United States District Court, S.D. New York
May 10, 2004.
JENNIFER SAUNDERS, individually and on behalf of all others similarly situated., Plaintiffs -against- THE PORT AUTHORITY OF NEW YORK and NEW JERSEY, et al., Defendants
The opinion of the court was delivered by: ROBERT CARTER, Senior District Judge
The plaintiff Jennifer Saunders brought this suit on behalf of herself
and others similarly situated. She and the class are seeking to enjoin
the use of a discount program offered to users of the electronic toll
system E-ZPass operated by the defendants, the Port Authority of New York
and New Jersey ("Port Authority") and the Metropolitan Transportation
Authority ("MTA"). The plaintiffs claim that the E-ZPass Discount Program
("EZDP") violates the Commerce Clause, U.S. Const., Art. I, § 8 cl. 3,
and their civil rights under 42 U.S.C. § 1983, including the fundamental
right to travel.
The plaintiff is a resident of Pennsylvania, a state that participates
in the E-ZPass program, however the plaintiff has chosen not to
participate in the EZDP. On July 5, 2002, the plaintiff traveled across
the George Washington Bridge and paid the full-undiscounted cash fare of
$6. Compl. ¶ 41.
Port Authority is a bi-state governmental agency run by twelve
commissioners and created to better coordinate terminals, bridges, and
tunnels of commerce in, about, and through the Port of New York. N.Y.
Unconsol. Law § 6401 (McKinney 2000), N.J.SA. 32:1-1 to 32.1-176;
(Compl. ¶ 6). Its responsibilities include the construction,
maintenance, operation, and control of all bridges and tunnels connecting
New York and New Jersey, including the Goethals Bridge, the Holland
Tunnel, the Lincoln Tunnel and the George Washington Bridge. N.Y.
Unconsol. Law § 6401 (McKinney 2000), N.J.SA. 32:1-118 et seq.
As authorized by the courts and legislature, Port Authority collects
tolls at its bridges and tunnels to finance the cost of their operation.
See Wallach v. Brezenoff, 930 F.2d 1070, 1072 (3rd Cir. 1991) (upholding
Port Authority's right to collect tolls and raise them as deemed
necessary to maintain the system of bridges, tunnels, and commuter
trains). Since 1998, Port Authority has used an electronic toll
collection system called E-ZPass to facilitate the collection of tolls.
The toll rates for automobiles as of July 2002 are as follows: $4.00
off-peak, $5.00 peak*fn1 for customers participating in the EZDP and $6.00
cash at all times. The Port Authority also has a special discount plan
applicable to the Staten Island Bridges.*fn2 The plan charges customers
$50 for 20 trips across the Staten Island Bridges in a 35-day period. The
customer is billed for 20 trips even if her use of the bridges falls
short of that number. The discounted plan is available to any E-ZPass
customer who enrolls in the plan and is not based on residency.
Distinct from Port Authority, the MTA is a public benefit corporation
chartered by the state of New York. Comp. ¶ 8. Through its constituent
agency, the Triborough Bridge and Tunnel Authority, the MTA operates
seven bridges and two tunnels in New York. The MTA operates the
Triborough Bridge, Throgs Neck Bridge, Bronx-Whitestone, Bridge,
Verranzano Bridge, Brooklyn-Battery Tunnel, Queens Midtown-Tunnel, Henry
Hudson Bridge, Cross Bay Bridge, and the Marine Parkway Bridge.
In the EZDP, tolls are collected electronically from a transponder
("tag") attached to the windshield of the customer's car as the customer
passes through the toll plaza. Anyone is eligible to join the program;
there are no residency requirements. Interested individuals must simply
(1) complete an application that may be obtained online or by contacting
one of several E-ZPass Customer Service Centers in New York and New
Jersey, (2) select a payment method, and (3) submit the application.
Compl. ¶ 15, Ex. 1. Customers are encouraged to set up their account
at the Service Center associated with the facilities they use most
frequently. Mem. in Supp. of Mot. at 2. Once the application and payment
are received the service center supplies the applicant with an E-ZPass
tag. The tag can be used at any toll plaza where the E-ZPass logo is
displayed. In addition to New York and New Jersey, the E-ZPass system is
used in several other states in the region, namely, Delaware, Maryland,
Massachusetts, Pennsylvania, and Connecticut, and anywhere else the E-ZPass logo is displayed. Compl. ¶
12, Ex. 1.
The defendant now files a motion to dismiss the claim under Federal
Rules of Civil Procedure 12(b)(6) for failure to state a claim upon which
relief can be granted. The court's duty "is merely to assess the legal
feasibility of the complaint and not to assay the weight of the evidence"
to be offered at trial. Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir.
