Holdover and Removal of Members of Amtrak's Reform Board

Holdover and Removal of Members of
Amtrak’s Reform Board
A member of Amtrak’s Reform Board whose statutory term has expired may not hold over in office
until a successor is appointed.
The President may remove a member of the Amtrak Reform Board without cause.

September 22, 2003

MEMORANDUM OPINION FOR THE COUNSEL TO THE PRESIDENT

You have asked for our opinion whether a member of Amtrak’s Reform Board
whose statutory term has expired may hold over in office until a successor is
appointed. We believe that he may not. You have also asked whether the President
may remove a member without cause. We believe that the President has that
power.

I.

Under the Amtrak Reform and Accountability Act of 1997, Pub. L. No. 105-
134, 111 Stat. 2570 (1997) (“Amtrak Act” or “Act”), Amtrak is a rail carrier
“operated and managed as a for-profit corporation.” 49 U.S.C. § 24301(a)(1), (2)
(2000). It is under the direction of a “Reform Board,” which “consist[s] of 7
voting members appointed by the President, by and with the advice and consent of
the Senate, for a term of 5 years.” Id. § 24302(a). Under the Act, it “is not a
department, agency, or instrumentality of the United States Government,” id.
§ 24301(a)(3), and “to the extent consistent with [the Act], the District of Colum-
bia Business Corporation Act (D.C. Code §§ 29-301 et seq.) appl[ies],” id.
§ 24301(e).
The Act does not provide that a member of the Reform Board may hold over
after his five-year term expires. We believe, therefore, that when a member’s term
expires, he may no longer sit on the Reform Board:

By the common law, as well as by the statutes of the United
States, and the laws of most of the States, when the term of office to
which one is elected or appointed expires, his power to perform its
duties ceases. This is the general rule.

The term of office of a district attorney of the United States is
fixed by statute at four years. When this four years comes round, his
right or power to perform the duties of the office is at an end, as
completely as if he had never held the office.

163
 Opinions of the Office of Legal Counsel in Volume 27

Badger v. United States, 93 U.S. 599, 601 (1876) (citation omitted). As the Supreme
Court similarly stated in United States v. Eckford’s Executors, 42 U.S. (1 How.) 250,
258 (1843), “[a]t the end of [the statutory] term, the office becomes vacant, and must
be filled by a new appointment.”
The Executive Branch recognizes the same rule. The opinions of our Office
have followed it. See Memorandum for John P. Schmitz, Deputy Counsel to the
President, from John C. Harrison, Deputy Assistant Attorney General, Office of
Legal Counsel, Re: Expiration of the Term of the Chairman of the Federal Reserve
System at 1 (July 5, 1991) (because “[t]here is no statutory provision allowing the
Chairman to hold over upon the expiration of his term,” “that office will become
vacant when Mr. Greenspan’s term as Chairman expires”); Federal Reserve
Board—Vacancy With the Office of the Chairman—Status of the Vice Chairman
(12 U.S.C. §§ 242, 244), 2 Op. O.L.C. 394, 395 (1978) (“Because the incumbent is
not entitled to continue to exercise his powers absent reappointment, a vacancy in
the position results.”). And a long line of prior opinions by the Attorneys General
reached the same conclusion. See Reappointment of the District of Columbia Rent
Commissioners, 33 Op. Att’y Gen. 43, 44 (1921) (“The general rule is that where
Congress has not authorized an officer to hold over, his incumbency must be
deemed to cease at the end of his term, though no appointment of a successor may
then have been made.”); Interstate Commerce Commission—Term of Office, 25
Op. Att’y Gen. 332, 332–33 (1905); Chiefs of Bureaus in the Navy Department, 17
Op. Att’y Gen. 648, 649 (1884); Liability of Sureties on Official Bond, 15 Op.
Att’y Gen. 214, 214–15 (1877); Resignation of Office, 14 Op. Att’y Gen. 259,
261–62 (1873); Secretary of New Mexico, 12 Op. Att’y Gen. 130 (1867); Tenure
of Navy Agents, 11 Op. Att’y Gen. 286, 286–87 (1865) (overruling Naval Officers
Hold Over Till Successors Are Qualified, 2 Op. Att’y Gen. 713 (1835)).
We are aware of only one argument for the position that, in the circumstances
here, this rule should not apply. The District of Columbia Business Corporation
Act (“D.C. Business Corporation Act”) provides that “[e]ach director [of a for-
profit corporation] shall hold office for the term for which elected or until a
successor shall have been elected and qualified.” D.C. Code Ann. § 29-101.33
(2001). The Act establishing Amtrak makes the D.C. Business Corporation Act
applicable “to the extent consistent with” the Amtrak Act, 49 U.S.C. § 24301(e),
and, according to the argument, it would be consistent with the Amtrak Act for the
members of the Reform Board, having served their statutory terms, to hold over
under the provision of District of Columbia law.1

