Elizabeth River Crossings v. Meeks
749 S.E.2d 176
Va.2013Background
- Portsmouth and Norfolk crosses (Downtown and Midtown tunnels) experienced severe congestion; State pursued a Public-Private Transportation Act (PPTA) project to build a new Midtown Tunnel, extend MLK Freeway, and maintain existing tunnels for 58 years. Estimated cost > $2.04 billion; funding from federal/state loans, ERC investment, and tolls.
- VDOT (public entity) solicited proposals under the PPTA; Elizabeth River Crossings OpCo, LLC (ERC) submitted the successful proposal; VDOT and ERC executed a Comprehensive Agreement in December 2011 that authorizes ERC to design, build, operate, and collect tolls subject to contractual limits and VDOT oversight; Commonwealth retains ownership.
- Meeks and other Portsmouth residents sued, alleging (inter alia) that (1) tolls are taxes and the PPTA unconstitutionally delegated taxation to VDOT/ERC (Article IV, §1); (2) PPTA/Comprehensive Agreement violated various constitutional provisions and abridged the Commonwealth’s police power.
- The circuit court granted summary judgment for plaintiffs on delegation/taxation claims (Counts 1–2); VDOT/ERC appealed. The Supreme Court of Virginia granted review of whether tolls are taxes, whether PPTA unconstitutionally delegated taxation/toll-setting, and whether the Comprehensive Agreement abridges police power.
- The Supreme Court reversed: it held tolls are user fees (not taxes); the General Assembly validly delegated toll-setting authority to VDOT and permissibly empowered ERC (with VDOT oversight); and the Comprehensive Agreement does not abridge the Commonwealth’s police power.
Issues
| Issue | Meeks' Argument | VDOT/ERC's Argument | Held |
|---|---|---|---|
| Are Project tolls taxes or user fees? | Tolls are taxes because their primary purpose is revenue and users lack reasonable alternatives. | Tolls are user fees: contractual payments for particularized benefits funding the Project only. | User fees: (1) confer particularized benefits; (2) are voluntary (reasonable alternatives exist); (3) revenues fund the Project only. |
| Did PPTA unconstitutionally delegate the power of taxation/toll-setting (Article IV, §1)? | PPTA delegates legislative ratemaking power to VDOT (and indirectly to ERC), an improper delegation of legislative authority. | SCC lacks jurisdiction here; General Assembly can delegate toll-setting to VDOT under PPTA and set standards; PPTA does not delegate taxation. | No unconstitutional delegation: tolls are fees, SCC does not have exclusive jurisdiction, and delegation to VDOT is permissible subject to statutory standards. |
| May the General Assembly (and VDOT) empower ERC (a private entity) to set tolls? | Empowering a private entity to set tolls is an improper delegation of legislative power. | ERC is empowered to negotiate and operate under VDOT oversight; ERC cannot unilaterally set rates beyond contract limits. | Permissible empowerment (not an unconstitutional delegation): ERC’s role is subordinate to VDOT; VDOT retained ultimate approval, contractual limits, notice, and emergency-stop rights. |
| Does the Comprehensive Agreement abridge the Commonwealth’s police power? | Long-term contract terms, indemnities, and damage provisions limit the Commonwealth’s future regulatory discretion and thus abridge the police power. | Agreement terms are contractual and subject to appropriation/legislative oversight; monetary obligations do not bar future police-power action. | No abridgment: contracts and contingent monetary liabilities (subject to appropriation) do not strip the Commonwealth of its police power. |
Key Cases Cited
- Westbrook, Inc. v. Town of Falls Church, 185 Va. 577, 39 S.E.2d 277 (Va. 1946) (defines tax as an enforced contribution for governmental purposes)
- Sands v. Manistee River Improvement Co., 123 U.S. 288 (U.S. 1887) (distinguishes tolls as compensation for use of property/improvements)
- Hampton Roads Sanitation Dist. Comm. v. Smith, 193 Va. 371, 68 S.E.2d 497 (Va. 1952) (tolls as authorized charge for use of a special facility)
- Murphy v. Massachusetts Turnpike Auth., 971 N.E.2d 231 (Mass. 2012) (adopts a three-part test to distinguish taxes from user fees)
- Mountain View Ltd. P'ship v. City of Clifton Forge, 256 Va. 304, 504 S.E.2d 371 (Va. 1998) (reasonable correlation test for fees that generate surplus)
- Harrison v. Day, 200 Va. 439, 106 S.E.2d 636 (Va. 1959) (textualist approach to constitutional delegation limits)
- Marshall v. Northern Virginia Transp. Auth., 275 Va. 419, 657 S.E.2d 71 (Va. 2008) (General Assembly’s plenary legislative power and permissible delegations)