1998). All factual allegations in the complaint must be accepted as true
and the complaint must be viewed in the light most favorable to the
plaintiff. LaBounty v. Adler, 933 F.2d 121, 123 (2nd Cir. 1991). "Although
bald assertions and conclusions of law are insufficient, the pleading
standard is nonetheless a liberal one." Parsky, 140 F.3d at 440.
The court must apply this standard in considering the plaintiff's
allegations. The plaintiff challenges the EZDP on four grounds:
1) It is an invalid user fee unrelated to actual
highway usage and therefore not a uniform, fair
and practical standard directly related to the
purpose and amount of service;
2) It is discriminatory in its practical effect
i. The vast majority of EZDP participants are
New York and New Jersey residents and so the
program offers a privilege far more valuable
to local interests, despite offering the
same nominal privilege to non-residents;
ii. The defendants intended to and have in fact
economically benefited New York and New Jersey
residents; accordingly, it imposes substantially
higher and a disproportionate share of the
state's highway costs onto non-residents thereby
economically benefiting in-state interests to
the detriment of out-of-state interests;
3) It discriminates on its face by: i. Not providing discounts to other electronic toll
collection systems, like Maine's Transpass
system, offered by other states, and
ii. Charging a different fee for using the same
4) The "economic decision" and restructuring of the
burdens arguments advanced by the defendants are
not legitimate local interests
5) The market participant theory does not apply to
channels of interstate commerce which include
highways, airports, and seaports; and
6) The burden imposed on out-of-state interests is
clearly excessive in relation to the local
interest. Pl. Opp. To Mot. at 4, 5.
The plaintiff alleges that the E-ZPass program favors residents of New
York and New Jersey over non-residents, thereby burdening interstate
commerce in violation of the Commerce Clause of the United States
Constitution. Compl. ¶¶ 38, 39, 42. The plaintiff also alleges that the
EZDP unconstitutionally abridges her right to travel under
42 U.S.C. § 1983. Id.
The Commerce Clause grants Congress the power to "regulate Commerce
with foreign nations and among the several states." U.S. Const., Art. I,
§ 8 cl. 3. The courts have also interpreted a negative duty of the States
not to constrain the free flow of interstate commerce. To determine
whether a state law violates this implied protection of the Commerce
Clause, first the court must examine whether the law, "regulates
evenhandedly with only `incidental' effects on interstate commerce, or
discriminates against interstate commerce." Hughes v. Oklahoma
441 U.S. 322, 326 (1979). The Supreme Court has defined discrimination as
the "differential treatment of in-state and out-of-state economic
interests that benefits the former and burdens the latter." Oregon Waste
Systems, Inc., Department of Environmental Quality, 51 U.S. 93, 99
(1994). In effect, a state regulation is constitutional when it operates
in a balanced way to promote a legitimate local public interest and has only an incidental effect on interstate commerce,
but only if the burden imposed on such commerce is not plainly excessive
in relation to the putative local benefits. Pike v. Bruce Church, Inc.,
397 U.S. 137, 142 (1970).
The tolls at issue constitute user fees, and as such are generally
permitted by the Commerce Clause. Such fees are paid as compensation for
the use or privilege of use of "special facilities" furnished and paid
for by the state and provided for the benefit of those engaged in
commerce. Evansville-Vanderburgh Airport Authority v. Delta Airlines,
Inc., 405 U.S. 707, 713 (1972). In Evansville -Vanderburgh the Supreme
Court allowed state and municipal authorities to collect a fee intended
to defray the cost of maintenance from all deboarding passengers. The
Court determined that the charge did not unreasonably burden interstate
commerce nor did it unconstitutionally impair the passengers' right to
The Court went on to say that it is "the amount of the tax, not its
formula that is of central concern." Id. at 716. The toll must be based
on a reasonable approximation of use or privilege for use and cannot
discriminate against interstate commerce. If it meets these two criteria
and does not appear excessive compared with the governmental benefit
conferred, the tax will be allowed. Id. The tax or fee will be allowed
"even though some other formula might reflect more exactly the relative
use of the state facilities by individual users." Id.
The District Court of Massachusetts recently dismissed a suit with
facts similar to those alleged in the current action. In Doran v. Mass
Turnpike Authority, 256 F. Supp.2d 48 (D. Mass 2003) the plaintiff
challenged the constitutionality of Fastlane, the electronic toll system
in Massachusetts. The District Court ruled in favor of the defendant and
granted the defendant's motion to dismiss. Appealed by the plaintiff, the
First Circuit recently upheld the district court's ruling. In Doran the
lower court applied the test used in Pike, and found that the toll
discount provided to Fastlane customers was not unreasonable nor did it
discriminate against out of state drivers. Compared with the
Massachusetts program, the EZDP is far less discriminatory to nonresident
drivers because New York's E-ZPass tag is recognized at toll plazas in
several other states, and because Port Authority's bridges and tunnels serve as major connectors for
the entire mid-Atlantic region, drivers are more likely to come from
out-of-state than drivers in Massachusetts.*fn3
EZDP is a valid user fee
In Doran et al. v. Massachusetts Turnpike Authority, et al., No.
