The Supreme Court debated Monday whether Amtrak has the authority to write the standards under which it should be judged.
The government created the for-profit corporation in 1970 and in 2008 told it to work with government agencies to develop “metrics and standards” to better judge its performance in providing passenger rail service.
The rub is that Amtrak runs on freight train rails, and the new standards gave Amtrak a tool with which to force freight railroads to delay their own traffic to benefit Amtrak’s on-time performance.
A panel of the U.S. Court of Appeals for the District of Columbia Circuit agreed with the freight industry that the 2008 law was unconstitutional because Congress cannot give a private company the right to develop regulations.
That was the backdrop for a rather dense hour-long argument at the Supreme Court, where justices expressed varying degrees of unease with the situation. But it was not clear whether any five of the nine had the same concerns.
Assistant Deputy Solicitor General Curtis E. Gannon, representing the federal government and Amtrak, said the lower court was wrong that Amtrak should be considered a private entity and that the standards were regulations.
Chief Justice John G. Roberts Jr. seemed to disagree. He noted that if Amtrak fell short of the standards, it could initiate an investigation by the Surface Transportation Board to see whether a lack of cooperation from the freight industry was the cause.
“That’s a significant regulatory impact — to tell railroads I, a private party, get to start a governmental proceeding and you have to show up to defend it,” Roberts said. He noted that after the appeals court struck down the standards, Amtrak’s performance dropped “dramatically.”
“Seems kind of regulatory,” Justice Elena Kagan agreed.
But she pressed Washington lawyer Thomas H. Dupree Jr., representing the Association of American Railroads, about his claim that Congress could not delegate authority to Amtrak because it is a private interest.
Canadian Pacific Railway Ltd. is caught up in the fallout from a political battle in Wisconsin over the building of a high-speed rail line.
The Calgary-based North American rail freight giant is making its case to a Wisconsin state arbitrator that it is owed more than $500,000 (U.S.) for planning work it did on a high-speed-rail project that was cancelled when a Republican politician opposed to it won the governorship in 2010.
CP, through its Soo Line Railroad Co. subsidiary, owns the right-of-way to several rail lines in the proposed corridor that would have required upgrading to accommodate high-speed passenger trains.
CP contends in its claim it “expended substantial resources” to help the Wisconsin Department of Transportation in 2009 and 2010 obtain an $810-million grant from the federal government in a rushed fashion before the 2010 election.
A majority on the Supreme Court appeared to support the Obama administration’s contention that Congress didn’t delegate too much authority to Amtrak for drafting standards that apply to the entire rail industry.
At issue in Department of Transportation v. Association of American Railroads are standards for on-time performance and other metrics issued by DOT in 2010 after “jointly” developing them with Amtrak. The freight rail industry claims the standards were too favorable to Amtrak, which operates most of its routes on tracks owned by freight companies. Amtrak and freight operators compete for limited capacity — a tension dating to Congress’ creation of Amtrak in 1970 (Greenwire, Oct. 31)
The freight companies sued, challenging a provision of the 2008 Passenger Rail Investment and Improvement Act, which aimed to address Amtrak’s struggles with on-time performance by cutting delays caused by freight traffic.
The law, they said, granted Amtrak too much leverage to negotiate standards that would apply to the entire industry.
A federal appeals court agreed, ruling in July 2013 that the law delegated too much authority to Amtrak — which is supposed to be run as a for-profit entity (Greenwire, July 2, 2013).
Most of the justices today appeared unwilling to rule for the first time in 80 years that Congress had violated the “non delegation doctrine,” which prohibits giving lawmaking authority to a private entity.
Curtis Gannon, an assistant to the solicitor general, argued that Amtrak alone didn’t issue the standards; federal agencies did after overseeing the entire process.
“The federal government’s fingerprints” are all over the standards, he said. He further contended that the metrics were not, in fact, regulations.
That seemed to gain traction with Justice Elena Kagan and other liberal members of the court.
There is “no place where a private actor can do something itself under this scheme,” Kagan said.
Justice Stephen Breyer, moreover, appeared concerned about the ramifications of the court ruling against the standards.
There are thousands of groups that set standards that apply to various industries, he said, such as those that set performance standards for Internet providers.
Breyer called the case a “wild goose chase” and said that “once we start down that road, there is no stopping point.”
Aside from the delegation issue, however, there were other significant concerns about the standards.
