Lawsuit challenging New York's use of toll money is revived

Reuters News
Posted: Aug 04, 2015 1:22 PM

By Jonathan Stempel

NEW YORK (Reuters) - A federal appeals court revived a class-action lawsuit by commercial truckers that accused the New York State Thruway Authority of charging illegally high tolls, and diverting excess sums it collected to maintain obsolete upstate canals.

By a 3-0 vote, the 2nd U.S. Circuit Court of Appeals on Tuesday said a lower court judge abused her discretion in dismissing claims by the trade group American Trucking Associations Inc and three trucking companies.

The plaintiffs accused the Thruway Authority of unlawfully burdening interstate commerce by diverting $80 million to $100 million of tolls a year, or 10 percent to 12 percent, for canal-related projects rather than spending it on the thruway itself.

These tolls are charged on the Gov. Thomas E. Dewey Thruway system, which stretches about 570 miles (917 km).

The truckers said the excess tolls reduced their revenue and raised consumer prices for the sake of benefiting a canal system, including the Erie Canal, that was once crucial for transporting goods but is now used mainly by tourists.

U.S. District Judge Colleen McMahon in Manhattan dismissed the lawsuit last August because New York itself was not named as a party, despite being "necessary" and "indispensable" because the state constitution required it to maintain the canals.

Writing for the appeals court, however, Circuit Judge Dennis Jacobs said the state need not be involved solely because an adverse outcome might force it to find new funds for the canals.

"Plaintiffs' constitutional claims would be identical if the Thruway Authority charged excessive tolls to underwrite the state's interest in a new baseball stadium, or agricultural research, or repertory theater," Jacobs wrote. 

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The judge also noted that state Attorney General Eric Schneiderman represented the Thruway Authority in the appeal.

"Whatever interest New York has in the outcome of this lawsuit," Jacobs wrote, "we are confident that Mr. Schneiderman will keep it in mind."Neither the Thruway Authority nor Schneiderman's office had an immediate comment. Lawyers for the trucking companies could not immediately be reached for comment.

The case is American Trucking Associations Inc et al v. New York State Thruway Authority et al, 2nd U.S. Circuit Court of Appeals, No. 14-3348.

(Editing by Grant McCool)