Howard YERGER; Donald Borodkin; Robert Colson; John Driesse; Gordon Frank; Duncan Fuller; Dr. Carmen Occhiuzzi; Amy Theobald, individually, and on behalf of all others similarly situated, Appellants v. MASSACHUSETTS TURNPIKE AUTHORITY.
No. 09-4083.
United States Court of Appeals, Third Circuit.
September 30, 2010.
878-885
Submitted Under Third Circuit LAR 34.1(a) Sept. 22, 2010.
Margaret Raymond-Flood, Esq., Norris, McLaughlin & Marcus, Bridgewater, NJ, for Massachusetts Turnpike Authority.
OPINION
AMBRO, Circuit Judge.
This case involves a dispute over a toll discount program administered by the Massachusetts Turnpike Authority (“MTA“). Plaintiffs filed a complaint alleging violations of the Commerce Clause,
I. Background
Nine states in the New England and Mid-Atlantic region participate in a common electronic toll payment system called E-ZPass.1 Unlike these states, Massachusetts administers its own system. Both systems function the same way—they allow tolls to be collected from a driver‘s prepaid account through an electronic transрonder device. Drivers holding transponders may use designated lanes in which they can pay tolls without stopping to interact with a cashier. There are no residency requirements on subscriptions to either system—residents of any state may subscribe to Fast Lane, E-ZPass, or both.
At issue here is the Fast Lane Discount Program (“FLDP“), administered by the MTA. The FLDP provides discounts to users of Fast Lane but not to users of E-ZPass, although drivers holding transponders from each program may travel the same routes and use the same toll booths.
Appellants are residents of New Jersey, New Hampshire, and Massachusetts. They subscribe to E-ZPass but nоt Fast Lane. Appellants allege that, during their use of the Fast Lane toll booths on the Massachusetts Turnpike, they were charged a higher toll amount than Fast Lane subscribers in violation of their constitutional rights.
II. Jurisdiction and the Standard of Review
The District Court had jurisdiction under
III. Discussion
To repeat, appellants claim that the Fast Lane Discount Program (1) creates an un
A. Commerce Clause
The Commerce Clause of the United States Constitution grants Congress the authority to “regulate Commerce among the several States.”
In order to determine whether a state law violates the dоrmant Commerce Clause, we engage in a two-fold inquiry. First, we consider whether the law discriminates against interstate commerce on its face or in effect. Id. If we determine that it does, heightened scrutiny applies, and the burden shifts to the state to prove that “the statute serves a legitimate loсal purpose, and that this purpose could not be served as well by available nondiscriminatory means.” Id. If we determine that it does not, we consider whether the law is invalid under the balancing test set forth in Pike v. Bruce Church, Inc., 397 U.S. 137, 90 S.Ct. 844, 25 L.Ed.2d 174 (1970). Under the Pike balancing test, we decide “whether ‘the burden imposed on such commerce is clearly exсessive in relation to the putative local benefits.‘” Cloverland, 462 F.3d at 263 (quoting Pike, 397 U.S. at 142, 90 S.Ct. 844).
Appellants assert that the FLDP is discriminatory on its face because the MTA imposes a higher toll on users of out-of-state E-ZPass transponders than on users of in-state Fast Lane transponders. They claim that the MTA is discriminating against interstate commеrce itself by placing a higher toll on the out-of-state toll transaction than the in-state toll transaction. We disagree.
Appellants cite a series of cases to support the proposition that a state cannot discriminate against transactions with some interstate element. Sеe, e.g., Fulton Corp. v. Faulkner, 516 U.S. 325, 331, 116 S.Ct. 848, 133 L.Ed.2d 796 (1996); Or. Waste Sys v. Dep‘t of Envtl. Quality of Or., 511 U.S. 93, 99-100, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994). Each of the cases cited, however, involves a classification or distinction that forms the basis of the facial discrimination. For example, in Fulton the Court struck down a North Carolina statute that provided for a deduction against an intangibles tax on stock, available only to residents, equаl to the fraction of the corporation‘s income subject to state tax. Fulton, 516 U.S. at 327-28, 116 S.Ct. 848. In Oregon Waste Systems, the Supreme Court struck down an Oregon law that imposed a surcharge of $2.25 per ton on waste generated out-of-state but disposed of within the state. 511 U.S. at 96, 114 S.Ct. 1345. Both of these cases, which are representative of thе authorities cited by appellants, involve a state law that discriminated by its express terms against out-of-state interests.
The FLDP does not discriminate on its own terms. Enrollment in Fast Lane is open to everyone. As the Doran court aptly reasoned, “[t]he FLDP is available on identical terms to drivers without regard to thеir residence; the program incorporates no distinctions or classifications based on residence and participation is open to anyone....” Doran, 348 F.3d at 319. In each of the cases cited by appellants, out-of-staters were prevented entirely from obtaining the benefits or avoiding the burdens of the state law at issue. In this case, the MTA has not limited a benefit solely to residents; rather, it simply offers more competitive toll rates to those individuals, from all states, who choose to enroll in Fast Lane.
2. FLDP does not discriminate in effect
Appellants also claim that the FLDP has a discriminatory effect on interstate commerce. Again, we disagree.
