(CN) – The 2nd Circuit rejected a ferry fee imposed on passengers who cross Long Island Sound, saying the extra cost exceeded the amount needed to benefit ferry passengers.
Since its formation in 1993, the Bridgeport Port Authority has imposed a fee on all passengers and cars that take the ferry from Bridgeport, Conn., to Port Jefferson, N.Y.
In 2003, the BPA charged $1 for adults on foot and $2 for a car and driver.
From 1993 to 2004, the port authority collected about $9.5 million in passenger fees and more than $1 million in rental payments from the Bridgeport & Port Jefferson Steamboat Co., which operates the ferry and leases dock space from the BPA.
The port authority’s executive director admitted that the BPA uses the passenger fee and ferry leases to pay for nearly all its operating expenses.
The ferry company recruited two passengers to challenge the fee in court, claiming it violates the Constitution’s dormant Commerce Clause and the rarely litigated Tonnage Clause. The company paid for all their legal expenses.
After examining the projects and services funded by the fee, the district court concluded that the charge was unconstitutional, because the amount collected substantially exceeded the amount of money spent on projects that benefitted passengers.
Based on this finding, the court concluded that the fee violated the Commerce Clause and the constitutional right to travel.
The New York-based federal appeals court agreed, citing several examples of BPA activities that were “properly deemed of no actual value or potential benefit to the ferry passengers.” These included development projects, legal fees for registering a new BPA trademark, and unrelated travel expenses of BPA executives.
Because these activities conferred no benefit on ferry passengers, and because the non-ferry services weren’t available to ferry passengers, the fee violated the Commerce Clause and Tonnage Clause, the court concluded.
The judges upheld an injunction barring collection of the fee, along with an award of nominal damages to the ferry company and “modest damages” to D&D Wholesale Flowers, a regular ferry passenger.