Unlock stock picks and a broker-level newsfeed that powers Wall Street.Upgrade Now
New York’s Congestion Pricing Plan Faces Another Legal Showdown
1 / 3
New York’s Congestion Pricing Plan Faces Another Legal Showdown
Chris Dolmetsch
5 min read
(Bloomberg) -- New York City’s controversial traffic tolling program is testing President Donald Trump’s ability to reach beyond his federal fights over citizenship and government efficiency all the way down to a local brawl in Wall Street’s backyard.
The legal battle kicked off when the state’s Metropolitan Transportation Authority sued the Trump administration last week for moving to take back federal approval of the Manhattan congestion pricing program. It has broad political implications and could even end up at the Supreme Court.
In its lawsuit, filed as the president pronounced congestion pricing “dead,” the MTA asked a court to declare Trump’s move unlawful. The agency argued that the program is complex and that reversing it would violate an agreement between it and the federal government.
“This is the first congestion pricing program in the US,” said Bennett L. Gershman, a professor at Pace University’s law school. “It may be something that the Supreme Court may want to look at, because it is so novel and it’s now being challenged.”
The agreement, struck under former President Joe Biden, is rooted in a federal law that lets local transportation agencies charge tolls to help cut traffic on busy routes. Legal experts expect an intense court fight, and several said New York is likely to win.
“The state is clearly not going to back down,” said David A. Super, a professor at Georgetown Law who focuses on administrative, constitutional and government law. “There’s no legal reason why they should.”
Deal Afoot?
That portends a vigorous appeal, whoever triumphs in this round — unless the two sides reach a deal. New York Governor Kathy Hochul’s office said the governor met with Trump Friday to discuss congestion pricing, among other topics.
A spokesperson for Hochul declined to comment on the dispute, beyond a TV interview the governor gave Sunday. The MTA referred to a press conference last week in which Chief Executive Officer Janno Lieber said, “We tried gridlock for 60 years. It didn’t work. It cost our economy billions.”
The Federal Highway Administration said it doesn’t comment on pending litigation. The White House didn’t respond to requests for comment.
For now the case is before US District Judge Lewis Liman in Manhattan, a Trump appointee who was nominated in 2018 as part of a bipartisan agreement on judicial nominees. Liman denied a request in late December for a preliminary injunction in a set of lawsuits filed by groups seeking to stop the congestion pricing program before it started.
Drawing Fire
The program, which charges most drivers a $9 toll to enter Manhattan between 60th Street and its southern tip, aims to reduce traffic and pollution while raising money for the city’s subways, buses and commuter rails.
But it has drawn fire for the financial hit to working people and is the target of a separate lawsuit by New Jersey that claims it has just shifted congestion and pollution to its neighbor across the Hudson River. That suit has largely gone Hochul’s way but is still pending.
The MTA, which filed its lawsuit Wednesday in federal court in Manhattan, alleges the Department of Transportation’s turnabout breaches its right to due process, among other protections.
“DOT did not cite any basis in the statute authorizing it to reverse the approval it had provided just three months earlier, following a four-year intensive review process,” the MTA argued in its suit. It called the move “the definition of arbitrary and capricious.”
‘Business Killer’
The tolls will remain in place for now, Lieber has said. The US, which could seek a court order to shut down the tolling during the litigation, has yet to respond to the suit in court. The MTA has said it has the money on hand to refund tolls if it loses its legal fight.
Trump has long vowed to undo the initiative, calling it a “massive business killer and tax on New Yorkers.” In a letter to Hochul last week, Transportation Secretary Sean Duffy said the program doesn’t provide toll-free options for many drivers and that the toll rate was set for transit revenue rather than at an amount needed to reduce traffic congestion.
“CONGESTION PRICING IS DEAD,” Trump posted on his social media platform Truth Social. “Manhattan, and all of New York, is SAVED.”
The state and other proponents of the program, including transit advocates and environmental experts, say it’s working. Launched on Jan. 5, it pulled in $48.6 million in its first month. Through Feb. 17 there were 2.6 million fewer vehicles in the congestion zone, a 10% decrease, causing traffic to move faster along Manhattan streets, according to the MTA.
‘Second Thoughts’
The agency’s lawsuit focuses on the legality of Duffy’s cutoff. The MTA argues it was done without following proper legal steps, in violation of the Administrative Procedure Act, which governs how federal agencies create and issue regulations.
The agreement with the state, called the Value Pricing Pilot Program, was authorized by an act of Congress, and there doesn’t appear to be any legal basis for the administration to stop it from proceeding, Pace University’s Gershman said.
“They endorsed it and now they may be having second thoughts,” he said. “But if they have second thoughts, go to Congress. Congress runs the show when it comes to things like interstate commerce.”
Gershman said the MTA is likely to win but that it’s hard to predict how the appeals process will play out, especially if the case reaches the Supreme Court.
‘Wrecking Ball’
Georgetown’s Super also said the MTA is likely to prevail in the trial court, because the law that authorized congestion pricing provides for initial approvals but not for any way to take them back.
If it does win, the Trump administration is likely to appeal, he said, but he doesn’t see the high court ultimately taking the case, because it’s so straightforward.
Noah Kazis, an assistant professor at University of Michigan Law School, called the administration’s move a “political wrecking ball” that disregards the law. He said he would be surprised if the justices took the case.
“It’s too much of a one-off for the Supreme Court to be interested, especially if the legal issues are as clear as they appear,” he said.
--With assistance from Michelle Kaske and Skylar Woodhouse.
