Department of Transportation v. Association of American Railroads

OCTOBER TERM, 2014 43

Syllabus

DEPARTMENT OF TRANSPORTATION et al. v. ASSOCIATION OF AMERICAN RAILROADS

certiorari to the united states court of appeals for the district of columbia circuit No. 13–1080. Argued December 8, 2014—Decided March 9, 2015 In 1970, Congress created the National Railroad Passenger Corporation (Amtrak). Congress has given Amtrak priority to use track systems owned by the freight railroads for passenger rail travel, at rates agreed to by the parties or, in case of a dispute, set by the Surface Transporta- tion Board. And in 2008, Congress gave Amtrak and the Federal Rail- road Administration (FRA) joint authority to issue “metrics and stand- ards” addressing the performance and scheduling of passenger railroad services, see § 207(a), 122 Stat. 4907, including Amtrak's on-time per- formance and train delays caused by host railroads. Respondent, the Association of American Railroads, sued petitioners—the Department of Transportation, the FRA, and two officials—claiming that the metrics and standards must be invalidated because it is unconstitutional for Con- gress to allow and direct a private entity like Amtrak to exercise joint authority in their issuance. Its argument rested on the Fifth Amend- ment Due Process Clause and the constitutional provisions regarding separation of powers. The District Court rejected respondent's claims, but the District of Columbia Circuit reversed as to the separation-of- powers claim, reasoning in central part that Amtrak is a private corpo- ration and thus cannot constitutionally be granted regulatory power under § 207. Held: For purposes of determining the validity of the metrics and stand- ards, Amtrak is a governmental entity. Pp. 50–56. (a) In concluding otherwise, the Court of Appeals relied on the statu- tory command that Amtrak “is not a department, agency, or instrumen- tality of the United States Government,” 49 U. S. C. § 24301(a)(3), and the pronouncement that Amtrak “shall be operated and managed as a for profit corporation,” § 24301(a)(2). But congressional pronounce- ments are not dispositive of Amtrak's status as a governmental entity for purposes of separation-of-powers analysis under the Constitution, and an independent inquiry reveals the Court of Appeals' premise that Amtrak is a private entity was flawed. As Amtrak's ownership and corporate structure show, the political branches control most of Am- trak's stock and its Board of Directors, most of whom are appointed by the President, § 24302(a)(1), confirmed by the Senate, ibid., and under-

44 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Syllabus

stood by the Executive Branch to be removable by the President at will. The political branches also exercise substantial, statutorily mandated supervision over Amtrak's priorities and operations. See, e. g., § 24315. Also of significance, Amtrak is required by statute to pursue broad public objectives, see, e. g., §§ 24101(b), 24307(a); certain aspects of Amtrak's day-to-day operations are mandated by Congress, see, e. g., §§ 24101(c)(6), 24902(b); and Amtrak has been dependent on federal financial support during every year of its existence. Given the combi- nation of these unique features and Amtrak's significant ties to the Government, Amtrak is not an autonomous private enterprise. Amtrak was created by the Government, is controlled by the Government, and operates for the Government's benefit. Thus, in jointly issuing the met- rics and standards with the FRA, Amtrak acted as a governmental en- tity for separation-of-powers purposes. And that exercise of govern- mental power must be consistent with the Constitution, including those provisions relating to the separation of powers. Pp. 50–54. (b) Respondent's reliance on congressional statements about Am- trak's status is misplaced. Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, teaches that, for purposes of Amtrak's status as a federal actor or instrumentality under the Constitution, the practi- cal reality of federal control and supervision prevails over Congress' disclaimer of Amtrak's governmental status. Treating Amtrak as gov- ernmental for these purposes, moreover, is not an unbridled grant of authority to an unaccountable actor, for the political branches created Amtrak, control its Board, define its mission, specify many of its day-to- day operations, have imposed substantial transparency and accountabil- ity mechanisms, and, for all practical purposes, set and supervise its annual budget. Pp. 54–55. (c) The Court of Appeals may address in the first instance any prop- erly preserved issues respecting the lawfulness of the metrics and standards that may remain in this case, including questions implicating the Constitution's structural separation of powers and the Appoint- ments Clause. Pp. 55–56. 721 F. 3d 666, vacated and remanded.

Kennedy, J., delivered the opinion of the Court, in which Roberts, C. J., and Scalia, Ginsburg, Breyer, Alito, Sotomayor, and Kagan, JJ., joined. Alito, J., filed a concurring opinion, post, p. 56. Thomas, J., filed an opinion concurring in the judgment, post, p. 66.

Curtis E. Gannon argued the cause for petitioners. With him on the briefs were Solicitor General Verrilli, Assistant

Cite as: 575 U. S. 43 (2015) 45

Opinion of the Court

Attorney General Delery, Deputy Solicitor General Knee- dler, Mark B. Stein, Michael S. Raab, Daniel Tenny, Kath- ryn B. Thomson, Paul M. Geier, Peter J. Plocki, Joy K. Park, and Melissa Porter. Thomas H. Dupree, Jr., argued the cause for respondent. With him on the brief were Amir C. Tayrani, Lucas C. Town- send, Louis P. Warchot, and Daniel Saphire.* Justice Kennedy delivered the opinion of the Court. In 1970, Congress created the National Railroad Passen- ger Corporation, most often known as Amtrak. Later, Con- gress granted Amtrak and the Federal Railroad Administra- tion (FRA) joint authority to issue “metrics and standards” that address the performance and scheduling of passenger railroad services. Alleging that the metrics and standards have substantial and adverse effects upon its members' freight services, respondent—the Association of American Railroads—filed this suit to challenge their validity. The defendants below, petitioners here, are the Department of Transportation, the FRA, and two individuals sued in their official capacity. Respondent alleges the metrics and standards must be in- validated on the ground that Amtrak is a private entity and *Karen E. Torrent filed a brief for the Environmental Law and Policy Center et al. as amici curiae urging reversal. Briefs of amici curiae urging affirmance were filed for the American Council of Trustees and Alumni et al. by Shannen W. Coffin and Jill C. Maguire; for the Association of Independent Passenger Rail Operators by Richard B. Katskee and Craig W. Canetti; for the Cato Institute by Jeffrey S. Bucholtz, Ilya Shapiro, Karen Harned, and Elizabeth Milito; for the Center for the Rule of Law by C. Boyden Gray, Adam J. White, and Ron- ald A. Cass; for the Chamber of Commerce of the United States of America by C. Frederick Beckner III, Jonathan F. Cohn, Joshua J. Foug- ere, and Kate Comerford Todd; for Resolute Forest Products Inc. by David B. Rivkin, Jr., and Andrew M. Grossman; and for Alexander Volokh by Sarah M. Shalf. John C. Eastman and Anthony T. Caso filed a brief for the Center for Constitutional Jurisprudence as amicus curiae.

46 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Opinion of the Court

it was therefore unconstitutional for Congress to allow and direct it to exercise joint authority in their issuance. This argument rests on the Fifth Amendment Due Process Clause and the constitutional provisions regarding separation of powers. The District Court rejected both of respondent's claims. The Court of Appeals for the District of Columbia Circuit reversed, finding that, for purposes of this dispute, Amtrak is a private entity and that Congress violated non- delegation principles in its grant of joint authority to Amtrak and the FRA. On that premise the Court of Appeals invali- dated the metrics and standards. Having granted the petition for writ of certiorari, 573 U. S. 930 (2014), this Court now holds that, for purposes of determining the validity of the metrics and standards, Am- trak is a governmental entity. Although Amtrak's actions here were governmental, substantial questions respecting the lawfulness of the metrics and standards—including ques- tions implicating the Constitution's structural separation of powers and the Appointments Clause, U. S. Const., Art. II, § 2, cl. 2—may still remain in the case. As those matters have not yet been passed upon by the Court of Appeals, this case is remanded. I A Amtrak is a corporation established and authorized by a detailed federal statute enacted by Congress for no less a purpose than to preserve passenger services and routes on our Nation's railroads. See Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, 383–384 (1995); Na- tional Railroad Passenger Corporation v. Atchison, T. & S. F. R. Co., 470 U. S. 451, 453–457 (1985); see also Rail Passen- ger Service Act of 1970, 84 Stat. 1328. Congress recognized that Amtrak, of necessity, must rely for most of its opera- tions on track systems owned by the freight railroads. So, as a condition of relief from their common-carrier duties,

Cite as: 575 U. S. 43 (2015) 47

Opinion of the Court

Congress required freight railroads to allow Amtrak to use their tracks and facilities at rates agreed to by the parties— or in the event of disagreement to be set by the Interstate Commerce Commission (ICC). See 45 U. S. C. §§ 561, 562 (1970 ed.). The Surface Transportation Board (STB) now occupies the dispute-resolution role originally assigned to the ICC. See 49 U. S. C. § 24308(a) (2012 ed.). Since 1973, Amtrak has received a statutory preference over freight transportation in using rail lines, junctions, and crossings. See § 24308(c). The metrics and standards at issue here are the result of a further and more recent enactment. Concerned by poor service, unreliability, and delays resulting from freight traffic congestion, Congress passed the Passenger Rail Investment and Improvement Act (PRIIA) in 2008. See 122 Stat. 4907. Section 207(a) of the PRIIA provides for the creation of the metrics and standards: “Within 180 days after the date of enactment of this Act, the Federal Railroad Administration and Amtrak shall jointly, in consultation with the Surface Transpor- tation Board, rail carriers over whose rail lines Amtrak trains operate, States, Amtrak employees, nonprofit em- ployee organizations representing Amtrak employees, and groups representing Amtrak passengers, as appro- priate, develop new or improve existing metrics and minimum standards for measuring the performance and service quality of intercity passenger train operations, including cost recovery, on-time performance and min- utes of delay, ridership, on-board services, stations, facil- ities, equipment, and other services.” Id., at 4916. Section 207(d) of the PRIIA further provides: “If the development of the metrics and standards is not completed within the 180-day period required by subsection (a), any party involved in the development of those standards may petition the Surface Transporta-

48 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Opinion of the Court

tion Board to appoint an arbitrator to assist the parties in resolving their disputes through binding arbitration.” Id., at 4917. The PRIIA specifies that the metrics and standards cre- ated under § 207(a) are to be used for a variety of purposes. Section 207(b) requires the FRA to “publish a quarterly re- port on the performance and service quality of intercity pas- senger train operations” addressing the specific elements to be measured by the metrics and standards. Id., at 4916– 4917. Section 207(c) provides that, “[t]o the extent practica- ble, Amtrak and its host rail carriers shall incorporate the metrics and standards developed under subsection (a) into their access and service agreements.” Id., at 4917. And § 222(a) obliges Amtrak, within one year after the metrics and standards are established, to “develop and implement a plan to improve on-board service pursuant to the metrics and standards for such service developed under [§ 207(a)].” Id., at 4932. Under § 213(a) of the PRIIA, the metrics and standards also may play a role in prompting investigations by the STB and in subsequent enforcement actions. For instance, “[i]f the on-time performance of any intercity passenger train av- erages less than 80 percent for any 2 consecutive calendar quarters,” the STB may initiate an investigation “to deter- mine whether and to what extent delays . . . are due to causes that could reasonably be addressed . . . by Amtrak or other intercity passenger rail operators.” Id., at 4925–4926. While conducting an investigation under § 213(a), the STB “has authority to review the accuracy of the train perform- ance data and the extent to which scheduling and congestion contribute to delays” and shall “obtain information from all parties involved and identify reasonable measures and make recommendations to improve the service, quality, and on- time performance of the train.” Id., at 4926. Following an investigation, the STB may award damages if it “determines that delays or failures to achieve minimum standards . . . are

Cite as: 575 U. S. 43 (2015) 49

Opinion of the Court

attributable to a rail carrier's failure to provide preference to Amtrak over freight transportation.” Ibid. The STB is further empowered to “order the host rail carrier to remit” damages “to Amtrak or to an entity for which Amtrak oper- ates intercity passenger rail service.” Ibid.

