United States District Court, S.D. New York
AUTOMOBILE CLUB OF NEW YORK, INC., d/b/a AAA New York, and AAA NORTH JERSEY, INC., Plaintiffs,
THE PORT AUTHORITY OF NEW YORK AND NEW JERSEY, Defendant.
MEMORANDUM OPINION and ORDER
RICHARD K. EATON, District Judge[*].
Before the court is the motion of plaintiffs Automobile Club of New York, Inc., d/b/a AAA New York, and AAA North Jersey, Inc. (together, "AAA"), for a preliminary injunction against defendant the Port Authority of New York and New Jersey (the "Port Authority") pursuant to Rule 65 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 65. AAA seeks to enjoin the Port Authority from implementing a scheduled December 7, 2014 toll increase on its bridges and tunnels, claiming that the increase is in violation of (1) the Commerce Clause of the United States Constitution, U.S. Const. art. I, § 8, cl. 3, and (2) the Surface Transportation and Uniform Relocation Assistance Act of 1987 (the "Highway Act"), 33 U.S.C. § 508. Oral argument was heard on the preliminary injunction motion on November 19, 2014. For the reasons stated below, AAA's motion is denied.
The following facts are drawn from the parties' papers and are uncontested, unless otherwise noted. AAA New York and AAA North Jersey are not-for-profit corporations that purport to represent the interests of nearly two million member drivers. The Port Authority is a bi-state governmental agency, created by an interstate compact between the States of New York and New Jersey, that operates facilities in the greater New York City area, including four interstate bridges, two interstate tunnels, the interstate Port Authority Trans-Hudson railroad ("PATH"), three bus terminals, two truck terminals, seven marine terminals, four airports, two heliports, and the sixteen-acre World Trade Center site.
The Port Authority is authorized to collect tolls at its bridge and tunnel facilities. See N.Y. Unconsol. Law § 6501 (McKinney); N.J. Stat. Ann. § 32:1-118 (West). On August 19, 2011, the Port Authority Board of Commissioners met and approved a toll increase schedule. According to Michael Fabiano, Chief Financial Officer for the Port Authority, the five toll increases on the schedule were necessitated by increasing financial pressures on the Port Authority, including the economic recession, increased security costs since the attacks of September 11, 2001, an 11-billion-dollar investment to rebuild the World Trade Center site, and a need to overhaul aging facilities, including the Bayonne, Goethals, and George Washington Bridges. See November 4, 2011 Aff. of Michael Fabiano ("Fabiano Aff."), Ex. F at 5-10 (ECF Dkt. No. 12-6).
The scheduled December 7, 2014 increase is the next to last of those on the schedule approved by the Port Authority Board. Because neither of the governors of New York or New Jersey vetoed the minutes of the August 19, 2011 Board meeting, the first of the increases went into effect on September 18, 2011, and two others have followed.
On September 27, 2011, AAA brought an action in this Court, seeking, among other things, a declaratory judgment that the toll increases were illegal. Also on September 27, 2011, AAA applied for a preliminary injunction seeking to enjoin the Port Authority "from continuing to collect toll increases on Port Authority bridges and tunnels." Mem. of Law in Supp. of Pls.' Mot. for a Prelim. Inj. 2. On February 6, 2012 this motion was denied by Judge Richard Holwell. Auto. Club of N.Y., Inc. v. Port Auth. of N.Y. & N.J., 842 F.Supp.2d 672, 681 (S.D.N.Y. 2012) (" AAA v. Port Authority "). In doing so, Judge Holwell found that AAA had not satisfied the test for the granting of a preliminary injunction because it had not demonstrated (1) irreparable injury or (2) likelihood of success on the merits. See id. at 676-677, 678, 680. Following the denial of AAA's September 27, 2011 motion for a preliminary injunction, the parties engaged in discovery,  which is now largely complete.
In making its case for the preliminary injunction, AAA claims in essence that "[t]he postapproval rationale for the [t]oll [i]ncreases... includes $3.8 billion that is not authorized, not for transportation, or not connected to any transportation project, " and that information it has acquired through discovery since Judge Holwell denied its first preliminary injunction motion provides new grounds for this second motion to be granted. See Pls.' Mem. of Law in Supp. of Mot. for a Prelim. Inj. 5, 6 (ECF Dkt. No. 118) ("Pls.' Br.").
The Port Authority insists that this second AAA motion should be denied because (1) AAA did not appeal Judge Holwell's February 6, 2012 order, (2) AAA has not demonstrated irreparable harm to toll-payers, and (3) AAA has not demonstrated that the toll increases are in excess of those required for the Interstate Transportation Network (the "ITN"). See Def.'s Opp'n to Pls.' Second Mot. for a Prelim. Inj. 10, 17, 23, 30 (ECF Dkt. No. 125) ("Def.'s Br.").
A preliminary injunction is "an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion." Sussman v. Crawford, 488 F.3d 136, 140 (2d Cir. 2007) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)) (internal quotation marks omitted).
In general, a district court may grant a preliminary injunction where the moving party establishes: (i) that it is likely to suffer irreparable injury if the injunction is not granted, and (ii) either (a) a likelihood of success on the merits of its claim, or (b) the existence of serious questions going to the merits of its claim and a balance of the hardships tipping decidedly in its favor. However, when "the moving party seeks to stay governmental action taken in the public interest pursuant to a statutory or regulatory scheme, ' the injunction should be granted only if the moving party meets the more rigorous likelihood-of-success standard." Finally, when the injunction sought "will alter, rather than maintain the status quo, " or will "provide the movant with... relief [that] cannot be undone even if the defendant prevails at a trial on the merits, " the moving party must show a "clear" or "substantial" likelihood of success.
Beal v. Stern, 184 F.3d 117, 122-23 (2d Cir. 1999) (alterations in original) (citations omitted) (internal quotation marks omitted).
I. Irreparable Injury
When making its first summary judgment argument, AAA asserted that it would be impractical for the Port Authority to return any unlawful toll increase to those who had been overcharged. In ...