Facts of the Case

Under the Rail Passenger Service Act of 1970 (RPSA), the National Railroad Passenger Corporation (Amtrak) may enter into "trackage rights" agreements to use tracks owned and used by freight railroads. Section 562(d) of the act also states that Amtrak may buy tracks from private railroads, and may ask the Interstate Commerce Commission (ICC) to condemn tracks owned by those railroads if they cannot agree on sale terms, provided that the tracks in question are "required for intercity rail passenger service." Amtrak's need for the tracks is established unless the private railroad can show either that its ability to carry out its obligations as a common carrier (that is, a transporter of public goods) will be seriously hampered or that Amtrak's needs can be met by the purchase of alternative property. Amtrak had a "trackage rights" agreement with Boston and Maine Railroad (B & M). Amtrak claimed that it was forced to discontinue this agreement because B & M did not properly maintain its tracks. Amtrak then entered into an agreement with the Central Vermont Railroad (CV), under which it would acquire the B & M track and sell it to CV, which would take over maintenance of the track but grant "trackage rights" to Amtrak and usage rights to B & M. When B & M declined Amtrak's offer to purchase the track, Amtrak asked the ICC to condemn the track (thus allowing Amtrak to seize it). The ICC granted Amtrak's request. The D.C. Circuit Court of Appeals, however, sent the case back to the ICC for reconsideration, because Amtrak had not demonstrated the need for ownership, just for use (demonstrated by its intent to convey the property to CV). Amtrak petitioned the appeals court to rehear the case, and while the petition was pending Congress amended the RPSA to explicitly allow Amtrak to seize property with the ICC's permission and then convey it to another party if that would further its mission. The appeals court denied rehearing, however, holding that the condemnation had been invalid because it was not "required for intercity rail passenger service."

Question

Was the Interstate Commerce Commission's decision to permit Amtrak to seize the property of B & M Railroad under the Rail Passenger Service Act of 1970 reasonable?

Conclusion

Yes. In a 6-to-3 decision, the Supreme Court held that the ICC was entitled to deference and that its decision had been reasonable. In the majority opinion, Justice Anthony Kennedy wrote that by interpreting the statute's use of "required" to mean that the track must be useful but not absolutely indispensable to Amtrak's operation, the ICC had better accommodated the underlying intention of the RPSA than the appeals court. That finding was reinforced by Congress's amendment to the act, which would only be effective under the ICC's interpretation.