B In March 2009, Amtrak and the FRA published a notice in the Federal Register inviting comments on a draft version of the metrics and standards. App. 75–76. The final ver- sion of the metrics and standards was issued jointly by Am- trak and the FRA in May 2010. Id., at 129–144. The met- rics and standards address, among other matters, Amtrak's financial performance, its scores on consumer satisfaction surveys, and the percentage of passenger trips to and from underserved communities. Of most importance for this case, the metrics and stand- ards also address Amtrak's on-time performance and train delays caused by host railroads. The standards associated with the on-time performance metrics require on-time per- formance by Amtrak trains at least 80% to 95% of the time for each route, depending on the route and year. Id., at 133–135. With respect to “host-responsible delays”—that is to say, delays attributed to the railroads along which Am- trak trains travel—the metrics and standards provide that “[d]elays must not be more than 900 minutes per 10,000 Train-Miles.” Id., at 138. Amtrak conductors determine responsibility for particular delays. Ibid., n. 23. In the District Court for the District of Columbia, re- spondent alleged injury to its members from being required to modify their rail operations, which mostly involve freight traffic, to satisfy the metrics and standards. Respondent claimed that § 207 “violates the nondelegation doctrine and the separation of powers principle by placing legislative and rulemaking authority in the hands of a private entity [Am- trak] that participates in the very industry it is supposed to

50 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Opinion of the Court

regulate.” Id., at 176–177, Complaint ¶51. Respondent also asserted that § 207 violates the Fifth Amendment Due Process Clause by “[v]esting the coercive power of the gov- ernment” in Amtrak, an “interested private part[y].” Id., at 177, ¶¶53–54. In its prayer for relief respondent sought, among other remedies, a declaration of § 207's unconstitution- ality and invalidation of the metrics and standards. Id., at 177. The District Court granted summary judgment to peti- tioners on both claims. See 865 F. Supp. 2d 22 (DC 2012). Without deciding whether Amtrak must be deemed private or governmental, it rejected respondent's nondelegation ar- gument on the ground that the FRA, the STB, and the politi- cal branches exercised sufficient control over promulgation and enforcement of the metrics and standards so that § 207 is constitutional. See id., at 35. The Court of Appeals for the District of Columbia Circuit reversed the judgment of the District Court as to the nondele- gation and separation-of-powers claim, reasoning in central part that because “Amtrak is a private corporation with re- spect to Congress's power to delegate . . . authority,” it cannot constitutionally be granted the “regulatory power prescribed in § 207.” 721 F. 3d 666, 677 (2013). The Court of Appeals did not reach respondent's due process claim. See ibid.

II In holding that Congress may not delegate to Amtrak the joint authority to issue the metrics and standards—authority it described as “regulatory power,” ibid.—the Court of Ap- peals concluded Amtrak is a private entity for purposes of determining its status when considering the constitutionality of its actions in the instant dispute. That court's analysis treated as controlling Congress' statutory command that Amtrak “ `is not a department, agency, or instrumentality of the United States Government.' ” Id., at 675 (quoting 49 U. S. C. § 24301(a)(3)). The Court of Appeals also relied on Congress' pronouncement that Amtrak “ `shall be operated

Cite as: 575 U. S. 43 (2015) 51

Opinion of the Court

and managed as a for-profit corporation.' ” 721 F. 3d, at 675 (quoting § 24301(a)(2)); see also id., at 677 (“Though the fed- eral government's involvement in Amtrak is considerable, Congress has both designated it a private corporation and instructed that it be managed so as to maximize profit. In deciding Amtrak's status for purposes of congressional dele- gations, these declarations are dispositive”). Proceeding from this premise, the Court of Appeals concluded it was impermissible for Congress to “delegate regulatory author- ity to a private entity.” Id., at 670; see also ibid. (holding Carter v. Carter Coal Co., 298 U. S. 238 (1936), prohibits any such delegation of authority). That premise, however, was erroneous. Congressional pronouncements, though instructive as to matters within Congress' authority to address, see, e. g., United States ex rel. Totten v. Bombardier Corp., 380 F. 3d 488, 491–492 (CADC 2004) (Roberts, J.), are not dispositive of Amtrak's status as a governmental entity for purposes of separation- of-powers analysis under the Constitution. And an inde- pendent inquiry into Amtrak's status under the Constitution reveals the Court of Appeals' premise was flawed. It is appropriate to begin the analysis with Amtrak's own- ership and corporate structure. The Secretary of Transpor- tation holds all of Amtrak's preferred stock and most of its common stock. Amtrak's Board of Directors is composed of nine members, one of whom is the Secretary of Trans- portation. Seven other Board members are appointed by the President and confirmed by the Senate. 49 U. S. C. § 24302(a)(1). These eight Board members, in turn, select Amtrak's president. § 24302(a)(1)(B); § 24303(a). Amtrak's Board members are subject to salary limits set by Congress, § 24303(b); and the Executive Branch has concluded that all appointed Board members are removable by the President without cause, see 27 Op. Atty. Gen. 163 (2003). Under further statutory provisions, Amtrak's Board mem- bers must possess certain qualifications. Congress has di- rected that the President make appointments based on an

52 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Opinion of the Court

individual's prior experience in the transportation industry, § 24302(a)(1)(C), and has provided that not more than five of the seven appointed Board members be from the same politi- cal party, § 24302(a)(3). In selecting Amtrak's Board mem- bers, moreover, the President must consult with leaders of both parties in both Houses of Congress in order to “provide adequate and balanced representation of the major geo- graphic regions of the United States served by Amtrak.” § 24302(a)(2). In addition to controlling Amtrak's stock and Board of Di- rectors the political branches exercise substantial, statuto- rily mandated supervision over Amtrak's priorities and oper- ations. Amtrak must submit numerous annual reports to Congress and the President, detailing such information as route-specific ridership and on-time performance. § 24315. The Freedom of Information Act applies to Amtrak in any year in which it receives a federal subsidy, 5 U. S. C. § 552, which thus far has been every year of its existence. Pursu- ant to its status under the Inspector General Act of 1978 as a “ `designated Federal entity,' ” 5 U. S. C. App. § 8G(a)(2), p. 521, Amtrak must maintain an inspector general, much like governmental agencies such as the Federal Communica- tions Commission and the Securities and Exchange Commis- sion. Furthermore, Congress conducts frequent oversight hearings into Amtrak's budget, routes, and prices. See, e. g., Hearing on Reviewing Alternatives to Amtrak's Annual Losses in Food and Beverage Service before the Subcommit- tee on Government Operations of the House Committee on Oversight and Government Reform, 113th Cong., 1st Sess., 5 (2013) (statement of Thomas J. Hall, chief of customer serv- ice, Amtrak); Hearing on Amtrak's Fiscal Year 2014 Budget: The Starting Point for Reauthorization before the Subcom- mittee on Railroads, Pipelines, and Hazardous Materials of the House Committee on Transportation and Infrastructure, 113th Cong., 1st Sess., 6 (2013) (statement of Joseph H. Boardman, president and chief executive officer, Amtrak).

Cite as: 575 U. S. 43 (2015) 53

Opinion of the Court

It is significant that, rather than advancing its own private economic interests, Amtrak is required to pursue numerous, additional goals defined by statute. To take a few examples: Amtrak must “provide efficient and effective intercity pas- senger rail mobility,” 49 U. S. C. § 24101(b); “minimize Gov- ernment subsidies,” § 24101(d); provide reduced fares to the disabled and elderly, § 24307(a); and ensure mobility in times of national disaster, § 24101(c)(9). In addition to directing Amtrak to serve these broad pub- lic objectives, Congress has mandated certain aspects of Amtrak's day-to-day operations. Amtrak must maintain a route between Louisiana and Florida. 122 Stat. 4934. When making improvements to the Northeast corridor, Am- trak must apply seven considerations in a specified order of priority. § 24902(b). And when Amtrak purchases materi- als worth more than $1 million, these materials must be mined or produced in the United States, or manufactured substantially from components that are mined, produced, or manufactured in the United States, unless the Secretary of Transportation grants an exemption. § 24305(f). Finally, Amtrak is also dependent on federal financial sup- port. In its first 43 years of operation, Amtrak has received more than $41 billion in federal subsidies. In recent years these subsidies have exceeded $1 billion annually. See Brief for Petitioners 5, and n. 2, 46. Given the combination of these unique features and its sig- nificant ties to the Government, Amtrak is not an autono- mous private enterprise. Among other important consider- ations, its priorities, operations, and decisions are extensively supervised and substantially funded by the polit- ical branches. A majority of its Board is appointed by the President and confirmed by the Senate and is understood by the Executive to be removable by the President at will. Amtrak was created by the Government, is controlled by the Government, and operates for the Government's benefit. Thus, in its joint issuance of the metrics and standards with

54 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Opinion of the Court

the FRA, Amtrak acted as a governmental entity for pur- poses of the Constitution's separation of powers provisions. And that exercise of governmental power must be consistent with the design and requirements of the Constitution, includ- ing those provisions relating to the separation of powers. Respondent urges that Amtrak cannot be deemed a gov- ernmental entity in this respect. Like the Court of Ap- peals, it relies principally on the statutory directives that Amtrak “shall be operated and managed as a for profit corpo- ration” and “is not a department, agency, or instrumentality of the United States Government.” §§ 24301(a)(2)–(3). In light of that statutory language, respondent asserts, Amtrak cannot exercise the joint authority entrusted to it and the FRA by § 207(a). On that point this Court's decision in Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, provides necessary instruction. In Lebron, Amtrak prohibited an artist from installing a politically controversial display in New York City's Penn Station. The artist sued Amtrak, al- leging a violation of his First Amendment rights. In re- sponse Amtrak asserted that it was not a governmental en- tity, explaining that “its charter's disclaimer of agency status prevent[ed] it from being considered a Government entity.” Id., at 392. The Court rejected this contention, holding “it is not for Congress to make the final determination of Am- trak's status as a Government entity for purposes of deter- mining the constitutional rights of citizens affected by its actions.” Ibid. To hold otherwise would allow the Govern- ment “to evade the most solemn obligations imposed in the Constitution by simply resorting to the corporate form.” Id., at 397. Noting that Amtrak “is established and orga- nized under federal law for the very purpose of pursuing federal governmental objectives, under the direction and control of federal governmental appointees,” id., at 398, and that the Government exerts its control over Amtrak “not as a creditor but as a policymaker,” the Court held Amtrak “is