03-1312 (1st Cir. 2003), the First Circuit reviewed the lower court's
dismissal of the challenge. The Court of Appeals concluded that a
driver's "anticipated frequency of use" of the particular roadway that is
the primary factor determining whether a driver will join the discount
program. Applying this "the frequency calculus," the court found that the
program created no resident versus non-resident classification." See Doran
v. MTA, No. 03-1312 at 5. Applying the court's reasoning in this
context, Driver A who lives and works in Manhattan may not travel New
York's bridges and tunnels with sufficient frequency to warrant joining
the EZDP, however Driver B who lives in Connecticut and commutes everyday
into Manhattan may find the program extremely advantageous. See id. The
toll is higher for Driver A than for Driver B despite her in-state
residency status. This court concludes, as the Doran court ultimately
did, that discounts realized by frequent drivers are offset because in
passing through the tolls more often, EZDP drivers are paying higher total
amounts in tolls. Id.
The EZDP is not discriminatory on its face or in its practical effect
The plaintiff asserts that the EZDP is discriminatory on its face or in
its practical effect, yet this claim is contradicted within the
plaintiff's own complaint. The Staten Island program is directly
correlated to frequency of use. Customers who use the bridges 20 times in
35 days receive the discount. Whereas other discounts are offered during
times when fewer vehicles are utilizing the roadways, and do not
discriminate against non-residents, as the plaintiff argues. At the individual level the burden on out-of-state non-member drivers
is even less consequential. The Doran court found that the increased toll
paid by infrequent non-resident users of the toll bridges and tunnels at
issue was "by necessity de minimus." See Doran v. MTA No. 03-1312 at 8.
The First Circuit also distinguished American Trucking Ass'n v.
Scheiner, 483 U.S. 266 (1987), a principle case relied on by the
plaintiff. In American Trucking, Pennsylvania applied an unapportioned
flat tax on all vehicles not registered in the state. The program at
issue here makes no comparable distinction between residents and
non-residents. The only relevant distinction in the instant case is
between those who participate in the program and those who do not.
Furthermore, the plaintiff points to the fact that there are other
programs, like the Maine's, whose tags cannot be used at toll plazas
operated with the E-ZPass system, to bolster its claim of discrimination.
Pl. Opp. to Mot. to Dismiss at 7. Yet there is no regulation that prevents
a driver from maintaining membership in both programs concurrently.
Because anyone can join any of the programs, the fact that the tags from
each system are not interchangeable is not relevant. As noted above, how
frequently a driver uses any of the bridges, tunnels, and roadways
monitored by a particular system is the key determinant of how useful the
program will be for a particular driver. If a driver frequently travels
between Maine and New York, then it may be to that driver's benefit to
join both systems, and there is no legal impediment to her doing so.
The plaintiff argument fails on several grounds. Because the E-ZPass
program is used in at least 5 other states in the region and eligibility
is not contingent on residency, the burden has not been demonstrated even
if all facts are taken as true. Also noteworthy are the benefits to local
traffic flow. The electronic toll system facilitates traffic flow because
drivers may pass through toll plazas without stopping to pay. The E-ZPass
customer benefits from the expedited process of collection and is able to
travel without interruption. The EZDP also benefits drivers who are not
EZDP customers because EZDP drivers are removed from the lines intended
for drivers paying in cash. A Legitimate local interest exists unrelated to economic protectionism
The plaintiff's claims that there is no legitimate local interest
unrelated to economic protectionism are refuted by the analytical points
made above. Lastly, the defendants' argument that it is a market
participant seems suspect given that the bridges and tunnels maintained
by both the MTA and the Port Authority constitute the only means by which
a driver can enter and/or exit the state from New Jersey. These passways
serve as major junctions of the tri-state area and by statute cannot be
operated by private entities.
For this reason the court finds that neither the MTA or the Port
Authority operate in this context as a market participant. The other
arguments made by the plaintiff were considered and researched but
appeared to be without merit and as such are not discussed. The court
finds that the plaintiff has failed to state a claim for which relief can
be granted as required under Rule 12(b)(6) and for this reason the court
dismisses all claims with prejudice.
IT IS SO ORDERED.