Chief Justice John Roberts and Justice Antonin Scalia zeroed in on an arbitrator provision that granted Amtrak the authority to force the government to hire an independent arbitrator if the two sides could not come to agreement. The arbitrator’s decision would then have the full force of the government.
Scalia indicated that provision would violate the due process rights of other participants in the marketplace — such as freight operators.
The arbitrator, Scalia said, is “supervised by nobody” and would be setting government policy.
Thomas Dupree of Gibson Dunn & Crutcher, representing the freight companies, agreed, arguing that the provision “gave Amtrak the pen.”
The case also gave the justices the opportunity to delve into the murky issue of whether Amtrak is private or public.
Despite Dupree’s arguments that it is a private actor in the marketplace, Kagan and Justice Ruth Bader Ginsburg seemed unwilling to budge.
“What about Amtrak is not governmental, other than the label?” Kagan asked.
INDIANAPOLIS (WLFI) – There’s a new twist in negotiations to help keep the Hoosier State passenger rail line alive. The Indiana Department of Transportation is working to continue service with Amtrak — past the contract that currently expires in less than three months.
As News 18 has been reporting, federal funding for the Hoosier State line ran out last year. Several communities, including Lafayette, West Lafayette, and Tippecanoe County are helping fund the service.
The state has a contract with Amtrak which currently ends on Jan. 31. INDOT was in negotiations with Corridor Capital LLC for the line. But INDOT Spokesman Will Wingfield tells News 18 those negotiations have ended. Instead, he said INDOT is talking to Amtrak about operating the line into February and beyond.
“Here recently we’ve requested Amtrak’s pricing for them to continue operating the service minus the elements that they provide today, so on-board services and rolling stock, such as passenger cars, etc.” said Wingfield.
Corridor Capital LLC posted an article on its website, saying the company wasn’t aware of negotiations ending until recent news reports. Wingfield declined to go into detail as to why INDOT ended negotiations with the group.
Wingfield said INDOT hopes to have an agreement with Amtrak by that Jan. 31 deadline. He said INDOT is also in renewal negotiations with the different communities.
It’s been more than half a century since Eau Claire last saw passenger rail service. If the turnout at a Thursday evening hearing was any indication, there is strong interest in making sure another 50 years don’t pass before the trains run again.
A standing-room-only crowd of more than 100 people, from 20-somethings to seniors, attended a Minnesota Department of Transportation open house at Chippewa Valley Technical College to hear about the neighboring state’s passenger rail plan, which includes a potential line between Eau Claire and the Twin Cities. The desire for such a route was identified when Minnesota created its state rail plan in 2010. Now, the Minnesota DOT is preparing a five-year update of that document.
The rail line is envisioned as offering speeds up to 79 mph (and perhaps as high as 90 mph) between Eau Claire and the Twin Cities, with stops in both St. Paul and Minneapolis. The 2010 plan included four round trips a day on the route and estimated passenger demand of between 100,000 and 300,000 riders annually.
But making the route a reality will take collaboration, political will, and – most of all – money. “This is a bi-state project,” Praveena Pidaparthi, planning director of MinnDOT’s passenger rail office, told the gathering. “We cannot advance this project just based on MinnDOT findings. We need WisDOT’s cooperation too to advance this. And I think we need that grassroots initiative, which we already have” – in the form of the West Central Wisconsin Rail Coalition, one of the event’s sponsors. Furthermore, the project needs to reach the stage of planning where funding can be found within the two state budgets’ and from the federal government, Pidaparthi said.
MOLINE — The Moline Historic Preservation Commission on Monday approved preliminary plans for the exterior of the building that will hold The Q, the Quad-Cities passenger rail station.
Jeff Nelson, MetroLINK’s general manager, and Ted Houg, a design principal with Legat Architects, told commissioners work is well underway for the station planned on the first floor of a former warehouse on 12th Street and 4th Avenue in Moline.
The effort to bring passenger rail back to the Quad-Cities has been in the works for 25 years, Mr. Nelson said. Illinois is managing most of the rail improvements, with the launch date for service between Moline and Chicago “still fluid.”
“We have been assured there will be a day the first train rolls,” he said.
City officials have said rail service likely will begin in 2016, although Illinois Department of Transportation officials recently said they could not cite a target date or year. IDOT has begun rail line upgrades near Chicago, but has not said when work will start on a 55-mile stretch of rail between Wyanet and Moline.
Joe Szabo, the Federal Railroad Administration’s chief since 2009, is leaving in January to return to Illinois.