Cite as: 575 U. S. 43 (2015) 55

Opinion of the Court

an agency or instrumentality of the United States for the purpose of individual rights guaranteed against the Govern- ment by the Constitution,” id., at 394, 399. Lebron teaches that, for purposes of Amtrak's status as a federal actor or instrumentality under the Constitution, the practical reality of federal control and supervision prevails over Congress' disclaimer of Amtrak's governmental status. Lebron involved a First Amendment question, while in this case the challenge is to Amtrak's joint authority to issue the metrics and standards. But “[t]he structural principles se- cured by the separation of powers protect the individual as well.” Bond v. United States, 564 U. S. 211, 222 (2011). Treating Amtrak as governmental for these purposes, more- over, is not an unbridled grant of authority to an unaccount- able actor. The political branches created Amtrak, control its Board, define its mission, specify many of its day-to-day operations, have imposed substantial transparency and ac- countability mechanisms, and, for all practical purposes, set and supervise its annual budget. Accordingly, the Court holds that Amtrak is a governmental entity, not a private one, for purposes of determining the constitutional issues presented in this case. III Because the Court of Appeals' decision was based on the flawed premise that Amtrak should be treated as a private entity, that opinion is now vacated. On remand, the Court of Appeals, after identifying the issues that are properly pre- served and before it, will then have the instruction of the analysis set forth here. Respondent argues that the selec- tion of Amtrak's president, who is appointed “not by the President . . . but by the other eight Board Members,” “call[s] into question Amtrak's structure under the Appointments Clause,” Brief for Respondent 42; that § 207(d)'s arbitrator provision “is a plain violation of the nondelegation principle” and the Appointments Clause requiring invalidation of § 207(a), id., at 26; and that Congress violated the Due Proc-

56 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Alito, J., concurring

ess Clause by “giv[ing] a federally chartered, nominally pri- vate, for-profit corporation regulatory authority over its own industry,” id., at 43. Petitioners, in turn, contend that “the metrics and standards do not reflect the exercise of `rule- making' authority or permit Amtrak to `regulate other pri- vate entities,' ” and thus do not raise nondelegation concerns. Reply Brief 5 (citation omitted). Because “[o]urs is a court of final review and not first view,” Zivotofsky v. Clinton, 566 U. S. 189, 201 (2012) (internal quotation marks omitted), those issues—to the extent they are properly before the Court of Appeals—should be addressed in the first instance on remand. The judgment of the Court of Appeals for the District of Columbia Circuit is vacated, and the case is remanded for further proceedings consistent with this opinion. It is so ordered.

Justice Alito, concurring. I entirely agree with the Court that Amtrak is “a federal actor or instrumentality,” as far as the Constitution is con- cerned. Ante, at 55. “Amtrak was created by the Govern- ment, is controlled by the Government, and operates for the Government's benefit.” Ante, at 53. The Government even “specif[ies] many of its day-to-day operations” and “for all practical purposes, set[s] and supervise[s] its annual budget.” Ante, at 55. The District of Columbia Circuit understand- ably heeded 49 U. S. C. § 24301(a)(3), which proclaims that Amtrak “is not a department, agency, or instrumentality of the United States Government,” but this statutory label can- not control for constitutional purposes. (Emphasis added.) I therefore join the Court's opinion in full. I write sepa- rately to discuss what follows from our judgment. I This case, on its face, may seem to involve technical issues, but in discussing trains, tracks, metrics, and standards, a

Cite as: 575 U. S. 43 (2015) 57

Alito, J., concurring

vital constitutional principle must not be forgotten: Liberty requires accountability. When citizens cannot readily identify the source of legisla- tion or regulation that affects their lives, Government offi- cials can wield power without owning up to the conse- quences. One way the Government can regulate without accountability is by passing off a Government operation as an independent private concern. Given this incentive to regulate without saying so, everyone should pay close atten- tion when Congress “sponsor[s] corporations that it specifi- cally designate[s] not to be agencies or establishments of the United States Government.” Lebron v. National Railroad Passenger Corporation, 513 U. S. 374, 390 (1995). Recognition that Amtrak is part of the Federal Govern- ment raises a host of constitutional questions. II I begin with something that may seem mundane on its face but that has a significant relationship to the principle of accountability. Under the Constitution, all officers of the United States must take an oath or affirmation to support the Constitution and must receive a commission. See Art. VI, cl. 3 (“[A]ll executive and judicial Officers . . . shall be bound by Oath or Affirmation, to support this Constitution”); Art. II, § 3, cl. 6 (The President “shall Commission all the Officers of the United States”). There is good reason to think that those who have not sworn an oath cannot exercise significant authority of the United States. See 14 Op. Atty. Gen. 406, 408 (1874) (“[A] Representative . . . does not become a member of the House until he takes the oath of office”); 15 Op. Atty. Gen. 280, 281 (1877) (similar).* And this Court certainly has never treated a commission from the President as a mere wall ornament. See, e. g., Marbury v. Madison, 1

*It is noteworthy that the first statute enacted by Congress was “An Act to regulate the Time and Manner of administering certain Oaths.” Act of June 1, 1789, ch. 1, § 1, 1 Stat. 23.

58 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Alito, J., concurring

Cranch 137, 156 (1803); see also id., at 179 (noting the impor- tance of an oath). Both the Oath and Commission Clauses confirm an impor- tant point: Those who exercise the power of Government are set apart from ordinary citizens. Because they exercise greater power, they are subject to special restraints. There should never be a question whether someone is an officer of the United States because, to be an officer, the person should have sworn an oath and possess a commission. Here, respondent tells the Court that “Amtrak's board members do not take an oath of office to uphold the Constitu- tion, as do Article II officers vested with rulemaking author- ity.” Brief for Respondent 47. The Government says not a word in response. Perhaps there is an answer. The rule, however, is clear. Because Amtrak is the Government, ante, at 55, those who run it need to satisfy basic constitu- tional requirements. III I turn next to the Passenger Rail Investment and Im- provement Act of 2008's (PRIIA) arbitration provision. 122 Stat. 4907. Section 207(a) of the PRIIA provides that “the Federal Railroad Administration [(FRA)] and Amtrak shall jointly . . . develop new or improve existing metrics and mini- mum standards for measuring the performance and service quality of intercity passenger train operations.” Id., at 4916. In addition, § 207(c) commands that “[t]o the extent practicable, Amtrak and its host rail carriers shall incor- porate [those] metrics and standards . . . into their access and service agreements.” Under § 213(a) of the PRIIA, moreover, “the metrics and standards also may play a role in prompting investigations by the [Surface Transporta- tion Board (STB)] and in subsequent enforcement actions.” Ante, at 48. This scheme is obviously regulatory. Section 207 pro- vides that Amtrak and the FRA “shall jointly” create new standards, cf., e. g., 12 U. S. C. § 1831m(g)(4)(B) (“The appro-

Cite as: 575 U. S. 43 (2015) 59

Alito, J., concurring

priate Federal banking agencies shall jointly issue rules of practice to implement this paragraph”), and that Amtrak and private rail carriers “shall incorporate” those standards into their agreements whenever “practicable,” cf., e. g., BP America Production Co. v. Burton, 549 U. S. 84, 88 (2006) (characterizing a command to “ `audit and reconcile, to the extent practicable, all current and past lease accounts' ” as creating “duties” for the Secretary of the Interior (quoting 30 U. S. C. § 1711(c)(1))). The fact that private rail carriers sometimes may be required by federal law to include the metrics and standards in their contracts by itself makes this a regulatory scheme. “As is often the case in administrative law,” moreover, “the metrics and standards lend definite regulatory force to an otherwise broad statutory mandate.” 721 F. 3d 666, 672 (CADC 2013). Here, though the nexus between regulation, statutory mandate, and penalty is not direct (for, as the Gov- ernment explains, there is a pre-existing requirement that railroads give preference to Amtrak, see Brief for Petition- ers 31–32 (citing 49 U. S. C. §§ 24308(c), (f))), the metrics and standards inherently have a “coercive effect,” Bennett v. Spear, 520 U. S. 154, 169 (1997), on private conduct. Even the United States concedes, with understatement, that there is “perhaps some incentivizing effect associated with the metrics and standards.” Brief for Petitioners 30. Because obedience to the metrics and standards materially reduces the risk of liability, railroads face powerful incentives to obey. See Bennett, supra, at 169–171. That is regulatory power. The language from § 207 quoted thus far should raise red flags. In one statute, Congress says Amtrak is not an “agency.” 49 U. S. C. § 24301(a)(3). But then Congress com- mands Amtrak to act like an agency, with effects on private rail carriers. No wonder the D. C. Circuit ruled as it did. The oddity continues, however. Section 207(d) of the PRIIA also provides that if the FRA and Amtrak cannot

60 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Alito, J., concurring

agree about what the regulatory standards should say, then “any party involved in the development of those standards may petition the Surface Transportation Board to appoint an arbitrator to assist the parties in resolving their disputes through binding arbitration.” 122 Stat. 4917. The statute says nothing more about this “binding arbitration,” including who the arbitrator should be. Looking to Congress' use of the word “arbitrator,” re- spondent argues that because the arbitrator can be a private person, this provision by itself violates the private nondele- gation doctrine. The United States, for its part, urges the Court to read the term “arbitrator” to mean “public arbitra- tor” in the interests of constitutional avoidance. No one disputes, however, that the arbitration provision is fair game for challenge, even though no arbitration occurred. The obvious purpose of the arbitration provision was to force Amtrak and the FRA to compromise, or else a third party would make the decision for them. The D. C. Circuit is cor- rect that when Congress enacts a compromise-forcing mech- anism, it is no good to say that the mechanism cannot be challenged because the parties compromised. See 721 F. 3d, at 674. “[S]tack[ing] the deck in favor of compromise” was the whole point. Ibid. Unsurprisingly, this Court has up- held standing to bring a separation-of-powers challenge in comparable circumstances. See Metropolitan Washington Airports Authority v. Citizens for Abatement of Aircraft Noise, Inc., 501 U. S. 252, 264–265 (1991) (“[T]his `personal injury' to respondents is `fairly traceable' to the Board of Review's veto power because knowledge that the master plan was subject to the veto power undoubtedly influenced MWAA's Board of Directors” (emphasis added)); see also Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U. S. 477, 512, n. 12 (2010) (“We cannot assume . . . that the Chairman would have made the same appointments acting alone”). As to the merits of this arbitration provision, I agree with the parties: If the arbitrator can be a private person, this

