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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

  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 because:
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 highway services;
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 travel.

  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.


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