OCTOBER TERM, 1994
Syllabus
LEBRON
v. NATIONAL RAILROAD PASSENGER CORPORATION
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND
CIRCUIT
No. 93-1525. Argued November 7, 1994-Decided February 21,
1995
Petitioner Lebron, who creates billboard displays that comment
on public issues, filed suit claiming,
inter alia, that
respondent National Railroad Passenger Corporation (Amtrak) had
violated his First Amendment rights by rejecting a display for an
Amtrak billboard because of its political nature. The District
Court ruled that Amtrak, because of its close ties to the Federal
Government, was a Government actor for First Amendment purposes,
and that its rejection of the display was unconstitutional. The
Court of Appeals reversed, noting that Amtrak was, by the terms of
the legislation that created it, not a Government entity, and
concluding that the Government was not so involved with Amtrak that
the latter's decisions could be considered federal action.
Held: Where, as here, the Government creates a
corporation by special law, for the furtherance of governmental
objectives, and retains for itself permanent authority to appoint a
majority of that corporation's directors, the corporation is part
of the Government for purposes of the First Amendment. Pp.
378-400.
(a) It is proper for this Court to consider the argument that
Amtrak is part of the Government, even though Lebron disavowed it
in both lower courts and did not explicitly raise it until his
brief on the merits here. It is not a new claim, but a new argument
to support his First Amendment claim, see,
e. g.,
Yee v.
Escondido, 503 U. S. 519, 534-535;
it was passed upon below, see,
e. g., United
States v.
Williams, 504 U. S. 36, 41; and it
was fairly embraced within both the question presented and the
argument set forth in the petition. Pp. 378-383.
(b) Amtrak was created by the Rail Passenger Service Act of 1970
(RPSA) to avert the threatened extinction of passenger trains in
the interest of "the public convenience and necessity." The
legislation establishes detailed goals for Amtrak, sets forth its
structure and powers, and assigns the appointment of a majority of
its board of directors to the President. Pp. 383-386.
(c) There is a long history of corporations created and
participated in by the United States for the achievement of
governmental objectives. Like some other Government corporations,
Amtrak's authorizing stat-
375
ute provides that it "will not be an agency or establishment of
the United States Government," 84 Stat. 1330; see also 45 U. S. C.
§ 541. Pp.386-391.
(d) Although § 541 is assuredly dispositive of Amtrak's
governmental status for purposes of matters within Congress's
control--e.
g., whether it is subject to statutes like the
Administrative Procedure Act-and can even suffice to deprive it of
all those inherent governmental powers and immunities that Congress
has the power to eliminate-e.
g., sovereign immunity from
suit-it is not for Congress to make the final determination of
Amtrak's status as a Government entity for purposes of determining
the constitutional rights of citizens affected by its actions. The
Constitution constrains governmental action by whatever instruments
or in whatever modes that action may be taken,
Ex parte
Virginia, 100 U.
S. 339,346-347, and under whatever congressional label,
Cherry Cotton Mills, Inc. v.
United States, 327 U. S. 536, 539.
National Railroad Passenger Corporation v.
Boston
&
Maine Corp., 503 U. S. 407, 410, and
National Railroad Passenger Corporation v.
Atchison,
T. & S.
(e) Amtrak is an agency or instrumentality of the United States
for the purpose of individual rights guaranteed against the
Government by the Constitution. This conclusion accords with the
public, judicial, and congressional understanding over the years
that Government-created and -controlled corporations are part of
the Government itself. See,
e. g., Reconstruction Finance
Corporation v.
J. G.
Menihan Corp., 312 U. S. 81,
83; Government Corporation Control Act, § 304(a), 59 Stat. 602. A
contrary holding would allow government to evade its most solemn
constitutional obligations by simply resorting to the corporate
form, cf.
Pennsylvania v.
Board of Directors of City
Trusts of Philadelphia, 353 U. S. 230, 231.
Bank of United
States v.
Planters' Bank of Georgia, 9 Wheat. 904, 907,
908, and
Regional Rail Reorganization Act Cases, 419 U. S.
102, 152, distinguished. Pp. 394-399.
12 F.3d
388, reversed and remanded.
SCALIA, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and STEVENS, KENNEDY, SOUTER, THOMAS, GINSBURG,
and BREYER, JJ., joined. O'CONNOR, J., filed a dissenting opinion,
post, p. 400.
David D. Cole argued the cause for petitioner. With him
on the briefs were
R. Bruce Rich and
Gloria C.
Phares.
376
Kevin T. Baine argued the cause for respondent. With him on the
brief were Nicole K. Seligman, Stephen C. Rogers, and Louis R.
Cohen.
*
JUSTICE SCALIA delivered the opinion of the Court.
In this case we consider whether actions of the National
Railroad Passenger Corporation, commonly known as Amtrak, are
subject to the constraints of the Constitution.
I
Petitioner, Michael A. Lebron, creates billboard displays that
involve commentary on public issues, and that seemingly propel him
into litigation. See,
e. g., Lebron v.
Washington
Metropolitan Area Transit Authority, 749
F.2d 893 (CADC 1984). In August 1991, he contacted
Transportation Displays, Incorporated (TDI), which manages the
leasing of the billboards in Amtrak's Pennsylvania Station in New
York City, seeking to display an advertisement on a billboard of
colossal proportions, known to New Yorkers (or at least to the more
Damon Runyonesque among them) as "the Spectacular." The Spectacular
is a curved, illuminated billboard, approximately 103 feet long and
10 feet high, which dominates the main entrance to Penn Station's
waiting room and ticket area.
On November 30, 1992, Lebron signed a contract with TDI to
display an advertisement on the Spectacular for two months
beginning in January 1993. The contract provided that "[a]ll
advertising copy is subject to approval of TDI and [Amtrak] as to
character, text, illustration, design and operation." App. 671.
Lebron declined to disclose the specific content of his
advertisement throughout his negotiations
*Briefs of
amici curiae urging reversal were filed for
the American Civil Liberties Union by
Stephen R. Shapiro,
Marjorie Heins, and
Arthur N Eisenberg; and for the
NAACP Legal Defense and Educational Fund, Inc., et al. by
James F.
Fitzpatrick, Elliot M. Mincberg, and
Lawrence S.
Ottinger.
377
with TDI, although he did explain to TDI that it was generally
political. On December 2, he submitted to TDI (and TDI later
forwarded to Amtrak) an advertisement described by the District
Court as follows:
"The work is a photomontage, accompanied by considerable text.
Taking off on a widely circulated Coors beer advertisement which
proclaims Coors to be the 'Right Beer,' Lebron's piece is captioned
'Is it the Right's Beer Now?' It includes photographic images of
convivial drinkers of Coors beer, juxtaposed with a Nicaraguan
village scene in which peasants are menaced by a can of Coors that
hurtles towards them, leaving behind a trail of fire, as if it were
a missile. The accompanying text, appearing on either end of the
montage, criticizes the Coors family for its support of right-wing
causes, particularly the contras in Nicaragua. Again taking off on
Coors' advertising which uses the slogan of 'Silver Bullet' for its
beer cans, the text proclaims that Coors is 'The Silver Bullet that
aims The Far Right's political agenda at the heart of America.'"
811 F. Supp. 993, 995 (SDNY 1993).
Amtrak's vice president disapproved the advertisement, invoking
Amtrak's policy, inherited from its predecessor as landlord of Penn
Station, the Pennsylvania Railroad Company, "that it will not allow
political advertising on the [S]pectacular advertising sign." App.
285.
Lebron then filed suit against Amtrak and TDI, claiming,
inter alia, that the refusal to place his advertisement on
the Spectacular had violated his First and Fifth Amendment rights.
After expedited discovery, the District Court ruled that Amtrak,
because of its close ties to the Federal Government, was a
Government actor, at least for First Amendment purposes, and that
its rejection of Lebron's proposed advertisement as unsuitable for
display in Penn Station had violated the First Amendment. The court
granted Lebron an
378
injunction and ordered Amtrak and TDI to display Lebron's
advertisement on the Spectacular.
The United States Court of Appeals for the Second Circuit
reversed.
12 F.3d
388 (1993). The panel's opinion first noted that Amtrak was, by
the terms of the legislation that created it, not a Government
entity,
id., at 390; and then concluded that the Federal
Government was not so involved with Amtrak that the latter's
decisions could be considered federal action,
id., at
391-392. Chief Judge Newman dissented. We granted certiorari. 511
U. S. 1105 (1994).
II
We have held once,
Burton v.
Wilmington Parking
Authority, 365 U.
S. 715 (1961), and said many times, that actions of private
entities can sometimes be regarded as governmental action for
constitutional purposes. See,
e. g., San Francisco Arts
&
Athletics, Inc. v.
United States Olympic Comm.,
483 U. S. 522,
546 (1987);
Blum v.
Yaretsky, 457 U. S. 991, 1004
(1982);
Moose Lodge No. 107 v.
