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Automobile Club of New York v. the Port Authority of New York and New Jersey

October 9, 2012

AUTOMOBILE CLUB OF NEW YORK, INC., D/B/A "AAA NEW YORK" AND "AAA NORTH JERSEY, INC." PLAINTIFFS,
v.
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY DEFENDANT.



The opinion of the court was delivered by: Pitman, United States Magistrate Judge:

OPINION AND ORDER

I. Introduction

By notice of motion dated July 3, 2012 (Docket Item 57), plaintiffs Automobile Club of New York, Inc., doing business as "AAA New York" and "AAA North Jersey" (collectively, "AAA"), move for an Order to expand discovery beyond the scope of my order of May 7, 2012 (Docket Item 34). For the reasons set forth below, plaintiffs' motion is (1) denied without prejudice to renewal to the extent that it seeks to expand the scope of discovery, and (2) denied to the extent that it seeks guidance as to future depositions.

II. Facts

A. Plaintiffs' Underlying Allegations

The facts and allegations in this case are fully set forth in the decision of the Honorable Richard J. Holwell, United States District Judge (retired), addressing plaintiffs' motion for a preliminary injunction and defendant's cross-motion to dismiss, Auto. Club of N.Y., Inc. v. Port Auth. of N.Y. & N.J., 842 F. Supp. 2d 672 (S.D.N.Y. 2012), and can be briefly summarized.

Plaintiffs contend that certain toll increases within the Port Authority's Integrated Transportation Network ("ITN"),*fn1 which took effect on September 18, 2011, were enacted for improper purposes, specifically, to fund real estate development at the World Trade Center, rather than being enacted to cover ITN capital needs, and violate the Commerce Clause of the United States Constitution and the Surface Transportation and Uniform Relocation Assistance Act of 1987 (the "Highway Act"), 33 U.S.C. § 508 (1987) (Complaint, filed Sept. 23, 2011 ("Compl.")(Docket Item 1) ¶¶ 1, 34-45). Plaintiffs argue that under Bridgeport & Port Jefferson Steamboat Co. v. Bridgeport Port Auth., 567 F.3d 79, 86 (2d Cir. 2009), such toll increases violate the dormant Commerce Clause because they do not bear a "functional relationship" to the ITN, and, thus, do not represent a "fair approximation" of the use of ITN facilities and are "excessive in relation to the benefits conferred" on toll payers (Memorandum of Law in Support of Plaintiffs' Motion for a Preliminary Injunction, dated September 26, 2011 (Docket Item 32)("Pls.' P.I. Mem."), at 10). Accordingly, plaintiffs contend that the tolls are not "just and reasonable" under the Highway Act, and are, therefore, illegal, because they were enacted to fund projects that are not part of the ITN (Pls.' P.I. Mem. at 6-7, citing Auto. Club of N.Y., Inc. v. Port Auth. of N.Y. & N.J., 887 F.2d 417 (2d Cir. 1989)). Plaintiffs sought a preliminary injunction, and continue to seek declaratory as well as injunctive relief (Compl. ¶¶ 46-51).

B. Procedural History

Plaintiffs commenced this action on September 27, 2011, and on that same date sought a preliminary injunction to reverse the toll increases. Defendant filed its answer on October 18, 2011, and moved for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) on November 4, 2011. On December 8, 2011, Judge Holwell heard oral argument on plaintiffs' motion for a preliminary injunction and defendant's motion to dismiss.

Judge Holwell denied plaintiffs' motion for a preliminary injunction on February 6, 2012 and converted defendant's motion to dismiss into a motion for summary judgment, pending further discovery. See Auto. Club of N.Y., Inc. v. Port Auth. of N.Y. & N.J., supra, 842 F. Supp. 2d at 681. On the same date, the matter was referred to me to supervise discovery in connection with defendant's motion for summary judgment (Docket Item 33).

On May 4, 2012, I held a conference in this matter during which various discovery disputes were discussed. In considering whether plaintiffs should be entitled to discovery regarding ITN funds allegedly diverted to the World Trade Center, and in consideration of the breadth of discovery contemplated by Judge Holwell in his February 6, 2012 opinion, I determined that the appropriate scope of discovery, with respect to financial matters, was "Interstate Transportation Network revenues and expenses for the years 2007 forward" (Order, dated May 7, 2012 ("May 7 Order") (Docket Item 41)). I explained the ruling as follows:

I think right now the relevant inquiry is income from the tolls, 2007 forward, and the actual expenses of the ITN and the projected expenses of the ITN. If the toll revenue is equal to or less than the ITN expenses and by ITN expenses I'm referring to all the categories of expenses that [defendant's counsel] described --- capital, operating, debt service --- it really doesn't matter how the World Trade Center site development is being funded. If, on the other hand, the tolls exceed the ITN expenses, then maybe we have a different situation. (Transcript of Proceedings held on May 4, 2012 ("May 4 Tr.") annexed as Exhibit C to Declaration of Kevin P. Mulry in Support of Motion to Compel Discovery, dated Jul. 3, 2012 (Docket Item 58)("Mulry Decl."), at 49).

Recognizing, however, that limited discovery had taken place prior to the May 4 conference, I informed plaintiffs that I was willing to "revisit the issue" if additional discovery revealed "other issues or shows that some more expansive discovery is appropriate" (May 4 Tr. at 49). As I noted at a later conference:

The last area here is AAA's intention to make a motion to compel with respect to disputed areas of discovery. Basically to revisit the May 7 order. [Plaintiffs' counsel], if you want to make a motion arguing that broader discovery is appropriate, I'm happy to consider such a motion. I would only ask that . . . the motion . . . is going to be based new or different arguments than were made in May. If it's just a rehash of what was said in May, ...


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