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- NOTICE: This opinion is subject to formal revision before publication in the
- preliminary print of the United States Reports. Readers are requested to
- notify the Reporter of Decisions, Supreme Court of the United States, Wash-
- ington, D.C. 20543, of any typographical or other formal errors, in order that
- corrections may be made before the preliminary print goes to press.
- SUPREME COURT OF THE UNITED STATES
- --------
- No. 93-1525
- --------
- MICHAEL A. LEBRON, PETITIONER v. NATIONAL
- RAILROAD PASSENGER CORPORATION
- on writ of certiorari to the united states court
- of appeals for the second circuit
- [February 21, 1995]
-
- 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 Author-
- ity, 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 Spectac-
- ular.- The Spectacular is a curved, illuminated bill-
- board, 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 advertise-
- ment throughout his negotiations with TDI, although he
- did explain to TDI that it was generally political. On
- December 2 he submitted to TDI (and TDI later for-
- warded 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, juxta-
- posed 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, particu-
- larly 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, claim-
- ing, inter alia, that the refusal to place his advertise-
- ment 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 injunc-
- tion 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. ___ (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 Committee, 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.- Edmondson v. Leesville Con-
- crete 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 propri-
- ety 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 constitu-
- tional requirements because Amtrak, although 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. ___, ___ (1992) (slip op., at 13); 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 ___ (slip op., at 13). 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.
- ___, ___ (1992) (slip op., at 4). 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 well-established proce-
- dures; 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. ___, ___ (1992) (slip op., at
- 7). Here, however, we are satisfied that the argument
- that Amtrak is a Government entity is fairly embraced
- within the question set forth in the petition for certio-
- rari-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 differ-
- ent 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, 503 U. S. ___ (1992). 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.- 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 3. 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-to-be-in-
- error; but rather the fact that that was the only ground
- of decision in two previous Court of Appeals cases,
- departure from which was said by the question presented
- to be the issue in the appeal. 503 U. S., at ___ (slip
- op., at 15).
- 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 2. 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 Am-
- trak 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 9. 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 what would go to show a physical taking
- were quite different. Here, however, those very ele-
- ments that we would be considering in determining
- whether Amtrak-the-private-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 which 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 1, is not Yee, but
- United States Nat. Bank of Ore. v. Independent Ins.
- Agents of America, Inc., 508 U. S. ___ (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 re-
- pealed-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 Insur-
- ance 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 in-
- quire 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 themselves -`as [a] self-directed boar[d] of
- legal inquiry,'- or had -exhibit[ed] little patience,- post,
- at 9.
-
- 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. 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 min-
- utes 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 incorpo-
- ration, 541-542, set forth its structure and powers,
- 543-545, 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 -a for profit
- corporation,- 84 Stat., at 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 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 Trans-
- portation, 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 1-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). Am-
- trak's four private shareholders have not been entitled
- to vote in selecting the board of directors since 1981.
- By 548 of the RPSA, Amtrak is required to submit
- three different annual reports to the President and Con-
- gress. One of these, a -report on the effectiveness of
- this chapter in meeting the requirements for a balanced
- national transportation system, together with any legis-
- lative recommendations,- is made part of the Depart-
- ment 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 Os-
- born v. Bank of United States, 9 Wheat. 738 (1824), was
- incorporated by the Act of April 10, 1816, 3 Stat. 266,
- which provided that the United States would subscribe
- 20 percent of the Bank's capital stock, ibid., and in ad-
- dition that the President would appoint, by and with the
- advice and consent of the Senate, 5 of the Bank's 25 di-
- rectors, 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, de-
- spite 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 speci-
- fication 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 cor-
- porate enterprise in which (as with Amtrak) it appointed
- a majority of the directors did not occur until the pres-
- ent 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 char-
- tered 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) (herein-
- after GAO Corporation Manual). The United States be-
- came 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, Re-
- duction of Nonessential Federal Expenditures, S. Doc.
- No. 227, 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 Func-
- tions 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, insur-
- ance 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 Depres-
- sion 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 corpora-
- tions without specific congressional authorization. See
- Act of June 25, 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 (-[i]t 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 (-[t]here 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 dollars. 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 (1945), 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., at 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 the President. Id., at 598; see also Leazes
- 22-23. The Act also ordered the dissolution or liquida-
- tion of all government corporations created under state
- law, except for those that Congress should act to
- reincorporate; and prohibited creation of new Govern-
- ment corporations without specific congressional authori-
- zation. 59 Stat., at 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). Begin-
- ning in 1962, however, the Government turned to
- sponsoring corporations which 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 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
- Government-conferred 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 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, supra, 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., at 1330; see 45 U. S. C. 541. Unlike Comsat,
- but like CPB and LSC, its board of directors is con-
- trolled 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 percep-
- tive observer has concluded with regard to the post-
- Comsat Government-sponsored -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 charac-
- terizing them as non-government.- Seidman, supra,
- at 93.
-
- 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' 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 determin-
- ing 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 Consti-
- tution 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 congressional label. 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. ___, ___ (1992) (slip op., at 2),
- 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 nongovernmental 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' 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 which
- 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 utilization
- of regular procedures of business management,- it was
- fully acknowledged that they were a -device- of -govern-
- ment,- 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 Corp. 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 perform-
- ing 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 jurisdic-
- tion over -counterclaims . . . on the part of the Govern-
- ment 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 desig-
- nated 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 could give
- security under 45 of the National Banking 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 activi-
- ties 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 -con-
- trolled corporations were part of the Government. The
- Government Corporation Control Act of 1945, discussed
- above, which brought to an end the era of uncontrolled
- growth of Government corporations, provided that,
- without explicit congressional authorization, no corpora-
- tion should be acquired or created by -any officer or
- agency of the Federal Government or by any Govern-
- ment corporation for the purpose of acting as an agency
- or instrumentality of the United States . . . .- 304(a),
- 59 Stat., at 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 instrumental-
- ity of the United States,- 304(b), 59 Stat., at 602.
- Once again, that was evidently meant to eliminate
- policy-implementing 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 Export-Import Bank of
- Washington as -an agency of the United States of
- America-); Federal Crop Insurance Act, 503, 52 Stat. 72
- (1938), 7 U. S. C. 1503 (creating Federal Crop Insur-
- ance 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 resur-
- rected 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 consti-
- tutional 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 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 restric-
- tion 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 objec-
- tives, under the direction and control of federal govern-
- mental 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 inde-
- pendent 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-a-vis regulatory commissioners seems to us
- of minor consequence for present purposes-especially
- since, by the very terms of the chartering Act, Con-
- gress'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 (O. 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,- id., at 907. -The govern-
- ment of the Union,- we said, -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 guaran-
- teed 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 responsi-
- bilities of the federal directors are not different from
- those of the other directors-to 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.
-
- * * *
- 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.
-