WASHINGTON, Dec 8 (Reuters) - The U.S. Supreme Court on Monday appeared divided as it weighed whether Amtrak, the government-owned passenger rail company, has too much sway over setting regulations that private freight carriers must follow.
The nine justices heard oral arguments in a challenge by the Association of American Railroads to a federal law that gives Amtrak, a government-owned corporation, a role in setting standards, including for on-time performance.
Freight carriers, which own the tracks that Amtrak uses, object to Amtrak's role because they can be penalized if passengers trains do not meet the standards.
Among the questions raised by the case is whether or not Amtrak is a government entity and, if it is a solely private entity, whether freight companies should also have a say in setting the standards.
One possible outcome based on questions asked by the justices is that the court could hand the government a narrow victory and sends the case back to a federal appeals court for further litigation over whether the freight carriers' due process rights were violated.
The law gives Amtrak and the U.S. Federal Railroad Administration the power to work jointly on the regulations. Freight carriers can then be forced to pay damages if Amtrak trains fail to meet their performance targets.
The railroad association challenged regulations, finalized by the government in 2010, that freight carriers said set unrealistic targets. The association's members include BNSF Railway Company and CSX Transportation Inc.
Amtrak, which is not involved in the litigation, is also a member of the association. (Reporting by Lawrence Hurley; Editing by Will Dunham)