A railroad company that has expressed an interest in buying parts of Amtrak lost a lawsuit for libel this month in the D.C. Court of Appeals against a newspaper columnist.
In addition to deciding a free-speech question, the lawsuit raised the issue of what would happen if Congress decides to sell off the national passenger railroad to private companies.
Guilford Transportation Industries, Inc., a freight railroad operator in New England, sued Frank Wilner, a former Surface Transportation Board (STB) executive. Mr. Wilner wrote one of his occasional columns for the Journal of Commerce that recounted Guilford Transportation’s labor and maintenance history.
The STB is the federal agency that regulates the railroad industry. Mr. Wilner was a chief of staff for one of the STB’s three commissioners until 1998.
Guilford Transportation said parts of Mr. Wilner’s column were untrue and hurt the company’s business.
In May 1997, Guilford Transportation announced its intention to acquire Amtrak’s rail operations in the Northeast. In a June 2, 1997, column, Mr. Wilner described “a bitter labor-management conflict” between Guilford Transportation’s unions and its owners, Timothy Mellon and David Fink.
He also said, “By the early 1990s the cats were herded, but the anti-establishment Mr. Mellon and Mr. Fink already made headlines with equally chaotic legal fisticuffs with Amtrak.”
Mr. Wilner, who lives in Northern Virginia and works in Washington, described how Amtrak seized track owned by Guilford Transportation using “an extraordinary power granted it by Congress to condemn private property.” He said that Amtrak claimed “poor maintenance” compelled it to use the condemnation authority.
“Guilford has a knack for grabbing headlines,” Mr. Wilner wrote. “With its latest offer to buy or lease Amtrak’s Northeast line, it is bound to keep the story alive.”
In the Oct. 12 ruling for Mr. Wilner, the D.C. Court of Appeals said, “The column was, after all, written in response to Guilford’s attempt to acquire and to privatize portions of Amtrak’s operations. In a society which regards freedom of the press as a core value, a newspaper columnist must surely have the right to question the qualifications of the would-be privatizers, as well as their motivations and business acumen, without fear of retaliatory litigation.”
Amtrak faces an Oct. 1, 2002, deadline to become financially self-sufficient. Otherwise, Congress is threatening to cut off subsidies and sell off the railroad to private companies. In the budget approved this month, Congress agreed to give Amtrak $521 million in fiscal year 2001. Amtrak’s latest venture to increase revenue is the introduction of its high-speed Acela service along the Northeast corridor, which is scheduled to begin next month.
If Amtrak is sold, Congress has said it would turn over the routes to regional railroads, like Guilford Transportation, that are expected to buy the most profitable rail segments. Other segments would be abandoned.
The likelihood of an Amtrak sale is contested. Brenda Follmer, Amtrak spokesman, said, “I haven’t heard any talk of getting sold off. We fully anticipate being operationally self-sufficient.” She acknowledged that the railroad might not meet all its capital, or infrastructure, costs through its own revenue.
In recent years, however, Amtrak says it has reduced the need for federal assistance to recover some of its costs. “We’ve been ahead of plan the last three years in terms of meeting our goals,” Miss Follmer said.
Tom White, Association of American Railroads spokesman, would not comment on whether he believes Amtrak can become financially self-sufficient. “Passenger rail is very expensive to operate,” Mr. White said. “It’s very labor-intensive and capital-intensive.”