Appeals Court Reinstates Lawsuit Over Use of N.Y. Thruway Toll Funds

A federal appeals court has reinstated a lawsuit challenging the New York Thruway Authority’s use of millions of dollars in toll revenue to maintain the state’s canal system.

The federal class action suit, filed in late 2013 by American Trucking Associations and three motor carriers, was dismissed last year by a federal district court judge on technical grounds.

But in an Aug. 4 ruling, the 2nd U.S. Circuit Court of Appeals in New York granted an appeal by ATA, sending the case back to the district court.

“The district court dismissed under Federal Rules of Civil Procedure for failure to join the state of New York as a necessary party,” the appeals court said. “We conclude that the ruling was an abuse of discretion, and therefore vacate the judgment and remand for further proceedings consistent with this opinion.”

ATA has alleged in its lawsuit that the Thruway’s use of toll revenue for the canal system was a violation of the Commerce Clause of the U.S. Constitution.

The lawsuit was filed in federal district court in New York on behalf of truckers and all individuals who have used the Thruway since November 2010.

ATA said the “excessive tolls” being charged to truckers also harm consumers by raising the prices and reducing the variety of goods that are available for purchase.

“This is a very important victory,” ATA Deputy General Counsel Richard Pianka said of the appeals court decision. “Now we go forward. If we hadn’t won this appeal, our lawsuit would have remained dismissed.”

The district court had dismissed the case earlier because ATA did not include the state of New York as a co-defendant with the Thruway Authority.

“It was sort of a catch-22,” Pianka said. “The state’s necessary for the case, but at the same time, it’s immune.”

In her ruling, U.S. District Court Judge Colleen McMahon said that ATA’s legal briefs “cavalierly assert that it is the Thruway Authority’s responsibility to fund the canal system, not the state’s, and urge that the authority need only raise tolls on the canals to pay for canal-related expenses.”

McMahon added, “But their own pleading belies the idiocy of that assertion.”

The Thruway system is New York’s piece of the National Interstate Highway System, stretching 570 miles across the state. It includes portions of Interstate 87, I-90, I-95, I-190, and I-287. It is a major artery of interstate commerce in the Northeast and a critical route for commercial truckers servicing the region.

ATA had maintained — and the appeals court agreed — that Thruway Authority revenue was almost solely generated by tolls and not from state coffers.

“The Thruway Authority is not an ‘arm of the state’ and therefore does not enjoy New York’s 11th Amendment state sovereign immunity,” the appeals court said. “The Thruway is not a traditional state agency but a public entity that is generally self-funded and, except for the appointment of its members to nine-year terms, it is not under significant state control.”

Pianka added, “The merits of the case are hugely important. We don’t think that states should be able to use an interstate highway as a piggy bank to fund local projects.”

A spokesman for the Thruway declined comment on the appeals court ruling.