Irvis, 407 U. S. 163, 172
(1972). It is fair to say that "our cases deciding when private
action might be deemed that of the state have not been a model of
consistency."
Edmonson v.
Leesville Concrete Co.,
500 U. S. 614,
632 (1991) (O'CONNOR, J., dissenting). It may be unnecessary to
traverse that difficult terrain in the present case, since Lebron's
first argument is that Amtrak is not a private entity but
Government itself. Before turning to the merits of this argument,
however, it is necessary to discuss the propriety of reaching it.
Lebron did not raise this point below; indeed, he expressly
disavowed it in both the District Court and the Court of Appeals.
See Plaintiff's Pre-Trial Proposed Conclusions of Law in No.
92-CIV-9411 (SDNY), p. 12, n. 1, reprinted in App. in No. 93-7127
(CA2), p. 1297; Brief for Appellee in No. 93-7127 (CA2), p. 30, n.
39. In those courts Lebron argued that Amtrak's actions were
subject to constitutional requirements because Amtrak,
al-
379
though a private entity, was closely connected with
federal entities. It was not until after we granted certiorari that
Lebron first explicitly presented-in his brief on the merits-the
alternative argument that Amtrak was itself a federal entity.
Our traditional rule is that "[o]nce a federal claim is properly
presented, a party can make any argument in support of that claim;
parties are not limited to the precise arguments they made below."
Yee v.
Escondido, 503 U. S. 519, 534
(1992); see also
Dewey v.
Des Moines, 173 U. S. 193, 198
(1899). Lebron's contention that Amtrak is part of the Government
is in our view not a new claim within the meaning of that rule, but
a new argument to support what has been his consistent claim: that
Amtrak did not accord him the rights it was obliged to provide by
the First Amendment. Cf.
Yee, supra, at 534-535. In fact,
even if this
were a claim not raised by petitioner below, we
would ordinarily feel free to address it, since it was addressed by
the court below. Our practice "permit[s] review of an issue not
pressed so long as it has been passed upon .... "
United
States v.
Williams, 504 U. S. 36, 41 (1992).
See
Virginia Bankshares, Inc. v.
Sandberg, 501 U. S. 1083, 1099, n.
8 (1991);
Stevens v.
Department of Treasury, 500 U. S. 1, 8 (1991).
Respondent asserts that, in addition to not having been raised
below, the issue of whether Amtrak is a Government entity was not
presented in the petition for certiorari. As this Court's Rule
14.1(a) and simple prudence dictate, we will not reach questions
not fairly included in the petition. "The Court decides which
questions to consider through wellestablished procedures; allowing
the able counsel who argue before us to alter these questions or to
devise additional questions at the last minute would thwart this
system."
Taylor v.
Freeland &
Kronz,
503 U. S. 638,
646 (1992). Here, however, we are satisfied that the argument that
Amtrak is a Government entity is fairly embraced within the
question
380
set forth in the petition for certiorari l-which explicitly
presents
neither the "Government entity" theory
nor
the "closely connected to Government" theory of First Amendment
application, but rather the facts that would support both. The
argument in the petition, moreover, though couched in terms of a
different but closely related theory, fairly embraced the argument
that Lebron now advances. See Pet. for Cert. 16-18.
The dissent contends that the "Government entity" question in
the present case occupies the same status, insofar as Rule 14.1(a)
is concerned, as the "physical taking" question which we deemed
excluded in
Yee v.
Escondido, supra. It gives two
reasons for that equivalence: First, the fact that Lebron prefaced
his question presented by the phrase, "Whether the court of appeals
erred in holding." App. to Pet. for Cert. i. The dissent asserts
that this is similar to the preface in
Yee, which had the
effect of limiting the question to the precise ground relied upon
by the Court of Appeal.
Post, at 402. But the preface in
Yee was not at all similar. What we said caused the question
presented to be limited to the physical-taking issue was
not
the fact that that was the only ground addressed by the
lower-court-said-tobe-in-error; but rather the fact that that was
the only ground of decision in two previous Court of Appeals cases,
departure
1 Certiorari was sought and granted in this case on the
following question:
"Whether the court of appeals erred in holding that Amtrak's
asserted policy barring the display of political advertising
messages in Pennsylvania Station, New York, was not state action,
where:
"(a) the United States created Amtrak, endowed it with
governmental powers, owns all its voting stock, and appoints all
members of its Board; "(b) the United States-appointed Board
approved the advertising policy challenged here;
"(c) the United States keeps Amtrak afloat every year by
subsidizing its losses; and
"(d) Pennsylvania Station was purchased for Amtrak by the United
States and is shared with several other governmental entities."
381
from which was said by the question presented to be the issue in
the appeal.2 503 U. S., at 536-537.
The dissent's second reason for believing that
Yee
governs the Rule 14.1(a) issue here is that the structural
relationship between the clearly presented question and the
assertedly included question in the two cases is the same. As the
dissent correctly analyzes
Yee, it involved one "umbrella
claim" (government taking of property without just compensation)
and "two distinct questions" that were "[s]ubsidiary to that claim"
(whether a physical taking had occurred, and whether a regulatory
taking had occurred).
Post, at 401. But the questions in
Yee were "distinct" in two important ways that the claims
here are not. First of all, it was possible to consider the
existence of a physical taking without
assuming (as one of
the premises of the inquiry) the
nonexistence of a
regulatory taking; whereas here it is quite impossible to consider
whether the Government connections are sufficient to convert
private-entity Amtrak into a Government actor without first
assuming that Amtrak is a private entity. The opinion in
Yee
did not have to begin: "Assuming that no regulatory taking has
occurred, .... " But the portion of today's dissent addressing the
merits of this case must begin:
"Accepting Lebron's concession that Amtrak is a private entity,
.... "
Post, at 408. The question of private-entity status
is, in other words, a
prior question. The second respect in
which the issues here are less "distinct" than in
Yee is
that the factors relevant to their resolution overlap. In
Yee, what would go to show a regulatory taking and
2 The question presented in
Yee read as follows:
"'Two federal courts of appeal have held that the transfer of a
premium value to a departing mobilehome tenant, representing the
value of the right to occupy at a reduced rate under local
mobilehome rent control ordinances, constitute[s] an impermissible
taking. Was it error for the state appellate court to disregard the
rulings and hold that there was no taking under the fifth and
fourteenth amendments?'" 503 U. S., at 536-537.
382
what would go to show a physical taking were quite different.
Here, however, those very elements that we would be considering in
determining whether Amtrak-theprivate-entity is so closely
connected with the Government as to be a Government actor (for
example, the constitution of its board) also bear upon whether it
is
in fact a private entity at all. When a question is, like
this one, both prior to the clearly presented question and
dependent upon many of the same factual inquiries, refusing to
regard it as embraced within the petition may force us to assume
what the facts will show to be ridiculous, a risk that ought to be
avoided.
The recent decision of ours that invites comparison with the
dissent's insistence that the "Government entity" question is
"precluded,"
post, at 400, is not
Yee, but
United
States Nat. Bank of Ore. v.
Independent Ins. Agents of
America, Inc., 508 U. S. 439 (1993).
There, in a case raising the question of the proper interpretation
of 12 U. S. C. § 92 (1926 ed.), we upheld the propriety of the
Court of Appeals' considering the prior question whether 12 U. S.
C. § 92 had been inadvertently repealed-even though the parties
themselves had failed to raise that question, not only (as here) in
the court below, but even in the initial briefs and oral arguments
before the Court of Appeals itself. That is to say, the situation
there, at the court of appeals level, was what the situation
would be before us here, if (1) the dissent were correct
that Rule 14.1(a) was not complied with, and (2) in addition, even
the petitioner's
principal brief and oral argument had
failed to raise the "Government entity" issue. Even so, we held in
Independent Insurance Agents that it was proper for the
Court of Appeals to request supplemental briefing upon, and to
decide, the statutory repeal question, and we then went on to
inquire into that question ourselves. Our opinion was unanimous,
not a single Justice protesting that the judges of the Court of
Appeals, or of this Court, had constituted
383
themselves" 'as [a] self-directed boar[d] of legal inquiry'" or
had "exhibit[ed] little patience,"
post, at 408.3
III
Before proceeding to consider Lebron's contention that Amtrak,
though nominally a private corporation, must be regarded as a
Government entity for First Amendment purposes, we examine the
nature and history of Amtrak and of Government-created corporations
in general.
A
Congress established Amtrak in order to avert the threatened
extinction of passenger trains in the United States.
3 The dissent sees no more in
Independent Ins. Agents
than a narrow holding that the Court of Appeals' decision to reach
the statutory repeal issue was not
so imprudent as to be
reversible for abuse of discretion. Even that is a damaging
concession, given the dissent's apparent position that allowing a
litigant "to resuscitate [a] claim that he himself put to rest"
always violates "prudential" rules.
