Changing signals: a new approach to the enforcement of rail passenger traffic preference in response to the Passenger Rail Investment and Improvement Act of 2008.

Author:Smith, Bradon J.
  1. INTRODUCTION II. Background A. The First Regulatory Era 1880-1920: Who's Running the Railroads? B. The Second Regulatory Era 1920-1970: Steep Grade Ahead, Passenger Terminus C. Amtrak and the Modern Era: From $40 Million to $40 Billion D. Three-Way Crossing: Federal Regulation, Service Guarantees, and the Necessity of Private Railroad Cooperation E. Sidetracked No Longer? The PRLLA's New Focus on Enforcing Federal Law 1. Metrics and the New Administrative Remedy 2. The Administrative Remedy and Its Reliability F. Freight Railroads React Part I: Impracticality of Proposed Regulations G. Freight Railroads React Part II: Invalid Statutory Framework? III. ANALYSIS A. Case Law Comparison: National Railroad Passenger Corp. v. Boston & Maine Corp., Lebron v. National Railroad Passenger Corp., or Both? B. Regulation in Practice: The Problem of Competent Evidence in a Dispute IV. RECOMMENDATION A. An Opportunity for Comparison: The Passenger Friendly Skies? B. Waking the Switchman: The Benefits of Active Enforcement via Federal Dispatchers V. CONCLUSION I. INTRODUCTION

    Rising oil prices and increasing concerns about transportation sustainability has renewed the drive for effective rail passenger travel. (1) The Obama Administration has touted high-speed intercity passenger rail travel as the answer to a number of economic and environmental problems. (2) Amtrak, the sole national passenger carrier, celebrated its 40th anniversary in 2011 with a special exhibition train and celebrations in major cities across the United States. (3) The passenger carrier went on to serve a record 31.2 million passengers in 2012. (4) These landmark events, record figures, and federal attention suggest that Amtrak is an integral part of the nation's infrastructure planning.

    It is all the more troubling then that Amtrak has long struggled to provide reliable service. (5) This struggle is in part because Amtrak must rely on the charity of freight railroads to operate outside of its limited holdings in the Northeast Corridor. (6) Federal law mandates that freight railroads give Amtrak traffic priority over all freight traffic, but the private freight railroads have long ignored this requirement. (7) Instead, the freight railroads allow their own trains to continue unimpeded while sidetracking Amtrak traffic, a practice that results in significant delays for passenger trains that must stop to let the freight traffic pass. (8) This Note proposes federalizing dispatch service to ensure compliance with federal law.

    Part II of this Note describes why the federal government took the responsibility of passenger service from the private carriers, how it did so, the severe problems passenger and freight carriers face in sharing the same infrastructure, the proposed solution of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA), and the private carriers' critique of the Act. Part III discusses the legal validity and practical consequences of the PRIIA solution. Part IV suggests a new approach to enforcement of the federal mandate via federal dispatch personnel, with a comparative paradigm drawn from a similar mode of mass transit--the airline industry.

  2. Background

    Dramatic increases in passenger and freight traffic in the late 19th century caused the railroad business to grow quickly. (9) Despite the substantial increase in each business line, the railroads were initially slow to serve their customers' needs. (10) Freight and passengers often traveled together on the same train. (11) The inconvenience waiting passengers experienced when traveling with freight resulted in demand for travel that was exclusively passenger oriented. (12)

    Though people and freight would soon separate, regulation remained unified. (13) Congress and the states established single regulatory agencies for the purpose of regulating both passenger and freight travel. (14) After all, freight and passenger traffic ran over the same rails, used the same switches, and were provided by the same carriers. (15) Today, interstate passenger service responsibility has been lifted from private carriers and is provided by the federal government. As a result, two separate services occupy a rail infrastructure that was intended for only single carrier control. (16) This competition for rail usage introduced a new problem after over a century of privately provided, unified service. (17)

    1. The First Regulatory Era 1880-1920: Who's Running the Railroads?

      In 1876, the Supreme Court opened the door for state regulation of corporate activities and, with it, state regulation of railroads. The Court's decision in Munn v. Illinois (18) began an inconsistent (four-decade) period where power and governance shifted between state and federal government and gave broader and narrower deference to carriers. (19) In Munn, the Supreme Court confronted an Illinois regulation requiring inspection of grain elevators. (20) In upholding the regulation, the Court held that states have a right to regulate corporate activities within their borders. (21) The decision permitted states to promulgate regulations for railroads regarding track usage, connections, and the charged rates for passenger and freight travel. (22)

