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Owner Operator Independent Drivers Association, Inc. v. Pennsylvania Turnpike Commission

United States Court of Appeals, Third Circuit

August 13, 2019

OWNER OPERATOR INDEPENDENT DRIVERS ASSOCIATION, INC.; NATIONAL MOTORIST ASSOCIATION; MARION L. SPRAY; B.L. REEVER TRANSPORT, INC.; FLAT ROCK TRANSPORTATION, LLC; MILLIGAN TRUCKING, INC.*; FRANK SCAVO; LAURENCE G. TARR, Appellants
v.
PENNSYLVANIA TURNPIKE COMMISSION; LESLIE S. RICHARDS, in her individual capacity and her official capacities as Chair of the PTC and Secretary of the Department of Transportation; WILLIAM K. LIEBERMAN, in his individual capacity and his official capacity as Vice Chair of the PTC; BARRY T. DREW, in his individual capacity and his official capacity as Secretary-Treasurer of the PTC; PASQUALE T. DEON, SR., in his individual capacity and his official capacity as Commissioner of the PTC; JOHN N. WOZNIAK, in his individual capacity and his official capacity as Commissioner of the PTC; MARK P. COMPTON, in his individual capacity and his official capacity as Chief Executive Officer of the PTC; CRAIG R. SHUEY, in his individual capacity and his official capacity as Chief Operating Officer of the PTC; TOM WOLF, Governor of the Commonwealth of Pennsylvania, in his individual capacity and his official capacity as Governor *(Amended as per the Clerk's 04/25/19 Order)

          Argued July 9, 2019

          Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. No. 1-18-cv-00608) District Judge: Hon. Yvette Kane

          Melissa A. Chapaska Kevin J. McKeon Dennis Whitaker Hawke McKeon & Sniscak Paul D. Cullen, Jr. Paul D. Cullen, Sr. [ARGUED] Kathleen B. Havener Counsel for Appellants Owner Operator Independent Drivers Association, Inc., National Motorist Association, Marion L. Spray, B.L. Reever Transport Inc., Flat Rock Transportation LLC, Milligan Trucking Inc., Frank Scavo, and Laurence G. Tarr

          Robert L. Byer [ARGUED] Leah A. Mintz Lawrence H. Pockers Brian J. Slipakoff Duane Morris Counsel for Appellees Pennsylvania Turnpike Commission; Leslie S. Richards, in her individual capacity and her official capacities as Chair of the PTC and Secretary of the Department of Transportation; William K. Lieberman, in his individual capacity and his official capacity as Vice Chair of the PTC; Barry Drew, in his individual capacity and his official capacity as Secretary-Treasurer of the PTC; Pasquale T. Deon, Sr., in his individual capacity and his official capacity as Commissioner of the PTC; John N. Wozniak, in his individual capacity and his official capacity as Commissioner of the PTC; Mark P. Compton, in his individual capacity and his official capacity as Chief Executive Officer of the PTC; and Craig R. Shuey, in his individual capacity and his official capacity as Chief Operating Officer of the PTC

          Arleigh P. Helfer, III Bruce P. Merenstein [ARGUED] Schnader Harrison Segal & Lewis Counsel for Appellees Leslie S. Richards, in her individual capacity and her official capacities as Chair of the PTC and Secretary of the Department of Transportation, and Tom Wolf, Governor of the Commonwealth of Pennsylvania, in his individual capacity and his official capacity as Governor

          Alex M. Lacey Robert M. Linn Robyn A. Shelton Cohen & Grigsby Counsel for Appellee William K. Lieberman, in his individual capacity and his official capacity as Vice Chair of the PTC

          Matthew H. Haverstick Shohin H. Vance Kleinbard Three Logan Square Counsel for Appellee Craig R. Shuey, in his individual capacity and his official capacity as Chief Operating Officer of the PTC

          Thomas M. Fisher Office of Attorney General of Indiana Counsel for Amicus Curiae the State of Indiana

          Miguel A. Estrada Gibson Dunn & Crutcher Counsel for Amicus Curiae ITR Concession Company LLC

          Before: SHWARTZ, KRAUSE, and FUENTES, Circuit Judges.

          OPINION

          SHWARTZ, CIRCUIT JUDGE

         Plaintiffs are individuals and members of groups who pay tolls to travel on the Pennsylvania Turnpike.[1] They allege that Pennsylvania state entities and officials ("Defendants") have violated the dormant Commerce Clause and their right to travel.[2] Specifically, Plaintiffs assert that Defendants have set exorbitantly high tolls for use of the Pennsylvania Turnpike and that the amounts collected exceed the costs to operate the Turnpike. They contend the extra funds are being used for projects that disproportionately benefit local interests and that the high tolls deter non-Pennsylvanians from using the Turnpike.

         Because Congress has permitted state authorities, such as Defendants, to use the tolls for non-Turnpike purposes, the collection and use of the tolls do not implicate the Commerce Clause. Moreover, because Plaintiffs have not alleged that their right to travel to, from, and within Pennsylvania has been deterred, their right to travel has not been infringed. Therefore, we will affirm the District Court's order dismissing the complaint.

         I

         A

         The Pennsylvania Turnpike is part of a 552-mile highway system that crosses Pennsylvania from New Jersey to Ohio. The Pennsylvania Turnpike Commission ("PTC") sets and collects Turnpike tolls.