Post, at 406. But in
fact the language of the
Independent Ins. Agents opinion is
much more approving of the Court of Appeals' action than that. It
declines even to brush aside the Court of Appeals' (questionable)
contention that there was "a 'duty' to address the status of
section 92," saying only that "[w]e need not decide" that question.
508 U. S., at 448. And it goes on to state that the Court of
Appeals acted "without
any impropriety," and that its
decision to consider the issue was
"certainly no abuse of
its discretion."
Ibid. (emphasis added). If we had not
thought that the Court of Appeals' entertainment of the statutory
repeal question was, not merely unreversible, but appropriate, we
would not have rendered ourselves complicit in the enterprise by
exercising our own discretion to grant certiorari on that question.
(There was no particular need to intervene, since the Court of
Appeals had upheld the law.)
The dissent also seeks to characterize
Independent Ins.
Agents as no more than an application of "the traditional
principle that there can be no estoppel in the way of ascertaining
the existence of a law."
Post, at 404 (internal quotation
marks omitted). It was indeed an application of that principle
insofar as concerned the claim that the appellants' right to assert
repeal of the statute had been forfeited. But forfeit was not the
only point decided in the case: not every nonforfeited claim merits
consideration on appeal.
384
The statute that created it begins with the congressional
finding, redolent of provisions of the Interstate Commerce Act,
see,
e. g., 49 U. S. C. §§ 10901, 10903, 10922 (1988
ed. and Supp. V), that "the
public convenience and necessity
require the continuance and improvement" of railroad passenger
service. Rail Passenger Service Act of 1970 (RPSA), § 101, 84 Stat.
1328 (emphasis added). In the current version of the RPSA, 45 U. S.
C. § 501
et seq. (1988 ed. and Supp. V), the congressional
findings are followed by a section entitled "Goals," which begins,
"The Congress hereby establishes the following goals for Amtrak,"
and includes items of such detail as the following:
"(3) Improvement of the number of passenger miles generated
systemwide per dollar of Federal funding by at least 30 percent
within the two-year period beginning on October 1, 1981.
"(4) Elimination of the deficit associated with food and
beverage services by September 30, 1982.
"(6) Operation of Amtrak trains, to the maximum extent feasible,
to all station stops within 15 minutes of the time established in
public timetables for such operation.
"(8) Implementation of schedules which provide a systemwide
average speed of at least 60 miles per hour .... " § 501a.
Later sections of the statute authorize Amtrak's incorporation,
§§ 541-542, set forth its structure and powers, §§ 543545, and
outline procedures under which Amtrak will relieve private
railroads of their passenger-service obligations and provide
intercity and commuter rail passenger service itself, §§ 561-566.
See generally
National Railroad Passenger Corporation v.
Atchison, T. & S.
F. R. Co., 470 U. S. 451, 453-456
(1985). As initially conceived, Amtrak was to be
385
"a for profit corporation," 84 Stat. 1330, but Congress later
modified this language to provide, less optimistically perhaps,
that Amtrak "shall be operated and managed as a for profit
corporation," § 541.
Amtrak is incorporated under the District of Columbia Business
Corporation Act, D. C. Code Ann. § 29-301
et seq. (1981 and
Supp. 1994), but is subject to the provisions of that Act only
insofar as the RPSA does not provide to the contrary, see § 541. It
does provide to the contrary with respect to many matters of
structure and power, including the manner of selecting the
company's board of directors. The RPSA provides for a board of nine
members, six of whom are appointed directly by the President of the
United States. The Secretary of Transportation, or his designee,
sits ex officio. § 543(a)(1)(A). The President appoints three more
directors with the advice and consent of the Senate, §
543(a)(1)(C), selecting one from a list of individuals recommended
by the Railway Labor Executives Association, § 543(a)(1)(C)(i), one
"from among the Governors of States with an interest in rail
transportation," § 543(a)(1)(C)(ii), and one as a "representative
of business with an interest in rail transportation," §
543(a)(1)(C)(iii). These directors serve 4-year terms. §
543(a)(2)(A). The President appoints two additional directors
without the involvement of the Senate, choosing them from a list of
names submitted by various commuter rail authorities. §
543(a)(1)(D). These directors serve 2-year terms. § 543(a)(2)(B).
The holders of Amtrak's preferred stock select two more directors,
who serve i-year terms. § 543(a)(1)(E). Since the United States
presently holds all of Amtrak's preferred stock, which it received
(and still receives) in exchange for its subsidization of Amtrak's
perennial losses, see § 544(c), the Secretary of Transportation
selects these two directors. The ninth member of the board is
Amtrak's president, § 543(a)(1)(B), who serves as the chairman of
the board, § 543(a)(4), is selected by the other eight directors,
and serves at their pleasure, § 543(d).
386
Amtrak's four private shareholders have not been entitled to
vote in selecting the board of directors since 1981.4
By § 548 of the RPSA, Amtrak is required to submit three
different annual reports to the President and Congress. One of
these, a "report on the effectiveness of this chapter in meeting
the requirements for a balanced national transportation system,
together with any legislative recommendations," is made part of the
Department of Transportation's annual report to Congress. §
548(c).
B
Amtrak is not a unique, or indeed even a particularly unusual,
phenomenon. In considering the question before us, it is useful to
place Amtrak within its proper context in the long history of
corporations created and participated in by the United States for
the achievement of governmental objectives.
The first was the Bank of the United States, created by the Act
of Feb. 25, 1791, ch. 10, 1 Stat. 191, which authorized the United
States to subscribe 20 percent of the corporation's stock,
id., at 196. That Bank expired pursuant to the terms of its
authorizing Act 20 years later. A second Bank of the United States,
the bank of
McCulloch v.
Maryland, 4 Wheat. 316
(1819), and
Osborn v.
Bank of United States, 9 Wheat.
738 (1824), was incorporated by the Act of April 10, 1816, 3
4 Originally, Amtrak's board comprised 15 directors: 7 selected
by the shareholders and 8 (one of whom had to be the Secretary of
Transportation) appointed by the President of the United States.
See RPSA §§ 303(a) and (c), 84 Stat. 1330-1331. In 1973, Congress
increased the number of directors to 17, the number of Presidential
appointees to 9, and made the Secretary of Transportation a
director ex officio. See Amtrak Improvement Act of 1973, § 3(a), 87
Stat. 548. In 1976, the number of Presidential appointees (apart
from the Secretary of Transportation) was reduced to eight and
Amtrak's president made a director ex officio. See Rail
Transportation Improvement Act, § 103, 90 Stat. 2615. Amtrak's
board was given its current size and membership in 1981. See
Omnibus Budget Reconciliation Act of 1981, § 1174,95 Stat. 689.
387
Stat. 266, which provided that the United States would subscribe
20 percent of the Bank's capital stock,
ibid., and in
addition that the President would appoint, by and with the advice
and consent of the Senate, 5 of the Bank's 25 directors, the rest
to be elected annually by shareholders other than the United
States,
id., at 269.
The second Bank's charter expired of its own force, despite
fierce efforts by the Bank's supporters to renew it, in 1836. See
generally R. Remini, Andrew Jackson and the Bank War 155-175
(1967). During the remainder of the 19th century, the Federal
Government continued to charter private corporations, see,
e. g., Act of July 2, 1864, 13 Stat. 365 (Northern
Pacific Railroad Company), but only once participated in such a
venture itself: the Union Pacific Railroad, chartered in 1862 with
the specification that two of its directors would be appointed by
the President of the United States. Act of July 1, 1862, § 1, 12
Stat. 491. See F. Leazes, Jr., Accountability and the Business
State 117, n. 8 (1987) (hereinafter Leazes).
The Federal Government's first participation in a corporate
enterprise in which (as with Amtrak) it appointed a majority of the
directors did not occur until the present century. In 1902, to
facilitate construction of the Panama Canal, Congress authorized
the President to purchase the assets of the New Panama Canal
Company of France, including that company's stock holdings in the
Panama Railroad Company, a private corporation chartered in 1849 by
the State of New York. See Act of June 28, 1902, 32 Stat. 481; see
also General Accounting Office, Reference Manual of Government
Corporations, S. Doc. No. 86, 79th Cong., 1st Sess., 176 (1945)
(hereinafter GAO Corporation Manual). The United States became the
sole shareholder of the Panama Railroad, and continued to operate
it under its original charter, with the Secretary of War, as the
holder of the stock, electing the Railroad's 13 directors.
Id., at 177; Joint Committee on Reduction of Nonessential
Federal Expenditures, Reduction of Nonessential Federal
Expenditures, S. Doc. No. 227,
388
78th Cong., 2d Sess., 20 (1944) (hereinafter Reduction of
Expenditures).
The first large-scale use of Government-controlled corporations
came with the First World War. In 1917 and 1918, Congress created,
among others, the United States Grain Corporation, the United
States Emergency Fleet Corporation, the United States Spruce
Production Corporation, and the War Finance Corporation. See Leazes
20. These entities were dissolved after the war ended. See
Reduction of Expenditures 1.
