Owner Operator Indep. Drivers Ass'n, Inc. v. Pa. Tpk. Comm'n
This text of 383 F. Supp. 3d 353 (Owner Operator Indep. Drivers Ass'n, Inc. v. Pa. Tpk. Comm'n) is published on Counsel Stack Legal Research, covering District Court, M.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
(Judge Kane )
In this action members of the motoring public who routinely access the Pennsylvania Turnpike (the "Turnpike") for business and personal travel have joined together in challenging Turnpike tolls that are alleged to be increasingly disproportionate to services rendered. Plaintiffs allege that the Pennsylvania statutory scheme permitting *356this inequity ("Act 44/89"), first enacted in 2007, violates the dormant Commerce Clause of the United States Constitution and their constitutional right to travel. Specifically, Plaintiffs complain that in violation of the Constitution, Act 44/89 authorizes and directs the Pennsylvania Turnpike Commission ("PTC") to collect user fees with no regard to Turnpike operating costs and to redistribute those funds to the Pennsylvania Department of Transportation ("PennDOT") for projects across the Commonwealth that are of no benefit to the paying Turnpike motorist.
Plaintiffs in this case are: Owner Operator Independent Drivers Association, Inc. ("OOIDA"), National Motorists Association ("NMA"), Marion L. Spray ("Spray"), B.L. Reever Transportation, LLC ("B.L. Reever"), Flat Rock Transportation, LLC ("Flat Rock"), Milligan Trucking, Inc. ("Milligan Trucking"), Frank Scavo ("Scavo"), and Laurence G. Tarr ("Tarr"), consisting of organizations, businesses, and individuals who are required to pay and have paid tolls to the PTC for their use of the Turnpike (collectively, "Plaintiffs"). (Doc. No. 1 ¶¶ 9-18.) Defendants are the PTC, William K. Lieberman, Vice Chair of the PTC, Barry T. Drew, Secretary Treasurer of the PTC, Pasquale T. Deon, Sr., Commissioner of the PTC, John N. Wozniak, Commissioner of the PTC, Mark P. Compton, Chief Executive Officer of the PTC, Craig R. Shuey, Chief Operating Officer of the PTC (collectively, the "PTC Defendants"), Tom Wolf, Governor of the Commonwealth of Pennsylvania, and Leslie S. Richards, Chair of the PTC and Secretary of PennDOT (collectively, the "Commonwealth Defendants"). (Id. ¶¶ 19-28.)
Before the Court are four motions to dismiss Plaintiffs' complaint filed by the PTC Defendants,1 the Commonwealth Defendants, individual defendant Shuey, and individual defendant Lieberman. (Doc. Nos. 49, 50, 52, and 53.) Also before the Court is Plaintiffs' Motion for Partial Summary Judgment on the issue of liability. (Doc. No. 84.) The motions have been fully briefed and are ripe for disposition.2 For the reasons that follow, the PTC and Commonwealth Defendants' motions to dismiss will be granted, the motions filed by individual defendants Shuey and Lieberman will be denied as moot, and Plaintiffs' motion for partial summary judgment on the issue of liability will be denied.3
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY4
A. Act 44/89
The Turnpike is a toll road operated by the PTC, running for 359 miles across the Commonwealth, beginning at the Ohio state line in Lawrence County and ending *357at the New Jersey border at the Delaware River Bridge in Bucks County. (Doc. No. 1 ¶ 41.) Including the Northeastern Extension and Western Extension, the Turnpike covers 552 miles. (Id. ) Plaintiffs challenge the constitutionality of "excessive" tolls charged to named Plaintiffs and members of a putative class of motor carriers, drivers, and motorists by the PTC for travel on the Turnpike. (Doc. No. 1 ¶ 1.) The PTC is "an instrumentality of the Commonwealth." 36 P.S. § 652d ; Doc. No. 1 ¶ 32. Pennsylvania law authorizes the PTC to fix and adjust tolls to generate funds for services and facilities provided by the Commonwealth of Pennsylvania, as follows:
(a) Establishment and changes in toll amounts. --
...
Tolls shall be fixed and adjusted as to provide funds at least sufficient with other Revenues of the Pennsylvania Turnpike System, if any, to pay all of the following:
...
(3) Amounts due to the department under 75 Pa. C.S. Ch. 89 (relating to Pennsylvania Turnpike) and pursuant to the lease agreement under 75 Pa. C.S. § 8915.3 (relating to lease of Interstate 80; related agreements).
...
(5) Any other amounts payable to the Commonwealth or to the department.
74 Pa. C.S. § 8116(a) ; Doc. No. 1 ¶ 40. Plaintiffs' complaint alleges that the PTC obtains almost the entirety of its operating revenue from tolls. (Doc. No. 1 ¶ 86.) Plaintiffs allege that prior to the enactment of Act 44, the PTC raised tolls on the Turnpike only five times in the 64-year history of the Turnpike. (Id. ¶ 87.) Plaintiffs allege that in fiscal year ending May 31, 2015, 192 million vehicles traveled on the Turnpike, consisting of approximately 166 million Class 1 Passenger vehicles and 26 million Class 2-9 commercial vehicles. (Id. ¶ 42.) Plaintiffs' complaint estimates that trucks provide for about half of the annual toll revenues generated by the Turnpike, producing $ 443 million in toll revenues for PTC in the 2016 fiscal year. (Id. ¶ 43.)
In 2007, the Pennsylvania General Assembly enacted a statute known as Act 44, amending portions of the Pennsylvania Public Transportation Law (Title 74) and the Vehicle Code (Title 75). See Act of July 18, 2007, P.L. 169, No. 44; Doc. No. 1 ¶ 44. Pursuant to the statute, the PTC and PennDOT entered into a Lease and Funding Agreement ("LAFA"), for a term of fifty years. See 75 Pa. C.S. § 8915.3(1) ; Doc. No. 1 ¶ 45. Act 44, as originally enacted, required the PTC to make a "[s]cheduled annual commission contribution" to PennDOT in the following amounts:
TABLE 1
Amount Fiscal Year $750,000,000 2007-2008 $850,000,000 2008-2009 $900,000,000 2009-2010 Annual Increases of 2.5% 2010-End
*35875 Pa. C.S. § 8901 ; Doc. No. 1 ¶ 52. As alleged in Plaintiffs' complaint, on December 4, 2008, the PTC issued a press release regarding an imminent 25 percent toll increase:
In December 2008, PTC's CEO announced: "The mission of [the Turnpike] has changed.... For the first time, toll income isn't only going back into our toll roads, but helping to fund infrastructure improvements in every corner of Pennsylvania .... Toll increase proceeds are mainly earmarked for non-Turnpike projects, so the funds generated by this [2009 toll] increase will largely be used by PennDOT to help finance off-Turnpike road and bridge projects and the state's 74 mass-transit operations."
(Doc. No. 1 ¶ 72.) In a December 30, 2008 press release by the PTC, the PTC's CEO stated that "[i]n fact, more than 90 percent of the toll-increase proceeds will benefit non-Turnpike road and bridge projects and transit operations." (Id. ¶ 73.)
In 2013, the General Assembly again amended the Public Transportation Law and Vehicle Code through legislation known as Act 89. See Act of Nov. 25, 2013, P.L. 974, No. 89; Doc. No. 1 ¶ 46. Act 89 amended the PTC's annual payment obligations to PennDOT. (Doc. No.
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(Judge Kane )
In this action members of the motoring public who routinely access the Pennsylvania Turnpike (the "Turnpike") for business and personal travel have joined together in challenging Turnpike tolls that are alleged to be increasingly disproportionate to services rendered. Plaintiffs allege that the Pennsylvania statutory scheme permitting *356this inequity ("Act 44/89"), first enacted in 2007, violates the dormant Commerce Clause of the United States Constitution and their constitutional right to travel. Specifically, Plaintiffs complain that in violation of the Constitution, Act 44/89 authorizes and directs the Pennsylvania Turnpike Commission ("PTC") to collect user fees with no regard to Turnpike operating costs and to redistribute those funds to the Pennsylvania Department of Transportation ("PennDOT") for projects across the Commonwealth that are of no benefit to the paying Turnpike motorist.
