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11/23/2016
Federal Judge OKs Toll Diversion In New York, New Jersey
AAA loses federal lawsuit against diversion of toll revenue from New York area bridges and tunnels to fund the World Trade Center site.

AAA v. Port Authority
Motorists in New York and New Jersey will have their tolls continue to pay for unrelated monument upkeep at the World Trade Center. That is the result of Friday's ruling by US District Judge Richard K. Eaton, who shot down AAA's five-year effort to overturn the toll hikes imposed by the Port Authority of New York and New Jersey, which raises $1.5 billion from motorists crossing into New York City.

In addition to toll bridges and tunnels, the Port Authority runs bus terminals, ferries, airports, ports and the World Trade Center site. AAA sued over the $4.50 toll hike proposed in 2011, arguing the excessive fees helped divert $385 million to subsidize the authority's non-motorist operations, specifically the World Trade Center reconstruction.

"The Port Authority has revealed in a public statement that $11 billion of the toll increase will be used to rebuild the World Trade Center and fund significant cost overruns which the Port Authority has encountered because of delays in construction," AAA lawyers wrote in their complaint.

As a legal matter, the argument appeared solid. In August, another federal judge ruled toll diversion for the benefit of the New York State Canal System was violated the Dormant Commerce Clause, which was found to prohibit states from discriminating against interstate commerce by imposing unreasonable toll rates (view ruling). In this case, however, the court was not convinced.

US Magistrate Judge Henry Pitman blocked access to a number of key financial documents and internal memos about the toll hikes, citing the "deliberative process privilege." Judge Pitman insisted that intentions were irrelevant, and the actual use of the funds was what mattered. The Port Authority maintained that when the toll revenues were added to the transit operations, the result was a net deficit, so there would be no money left over to transfer to the World Trade Center. Without access to the documents, the resulting case was not strong enough to continue.

"AAA has simply not done the math demonstrating that, even using its preferred method of calculation, the increased tolls will create a positive rate of return for the integrated transportation network, let alone an unreasonably high rate of return," Judge Eaton wrote. "AAA's entire claim rests on arguments, not facts."

Judge Eaton dismissed the case in its entirety. A copy of the ruling is available in a 130k PDF file at the source link below.

Source: PDF File AAA v. Port Authority of New York and New Jersey (US District Court, Southern District New York, 11/18/2016)



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