The Great Depression brought the next major group of Government
corporations, which proved to be more enduring. These were
primarily directed to stabilizing the economy and to making
distress loans to farms, homeowners, banks, and other enterprises.
See R. Moe, CRS Report for Congress, Administering Public Functions
at the Margins of Government: The Case of Federal Corporations 6-7
(1983). The Reconstruction Finance Corporation (RFC), to take the
premier example, was initially authorized to make loans to banks,
insurance companies, railroads, land banks, and agricultural credit
organizations, including loans secured by the assets of failed
banks. See Act of Jan. 22, 1932, § 5, 47 Stat. 6-7. The Federal
Deposit Insurance Corporation (FDIC), was established to hold and
liquidate the assets of failed banks, and to insure bank deposits.
See Act of June 16, 1933, ch. 89, § 8, 48 Stat. 168, as amended, 12
U. S. C. § 1811
et seq. (1988 ed. and Supp. V). And a few
corporations, such as the Tennessee Valley Authority (TVA), brought
the Government into the commercial sale of goods and services. See
Act of May 18, 1933, ch. 32, 48 Stat. 58, as amended, 16 U. S. C. §
831
et seq. (1988 ed. and Supp. V).
The growth of federal corporations during the Depression and the
World War II era was not limited to the numerous entities
specifically approved by Congress. In 1940, Congress empowered the
RFC to create corporations without specific congressional
authorization. See Act of June 25,
389
1940, §5, 54 Stat. 573-574. The RFC proceeded to do so with
gusto, incorporating on its own the Defense Plant Corporation, the
Defense Supplies Corporation, the Metals Reserve Company (which
itself created several subsidiaries), the Petroleum Reserves
Corporation, the Rubber Development Corporation, and the War Damage
Corporation, among others. See GAO Corporation Manual 32, 38, 169,
182, 219, 279. Other corporations were formed, sometimes under
state law, without even the general congressional authorization
granted the RFC. For example, the Defense Homes Corporation was
organized under Maryland law by the Secretary of the Treasury,
using emergency funds allocated to the President,
id., at 28
("It is not clear what, if any, specific Federal statutory
authority was relied upon for the creation of the Defense Homes
Corporation"); and the Tennessee Valley Associated Cooperatives,
Inc., was chartered under Tennessee law by the TVA,
id., at
244 ("There has been found no Federal statute specifically
authorizing the Board of Directors of the Tennessee Valley
Authority to organize a corporation"). By 1945, the General
Accounting Office's Reference Manual of Government Corporations
listed 58 government corporations, with total assets (in 1945
dollars) of $29.6 billion. See
id., at iii, v-vi.
By the end of World War II, Government-created and -controlled
corporations had gotten out of hand, in both their number and their
lack of accountability. Congress moved to reestablish order in the
Government Corporation Control Act (GCCA), 59 Stat. 597, as
amended, 31 U. S. C. § 9101
et seq. (1988 ed. and Supp. V).
See Pritchett, The Government Corporation Control Act of 1945, 40
Am. Pol. Sci. Rev. 495 (1946). The GCCA required that specified
corporations, both wholly owned and partially owned by the
Government, be audited by the Comptroller General. See 59 Stat.
599, 600. Additionally, the wholly owned corporations were
required, for the first time, to submit budgets which would be
included in the budget submitted annually to Congress by
390
the President.
Id., at 598; see also Leazes 22-23. The
GCCA also ordered the dissolution or liquidation of all government
corporations created under state law, except for those that
Congress should act to reincorporate; and prohibited creation of
new Government corporations without specific congressional
authorization. 59 Stat. 602; cf. 31 U. S. C. § 9102.
Thus, in the years immediately following World War II, many
Government corporations were dissolved, and to our knowledge only
one, the Saint Lawrence Seaway Development Corporation, was
created. See Leazes 25, 27. In the 1960's, however, the allure of
the corporate form was felt again, and new entities proliferated.
Many of them followed the traditional model, often explicitly
designated as Government agencies and located within the existing
Government structure. See,
e. g., Foreign Assistance
Act of 1969, § 105, 83 Stat. 809 (creating the Overseas Private
Investment Corporation as "an agency of the United States under the
policy guidance of the Secretary of State"), as amended, 22 U. S.
C. § 2191
et seq. (1988 ed. and Supp. V). Beginning in 1962,
however, the Government turned to sponsoring corporations that it
specifically designated
not to be agencies or establishments
of the United States Government, and declined to subject to the
control mechanisms of the GCCA. The first of these, the
Communications Satellite Corporation (Comsat), was incorporated
under the District of Columbia Business Corporation Act, D. C. Code
Ann. § 29-301
et seq. (1981 and Supp. 1994), see 47 U. S. C.
§ 731
et seq., with the purpose of entering the private
sector, but doing so with Governmentconferred advantages, see Moe,
supra, at 22. Comsat was capitalized entirely with private
funds. See Seidman, Government-sponsored Enterprise in the United
States, in The New Political Economy: The Public Use of the Private
Sector 92 (B. Smith ed. 1975). In contrast to the corporations that
had in the past been deemed part of the Government, Comsat's board
was to be controlled by its private
391
shareholders; only 3 of its 15 directors were appointed by the
President, § 733(a).
The Comsat model, which was seen as allowing the Government to
act unhindered by the restraints of bureaucracy and politics, see
Moe, CRS Report, at 22, 24, was soon followed in creating other
corporations. But some of these new "private" corporations, though
said by their charters not to be agencies or instrumentalities of
the Government, see,
e. g., 47 U. S. C. § 396(b)
(Corporation for Public Broadcasting (CPB)); 42 u. S. C. §
2996d(e)(1) (Legal Services Corporation (LSC)), and though not
subjected to the restrictions of the GCCA, were (unlike Comsat)
managed by boards of directors on which Government appointees had
not just a few votes but voting control. See Public Broadcasting
Act of 1967, § 201, 81 Stat. 369 (CPB's entire board appointed by
President); Legal Services Corporation Act of 1974, § 2, 88 Stat.
379 (same for LSC).
Amtrak is yet another variation upon the Comsat theme.
Like Comsat, CPB, and LSC, its authorizing statute declares that
it "will not be an agency or establishment of the United States
Government." 84 Stat. 1330; see 45 U. S. C. § 541. Unlike Comsat,
but like CPB and LSC, its board of directors is controlled by
Government appointees. And unlike all three of those "private"
corporations, it
has been added to the list of corporations
covered by the GCCA, see 31 U. S. C. § 9101 (1988 ed. and Supp. V).
As one perceptive observer has concluded with regard to the
post-Comsat Governmentsponsored "private" enterprises:
"There is no valid basis for distinguishing between many
government-sponsored enterprises and other types of government
activities, except for the fact that they are designed
[designated?] by law as 'not an agency and instrumentality of the
United States Government.' Comparable powers and immunities could
be granted to such agencies without characterizing them as
nongovernment." Seidman, supra, at 93.
392
IV
Amtrak claims that, whatever its relationship with the Federal
Government, its charter's disclaimer of agency status prevents it
from being considered a Government entity in the present case. This
reliance on the statute is misplaced. Section 541 is assuredly
dispositive of Amtrak's status as a Government entity for purposes
of matters that are within Congress's control-for example, whether
it is subject to statutes that impose obligations or confer powers
upon Government entities, such as the Administrative Procedure Act,
5 U. S. C. § 551
et seq. (1988 ed. and Supp. V), the Federal
Advisory Committee Act, 5 U. S. C. App. § 1
et seq., and the
laws governing Government procurement, see 41 U. S. C. § 5
et seq. (1988 ed. and Supp. V). And even beyond that, we
think § 541 can suffice to deprive Amtrak of all those inherent
powers and immunities of Government agencies that it is within the
power of Congress to eliminate. We have no doubt, for example, that
the statutory disavowal of Amtrak's agency status deprives Amtrak
of sovereign immunity from suit, see
Sentner v.
Amtrak, 540 F. Supp. 557, 560 (NJ 1982), and of the
ordinarily presumed power of Government agencies authorized to
incur obligations to pledge the credit of the United States, see,
e. g., Debt Obligations of Nat. Credit Union Admin., 6 Op.
Off. Legal Counsel 262, 264 (1982). But it is not for Congress to
make the final determination of Amtrak's status as a Government
entity for purposes of determining the constitutional rights of
citizens affected by its actions. If Amtrak is, by its very nature,
what the Constitution regards as the Government, congressional
pronouncement that it is not such can no more relieve it of its
First Amendment restrictions than a similar pronouncement could
exempt the Federal Bureau of Investigation from the Fourth
Amendment. The Constitution constrains governmental action "by
whatever instruments or in whatever modes that action may be
taken."
Ex parte Virginia, 100 U. S. 339, 346-347 (1880).