In an email this morning to the agency’s approximately 840 employees, Szabo said he has accepted a job as senior fellow for the Chicago Metropolitan Agency for Planning, where he’ll work with elected officials, industry and organized labor on transportation planning and programming.
“It is a role that allows me to return to my roots in local government, to serve as a senior adviser on transportation policy, and — from Chicago — continue to advance the safe, efficient and reliable movement of people and goods for a strong America, just like we’ve done together here at FRA.”
Szabo has headed the railroad administration, which is part of the Department of Transportation, for almost all of the Obama administration, having won Senate confirmation for the post in April 2009. A former railroad worker who became vice president of the Illinois AFL-CIO, Szabo also served as mayor of Riverdale, Ill., near Chicago.
Among accomplishments cited in today’s email, Szabo singled out the drop in work-related railroad employee deaths during his tenure, which he said fell from 26 in 2008 to five so far this year. He also highlighted FRA’s work to put California’s high-speed rail program “on a solid footing”; the launch of a comprehensive plan for Amtrak’s Northeast Corridor, which runs from Washington, D.C., to Boston; and improved ability by the agency and state governments to complete projects “on time and on budget.”
“Due to your good work, the pipeline of rail projects has never been stronger and states and regions are ready to execute as predictable, dedicated funding becomes available,” he told employees.
Today’s announcement comes about two months after the agency’s deputy administrator, Karen Hedlund, also stepped down. That post is currently vacant.
At the Environmental Law and Policy Center, a Chicago-based organization that supports expanded passenger train service, Federal Legislative Director Karen Torrent praised Szabo’s work on safety and as a “tireless advocate” for a national rail plan but expressed concern at the possibility that FRA will lack permanent top leadership at a time when both Amtrak and surface transportation programs are up for congressional reauthorization.
“You want to have those positions filled so they can be participating” in the reauthorization process, Torrent said.
Wisconsin resident Bob Fisher had a ticket to ride the train. He ended up on a bus.
Fisher, a retired planner from La Crosse, had planned to take Amtrak’s Empire Builder eastward across the state to Milwaukee for a conference this summer. Informed that his train was running six hours late, Fisher disappointedly opted to make the trip on a motor coach chartered at the railroad’s expense.
For Amtrak travelers, such schedule-shredding snafus are becoming more common as delays push long-distance train punctuality to its lowest point in years, driving off customers and raising costs.
Along the 15 routes in the railroad’s national network, on-time performance was 41 percent in August, compared to 66 percent a year earlier, even with a fudge factor that allows trains to reach their end destination as much as a half-hour late and still be counted as on time. Worst off were passengers on the Capitol Limited, which runs daily between Chicago and Washington, D.C. For August, travelers between the two cities had about a 3 percent chance of arriving on time, the most recent available statistics show.
By many indicators, “the situation is worsening, not improving,” D.J. Stadtler, Amtrak’s vice president of operations, said at a Surface Transportation Board hearing last month.
But while grain and industrial shippers are also up in arms about clogged tracks and spotty service attributed to a surge in crude-by-rail traffic, Amtrak executives see another force in play: a federal appellate court’s decision last year to strike a provision in a 2008 law that provided more leverage for prodding freight railroads to give passenger trains legally required preference on their tracks.
Following that July 2013 ruling, “we saw an immediate drop in [on-time performance] across the board,” said Amtrak spokesman Craig Schulz.
The ruling came in response to a suit brought by the Association of American Railroads on behalf of large freight carriers. Those carriers are obeying the law, said spokesman Ed Greenberg, adding that the “lingering service issues” also affect freight shipments and stem from a resurgent economy that has pushed rail traffic to its highest level in seven years.
“The freight rail industry shares Amtrak’s concern and is working hard to address the current network capacity situation,” he added in an email.
The case is now before the Supreme Court, with oral arguments scheduled for Dec. 8.
The legal crux is the fuzzy question of whether Amtrak, a creation of Congress that is supposed to be run as a for-profit business, should be considered a private enterprise or government agency.
In court papers, parties on both sides paint the practical stakes in stark terms. The appellate court ruling “thwarts the intent of Congress and threatens the future of passenger rail service in the United States,” the Environmental Law and Policy Center, a Chicago-based advocacy group that supports “clean transportation,” said in a friend-of-the-court filing.
To the railroad association, however, the disputed provision allows a private entity to use government rulemaking authority “to seize a commercial advantage,” according to its brief. Although Amtrak and the freight lines don’t vie for customers, they do compete for “the ability to operate trains within the limited slots available on a rail line,” the brief said.