Cite as: 575 U. S. 43 (2015) 61

Alito, J., concurring

law is unconstitutional. Even the United States accepts that Congress “cannot delegate regulatory authority to a pri- vate entity.” 721 F. 3d, at 670. Indeed, Congress, vested with enumerated “legislative Powers,” Art. I, § 1, cannot del- egate “exclusively legislative” authority at all. Wayman v. Southard, 10 Wheat. 1, 42–43 (1825) (Marshall, C. J.). The Court has invalidated statutes for that very reason. See A. L. A. Schechter Poultry Corp. v. United States, 295 U. S. 495 (1935); Panama Refining Co. v. Ryan, 293 U. S. 388 (1935); see also Mistretta v. United States, 488 U. S. 361, 373, n. 7 (1989) (citing, inter alia, Industrial Union Dept., AFL–CIO v. American Petroleum Institute, 448 U. S. 607, 646 (1980)). The principle that Congress cannot delegate away its vested powers exists to protect liberty. Our Constitution, by careful design, prescribes a process for making law, and within that process there are many accountability check- points. See INS v. Chadha, 462 U. S. 919, 959 (1983). It would dash the whole scheme if Congress could give its power away to an entity that is not constrained by those checkpoints. The Constitution's deliberative process was viewed by the Framers as a valuable feature, see, e. g., Man- ning, Lawmaking Made Easy, 10 Green Bag 2d 202 (2007) (“[B]icameralism and presentment make lawmaking difficult by design” (citing, inter alia, The Federalist No. 62, p. 378 (J. Madison), and No. 63, at 443–444 (A. Hamilton))), not something to be lamented and evaded. Of course, this Court has “ `almost never felt qualified to second-guess Congress regarding the permissible degree of policy judgment that can be left to those executing or apply- ing the law.' ” Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 474–475 (2001) (quoting Mistretta, supra, at 416 (Scalia, J., dissenting)). But the inherent difficulty of line-drawing is no excuse for not enforcing the Constitu- tion. Rather, the formal reason why the Court does not en- force the nondelegation doctrine with more vigilance is that the other branches of Government have vested powers of their own that can be used in ways that resemble lawmaking.

62 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Alito, J., concurring

See, e. g., Arlington v. FCC, 569 U. S. 290, 304–305, n. 4 (2013) (explaining that agency rulemakings “are exercises of—indeed, under our constitutional structure they must be exercises of—the `executive Power' ” (quoting Art. II, § 1, cl. 1)). Even so, “the citizen confronting thousands of pages of regulations—promulgated by an agency directed by Con- gress to regulate, say, `in the public interest'—can perhaps be excused for thinking that it is the agency really doing the legislating.” 569 U. S., at 315 (Roberts, C. J., dissenting). When it comes to private entities, however, there is not even a fig leaf of constitutional justification. Private entities are not vested with “legislative Powers.” Art. I, § 1. Nor are they vested with the “executive Power,” Art. II, § 1, cl. 1, which belongs to the President. Indeed, it raises “[d]ifficult and fundamental questions” about “the delegation of Execu- tive power ” when Congress authorizes citizen suits. Friends of the Earth, Inc. v. Laidlaw Environmental Serv- ices (TOC), Inc., 528 U. S. 167, 197 (2000) (Kennedy, J., con- curring). A citizen suit to enforce existing law, however, is nothing compared to delegated power to create new law. By any measure, handing off regulatory power to a private entity is “legislative delegation in its most obnoxious form.” Carter v. Carter Coal Co., 298 U. S. 238, 311 (1936). For these reasons, it is hard to imagine how delegating “binding” tie-breaking authority to a private arbitrator to resolve a dispute between Amtrak and the FRA could be constitutional. No private arbitrator can promulgate bind- ing metrics and standards for the railroad industry. Thus, if the term “arbitrator” refers to a private arbitrator, or even the possibility of a private arbitrator, the Constitution is vio- lated. See 721 F. 3d, at 674 (“[T]hat the recipients of illicitly delegated authority opted not to make use of it is no antidote. It is Congress's decision to delegate that is unconstitutional” (citing Whitman, supra, at 473)). As I read the Government's briefing, it does not dispute any of this (other than my characterization of the PRIIA as

Cite as: 575 U. S. 43 (2015) 63

Alito, J., concurring

regulatory, which it surely is). Rather than trying to defend a private arbitrator, the Government argues that the Court, for reasons of constitutional avoidance, should read the word “arbitrator” to mean “public arbitrator.” The Government's argument, however, lurches into a new problem: Constitu- tional avoidance works only if the statute is susceptible to an alternative reading and that such an alternative reading would itself be constitutional. Here, the Government's argument that the word “arbitra- tor” does not mean “private arbitrator” is in some tension with the ordinary meaning of the word. Although Govern- ment arbitrators are not unheard of, we usually think of arbi- tration as a form of “private dispute resolution.” See, e. g., Stolt-Nielsen S. A. v. AnimalFeeds Int'l Corp., 559 U. S. 662, 685 (2010). Likewise, the appointment of a public arbitrator here would raise serious questions under the Appointments Clause. Unless an “inferior Office[r]” is at issue, Article II of the Constitution demands that the President appoint all “Officers of the United States” with the Senate's advice and consent. Art. II, § 2, cl. 2. This provision ensures that those who exercise the power of the United States are ac- countable to the President, who himself is accountable to the people. See Free Enterprise Fund, 561 U. S., at 497–498 (citing The Federalist No. 72, p. 487 (J. Cooke ed. 1961) (A. Hamilton)). The Court has held that someone “who exer- cis[es] significant authority pursuant to the laws of the United States” is an “Officer,” Buckley v. Valeo, 424 U. S. 1, 126 (1976) (per curiam), and further that an officer who acts without supervision must be a principal officer, see Edmond v. United States, 520 U. S. 651, 663 (1997) (“[W]e think it evident that `inferior officers' are officers whose work is di- rected and supervised at some level by others who were ap- pointed by Presidential nomination with the advice and con- sent of the Senate”). While some officers may be principal even if they have a supervisor, it is common ground that an

64 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Alito, J., concurring

officer without a supervisor must be principal. See id., at 667 (Souter, J., concurring in part and concurring in judgment). Here, even under the Government's public-arbitrator the- ory, it looks like the arbitrator would be making law without supervision—again, it is “binding arbitration.” Nothing suggests that those words mean anything other than what they say. This means that an arbitrator could set the met- rics and standards that “shall” become part of a private rail- road's contracts with Amtrak whenever “practicable.” As to that “binding” decision, who is the supervisor? Inferior officers can do many things, but nothing final should appear in the Federal Register unless a Presidential appointee has at least signed off on it. See 75 Fed. Reg. 26839 (2010) (plac- ing the metrics and standards in the Federal Register); Ed- mond, supra, at 665. IV Finally, the Board of Amtrak, and, in particular, Amtrak's president, also poses difficult constitutional problems. As the Court observes, “Amtrak's Board of Directors is com- posed of nine members, one of whom is the Secretary of Transportation. Seven other Board members are appointed by the President and confirmed by the Senate. These eight Board members, in turn, select Amtrak's president.” Ante, at 51 (citation omitted). In other words, unlike everyone else on the Board, Amtrak's president has not been ap- pointed by the President and confirmed by the Senate. As explained above, accountability demands that principal officers be appointed by the President. See Art. II, § 2, cl. 2. The President, after all, must have “the general administra- tive control of those executing the laws,” Myers v. United States, 272 U. S. 52, 164 (1926), and this principle applies with special force to those who can “exercis[e] significant author- ity” without direct supervision, Buckley, supra, at 126; see also Edmond, supra, at 663. Unsurprisingly then, the United States defends the non-Presidential appointment of

Cite as: 575 U. S. 43 (2015) 65

Alito, J., concurring

Amtrak's president on the ground that the Amtrak president is merely an inferior officer. Given Article II, for the Gov- ernment to argue anything else would be surrender. This argument, however, is problematic. Granted, a multimember body may head an agency. See Free Enter- prise Fund, supra, at 512–513. But those who head agen- cies must be principal officers. See Edmond, supra, at 663. It would seem to follow that because agency heads must be principal officers, every member of a multimember body heading an agency must also be a principal officer. After all, every member of a multimember body could cast the de- ciding vote with respect to a particular decision. One would think that anyone who has the unilateral authority to tip a final decision one way or the other cannot be an inferior officer. The Government's response is tucked away in a footnote. It contends that because Amtrak's president serves at the pleasure of the other Board members, he is only an inferior officer. See Reply Brief for Petitioners 14, n. 6. But the Government does not argue that the president of Amtrak cannot cast tie-breaking votes. Assuming he can vote when the Board of Directors is divided, it makes no sense to think that the side with which the president agrees will demand his removal. In any event, even assuming that Amtrak's president could be an inferior officer, there would still be another problem: Amtrak's Board may lack constitutional authority to appoint inferior officers. The Appointments Clause provides an ex- ception from the ordinary rule of Presidential appointment for “inferior Officers,” but that exception has accountability limits of its own, namely, that Congress may only vest the appointment power “in the President alone, in the Courts of Law, or in the Heads of Departments.” Art. II, § 2, cl. 2. Although a multimember body like Amtrak's Board can head a department, here it is not at all clear that Amtrak is a department.

66 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

A “Department” may not be “subordinate to or contained within any other such component” of the Executive Branch. Free Enterprise Fund, 561 U. S., at 511. As explained above, however, in jointly creating metrics and standards, Amtrak may have to give way to an arbitrator appointed by the STB. Does that mean that Amtrak is “subordinate to” the STB? See also 49 U. S. C. § 24308 (explaining the STB's role in disputes between Amtrak and rail carriers). At the same time, the Secretary of Transportation sits on Amtrak's Board and controls some aspects of Amtrak's relationship with rail carriers. See, e. g., §§ 24302(a)(1), 24309(d)(2). The Secretary of Transportation also has authority to ex- empt Amtrak from certain statutory requirements. See § 24305(f)(4). Does that mean that Amtrak is “subordinate to or contained within” the Department of Transportation? (The STB, of course, also may be “subordinate to or con- tained within” the Department of Transportation. If so, this may further suggest that Amtrak is not a department, and also further undermine the STB's ability to appoint an arbitrator.) All of these are difficult questions.

* * * In sum, while I entirely agree with the Court that Amtrak must be regarded as a federal actor for constitutional pur- poses, it does not by any means necessarily follow that the present structure of Amtrak is consistent with the Con- stitution. The constitutional issues that I have outlined (and perhaps others) all flow from the fact that no matter what Congress may call Amtrak, the Constitution cannot be disregarded. Justice Thomas, concurring in the judgment. We have come to a strange place in our separation-of- powers jurisprudence. Confronted with a statute that au- thorizes a putatively private market participant to work hand in hand with an executive agency to craft rules that

Cite as: 575 U. S. 43 (2015) 67

Thomas, J., concurring in judgment

have the force and effect of law, our primary question— indeed, the primary question the parties ask us to answer— is whether that market participant is subject to an adequate measure of control by the Federal Government. We never even glance at the Constitution to see what it says about how this authority must be exercised and by whom. I agree with the Court that the proper disposition in this case is to vacate the decision below and to remand for further consideration of respondent's constitutional challenge to the metrics and standards. I cannot join the majority's analysis, however, because it fails to fully correct the errors that re- quire us to vacate the Court of Appeals' decision. I write separately to describe the framework that I believe should guide our resolution of delegation challenges and to highlight serious constitutional defects in the Passenger Rail Invest- ment and Improvement Act of 2008 (PRIIA) that are prop- erly presented for the lower courts' review on remand.