Plaintiffs in this case are: Owner Operator Independent Drivers Association, Inc. ("OOIDA"), National Motorists Association ("NMA"), Marion L. Spray ("Spray"), B.L. Reever Transportation, LLC ("B.L. Reever"), Flat Rock Transportation, LLC ("Flat Rock"), Milligan Trucking, Inc. ("Milligan Trucking"), Frank Scavo ("Scavo"), and Laurence G. Tarr ("Tarr"), consisting of organizations, businesses, and individuals who are required to pay and have paid tolls to the PTC for their use of the Turnpike (collectively, "Plaintiffs"). (Doc. No. 1 ¶¶ 9-18.) Defendants are the PTC, William K. Lieberman, Vice Chair of the PTC, Barry T. Drew, Secretary Treasurer of the PTC, Pasquale T. Deon, Sr., Commissioner of the PTC, John N. Wozniak, Commissioner of the PTC, Mark P. Compton, Chief Executive Officer of the PTC, Craig R. Shuey, Chief Operating Officer of the PTC (collectively, the "PTC Defendants"), Tom Wolf, Governor of the Commonwealth of Pennsylvania, and Leslie S. Richards, Chair of the PTC and Secretary of PennDOT (collectively, the "Commonwealth Defendants"). (Id. ¶¶ 19-28.)
Before the Court are four motions to dismiss Plaintiffs' complaint filed by the PTC Defendants,1 the Commonwealth Defendants, individual defendant Shuey, and individual defendant Lieberman. (Doc. Nos. 49, 50, 52, and 53.) Also before the Court is Plaintiffs' Motion for Partial Summary Judgment on the issue of liability. (Doc. No. 84.) The motions have been fully briefed and are ripe for disposition.2 For the reasons that follow, the PTC and Commonwealth Defendants' motions to dismiss will be granted, the motions filed by individual defendants Shuey and Lieberman will be denied as moot, and Plaintiffs' motion for partial summary judgment on the issue of liability will be denied.3
I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY4
A. Act 44/89
The Turnpike is a toll road operated by the PTC, running for 359 miles across the Commonwealth, beginning at the Ohio state line in Lawrence County and ending *357at the New Jersey border at the Delaware River Bridge in Bucks County. (Doc. No. 1 ¶ 41.) Including the Northeastern Extension and Western Extension, the Turnpike covers 552 miles. (Id. ) Plaintiffs challenge the constitutionality of "excessive" tolls charged to named Plaintiffs and members of a putative class of motor carriers, drivers, and motorists by the PTC for travel on the Turnpike. (Doc. No. 1 ¶ 1.) The PTC is "an instrumentality of the Commonwealth." 36 P.S. § 652d ; Doc. No. 1 ¶ 32. Pennsylvania law authorizes the PTC to fix and adjust tolls to generate funds for services and facilities provided by the Commonwealth of Pennsylvania, as follows:
(a) Establishment and changes in toll amounts. --
...
Tolls shall be fixed and adjusted as to provide funds at least sufficient with other Revenues of the Pennsylvania Turnpike System, if any, to pay all of the following:
...
(3) Amounts due to the department under 75 Pa. C.S. Ch. 89 (relating to Pennsylvania Turnpike) and pursuant to the lease agreement under 75 Pa. C.S. § 8915.3 (relating to lease of Interstate 80; related agreements).
...
(5) Any other amounts payable to the Commonwealth or to the department.
74 Pa. C.S. § 8116(a) ; Doc. No. 1 ¶ 40. Plaintiffs' complaint alleges that the PTC obtains almost the entirety of its operating revenue from tolls. (Doc. No. 1 ¶ 86.) Plaintiffs allege that prior to the enactment of Act 44, the PTC raised tolls on the Turnpike only five times in the 64-year history of the Turnpike. (Id. ¶ 87.) Plaintiffs allege that in fiscal year ending May 31, 2015, 192 million vehicles traveled on the Turnpike, consisting of approximately 166 million Class 1 Passenger vehicles and 26 million Class 2-9 commercial vehicles. (Id. ¶ 42.) Plaintiffs' complaint estimates that trucks provide for about half of the annual toll revenues generated by the Turnpike, producing $ 443 million in toll revenues for PTC in the 2016 fiscal year. (Id. ¶ 43.)
In 2007, the Pennsylvania General Assembly enacted a statute known as Act 44, amending portions of the Pennsylvania Public Transportation Law (Title 74) and the Vehicle Code (Title 75). See Act of July 18, 2007, P.L. 169, No. 44; Doc. No. 1 ¶ 44. Pursuant to the statute, the PTC and PennDOT entered into a Lease and Funding Agreement ("LAFA"), for a term of fifty years. See 75 Pa. C.S. § 8915.3(1) ; Doc. No. 1 ¶ 45. Act 44, as originally enacted, required the PTC to make a "[s]cheduled annual commission contribution" to PennDOT in the following amounts:
TABLE 1
Amount Fiscal Year $750,000,000 2007-2008 $850,000,000 2008-2009 $900,000,000 2009-2010 Annual Increases of 2.5% 2010-End
*35875 Pa. C.S. § 8901 ; Doc. No. 1 ¶ 52. As alleged in Plaintiffs' complaint, on December 4, 2008, the PTC issued a press release regarding an imminent 25 percent toll increase:
In December 2008, PTC's CEO announced: "The mission of [the Turnpike] has changed.... For the first time, toll income isn't only going back into our toll roads, but helping to fund infrastructure improvements in every corner of Pennsylvania .... Toll increase proceeds are mainly earmarked for non-Turnpike projects, so the funds generated by this [2009 toll] increase will largely be used by PennDOT to help finance off-Turnpike road and bridge projects and the state's 74 mass-transit operations."
(Doc. No. 1 ¶ 72.) In a December 30, 2008 press release by the PTC, the PTC's CEO stated that "[i]n fact, more than 90 percent of the toll-increase proceeds will benefit non-Turnpike road and bridge projects and transit operations." (Id. ¶ 73.)
In 2013, the General Assembly again amended the Public Transportation Law and Vehicle Code through legislation known as Act 89. See Act of Nov. 25, 2013, P.L. 974, No. 89; Doc. No. 1 ¶ 46. Act 89 amended the PTC's annual payment obligations to PennDOT. (Doc. No. 1 ¶ 53.) Pursuant to Act 89, the PTC and PennDOT amended the LAFA in 2014, entering into an Amended Funding Agreement scheduled to terminate in October of 2057. (Doc. No. 1 ¶ 47.)
The statutory scheme established by Act 44/89 provides for annual payments made by the PTC to PennDOT that currently total $ 450 million annually through fiscal year 2022 and reduce to $ 50 million annually through 2057. See 75 Pa. C.S. §§ 8901 ; Doc. No. 1 ¶¶ 51-54. Under Act 44/89, the PTC's annual payments to PennDOT through fiscal year 2057 will total $ 9.65 billion. (Doc. No. 1 ¶ 55.) The PTC obtains the funds necessary to make the annual Act 44/89 payments from Turnpike tolls and from bonds it issues, the interest and principal of which are paid from tolls. (Id. ¶¶ 59-61.) Plaintiffs' complaint alleges that the PTC's Act 44/89 payments to PennDOT, interest, and bond expenses are classified by the PTC as "non-operating expenses." (Id. ¶ 62.) As alleged by Plaintiffs, the largest portion of PTC's revenues derive from tolls, which are pledged to secure the PTC's outstanding Senior Revenue Bonds, also known as Turnpike Revenue Bonds. (Id. ¶ 63.) Plaintiffs' complaint alleges that, according to the Commonwealth of Pennsylvania Auditor General's 2016 Performance Audit of PTC ("2016 Performance Audit"), beginning in 2015, the PTC's Act 44/89 payments have been solely dedicated to "non-highway purposes," including transit. (Id. ¶ 69.) The PTC Act 44 Financial Plan Fiscal Year 2018 ("Act 44 Plan FY2018"), dated June 1, 2017, describes the change in funding obligations imposed by Act 89 as follows:
Act 89 substantially altered the Commission's funding obligations to PennDOT. While the Commission's aggregate payment obligation remains at $ 450 million annually, beginning July 1, 2014, none of the payments are dedicated to highways and bridges. Instead, all $ 450 million is allocated to support transit capital, operating, multi-modal and other non-highway programs.
(Doc. No. 1 ¶ 70) (quoting Act 44 Plan FY2018).