1
The Amtrak statute actually refers to “D.C. Code § 29-301 et seq.,” and although that citation at
one time would have referred to provisions about for-profit corporations, the citation now refers to the
provisions governing non-profit corporations. See D.C. Code § 29-301 note (2001) (referring to 1981
edition). The provision of District of Columbia law governing for-profit corporations, by its terms, does
not fit the situation of Amtrak’s Reform Board. That provision states that a director may continue to
serve “until a successor shall have been elected and qualified.” D.C. Code § 29.101.33 (2001).
Amtrak’s Reform Board, however, is appointed, not elected. The provision on non-profit corporations,

164
 Holdover and Removal of Members of Amtrak’s Reform Board

We believe that this argument would be mistaken. In order to determine wheth-
er, and to what extent, a provision of the D.C. Business Corporation Act is
“consistent with” the Amtrak Act, we must first determine what the Amtrak Act,
standing alone, means and must then ascertain whether the provision of the D.C.
Business Corporation Act supplements—or instead conflicts with—that meaning.
In view of the well-established principle that an appointee may not continue past
his term unless the statute provides for him to hold over, we believe that the
Amtrak Act’s specification of a simple five-year term affirmatively excludes the
existence of holdover rights. Congress passed the Act against the background of
the longstanding interpretation on holdover rights, and “we may presume ‘that our
elected representatives, like other citizens, know the law.’” Dir., Ofc. of Workers’
Comp. Progs. v. Perini North River Assocs., 459 U.S. 297, 319 (1983) (quoting
Cannon v. Univ. of Chicago, 441 U.S. 677, 696–97 (1979)). See also Edelman v.
Lynchburg Coll., 535 U.S. 106, 117 (2002) (“Congress being presumed to have
known of this settled judicial treatment”). Furthermore, the federal statute at one
time expressly allowed a director to hold over after his term had ended, until a new
director was selected, see 49 U.S.C. § 24302(a)(2)–(4) (1994), but Congress later
deleted this provision, compare Pub. L. No. 103-272, § 1(e), 108 Stat. 745, 906
(1994), with Pub. L. No. 105-134, § 411(a), 111 Stat. 2570, 2588 (1997). The
holdover rights under the D.C. Business Corporation Act therefore do not fill in a
term that the Amtrak Act leaves open, but instead conflict with that statute’s
rejection of holdover rights.
In Lebron v. National Railroad Passenger Corp., 513 U.S. 374, 385 (1995),
where the Supreme Court held that Amtrak is part of the federal government for
purposes of the First Amendment but ordinarily is treated, for statutory purposes,
as a corporation under the laws of the District of Columbia, the Court noted that
the statutory provisions governing Amtrak are nevertheless contrary to District of
Columbia law “with respect to many matters of structure and power, including the
manner of selecting the company’s board of directors.” The Court listed, as an
instance where the federal statute conflicts with District of Columbia law, the
provision that, at the time, set a four-year term for a director. Id. So, too, the
provision of the Act that now sets a simple five-year term is inconsistent with, and
therefore is not supplemented by, District of Columbia law.

by contrast, uses the language “until his successor shall have been elected or appointed.” D.C. Code
§ 29.301.19(c). We find it unnecessary to attempt to resolve which part of the District of Columbia law
of corporations—the part governing for-profit corporations or the part governing non-profits—applies
to Amtrak “to the extent consistent with” the Amtrak Act, because, as we explain below, the holdover
rights under each are not consistent with the Amtrak Act.

