NRPC v. Atchison, T. & S. F. Ry. Co.
470 U.S. 451 (1985)

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U.S. Supreme Court

NRPC v. Atchison, T. & S. F. Ry. Co., 470 U.S. 451 (1985)

National Railroad Passenger Corporation v. Atchison,

Topeka & Santa Fe Railway Co.

No. 83-1492

Argued January 15, 1985

Decided March 18, 1985*

470 U.S. 451

Syllabus

The Rail Passenger Service Act of 1970 (Act or RPSA) was enacted in an attempt to revive the failing intercity passenger train industry. For this purpose, the Act established the National Railroad Passenger Corporation (Amtrak), a private, for-profit corporation, authorized to operate, or contract with private railroads for the operation of, intercity rail passenger service. Most private railroads offering such service entered into "Basic Agreements" with Amtrak, and thereby, as provided by the Act, shed their intercity rail passenger obligations. Section 7.5 of each Basic Agreement, which concerned railroad employees' privileges to travel on Amtrak trains for free or at reduced fares, gave Amtrak discretion to determine such privileges. When a controversy arose over Amtrak's decision to cut back on these privileges, Congress in 1972 added § 405(f) to the RPSA to restore the privileges as they existed when Amtrak took over passenger rail service in 1971. But § 405(f) also required the railroads to pay, at a reimbursement rate determined by the Interstate Commerce Commission, for such costs as might be incurred by Amtrak in providing for the pass privileges. In 1979, Congress decided that the ICC's reimbursement rate resulted in inadequate compensation to Amtrak, and accordingly amended § 405(f) to require the railroads to reimburse Amtrak for pass-rider service at the rate of "25 percent of the systemwide average monthly yield per revenue passenger mile" for two years. In 1981, § 405(f) was again amended to provide that the 25 percent reimbursement requirement remain in effect indefinitely. Five railroads filed suit against Amtrak in Federal District Court, challenging the constitutionality of § 405(f) on the grounds that the reimbursement requirement violated the Due Process Clause of the Fifth Amendment. The United States intervened in the suit as a defendant. The District Court granted summary judgment in favor of Amtrak and the United States, holding that the Act did not constitute a contract between the United States and the railroads, that therefore

Page 470 U. S. 452

§ 405(f) did not impair an obligation of the United States under a contract, and that, moreover, § 405(f) did not impair the Basic Agreements. The Court of Appeals affirmed in part and reversed in part, holding that the railroads could be compelled to reimburse Amtrak for the incremental cost of carrying the pass riders, but that the "windfall" to Amtrak under the 1979 amendment, whereby the railroads were required to pay more than the incremental cost, violated the Due Process Clause, because it unreasonably and illegally impaired the railroads' rights under the Basic Agreements.

Held:

1. Section 405(f) is constitutional. 470 U. S. 465-479.

(a) The RPSA does not constitute a binding obligation of Congress. Neither the language of the Act nor the circumstances surrounding its passage manifest any intent on Congress' part to bind itself contractually to the railroads. Pp. 470 U. S. 465-470.

(b) The Basic Agreements do not grant the railroads a contractual right against the United States to be free from all obligation to provide passenger service. Those Agreements are not contracts between the railroads and the United States, but simply between the railroads and Amtrak. Pp. 470 U. S. 470-471.

(c) Section 405(f)'s payment obligation does not unconstitutionally impair the railroads' private contractual rights under the Basic Agreements. Those Agreements relieved the railroads only of common carriage responsibilities, and not of the responsibility to provide their employees with pass privileges, for no state or federal law imposed that responsibility on them, as common carriers, when the Agreements were executed. It was not until after the Agreements were signed and Amtrak operations were underway that Congress imposed new obligations on both parties to the Agreements. Pp. 470 U. S. 472-475.

(d) Even if the railroads have a private contractual right not to pay more than the incremental cost of the pass privileges, the Due Process Clause does not limit Congress' power to choose a different reimbursement scheme. Congress' decision to assess the railroads was rational, and the railroads have not met their burden of proving irrationality, and thus have not proved a due process violation. Pp. 470 U. S. 475-478.

2. The railroads have no contractual right to be free from the obligation to make any payments to Amtrak, even for incremental costs. Nothing in the RPSA or the Basic Agreements suggests that the railroads were relieved of the responsibility to reimburse Amtrak for the pass privileges in question. Pp. 470 U. S. 478-479.

723 F.2d 1298, reversed.

Page 470 U. S. 453

MARSHALL, J., delivered the opinion of the Court, in which all other Members joined, except POWELL, J., who took no part in the decision of the cases.

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