United States Court of Appeals
For the First Circuit
No. 03-1312
PETER A. DORAN, individually and on behalf of
all others similarly situated; WENDY E. SAUNDERS;
individually and on behalf of all others similarly situated,
Plaintiffs, Appellants,
v.
MASSACHUSETTS TURNPIKE AUTHORITY;
MATTHEW AMORELLO; CHRISTY MIHOS; JORDAN LEVY,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nancy Gertner, U.S. District Judge]
Before
Torruella, Circuit Judge,
Howard, Circuit Judge,
and Schwarzer,* Senior District Judge.
Stephen V. Saia was on brief for appellants.
Joshua M. Davis, with whom James A. Aloisi, Jr. and
Peter N. Kochansky, was on brief for appellees.
November 6, 2003
*
Of the Northern District of California, sitting by
designation.
SCHWARZER, Senior District Judge. Peter A. Doran and
Wendy E. Saunders brought this action under 42 U.S.C. § 1983
against the Massachusetts Turnpike Authority, its chairman and
members of its board (collectively, “MTA”). Plaintiffs complain
that the FAST LANE Discount Program (“FLDP” or “program”)
established by MTA violates the dormant Commerce Clause of the
United States Constitution. U.S. CONST . art. I, § 8, cl. 3. That
program permits drivers of automobiles equipped with a transponder
sold by MTA to pass through certain toll plazas and tunnels in the
Boston area for a discounted toll which is electronically
collected. Plaintiffs contend that the program discriminates
against nonresidents of Massachusetts and does not serve a
legitimate local interest. The district court dismissed the
complaint under Federal Rule of Civil Procedure 12(b)(6) for
failure to state a claim on which relief can be granted. It held
that the FLDP did not discriminate against out-of-state residents
and did not excessively burden interstate commerce. The district
court had jurisdiction under 28 U.S.C. §§ 1331 and 1343, and we
have jurisdiction under 28 U.S.C. § 1291. For the reasons
discussed below, we affirm.
FACTUAL AND PROCEDURAL HISTORY
In March 1997 Massachusetts Governor William Weld signed
the Metropolitan Highway Systems bill authorizing MTA to increase
tolls at the Allston-Brighton and Route 128 toll plazas from $.50
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to $1.00, and at the Ted Williams Tunnel and the Sumner Tunnel from
$2.00 to $3.00. The revenue from these toll increases would help
finance Boston’s Central Artery/Third Harbor Tunnel Project,
commonly known as the “Big Dig.” That project aims to bury
stretches of Interstate 93 beneath the city and extend Interstate
90 to Logan International Airport. MTA is responsible for
generating through tolls approximately $1.5 billion of the nearly
$6 billion needed to complete work on the Interstate 90 segment.
The toll increase was scheduled to go into effect on
January 1, 2002. In response to public opposition, MTA postponed
the increase and proposed to implement a Resident Only Discount
Program, under which state residents who drove automobiles equipped
with FAST LANE transponders would receive toll discounts of $.25 at
the Allston-Brighton and Route 128 toll plazas and $.50 at the
tunnels.
The FAST LANE system allows vehicles equipped with a
transponder to pass through toll plazas without having to stop and
pay. Participants must purchase a transponder from MTA for $27.50.
The transponder is a small plastic device attached to the
windshield. It signals the car’s identity to an MTA facility which
automatically charges the toll to the driver’s account. Drivers
generally assign their account to their credit card which is billed
$20 at the outset; thereafter, tolls are deducted until $10
remains, at which point an additional $10 is billed to replenish
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the account. Cars equipped with transponders used in other cities
that—like the E-Z Pass system—are interoperable, may drive through
FAST LANE toll gates without stopping, but do not receive
discounts.1
Before the Resident Only Discount Program went into
effect, a newspaper article questioned whether it violated the
dormant Commerce Clause of the Constitution. In response, MTA
modified the program to apply to all drivers of automobiles,
resident or not, equipped with FAST LANE transponders. MTA’s
chairman noted that as a result a few thousand out-of-state FAST
LANE subscribers, most of whom commute from Connecticut, would
become eligible for discounts.
