Legal Briefs

Dept. of Transportation v. Association of American Railroads

By Jeffrey S. Bucholtz, Brian Callanan, and Ilya Shapiro
September 29, 2014

Article One, Section One of the Constitution vests “all legislative powers” in Congress. The sovereign power to make law comes from the people, so their representatives—Congress—should make the laws. It sounds simple enough, but once the federal government started ballooning in size and regulating everything under the sun, that simple understanding had to go. There was too much governing for Congress to handle on its own, so the courts adjusted, allowing a proliferation of government agencies to exercise lawmaking power, within certain guidelines. We’ve now apparently gotten to the point, however, that there’s so much governing to do that it’s too much for the government to handle on its own. In a case now before the Supreme Court, Amtrak—the for-profit, quasi-public entity that the federal government has deemed private for these purposes—has been given a part to play in making laws to regulate its competitors in the rail transportation industry. If you think this sounds like a far cry from “all legislative powers” being vested in Congress, you’re not alone. The Association of American Railroads, which represents the rail companies subject to these regulations, has sued the Department of Transportation, arguing that the Passenger Rail Improvement and Investment Act of 2008 unconstitutionally vests federal legislative power in a private entity by giving Amtrak the ability to set rail standards (in conjunction with the DOT). AAR has battled through the federal courts, most recently winning in the U.S. Court of Appeals for the D.C. Circuit, and is now trying to preserve that victory before the Supreme Court. Cato, joined by the National Federation of Independent Business, has filed a brief supporting AAR. We argue that this case is different from other cases where courts have found prudential reasons for not enforcing the nondelegation doctrine, the concept that Congress can’t delegate its own legislative powers. As we explain, the judicial administrability, political accountability, and necessity arguments in favor of liberal delegation of lawmaking powers are far less valid in the context of delegation to private entities. Further, apart from these prudential concerns, the Court has vigilantly enforced these important structural limitations on delegation and should continue to do so here. It’s perhaps too late to expect the courts to meaningfully rein in the massive delegation of power to the administrative state—though we should limit that delegation to implementation of law rather than actual legislation—but, as our brief explains here, it could be much worse. Many agencies are already dominated by the private interests they’re supposed to regulate (a dynamic known as “regulatory capture”), but allowing a private entity to secure a legislative role in governing its competitors not only exacerbates the problems that the administrative state already poses, it makes a mockery of the Constitution and erodes one more important structural protection for liberty.

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