And under whatever congres-
393
sionallabel. As we said of the Reconstruction Finance
Corporation in deciding whether debts owed it were owed the United
States Government: "That the Congress chose to call it a
corporation does not alter its characteristics so as to make it
something other than what it actually is .... "
Cherry Cotton
Mills, Inc. v.
United States, 327 U. S. 536, 539
(1946).
Amtrak points to two of our opinions that characterize Amtrak as
a nongovernmental entity. The first is
National Railroad
Passenger Corporation v.
Boston &
Maine
Corp., 503 U. S.
407, 410 (1992), which describes the corporation as "not an
agency or instrumentality of the United States Government." But the
governmental or nongovernmental nature of Amtrak had no conceivable
relevance to the issues before the Court in
Boston &
Maine. The quoted characterization, similar to that
contained in the statute, was merely set forth at the beginning of
the opinion, in describing the factual background of the case. It
is hard to imagine weaker dictum.
The second case is
National Railroad Passenger
Corporation v.
Atchison, T. & S.
F. R. Co.,
470 U. S. 451
(1985). There the governmental character of Amtrak
was
marginally relevant. The railroads opposing Amtrak in the case
argued that a subsequent statute reneging on the Government's
own obligations was subject to a "more rigorous standard of
review" under the Due Process Clause than a statute impairing
private contractual obligations.
Id., at 471. The Court said
it did not have to consider that question because the contracts in
question were "not between the railroads and the United States but
simply between the railroads and the nongovernmental corporation,
Amtrak."
Id., at 470. But it develops, later in the opinion,
that the Court would not have had to consider that question anyway,
since it concluded that the contracts (whether those of the United
States or not) did not incur the obligation alleged. The effect of
the apparent reliance upon Amtrak's nongov-
394
ernmental character was
at most to enable the Court to
make, later in the opinion, without applying the "more rigorous
standard" urged by the railroads, the superfluous argument that
"[e]ven were the Court of Appeals correct that the railroads have a
private contractual right ... we disagree with the Court of
Appeals' conclusion that the Due Process Clause limited Congress'
power to [affect that right as it did]."
Id., at 476.
Moreover, for the purpose at hand in
Atchison it was quite
proper for the Court to treat Congress's assertion of Amtrak's
nongovernmental status in § 541 as conclusive. As we have suggested
above, even if Amtrak
is a Government entity, § 541's
disavowal of that status certainly suffices to disable that agency
from incurring contractual obligations on behalf of the United
States. For these reasons, we think that
Atchison's
assumption of Amtrak's nongovernmental status (a point uncontested
by the parties in the case, since it was not Amtrak's governmental
character that the railroads relied upon to establish an obligation
of the United States) does not bind us here.
v
The question before us today is unanswered, therefore, by
governing statutory text or by binding precedent of this Court.
Facing the question of Amtrak's status for the first time, we
conclude that it is an agency or instrumentality of the United
States for the purpose of individual rights guaranteed against the
Government by the Constitution.
This conclusion seems to us in accord with public and judicial
understanding of the nature of Government-created and -controlled
corporations over the years. A remarkable feature of the heyday of
those corporations, in the 1930's and 1940's, was that, even while
they were praised for their status "as agencies separate and
distinct, administratively and financially and legally, from the
government itself, [which] has facilitated their adoption of
commercial methods of accounting and financing, avoidance of
political controls, and
395
utilization of regular procedures of business management," it
was fully acknowledged that they were a "device" of "government,"
and constituted "federal corporate agencies" apart from "regular
government departments." Pritchett, 40 Am. Pol. Sci. Rev., at 495.
The Reference Manual of Government Corporations, prepared in 1945
by the Comptroller General, contains as one of its Tables
"Corporations arranged according to supervising or interested
Government department or agency," see GAO Corporation Manual x-xi.
This lists the 58 then-extant Government corporations under the
various departments and agencies, from the Agriculture Department
to the War Department, and then concludes the list with five
"Independent corporations" -analogous, one supposes, to the
"independent agencies" of the Executive Branch proper. The whole
tenor of the Manual is that these corporations are part of the
Government.
This Court has shared that view. For example, in
Reconstruction Finance Corporation v.
J. G.
Menihan Corp., 312 U. S. 81 (1941), Chief Justice Hughes,
writing for the Court, described the RFC, whose organic statute did
not state it to be a Government instrumentality, as, nonetheless,
"a corporate agency of the government," and said that "it acts as a
governmental agency in performing its functions."
Id., at
83. In
Cherry Cotton Mills, Inc. v.
United States,
327 U. S. 536
(1946), we had little difficulty finding that the RFC was "an
agency selected by Government to accomplish purely governmental
purposes,"
id., at 539, and was thus entitled to the benefit
of a statute giving the Court of Claims jurisdiction over
"counterclaims ... on the part of the Government of the United
States," 28 U. S. C. § 250(2) (1940 ed.). Likewise in
Inland
Waterways Corp. v.
Young, 309 U. S. 517 (1940), we
found that the Inland Waterways Corporation, which similarly was
not specifically designated in its charter as an instrumentality of
the United States, see Act of June 3, 1924, 43 Stat. 360, was an
agency of the United States, so that its funds were "public moneys"
for which national banks
396
could give security under §45 of the National Bank Act of 1864,
13 Stat. 113, 309 U. S., at 523-524. Justice Frankfurter wrote for
the Court:
"So far as the powers of a national bank to pledge its assets
are concerned, the form which Government takes-whether it appears
as the Secretary of the Treasury, the Secretary of War, or the
Inland Waterways Corporation-is wholly immaterial. The motives
which lead Government to clothe its activities in corporate form
are entirely unrelated to the problem of safeguarding governmental
deposits .... " Id., at 523.
Even Congress itself appeared to acknowledge, at least until
recent years, that Government-created and -controlled corporations
were part of the Government. The GCCA, discussed above, which
brought to an end the era of uncontrolled growth of Government
corporations, provided that, without explicit congressional
authorization, no corporation should be acquired or created by "any
officer or agency of the Federal Government or by any Government
corporation
for the purpose of acting as an agency or
instrumentality of the United States .... " § 304(a), 59 Stat.
602 (emphasis added). That was evidently intended to restrict the
creation of
all Government-controlled policy-implementing
corporations, and not just some of them. And the companion
provision that swept away many of the extant corporations said that
no wholly owned government corporation created under state law
could continue "as an agency or instrumentality of the United
States," § 304(b), 59 Stat. 602. Once again, that was evidently
meant to eliminate policyimplementing government ownership of
all state corporations, and not just some of them. From the
1930's onward, many of the statutes creating Government-controlled
corporations said explicitly that they were agencies or
instrumentalities of the United States, see,
e. g.,
Act of June 9, 1947, § 1, 61 Stat. 130, as amended, 12 U. S. C. §
635 (creating the
397
Export- Import Bank of Washington as "an agency of the United
States of America"); Federal Crop Insurance Act, § 503, 52 Stat.
72, 7 U. S. C. § 1503 (creating Federal Crop Insurance Corporation
as "an agency of and within the Department of Agriculture"), and
until 1962 none said otherwise. As we have described above,
moreover, those later statutes, relatively few in number, took that
statement, perhaps too uncritically, from an earlier statute
pertaining to a corporation (Comsat) that was
genuinely
private and
not Government controlled.
That Government-created and -controlled corporations are (for
many purposes at least) part of the Government itself has a strong
basis, not merely in past practice and understanding, but in reason
itself. It surely cannot be that government, state or federal, is
able to evade the most solemn obligations imposed in the
Constitution by simply resorting to the corporate form. On that
thesis,
Plessy v.
Ferguson, 163 U. S. 537 (1896), can
be resurrected by the simple device of having the State of
Louisiana operate segregated trains through a state-owned Amtrak.
In
Pennsylvania v.
Board of Directors of City Trusts of
Philadelphia, 353
U. S. 230 (1957) (per curiam), we held that
Girard College, which had been built and maintained pursuant to a
privately erected trust, was nevertheless a governmental actor for
constitutional purposes because it was operated and controlled by a
board of state appointees, which was itself a state agency.
Id., at 231. Amtrak seems to us an
a fortiori
case.
Amtrak was created by a special statute, explicitly for the
furtherance of federal governmental goals. As we have described,
six of the corporation's eight externally named directors (the
ninth is named by a majority of the board itself) are appointed
directly by the President of the United States-four of them
(including the Secretary of Transportation) with the advice and
consent of the Senate. See §§ 543(a)(1)(A), (C)-(D). Although the
statute restricts most of the President's choices to persons
suggested by certain
398
organizations or persons having certain qualifications, those
restrictions have been tailor-made by Congress for this entity
alone. They do not in our view establish an absence of control by
the Government as a whole, but rather constitute a restriction
imposed by one of the political branches upon the other. Moreover,
Amtrak is not merely in the temporary control of the Government (as
a private corporation whose stock comes into federal ownership
might be); it is established and organized under federal law for
the very purpose of pursuing federal governmental objectives, under
the direction and control of federal governmental appointees. It is
in that respect no different from the so-called independent
regulatory agencies such as the Federal Communications Commission
or the Securities Exchange Commission, which are run by
Presidential appointees with fixed terms. It is true that the
directors of Amtrak, unlike commissioners of independent regulatory
agencies, are not, by the explicit terms of the statute, removable
by the President for cause, and are not impeachable by Congress.