165
 Opinions of the Office of Legal Counsel in Volume 27

II.

We believe that the President, even without cause, may remove a member of
Amtrak’s Reform Board. As a general matter, the power of appointment “carrie[s]
with it the power of removal.” Myers v. United States, 272 U.S. 52, 119 (1926).
This “rule of constitutional and statutory construction” recognizes that “those in
charge of and responsible for administering functions of government who select
their executive subordinates, need in meeting their responsibility to have the
power to remove those whom they appoint.” Id. See also Sampson v. Murray, 415
U.S. 61, 70 n.17 (1974); Keim v. United States, 177 U.S. 290, 293–94 (1900); Ex
Parte Hennen, 38 U.S. (13 Pet.) 230, 259 (1839). The power of removal aids the
President in carrying out his constitutional duty to exercise “the executive Power”
and “take Care that the Laws be faithfully executed.” U.S. Const. art. II, §§ 1, 3.
See Morrison v. Olson, 487 U.S. 654, 689–90 (1988).
This structural principle, we believe, applies to Amtrak. Although for statutory
purposes Amtrak “is not a department, agency, or instrumentality of the United
States Government,” 49 U.S.C. § 24301(a)(3), the Supreme Court in Lebron held,
in the context of claims that Amtrak had violated the First Amendment, that it is
“an agency of the Government, for purposes of the constitutional obligations of the
Government . . . when the [Government] 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.” 513 U.S. at
399. Applying Lebron, our Office has concluded that “[w]e can conceive of no
principled basis for distinguishing between the status of a federal entity vis-à-vis
constitutional obligations relating to individual rights and vis-à-vis the structural
obligations that the Constitution imposes on federal entities.” The Constitutional
Separation of Powers Between the President and Congress, 20 Op. O.L.C. 124,
148 n.70 (1996) (citation omitted) (“Constitutional Separation of Powers”). A
fundamental element of Executive Branch structure is that presidential appointees
are subject to removal by the President.
Congress provided no express restriction against removal, without cause, of
members of the Reform Board. Because the removal power is a principal means
by which the President carries out the executive power and takes care that the laws
be faithfully executed, we do not believe that any restriction on the President’s
removal authority should be inferred. See Armstrong v. Bush, 924 F.2d 282, 289
(D.C. Cir. 1991) (“When Congress decides purposefully to enact legislation
restricting or regulating presidential action, it must make its intent clear.”).
To be sure, in Wiener v. United States, 357 U.S. 349 (1958), the Supreme Court
did infer a tenure protection from statutory silence. There, the Court held that the
President could not remove, without cause, a member of the War Claims Commis-
sion, “an adjudicating body with all the paraphernalia by which legal claims are
put to the test of proof, with finality of determination ‘not subject to review by any
other official of the United States or by any court by mandamus or otherwise.’” Id.

