Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 80 C 6749 -- Bernard M. Decker, Judge.
Pell, Circuit Judge, Coffey, Circuit Judge, and Neaher, Senior District Judge.*fn*
NEAHER, Senior District Judge.
Plaintiffs, Atchison, Topeka, and Santa Fe Railway Company, Burlington Northern Inc., Chesapeake & Ohio Railway Company, Baltimore and Ohio Railroad Company, and the Union Pacific Railroad Company (railroads), appeal the District Court's entry of summary judgment in favor of defendant National Railroad Passenger Corporation (Amtrak). Because the suit challenged the constitutionality of a statute, the United States intervened below and submitted a brief on appeal. We affirm the District Court's judgment in part and reverse it in part.
In 1971, when Congress created Amtrak (the Rail Passenger Service Act, 45 U.S.C. § 501 et seq.), it did not explicitly decide who should pay for the time-honored custom (dating back to the 1880's) of providing railroad employees with free passes. That deficiency and its subsequent definitive solution have generated this controversy.
Pursuant to 45 U.S.C. § 561,*fn1 Amtrak negotiated a "Basic Agreement" with each plaintiff containing the following relevant language:
"Section 2.1 Relief from Responsibility
"From and after May 1, 1971, Railroad shall be relieved of its entire responsibility for the provision of Intercity Rail Passenger Service.
"Section 7.5 Transportation Privileges
"Transportation privileges, if any, with respect to business and personal travel of Railroad personnel shall be as determined by [Amtrak]."
When Amtrak assumed the railroads' intercity passenger operations, it initially decided to reduce employee pass privileges. An ongoing dispute arose, and Congress eventually settled the issue with Public Law 92-316, 45 U.S.C. § 565(f), which expressly restored employees' pass privileges on terms similar to those available on April 30, 1971. The statute also required the railroads to reimburse Amtrak for costs incurred in furnishing the passes.
After hearing evidence, the Interstate Commerce Commission set the rate of reimbursement at .00079 cents per passenger mile. The I.C.C. also found that these costs should be offset by the sums collected from employees paying half fare. As it turned out, the revenues from the half fares exceeded the variable costs and consequently, Amtrak collected only administrative expenses amounting to about $500,000 per year from 1972 to 1979.
In 1979 Congress enacted the Amtrak Reorganization Act, Public Law 96-73, 93 Stat. 547, which amended section 565(f). Beginning October 1, 1979 and for two years thereafter, Amtrak was to be reimbursed "at the rate of 25 percent of system wide average monthly yield per revenue passenger mile." Amtrak billed the railroads at rates from.02067 cents to.02343 cents per passenger mile.*fn2 The two-year ...