appellant's statement, Court's Rule 12.4. filing properly cross-appeal, jurisdictionally sound. cross-appeal. 1252 "[a]ny appeal Supreme interlocutory final decree civil action agencies party." Regan Taxation With Representation 461 540, 543, 3, 1997, 1999, 76 129 (1983), sufficiently broad encompass appeal. buttressed us." Heckler Edwards, 465 870, 879, 1532, 1538, 79 878 case, taking 12.4 invoked, timely, Sinking Fund Cases, Otto 700, 99 496 (1879), recognized few simple words. challenged statutes governed securities issued aid construction railways. improperly interfered "Congress retains, notice retain, full complete alterations charter power." 720. clause Corporation's corporate charter. change Act," ground single aspect assistance (or disagreement), 562 disadvantaged These requirements easily conditions petition 10903(a)(2), 11101. consideration, ongoing arrangement. observed: "There distinction control interdict interfere exercise authority, repudiate substance engagements. withdraw ignore pledge Constitution contemplates vain promise, sanction pleasure convenience pledgor. conception Government." Perry 294 330, 350-351, 55 432, 434-435, 912 (1935). credit debtors, Lynch 292 571, 580, 54 840, 844, 78 1434 (1934), "State's self-interest stake," 26, 1519, (1977), perhaps treated differently. 244, (1978). where issue, concerns implicated, reason heightened review. reviews same. 732-733, 2719-2720, principles guarantee coextensive prohibitions observed, standards differ, searching occurs 24, supra government's obligations). raised appeal, postpone discussion Columbia. Columbia, courts ambiguous susceptible interpretations. Kass William Norwitz 509 618, 623-624 (DC 1980). Agreement ambiguous. 1301. makes clear, agree.

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