Backing the association are the U.S. Chamber of Commerce and organizations including the libertarian Cato Institute.
A Supreme Court ruling in the freight industry’s favor could also imperil a separate Amtrak complaint asking the Surface Transportation Board to investigate and impose damages on Canadian National Railway Co. for allegedly shunting Amtrak trains onto sidings and taking other steps that illegally put freight traffic first. Canadian National has denied wrongdoing. In a recent filing with the board, its lawyers said the appellate court’s decision removed any basis for an investigation.
Whatever the causes, the turmoil may be turning off would-be passengers that Amtrak — heavily dependent on federal subsidies — can ill afford to lose.
Ridership on the Empire Builder, whose breathtaking views along its route between Chicago and the Pacific Northwest have helped make it Amtrak’s most popular long-distance train, tumbled almost 16 percent in fiscal 2014, according to figures released this week. Ticket revenue for the Empire Builder dropped almost $13 million, or about 19 percent.
Conflict’s deep roots
Underlying the standoff is tension dating back to the 1970 law that created Amtrak as the sole national passenger railroad. Up to that point, freight railroads were legally bound to provide passenger service.
Eager to unload a money-losing obligation, they agreed to let Amtrak trains use their tracks. In 1973, Congress followed up by instructing the freight lines to generally give preference to Amtrak trains except in cases of emergency. Apart from the Northeast Corridor, stretching from Washington, D.C., to Boston, virtually all Amtrak trains still run on thousands of miles of tracks controlled and dispatched by Canadian National, BNSF Railway Co. and other Class I freight railroads.
Timekeeping nonetheless remained a struggle. For just one year, late trains cost Amtrak almost $137 million in lower ticket revenue and higher outlays for overtime and other expenses, the Transportation Department’s inspector general concluded in a 2008 report requested by a House subcommittee.
As part of a reauthorization bill approved later that year, lawmakers ordered Amtrak and the Federal Railroad Administration to come up with standards for measuring punctuality and other key service yardsticks. To give the provision more teeth, the law also allowed the Surface Transportation Board, which oversees the freight rail industry, to investigate whenever on-time performance on any Amtrak train route averaged less than 80 percent over a six-month period.
In 2011, the year after Amtrak and the railroad administration issued the final standards, the railroad association filed suit against FRA and its parent agency, the Department of Transportation. Congress had unconstitutionally delegated rulemaking authority to a private entity that stood to gain financially from its handiwork, the association argued. The suit also voiced concern that the new standards could find their way into the long-term contracts — formally known as “operating agreements” — that set the rates and terms for Amtrak’s use of freight tracks.
After losing in U.S. District Court, the association took the case to the U.S. Court of Appeals for the District of Columbia Circuit. In last year’s decision, a three-judge panel unanimously sided with the freight industry. By designing Amtrak to run as a private corporation, they said, Congress ruled out giving it governmental authority to write regulations (Greenwire, July 2, 2013). The Transportation Department then appealed to the Supreme Court. Amtrak is not an actual party to the suit.
Cindy Bergmann, a lawyer who heads the transportation practice at the Chicago firm Freeborn & Peters LLP, expects the appellate court ruling to stand. “At that point, we’re kind of left with a void,” Bergmann, who is not involved in the case, said in a phone interview. The two sides “will want to come up with some new mechanism to determine what on-time performance is and what the rights and remedies of the parties should be.”
While the 15 long-distance routes accounted for about 15 percent of some 31 million Amtrak passengers in fiscal 2014, they brought in more than 23 percent of $2.2 billion in ticket revenue. They also serve parts of the country that increasingly lack “mobility choices,” Stadtler told the board at last month’s hearing. Earlier this week, the railroad announced the formation of a three-member panel to address congestion at its Chicago hub, with recommendations expected by May (Greenwire, Oct. 28).
In response to an inquiry this month from Surface Transportation Board Chairman Daniel Elliott, Norfolk Southern Corp. said it is “working hard” to implement plans to reduce delays affecting the Capitol Limited and other Amtrak trains that use its tracks.
‘Nail in the coffin’
Amid the legal wrangling, punctuality has generally kept sliding, when measured by on-time arrival either at trains’ end destinations or at all stations on a particular route.
The August numbers were actually up slightly from July, when overall “end point” on-time performance was the worst since February 2007, Amtrak spokeswoman Christina Leeds said in an email. For the period from September 2013 through this August, the biggest single cause of delays was freight train interference, according to the railroad.