         In 2007, the Pennsylvania legislature enacted Act 44, which, among other things, permitted the PTC to increase tolls and required the PTC to make annual payments for a fifty-year period to the Pennsylvania Department of Transportation ("PennDOT") Trust Fund. See 75 Pa. Cons. Stat. § 8915.3. In 2013, Act 89 amended Act 44, as amended "Act 44/89." Act 89 continued to permit toll increases but lowered the annual payments to the PennDOT Trust Fund.

         After Act 44 went into effect, the PTC announced a 25% toll increase and from 2009 through 2016, tolls were increased annually by more than 10% for cash customers and 5.75% for customers using an electronic toll transmitter known as an EZ-Pass. Plaintiffs assert that since the enactment of Act 44, tolls have increased more than 200% and that the current cost for the heaviest vehicles to cross the 359-mile portion of the Pennsylvania Turnpike that spans from New Jersey to Ohio exceeds $1800. Pennsylvania's Auditor General found that PTC's annual "costly toll increases place an undue burden" on Pennsylvanians, opined that "the average turnpike traveler will be deterred by the increased cost and seek alternative toll-free routes," App. 88 (emphasis omitted) (quoting September 2016 Performance Audit of the PTC), and recommended that the PTC seek legislative relief from its Act 44/89 payment obligations.

         Tolls are PTC's largest revenue source and amount to 166-215% of the costs to maintain and operate the Turnpike. Simply put, the amount of the tolls collected exceeds the amount it costs to run the Turnpike. The excess tolls are deposited into the PennDOT Trust Fund, which are, in turn, transferred to four different programs: (1) operating programs under 74 Pa. Cons. Stat. § 1513, which include asset maintenance costs and expenses for public passenger transport; (2) the multimodal transportation fund under 74 Pa. Cons. Stat. § 2104, which covers aviation, freight and passenger rail, and port and waterway projects; (3) the asset improvement program under 74 Pa. Cons. Stat. § 1514 for financial assistance for the improvement, replacement, or expansion of capital projects; and (4) programs of statewide significance under 74 Pa. Cons. Stat. § 1516, which include disability programs, rail and bus services, community transportation, Welfare-to-Work programs, and research projects. Act 44/89 is designed to generate $450 million annually for PennDOT from 2011 through 2022.[3] More than ninety percent of Act 44/89 payments-approximately $425 million annually- benefit "non-Turnpike road and bridge projects and transit operations." App. 78. Plaintiffs allege that many of these "programs have no functional relationship to the Pennsylvania Turnpike," including, for instance, the "[c]onstruction of an underpass" and a "[s]idewalk installation."[4] App. 81-82. Plaintiffs concede that a federal statute, the Intermodal Surface Transportation Efficiency Act of 1991 ("ISTEA"), Pub. L. No. 102-240, 105 Stat. 1914 (codified as amended in scattered titles), authorizes these types of projects. Nonetheless, they assert that the toll costs burden interstate commerce and "discourag[e] both business and private travelers from using the Turnpike." App. 99.

         B

         Plaintiffs brought suit on behalf of a putative class alleging violations of the dormant Commerce Clause and their right to travel.[5] Defendants moved to dismiss and Plaintiffs moved for partial summary judgment on the issue of liability.

         The District Court granted Defendants' motions to dismiss[6] and denied Plaintiffs' motion for summary judgment. See generally Owner Operator Indep. Drivers Ass'n v. Pa. Tpk. Comm'n, No. 1:18-cv-00608, -- F.Supp.3d --, 2019 WL 1493182 (M.D. Pa. Apr. 4, 2019). The Court applied the test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137 (1970), and held that, because the alleged burdens from the tolls are equally imposed on both in- and out-of-state drivers, they are general burdens on commerce that do not violate the dormant Commerce Clause, Owner Operator, 2019 WL 1493182, at *22. The Court also held that Plaintiffs failed to state a claim that their right to interstate travel was infringed because they asserted only that the toll structure deterred Turnpike travel. Id. at *24.

         II[7]

         A

         1

         The Commerce Clause confers upon Congress the power "[t]o regulate Commerce . . . among the several States." U.S. Const. art. I, § 8, cl. 3. By negative implication, Congress's authority to regulate commerce prohibits the states from enacting "laws that unduly restrict interstate commerce." Tenn. Wine & Spirits Retailers Ass'n v. Thomas, 139 S.Ct. 2449, 2459 (2019). This "dormant Commerce Clause" bars states from discriminating against or unduly burdening interstate commerce, for instance by enacting protectionist regulations that give in-state businesses an advantage over out-of-state businesses, see, e.g., Pike, 397 U.S. at 144-45, or by assessing fees that "threaten the free movement of commerce by placing a financial barrier around the [s]tate," Am. Trucking Ass'ns, Inc. v. Scheiner, 483 U.S. 266, 284 (1987).

         Congress, however, may authorize a state to take actions that burden interstate commerce. S. Dakota v. Wayfair, Inc., 138 S.Ct. 2080, 2089 (2018). "[W]hen Congress exercises its power to regulate commerce by enacting legislation, the legislation controls." Id. Thus, where Congress has spoken and state or local governments take actions that are "specifically authorized by Congress," those actions are "not subject to the Commerce Clause even if [they] interfere[] with interstate commerce." [8]White v. Mass. Council of Constr. Emp'rs, Inc., 460 U.S. 204, 213 (1983) (citation omitted). In short, as applied here, if Congress ...


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