The Independent Referee, Fired
Rail labor runs on neutrals. When a carrier and a craft reach the end of their arguing — a man dismissed, a work rule contested, a day's pay claimed and denied — the matter goes to a referee who belongs to neither, and both sides live by his ruling for one reason only: neither side can fire him. That is the whole of his authority. Not his wisdom — his independence. Let one party hire and dismiss the hand that decides, and the decision stops being a judgment and becomes an instruction wearing a judgment's robe.
The Surface Transportation Board is the neutral for the whole industry — the referee between one railroad and the next, between the railroad and the shipper with nowhere else to load, between the merger on the table and the country that has to live with the answer. And on a Monday at the end of June, the Supreme Court reached into that arrangement and cut the one wire that made the referee a referee.
In Trump v. Slaughter, decided the twenty-ninth of June, the Court overruled a precedent that had stood since 1935 — Humphrey's Executor, the decision that let Congress build agencies whose members a President could not fire at will, but only for cause. That wall is down. The members of the independent agencies now serve at the pleasure of the President, removable on a morning's notice for any reason or for none. The Court left one board its shelter — the Federal Reserve, whose independence the markets will not abide losing. It did not extend that shelter to the Surface Transportation Board.
Read the omission the way you would read a switch lined against you. The referee for the railroads was not thought important enough to protect.
Regular readers know the first half of this. I wrote last time that the Board keeps no judge of its own — that when the hard questions come, it borrows a hearing officer from another corner of the government, because the agency Congress built to be the railroads' own forum no longer stocks a bench. That was the borrowed gavel. This is the second beam. The Board does not own the gavel, and now it does not own its seats — hollowed of its bench and hollowed of its independence, the same institution thinned from both ends in the same season.
And it lands now, not in some seminar on administrative law, because the Board is at this hour deciding the largest railroad combination in the history of this country. Union Pacific and Norfolk Southern — eighty-five billion dollars, the first true transcontinental — sit before it under docket FD 36873, accepted for review and held in abeyance while the applicants answer the supplemental questions due the twenty-seventh of July. Discovery is live; the borrowed judge runs it.
Now set beside that the thing the ruling changed. The members who will weigh the merger — who decide whether the conditions hold, whether the promises bind, whether the captive shipper gets the switch or the brush-off — now hold their seats at the pleasure of a President who has said, out loud, that he would like the government to take a stake in the combined railroad. Union Pacific's chief executive waved the notion off; the railroad, he said, does not need anybody's help. Waved off or not, the interest is on the record. The one man who can now remove a Board member at will has told the country he has a side in the thing the Board is judging.
I am not going to tell you the fix is in. I am going to tell you something narrower and harder to unsee: the structure that guaranteed the fix could not be in is gone. Whether a hand ever reaches the scale, the hand is, for the first time in ninety years, lawfully free to.
Give the other argument its full weight, because it is not small. The case against agencies built like this one is a case about democracy, not railroads: officials who wield real power over the economy are not elected, and for ninety years they have been insulated from the one official the voters do choose. A serious person can hold that view, and many serious people do. But grant the whole of it, and you have won an argument about the Federal Trade Commission or a rulemaking shop drawing regulations for the general run of the economy. Carry that victory down the hall to a tribunal sitting in judgment on a single eighty-five-billion-dollar transaction between two named companies, with a third of the nation's freight network riding on the conditions, and the abstraction grows a thumb. One case is about who writes the rules. The other is about who wins the hand being dealt on the table right now.
The man who held one of those seats until ten months ago said it plainer than I can, on the record. Robert Primus — removed from the Board, and neither quiet nor bitter about it — called the ruling "a significant and lasting blow to our nation's independent regulatory institutions, including the Surface Transportation Board." Board members, he wrote, will now serve under "the Sword of Damocles," and "the proverbial thumb on the scale is now present and potentially permanent." Ask who wins, he wrote, and the answer is the President and those who follow or fear him; ask who loses, and the answer is the whole freight network, the supply chain, and the country. He is a stakeholder of record, not a commentator — a man who sat in the seat, naming what it feels like now that the wire is cut.
Return, at the end, to the one who always pays. The captive shipper — one plant, one siding, one railroad it cannot escape — walks into this proceeding with what it has always had and nothing more: the record, the filing, the promise written down. The borrowed judge can force the giant to show its work. But the judge makes findings; the Board makes the decision. And the Board, as of the end of June, makes it under a sword.
They keep no judge. Now they hold no certain seat. The gavel is borrowed and the bench can be cleared, and the scale that weighs the largest merger of our working lives can, for the first time in ninety years, be lawfully touched by a hand with a stake in the weighing.
Maybe no one ever reaches for it. Maybe the members rule precisely as they would have, and the record carries the day. But we will not again be able to say, with a straight face, that it could not have gone otherwise.
The field will read the call when it comes — and it will read it knowing what was taken out of the room. It always does.