Pursuant to Act 44/89, PennDOT deposits the annual payments from the PTC into the Public Transportation Trust Fund ("PTTF"). See 74 Pa. C.S. § 1506(b)(1). Monies from that fund are then distributed among four programs: the "operating program," the "asset improvement program," the Multimodal Transportation Fund *359("MTF"), and "programs of statewide significance." See 74 Pa. C.S. §§ 1506(e)(1)-(3), (6) ; Doc. No. 1 ¶ 71. The statute directs that of the $ 450 million transferred to the PTTF, $ 30 million must be deposited in the MTF. 74 Pa. C.S. § 1506(b)(1), (e)(6). The statute further provides that 95% of the funds transferred to the PTTF annually from PennDOT, after the transfer of $ 30 million to the MTF, are utilized in connection with the "asset improvement program." Id. §§ 1514, 1506(e)(2). Funds expended in connection with the "asset improvement program" are used for "improvement, replacement or expansion of capital projects" related to public transportation. Id. § 1514(a)(1). The relevant statute provides that southeastern Pennsylvania's public transportation agency, ("SEPTA"), and the Port Authority of Allegheny County receive the majority of such funds, with other mass transit agencies in the Commonwealth receiving the remaining funds. See id. § 1514(e.1). The statute provides that as to the "asset improvement program," "[e]ligible applicants ... may apply for financial assistance for improvement, replacement or expansion of capital projects." Id. § 1514. Such applicants may include "[a] local transportation organization," Commonwealth agencies and instrumentalities, and any "person responsible for coordinating community transportation program services." Id. § 1514(a). A "capital project" is defined as:
A system or component of a system for the provision of public passenger transportation. The term includes vehicles; infrastructure power; passenger amenities; storage and maintenance buildings; parking facilities; the land on which any capital project is situated and the land needed to support it, whether owned in whole or in part; overhaul of vehicles; debt service; and the cost of issuance of bonds, notes and other evidences of indebtedness which a local transportation organization or transportation company is permitted to issue under any law of this Commonwealth.
Id. § 1503. A significantly smaller amount of the funds transferred from the PTC to PennDOT and deposited in the PTTF is dedicated to the "operating program"5 and "programs of statewide significance."6 Id. §§ 1513, 1516, 1506(e)(1), (3).
The $ 30 million deposited in the MTF finances transportation improvement programs including those related to bicycle and pedestrian safety, aviation, rail freight, passenger rail, and ports and waterways. Id. § 2104(a). "Eligible program[s]" under the MTF include: "(1) A project which coordinates local land use with transportation assets to enhance existing communities[,] (2) A project related to streetscape, lighting, sidewalk enhancement and pedestrian safety[,] (3) A project improving connectivity or utilization of existing transportation assets[, and] (4) A project related to transit-oriented development[.]" Id. § 2101.
Plaintiffs' complaint alleges that some of the projects approved under these statutory provisions (and funded with Act 44/89 toll revenues) include the following:
*360a. Development of Three Crossings, a mixed-use development consisting of residential units, office space, and a transportation facility with vehicle and bicycle parking, bicycle repair, electric-vehicle charging stations, kayak storage, and transit station in Pittsburgh (Allegheny County);
b. Construction of an underpass under U.S. 22, connecting the Lower Trail with Canoe Creek State Park (Blair County);
c. Rehabilitation of nine stone-arch bridges along the SEPTA regional railway line (Regional project);
d. Replacement of the roof at Collier Bus Garage (Allegheny County);
e. Sidewalk installation along North Main Street in Yardley (Bucks County);
f. Installation of approximately 1,800 feet of ADA-compliant sidewalk along the south side of Union Deposit Road between Shield Street and Powers Avenue at the Union Square Shopping Center in Susquehanna (Dauphin County);
g. Extension of internal road, including final design, survey, permit modifications, bid documents, construction, storm water, street lights, project administration, legal expenses, audit expenses, and contingencies in Windy Ridge Business and Technology Park (Indiana County);
h. Improvements to roadways in 12,000 acres of parks, including widening shoulders, paving, signage installation, and bicycle marking in the Allegheny County Parks;
i. Addition of eight curb ramps, new asphalt, four decorative crosswalks and a surface sign at an intersection in Latrobe (Westmoreland County);
j. Phase II Construction of Erie Metropolitan Transportation Authority's Maintenance and Paratransit Bus Storage Facility (Erie County);
k. Improvements to the Erie International Airport terminal building (Erie County);
l. Creation of a multi-use trail and installing associated signage from the West End neighborhood linking existing bike routes to a multi-use path that connects to The Pennsylvania State University (Centre County);
m. Creation of a pedestrian island at the intersection of Park Avenue and McKee Street in State College to provide a safer crossing for pedestrians and cyclists and accommodate the accessibility needs of vision-impaired residents (Centre County);
n. Construction of a new two-way industrial access road, realigning a portion of the Nittany & Bald Eagle Railroad Main Line to accommodate the access road, and constructing new sidings and operating tracks for First Quality Tissue's two existing facilities and a proposed new facility (Clinton County);
o. Construction of an 85-car unit train loop track in the Keystone Regional Industrial Park to connect with an existing Norfolk Southern main line track and serve a Deer field Farms Service grain elevator facility in Greenwood (Crawford County).
(Doc. No. 1 ¶ 84.)
Plaintiffs assert that these funded programs have "no functional relationship to the Pennsylvania Turnpike," and that the PTC does not possess the financial resources to make the Act 44/89 payments currently and in the future without continually increasing toll rates and debt. (Id. ¶¶ 84-85, 88.) Plaintiffs' complaint sets *361forth "Actual (through 2016) and Expected Toll Increase Resulting from Act 44/89" as contained in an Auditor General Performance Audit as follows:
TABLE 2
Actual (through 2016) and Expected Toll Increase Resulting from Act 44/89 Calendar Year 2009 through 2044
Year Cash E-Z Pass Cash E-Z Pass 2009 25.0% 25.0% 2027 3.5% 3.5% 2010 3.0% 3.0% 2028 3.0% 3.0% 2011 10.0% 3.0% 2029 3.0% 3.0% 2012 10.0% - 2030 3.0% 3.0% 2013 10.0% 2.0% 2031 3.0% 3.0% 2014 12.0% 2.0% 2032 3.0% 3.0% 2015 5.0% 5.0% 2033 3.0% 3.0% 2016 6.0% 6.0% 2034 3.0% 3.0% 2017 6.0% 6.0% 2035 3.0% 3.0% 2018 6.0% 6.0% 2036 3.0% 3.0% 2019 6.0% 6.0% 2037 3.0% 3.0% 2020 6.0% 6.0% 2038 3.0% 3.0% 2021 5.0% 5.0% 2039 3.0% 3.0% 2022 5.0% 5.0% 2040 3.0% 3.0% 2023 5.0% 5.0% 2041 3.0% 3.0% 2024 5.0% 5.0% 2042 3.0% 3.0% 2025 5.0% 5.0% 2043 3.0% 3.0% 2026 4.0% 4.0% 2044 3.0% 3.0%
(Id. ¶ 90.) Plaintiffs' complaint alleges that between 2006 and 2018, tolls paid by cash have increased over 200% for all classes of vehicles as follows:
TABLE 3
2006-2018 Increase in Tolls Mainline Roadway East to West Complete Trip Delaware River Bridge (NJ Border) to Gateway (Ohio Border)
Vehicle Toll Gross Vehicle 2006 Toll 2018 Toll (Cash) Increase Class Wt. (1000 lb.) 1 1-7 $21.25 $47.55 223% 2 7-15 $31.25 $69.85 223% 3 15-19 $39.00 $84.35 216% 4 19-30 $45.25 $101.15 223% 5 30-45 $63.75 $141.85 222% 6 45-62 $80.75 $177.90 220% 7 62-80 $115.25 $254.70 220% 8 80-100 $150.75 $333.85 221% 9 Over 100 $861.00 $1,836.40 213%
(Id. ¶ 93.) Plaintiffs' complaint further alleges that each year since 2011, the PTC's toll revenues have consisted of an amount over 200% of the cost to operate, maintain, and upgrade the Turnpike as follows:
TABLE 4
*362PTC Cost of Turnpike Gross Toll Revenue Toll Revenue as a % Services of Cost of Services 2007 $369,855,000 $617,616,000 166.99% 2008 $372,959,000 $619,150,000 166.01% 2009 $393,364,000 $638,244,000 162.25% 2010 $378,426,000 $718,038,000 189.74% 2011 $359,870,000 $763,856,000 212.26% 2012 $387,506,000 $797,779,000 205.88% 2013 $412,484,000 $821,740,000 199.22% 2014 $438,981,000 $866,066,000 197.29% 2015 $459,780,000 $934,252,000 203.20% 2016 $471,132,000 $1,031,620,000 218.97% 2017 $517,103,000 $1,114,976,000 215.62%
(Doc. No. 1 ¶ 95.)
