Lawsuit Challenging N.Y. Thruway Authority’s Use of Toll Revenue for Canals Reinstated by Court
A federal appeals court has reinstated a lawsuit challenging the New York Thruway Authority’s use of millions of dollars in toll revenues to maintain the state’s canal system used mostly by tourists.
The federal class action lawsuit, 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 that by not also filing against the state of New York, the plaintiffs did not satisfy federal rules of evidence to proceed with the lawsuit.
“Plaintiffs 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,” U.S. District Court Judge Colleen McMahon said in her dismissal ruling last year. “But their own pleading belies the idiocy of that assertion.”
However, in an Aug. 4 ruling, the 2nd U.S. Circuit Court of Appeals granted ATA’s appeal, disagreeing with the district judge’s criticism of the class action litigants.
“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.”
The Thruway Authority declined to comment.
ATA had alleged in its lawsuit that the thruway’s use of toll revenue for canal system maintenance and improvements 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 all individuals and truckers 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 Gov. Thomas E. Dewey Thruway system is New York’s piece of the National Interstate Highway System and stretches for 570 miles across the state. It includes portions of Interstate 87, I-90, I-95, I-190, and I-287. The Thruway 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 revenues were 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.”
