U.S. court says Amtrak has too much power over freight carriers

By Lawrence Hurley

WASHINGTON, April 29 (Reuters) - Amtrak, the government-owned passenger rail company, wields too much power in setting regulations that private freight carriers must also follow, a top court ruled on Friday.

The U.S. Court of Appeals for the District of Columbia Circuit struck down parts of a 2008 law called the Passenger Rail Investment and Improvement Act, saying it violates the due process rights of freight carriers.

The court said there is a due process problem because a government-owned, nominally for-profit entity has regulatory authority over the industry in which it participates. Both freight carriers and Amtrak compete for use of the same track, the court noted. The railroad law allows Amtrak and the U.S. Federal Railroad Administration to work jointly on the regulations.

The case was brought by the Association of American Railroads, which says the law gives Amtrak an oversized role in setting standards for railroads, including for on-time performance.

Judge Janice Rogers Brown wrote on behalf of the unanimous three-judge panel that "there are limits to how far Congress may go to ensure Amtrak's on-time performance."

The railroad association sued after objecting to 2010 regulations that freight carriers contend set unrealistic performance targets. Association members include BNSF Railway Company and CSX Transportation Inc.

(Reporting by Lawrence Hurley; Editing by Tom Brown)