Based on these alleged numbers, Plaintiffs contend that Turnpike tolls do not represent a "fair approximation of the use of the Turnpike facilities provided, they are excessive in relation to the benefits conferred, and they significantly exceed the costs incurred by PTC to operate and maintain the Pennsylvania Turnpike System." (Id. ¶ 96.) Further, Plaintiffs maintain that "PTC's tolls unduly burden interstate commerce by causing the Pennsylvania Turnpike System to be used as a revenue-generating facility designed to underwrite expenses incurred by PennDOT in providing services and facilities throughout the Commonwealth that have no functional relationship to the Pennsylvania Turnpike System." (Id. ¶ 97.)
Plaintiffs' complaint cites the 2016 Performance Audit, which states that "[a]nnual costly toll increases place an undue burden on Pennsylvanians." (Id. ¶ 98.) Plaintiffs' complaint also cites the 2016 Performance Audit's statement that at some point "the average turnpike traveler will be deterred by the increased cost and seek alternative toll-free routes," as well as its conclusion that "[t]he toll prices potentially are already nearing the point where certain consumers will find it too costly and avoid using the Pennsylvania Turnpike." (Id. ¶ 99.) Plaintiffs' complaint notes that the 2016 Performance Audit recommended that the PTC "[s]eek immediate relief from the legislature to further reduce or eliminate Act 44/89 required payments to PennDOT." (Id. ¶ 100.)
Plaintiffs' complaint further alleges that the enforcement of Act 44/89 "is an official state action that impedes travelers' use of the Pennsylvania Turnpike System," asserting that the right to move freely by automobile "is implicit in the concept of ordered liberty and finds ample support in the Commerce Clause, the Privileges and Immunities Clause, and the Due Process Clause of the Fourteenth Amendment," and that the economic burdens of Act 44/89 payments fall "exclusively on travelers paying the toll," while the economic benefits from Act 44/89 payments "fall substantially on others who do not pay the toll." (Id. ¶¶ 101-04.) Plaintiffs' complaint concludes that the PTC's "imposition of a toll inflated to guarantee the Act 44/89 payments to PennDOT to support facilities and services having no functional relationship to use of the Turnpike impairs Plaintiffs' and potential class members' constitutional right to travel." (Id. ¶ 105.)
Plaintiffs' complaint alleges a violation of the Commerce Clause of the United States Constitution, asserting that the Clause "prohibits state actions that unduly burden interstate commerce," and "requires that user fees like tolls: (1) may not discriminate against interstate commerce and travel;
*363(2) must reflect a fair approximation of the use of facilities for whose benefit they are imposed; and (3) may not be excessive in relation to costs incurred by the imposing authority." (Id. ¶¶ 120-21.) Plaintiffs' complaint maintains that:
PTC's imposition of tolls for use of the Pennsylvania Turnpike constitutes an undue burden on interstate commerce in violation of the Commerce Clause because: a. the tolls do not reflect a fair approximation of the use of Pennsylvania Turnpike facilities by those upon whom the tolls are imposed; b. the annual toll revenues collected by PTC are excessive and currently represent over 200 percent of the actual cost of making the Pennsylvania Turnpike System available to users; and c. more than half of the annual toll revenues [collected] by PTC [ ] are used to pay for services and facilities having no functional relationship to the operation and maintenance of the Pennsylvania Turnpike System.
(Id. ¶ 122.) Plaintiffs' complaint further alleges that the provisions of Act 44/89 are unconstitutional facially or as applied, and that Defendants, "acting under color of state law, have deprived and continue to deprive Plaintiffs and putative class members of the right to engage in interstate commerce in violation of their rights under the Commerce Clause." (Id. ¶¶ 123-24.)
Plaintiffs' complaint also alleges a violation of the constitutional right to travel, asserting that the "U.S. Constitution protects individuals' right to travel," which Plaintiffs allege Defendants are impairing, in that the imposition of an "excessive" toll:
a. unconstitutionally limits travelers' access to the Pennsylvania Turnpike; b. unduly burdens and impedes motorists' right to travel freely through the Commonwealth; and c. is currently discouraging both business and private travelers from using the Turnpike.
(Id. ¶¶ 127-28.) Plaintiffs' complaint alleges that Defendants, "acting under color of state law, have imposed and continue to impose tolls that act as an unconstitutional impediment to Plaintiffs' and class members' right to travel." (Id. ¶ 129.)
As relief for these alleged constitutional violations, Plaintiffs seek a declaratory judgment holding that:
(1) the PTC's imposition of excessive tolls for the use of the Pennsylvania Turnpike by motor carriers engaged in interstate commerce in amounts specifically calculated to provide funds to support facilities and services having no functional relationship to the operation and maintenance of the Pennsylvania Turnpike System constitutes an undue burden on commerce in violation of the Commerce Clause; ... [and] an unjustified impairment on their constitutional right to travel; [and]
(2) the provisions of Act 44, as amended by Act 89, that direct the PTC to: (a) make payments to PennDOT to support facilities and services provided by the Commonwealth of Pennsylvania having no functional relation to the operation and maintenance of the Pennsylvania Turnpike, and (b) fund those payments with sums generated through the imposition of tolls upon users of the Pennsylvania Turnpike that do not represent a fair approximation of the use of Turnpike facilities, violate the Commerce Clause of the United States Constitution, both facially or as applied.
(Id. at 38-40.) Plaintiffs' complaint also seeks a permanent injunction enjoining "Defendants PTC, its Commissioners, and *364its Executive Officers from imposing constitutionally excessive tolls upon users of the Pennsylvania Turnpike System;" the "PTC from issuing any further bonds or incurring any additional debt for the purpose of making Act 44/89 payments;" the "PTC from using toll revenues to make payments of interest or principal on outstanding bonds issued for the purpose of meeting its Act 44/89 obligations;" and "Defendants Leslie S. Richards, in her official capacity as Secretary of PennDOT, and Tom Wolf, Governor of Pennsylvania, from enforcing Act 44/89 and from demanding or receiving Act 44/89 payments." (Id. at 41-42.) Plaintiffs' complaint further seeks a judgment against Defendants PTC and its Commissioners and Executive Officers in favor of Plaintiffs that awards "them refunds of all payments of tolls imposed upon their use of the Pennsylvania Turnpike System in excess of what was reasonably necessary to pay for the cost of operating and maintaining the Pennsylvania Turnpike." (Id. at 42.) Finally, Plaintiffs seek an order certifying this proceeding as a class action and an award of reasonable attorneys' fees and costs. (Id. )
B. Procedural History
On March 15, 2018, Plaintiffs filed this putative class action complaint against the PTC Defendants and the Commonwealth Defendants in their individual and official capacities. (Doc. No. 1.) On April 2, 2018, Plaintiffs filed a Motion for Preliminary Injunction with supporting brief (Doc. Nos. 19, 20), in connection with their complaint. Shortly thereafter, Plaintiffs filed a Motion for Expedited Hearing on Plaintiff's Motion for Preliminary Injunction with supporting brief, (Doc. Nos. 22, 23), to which Defendants objected (Doc. No. 25). On April 13, 2018, the Court denied Plaintiffs' Motion for Expedited Hearing on Plaintiffs' Motion for Preliminary Injunction. (Doc. No. 33.) At the same time, the Court issued an Order to Show Cause why a hearing on Plaintiffs' Motion for Preliminary Injunction should not be consolidated with the trial on the merits of this action pursuant to Federal Rule of Civil Procedure 65(a)(2). (Doc. No. 34.) Plaintiffs subsequently filed a Motion to Withdraw Motion for Preliminary Injunction (Doc. No. 40), which the Court granted by Order dated April 24, 2018 (Doc. No. 42).
On May 15, 2018, three separate motions to dismiss Plaintiffs' Complaint were filed by certain Defendants: (1) Craig Shuey, Chief Operating Officer of the PTC (Doc. No. 49); (2) the Commonwealth Defendants (Doc. No. 50); and (3) William K. Lieberman, Vice Chair of the PTC (Doc. No. 53). On the same date, the PTC Defendants filed a motion to dismiss or, in the alternative, for summary judgment (Doc. No. 52). The motions have been fully briefed. (Doc. Nos. 51, 54, 55, 56, 66, 70, 71, 72, 76-80).