On July 4, 2002, plaintiff Doran drove through the
Allston-Brighton and Route 128 toll plazas. Doran is a Vermont
resident who did not subscribe to the FLDP, so he paid the full
tolls. On July 5, plaintiff Saunders drove through the same toll
plazas. She is a New York resident who had an E-Z Pass but no FAST
LANE transponder, so she also paid the full tolls.
Doran and Saunders then filed this action alleging that
MTA’s discount system violates the dormant Commerce Clause, and
moved for a preliminary injunction. Finding that the complaint
1
E-Z Pass is the equivalent electronic toll payment system
used by the State of New York.
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failed to state a claim, the district court granted MTA’s motion to
dismiss.
DISCUSSION
I. STANDARD OF REVIEW
We review “the grant of a motion to dismiss de novo,
taking the allegations in the complaint as true and making all
reasonable inferences in favor of plaintiff.” Rockwell v. Cape Cod
Hosp., 26 F.3d 254, 255 (1st Cir. 1994). However, we are not
required to accept legal conclusions. New England Cleaning
Servs. v. American Arbitration Ass’n, 199 F.3d 542, 545 (1st Cir.
1999). A motion to dismiss under Federal Rule of Civil Procedure
12(b)(6) should succeed only when “it is clear that no relief could
be granted under any set of facts that could be proved consistent
with the allegation.” Gorski v. New Hampshire Dep’t of Corr., 290
F.3d 466, 473 (1st. Cir. 2002) (citing Hishon v. King & Spalding,
467 U.S. 69, 73 (1984)).
II. THE MERITS
The Commerce Clause of the United States Constitution
grants Congress the power to “regulate Commerce . . . among the
several States.” U.S. CONST . art. I, § 8, cl. 3. The Commerce
Clause “not only grants Congress the authority to regulate commerce
among the States, but also directly limits the power of the States
to discriminate against interstate commerce.” New Energy Co. v.
Limbach, 486 U.S. 269, 273 (1988). This “dormant” Commerce Clause
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“prohibits economic protectionism—that is, regulatory measures
designed to benefit in-state economic interests by burdening out-of-
state competitors.” Id. We must decide whether plaintiffs have
stated a claim that the FLDP offends the dormant Commerce Clause.
Plaintiffs advance four contentions in support of their
claim:
1) That the FLDP imposes a nonuniform and noncompensatory
user fee unrelated to actual highway usage;
2) That it is discriminatory on its face or in practical
effect;
3) That it does not serve a legitimate local interest
unrelated to economic protectionism; and
4) That its cumulative effects on commerce, by shifting
highway costs to nonresidents, are excessive. Appellants’ Br. at
9.
We address each of these contentions in turn.2
A. The FLDP Does Not Impose a
Nonuniform and Noncompensatory
User Fee
Plaintiffs argue that the FLDP violates the Commerce
Clause because it does not charge every user the same amount for
identical use and because the discount is nonuniform,
2
Because we find other arguments to fully support MTA’s
position, we do not address the market participant issue. MTA
contends that the dormant Commerce Clause does not even apply to
this case because of the market participant exception. See Reeves,
Inc. v. Stake, 449 U.S. 429 (1980).
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noncompensatory and unrelated to actual highway usage or to specific
services provided by MTA. To begin with, the argument is factually
flawed. The FLDP is available on identical terms to drivers without
regard to their residence; the program incorporates no distinctions
or classifications based on residence and participation is open to
anyone. The benefits of the discount program accrue simply on
account of a driver’s frequency of use. The frequent driver will
receive a greater amount of discounts than the infrequent driver,
but he or she will, of course, also pay a correspondingly greater
amount in tolls.