To support their argument, appellants cite Hunt v. Wash. State Apple Adver. Comm‘n, 432 U.S. 333, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977), in which the Supreme Court struck down a facially neutral North Carolina statute that required all containers of apples sold in the state to bear no other grade than a federal grade because the statute had the effect of discriminating against Washington Statе apple growers. The Court held that the statute forced Washington growers and dealers to “alter their long-established procedures at substantial cost,” and thus took away the competitive advantage Washington apple growers earned though their expensive and unique grading system, resulting in a “lеveling effect which insidiously operate[d] to the advantage of local apple producers.” Id. at 351, 97 S.Ct. 2434.
Unlike Hunt, this case does not present a situation where eligibility or access to a state benefit (or imposition of a state burden) is premised on some seemingly neutral criteria that serve mеrely as a proxy
3. Pike Balancing Test
As the FLDP does not trigger heightened scrutiny, we proceed to the balancing test set forth in Pike. Under that 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 upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits.” Pike, 397 U.S. at 142, 90 S.Ct. 844.
Aрpellants contend that the FLDP burdens interstate commerce because (1) it imposes a financial burden on the use of E-ZPass over Fast Lane and (2) most E-ZPass users live out-of-state while most Fast Lane users live in-state. Appellants are incorrect. As the Doran Court held, the FLDP does not even implicate the Pike balancing test because it is available оn equal terms to residents and non-residents, and thus places no burden on interstate commerce. Doran, 348 F.3d at 322.
Appellants cite Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 79 S.Ct. 962, 3 L.Ed.2d 1003 (1959), a pre-Pike case, in which the Supreme Court struck down a facially neutral law because the burden on interstate commerce outweighed the public benefits. The law required all trucks travelling through Illinois to have сontoured mud flaps, while at the same time, under Arkansas law, trucks were required to be equipped with straight mud flaps. Id. at 527, 79 S.Ct. 962. The Court held that the Illinois law violated the Commerce Clause because, “if a trailer [were] to be operated in both States, mudguards would have to be interchanged, causing a significant dеlay in operation where prompt movement may be of the essence.” Id.
Appellants analogize to Bibb, asserting that drivers who wish to carry both in-state and out-of-state transponders must perform a “swap-and-stuff”2 to prevent being double-charged for tolls. However, appellants ignore two key differences between Bibb аnd the current case. First, neither Fast Lane nor E-ZPass prohibits drivers from carrying more than one transponder. So, unlike in Bibb, where truck drivers were unable to comply simultaneously with Illinois and Arkansas law, residents of all states are free to participate in both programs at the same time. See Bibb, 359 U.S. at 527, 79 S.Ct. 962. Second, to the extent that drivers residing in- and out-of-state choose to carry more than one transponder (though out-of-state residents who commute regularly to Boston each day might very well decide to carry only a Fast Lane transponder), the delay to drivers caused by placing a tran
B. Equal Protection Clause
In reviewing a claim under the Equal Protection Clause, we ask first whether the alleged state actiоn burdens a fundamental constitutional right or targets a suspect class. Doe v. Pa. Bd. of Prob. & Parole, 513 F.3d 95, 107 (3d Cir. 2008). If it does not, the statute “does not violate equal protection so long as it bears a rational relationship to some legitimate end.” Id. Appellants do not contend that the FLDP burdens a fundamental right or targets a suspect сlass, so the rational basis test applies here.
The MTA has proffered three legitimate goals of the FLDP—that it (1) improves traffic flow, (2) facilitates funding for highway improvements, and (3) ensures a more equitable sharing of tolls among Boston-area commuters. Appellants contend that these goals оnly justify discounts to electronic system users in general, not the FLDP. Yet again, we disagree.
First, the MTA allows all electronic system users to use the special lanes designed for Fast Lane customers—a testament to its commitment to improving traffic flow. Second, although it is true that the FLDP costs Massachusetts money, it may permit the MTA to raise tolls across all drivers while not overly burdening commuters. Third, because all Boston-area commuters, residents and non-residents alike, have an incentive to enroll in Fast Lane, it is reasonable for the MTA to use an out-of-state toll system as a proxy for non-commuters when establishing a discount program designed to benefit only commuters. In fact, this ability to offer selective discounts to users of the Fast Lane system, and thereby target Boston-area commuters, is a sensible and legitimate reason why the MTA may have chosen to create its own electronic tolling system rathеr than join the states using E-ZPass. As the First Circuit Court pointed out in Doran, implementing a policy to benefit commuters is “surely a constitutionally valid purpose.” Doran, 348 F.3d at 321. Thus, the FLDP does not violate appellants’ rights under the Equal Protection Clause.
C. Privileges and Immunities
Appellants’ claim under the Privileges and Immunities Clause is easily rejected. That provision provides that “the Citizens of each State shall be entitled
We agree with the District Court. The FLDP does not use E-ZPass as a proxy for Massachusetts citizenship to achieve discrimination despite a facially neutral program; rather, it offers all Fast Lane enrollees, regardless of citizenship, access to toll discounts on the same terms. The fact that more Massachusetts citizens than out-of-state citizens may work in the Boston area, and therefore have a greater incentive to join Fast Lane, does not demonstrate that the program is unconstitutionally discriminatory.
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For the reasons stated above, we affirm the judgment of the District Court.