I The Constitution does not vest the Federal Government with an undifferentiated “governmental power.” Instead, the Constitution identifies three types of governmental power and, in the Vesting Clauses, commits them to three branches of Government. Those Clauses provide that “[a]ll legislative Powers herein granted shall be vested in a Con- gress of the United States,” Art. I, § 1, “[t]he executive Power shall be vested in a President of the United States,” Art. II, § 1, cl. 1, and “[t]he judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time or- dain and establish,” Art. III, § 1. These grants are exclusive. See Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 472 (2001) (legislative power); Free Enterprise Fund v. Public Company Account- ing Oversight Bd., 561 U. S. 477, 496–497 (2010) (executive power); Stern v. Marshall, 564 U. S. 462, 482–483 (2011) ( ju-

68 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

dicial power). When the Government is called upon to per- form a function that requires an exercise of legislative, exec- utive, or judicial power, only the vested recipient of that power can perform it. In addition to allocating power among the different branches, the Constitution identifies certain restrictions on the manner in which those powers are to be exercised. Ar- ticle I requires, among other things, that “[e]very Bill which shall have passed the House of Representatives and the Sen- ate, shall, before it become a Law, be presented to the Presi- dent of the United States; If he approve he shall sign it, but if not he shall return it . . . .” Art. I, § 7, cl. 2. And al- though the Constitution is less specific about how the Presi- dent shall exercise power, it is clear that he may carry out his duty to take care that the laws be faithfully executed with the aid of subordinates. Myers v. United States, 272 U. S. 52, 117 (1926), overruled in part on unrelated grounds in Humphrey's Executor v. United States, 295 U. S. 602 (1935). When the Court speaks of Congress improperly delegating power, what it means is Congress' authorizing an entity to exercise power in a manner inconsistent with the Constitu- tion. For example, Congress improperly “delegates” legis- lative power when it authorizes an entity other than itself to make a determination that requires an exercise of legislative power. See Whitman, supra, at 472. It also improperly “delegates” legislative power to itself when it authorizes it- self to act without bicameralism and presentment. See, e. g., INS v. Chadha, 462 U. S. 919 (1983). And Congress improp- erly “delegates”—or, more precisely, authorizes the exercise of, see Perez v. Mortgage Bankers Assn., post, at 131, 132 (Thomas, J., concurring in judgment) (noting that Congress may not “delegate” power it does not possess)—executive power when it authorizes individuals or groups outside of the President's control to perform a function that requires the exercise of that power. See, e. g., Free Enterprise Fund, supra.

Cite as: 575 U. S. 43 (2015) 69

Thomas, J., concurring in judgment

In order to be able to adhere to the provisions of the Con- stitution that allocate and constrain the exercise of these powers, we must first understand their boundaries. Here, I do not purport to offer a comprehensive description of these powers. My purpose is to identify principles relevant to to- day's dispute, with an eye to offering guidance to the lower courts on remand. At issue in this case is the proper divi- sion between legislative and executive powers. An exami- nation of the history of those powers reveals how far our modern separation-of-powers jurisprudence has departed from the original meaning of the Constitution.

II The allocation of powers in the Constitution is absolute, Perez, post, at 115–119 (opinion of Thomas, J.), but it does not follow that there is no overlap between the three catego- ries of governmental power. Certain functions may be per- formed by two or more branches without either exceeding its enumerated powers under the Constitution. Resolution of claims against the Government is the classic example. At least when Congress waives its sovereign immunity, such claims may be heard by an Article III court, which adjudi- cates such claims by an exercise of judicial power. See Ex parte Bakelite Corp., 279 U. S. 438, 452 (1929). But Con- gress may also provide for an executive agency to adjudicate such claims by an exercise of executive power. See ibid. Or Congress may resolve the claims itself, legislating by spe- cial Act. See ibid. The question is whether the particular function requires the exercise of a certain type of power; if it does, then only the branch in which that power is vested can perform it. For example, although this Court has long recognized that it does not necessarily violate the Constitu- tion for Congress to authorize another branch to make a de- termination that it could make itself, there are certain core functions that require the exercise of legislative power and that only Congress can perform. Wayman v. Southard, 10 Wheat. 1, 43 (1825) (distinguishing between those functions

70 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

Congress must perform itself and those it may leave to an- other branch). The function at issue here is the formulation of generally applicable rules of private conduct. Under the original un- derstanding of the Constitution, that function requires the exercise of legislative power. By corollary, the discretion inherent in executive power does not comprehend the dis- cretion to formulate generally applicable rules of private conduct. A The idea that the Executive may not formulate generally applicable rules of private conduct emerged even before the theory of the separation of powers on which our Constitution was founded. The idea has ancient roots in the concept of the “rule of law,” which has been understood since Greek and Roman times to mean that a ruler must be subject to the law in exercising his power and may not govern by will alone. M. Vile, Constitutionalism and the Separation of Powers 25 (2d ed. 1998); 2 Bracton, De Legibus et Consuetudinibus Angliae 33 (G. Woodbine ed., S. Thorne transl. 1968). The principle that a ruler must govern according to law “presupposes at least two distinct operations, the making of law, and putting it into effect.” Vile, supra, at 24. Although it was origi- nally thought “that the rule of law was satisfied if a king made good laws and always acted according to them,” it be- came increasingly apparent over time that the rule of law demanded that the operations of “making” law and of “put- ting it into effect” be kept separate. W. Gwyn, The Meaning of the Separation of Powers 35 (1965); see also id., at 8–9. But when the King's power was at its height, it was still accepted that his “principal duty . . . [was] to govern his people according to law.” 1 W. Blackstone, Commentaries on the Laws of England 226 (1765) (Commentaries) (empha- sis added).

Cite as: 575 U. S. 43 (2015) 71

Thomas, J., concurring in judgment

An early expression of this idea in England is seen in the “constitutional” law concerning crown proclamations. Even before a more formal separation of powers came about dur- ing the English Civil War, it was generally thought that the King could not use his proclamation power to alter the rights and duties of his subjects. P. Hamburger, Is Administrative Law Unlawful? 33–34 (2014) (Hamburger). This power could be exercised by the King only in conjunction with Par- liament and was exercised through statutes. Ibid.; see also M. Hale, The Prerogatives of the King 141, 171–172 (D. Yale ed. 1976). The King might participate in “the legislative power” by giving his “assent” to laws created by the “con- currence” of “lords and commons assembled in parliament,” but he could not of his own accord “make a law or impose a charge.” Id., at 141. In 1539, King Henry VIII secured what might be called a “delegation” of the legislative power by prevailing on Parlia- ment to pass the Act of Proclamations. Hamburger 35–36. That Act declared that the King's proclamations would have the force and effect of an Act of Parliament. Id., at 37. But the Act did not permit the King to deprive his subjects of their property, privileges and franchises, or their lives, ex- cept as provided by statutory or common law. Id., at 37– 38. Nor did the Act permit him to invalidate “ `any acts, [or] common laws standing at [that] time in strength and force.' ” Id., at 38 (quoting An Act that Proclamations Made by the King Shall be Obeyed, 31 Hen. VIII, ch. 8, in Eng. Stat. at Large 263 (1539)). Even this limited delegation of lawmaking power to the King was repudiated by Parliament less than a decade later. Hamburger 38. Reflecting on this period in history, David Hume would observe that, when Parliament “gave to the king's proclamation the same force as to a statute enacted by parliament,” it “made by one act a total subversion of the English constitution.” 3 D. Hume, The History of England From the Invasion of Julius Caesar to the Revolution in 1688,

72 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

p. 266 (1983). By the 17th century, when English scholars and jurists began to articulate a more formal theory of the separation of powers, delegations of the type afforded to King Henry VIII were all but unheard of. Hale, supra, at 172–173. This is not to say that the Crown did not endeavor to exer- cise the power to make rules governing private conduct. King James I made a famous attempt, see Perez, post, at 124–125 (opinion of Thomas, J.), prompting the influential ju- rist Chief Justice Edward Coke to write that the King could not “change any part of the common law, nor create any of- fence by his proclamation, which was not an offence before, without Parliament.” Case of Proclamations, 12 Co. Rep. 74, 75, 77 Eng. Rep. 1352, 1353 (K. B. 1611). Coke associated this principle with chapter 39 of Magna Carta,1 which he understood to guarantee that no subject would be de- prived of a private right—that is, a right of life, liberty, or property—except in accordance with “the law of the land,” which consisted only of statutory and common law. Chapman & McConnell, Due Process as Separation of Pow- ers, 121 Yale L. J. 1672, 1688 (2012). When the King at- tempted to fashion rules of private conduct unilaterally, as he did in the Case of Proclamations, the resulting enforce- ment action could not be said to accord with “the law of the land.” John Locke echoed this view. “[F]reedom of men under government,” he wrote, “is to have a standing rule to live by, common to every one of that society, and made by the legislative power erected in it . . . and not to be subject to the inconstant, uncertain, unknown, arbitrary will of another

1 Chapter 39 of 1215 Magna Carta declared that “[n]o free man shall be taken, imprisoned, disseised, outlawed, banished, or in any way destroyed, nor will We proceed against or prosecute him, except by the lawful judg- ment of his peers and by the law of the land.” A. Howard, Magna Carta: Text and Commentary 43 (1964).

Cite as: 575 U. S. 43 (2015) 73

Thomas, J., concurring in judgment

man.” J. Locke, Second Treatise of Civil Government § 22, p. 13 (J. Gough ed. 1947) (Locke) (emphasis added). It fol- lowed that this freedom required that the power to make the standing rules and the power to enforce them not lie in the same hands. See id., § 143, at 72. He further concluded that “[t]he legislative c[ould not] transfer the power of mak- ing laws to any other hands: for it being but a delegated power from the people, they who have it [could not] pass it over to others.” Id., § 141, at 71.2 William Blackstone, in his Commentaries, likewise main- tained that the English Constitution required that no subject be deprived of core private rights except in accordance with the law of the land. See 1 Commentaries 129, 134, 137–138. He defined a “law” as a generally applicable “rule of civil conduct prescribed by the supreme power in a state, com- manding what is right and prohibiting what is wrong.” Id., at 44 (internal quotation marks omitted). And he defined a tyrannical government as one in which “the right both of making and of enforcing the laws, is vested in one and the same man, or one and the same body of men,” for “wherever these two powers are united together, there can be no public liberty.” Id., at 142. Thus, although Blackstone viewed Parliament as sovereign and capable of changing the consti- tution, id., at 156, he thought a delegation of lawmaking

2 Locke and his contemporaries also believed that requiring laws to be made in Parliament secured the common interest. W. Gwyn, The Mean- ing of the Separation of Powers 75 (1965). Parliament would assemble to do the business of legislation, but then its members would disperse to live as private citizens under the laws they had created, providing them an incentive to legislate in the common interest. During Parliament's ab- sence, the King might meet certain emergencies through the exercise of prerogative power, but in order to make new, permanent laws, he would be required to call Parliament into session. Locke §§ 143–144, at 72–73. If the King were not dependent on Parliament to legislate, then this bene- ficial cycle of periodic lawmaking interspersed with representatives' living as private citizens would be broken.

