Eight years on, the Supreme Court's revival of the president's removal power in Free Enterprise Fund v. PCAOB offers important lessons for originalism.
Late last week, a panel of the D.C. Circuit dinged Amtrak for the second time. The case (Association of American Railroads v. Department of Transportation) involves several constitutional questions regarding Amtrak’s funky set-up and operation. Herewith a few preliminary words on one of them: delegation and due process.
Amtrak is an odd creation: it’s organized as a private corporation, and it’s commanded by statute to maximize profits (ha!), subject to various qualifications. But it also has regulatory powers, having to do with the coordination between Amtrak’s trains and private rail carriers operating on the same tracks. On the first go-around, the D.C. Circuit nixed that arrangement on the grounds that Congress can’t delegate regulatory power to a private entity. The Supreme Court reversed, saying that Amtrak is a government entity for constitutional purposes (regardless of its statutory status). But that still left several separation-of-powers issues, which the Supremes kicked back to the D.C. Circuit for disposition in light of the High Court’s ruling.
In that light, what do we make of Amtrak’s combination of profit motive and regulatory authority? Still unconstitutional, the D.C. Circuit says—under the Due Process Clause. That’s most welcome—but also very tricky. Two points.
One: isn’t this just a leap from one sinking ship (non-delegation) to another (due process)? No. At the risk of sounding like a broken record: constitutional clauses and doctrines are not isolated boats at sea; rightly viewed and “in the nature of things” (a phrase the D.C. Circuit conspicuously embraces) they all belong together. The problem in conjoining profit motive and regulatory power is self-dealing, right? In the D.C. Circuit’s words, the question “is whether an economically self-interested entity may exercise regulatory authority over its rivals.” That question, and the self-dealing menace arises regardless of whether Congress hands regulatory power to a private entity or whether that same profit-seeking entity is made into, or viewed as, a government actor—right? Right. The doctrines governing one situation and the other have to fit. It’s due process as separation of powers (and vice versa).
Two: it’s tempting to cut through the mess with categorical distinctions and propositions: government and the public interest is one thing; profit and private enterprise is another; and never the twain shall be combined. “Our decision today,” the panel says, “does not foreclose Congress from tapping into whatever creative spark spawned the Amtrak experiment in public-private enterprise. But the Due Process Clause of the Fifth Amendment puts Congress to a choice: its chartered entities may either compete, as market participants, or regulate, as official bodies.” Whoa.
The Federal Reserve is a market participant. And it regulates. Is Janet Yellen constitutional? That in terrorem example aside: there are lots of government agencies with both revenue-maximizing mandates and regulatory powers; and those agencies come in a dizzying array of shapes and forms. So, how far does this go?
Dan Hemel and Aaron Nielson have an initial, instructive discussion here. I’m not sure I agree with either of them but there’ll be plenty of occasions to sort this out.
The feds, everyone agrees, will try to take this en banc and/or back to the Supremes. (They’ve had it with the D.C. Circuit, and these judges in particular.) The contours of the litigation will be shaped, in no small measure, by the D.C. Circuit’s opinion. The actual holding is not remotely as broad as its sweeping “either-or” pronouncement seems to suggest: the opinion contains various concessions and qualifications (many of them in footnotes). It’s not a bad idea to put down a marker or general principle and to then work through the complications. But it allows the feds to say, “the court’s holding, however qualified, rests on a principle that would declare half the government unconstitutional.” (And there’ll eventually be a Breyer opinion with an Appendix listing 400 examples, from the Fed to the Administrative Raisin Board or whatever.) The private bar’s job is to explain that the general principle comes with provisos that limit its reach; and that those provisos are neither ad hoc nor merely a matter of degree but a matter of sound doctrine. And then, instead of droning on about the sacred heritage of Magna Carta or whatever, and instead of getting entangled in Amtrak’s unique and quirky features, the lawyers will have to articulate a doctrine with some coherence and some bite. We’ll see.