It is true that to participate in the FLDP, a driver must
purchase a transponder for $27.50. The right to purchase is not
restricted to residents, but is open to all. The decision whether
to do so turns on one’s anticipated frequency of use. The distance
a driver lives from Boston will be a factor, but not the only
factor, affecting the frequency with which he or she is likely to
drive through the toll plazas or the tunnels. But the frequency
calculus creates no resident versus nonresident classification. The
geographical reality is that a commuter from Providence, RI or
Manchester, NH is no more distant from Boston than one from
Worcester, MA; a commuter from Hartford, CN or Portland, ME is no
further from Boston than one from Springfield, MA; and residents of
cities in Western Massachusetts such as Pittsfield are further than
residents of any of these major out-of-state population centers.
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Thus, plaintiffs’ claim that MTA “charg[es] millions of non-
residents a higher cost per mile for traveling the exact same
distance,” Appellants’ Br. at 10, is pure fiction. The toll is
higher for nonparticipants than for participants, regardless of
where they live. Thus, many infrequent nonparticipating drivers
living in and around Boston will pay a higher toll for whatever
distances they may drive than commuters from, say, Manchester,
Providence or Portland who have chosen to participate.
Plaintiffs rely principally on American Trucking Ass’n v.
Scheiner, 483 U.S. 266 (1987), to support their argument. That case
involved the validity of flat taxes imposed on trucks. Pennsylvania
first required owners of trucks operating on its roads to purchase
an identification marker. For vehicles not registered in
Pennsylvania the fee was $25, while owners of vehicles registered
in Pennsylvania were not required to pay the fee. Later,
Pennsylvania reduced the marker fee to $5 and instituted an axle tax
on all trucks above a certain weight. At the same time, it reduced
the registration fee for in-state trucks in an amount identical to
the new axle tax, thereby eliminating the effect of the axle tax on
in-state vehicles. These flat taxes were assessed annually without
regard to the number of miles traveled on Pennsylvania roads. Id.
at 274-75, 281-82.
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The Court stated that the issue was whether the methods
by which the flat taxes are assessed discriminate against some
participants in interstate commerce and held:
We find dispositive those of our precedents
which make clear that the Commerce Clause
prohibits a State from imposing a heavier tax
burden on out-of-state businesses that compete
in an interstate market than it imposes on its
own residents who also engage in commerce among
States.
Id. at 282. Although the Court’s discussion in Scheiner largely
focuses on the validity of an unapportioned flat tax on trucks, the
decision rests on the premise that the imposition of the
Pennsylvania tax did not treat interstate and intrastate interests
evenhandedly. Thus, the case is not apposite. The FLDP does not
impose a heavier burden—toll or otherwise—on out-of-state residents.
Plaintiffs’ discussion of the Court’s analysis of potential defenses
of the Pennsylvania scheme and, in particular, the user fee defense,
is therefore not relevant. The Court’s rejection of that
defense—based on the fact that Pennsylvania’s taxes discriminate
against out-of-state vehicles—affords no support to plaintiffs’
claim that MTA’s nondiscriminating program violates the Commerce
Clause.
Moreover, the FLDP bears no resemblance to Pennsylvania’s
flat tax. As plaintiffs argue, the Pennsylvania tax imposed for the
privilege of using Pennsylvania roads discriminated because that
privilege was more valuable to residents than nonresidents. The
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tolls in issue here, in contrast, are imposed on a per-use basis.
They are imposed only when the driver actually uses the toll plazas
or tunnels and are directly proportional to that use. As the
Scheiner court put it, “[s]o long as a State bases its tax on a
relevant measure of actual road use, obviously both interstate and
intrastate [drivers] pay according to the facilities in fact
provided by the State,” and the program places no undue burden on
interstate commerce. See id. at 291 (quoting Capitol Greyhound
Lines v. Brice, 339 U.S. 542, 557 (1950) (Frankfurter, J.,
dissenting)).
