Supreme Court Grants Certiorari to Review D.C. Circuit Decision Hampering Amtrak's On-Time Performance

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On June 23rd, the U.S. Supreme Court granted the government’s Writ of Certiorari to review the decision of the D.C. Circuit that many believe may be hampering Amtrak’s leverage with freight railroads and its on-time performance.

According to Amtrak’s most recent issued Monthly Performance Report (May 2014), end station on-time performance (OTP) is approximately 74 percent so far this fiscal year (which started October 2013) down 12 percent from FY 2013, when the same performance measure finished at 85 percent.

While the particularly harsh winter weather may have been a factor, it could not be the whole story.  In July of 2013, the D.C. Circuit ruled that the provision of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) by which Amtrak and the Federal Railroad Administration (FRA) jointly established metrics to measure Amtrak’s performance, was an unconstitutional delegation of regulatory power to Amtrak. Congress had directed that the metrics be used to (among other things) measure whether the railroads hosting Amtrak service were meeting their long-standing statutory obligation to give priority to Amtrak trains.  Congress also called for Amtrak and its host railroads to incorporate the metrics into their operating agreements to the extent practicable.

As City Lab’s Eric Jaffe has observed, Amtrak end station OTP dropped dramatically shortly after the D.C. Circuit decision.  “What you're seeing is the aftermath of [the D.C. Circuit’s decision which] severely damaged Amtrak's leverage with the freight rail companies whose tracks it shares.” The decision nullified the metrics and, as Jaffe notes, it “likewise triggered the start of Amtrak's on-time performance decline.”

D.J. Stadtler, Amtrak’s VP Operations, made a similar observation in his testimony before the Surface Transportation Board on April 10, 2014, pointing out that Amtrak “saw an immediate drop in on-time performance across the board that was directly attributable to train handling by the host carriers.”

For the railroad industry, the Supreme Court’s review is of vital importance because it could determine whether the metrics will survive and be used to measure whether (and how well) host railroads adhere to their statutory obligation to give priority to Amtrak trains and be incorporated into the contracts governing Amtrak operations.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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