Appeals court hears oral arguments in OOIDA’s Pennsylvania toll lawsuit
Attorneys for OOIDA and the Pennsylvania Turnpike Commission duked it out in a federal courtroom in July.
Attorneys for the Owner-Operator Independent Drivers Association and the Pennsylvania Turnpike Commission presented their oral arguments in front of an appellate panel in July. In April, a U.S. District Court dismissed OOIDA’s case against the commission that claimed the state’s toll are unconstitutional.
On July 9, the Third Circuit Court of Appeals heard arguments from Paul D. Cullen Sr., representing OOIDA; Robert Byer, representing the Pennsylvania Turnpike Commission; and Bruce Merenstein, representing the state government.
Burden on interstate commerce
Cullen argued that increased tolls are limited by the Commerce Clause of the Constitution. Currently, toll revenue reaches 300% of the cost of operating and maintaining the turnpike. A user fee cannot exceed the approximated cost of providing the facility or the value of the benefits.
The panel asked Cullen how does the court decide what is fair and what is excessive.
“In the New York Thruway case, before it was found that Congress consented to helping out the canal system, the tolls were 7 or 12% of the revenue going into the Thruway,” Cullen said. “They found that to be constitutionally excessive. Here, we are at 300%. You don’t have a difficult question here. It is so far over the top that I don’t think the Third Circuit Court of Appeals wants to be the first one to say ‘We’re going to let you off the hook. We don’t care whether they’re 300%. We don’t care whether it’s $500 million a year. We’re allowing the state to take all this money that should be paid by the local residents and pass the cost of all these local goodies that you get scattered around the whole state and pass that off to the interstate trucking industry.’ I don’t think you want to make that decision.”
User fee vs. tax
During his arguments, Cullen explained how tolls are user fees and not taxes. He said a user fee is defined as “a compensation paid to a government unit for providing specific facilities to persons who agreed to pay for the use of those facilities, like a toll.”
Cullen further defined a tax as “a mode of raising revenue by a duly authorized taxing authority, and the revenue is raised from the general public for the needs of the public or for general public purposes.”
The panel asked whether or not that is the crux of the lawsuit, i.e., Pennsylvania is engaged in revenue raising for purposes far beyond simply the use of the turnpike. That turned into a question of who can impose a tax based on Pennsylvania Supreme Court decisions, which has ruled that responsibility lies solely on the General Assembly. The Turnpike Commission is not part of the General Assembly, so therefore it has no authority to impose a tax. Based on that logic, the toll cannot be considered a tax without violating the state constitution.
Regardless of how a toll is defined and whether or not it puts a burden on interstate commerce, the state argues that congressional authorization of the use of toll revenue supersedes all.
Merenstein stated that OOIDA’s claim is based entirely on tolls being used for nonturnpike projects. However, he argued that is what the congressional statutes allow the Pennsylvania Turnpike Authority to do. After everything is paid for, remaining funds can be used for transportation-related projects, he said.
Cullen’s rebuttal relied on the fact that Congress could not have contemplated what Pennsylvania would do when given such authorization. The statute in question was established in the Intermodal Surface Transportation Efficiency Act of 1991, long before the tolls were implemented. The statute allows excess toll revenue to be used for transportation projects.
OOIDA claims that Congress assumed tolls would be collected and imposed in a constitutional manner. Considering it is common for an accumulation of unspent nickels and dimes, such extra cash could be used for such projects. However, Congress never contemplated hundreds of millions of dollars of intentional revenue excess. LL