But any reduction in the immediacy of accountability for Amtrak
directors vis-avis regulatory commissioners seems to us of minor
consequence for present purposes-especially since, by the very
terms of the chartering Act, Congress's "right to repeal, alter, or
amend this chapter at any time is expressly reserved." 45 U. S. C.
§ 541.
Respondent appeals to statements this Court made in a case
involving the second Bank of the United States,
Bank of United
States v.
Planters' Bank of Georgia, 9 Wheat. 904
(1824). There we allowed the Planters' Bank, in which the State of
Georgia held a noncontrolling interest, see Act of Dec. 19, 1810, §
1, reprinted in Digest of Laws of State of Georgia 34-35 (0. Prince
ed. 1822); Act of Dec. 3, 1811, § 1,
id., at 35, to be sued
in federal court despite the Eleventh Amendment, reasoning that
"[t]he State does not, by becoming a corporator, identify itself
with the corporation," 9 Wheat., at 907. "The government of the
Union," we said,
399
"held shares in the old Bank of the United States; but the
privileges of the government were not imparted by that circumstance
to the bank. The United States was not a party to suits brought by
or against the bank in the sense of the constitution."
Id.,
at 908. But it does not contradict those statements to hold that a
corporation is an agency of the Government, for purposes of the
constitutional obligations of Government rather than the
"privileges of the government," when the State has specifically
created that corporation for the furtherance of governmental
objectives, and not merely holds some shares but controls the
operation of the corporation through its appointees.
Respondent also invokes our decision in the
Regional Rail
Reorganization Act Cases, 419 U. S. 102 (1974),
which found the Consolidated Rail Corporation, or Conrail, not to
be a federal instrumentality, despite the President's power to
appoint, directly or indirectly, 8 of its 15 directors. See
id., at 152, n. 40; Regional Rail Reorganization Act of
1973, § 301, 87 Stat. 1004. But we specifically observed in that
case that the directors were placed on the board to protect the
United States' interest "in assuring payment of the obligations
guaranteed by the United States," and that "[f]ull voting control
... will shift to the shareholders if federal obligations fall
below 50% of Conrail's indebtedness." 419 U. S., at 152. Moreover,
we noted, "[t]he responsibilities of the federal directors are not
different from those of the other directorsto operate Conrail at a
profit for the benefit of its shareholders,"
ibid.-which
contrasts with the public interest "goals" set forth in Amtrak's
charter, see 45 U. S. C. § 501a. Amtrak is worlds apart from
Conrail: The Government exerts its control not as a creditor but as
a policymaker, and no provision exists that will automatically
terminate control upon termination of a temporary financial
interest.5
5 Section 543(c) purports to divide the authority to select
seven directors between the common stockholders and the preferred
stockholders upon conversion of one-fourth or more of Amtrak's
outstanding preferred stock
400
***
We hold that where, as here, the Government creates a
corporation by special law, for the furtherance of governmental
objectives, and retains for itself permanent authority to appoint a
majority of the directors of that corporation, the corporation is
part of the Government for purposes of the First Amendment. We
express no opinion as to whether Amtrak's refusal to display
Lebron's advertisement violated that Amendment, but leave it to the
Court of Appeals to decide that. The judgment of the Court of
Appeals is reversed, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.
JUSTICE O'CONNOR, dissenting.
The Court holds that Amtrak is a Government entity and therefore
all of its actions are subject to constitutional challenge. Lebron,
however, expressly disavowed this argument below, and consideration
of this broad and unexpected question is precluded because it was
not presented in the petition for certiorari. The question on which
we granted certiorari is narrower: Whether the alleged suppression
of Lebron's speech by Amtrak, as a concededly private entity,
should be imputed to the Government. Because Amtrak's decision to
reject Lebron's billboard proposal was a matter of private business
judgment and not of Government coercion, I would affirm the
judgment below.
I
This Court's Rule 14.1(a) provides: "Only the questions set
forth in the petition, or fairly included therein, will be
considered by the Court." While "[t]he statement of any
question
to common stock. This subsection was originally enacted in 1970,
and has not since been amended. It is irreconcilable with the
revised provision for a nine-member board, § 543(a)(1).
401
presented will be deemed to comprise every subsidiary question,"
ibid., questions that are merely "related" or
"complementary" to the question presented are not "fairly included
therein."
Yee v.
Escondido, 503 U. S. 519, 537-538
(1992) (emphasis deleted). In
Yee, we held that a regulatory
taking argument, while subsidiary to the umbrella question whether
a taking had occurred, was only complementary to the physical
taking inquiry set forth in the petition and thus was barred under
Rule 14.1(a). See
id., at 535. Here, state action is the
umbrella claim. Subsidiary to that claim, but complementary to each
other, are two distinct questions: whether Amtrak is a Government
entity, and whether Amtrak's conduct as a private actor is
nevertheless attributable to the Government.
We granted certiorari on the following question, set forth in
the petition:
"Whether the court of appeals erred in holding that Amtrak's
asserted policy barring the display of political advertising
messages in Pennsylvania Station, New York, was not state action,
where:
"(a) the United States created Amtrak, endowed it with
governmental powers, owns all its voting stock, and appoints all
the members of its Board;
"(b) the United States-appointed Board approved the advertising
policy challenged here;
"(c) the United States keeps Amtrak afloat every year by
subsidizing its losses; and
"(d) Pennsylvania Station was purchased for Amtrak by the United
States and is shared with several other governmental entities."
Pet. for Cert. i.
The question asks whether the challenged policy "was not state
action" and therefore may, at first blush, appear to present the
umbrella inquiry.
Yee suggests otherwise. The petition there
recited two decisions by the Courts of Appeals and asked: "Was it
error for the state appellate court to dis-
402
regard the rulings and hold that there was no taking under the
fifth and fourteenth amendments?" Instead of focusing on whether
"there was no taking," we read the question as a whole. Since the
decisions by the Courts of Appeals and the lower court opinion
involved only physical takings, we concluded: "Fairly construed,
then, petitioners' question presented is the equivalent of the
question, 'Did the court below err in finding no physical taking?'"
503 U. S., at 537.
Just so here. The question asks whether the lower court erred
and thus directs our attention to the decisions below. The District
Court, in its thorough order, explicitly noted Lebron's theory of
the case: "Plaintiff does not contend that Amtrak is a governmental
agency. What plaintiff contends is that the federal government is
sufficiently entwined in Amtrak's operations and authority that the
particular actions at issue must be deemed governmental action."
811 F. Supp. 993, 999 (SDNY 1993). Before the Court of Appeals, in
order to distinguish a long line of cases which held that Amtrak is
not a Government agency, Lebron stated:
"Since Lebron does not contend that Amtrak is a governmental
entity per se, but rather is so interrelated to state entities that
it should be treated as a state actor here, these cases are
inapposite." Brief for Michael A. Lebron in No. 93-7127 (CA2), p.
30, n. 39.
The Court of Appeals, like the District Court, substantively
discussed only the second question that Lebron argues here-whether
Amtrak's conduct in this case implicates "the presence of
government action in the activities of private entities."
12 F.3d
388, 390 (CA2 1993). To introduce its analysis, the Court of
Appeals did state that "[t]he Rail Passenger Service Act of 1970
... created Amtrak as a private, for-profit corporation under the
District of Columbia Business Corporation Act,"
ibid.,
relying on Congress' characterization of the corporation in 45 U.
S. C. § 541. In so asserting, the Court of Appeals did not" 'pas[s]
upon' " the question such that it is now a proper basis for
reversal,
ante, at 379,
403
but rather merely identified the question that the court had to
address and focused the inquiry on the precise argument presented
by Lebron. This observation by the Court of Appeals is much
like-indeed, much less extensive than-our discussion of Amtrak's
status as a private corporation in
National Railroad
Passenger Corporation v.
Atchison, T. & S.
F. R.
Co., 470 U. S.
451, 453-456 (1985). I agree with the Court that
Atchison does not bind us,
ante, at 393-394, but, by
the same token, I do not see how the court below could be said to
have addressed the issue. A passing observation could not
constitute binding precedent; so, too, it could not serve as the
basis for reversal.