166
 Holdover and Removal of Members of Amtrak’s Reform Board

at 354–55 (citation omitted). The Court reasoned that the “intrinsic judicial char-
acter of the task with which the Commission was charged” could not be squared
with tenure at the pleasure of the President.2 Id. The Amtrak Reform Board runs a
business; it is not an adjudicatory body. Consequently, there is no ground for
inferring any tenure protection for the Reform Board’s members under the
reasoning of Wiener.
In Constitutional Separation of Powers, we analyzed the cases about removal
restrictions and concluded that “[i]n situations in which Congress does not enact
express removal limitations, . . . the executive branch should resist any further
application of the Wiener rationale, under which a court may infer the existence of
a for-cause limit on presidential removal, except with respect to officers whose
only functions are adjudicatory.” 20 Op. O.L.C. at 170 (footnote omitted). How-
ever, even if we were to concede that removal restrictions sometimes may be
inferred for officers whose duties are not wholly adjudicatory, such as the
members of the “independent” regulatory commissions, the Reform Board lacks
some critical characteristics of the multi-member boards whose members the
lower courts have assumed to be tenure-protected despite the absence of any
express statutory limit on removal. The members of the Reform Board do not
serve staggered terms; they are not subject to political balance requirements,
although the President is to consult with both the majority and minority leaders in
making his selections; and they do not engage in regulation through agency
adjudication and rulemaking.3 Cf. FEC v. NRA Political Victory Fund, 6 F.3d 821,
826 (D.C. Cir. 1993) (the Federal Election Commission was “likely correct” that
“the President can remove the commissioners only for good cause, which limita-
tion is implied by the Commission’s structure and mission as well as the commis-
sioners’ terms”); SEC v. Blinder, Robinson & Co., 855 F.2d 677, 681 (10th Cir.
1988) (“[F]or purposes of this case, we accept appellants’ assertion in their brief,
that it is commonly understood that the President may remove a commissioner [of
the Securities and Exchange Commission] only for ‘inefficiency, neglect of duty,
or malfeasance in office.’”). Even if the independent regulatory commissions are
taken as a model, no tenure protection could be found here.
Nevertheless, in Lebron, the Supreme Court suggested that the President might
not be able to remove Amtrak’s directors at all:

2
Although the Court’s later decision in Morrison v. Olson, 487 U.S. 654 (1988), stated that an
officer’s function is only one consideration in deciding whether an express statutory protection of
tenure is constitutional, id. at 691, the Court in Morrison did not address the role of an officer’s
function when tenure protection might be inferred from statutory silence.
3
Furthermore, the President is authorized to appoint to the Reform Board the Secretary of Trans-
portation, 49 U.S.C. § 24302(a)(2)(ii), an official who plainly may be removed by the President without
cause, and we understand that, in the practical application of this provision, the Secretary is understood
to serve on the Reform Board only as long as he holds the office of Secretary.

167
 Opinions of the Office of Legal Counsel in Volume 27

[Amtrak] is established and organized under federal law for the very
purpose of pursuing federal governmental objectives, under the di-
rection and control of federal governmental appointees. It is in that
respect no different from the so-called independent regulatory agen-
cies such as the Federal Communications Commission and the Secu-
rities and Exchange Commission, which are run by Presidential ap-
pointees with fixed terms. It is true that the directors of Amtrak,
unlike commissioners of the 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 immediate accountability for Amtrak directors vis-à-vis regu-
latory 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.”

513 U.S. at 398 (citation omitted). The Court’s discussion of the President’s con-
trol over Amtrak’s directors, we believe, was dictum. It was not essential to the
conclusion in Lebron because the Court found that the government exercises
control over Amtrak even if the President has less authority than over the inde-
pendent regulatory agencies. Further, the passage starts from incorrect premises
and arrives at an incorrect conclusion. The commissioners of the Federal Commu-
nications Commission and the Securities and Exchange Commission are not “by
the explicit terms of the statute[s], removable by the President for cause.” In each
case the statute is silent on removal. See 15 U.S.C. § 78d(a) (2000); 47 U.S.C.
§ 154(a), (c) (2000). Thus, in each case, the President’s power follows from the
general principles that we have set out above and not from an explicit statutory
grant of power. The power of Congress to revoke Amtrak’s charter, moreover,
while relevant to whether Amtrak is part of the government for constitutional
purposes, does not enable the President to carry out his constitutional responsibili-
ties. To discharge those responsibilities, the President needs the power of removal,
and he has that power even in the absence of a statutory provision that confers it
upon him.

M. EDWARD WHELAN III
Acting Assistant Attorney General
Office of Legal Counsel

168