To draw attention to the falloff, the National Association of Railroad Passengers, which has signed on to the Environmental Law and Policy Center’s brief, recently asked rail travelers to publicly recount their frustrations.
The tales since posted on the organization’s website include those of a Utica, N.Y., resident whose train arrived in Detroit more than nine hours behind schedule and a Pennsylvania State University graduate student who reported being put on a bus for eight hours, with only a doughnut as compensation for the inconvenience.
For Bob Fisher, a lifelong rail aficionado, this summer’s experience didn’t deter him from train travel. Earlier this month, Fisher said in an interview, he successfully made the round trip from La Crosse to Milwaukee, although the train in one direction was about 2½ hours late. But for less forgiving passengers, Fisher worried that a bad trip could turn into a “nail in the coffin.”
A closer look at the gripes on both sides can be found in Amtrak’s complaint against Canadian National. In its original January 2012 filing, Amtrak accused CN dispatchers of forcing passenger trains onto sidings to let freight trains pass and other infringements of Amtrak’s preference rights on routes like the City of New Orleans, which runs between Louisiana’s largest city and Chicago.
Although Canadian National describes itself as a “precision railroad,” Amtrak’s lawyers wrote, “this claimed precision has not translated into Amtrak trains running like clockwork on CN’s rail lines.” Those delays were the worst among all the Class I railroads in the country, they added.
Canadian National attorneys replied that preference rights are “contextual.” While CN always puts priority on accommodating Amtrak trains, they wrote, that does not mean holding up an on-time freight train for hours “in order to make absolutely certain that it will add no delay to an untimely, unpredictable Amtrak train.”
Talks to settle the dispute have so far failed, documents indicate. In hopes of “expediting” a Surface Transportation Board investigation, Amtrak two months ago narrowed its complaint to just the Illini-Saluki line, a state-supported route in Illinois where punctuality has been well below the 80 percent investigation threshold for three years, according to the filing.
The board has yet to rule on Canadian National’s motion for dismissal, but the new filing has garnered support from Illinois politicians. In a letter last week, Gov. Pat Quinn (D) urged the board to take a strong stand “so Amtrak’s rights to running passenger trains are safeguarded, and so our state can continue to rely on passenger trains on routes running today, and those that we wish to build tomorrow.”
CHICAGO – The Environmental Law & Policy Center issued the following statement regarding a new study released today by Good Jobs First, a non-profit, non-partisan group based in Washington D.C. that promotes smart growth for working families.
“This study shows that high-speed rail development creates jobs and spurs economic growth while improving mobility,” said Howard Learner, Executive Director of the Environmental Law & Policy Center. “Normal, Illinois is a shining example of how Midwest high-speed rail expansion has created manufacturing and construction jobs with better transportation soon available to millions of people.”
According to the study, building Normal’s Uptown Transit Station created 140,000 hours of work for construction workers in at least 13 different crafts. Unlike road-building projects where three crafts tend to receive the bulk of the work-hours, the Uptown Train Station in Normal, Illinois created work for iron workers, electricians, bricklayers, plumbers, sprinkler fitters, and sheet metal workers.
The $49 million project was supported by a $22 million Transportation Infrastructure Generating Employment Recovery (TIGER) grant, part of the federal economic stimulus program. Private spinoff development, totaling $220 million, leveraged and anchored by the Transit Center is already revitalizing the community. It’s also a best-practice model of long-range neighborhood planning focused around transit investments and integrating passenger rail into communities: Normal’s station connects Amtrak, local transit, intercity buses, bicycling, autos and pedestrians.
Amtrak ridership increased on its busiest line during the rail operator’s 2014 fiscal year, but lagging infrastructure upgrades slowed overall passenger growth, Amtrak reported Monday.
During the fiscal year ending Sept. 30, Amtrak ridership increased 0.2 percent year over year to 30.9 million, and ticket revenues increased 4 percent to $2.19 billion. Amtrak noted year-over-year ridership growth was slower than in recent years “due, in part, to a harsh winter season and on-time performance issues associated with freight train delays and infrastructure in need of replacement.”
Ridership on the busy Washington-to-Boston Northeast Corridor line increased 3.3 percent to 11.6 million, an all-time record, and the high-speed Acela Express service also had record ridership, according to Amtrak. Ridership was down, however, on both long-distance routes (down 4.5 percent) and state-supported services (down 0.6 percent). Many of those routes use tracks that are owned and dispatched by freight railroads that are in need of infrastructure upgrades, according to Amtrak.