On May 15, 2018, the Pennsylvania Public Transportation Association, Southeastern Pennsylvania Transportation Authority, and the Port Authority of Allegheny County filed a Motion for Leave to File an Amicus Curiae Brief in Support of Defendants (Doc. No. 57), with three supporting Declarations (Doc. Nos. 58-60). The Court granted the Motion by Order dated May 22, 2018. (Doc. No. 63.)
Subsequently, on June 13, 2018, Plaintiffs filed a Motion to Certify Class and Appoint Class Counsel (Doc. No. 73), with a supporting Declaration (Doc. No. 74), and brief (Doc. No. 75). On June 21, 2018, the Commonwealth Defendants filed a Motion to Stay briefing on the Motion to Certify Class and Appoint Class Counsel until the Court's disposition of the pending motions to dismiss (Doc. No. 81), with a brief in support (Doc. No. 82). The Court granted the Motion to Stay briefing and consideration of the Motion to Certify *365Class by Order dated June 25, 2018. (Doc. No. 83.)
On June 28, 2018, Plaintiffs filed a Motion for Partial Summary Judgment on the Issue of Liability (Doc. No. 84), with a brief in support thereto (Doc. No. 85), and a statement of facts (Doc. No. 86), with supporting Declaration (Doc. No. 87). On July 20, 2018, Defendants Shuey and Lieberman filed briefs in opposition to Plaintiff's motion (Doc. Nos. 93, 94). On the same date, the PTC Defendants filed a brief in opposition to the motion (Doc. No. 88), as well as an answer to statement of facts (Doc. No. 89). The Commonwealth Defendants also filed a brief in opposition (Doc. No. 90), an answer to statement of facts (Doc. No. 91), and a supporting Declaration (Doc. No. 92), on the same date. On August 3, 2018, Plaintiffs filed a reply brief in further support of their motion (Doc. No. 97), as well as responses to the answers to statement of facts filed by the Defendants (Doc. Nos. 98, 99).
On November 28, 2018, the PTC Defendants and the Commonwealth Defendants filed a Notice of Supplemental Authority. (Doc. No. 102.) On November 29, 2018, Plaintiffs filed Objections to the Notice (Doc. No. 103), as well as a Supplement to their Statement of Material Facts in support of their Motion for Partial Summary Judgment (Doc. No. 104). The Commonwealth Defendants filed an Answer to Plaintiffs' Supplement to their Statement of Material Facts on December 10, 2018. (Doc. No. 105.)
II. LEGAL STANDARDS
A. Motion to Dismiss
Federal notice and pleading rules require the complaint to provide the defendant notice of the claim and the grounds upon which it rests. Phillips v. Cty. Of Allegheny,
When ruling on a motion to dismiss under Rule 12(b)(6), the Court must accept as true all factual allegations in the complaint and all reasonable inference that can be drawn therefrom, viewed in the light most favorable to the plaintiff. See In re Ins. Brokerage Antitrust Litig.,
Accordingly, to determine the sufficiency of a complaint under Twombly and Iqbal, the United States Court of Appeals for the Third Circuit has identified the following steps a district court must take when *366determining the sufficiency of a complaint under Rule 12(b)(6) : (1) identify the elements a plaintiff must plead to state a claim; (2) identify any conclusory allegations contained in the complaint "not entitled" to the assumption of truth; and (3) determine whether any "well-pleaded factual allegations" contained in the complaint "plausibly give rise to an entitlement to relief." See Santiago v. Warminster Twp.,
In ruling on a Rule 12(b)(6) motion to dismiss for failure to state a claim, "a court must consider only the complaint, exhibits attached to the complaint, matters of public record, as well as undisputedly authentic documents if the complainant's claims are based upon these documents." Mayer v. Belichick,
B. Motion for Summary Judgment
Rule 56(a) of the Federal Rules of Civil Procedure provides that summary judgment is warranted "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A factual dispute is material if it might affect the outcome of the suit under the applicable law, and it is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact-finder to return a verdict for the non-moving party. Anderson v. Liberty Lobby, Inc.,
The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co.,
C. Facial Versus As-Applied Constitutional Challenges
"A party asserting a facial challenge 'must establish that no set of circumstances exists under which [an act] would be valid.' " Heffner v. Murphy,
III. DISCUSSION
As noted above, Plaintiffs' complaint asserts that Act 44/89 violates both (1) the dormant Commerce Clause of the United States Constitution, and (2) the constitutional right to travel. The Commonwealth Defendants and the PTC Defendants' motions to dismiss both argue that Plaintiffs' complaint fails to state a claim on either ground. The Court first addresses Defendants' challenges to Plaintiffs' dormant Commerce Clause claim.
A. Plaintiffs' Claim that Act 44/89 Violates the dormant Commerce Clause
1. Applicable Legal Standard
The Commerce Clause of the United States Constitution grants Congress the authority to "regulate Commerce ... among the several States." U.S. CONST. ART. I, § 8, cl. 3. The Commerce Clause also contains an implied requirement, known as the "dormant" Commerce Clause, that "states not 'mandate differential treatment of in-state and out-of-state economic interests that benefits the former and burdens the latter.' " Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg. Bd.,
The Supreme Court recently discussed the two principles that govern the *368authority of a State to regulate interstate commerce: "[f]irst, state regulations may not discriminate against interstate commerce; and second, States may not impose undue burdens on interstate commerce." South Dakota v. Wayfair, Inc., --- U.S. ----,
Further, the Supreme Court has recognized that "[w]here state or local government action is specifically authorized by Congress, it is not subject to the [dormant] Commerce Clause even if it interferes with interstate commerce." White v. Mass. Council of Constr. Emp'rs, Inc.,
2. Arguments of the parties
a. Commonwealth Defendants
In arguing that Plaintiffs' complaint fails to state a claim that Act 44/89 violates the dormant Commerce Clause, the Commonwealth Defendants maintain that: (1) Congress has specifically authorized state transportation authorities to use toll revenues for any purpose for which federal transportation funds may be used; and (2) even in the absence of specific congressional authorization, Act 44/89 does not impose a burden on interstate commerce that is "clearly excessive in relation to the putative local benefits" such that Act 44/89 violates the dormant Commerce Clause. (Doc. No. 51 at 17-30.)