Even if we were to treat these highway tolls as analogous
to a flat tax, as plaintiffs appear to argue, MTA “treat[s] [in-
state and out-of-state] vehicles with an even hand.” See id. at
282. Tolls are the same for both kinds of vehicles and each is
eligible to participate in the discount program. That the incentive
to participate varies across drivers does not make the program
discriminatory. That incentive “affects local and out-of-state
vehicles in precisely the same way, and thus does not implicate the
Commerce Clause.” Id. at 283 n.15. Thus, contrary to plaintiffs’
contention, the program does not fail Scheiner’s internal
consistency test. Appellants’ Br. at 22. As the Court put it, if
more than one state adopted a similar discount program, the Commerce
Clause is satisfied where the programs would “maintain state
boundaries as a neutral factor in economic decision making.” Id.
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at 282-83; see also id. at 284 (“To pass the ‘internal
inconsistency’ test, a state tax must be of a kind that, ‘if applied
by every jurisdiction, there would be no impermissible interference
with free trade.’”); American Trucking Ass’n, Inc. v. Sec’y of
Admin., 613 N.E.2d 95, 102 (Mass. 1993) (stating that “[a] valid
user fee will pass the internal consistency test because the full
measure of the fee is not imposed for merely crossing the taxing
State’s border, but is directly related in purpose and amount, to
the use of a service or privilege.”)
We think that the case before us is more akin to
Evansville-Vanderburgh Airport Auth. v. Delta Airlines, Inc., 405
U.S. 707 (1972), which upheld the validity of a flat charge of $1.00
per passenger enplaning on a commercial airliner operating from the
Evansville airport. The Court held that because both interstate and
intrastate flights are subject to the same charge, the fee did not
discriminate against interstate commerce, even though the vast
majority of passengers boarding aircraft traveled in interstate
commerce. It stated that
so long as the toll is based on some fair
approximation of use or privilege for use, as
was that before us in Capitol Greyhound [Lines
v. Brice, 339 U.S. 542 (1950)], and is neither
discriminatory against interstate commerce nor
excessive in comparison with the governmental
benefit conferred, it will pass constitutional
muster, even though some other formula might
reflect more exactly the relative use of the
state facilities by individual users.
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Id. at 716-17. In Capitol Greyhound, cited by the Court, it had
upheld the validity of Maryland’s excise tax of 2% of the value of
a vehicle imposed as a condition precedent to operation of the
vehicle in the State of Maryland, in part because the tax “applie[d]
to interstate and intrastate commerce without discrimination.” 339
U.S. at 544.
Here, the tolls are assessed uniformly in direct
proportion to use of the toll facilities and have not been shown to
be excessive, either standing alone or by reason of the unrestricted
availability of the frequent traveler discount.
B. The FLDP Is Not Discriminatory
On Its Face Or In Its Practical
Effect
Plaintiffs offer three arguments in support of their
second contention. First, they say that the FLDP “invariably
result[s] in a significant degree of permanent cost exporting onto
the interstate traveler, non-resident and/or non-participant.”
Appellants’ Br. at 29. As we have explained above, interstate
travelers pay the same tolls as resident travelers. Any traveler
can qualify for a discount but the decision whether to do so turns
principally on anticipated frequency of travel. While a New York
resident is likely to make infrequent trips through the toll plazas
and tunnels, so is the resident of a “wealthy suburb of Boston” who
prefers using public transportation to driving his or her car into
the city. Appellants’ Br. at 32. But the incremental burden of the
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undiscounted toll for the infrequent traveler is by necessity de
minimus. Plaintiffs’ inflammatory assertion that “[e]ach year
millions of non-FASTLANE participants pay a significant toll
premium, a tariff of 20% or 33% greater than participants (i.e.
Massachusetts residents), for using the same stretch of road,”
Appellants’ Br. at 14, proves nothing; it is expected that
nonparticipants will pay higher tolls but it does not follow that
interstate commerce will be burdened, much less that it will suffer
discrimination. Unlike flat taxes imposed on interstate truck
operators, the collection of undiscounted tolls from the occasional
traveler—resident or non-resident—results in no discernable “cost
exporting.”
Second, they argue that the FLDP has a discriminatory
intent and purpose. Plaintiffs point out that the FLDP was adopted
in response to political pressure to benefit commuters, surely a
constitutionally valid purpose. Appellants’ Br. at 31. They go on
to argue that when MTA sought to quell constitutional concerns by
offering discounted tolls to nonresidents who participate in the
FLDP, it merely “sought to mask the discriminatory impact on non-
residents by offering a hollow option that few non-residents will
choose.” Appellants’ Br. at 32.