74 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

power to be “disgrace[ful],” 4 id., at 424; see also Hamburger 39, n. 17. B These principles about the relationship between private rights and governmental power profoundly influenced the men who crafted, debated, and ratified the Constitution. The document itself and the writings surrounding it reflect a conviction that the power to make the law and the power to enforce it must be kept separate, particularly with respect to the regulation of private conduct. The Framers' dedication to the separation of powers has been well documented, if only half-heartedly honored. See, e. g., Mistretta v. United States, 488 U. S. 361, 380–381 (1989). Most famously, in The Federalist, Madison wrote that “[n]o political truth is certainly of greater intrinsic value, or is stamped with the authority of more enlightened patrons of liberty than” the separation of powers. The Federalist No. 47, p. 301 (C. Rossiter ed. 1961). “The accumulation of all powers, legislative, executive, and judiciary, in the same hands, . . . may justly be pronounced the very definition of tyranny.” Ibid.; see also Perez, post, at 117–119 (opinion of Thomas, J.). This devotion to the separation of powers is, in part, what supports our enduring conviction that the Vesting Clauses are exclusive and that the branch in which a power is vested may not give it up or otherwise reallocate it. The Framers were concerned not just with the starting allocation, but with the “gradual concentration of the several powers in the same department.” The Federalist No. 51, at 321 (J. Madi- son). It was this fear that prompted the Framers to build checks and balances into our constitutional structure, so that the branches could defend their powers on an ongoing basis. Ibid.; see also Perez, post, at 117–119 (opinion of Thomas, J.). In this sense, the founding generation did not subscribe to Blackstone's view of parliamentary supremacy. Parlia- ment's violations of the law of the land had been a significant

Cite as: 575 U. S. 43 (2015) 75

Thomas, J., concurring in judgment

complaint of the American Revolution, Chapman & McCon- nell, 121 Yale L. J., at 1699–1703. And experiments in legis- lative supremacy in the States had confirmed the idea that even the legislature must be made subject to the law. Perez, post, at 117 (opinion of Thomas, J.). James Wilson explained the Constitution's break with the legislative su- premacy model at the Pennsylvania ratification convention: “Sir William Blackstone will tell you, that in Britain . . . the Parliament may alter the form of the government; and that its power is absolute, without control. The idea of a constitution, limiting and superintending the operations of legislative authority, seems not to have been accurately understood in Britain. . . . “To control the power and conduct of the legislature, by an overruling constitution, was an improvement in the science and practice of government reserved to the American states.” 2 J. Elliot, Debates on the Federal Constitution 432 (2d ed. 1863).

See also 4 id., at 63 (A. Maclaine) (contrasting Congress, which “is to be guided by the Constitution” and “cannot travel beyond its bounds,” with the Parliament described in Blackstone's Commentaries). As an illustration of Black- stone's contrasting model of sovereignty, Wilson cited the Act of Proclamations, by which Parliament had delegated legislative power to King Henry VIII. 2 id., at 432 (J. Wil- son); see supra, at 72. At the center of the Framers' dedication to the separation of powers was individual liberty. The Federalist No. 47, at 302 (J. Madison) (quoting Baron de Montesquieu for the prop- osition that “ `[t]here can be no liberty where the legislative and executive powers are united in the same person, or body of magistrates' ”). This was not liberty in the sense of free- dom from all constraint, but liberty as described by Locke: “to have a standing rule to live by . . . made by the legisla- tive power,” and to be free from “the inconstant, uncertain,

76 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

unknown, arbitrary will of another man.” Locke § 22, at 13. At the heart of this liberty were the Lockean private rights: life, liberty, and property. If a person could be deprived of these private rights on the basis of a rule (or a will) not enacted by the legislature, then he was not truly free. See D. Currie, The Constitution in the Supreme Court: The First One Hundred Years, 1789–1888, p. 272, and n. 268 (1985).3 This history confirms that the core of the legislative power that the Framers sought to protect from consolidation with the executive is the power to make “law” in the Blackstonian sense of generally applicable rules of private conduct.

III Even with these sound historical principles in mind, classi- fying governmental power is an elusive venture. Wayman, 10 Wheat., at 43; The Federalist No. 37, at 228 (J. Madison). But it is no less important for its difficulty. The “check” the Judiciary provides to maintain our separation of powers is enforcement of the rule of law through judicial review. Perez, post, at 124 (opinion of Thomas, J.). We may not— without imperiling the delicate balance of our constitutional system—forgo our judicial duty to ascertain the meaning of the Vesting Clauses and to adhere to that meaning as the law. Perez, post, at 124–126. We have been willing to check the improper allocation of executive power, see, e. g., Free Enterprise Fund, 561 U. S. 477; Metropolitan Washington Airports Authority v. Citi- zens for Abatement of Aircraft Noise, Inc., 501 U. S. 252 (1991), although probably not as often as we should, see, e. g.,

3 I do not mean to suggest here that the Framers believed an Act of the Legislature was sufficient to deprive a person of private rights; only that it was necessary. See generally Chapman & McConnell, Due Process as Separation of Powers, 121 Yale L. J. 1672, 1715, 1721–1726 (2012) (discuss- ing historical evidence that the Framers believed the Due Process Clause limited Congress' power to provide by law for the deprivation of private rights without judicial process).

Cite as: 575 U. S. 43 (2015) 77

Thomas, J., concurring in judgment

Morrison v. Olson, 487 U. S. 654 (1988). Our record with regard to legislative power has been far worse. We have held that the Constitution categorically forbids Congress to delegate its legislative power to any other body, Whitman, 531 U. S., at 472, but it has become increasingly clear to me that the test we have applied to distinguish legis- lative from executive power largely abdicates our duty to enforce that prohibition. Implicitly recognizing that the power to fashion legally binding rules is legislative, we have nevertheless classified rulemaking as executive (or judicial) power when the authorizing statute sets out “an intelligible principle” to guide the rulemaker's discretion. Ibid. Al- though the Court may never have intended the boundless standard the “intelligible principle” test has become, it is evident that it does not adequately reinforce the Constitu- tion's allocation of legislative power. I would return to the original understanding of the federal legislative power and require that the Federal Government create generally appli- cable rules of private conduct only through the constitution- ally prescribed legislative process.

A The Court first announced the intelligible-principle test in J. W. Hampton, Jr., & Co. v. United States, 276 U. S. 394 (1928). That case involved a challenge to a tariff assessed on a shipment of barium dioxide. Id., at 400. The rate of the tariff had been set by proclamation of the President, pur- suant to the so-called flexible tariff provision of the Tariff Act of 1922. Ibid. That provision authorized the President to increase or decrease a duty set by the statute if he deter- mined that the duty did not “ `equalize . . . differences in costs of production [of the item to which the duty applied] in the United States and the principal competing country.' ” Id., at 401 (quoting 19 U. S. C. § 154 (1925 ed.)). The im- porter of the barium dioxide challenged the provision as an unconstitutional delegation of legislative power to the Presi-

78 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

dent. 276 U. S., at 404. Agreeing that Congress could not delegate legislative power, the Court nevertheless upheld the Act as constitutional, setting forth the now-famous for- mulation: “If Congress shall lay down by legislative act an intelligible principle to which the person or body authorized to fix such rates is directed to conform, such legislative ac- tion is not a forbidden delegation of legislative power.” Id., at 409. Though worded broadly, the test rested on a narrow foun- dation. At the time J. W. Hampton was decided, most “dele- gations” by Congress to the Executive, including the delega- tion at issue in that case, had taken the form of conditional legislation. See Marshall Field & Co. v. Clark, 143 U. S. 649, 683–689 (1892). That form of legislation “makes the suspension of certain provisions and the going into operation of other provisions of an act of Congress depend upon the action of the President based upon the occurrence of subse- quent events, or the ascertainment by him of certain facts, to be made known by his proclamation.” Id., at 683. The practice of conditional legislation dates back at least to the Third Congress in 1794. Id., at 683–689 (collecting statutes). It first came before the Court in Cargo of Brig Aurora v. United States, 7 Cranch 382 (1813). There, the Court considered whether a Presidential proclamation could, by declaring that France had ceased to violate the neutral commerce of the United States, reinstate a legislative Act embargoing British goods. Id., at 384, 388. The Court con- cluded that the proclamation was effective, seeing “no suffi- cient reaso[n] why the legislature should not exercise its dis- cretion . . . either expressly or conditionally, as their judgment should direct.” Id., at 388. At least as defined by the Court in Field, the practice of conditional legislation does not seem to call on the President to exercise a core function that demands an exercise of legis- lative power. Congress creates the rule of private conduct, and the President makes the factual determination that causes that rule to go into effect. That type of factual de-

Cite as: 575 U. S. 43 (2015) 79

Thomas, J., concurring in judgment

termination seems similar to the type of factual determina- tion on which an enforcement action is conditioned: Neither involves an exercise of policy discretion, and both are subject to review by a court. See Union Bridge Co. v. United States, 204 U. S. 364, 386 (1907) (explaining that, when the Secretary of War determined whether bridges unreasonably obstruct navigation, he “could not be said to exercise strictly legislative . . . power any more, for instance, than it could be said that Executive officers exercise such power when, upon investigation, they ascertain whether a particular applicant for a pension belongs to a class of persons who, under general rules prescribed by Congress, are entitled to pensions”). As it happens, however, conditional statutes sometimes did call for the President to make at least an implicit policy de- termination. For example, a 1794 provision entitled “An Act to authorize the President of the United States to lay, regu- late and revoke Embargoes,” ch. 41, 1 Stat. 372, called on the President to impose an embargo on shipping “whenever, in his opinion, the public safety shall so require . . . .” Ibid. The statutes at issue in Field and J. W. Hampton could simi- larly be viewed as calling for built-in policy judgments. See Schoenbrod, The Delegation Doctrine: Could The Court Give It Substance? 83 Mich. L. Rev. 1223, 1263–1264 (1985).4 4 The statute at issue in Field authorized the President to reimpose statutory duties on exports from a particular country if he found that the country had imposed “reciprocally unequal and unreasonable” duties on U. S. exports. 143 U. S., at 692. At least insofar as the terms “unequal” and “unreasonable” did not have settled common-law definitions that could be applied mechanically to the facts, they could be said to call for the President to exercise policy judgment about which duties qualified. See id., at 699 (Lamar, J., dissenting but concurring in judgment) (The statute “does not, as was provided in the statutes of 1809 and 1810, entrust the President with the ascertainment of a fact therein defined upon which the law is to go into operation. It goes farther than that, and deputes to the President the power to suspend another section in the same act whenever `he may deem' the action of any foreign nation . . . to be `reciprocally unequal and unreasonable . . . ' ”). Similarly, the statute at issue in J. W. Hampton called on the President, with the aid of a commission, to deter- mine the “ `costs of production' ” for various goods—a calculation that