In arguing that Congress has specifically authorized the state statutory scheme such that Act 44/89 is invulnerable to constitutional attack on dormant Commerce Clause grounds, the Commonwealth Defendants point to the Intermodal Surface Transportation Efficiency Act of 1991 ("ISTEA"), federal legislation that permits public transportation authorities to use toll revenues from toll facilities initially for debt service on bonds and for operation and maintenance of the toll facilities, and secondarily (to the extent additional funds are available) for "any other purpose for which Federal funds may be obligated by a State" under Title 23 of the U.S. Code. (Doc. No. 51 at 18-19) (citing *369
The Commonwealth Defendants maintain that the projects that Plaintiffs assert should not be funded with Turnpike toll revenues (as described in paragraph 84 of their complaint) are all projects that fit within the broad authorization of ISTEA, as amended by the FAST Act. (Id. at 21-22.) The Commonwealth Defendants admit that two projects cited by Plaintiffs - airport terminal improvements and construction of a train track in an industrial park - may not be covered by Section 133(b), but maintain, however, that Plaintiffs allege only that these projects can receive funds from the MTF (Doc. No. 1 ¶ 79), not that the projects were paid for with funds transferred from the PTC and PennDOT, as the MTF receives, in addition to the $ 30 million from the PTC transfer to PennDOT, funds from vehicle and driver fees (Doc. No. 51 at 22) (citing 74 Pa. C.S. § 1904(b)(3)); 2018-19 GOVERNOR'S EXECUTIVE BUDGET at H49 (Feb. 6, 2018) (indicating that $ 74-$ 80 million is deposited in the MTF annually from driver and vehicle fees).9 Similarly, the Commonwealth Defendants argue that, as to Plaintiffs' apparent challenge to the use of Act 44/89 funds to pay for programs of statewide significance such as intercity passenger rail and bus services (Doc. No. 1 ¶ 83), even if such programs are not authorized to receive funds under Title 23, the programs receive the majority of their funding from sales tax funds, as opposed to Act 44/89 transfer payments (Doc. No. 51 at 23).10 In sum, the *370Commonwealth Defendants maintain that given the multiple sources of funding for the projects mentioned by Plaintiffs, even if Section 133(b) does not authorize any of those projects, Plaintiffs have not and cannot plead that Act 44/89 toll revenues are utilized for such programs. (Id. )
In further support of their position, the Commonwealth Defendants point to a relatively recent opinion from the United States Court of Appeals for the Second Circuit in American Trucking Associations, Inc. v. New York State Thruway Authority,
The Commonwealth Defendants further argue that, even if the Court should find that Congress did not expressly authorize the challenged use of Turnpike toll revenues, removing them from potential dormant Commerce Clause attack, Plaintiffs' dormant Commerce Clause claim still fails because Act 44/89 does not impose "discriminatory burdens on interstate commerce." (Id. at 25.) In so arguing, the Commonwealth Defendants maintain that the applicable standard for evaluating any potential burden imposed by Act 44/89 on interstate commerce is provided by Pike v. Bruce Church, Inc.,
Nevertheless, the Commonwealth Defendants maintain that even when analyzed under the jurisprudence relied on by Plaintiffs, Plaintiffs' complaint still fails to state a claim for a violation of the dormant Commerce Clause. (Id. at 27.) In Northwest Airlines, the Supreme Court stated that a "levy is reasonable ... if it (1) is based on some fair approximation of use of the facilities, (2) is not excessive in relation to the benefits conferred, and (3) does not discriminate against interstate commerce." Northwest Airlines,
b. PTC Defendants
The PTC Defendants similarly argue that Plaintiffs' complaint fails to state a claim for a violation of the dormant Commerce Clause because Plaintiffs rely on the Evansville / Northwest Airlines test, as opposed to the Pike test, which the PTC Defendants maintain is the correct test for evaluating whether the allegations of Plaintiffs' complaint state a claim for violation of the dormant Commerce Clause. (Doc. No. 56 at 13-22.) Second, the PTC Defendants maintain that, assuming arguendo that Plaintiffs' complaint states a claim for violation of the dormant Commerce Clause, because Congress has specifically authorized the PTC to collect toll revenues in excess of those needed to operate the Turnpike, the PTC Defendants are entitled to summary judgment on Plaintiffs' dormant Commerce Clause claim. (Id. at 23-30.)12
As to their first argument, the PTC Defendants maintain that the correct test in the Third Circuit for evaluating dormant Commerce Clause challenges is that set forth in Pike v. Bruce Church, Inc.,
In support of their argument that Pike provides the correct test against which to measure the allegations of Plaintiffs' complaint, the PTC Defendants note that Pike has been recently applied by the Supreme Court in dormant Commerce Clause cases, pointing to Department of Revenue of Kentucky v. Davis,
The PTC Defendants then turn to an analysis of the allegations of Plaintiffs' complaint under the Pike test.13 They note that in Pike, the Supreme Court explained that "where the statute addresses a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits." (Doc. No. 56 at 18) (quoting Pike,
As to the second part of the Pike balancing test - whether the burden imposed on interstate commerce by the statute is "clearly excessive" in relation to local benefits conferred by the statute - the PTC Defendants argue that Plaintiffs' complaint fails to "identify any differential burden placed on interstate commerce by the [PTC's] toll practices." (Id. at 21-22.) On this point, the PTC Defendants quote Norfolk Southern Corporation v. Oberly,
As noted above, the PTC Defendants argue that, in the event that Plaintiffs' complaint is not dismissed for failure to state a claim under the dormant Commerce Clause, they are entitled to summary judgment on Plaintiffs' dormant Commerce Clause claim because Congress has specifically authorized the PTC's toll structure as established in Act 44/89. (Id. at 23.) Like the Commonwealth Defendants, they analogize the instant case to American Trucking Associations, Inc. v. New York State Thruway Authority,
In concluding that ISTEA specifically authorized a toll structure that permitted the expenditure of toll revenues on non-tolled road projects, the Second Circuit in ATA II described ISTEA's departure from the prior statutory framework as follows:
[S]ection 1012(a) authorized state public authorities to collect highway tolls without repaying the federal government, so long as those funds "will be used first for debt service, for reasonable return on investment of any private person financing the project, and for the costs necessary for the proper operation and maintenance of the toll facility." Once a state certified adequate maintenance, it could use any excess toll revenues "for any purpose for which Federal funds may be obligated by a State under [Title 23]."
The PTC Defendants point to record evidence of the PTC's entry into an agreement with the Federal Highway Administration ("FHWA Agreement") pursuant to ISTEA permitting the PTC to use "toll revenues resulting from the operation of the toll facility" - defined as the entire Pennsylvania Turnpike System, including "any future system extensions" - "first for debt service," and further providing that "the [PTC] is entitled to use any toll revenues in excess of amounts required under [ISTEA, § 1012(a) ], for any purpose for which [f]ederal funds may be obligated by a State under Title 23, United States Code." (Doc. No. 55 ¶ 24.) Thus, the PTC Defendants maintain that based on ISTEA § 1012(a) and the FHWA Agreement negotiated pursuant to it, Congress has expressly authorized the PTC to utilize toll revenues on (1) debt service and (2) for "any purpose for which [f]ederal funds may be obligated by a State under Title 23, United States Code."16 (Doc. No. 56 at 25-26.)
The PTC Defendants maintain that the PTC's use of toll revenues to satisfy Act 44/89 obligations is fully compliant with this authorization. (Doc. No. 56 at 26.) The PTC Defendants explain that the PTC makes its annual $ 450 million payment to PennDOT by "(1) transferring $ 50 million in funds from operating revenues and (2) incurring 30-year subordinated debt to fund the remaining $ 400 million due." (Id.) (citing Doc. No. 55 ¶ 12). The PTC Defendants note that the PTC "makes debt service payments of principal and interest to subordinated bondholders, also out of operating revenue" to service that debt. (Id. ) (citing Doc. No. 55 ¶¶ 13-14).
The PTC Defendants maintain that both uses of funds are expressly authorized and constitutionally permissible under the FHWA Agreement. (Doc. No. 56 at 27.) Pointing to record evidence, the PTC Defendants maintain that "[a]ll but $ 50 million *375in annual Act 44/89-related toll revenue expenditures are for service on the [PTC]'s subordinated debt obligations," (Id. at 27) (citing Doc. No. 55 at ¶ 12), a purpose permitted by the plain language of the FHWA Agreement entered into pursuant to ISTEA Section 1012(a), which does not restrict the types of "debt service" for which toll revenues can be dedicated (Id. at 27). As to the remaining $ 50 million transferred annually from the PTC to PennDOT, the PTC Defendants maintain that Section 1012(a) of ISTEA, as well as the FHWA Agreement, permit the PTC to utilize toll revenues for "any purpose for which [f]ederal funds may be obligated by a State under Title 23, United States Code," providing that the "State certifies annually that the tolled facility is being adequately maintained." (Id. at 27) (quoting ISTEA § 1012(a)).
The PTC Defendants point to record evidence that they maintain supports their position that the PTC has made the necessary certifications of adequate maintenance to the FHWA for the period ending May 31, 2016. (Id. at 27-28) (citing Doc. No. 55 ¶ 27). The PTC Defendants admit that the certifications have not been made on a yearly basis due to the limited capacity of the Commonwealth of Pennsylvania's Bureau of Audits, but argue that nothing in ISTEA or the FHWA Agreement sets a date by which audits must be performed, and moreover, the Secretary of Transportation, the individual "charged with enforcement of 'the limitations on the use of revenues described in' Section 129(a)," has not found the PTC in non-compliance with those limitations. (Id. at 28) (citing Doc. No. 55 ¶ 30). Therefore, the PTC Defendants maintain that they are "entitled 'to allocate excess toll revenues ... for any project eligible to receive federal assistance under Title 23.' " (Id. at 28) (quoting ATA II,
Accordingly, the PTC Defendants maintain that the issue of express congressional authorization turns on whether the funds transferred from the PTC to PennDOT pursuant to Act 44/89 are "expended on a 'project eligible to receive federal assistance under Title 23.' " (Id. at 29) (citing ATA II,
c. Plaintiffs
In response to the arguments of the Commonwealth Defendants and the PTC Defendants, Plaintiffs argue first that their complaint states a claim for violation of the dormant Commerce Clause under the Evansville / Northwest Airlines test, which they maintain is the standard that governs in a dormant Commerce Clause challenge to allegedly excessive tolls or user fees. (Doc. No. 70 at 24-35.) Second, Plaintiffs argue that through ISTEA, Congress has not authorized states to impose turnpike tolls free of limitations imposed by the dormant Commerce Clause. (Id. at 41-53.) In addition, Plaintiffs maintain that even if *376Congress did authorize states to utilize excess toll revenues on unrelated transportation projects, Defendants have not complied with the limitation placed on the exercise of that authority by failing to certify annually that the Turnpike is adequately maintained. (Id. at 53-63.)
