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1 i No In the Supreme Court of the United States DEPARTMENT OF TRANSPORTATION, et al. Petitioners, v. ASSOCIATION OF AMERICAN RAILROADS, Respondent. On Writ of Certiorari to the United States Court of Appeals for the District of Columbia Circuit BRIEF AMICUS CURIAE OF CENTER FOR CONSTITUTIONAL JURISPRUDENCE IN SUPPORT OF RESPONDENT JOHN C. EASTMAN ANTHONY T. CASO Counsel of Record Center for Constitutional Jurisprudence c/o Fowler School of Law One University Drive Orange, CA Telephone: (714) Counsel for Amicus Curiae Center for Constitutional Jurisprudence
2 i QUESTIONS PRESENTED Whether Congress may constitutionally delegate legislative authority to a private entity, make delegations not bound by an intelligible principle, and create Officers of the United States who are not subject to removal by the President.
3 ii TABLE OF CONTENTS QUESTIONS PRESENTED... i TABLE OF AUTHORITIES... iii IDENTITY AND INTEREST OF AMICUS CURIAE... 1 SUMMARY OF ARGUMENT... 2 I. The Non-Delegation Doctrine Demands, at the Minimum, that Congress Limit Delegations by Setting Out an Intelligible Principle to Guide the Executive Agency... 3 II. The Arbitrator in this Statutory Scheme is an Officer of the United States Who Must Be Subject to Removal by the President... 8 CONCLUSION... 12
4 iii TABLE OF AUTHORITIES Cases A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935)... 3, 4, 6, 7 American Power & Light Co. v. Securities and Exchange Commission, 329 U.S. 90 (1946)... 4 Buckley v. Valeo, 424 U.S. 1 (1976)... 9 Christopher v. SmithKline Beecham, Corp., 132 S. Ct (2012)... 1 Edmund v. United States, 520 U.S. 651 (1997) Ex Parte Siebold, 100 U.S. 371 (1880)... 9 Free Enterprise Fund v. Public Company Accountancy Oversight Board, 561 U.S. 477; 130 S. Ct (2010) J.W. Hampton Jr. & Co. v. United States, 276 U.S. 394, 409 (1928)... 4 Morrison v. Olson, 487 U.S. 654 (1988)... 9, 10 National Broadcasting Co. v. United States, 319 U.S. 190, (1943)... 4, 5 National Federation of Independent Business v. Sebelius, 132 S. Ct (2012)... 1 Panama Refining Co. v. Ryan, 293 U.S. 388 (1935)... 6
5 iv Sackett v. Environmental Protection Agency, 132 S. Ct (2012)... 1 United States v. Eaton, 169 U.S. 331 (1898)... 9, 10 United States v. Germaine, 99 U.S. 508 (1879)... 9 United States v. Perkins, 116 U.S. 483 (1886) Whitman v. American Trucking Association, 531 U.S. 457, (2001)... 5, 6 Yakus v. United States, 321 U.S. 414 (1944)... 4 Other Authorities Locke, John, THE TWO TREATISES OF CIVIL GOVERNMENT, Book II, (Hollis Ed. (1764)) (Liberty Fund Online Library)... 3 Madison, James, THE FEDERALIST NO. 47 (Clinton Rossiter, Ed. (1961))... 3 Rules Sup. Ct. R. 37.3(a)... 1 Sup. Ct. R
6 1 IDENTITY AND INTEREST OF AMICUS CURIAE Amicus, the Claremont Institute s Center for Constitutional Jurisprudence, 1 is dedicated to upholding the principles of the American Founding, including the individual liberties the Framers sought to protect by adoption of the Constitution. In addition to providing counsel for parties at all levels of state and federal courts, the Center has participated as amicus curiae before this Court in several cases of constitutional significance, including National Federation of Independent Business v. Sebelius, 132 S. Ct (2012); Christopher v. SmithKline Beecham, Corp., 132 S. Ct (2012); and Sackett v. Environmental Protection Agency, 132 S. Ct (2012), to name a few. The Center is vitally interested in preserving the constitutional structure of government with enumerated powers, separated between constitutional actors. This case tests the proposition that Congress must circumscribe delegations of authority to the Executive Branch by an intelligible principle. It further presents the Court for the first time with the question of whether an arbitrator granted the powers of government is an officer of the United States who must be subject to the President s power of re- 1 Pursuant to this Court s Rule 37.3(a), all parties have consented to the filing of this brief. Copies of those consents have been lodged with the clerk. Pursuant to Rule 37.6, Amicus Curiae affirms that no counsel for any party authored this brief in whole or in part, and no counsel or party made a monetary contribution intended to fund the preparation or submission of this brief. No person other than Amicus Curiae, its members, or its counsel made a monetary contribution to its preparation or submission.