80 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

Such delegations of policy determinations pose a constitu- tional problem because they effectively permit the President to define some or all of the content of that rule of conduct. He may do so expressly—by setting out regulations specify- ing what conduct jeopardizes “the public safety,” for exam- ple—or implicitly—by drawing distinctions on an ad hoc basis. In either event, he does so based on a policy judg- ment that is not reviewable by the courts, at least to the extent that the judgment falls within the range of discretion permitted him by the law. See id., at 1255–1260. The existence of these statutes should not be taken to sug- gest that the Constitution, as originally understood, would permit such delegations. The 1794 embargo statute in- volved the external relations of the United States, so the determination it authorized the President to make arguably did not involve an exercise of core legislative power. See id., at 1260–1263 (distinguishing the tariff statute at issue in Field and J. W. Hampton on these grounds).5 Moreover, the could entail an exercise of policy judgment about the appropriate wage and profit rates in the relevant industries. 276 U. S., at 401. 5 The definition of “law” in England at the time of the ratification did not necessarily include rules—even rules of private conduct—dealing with external relations. For example, while “every Englishman [could] claim a right to abide in his own country so long as he pleases; and not to be driven from it unless by the sentence of the law,” the King “by his royal prerogative, [could] issue out his writ ne exeat regnum, and prohibit any of his subjects from going into foreign parts without licence.” 1 Commen- taries 133. It is thus likely the Constitution grants the President a greater measure of discretion in the realm of foreign relations, and the conditional tariff Acts must be understood accordingly. See Clinton v. City of New York, 524 U. S. 417, 445 (1998) (distinguishing Field on the ground that the statute at issue in Field regulated foreign trade); see also United States v. Curtiss-Wright Export Corp., 299 U. S. 304, 324 (1936) (“Practically every volume of the United States Statutes contains one or more acts or joint resolutions of Congress authorizing action by the Presi- dent in respect of subjects affecting foreign relations, which either leave the exercise of the power to his unrestricted judgment, or provide a stand- ard far more general than that which has always been considered requisite with regard to domestic affairs”). This Court has at least once expressly relied on this rationale to sanction a delegation of power to make rules

Cite as: 575 U. S. 43 (2015) 81

Thomas, J., concurring in judgment

statute was never subjected to constitutional scrutiny. And when a statute of its kind—that is, a tariff statute calling for an exercise of policy judgment—finally came before this Court for consideration in Field, the Court appeared to un- derstand the statute as calling for no more than a factual determination. 143 U. S., at 693. The Court thus did not in that case endorse the principle that the Executive may fashion generally applicable rules of private conduct and ap- pears not to have done so until the 20th century. More to the point, J. W. Hampton can be read to adhere to the “factual determination” rationale from Field. The Court concluded its delegation analysis in J. W. Hampton not with the “intelligible principle” language, but by citing to Field for the proposition that the “Act did not in any real sense invest the President with the power of legislation, be- cause nothing involving the expediency or just operation of such legislation was left to the determination of the Presi- dent.” 276 U. S., at 410 (emphasis added); Field, 143 U. S., at 692 (explaining that an Act did not “in any real sense, invest the President with the power of legislation”). Con- gress had created a “named contingency,” and the President “was the mere agent of the law-making department to ascer- tain and declare the event upon which its expressed will was to take effect.” J. W. Hampton, supra, at 410–411.6 The analysis in Field and J. W. Hampton may have been premised on an incorrect assessment of the statutes before

governing private conduct in the area of foreign trade. See Buttfield v. Stranahan, 192 U. S. 470, 496 (1904). 6 Contemporary perceptions of the statute were less sanguine. One edi- torial deemed it “the most dangerous advance in bureaucratic government ever attempted in America.” D. Schoenbrod, Power Without Responsibil- ity 36 (1993) (quoting Letter from J. Cotton (Feb. 7, 1929), in With Our Readers, 13 Constitutional Review 98, 101 (1929)). President-elect Hoo- ver stirred the public with promises of a repeal: “There is only one com- mission to which delegation of [the] authority [to set tariffs] can be made. That is the great commission of [the people's] own choosing, the Congress of the United States and the President.” Public Papers of the Presidents, Herbert Hoover, 1929, p. 565 (1974); see also Schoenbrod, supra, at 36.

82 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

the Court, see n. 4, supra, but neither purported to define executive power as including the discretion to make gener- ally applicable rules governing private conduct. To the ex- tent that our modern jurisprudence treats them as sanction- ing the “delegation” of such power, it misunderstands their historical foundations and expands the Court's holdings.

B It is nevertheless true that, at the time J. W. Hampton was decided, there was a growing trend of cases upholding statutes pursuant to which the Executive exercised the power of “making . . . subordinate rules within prescribed limits.” Panama Refining Co. v. Ryan, 293 U. S. 388, 421 (1935); see also id., at 429 (collecting cases). These cases involved executive power to make “binding rules of con- duct,” and they were found valid “as subordinate rules . . . [when] within the framework of the policy which the legisla- ture ha[d] sufficiently defined.” Id., at 428–429. To the ex- tent that these cases endorsed authorizing the Executive to craft generally applicable rules of private conduct, they de- parted from the precedents on which they purported to rely. The key decision to which these cases purport to trace their origin is Wayman, 10 Wheat. 1, but that decision does not stand for the proposition those cases suggest. Although it upheld a statute authorizing courts to set rules governing the execution of their own judgments, id., at 50, its reasoning strongly suggests that rules of private conduct were not the proper subject of rulemaking by the courts. Writing for the Court, Chief Justice Marshall surveyed a number of choices that could be left to rulemaking by the courts, explaining that they concerned only “the regulation of the conduct of the officer of the Court in giving effect to its judgments.” Id., at 45. When it came to specifying “the mode of obeying the mandate of a writ,” however, he lamented that “so much of that which may be done by the judiciary, under the author- ity of the legislature, seems to be blended with that for which

Cite as: 575 U. S. 43 (2015) 83

Thomas, J., concurring in judgment

the legislature must expressly and directly provide.” Id., at 46. This important passage reflects two premises that Chief Justice Marshall took for granted, but which are disregarded in later decisions relying on this precedent: First, reflected in his discussion of “blending” permissible with impermissible discretion is the premise that it is not the quantity, but the quality, of the discretion that determines whether an au- thorization is constitutional. Second, reflected in the con- trast Chief Justice Marshall draws between the two types of rules is the premise that the rules “for which the legislature must expressly and directly provide” are those regulating private conduct rather than those regulating the conduct of court officers. Thus, when Chief Justice Marshall spoke about the “diffi- culty in discerning the exact limits within which the legisla- ture may avail itself of the agency of its Courts,” ibid., he did not refer to the difficulty in discerning whether the Leg- islature's policy guidance is “sufficiently defined,” see Pan- ama Refining, supra, at 429, but instead the difficulty in dis- cerning which rules affected substantive private rights and duties and which did not. We continue to wrestle with this same distinction today in our decisions distinguishing be- tween substantive and procedural rules both in diversity cases and under the Rules Enabling Act. See, e. g., Shady Grove Orthopedic Associates, P. A. v. Allstate Ins. Co., 559 U. S. 393, 406–407 (2010) (“In the Rules Enabling Act, Con- gress authorized this Court to promulgate rules of procedure subject to its review, 28 U. S. C. § 2072(a), but with the limita- tion that those rules `shall not abridge, enlarge or modify any substantive right,' § 2072(b)”).7

7 Another early precedent on which the errant “subordinate rule- making” line of cases relies involves rules governing mining claims on public land. Jackson v. Roby, 109 U. S. 440, 441 (1883); see also United States v. Grimaud, 220 U. S. 506 (1911) (sustaining an Act authorizing the Secretary of Agriculture to make rules and regulations governing the use

84 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

C Today, the Court has abandoned all pretense of enforcing a qualitative distinction between legislative and executive power. To the extent that the “intelligible principle” test was ever an adequate means of enforcing that distinction, it has been decoupled from the historical understanding of the legislative and executive powers and thus does not keep ex- ecutive “lawmaking” within the bounds of inherent execu- tive discretion. See Whitman, 531 U. S., at 487 (Thomas, J., concurring) (“I am not convinced that the intelligible prin- ciple doctrine serves to prevent all cessions of legislative power”). Perhaps we were led astray by the optical illusion caused by different branches carrying out the same func- tions, believing that the separation of powers would be sub- stantially honored so long as the encroachment were not too great. See, e. g., Loving v. United States, 517 U. S. 748, 773 (1996) (“Separation-of-powers principles are vindicated, not disserved, by measured cooperation between two political branches of the Government, each contributing to a lawful objective through its own processes”). Or perhaps we delib- erately departed from the separation, bowing to the exigen- cies of modern Government that were so often cited in cases upholding challenged delegations of rulemaking authority.8 See, e. g., Mistretta, 488 U. S., at 372 (“[O]ur jurisprudence has been driven by a practical understanding that in our in- creasingly complex society, replete with ever changing and and occupancy of public forest reservations). Although perhaps question- able on its own terms, Jackson is distinguishable because it did not involve the Government's reaching out to regulate private conduct, but instead involved the Government's setting rules by which individuals might enter onto public land to avail themselves of resources belonging to the Government. 8 Much of the upheaval in our delegation jurisprudence occurred during the Progressive Era, a time marked by an increased faith in the technical expertise of agencies and a commensurate cynicism about principles of popular sovereignty. See Perez v. Mortgage Bankers Assn., post, at 129– 130, n. 6 (Thomas, J., concurring in judgment).