However, plaintiffs’ First Amended Complaint contains no
allegation of discriminatory purpose; on the contrary, plaintiffs
allege that
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to head off concerns that the Resident Only
Fast Lane Discount Program may violate the
interstate Commerce Clause . . . defendants
modified the Resident Only Discount Program to
apply to all travelers, residents and non-
residents, equipped with FAST LANE
transponders.
First Am. Compl. at ¶ 27. We think that plaintiffs’ argument falls
of its own weight. See Grant’s Dairy v. Comm’r of Me. Dep’t of
Agric., 232 F.3d 8, 23 (1st Cir. 2000) (innocuous expressions of
concern insufficient to raise inference of protectionist intent).
Finally, plaintiffs contend that the FLDP is
discriminatory on its face
because it regulates the toll that one pays
based on one’s participation in the state
sponsored FASTLANE electronic toll collection
program to the exclusion of all other competing
electronic toll collection systems like E-Z
Pass offered by other states or that do not
participate in any electronic toll collection
system.
Appellants’ Br. at 33. The logic underlying the argument is
elusive. Participation in FAST LANE does not preclude participation
in other electronic toll collection systems; nothing in the record
indicates that automobiles cannot carry more than one transponder.
Moreover, it can hardly be said that FAST LANE, which operates on
three Massachusetts toll collection points, competes with systems
that operate on toll collection points in New York, New Jersey and
Delaware. Participants in systems in those states are not
“penalized,” as plaintiffs argue, for their decision to choose a
different system. Appellants’ Br. at 33. Their participation in
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such systems has no impact on their right to participate in the
FLDP.
C. The FLDP Does Not Shift Highway
Costs To Non-Residents and
Serves A Legitimate Local
Interest Unrelated To Economic
Protectionism
We address plaintiffs’ third and fourth contentions
together. Arguing from the premise that the FLDP redistributes the
increased toll burden from Boston commuters to nonresidents and
forces nonresidents “with little or no incentive to participate to
pay a disproportionate share of the state’s highway costs,”
plaintiffs contend that the FLDP serves no legitimate local interest
unrelated to economic protectionism. Appellants’ Br. at 38. For
the reasons discussed at length above, the premise is flawed. There
is nothing to show that one who drives from New York to Boston and
pays the $1.00 toll pays a “disproportionate share of the state’s
highway costs” compared to the suburban commuter who, driving over
a much shorter distance on the state’s highways, pays the discounted
toll of $.75. Thus, the program does not implicate the balancing
test under Pike v. Bruce Church, 397 U.S. 137 (1970). See
Appellants’ Br. at 40.
Even if it did, however, the plan passes muster. Under
the Pike balancing test, “[w]here the statute regulates even-
handedly to effectuate a legitimate local public interest, and its
effects on interstate commerce are only incidental, it will be
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upheld unless the burden imposed on such commerce is clearly
excessive in relation to the putative local benefits.” Id. at 142.
Here, the effect on nonresident drivers—just as on resident drivers
—is that to qualify for the discounts, they must invest $27.50 to
acquire a transponder and maintain an account balance of $10-$20.
That burden is de minimis in relation to the public benefits of
achieving a more equitable sharing of toll burdens among commuters,
some of whom pay no tolls on their routes, and facilitating the
implementation of an essential funding scheme for major highway
improvements.
We have considered other arguments advanced by plaintiffs
and found them to be without merit.
CONCLUSION
We conclude that the FLDP treats Massachusetts-based and
other vehicles with an even hand and that the program does not
interfere with commerce between the states. Accordingly, the
judgment of the district court is AFFIRMED.
AFFIRMED.
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Doran v. Massachusetts Turnpike Authority
Court: Court of Appeals for the First Circuit
Date filed: 2003-11-06
Citations: 348 F.3d 315
Copy CitationsCombined Opinion