As to the correct standard applicable to Plaintiffs' dormant Commerce Clause challenge, Plaintiffs maintain that various Circuit Courts of Appeal have applied the Evansville / Northwest Airlines test to the evaluation of tolls and other user fees, and argue that this Court (and the Third Circuit) should do likewise. (Id. at 24-26.) Under the Evansville / Northwest Airlines test, tolls are reasonable if they "(1) [are] based on some fair approximation of use of the facilities, (2) [are] not excessive in relation to the benefits conferred, and (3) [do] not discriminate against interstate commerce." Northwest Airlines,
In support of their argument, Plaintiffs point to a non-precedential 2010 Third Circuit opinion in Yerger v. Massachusetts Turnpike Authority,
Plaintiffs maintain that the Supreme Court has recognized that the Pike test is appropriate for laws "directed to legitimate local concerns, with effects upon interstate commerce that are only incidental." (Doc. No. 70 at 28) (citing United Haulers Ass'n, Inc. v. Oneida-Herkimer Solid Waste Mgmt. Auth.,
Plaintiffs then turn to an analysis of Act 44/89's tolling structure under the Evansville / Northwest Airlines test, and argue that toll receipts, which they allege have exceeded 200 percent of the cost to maintain and operate the Turnpike, are not based on some fair approximation of the use of the Turnpike and are excessive in relation to the benefits conferred. (Id. at 30-34.) Plaintiffs point to the allegations of their complaint regarding the non-highway purposes to which Act 44/89 revenues are *377dedicated and argue that it is not sufficient for the Commonwealth Defendants to assert that providing "access to an extensive and well-maintained transportation system in the Commonwealth" justifies the wide-ranging expenditure of Act 44/89 toll revenues and confers a benefit on all users of the Turnpike that fairly approximates their use of the same. (Id. at 30) (quoting Doc. No. 51 at 22). In sum, Plaintiffs maintain that the allegations of their complaint support a reasonable inference that the Pennsylvania Turnpike tolls (and the Act 44/89 toll structure that governs them) are not based on some fair approximation of the use of the Turnpike and are excessive under the Evansville / Northwest Airlines standard.
As noted above, Plaintiffs urge the Court to reject Defendants' claim of congressional authorization because Congress has not unambiguously authorized States to impose highway tolls free of dormant Commerce Clause limitations. (Id. at 41.) Plaintiffs maintain that "for Congress to approve State action that would otherwise violate the Commerce Clause, Congress must 'affirmatively contemplate otherwise invalid state legislation' and express an unmistakably clear, unambiguous intent to approve such legislation in the text of a federal statute." (Id. at 43) (quoting Wunnicke,
Plaintiffs maintain that there exists an "historic animus" against federal funding of toll roads, and argue that while "States are free to build, operate or regulate toll facilities largely as they see fit," practically, "the flexibility of State and local governments to deal with toll facilities is constrained by two factors at the federal level." (Id. at 45.) Plaintiffs describe those two factors as follows: (1) the dormant Commerce Clause, which "restricts States from imposing undue burdens upon interstate commerce by means of toll facilities;" and (2) "if States wish to participate in federal highway funding programs, they are required to conform to federal requirements and operate tolled facilities in conformity with federal standards." (Id. )
Plaintiffs argue that Section 1012(a) of ISTEA, the statute upon which Defendants rely for congressional authorization of the Act 44/89 toll structure, established certain conditions that States were required to satisfy in order to qualify for federal funds for state-tolled facilities, but did not "authorize States or state-tolling authorities to do anything." (Id. at 46.) Plaintiffs discuss the origins of ISTEA and specifically, Section 1012(a)(1), maintaining that the provision "authorized the U.S. Secretary of Transportation to make federal funds available for certain limited types of state-tolled facilities," while Section 1012(a)(3) "established conditions that States were required to satisfy in order to qualify for federal funds."17 (Id. ) Plaintiffs maintain that while Section 1012(a)(1) "continues to limit the use of revenue" on the part of States, it did not and does not "authorize[ ] States to operate their tolling facilities in a manner that violates the dormant Commerce Clause." (Id. at 47.)
Plaintiffs further argue that the Defendants' reliance on the Second Circuit decision in ATA II as authority for the proposition that Section 1012(a) of ISTEA expressly authorized Act 44/89's toll structure is inapposite because that case *378analyzed and relied on a separate section of ISTEA - Section 1012(e), not Section 1012(a). (Id. ) Plaintiffs maintain that Section 1012(e), originally enacted as a Note to Section 129 but never codified, was specific to New York State in authorizing tolls from the New York Thruway to be utilized to support the New York Canal System, which was "functionally unrelated to the Thruway." (Id. at 48.) Accordingly, Plaintiffs argue that ATA II "says nothing about whether Congress authorized - in the entirely independent Section 1012(a) - any State or local entity in the country to remedy its local budget shortfalls through unlimited, unconstitutionally-excessive tolls." (Id. at 49.)
In further disputing Defendants' argument that Section 1012(a) constitutes express congressional authorization insulating the Act 44/89 toll structure from dormant Commerce Clause attack, Plaintiffs maintain that Defendants "place undue emphasis on their twenty-year-old agreement with the [FHWA]." (Id. at 51.) Plaintiffs maintain that the FHWA Agreement "goes no further" than Section 129(a)(3) in its purpose to "govern[ ] the use of federal funds received by PTC and PennDOT," and because the FHWA "cannot authorize a violation of the Commerce Clause," it "provides [no] independent justification for [Defendants'] actions." (Id. at 52.)
Finally, in disputing Defendants' argument that Congress expressly authorized States to expend toll revenues in the manner contemplated by Act 44/89, Plaintiffs argue that even assuming arguendo that Congress did so authorize States in Section 129(a), Defendants have failed to comply with the statutory limitations placed on the exercise of that authority. (Id. at 53.) Specifically, Plaintiffs point to Section 129(a)(3)(A)(v) and argue that a State can use toll revenues for "projects for which federal funds may otherwise be obligated" only "if the public authority certifies annually that the tolled facility is being adequately maintained." (Id. at 53) (citing
As it relates to their constitutional challenge to Act 44/89's tolling structure Plaintiffs argue in sum that:
there is a huge difference between "excess toll revenues" that could have been the subject of Section 1012(a)(3) and "excessive tolls" collected to fund a wide array of state-wide projects that are authorized, administered, and controlled by PennDOT, not PTC. Even if Congress had opened the door for States to use toll revenues left over after the repayment of debt borrowed for the construction, operation, and maintenance of Turnpike (Senior Revenue Bonds), there is no support for the proposition that Congress ever envisioned that any State would fabricate a statutory scheme that requires a turnpike authority to raise toll rates with no limit to their amount or the time period they could be imposed to support the transfer of billions of dollars to State transportation departments (here PennDOT) to support projects *379with no functional relation to the tolled facility.
(Id. at 61-62.)18
3. Analysis
The Court has carefully considered the detailed and well-documented allegations of Plaintiffs' complaint, as well as the extensive briefing and legal arguments of the parties. As outlined fully above, the factual predicates for Plaintiffs' claim are for the most part undisputed, as the PTC tolls and expenditures are a matter of public record, as are the statutory origins of the PTC's scheme for collecting toll revenues and transferring funds to PennDOT. What is in dispute is how five decades of slowly evolving federal law related to the dormant Commerce Clause informs this Court's analysis of whether Plaintiffs' challenge to excessive tolls represents a constitutional injury that this Court is empowered to rectify, or a matter for legislative overhaul.
The Court notes that the parties maintain wholly different legal analyses of Plaintiffs' dormant Commerce Clause claim. It is no wonder. Even the legitimacy and parameters of the dormant Commerce Clause are the subject of continuous vigorous debate.19 The application of the case law implementing the doctrine is no more conclusive. As explained previously, Plaintiffs urge this Court to invoke the analysis articulated by the United States Supreme Court in Evansville / Northwest Airlines (see Doc. No. 70 at 27) (maintaining that " Evansville stands as the appropriate test for analyzing excessive user fees and tolls"), while Defendants maintain that the standard set forth in the earlier Pike decision is the appropriate standard to apply to Plaintiffs' dormant Commerce Clause claim (see Doc. No. 76 at 17) (maintaining that in the Third Circuit, " Pike governs challenges to the constitutionality of highway toll programs"). Consequently, the parties in this case have characterized these tests as separate, competing standards within the world of dormant Commerce Clause jurisprudence, rather than two analytical frameworks that may complement, rather than replace, one another. No definitive controlling precedent supports either side. The Third Circuit has never specifically evaluated Evansville and Pike as competing tests in any Commerce Clause challenge to highway tolls, nor has the United States Supreme Court. For the reasons that follow, upon review of all persuasive and controlling law, this Court finds that the relevant authority renders Pike the appropriate test for examining Plaintiffs' dormant Commerce Clause challenge.