Cite as: 575 U. S. 43 (2015) 85

Thomas, J., concurring in judgment

more technical problems, Congress simply cannot do its job absent an ability to delegate power under broad general directives”). For whatever reason, the intelligible-principle test now re- quires nothing more than a minimal degree of specificity in the instructions Congress gives to the Executive when it au- thorizes the Executive to make rules having the force and effect of law. And because the Court has “ `almost never felt qualified to second-guess Congress regarding the permissi- ble degree of policy judgment that can be left to those exe- cuting or applying the law,' ” Whitman, supra, at 474–475 (majority opinion) (quoting Mistretta, supra, at 416 (Scalia, J., dissenting)), the level of specificity it has required has been very minimal indeed, see 531 U. S., at 474 (collecting cases upholding delegations to regulate in the “public inter- est”). Under the guise of the intelligible-principle test, the Court has allowed the Executive to go beyond the safe realm of factual investigation to make political judgments about what is “unfair” or “unnecessary.” See, e. g., American Power & Light Co. v. SEC, 329 U. S. 90, 104–105 (1946). It has permitted the Executive to make tradeoffs between com- peting policy goals. See, e. g., Yakus v. United States, 321 U. S. 414, 420, 423–426 (1944) (approving authorization for agency to set prices of commodities at levels that “will effec- tuate the [sometimes conflicting] purposes of th[e] Act”); see also Industrial Union Dept., AFL–CIO v. American Petro- leum Institute, 448 U. S. 607, 686–687 (1980) (Rehnquist, J., concurring in judgment) (“It is difficult to imagine a more obvious example of Congress simply avoiding a choice which was both fundamental for purposes of the statute and yet politically so divisive that the necessary decision or compro- mise was difficult, if not impossible, to hammer out in the legislative forge”). It has even permitted the Executive to decide which policy goals it wants to pursue. Entergy Corp. v. Riverkeeper, Inc., 556 U. S. 208, 218–223 (2009) (concluding that Congress gave the Environmental Protection Agency

86 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

(EPA) discretion to decide whether it should consider costs in making certain rules). And it has given sanction to the Executive to craft significant rules of private conduct. See, e. g., Whitman, 531 U. S., at 472–476 (approving delegation to EPA to set national standards for air quality); see also id., at 488–489 (Stevens, J., concurring in part and concurring in judgment) (arguing that the Clean Air Act effects a delega- tion of legislative power because it authorizes EPA to make prospective, generally applicable rules of conduct). Our reluctance to second-guess Congress on the degree of policy judgment is understandable; our mistake lies in as- suming that any degree of policy judgment is permissible when it comes to establishing generally applicable rules gov- erning private conduct. To understand the “intelligible principle” test as permitting Congress to delegate policy judgment in this context is to divorce that test from its his- tory. It may never be possible perfectly to distinguish be- tween legislative and executive power, but that does not mean we may look the other way when the Government asks us to apply a legally binding rule that is not enacted by Con- gress pursuant to Article I. We should return to the original meaning of the Constitu- tion: The Government may create generally applicable rules of private conduct only through the proper exercise of legis- lative power. I accept that this would inhibit the Govern- ment from acting with the speed and efficiency Congress has sometimes found desirable. In anticipating that result and accepting it, I am in good company. John Locke, for exam- ple, acknowledged that a legislative body “is usually too nu- merous, and so too slow for the dispatch requisite to execu- tion.” Locke § 160, at 80. But he saw that as a benefit for legislation, for he believed that the creation of rules of pri- vate conduct should be an irregular and infrequent occur- rence. See id., § 143, at 72. The Framers, it appears, were inclined to agree. As Alexander Hamilton explained in another context, “It may perhaps be said that the power

Cite as: 575 U. S. 43 (2015) 87

Thomas, J., concurring in judgment

of preventing bad laws includes that of preventing good ones . . . . But this objection will have little weight with those who can properly estimate the mischiefs of that incon- stancy and mutability in the laws, which form the greatest blemish in the character and genius of our governments.” The Federalist No. 73, at 443–444. I am comfortable joining his conclusion that “[t]he injury which may possibly be done by defeating a few good laws will be amply compensated by the advantage of preventing a number of bad ones.” Id., at 444. IV Although the majority corrects an undoubted error in the framing of the delegation dispute below, it does so without placing that error in the context of the constitutional pro- visions that govern respondent's challenge to § 207 of the PRIIA. A Until the case arrived in this Court, the parties proceeded on the assumption that Amtrak is a private entity, albeit one subject to an unusual degree of governmental control.9 The Court of Appeals agreed. 721 F. 3d 666, 674–677 (CADC 2013). Because it also concluded that Congress delegated regulatory power to Amtrak, id., at 670–674, and because this Court has held that delegations of regulatory power to private parties are impermissible, Carter v. Carter Coal Co., 298 U. S. 238, 311 (1936), it held the delegation to be unconsti- tutional, 721 F. 3d, at 677. Although no provision of the Constitution expressly for- bids the exercise of governmental power by a private entity, our so-called “private nondelegation doctrine” flows logically 9 See Brief for Appellees in No. 12–5204 (DC), pp. 23–29 (defending § 207 under cases upholding statutes “assign[ing] an important role to a private party”); id., at 29 (“Amtrak . . . is not a private entity comparable to the [private parties in a relevant precedent]. Although the government does not control Amtrak's day-to-day operations, the government exercises sig- nificant structural control”).

88 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

from the three Vesting Clauses. Because a private entity is neither Congress, nor the President or one of his agents, nor the Supreme Court or an inferior court established by Con- gress, the Vesting Clauses would categorically preclude it from exercising the legislative, executive, or judicial powers of the Federal Government. In short, the “private nondele- gation doctrine” is merely one application of the provisions of the Constitution that forbid Congress to allocate power to an ineligible entity, whether governmental or private. For this reason, a conclusion that Amtrak is private—that is, not part of the Government at all—would necessarily mean that it cannot exercise these three categories of gov- ernmental power. But the converse is not true: A determi- nation that Amtrak acts as a governmental entity in crafting the metrics and standards says nothing about whether it prop- erly exercises governmental power when it does so. An en- tity that “was created by the Government, is controlled by the Government, and operates for the Government's benefit,” ante, at 53 (majority opinion), but that is not properly consti- tuted to exercise a power under one of the Vesting Clauses, is no better qualified to be a delegatee of that power than is a purely private one. To its credit, the majority does not hold otherwise. It merely refutes the Court of Appeals' premise that Amtrak is private. But this answer could be read to sug- gest, wrongly, that our conclusion about Amtrak's status has some constitutional significance for “delegation” purposes. B The first step in the Court of Appeals' analysis on remand should be to classify the power that § 207 purports to author- ize Amtrak to exercise. The second step should be to deter- mine whether the Constitution's requirements for the exer- cise of that power have been satisfied. 1 Under the original understanding of the legislative and executive power, Amtrak's role in the creation of metrics and

Cite as: 575 U. S. 43 (2015) 89

Thomas, J., concurring in judgment

standards requires an exercise of legislative power because it allows Amtrak to decide the applicability of standards that provide content to generally applicable rules of private conduct. Specifically, the metrics and standards alter the railroads' common-carrier obligations under 49 U. S. C. § 11101. Host railroads may enter into contracts with Amtrak under §§ 10908 and 24308 to fulfill their common-carrier obligations. The metrics and standards shape the types of contracts that satisfy the common-carrier obligations because § 207 pro- vides that “Amtrak and its host rail carriers shall” include the metrics and standards in their contracts “[t]o the extent practicable.” PRIIA § 207(c), 49 U. S. C. § 24101 (note) (em- phasis added). As Justice Alito explains, it matters little that the railroads may avoid incorporating the metrics and standards by arguing that incorporation is impracticable; the point is that they have a legal duty to try—a duty the sub- stance of which is defined by the metrics and standards. See ante, at 58–59 (concurring opinion). And that duty is backed up by the Surface Transportation Board's coercive power to impose “reasonable terms” on host railroads when they fail to come to an agreement with Amtrak. § 24308(a) (2)(A)(ii). Presumably, when it is “practicable” to incorpo- rate the metrics and standards, the Board is better posi- tioned to deem such terms “reasonable” and to force them upon the railroads. Although the Government's argument to the contrary will presumably change now that the Court has held that Amtrak is a governmental entity, it argued before this Court that Amtrak did not exercise meaningful power because other “governmental entities had sufficient control over the devel- opment and adoption of the metrics and standards.” Brief for Petitioners 19–26. For support, the Government relied on two questionable precedents in which this Court held that Congress may grant private actors the power to determine whether a government regulation will go into effect: Currin

90 DEPARTMENT OF TRANSPORTATION v. ASSOCIATION OF AMERICAN RAILROADS Thomas, J., concurring in judgment

v. Wallace, 306 U. S. 1 (1939), and United States v. Rock Royal Co-operative, Inc., 307 U. S. 533 (1939). Those prece- dents reason that it does not require an exercise of legisla- tive power to decide whether and when legally binding rules of private conduct will go into effect. Currin, supra, at 16– 18; Rock Royal, supra, at 574–577. But as I have explained above, to the extent that this decision involves an exercise of policy discretion, it requires an exercise of legislative power. Supra, at 85–87. In any event, these precedents are directly contrary to our more recent holding that a discretionary “veto” necessarily involves an exercise of legislative power. See INS v. Chadha, 462 U. S., at 952–953; see also id., at 987 (White, J., dissenting) (noting that the power Congress reserved to itself was virtually identical to the power it con- ferred on private parties in Currin and Rock Royal). As such, Currin and Rock Royal have been discredited and lack any force as precedents. Section 207 therefore violates the Constitution. Article I, § 1, vests the legislative power in Congress, and Amtrak is not Congress. The procedures that § 207 sets forth for enacting the metrics and standards also do not comply with bicameralism and presentment. Art. I, § 7. For these rea- sons, the metrics and standards promulgated under this pro- vision are invalid. 2 I recognize, of course, that the courts below will be bound to apply our “intelligible principle” test. I recognize, too, that that test means so little that the courts are likely to conclude that § 207 calls for nothing more than the exercise of executive power. Having made that determination, the Court of Appeals must then determine whether Amtrak is constitutionally eligible to exercise executive power. As noted, Article II of the Constitution vests the executive power in a “President of the United States of America.” Art. II, § 1. Amtrak, of course, is not the President of the United States, but this fact does not immediately disqualify

Cite as: 575 U. S. 43 (2015) 91

Thomas, J., concurring in judgment

it from the exercise of executive power. Congress may au- thorize subordinates of the President to exercise such power, so long as they remain subject to Presidential control. The critical question, then, is whether Amtrak is ade- quately subject to Presidential control. See Myers, 272 U. S., at 117. Our precedents treat appointment and re- moval powers as the primary devices of executive control, Free Enterprise Fund, 561 U. S., at 492, and that should be the starting point of the Court of Appeals' analysis. As Justice Alito’s concurrence demonstrates, however, there are other constitutional requirements that the Court of Ap- peals should also scrutinize in deciding whether Amtrak is constitutionally eligible to exercise the power § 207 confers on it. * * * In this case, Congress has permitted a corporation subject only to limited control by the President to create legally binding rules. These rules give content to private railroads' statutory duty to share their private infrastructure with Amtrak. This arrangement raises serious constitutional questions to which the majority's holding that Amtrak is a governmental entity is all but a non sequitur. These con- cerns merit close consideration by the courts below and by this Court if the case reaches us again. We have too long abrogated our duty to enforce the separation of powers re- quired by our Constitution. We have overseen and sanc- tioned the growth of an administrative system that concen- trates the power to make laws and the power to enforce them in the hands of a vast and unaccountable administrative ap- paratus that finds no comfortable home in our constitutional structure. The end result may be trains that run on time (although I doubt it), but the cost is to our Constitution and the individual liberty it protects.