The question set forth in the petition focused on the specific
action by Amtrak, not on the general nature of the corporation as a
private or public entity. Lebron asked whether "Amtrak's asserted
policy barring the display of political advertising messages in
Pennsylvania Station, New York, was not state action." App. to Pet.
for Cert. i. The list that follows this question, while partially
concerning Amtrak's nature as an entity, went to support the thrust
of the query, which is whether these enumerated attributes render
Amtrak's advertising policy state action. Lebron's emphasis on the
specific action challenged is the crucial difference between his
alternative arguments for state action. The first inquiry-whether
Amtrak is a Government entity-focuses on whether Amtrak is so
controlled by the Government that it should be treated as a
Government agency, and all of its decisions considered state
action. The second inquiry takes Lebron at his word that Amtrak is
not a Government entity and instead focuses on the State's
influence on particular actions by Amtrak as a private actor.
Fairly construed, the question presented is whether the Court of
Appeals erred in holding that the advertising policy of Amtrak, as
a private entity, is not attributable to the Federal Government
despite the corporation's links thereto. This question is closely
related and complementary to, but
404
certainly not inclusive of, the question answered by the Court
today, which is whether those links render Amtrak the functional
equivalent of a Government agency. In my view, the latter question
is barred by Rule 14.1(a).
Relying on
United States Nat. Bank of Ore. v.
Independent Ins. Agents of America, Inc., 508 U. S. 439 (1993), the
Court argues that it properly addresses whether Amtrak is a
Government entity because that inquiry is "prior to the clearly
presented question," namely, whether Amtrak's decision is
attributable to the Government.
Ante, at 382.
Independent
Ins. Agents, however, held only that the Court of Appeals had
authority to consider a waived claim
sua sponte and did not
abuse its discretion in doing so. * That is quite different from
the purpose for which the Court now marshals the case, which is to
justify its consideration of a waived question in the first
instance. As explained below, I do not question the Court's
authority, only its prudence. In any event, the dispute in
Independent Ins. Agents centered on the interpretation of a
statute that may not have existed, and, as the Court recognizes,
ante, at 383, n. 3, the decision simply applied the
traditional principle that "[t]here can be no estoppel in the way
of ascertaining the existence of a law."
South Ottawa v.
Perkins, 94 U.
S. 260, 267 (1877). Here, one need not assume the existence of
any predicate legal rule to accept Lebron's word that Amtrak is a
private entity.
The mere fact that one question must be answered before another
does not insulate the former from Rule 14.1(a) and other waiver
rules. In
Stone v.
Powell, 428 U. S. 465 (1976),
*The Court would read more into the decision, because we
"decline[d] even to brush aside the Court of Appeals'
(questionable) contention that there was 'a "duty" to address the
status of section 92,' saying only that '[w]e need not decide' that
question."
Ante, at 383, n. 3. But by (prudently) reserving
the question, the Court could not have implied its answer. And our
"complicit[y] in the [Court of Appeals'] enterprise,"
ibid.,
exists only if one indulges in the unlikely inference that we held
more than what we said we did.
405
we held that Fourth Amendment claims are not ordinarily
cognizable in federal habeas proceedings and distinguished several
cases by noting that "the issue of the substantive scope of the
writ was not presented in the petition[s] for certiorari."
Id., at 481, n. 15. We thus recognized that those decisions
properly avoided the question of cognizability, which question, of
course, is logically anterior to the merits of the Fourth Amendment
claims presented. In
Steagald v.
United States,
451 U. S. 204,
211 (1981), we held that the Government had conceded that the
petitioner had a Fourth Amendment interest in the searched home, an
inquiry that precedes the question that was preserved, whether the
search was reasonable. In
Kamen v.
Kemper Financial
Services, Inc., 500 U. S. 90, 97, n. 4
(1991), because the question was neither litigated below nor
included in the petition, we assumed the existence of a cause of
action under § 20(a) of the Investment Company Act of 1940 before
addressing the requirements of such an action. See also
Burks v.
Lasker, 441 U. S. 471, 476 (1979)
(assuming same). Finally, in
McCormick v.
United
States, 500 U. S.
257 (1991), the Court held that a state legislator did not
violate the antiextortion Hobbs Act, 18 U. S. C. § 1951, by
accepting campaign contributions without an explicit exchange of
improper promises. The Court reached this question only after
declining to consider whether the Act applies to local officials at
all, because that question was neither argued below nor included in
the petition for certiorari.
McCormick, 500 U. S., at 268,
n. 6; see also
id., at 280 (SCALIA, J., concurring)
(accepting the assumption, because the argument was waived, that
the Hobbs Act is a "federal 'payment for official action' statute"
even though "I think it well to bear in mind that the statute may
not exist").
The Court does not take issue with these cases but argues
further that, because the question whether Amtrak is a Government
entity is "dependent upon many of the same factual inquiries [as
the clearly presented question], refusing to re-
406
gard it as embraced within the petition may force us to assume
what the facts will show to be ridiculous, a risk which ought to be
avoided."
Ante, at 382. A certain circularity inheres in
this logic, because the Court must first answer the omitted
question in order to determine whether its answer turns on "the
same factual inquiries" as the clearly presented question. As for
the facts, the record is shaped by the parties' arguments below.
Perhaps serendipity has given the Court a factual record adequate
to decide a question other than that advanced below, but there is
no guarantee of such convergence. It is rather unfair to hold a
party to a record that it may have developed differently in
response to a different theory of the case. It is this risk of
unfairness, rather than the fear of seeming "ridiculous," that we
should avoid.
Rule 14.1(a), of course, imposes only a prudential limitation,
but one that we disregard "only in the most exceptional cases."
Stone v.
Powell, supra, at 481, n. 15; see also
United States v.
Mendenhall, 446 U. S. 544, 551, n. 5
(1980). This is not one of them. As noted before, not only did
Lebron disavow the argument that Amtrak is a Government entity
below, he did so in order to distinguish troublesome cases.
Lebron's postpetition attempt to resuscitate the claim that he
himself put to rest is precisely the kind of bait-and-switch
strategy that waiver rules, prudential or otherwise, are supposed
to protect against. In
Steagald, supra, at 211, for example,
we stated unequivocally that "the Government, through its
assertions, concessions, and acquiescence, has lost its right to
challenge petitioner's assertion that he possessed a legitimate
expectation of privacy in the searched home." I see no difference
here.
The Rule's prudential limitation on our power of review serves
two important purposes, both of which the Court disserves by
deciding that Amtrak is a Government entity. First, the Rule
provides notice and enables the respondent to sharpen its arguments
in opposition to certiorari. "By
407
forcing the petitioner to choose his questions at the outset,
Rule 14.1(a) relieves the respondent of the expense of unnecessary
litigation on the merits and the burden of opposing certiorari on
unpresented questions."
Yee, 503 U. S., at 536. Lebron
argues that Amtrak has waived its Rule 14.1(a) argument by failing
to object in the brief in opposition to certiorari. But that is
exactly the point: The question set forth did not fairly include an
argument that Amtrak is a Government agency, and, indeed, the
petition was devoted to whether Amtrak's private decision should be
imputed to the State. Even at pages 16-18, the petition did not
"fairly embrac[e] the argument that Lebron now advances,"
ante, at 380, but rather argued that the composition of
Amtrak's board "renders
an otherwise private entity a state
actor," Pet. for Cert. 16 (emphasis added)-thus specifically
repeating the concession he now wishes to withdraw. Amtrak could
not respond to a point not argued and did not waive an argument
that was not at issue. Not until the merits brief did Amtrak have
notice that Lebron would contradict his persistent assertion that
the corporation was a private entity.
Second, the Rule assists the management of our cases.
"Rule 14.1(a) forces the parties to focus on the questions the
Court has viewed as particularly important, thus enabling us to
make efficient use of our resources."
Yee, supra, at 536. We
normally grant only petitions that present an important question of
law on which the lower courts are in conflict. Here, the lower
courts have generally held that Amtrak is not a Government entity,
see,
e. g., Anderson v.
National Railroad Passenger
Corporation, 754 F.2d
202, 204 (CA71985);
Ehm v.
National Railroad
Passenger Corporation, 732 F.2d
1250, 1255 (CA5), cert. denied, 469 U. S. 982 (1984), and none
of our cases suggest otherwise. Even where the lower courts are in
clear conflict, we often defer consideration of novel questions of
law to permit further development. Despite the prevalence of
publicly owned corporations, whether they are Government agencies
is a question
408
seldom answered, and then only for limited purposes. See
Cherry Cotton Mills, Inc. v.
United States, 327 U. S. 536, 539
(1946); National Railroad Passenger Corporation v.
Atchison, T. & S.
F. R. Co., 470 U. S., at 471.
Answering this question today merely opens the back door to
premature adjudication of similarly broad and novel theories in the
future.
Weeding out such endeavors, Rule 14.1(a), like other waiver
rules, rests firmly upon a limited view of our judicial power. See,
e. g., Carducci v.
