Gulf Coast Restoration Ruling Likely Safe From EPA Case

By Jim Mathews / President & CEO

Ever since the Supreme Court ruling a few days ago clipping the Environmental Protection Agency’s authority to regulate powerplant emissions in West Virginia v EPA, my inbox here at the Association has been peppered with queries from journalists and supporters alike, all asking the same question: what does this mean for the Surface Transportation Board and the Gulf Coast case?

The always-excellent Frank Wilner tackled the question this week in Railway Age, and I’d strongly encourage all of you to take a look at what he wrote. (Judging from how many of you forwarded his column to me for comment, I’m guessing many of you already did!)

From our perspective at the Association, however, the short answer is that the EPA decision probably won’t directly hurt our chances in the STB proceeding.

In the EPA case, the Court’s conservative majority declared that when it comes to an agency deciding a “major question” with significant national political or economic consequences, courts will have to find that Congress spoke “clearly” on that agency’s role in that arena before ratifying the agency’s decision. The Court railed against “agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.”

Given the precedent-setting nature of the dispute over Amtrak’s Gulf Coast service restoration petition, and the potential connection to all of the route-expansion efforts now planned thanks to the funding we helped to secure in the Bipartisan Infrastructure Law, doesn’t Gulf Coast fall into that bucket? No, not precisely.

We think the Surface Transportation Board has two things going for it that the EPA itself didn’t have in the West Virginia case.

First, the STB is expressly designed and organized by law to be an independent decision-making body on matters relating to surface transportation and especially to freight and passenger rail. When it comes to decisions in this space, STB would be acting well within the unambiguous intent of Congress.

Second, the relevant statute talks expressly about preference being given to passenger-rail operations unless a freight railroad can affirmatively show that the passenger service would "unreasonably impair" freight service. Therefore, an STB ruling on unreasonable impairment would be well within the four corners of what Congress expected STB to do.

If you’d like to follow along at home, take a look at 49 U.S. Code § 24308. Here Congress says that “When a rail carrier does not agree to provide, or allow Amtrak to provide, for the operation of additional trains over a rail line of the carrier, Amtrak may apply to the [Surface Transportation] Board for an order requiring the carrier to provide or allow for the operation of the requested trains. After a hearing on the record, the Board may order the carrier, within 60 days, to provide or allow for the operation of the requested trains on a schedule based on legally permissible operating times.”

Immediately after that paragraph, Congress says “The Board shall consider” – not may, or could, but shall – “when conducting a hearing, whether an order would impair unreasonably freight transportation of the rail carrier, with the carrier having the burden of demonstrating that the additional trains will impair the freight transportation.”

And then Congress winds up by declaring that “Unless the parties have an agreement that establishes the compensation Amtrak will pay the carrier for additional trains provided under an order under this subsection, the Board shall decide the dispute under subsection (a) of this section.”

In other words, an STB Gulf ruling, while consequential and precedent-setting, would still fit comfortably within the governing statute and not be an example of, in the Court's words, “agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted.” Here, Congress spoke clearly and unambiguously about the matters the STB tackles, the manner in which it makes its decisions, the criteria it should use, and then directs the Board to make the decision.

The counterargument, of course, will be that with $66 billion standing by to be invested in new services around the entire country, a precedent-setting STB decision in the Gulf could conceivably meet the new June 30 decision's trigger of an agency "asserting highly consequential power."

Even so, in my view it seems that even exercising "highly consequential power" would NOT satisfy the standard in the remainder of that clause if that power is NOT "beyond what Congress could reasonably be understood to have granted.”

Congress said clearly that passenger trains are a policy priority and wrote that into law, and Congress also said clearly that the Surface Transportation Board -- as an independent decision-making body -- has the power to enforce those laws and regulations.