7 2 moval. As we drift further from the principles of government that were enshrined in our Constitution, we endanger the core mission of the Constitution of preserving individual liberty. SUMMARY OF ARGUMENT The United States concedes that the statute at issue must be given a limiting construction in order to avoid constitutional infirmity. Acknowledging the ruling of the court below that the statue could be read to allow delegation of government power to a private arbitrator, the United States argues that this Court should reform the statute with a limiting construction. This ignores the fact that the statute is silent on whether the arbitrator is a government or private actor. It is silent on the qualifications of the arbitrator. It is silent on how the Surface Transportation Board should choose the arbitrator. It is silent on how the arbitrator should conduct proceedings or whether to conduct proceedings at all. It is silent on who, if anybody, can participate in any arbitration proceedings that the arbitrator may choose to hold. It is silent on factors the arbitrator should apply in reaching a decision. In other words, the statute is utterly devoid of any intelligible principle to guide the process of selection of the arbitrator and conduct of arbitration proceedings. Once chosen, the statute vests the arbitrator with unbridled discretion to exercise significant government power in setting the metrics that are at issue in this case. Under this scheme, the arbitrator is an officer of the United States. Congress failed, however, to create a mechanism for removal of the
8 3 arbitrator for any cause. Neither the Board nor the President has authority under this statue to terminate the arbitrator. This scheme violates separation of powers. ARGUMENT I. The Non-Delegation Doctrine Demands, at the Minimum, that Congress Limit Delegations by Setting Out an Intelligible Principle to Guide the Executive Agency The Constitution describes a federal government of limited, enumerated power. If a power is not enumerated, it is reserved to the states or to the people by the Tenth Amendment. Moreover, even when dealing with subjects that are among the enumerated powers granted to Congress, Congress does not have authority to delegate its own power to another entity. A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495, 529 (1935). As John Locke notes, legislatures have the power to make laws, not legislators. John Locke, THE TWO TREATISES OF CIVIL GOVERNMENT, Book II, 141(Hollis Ed. (1764)) (Liberty Fund Online Library at 156). This restriction on Congress is not based solely on the description of its enumerated power. The specific enumeration of power to each branch of the national government was meant to separate and equalize power between the branches. The founding generation paid attention to the warning of Montesquieu that the union of legislative and executive power is a grave danger to liberty. James Madison, THE FED- ERALIST NO. 47 (Clinton Rossiter, Ed. (1961)) at There is a special concern, therefore, when pow-
9 4 er is transferred from the legislative to the executive branch. This does not mean that Congress must fill in every detail in every statute, or that it cannot grant the Executive Branch the flexibility necessary to accomplish the Congressional objective. Congress must, however, establish for itself the standards of legal obligation, thus performing its essential legislative function. Schechter Poultry, 295 U.S., at 530. The Court now describes this standards of legal obligation formula as an intelligible principle to which the person or body authorized to [promulgate regulations] is directed to conform. J.W. Hampton Jr. & Co. v. United States, 276 U.S. 394, 409 (1928). Congress sets the policy and the executive branch administers the law within the confines of that policy. Since the decision in Schechter Poultry, this Court has approved delegations constrained by seemingly broad and largely undefined policy statements. E.g., American Power & Light Co. v. Securities and Exchange Commission, 329 U.S. 90, 104 (1946) (authorizing SEC to ensure company structure was not unfair or inequitable); Yakus v. United States, 321 U.S. 414, 420, (1944)(the constraining policy required the agency to be fair and equitable); National Broadcasting Co. v. United States, 319 U.S. 190, (1943)(requirement that the agency act in the public interest was a sufficient constraint). Indeed, this Court has gone so far as to suggest that it will not second guess Congress regarding the permissible degree of policy judgment that can be left to those executing or applying the law. Whitman v.