      However, a challenge to these state-regulated prices caused the Court to switch tracks. (23) In 1886--only ten years after Munn--the Court ruled against a wholly intrastate control in Wabash, St. Louis, & Pac. Ry. Co. v. Illinois. (24) At issue in the lawsuit was the state's mandate that railroads assess the same shipping intrastate rate on freight carried into the state as for freight carried out of the state. (25) Though the Supreme Court had previously upheld state regulation of corporate activities within state borders, the Wabash Court held that this particular regulation--though it concerned commerce within the state of Illinois--infringed on the federal constitutional prerogative to regulate interstate commerce established in Gibbons v. Ogden. (26) The Supreme Court had set the stage for a confused, dualistic system of regulation in Wabash and Munn when it failed to mark the boundaries between the state intrastate and federal interstate commerce powers. (27)

      Perhaps taking a cue from these state regulatory regimes and the Supreme Court's determination that the federal government has the exclusive right to regulate interstate shipping and passenger rates, Congress passed the Interstate Commerce Act (ICA) of 1887. (28) The ICA had few concrete mandates: it required only that the rates charged for interstate shipping be "[f]air and just." (29) The ICA also established the Interstate Commerce Commission (ICC) to enforce regulations and render rate decisions. (30) However, the ICA also permitted railroads to seek judicial review of ICC rate decisions in the federal courts and present new evidence that the railroads' rates were "fair and just." (31) The railroads generally succeeded in convincing federal courts to overturn the Commission's rulings. (32) In 1903, Congress slightly augmented the ICA's enforcement provision when it instituted a criminal penalty for decision-making individuals who set unfair rates, but did not alter the judicial bypass the railroads had used to circumvent the ICC. (33) Three years later, Congress--under the pressure of pro-regulation President Theodore Roosevelt--provided meaningful enforcement power in the Hepburn Act. (34) In contrast to its predecessor the ICA, the Hepburn Act empowered the ICC to set the maximum rates for interstate shipping and passenger travel. (35)

      Despite these federal developments, dualism remained as state governments retained significant regulatory power. (36) In 1910, the Court confronted a Kansas Railway Commissioners' order that directed the Missouri Pacific Railway to afford passenger service from the rail line's terminus (37) to the state line. (38) However, as there were insufficient passenger facilities and little demand for service at the state line, the order provided that the Missouri Pacific Railway could let passengers off at a reasonable point after crossing into Missouri. (39) This regulation may appear to be a de facto requirement that the train carry passengers interstate and stop in a state that is outside the Kansas Commissioners' jurisdiction. (40) The Supreme Court held that the state may propagate such a regulation to ensure adequate intrastate service. (41)

      It is difficult to reconcile the Kansas regulation in Missouri Pacific with the new federal prerogative of interstate railroad regulation, or Gibbons v. Ogden for that matter. (42) In deciding Missouri Pacific, the Court upheld a state regulation that had the effect of mandating interstate service. (43) This result, juxtaposed with the Ogden ferry service and the federal control of rates, demonstrates the asymmetric web of state and federal regulation. (44) At the turn of the century, it was unclear who was in charge of railroads--both federal and state governments were able to propagate regulations affecting inter- and intrastate commerce of passengers.

    2. The Second Regulatory Era 1920-1970: Steep Grade Ahead, Passenger Terminus

      The First World War and its accompanying emergency government monopoly of passenger service interrupted this system of regulation and the Transportation Act of 1920--which returned the commission to private control after the government monopoly of the war-years--signaled the end of dualistic regulation. (45) The Transportation Act gave the ICC broader powers concerning rate regulation and empowered it to mediate disputes over appropriate fares and track usage. (46) The Transportation Act's effect was not immediate though; successive presidents' laissez-faire economic policies in the post-war period prevented the Commission from exercising its full powers to regulate the industry. (47) Yet, one particular part of the 1920 Act should not be overlooked: it gave the ICC absolute power to ensure that the railroads...

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