Justices Probe Limits Of Non-Delegation Doctrine And Express Due Process Concerns

Jerrold J. Ganzfried is a Partner and Jameson B. Riceis an Associate both in our Washington D.C. office .

Yesterday, the U.S. Supreme Court heard oral argument in Dep't of Transp. v. Ass'n of Am. Railroads. At issue is whether Congress may grant Amtrak, a private entity created by Congress, the power to co-author regulations governing, and appoint an arbitrator for disputes concerning, private freight railroads, as instructed by § 207 of the Passenger Rail Investment Improvement Act without violating the non-delegation doctrine or due process clause.

During oral argument, counsel for the Department of Transportation argued that the metrics and standards developed pursuant to the statute are not regulatory and that instead any "regulatory effect" comes from the long-standing statutory preference requirement enacted by Congress rather than Amtrak. Counsel for the Association of American Railroads responded that to impose liability on the freight railroads, "[the government needs to prove both...violation of the metrics and standards and violation of the preference requirement"; therefore, the metrics and standards are also a part of the regulations imposed upon the freight railroads.

Chief Justice Roberts joined Justice Scalia in posing probing questions to the agency regarding its interpretation that a government arbitrator (rather than a private arbitrator) could be appointed, and asking whether such an arbitrator would be a principal or inferior officer. Both Justices pushed back on the agency's response that such an arbitrator would be an inferior officer, emphasizing the lack of supervision over the arbitrator's decision.

Notably, the Association's due process claim received substantial...