10 5 American Trucking Association, 531 U.S. 457, (2001). In each of these cases, however, the Court recognized that Congress had set down the policy for the executive to follow. Although broad, the policy or intelligible principle was still discernable. For instance, in National Broadcasting the Court upheld a statute authorizing the Federal Communications Commission to regulate the licensing of radio broadcasting under the Communications Act of 1934 based on public interest, convenience, or necessity. National Broadcasting, 319 U.S., at 216. This Court ruled that the public interest standard was sufficiently concrete because the term is interpreted within the context of the statute. Id. It cannot be interpreted as granting the Commission unlimited power, but must be viewed in the context of the limited radio spectrum and the interest of the public in effective use of the scarce resource. Id. In short, Congress had determined the scope of the public interest that guided the Commission s regulation. The same is true of the statutory grant upheld in Whitman. There, this Court approved a delegation to EPA to set air quality standards at the level that is requisite to protect public health. Whitman, 531 U.S. at That standard was sufficient because the term requisite in that context was definable as not lower or higher than is necessary to protect the public health with an adequate margin of safety. Id., at The intelligible principle standard is not stringent or difficult for Congress to meet. But this Court has not approved a delegation without any
11 6 intelligible principle whatsoever. 2 A.L.A Schechter Poultry, 295 U.S., at ( Instead of prescribing rules of conduct, it authorizes the making of codes to prescribe them); Panama Refining Co. v. Ryan, 293 U.S. 388, 415 (1935) (statute giving the President unlimited authority to determine the policy is beyond Congress power to enact). The arbitration provisions of this statute contain no legal standards or intelligible principles. The Surface Transportation Board appoints arbitrator after Amtrak, the Federal Railroad Administration, or any party involved in the development of the standards requests the appointment. The arbitrator is empowered to issue a decision binding both Amtrak and the federal government (and private railroads who share their tracks with Amtrak) on the metrics and standards. That is the sum total of the meaning that can be squeezed out of this statute regarding the Board s selection of the arbitrator and the arbitrator s decision. The lack of congressional guidance is highlighted by the United States concession that this Court can invoke principles of constitutional avoidance to give this statute a narrowing construction that would prohibit the Board from selecting a private in- 2 As Justice Thomas has noted, the Constitution does not speak of intelligible principles. Rather, it speaks in much simpler terms: All legislative Powers herein granted shall be vested in a Congress. Whitman, 531 U.S., at 487 (Thomas, J., concurring). Since this statute contains no principle, intelligible or otherwise, there is no need for the Court in this case to determine whether the intelligible principle doctrine is itself inconsistent with the Constitution.
12 7 dividual as the arbitrator. 3 Appellants Brief at 29. However, a narrowing construction is only necessary if the statute itself provides no guidance on the question. This statute is silent not only on the status of the arbitrator (private or government), but also on the selection process and factors guiding the arbitrator s decision. The United States urges that this Court can use the doctrine of constitutional avoidance to construe this statute as permitting the appointment of only a government arbitrator. That is of little help here, however. There is no Office of Federal Arbitrators to whom the Surface Transportation Board can turn. The Board will have to decide whether it can appoint an official of the Federal Railroad Administration (one of the parties to the arbitration) as the arbitrator, or whether it must seek a federal arbitrator from some other agency. Assuming the Board wants an arbitrator from within the Department of Transportation, does it pick someone from the Federal Aviation Administration, the Federal Motor Carrier Safety Administration, or the National Highway Traffic Safety Administration? The statute does not say. 3 The United States suggests that this Court in Schechter did not criticize the statute for its delegation of government power to private entities. Appellants Brief at 20 n.5. This is a serious misreading of that decision. As this Court noted: Could trade or industrial associations or groups be constituted legislative bodies for that purpose because such associations or groups are familiar with the problems of their enterprises? The answer is obvious. Such a delegation of legislative power is unknown to our law, and is utterly inconsistent with the constitutional prerogatives and duties of Congress. ALA Schechter, 295 U.S., at 537. The Court did not base its ruling on that issue since the statute delegated the power to the President rather than the trade associations. Id.
13 8 Can anyone challenge the selection of the arbitrator? The statute is silent. Once the Board chooses the arbitrator, how does the arbitration proceed? There is no guidance in the statute. Must the arbitrator take evidence or consider the positions of Amtrak, the Federal Railroad Authority, or private railroads? How does the arbitrator reach a decision? What factors guide the exercise of discretion in setting the metrics and standards? Again, the statute is silent. The only thing that is clear is that there is no appeal from the arbitrator s decision. The statute characterizes the arbitration as binding. The statute gives the arbitrator the power to bind Amtrak, the Federal Railroad Authority, the Surface Transportation Board, and the private railroads whose tracks Amtrak shares. Congress provided no guidance, however, for that decision. Congress provided no direction for how the Board should select the arbitrator. Congress provided no guidance for how the arbitration should proceed. The statute lacks any semblance of an intelligible principle that could guide the exercise of agency discretion. This lack of guidance renders the statute unconstitutional. II. The Arbitrator in this Statutory Scheme Is an Officer of the United States Who Must Be Subject to Removal by the President This Court has yet to address whether Congress can turn over government decision-making to an arbitrator empowered to make binding (nonappealable) decisions. Under this statute, the arbitrator s decision binds not only Amtrak, a private entity, but also the Federal Railroad Administration and, by exten-