*380Only two relevant cases in the Third Circuit address the applicability of Evansville or Pike to a dormant Commerce Clause challenge to a highway toll, Wallach v. Brezenoff,
Second, in Yerger v. Massachusetts Turnpike Authority,
In addition, it is noteworthy that Plaintiffs generally rely on case law from the First and Second Circuits to support their argument as to the applicability of Evansville to their dormant Commerce Clause challenge. This Court, however, finds that those decisions do not adequately explain the relationship between Pike and Evansville for purposes of Plaintiffs' claim. In Doran v. Massachusetts Turnpike Authority,
Importantly, one district court in the First Circuit has described Doran as recognizing the Pike and Evansville tests as "alternate tests, not substitutes for one another," and noted that "[t]he Northwest Airlines test is applied when reviewing the constitutionality of a tax or penalty imposed directly on interstate commerce. The Pike test, on the other hand, is the *382test to be applied when a concessionary benefit that incidentally impacts interstate commerce is granted to in-state residents." See Surprenant v. Mass. Tpk. Auth., No. 09-cv-10428-RGS,
Further, in Selevan v. New York Thruway Authority,
*383Finally, in assessing the unsettled landscape against which this Court is asked to make a determination as to whether Pike or Evansville / Northwest Airlines applies to Plaintiffs' dormant Commerce Clause claim, the Court notes that in neither Doran nor in Selevan I did the parties characterize these tests as competing analyses from which the Court must select the more appropriate standard to apply, as the parties do here. (Doc. No. 70 at 74) (" Evansville, not Pike, is the proper standard."); (Doc. No. 56 at 11) ("[T]he correct test in the Third Circuit is the one laid out in Pike."). In Doran, as noted above, the parties (and the court) treated the tests as potential alternative analyses, and in Selevan I, while the Second Circuit directed the district court to apply Evansville on remand, there is no indication that the issue was actively litigated at the trial court level, ostensibly because the district court opinion focused almost entirely on the issue of standing. Accordingly, the Court finds that neither the First nor the Second Circuit was faced with the same issue confronting this Court, rendering Selevan I and Doran only somewhat persuasive authority with questionable applicability to the precise question presented in the case at bar.
Moreover, during the pendency of this case, the United States Supreme Court announced "the analytical framework that now prevails for Commerce Clause cases" in South Dakota v. Wayfair, Inc., --- U.S. ----,
Upon consideration of all of the above authorities, and noting the Supreme *384Court's recent articulation of Pike as the standard governing dormant Commerce Clause challenges on undue burden grounds, which comports with the limited precedent in the Third Circuit on this issue in the context of highway tolls, the Court is persuaded that, as between Evansville / Northwest Airlines and Pike, for purposes of the specific issue raised by the parties here, Pike provides the appropriate test against which to assess the allegations of Plaintiffs' complaint in the context of a dormant Commerce Clause challenge.
Having concluded that Pike governs Plaintiffs' dormant Commerce Clause claim, the Court is required to assess, with regard to "[s]tate laws that 'regulat[e] even-handedly to effectuate a legitimate local public interest,' " whether " 'the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.' " Wayfair, 138 S.Ct. at 2090-91 (quoting Pike,
Assessed against the above standard, the Court agrees with the PTC and Commonwealth Defendants that the tolls complained of (and governed by Act 44/89), alleged to burden in-state and out-of-state drivers on the Turnpike equally by charging them identical tolls, impose a burden on commerce as opposed to a burden on interstate commerce. This effectively disposes of Plaintiffs' dormant Commerce Clause challenge under Pike. See Instructional Sys., Inc.,
*385B. Plaintiffs' Claim that Act 44/89 Violates the Constitutional Right to Travel
While the right to "travel" is not explicitly found in the Constitution, the United States Supreme Court has stated that the " 'constitutional right to travel from one State to another' is firmly embedded in our jurisprudence." Saenz v. Roe,
In United States v. Baroni,
At the outset, the Commonwealth Defendants highlight that, of the three recognized components of a constitutional right to travel, only the "right of a citizen of one State to enter and to leave another State" could "possibly be implicated" by the allegations in Plaintiffs' complaint. (Doc. No. 51 at 31.) Therefore, the Commonwealth Defendants characterize Plaintiffs' claim as asserting that "Act 44/89, by allegedly requiring Turnpike tolls above the level necessary to fund Turnpike operations, actually deters interstate travel." (Id. at 32.) The Commonwealth Defendants argue that paragraph 128 of Plaintiffs' complaint asserts only a conclusory allegation to this effect without any factual support, and maintain that "the Supreme Court has rejected the notion that a state-imposed fee on the use of interstate travel facilities *386impermissibly burdens the constitutional right to travel," citing Evansville-Vanderburgh,
The PTC Defendants similarly argue that a "non-discriminatory burden like a highway toll does not deter interstate travel in a constitutional sense," pointing out that Plaintiffs' complaint indicates that alternative toll-free highways exist. (Doc. No. 56 at 33) (citing Doc. No. 1 ¶ 99). Along those lines, the PTC Defendants maintain that while drivers might prefer to use the "convenient and more direct Turnpike," the imposition of " 'burdens on a single mode of transportation do not implicate the right to interstate travel.' " (Doc. No. 56 at 33) (quoting Miller v. Reed,
In opposition to the arguments of the Commonwealth and PTC Defendants as to any alleged violation of the constitutional right to travel resulting from Turnpike toll structure established by Act 44/89, the Plaintiffs rely largely on Crandall v. Nevada, 73 U.S. (6 Wall.) 35,
Upon careful consideration of the arguments of the parties, the relevant authorities, and the allegations of Plaintiffs' complaint, this Court is unpersuaded by Plaintiffs' argument that the allegations set forth in their complaint support a reasonable *387inference that the provisions of Act 44/89 constitute a violation of the constitutional right to travel. As all parties appear to agree, the only component of the constitutional right to travel recognized by the Supreme Court ostensibly implicated by Plaintiffs' allegations is the "right of a citizen of one State to enter and to leave another State." See Saenz,
The Court is also unpersuaded by Plaintiffs' reliance on Crandall v. Nevada to support their right to travel claim because in that case, as noted above, the Supreme Court struck down a statute that levied a fee on every person leaving the state by way of a common carrier and articulated its concern that, if the levy were permitted, "[s]tates covering the only practicable routes of travel from the east to the west, or from the north to the south, may totally prevent or seriously burden all transportation of passengers from one part of the country to the other." Crandall, 73 U.S. at 46. In contrast, Plaintiffs' complaint does not allege that the Turnpike is "the only practicable route[ ] of travel" through Pennsylvania. Moreover, based on subsequent case law, the Court finds that a narrow construction of Crandall is appropriate. See Lutz,
IV. CONCLUSION
The Court has carefully reviewed Plaintiffs' complaint and the legal authority submitted in support of the complaint. Plaintiffs' complaint credibly alleges that Pennsylvania's policy decisions related to transportation have resulted in a statutory scheme that disproportionately burdens Turnpike travelers with the costs of a state-wide transportation system that is of no direct benefit to them. Evaluating Plaintiffs' well-articulated complaint applying established Supreme Court and Third Circuit precedent that limits the breadth of the constitutional claims asserted here, this Court is constrained to find that Plaintiffs' factual allegations do not support a claim for violations of the dormant Commerce Clause or the constitutional right to travel. Accordingly, for all of the reasons stated herein, the Court will grant the PTC Defendants' and Commonwealth Defendants' motions to dismiss. In light of the Court's determination that Plaintiffs' complaint fails to state a claim upon which relief may be granted for violations of the dormant Commerce Clause or constitutional right to travel, the Court need not address the various immunity issues raised by individual defendants Shuey's and Lieberman's motions to dismiss, and, therefore, those motions will be denied as moot. Plaintiffs' motion for partial summary judgment will also be denied. An appropriate Order follows.
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Cite This Page — Counsel Stack
383 F. Supp. 3d 353, Counsel Stack Legal Research, https://law.counselstack.com/opinion/owner-operator-indep-drivers-assn-inc-v-pa-tpk-commn-pamd-2019.