CHICAGO (CN) — States cannot unfairly single out heavy vehicles in their operation of toll roads, a trucking association challenging Indiana’s toll system argued before a Seventh Circuit panel Monday.
The Owner-Operator Independent Drivers Association claims a toll increase imposed only on commercial vehicles in Indiana is unfair and that the state can’t use the funds for projects unrelated to the road in question.
A federal class action led by OOIDA and several trucking companies was filed last year after a 35% increase went into effect on Indiana’s only toll road, which spans 157 miles of the Hoosier State from Ohio to Chicago.
The complaint against Republican Governor Eric Holcomb, other state officials and the private company that leases the road, ITR Concession Company (ITRCC), alleges the toll not only discriminates against interstate commerce but violates rules pertaining to what toll money can be used for.
To fund his 2018 infrastructure improvement plan which includes expanding broadband internet access in rural areas and improving airport access, Holcomb announced that ITRCC would make $1 billion in payments to the state in exchange for the trucker toll hike.
“None of the intended expenditures of any portion of the $1 billion is intended to contribute to the maintenance, operation, or improvement of the toll road,” the truckers’ complaint states. “Funding these projects with toll receipts violates constitutional protections guaranteed to users of the toll road.”
According to the complaint, tolls collected must be used to maintain the road and can’t be transferred to other projects.
Furthermore, raising tolls for only commercial vehicles puts an undue burden on interstate commerce, a violation of the federal commerce clause, the plaintiffs argue, pointing out in their complaint that 90% of heavy truck traffic in Indiana is interstate.
“The artificial inflation of the tolls for trucks to use the toll road has and will continue to have significant and adverse effects on interstate commerce,” the lawsuit states.
U.S. District Court Judge Richard L. Young, appointed by Bill Clinton, dismissed the case for failure to state a claim in March.
Taking a magistrate judge’s recommendations based on the 1999 district court case Endsley v. City of Chicago, Judge Young concluded that because the state is acting as a market participant in operating the toll road, offering access to its property in exchange for a fee, it is acting as an owner and not a regulator and is not subject to the commerce clause.
The judge’s order also adds that the toll increase itself is not discriminatory, as it is charged to trucks traveling both interstate and only within Indiana.
The OOIDA and the trucking companies appealed that decision to the Chicago-based Seventh Circuit, and Monday’s oral arguments via telephone focused on whether a state is allowed to be a market participant when it comes to toll roads.
Attorney Paul D. Cullen Sr. of the Washington, D.C.-based Cullen Law Firm argued on behalf of the plaintiffs and took issue with the case law cited in the district court’s decision, which he said “permits a public-private partnership to defeat the commerce clause, using property to raise money.”
“[Endsley] says very simply that if there is a transaction between a party for the use of a facility and a fee is charged for that, they are protected by the market participant theory. There are absolutely no limitations,” Cullen said. “If states could charge whatever the market tolerates and use the funds for whatever infrastructure projects they want… no court would tolerate that.”
The attorney added that running a toll “is essentially a state function,” and that the money generated from the toll should be spent on maintaining the toll road itself and any expenses related to that function.
“When the state builds a very fine limited access road, it’s a very desirable thing,” Cullen said. “When they build such a limited access facility, it’s not open to everyone.”
The issue is that these roads are still instrumental to interstate commerce, Cullen said, and “the toll system has a must greater impact on interstate truckers that pass through the state.”
“Isn’t this a self-correcting problem?” asked U.S. Circuit Judge Illana D. Rovner, a Ronald Regan appointee. If the tolls get too high, she said, drivers could just find another route.
“The availability of other alternatives shouldn’t be a factor here,” Cullen answered.
But road alternatives are essential to the point, argued Indiana’s attorney, Miguel A. Estrada of Gibson, Dunn & Crutcher in Washington, D.C.
“When the state furnishes a toll road in exchange for money it provides an asset, which is a faster route, while other routes remain available. The element of choice has importance here,” Estrada said. “The question is, is the state acting as an owner instead of a regulator if it furnishes an additional facility for pay for those who choose to use it?”
He added, “If you have a state acting as an owner and providing an asset, you have the epitome of a market participant.”
On the flip side, the state imposing a tax on something no one can avoid would constitute the state acting as a regulator, Estrada argued. He also said there would be “an element of regulatory coercion” if trucks were forced to use and pay for the toll road, but they do have other options.
U.S. Circuit Judges Frank H. Easterbrook, a Reagan appointee, and Diane P. Wood, a Clinton appointee, joined Rovner on the three-judge panel. The judges took the case under advisement but did not say when their decision would be issued.