14 9 sion, the Surface Transportation Board. The arbitrator s decision remains in effect until Congress enacts a new law. Congress did nothing to limit the arbitrator s discretion or even to dictate the procedure that the arbitrator must use. Once appointed the arbitrator answers to no agency of government and is apparently not subject to removal. Because of the significant authority to bind both the government and private parties to his decision, the arbitrator described in the statute is an officer of the United States and must be subject to removal by the President. Older decisions of this Court defined officer by tenure, duration, emolument, and duties and required the position to be continuing and permanent. United States v. Germaine, 99 U.S. 508, (1879). Later decisions, however, have discarded the requirement of permanence. See Morrison v. Olson, 487 U.S. 654, (1988) (special prosecutor whose appointment is limited to a particular case is an inferior officer); United States v. Eaton, 169 U.S. 331, 343 (1898) (a vice-consul with a temporary appointment to perform functions of consular office is an inferior officer); Ex Parte Siebold, 100 U.S. 371, (1880) (elections officers appointed to supervise an election are inferior officers). Instead of duration of the position, the Court now focuses on whether the individual in question exercises significant authority. Buckley v. Valeo, 424 U.S. 1, (1976). The officer who exercises significant authority is distinguished from mere employees characterized as lesser functionaries. Id., at 126, n.162. By contrast, a principle officer is not subject to the control or direction of any other au-
15 10 thority. Id. An inferior or subordinate officer is one whose work is directed and supervised at some level by others who were appointed by Presidential nomination. Edmund v. United States, 520 U.S. 651, 663 (1997). The statute under review in this case grants the arbitrator significant authority. The arbitrator is empowered to issue a final and binding decree setting the metrics that Amtrak must meet and that dictate track usage by all freight lines whose tracks Amtrak uses. The metrics also bind the United States. The Federal Railroad Administration cannot impose any metrics that differ from the arbitrator s decision and the Surface Transportation Board must use those metrics as the basis for its investigations and decisions. There is no appeal from the arbitrator s decision. Unlike agency rulemaking, the Administrative Procedure Act does not apply to the arbitrator. Thus, there is no public comment. There is no notice of the proceeding in the Federal Register. Significantly, there is no judicial review. Instead, the arbitrator issues a ruling that binds both the government and the rail industry. This is significant authority. Under this statute, the arbitrator is not subject to any supervision at all. Nonetheless, the single focus and temporary nature of the appointment show that the arbitrator fits best as an inferior or subordinate officer rather than a principle officer. See Morrison, 487 U.S., at 673; Eaton, 169 U.S., at 343. Even as an inferior officer, however, the arbitrator must still be subject to the President s supervision.
16 11 Article II gives the President control of the Executive Branch of the national government. That power of administration necessarily includes some power of removal. Free Enterprise Fund v. Public Company Accountancy Oversight Board, 561 U.S. 477; 130 S. Ct. 3138, 3152 (2010). Although this Court has held that Congress can limit the President s power of removal by protecting the tenure of subordinate officers with a good cause requirement for removal, Congress cannot completely insulate even subordinate officers from Presidential supervision. Id., at Just as Congress may not delegate legislative authority, it similarly has no power to invest executive authority in an officer not subject to the President s supervision. This Court noted in Free Enterprise Fund: The Framers did not rest our liberties on bureaucratic minutiae. Id., at Instead, they established a structure where the President was answerable to the people for the actions of the Executive Branch. Congress may not disrupt this constitutional scheme by insulating executive officers from presidential supervision. The statute before the Court does not contemplate removal of the arbitrator once appointed. There is no power in the Surface Transportation Board to revoke the appointment. Once the Board makes the appointment, it must wait for the decision that will bind it, the Federal Railroad Authority, and the private railroads with whom Amtrak shares track. The Board can take no other action. Statutory silence cannot grant removal power. United States v. Perkins, 116 U.S. 483, (1886). Congress created an officer of the United States in this statute, but failed to provide for re-
17 12 moval of that officer. Because Congress insulated the officer supervision by the President, the statute is unconstitutional. CONCLUSION It has been nearly 80 years since this Court upheld a nondelegation challenge. During that time this Court has granted significant leeway to Congress to vest discretion in the Executive so long as Congress set forth some discernable policy, some intelligible principle. Congress has failed to set forth the required standard of legal obligation in this case. The statute authorizes both the Federal Railroad Authority and a private company to delegate to an arbitrator the power to render a decision binding on both the government and private parties. Congress failed to set down any principle, however, for selecting the arbitrator or for how the arbitrator is supposed to exercise his power. Because the statute grants the arbitrator significant powers, the arbitrator is an officer of the United States. The statute provides no means for removal of the arbitrator, however. The arbitrator is free from the supervision of the one person tasked with
18 13 the constitutional duty to faithfully execute the law the President. This insulation of the arbitrator violates separation of powers. DATED: September, Respectfully submitted, JOHN C. EASTMAN ANTHONY T. CASO Counsel of Record Center for Constitutional Jurisprudence c/o Fowler School of Law One University Drive Orange, CA Telephone: (714) Counsel for Amicus Curiae Center for Constitutional Jurisprudence
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