Regan, 714 F.2d
171, 177 (CADC 1983) (Scalia, J.) ("The premise of our
adversarial system is that appellate courts do not sit as
self-directed boards of legal inquiry and research, but essentially
as arbiters of legal questions presented and argued by the parties
before them"). "The doctrine of judicial restraint teaches us that
patience in the judicial resolution of conflicts may sometimes
produce the most desirable result." Stevens, Some Thoughts on
Judicial Restraint, 66 Judicature 177, 183 (1982). Whether the
result of today's decision is desirable I do not decide. But I
think it clear that the Court has exhibited little patience in
reaching that result.
II
Accepting Lebron's concession that Amtrak is a private entity, I
must "traverse thee] difficult terrain,"
ante, at 378, that
the Court sees fit to avoid, and answer the question that is
properly presented to us: whether Amtrak's decision to ban Lebron's
speech, although made by a concededly private entity, is
nevertheless attributable to the Government and therefore
considered state action for constitutional purposes. Reflecting the
discontinuity that marks the law in this area, we have variously
characterized the inquiry as whether "there is a sufficiently close
nexus between the State and the challenged action,"
Jackson
v.
Metropolitan Edison Co., 419 U. S. 345, 351
(1974); whether the State, by encouraging the challenged conduct,
could be thought
"responsible for those
409
actions,"
Blum v.
Yaretsky, 457 U. S. 991, 1005
(1982); and whether "the alleged infringement of federal rights
[is] 'fairly attributable to the State,'"
Rendell-Baker v.
Kohn, 457 U.
S. 830, 838 (1982), quoting
Lugar v.
Edmondson
Oil Co., 457 U. S. 922, 937
(1982). Whatever the semantic formulation, I remain of the view
that the conduct of a private actor is not subject to
constitutional challenge if such conduct is "fundamentally a matter
of private choice and not state action."
Edmonson v.
Leesville Concrete Co., 500 U. S. 614, 632 (1991) (O'CONNOR,
J., dissenting).
Lebron relies heavily on
Burton v.
Wilmington Parking
Authority, 365 U.
S. 715 (1961). There, the Court perceived a symbiotic
relationship between a racially segregated restaurant and a state
agency from which the restaurant leased public space. Noting that
the State stood to profit from the discrimination, the Court held
that the government had "so far insinuated itself into a position
of interdependence with" the private restaurant that it was in
effect "a joint participant in the challenged activity."
Id., at 725. Focusing on this language, Lebron argues that
various features of Amtrak's structure and management-its statutory
genesis, the heavy reliance on federal subsidies, and a board
appointed by the President-places it in a symbiotic relationship
with the Government such that the decision to ban Lebron's speech
should be imputed to the State.
Our decision in
Burton, however, was quite narrow. We
recognized "the limits of our inquiry" and emphasized that our
decision depended on the "peculiar facts [and] circumstances
present."
Id., at 726. We have since noted that
Burton limited its "actual holding to lessees of public
property,"
Jackson v.
Metropolitan Edison Co., supra,
at 358, and our recent decisions in this area have led commentators
to doubt its continuing vitality, see,
e. g., L.
Tribe, American Constitutional Law § 18-3, p. 1701, n. 13 (2d ed.
1988) ("The only surviving explanation of the result in
Burton may be that found in Justice Stewart's
concurrence").
410
O'CONNOR, J., dissenting
In
Jackson, we held that a private utility's termination
of service to a customer is not subject to due process challenge,
even though the termination was made pursuant to a state law. In
doing so, we made clear that the question turns on whether the
challenged conduct results from private choice:
"Respondent's exercise of the choice allowed by state law where
the initiative comes from it and not from the State, does not make
its action in doing so 'state action' for purposes of the
Fourteenth Amendment." 419 U. S., at 357 (footnote omitted). The
rule applies even where the private entity makes its decision in an
environment heavily regulated by the government.
Rendell-Baker,
supra, involved a private school for troubled students who were
transferred there by authority of a state law, and for whose
education the State paid the school. Public funds comprised 90% to
99% of the school budget. The school fired petitioners, and a state
grievance board reviewed that personnel action. Despite the
school's pervasive ties to the State, we held that the discharge
decisions were not subject to constitutional challenge because
those actions "were not compelled or even influenced by any state
regulation."
Id., at 841. We noted that "in contrast to the
extensive regulation of the school generally, the various
regulators showed relatively little interest in the school's
personnel matters."
Ibid. Likewise, in
Blum v.
Yaretsky, supra, we held that the decisions of a regulated
hospital to discharge its patients were not subject to
constitutional challenge. Although various Medicaid regulations and
benefit adjustment procedures may have encouraged the hospital's
decisions to discharge its patients early, we held that the State
was not
"responsible for those actions" because such actions
"ultimately turn on medical judgments made by private parties
according to professional standards that are not established by the
State."
Id., at 1005, 1008. See also
San Francisco
Arts &
Athletics, Inc. v.
United States Olympic
Comm., 483 U. S.
522, 547 (1987) ("There is no evidence that the Federal
Government coerced
411
or encouraged the USOC in the exercise of its right [to deny use
of its copyright]").
These cases differ markedly from the "interdependence" or "joint
participation" analysis of
Burton and stand for the
principle that, unless the government affirmatively influenced or
coerced the private party to undertake the challenged action, such
conduct is not state action for constitutional purposes.
Edmonson v.
Leesville Concrete Co., supra, is not to
the contrary. In that case, the Court held that a private
attorney's exercise of a peremptory challenge is attributable to
the government and therefore subject to constitutional inquiry.
Although the opinion cited
Burton, see 500 U. S., at 621,
624, it emphasized that a private party exercising a peremptory
challenge enjoys the "overt, significant assistance of the court,"
id., at 624. The decision therefore is an application of
Shelley v.
Kraemer, 334 U. S. 1, 19 (1948),
which focused on the use of the State's coercive power, through its
courts, to effect the litigant's allegedly unconstitutional choice.
Moreover,
Edmonson stressed that a litigant exercising a
peremptory challenge performs a "traditional function of the
government," 500 U. S., at 624, a theory of state action
established by
Marsh v.
Alabama, 326 U. S. 501
(1946), that is independent from
Burton and not relevant to
this case.
Relying thus on
Shelley and
Marsh, Edmonson did
not necessarily extend the "interdependence" rationale of
Burton beyond the limited facts of that case. Given the
pervasive role of government in our society, a test of state action
predicated upon public and private "interdependence" sweeps much
too broadly and would subject to constitutional challenge the most
pedestrian of everyday activities, a problem that the Court
recognized in
Burton itself, see 365 U. S., at 725-726. A
more refined inquiry is that established by
Jackson,
Rendell-Baker, Blum, and
San Francisco Arts &
Athletics: The conduct of a private entity is not subject to
constitutional scrutiny if the challenged action results from
412
the exercise of private choice and not from state influence or
coercion.
Applying this principle to the facts before us, I see no basis
to impute to the Government Amtrak's decision to disapprove
Lebron's advertisement. Although a number of factors indicate the
Government's pervasive influence in Amtrak's management and
operation, none suggest that the Government had any effect on
Amtrak's decision to turn down Lebron's proposal. The advertising
policy that allegedly violates the First Amendment originated with
a predecessor to Amtrak, the wholly private Pennsylvania Railroad
Company. A 1967 lease by that company, for example, prohibited "any
advertisement which in the judgement of Licensor is or might be
deemed to be slanderous, libelous, unlawful, immoral, [or]
offensive to good taste .... " App. 326, , 19. Amtrak simply
continued this policy after it took over. The specific decision to
disapprove Lebron's advertising was made by Amtrak's Vice President
of Real Estate and Operations Development, who, as a corporate
officer, was neither appointed by the President nor directed by the
Presidentappointed board to disapprove Lebron's proposal.
Lebron nevertheless contends that the board, through its
approval of the advertising policy, controlled the adverse action
against him. This contention rests on the faulty premise that
Amtrak's directors are state actors simply because they were
appointed by the President; it assumes that the board members sit
as public officials and not as business directors, thus begging the
question whether Amtrak is a Government agency or a private entity.
In any event, even accepting Lebron's premise that the board's
approval has constitutional significance, the factual record belies
his contention. The particular lease that permitted Amtrak to
disallow Lebron's billboard was neither reviewed nor approved
directly by the board. In fact, minutes of meetings dating back to
1985 showed that the board approved only one contract between
Amtrak and Transportation Displays, Incor-
413
porated, the billboard leasing company that served as Amtrak's
agent, and even then it is not clear whether the board approved the
contract or merely delegated authority to execute the licensing
agreement. App. 402. In short, nothing in this case suggests that
the Government controlled, coerced, or even influenced Amtrak's
decision, made pursuant to corporate policy and private business
judgment, to disapprove the advertisement proposed by Lebron.
Presented with this question, the Court of Appeals properly
applied our precedents and did not impute Amtrak's decision to the
Government. I would affirm on this basis and not reverse the Court
of Appeals based on a theory that is foreign to this case.
Respectfully, I dissent.
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