D.C. Circuit Review – Reviewed: Eighth Circuit Edition
Last week I wrote a special edition of D.C. Circuit Review – Reviewed dedicated to the Tenth Circuit’s Appointments Clause decision. This week, the D.C. Circuit issued no opinions. So I’ve decided to again look beyond the D.C. Circuit to see what else is happening in the wide, wide world of administrative law. It turns out that there is an interesting case pending in the Eighth Circuit — and one with significant connections to the D.C. Circuit.
Readers will recall that last year the D.C. Circuit issued an important decision about Amtrak and due process.* Very quick recap: The D.C. Circuit held that it violates constitutional due process for Congress to tell a government agency to act like a private competitor and then also give that “private” competitor power to regulate those it competes with. (The government’s certiorari petition is due on February 6th.)
Well, it turns out there is another chapter in this story that is now playing out in the Eighth Circuit.
In Section 207 of the Passenger Rail Investment and Improvement Act of 2008, Congress gave Amtrak and the Federal Railroad Administration joint authority to develop “metrics and minimum standards for measuring the performance and service quality of intercity passenger train operations,” including “on-time performance.” The statute also says in Section 213 that “[i]f the on-time performance of any intercity passenger train averages less than 80 percent for any 2 consecutive calendar quarters,” the STB may initiate an investigation. The D.C. Circuit said that this joint rulemaking authority violates due process because Amtrak competes with other railroads.
Here is the latest twist: The STB has issued a rule of its own defining “on-time performance.” The Eighth Circuit will decide whether that rule is lawful. Many in the railroad industry, as you can imagine, think it is not.
From their brief:
On December 19, 2014, in the midst of the constitutional litigation, the Board announced that it would issue its own definition of On-Time Performance. The Board made this announcement in the context of a PRIIA § 213 proceeding brought by Amtrak against Canadian National. In denying Canadian National’s motion to dismiss that proceeding on the ground that the Board lacked authority to define On-Time Performance, the Board stated that “the invalidity of Section 207 does not preclude the Board from construing the term ‘on-time performance’ and initiating an investigation under Section 213.” Decision, Docket No. NOR 42134, at 10 (Dec. 19, 2014). The Board asked the parties to brief the question of how the Board should define On-Time Performance for purposes of PRIIA § 213. Id. at 11.
Eventually the STB decided to propose a rule, which it later finalized. Again, quoting from the Railroads’ brief:
The Board issued its final rule on July 28, 2016. It asserted that the D.C. Circuit’s invalidation of PRIIA § 207 gave the Board the authority to issue an On-Time Performance rule. The Board acknowledged that PRIIA § 207 “charged Amtrak and the Federal Railroad Administration”—not the Board—“with ‘jointly’ developing new, or improving existing, metrics and standards for measuring the performance of intercity passenger rail operations, including on-time performance and train delays incurred on host railroads.” The Board reasoned, however, that “the invalidation of Section 207 of PRIIA leaves a gap that the Board has the delegated authority to fill by virtue of its authority to adjudicate complaints brought by Amtrak against host freight railroads for violations of Amtrak’s statutory preference and to award damages where a preference violation is found.” The Board insisted that “[a]ny other result would gut the remedial scheme, a result that Congress clearly did not intend.”
There is a lot more going on in this case, but this paragraph is an interesting one. Is that really how the law works? Law Professor Neomi Rao filed an amicus brief challenging this analysis:
In its final rule, the Board also claims authority to define on-time performance, because “[a]ny other result would gut the remedial scheme.” Final Rule, 81 Fed. Reg. at 51345. While agencies have the power to resolve some statutory ambiguities, their authority “does not include a power to revise clear statutory terms that turn out not to work in practice.” [Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2446 (2014).] Such revisions violate “the core administrative-law principle that an agency may not rewrite clear statutory terms to suit its own sense of how the statute should operate.” Id. When part of a statute is invalidated on constitutional grounds, the Court does not rewrite the statute, but instead sends it back to Congress. The “editorial freedom” to revise a statute after the finding of a constitutional violation “belongs to the Legislature, not the Judiciary.” Free Enterprise Fund v. PCAOB, 561 U.S. 477, 510 (2010). Accordingly, the Board cannot seize rulemaking authority about on-time performance standards without a statutory amendment enacted by Congress.
Here is a snippet of the STB’s argument on this score:
Section 213’s main purpose is to give Amtrak a convenient forum to enforce its statutory preference right over a host carrier’s freight trains under 49 U.S.C. § 24308(c). Consistent with the analysis in United States v. Booker, 543 U.S. 220, 258-59 (2005), the Board considered whether Section 213 would be “capable of functioning independently” in the absence of the metrics and standards and would function “consistent with Congress’ basic goals in enacting the statute.” It correctly found that it would. The Board also correctly concluded that “[a]ny other result would gut the remedial scheme, a result that Congress clearly did not intend.”
Anyway, it is hard to summarize the entire case in a blog post — and needless to say, there is a lot going on. If you are interested, here is the full briefing (I requested it from one of the lawyers):
Chamber of Commerce Amicus Brief.
Professor Neomi Rao Amicus Brief.
United States Conference of Mayors Amicus Brief.
It will be interesting to see what happens. Oral argument is scheduled for February 8th.
* My friend and co-author Daniel Hemel also wrote about the decision, and responded to my post, which prompted a reply from me.
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