The Congestion Pricing toll for vehicles entering Manhattan below 60th Street has won another victory in court. Last year saw numerous litigations in New York and New Jersey by elected officials and other plaintiffs who attempted to prevent the toll from being collected. The fee went into effect Jan. 5, and U.S. Transportation Secretary Sean Duffy has been attempting to terminate it almost since the day he took office. He has not been successful so far, as Judge Louis J. Liman issued a preliminary injunction restraining USDOT from taking actions that would eliminate the toll, at least for now. This could mark the beginning of the end of the efforts by the USDOT to reverse the prior approval of the tolls.
The toll’s proponents won their cases last year, some of which had been consolidated into litigations with huge files and, in one matter, hundreds of plaintiffs opposing the toll. Cases originally filed in federal courts for the Southern District of New York (based in Manhattan) and the Eastern District of New York (based in Brooklyn) were consolidated and assigned to Judge Liman, who issued a 113-page opinion on June 20, 2024.
The present case was filed on Feb. 19. POTUS 47 had campaigned against the toll last year, and Duffy first ordered it terminated on Feb. 19. New York Gov. Kathy Hochul strongly supports the toll, with its purposes of mitigating vehicle congestion on the streets of Manhattan from Midtown to the downtown Financial District (and everywhere in between) and raising money to support the capital program at the Metropolitan Transportation Authority (MTA), a State agency that runs New York City Transit, the Long Island Rail Road, and Metro North. Those are the entities whose capital programs benefit from the Congestion Pricing toll. Duffy objected to the toll and ordered it terminated and issued further orders to that effect during the spring. He purported to withdraw the Department’s approval for the toll, which was granted during the Biden Administration. He specifically objected to the lack of a non-tolled highway that motorists could use to enter the tolling zone, although he did not acknowledge the availability of transit (most notably New Jersey Transit, PATH trains, and buses operated by private-sector firms). He also objected to motorists being required to pay to support transit.
Hochul’s state agencies fought back in court. This time, the MTA and the Triborough Bridge & Tunnel Authority (TBTA) were the plaintiffs, and they asked for an injunction against enforcing Duffy’s directive that purported to kill the tolls. The TBTA is an MTA subsidiary that operates bridges and tunnels among the city’s boroughs and also collects the tolls for the MTA.
Another Big Case
The file in the present case is not as voluminous as the ones that were litigated last year, but it’s still big. Court Listener, which collects case files and makes them available to the public (they are officially “public documents” in all courts, except for sensitive cases, like family-law matters involving minors). Judge Liman’s “Opinion and Order” dated May 28 was the 200th filed after the Complaint was filed, although many of the documents are routine, such as Notice of Appearances by attorneys representing parties and others in the matter. It is “Document 132” according to Court Listener’s count.
The case was assigned Docket No. 1:25-cv-01413-LJL, in the Southern District of New York. It makes sense that Judge Liman was assigned to the case, since he handled the previous matter that arose from the same facts (although the present case is about injunctive relief, which is a different legal issue), so he was already familiar with the facts and circumstances of the matter. His document that we reviewed for this report is 109 pages long, so he dealt with issues thoroughly in both matters. We are now catching up on developments during the pendency of the matter so far. The arguments about the toll itself were more-thoroughly contested last year and much has happened during the past few months.
I will summarize those events from our review of the Opinion and Order that granted the injunction that the MTA and the TBTA requested.
New Parties Join
The original plaintiffs were the MTA and TBTA, while the original defendants were Duffy and the USDOT. There are now four plaintiff-intervenors: the New York State Department of Transportation (NYSDOT), the New York City Department of Transportation (NYCDOT) Riders’ Alliance, and the Sierra Club. Becoming an intervenor requires the judge’s permission, and the request is made by a motion. In motion practice, the movant files a Notice of Motion and a brief and other documents supporting its request. Existing parties are allowed to oppose the motion (if they are on the other side of the case) or support it (if they are on the same side), and they submit briefs in support of their positions. The judge might require oral argument on the motion and then decides. Riders’ Alliance advocates for better city transit, while the Sierra Club is an environmental advocacy organization.
The injunction action started this way: “On May 5, 2025, the MTA, TBTA, anld NYCDOT filed a motion for a preliminary injunction along with a memorandum of law and four supporting declarations. On May 5 and 6, 2025, the NYSDOT filed a motion for a preliminary injunction along with a memorandum of law and two supporting declarations” (at 2; docket citations omitted). Several other organizations filed amicus briefs in support of the injunction request (at 2-3). After briefing, “The Court held a hearing on the motion for a preliminary injunction on May 27, 2025. At the hearing, the Court orally issued a temporary restraining order which the Court later memorialized in a written order” (at 3; document citation omitted). The judge then scheduled discovery; the process for obtaining information from the parties to develop the record for the case.” He also said that he expects to issue a final judgment on the merits by the end of the year (at 3).
Findings of Fact
Liman then turned to Findings of Fact (at 4-34) and cited other occasions when he had done so (at 4). He started with the Value Pricing Pilot Program (VPPP), which Duffy had ordered terminated. He noted that, going back to the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), states have flexibility in establishing such tolling programs (at 5-6). He then recounted efforts to establish a toll, culminating in New York’s Traffic Mobility Act in 2019 (TMA)(at 6-10), further noting cooperation between federal, state, and local agencies since then, including NEPA National Environmental Policy Act) review (at 14-18) and the VPPP agreement itself (at 18-20), as well as the various legal challenges to the program (at 20-23). Some of those cases are still pending for resolution of certain issues, but all judges denied injunctive relief before toll collection was scheduled to begin that that would have prevented its implementation.
Liman then turned to the implementation of the tolling program and its immediate effects (at 23-25). Compared to last year, he noted that traffic in the tolling zone has decreased, and so has trip time, including for express buses. He found that trips are not only faster, but also more reliable, with improvements in emergency response time and on-time-performance for school buses. He also noted that there was no harm to the city’s economic interests, citing increases in pedestrian traffic, retail sales, leasing, and hotel occupancy, and theater attendance.
Then he described the breakdown in cooperation since the start of the POTUS 47 Administration. He cited a Feb. 19 social media post that included the words “TRUMP” and “LONG LIVE THE KING” (at 26, emphasis in original) and then cited Art. I, §9, cl. 8 of the U.S. Constitution, which prohibits Titles of Nobility (Id., n.44). Then he summarized Duffy’s legal arguments, which he sent to Hochul in a letter that same day (at 26-29). The MTA and TBTA also filed their Complaint on that day. He then described further efforts by USDOT to terminate the tolling program and efforts by New York State authorities in opposition to Duffy’s directives regarding the matter (at 29-34). He quoted Duffy from his April 21 letter: “It is unconscionable as a matter of policy that highway users are being forced to bail out the MTA transit system” and “I … will only prioritize tolling projects under the VPPP that … set tolls with the aims of reducing congestion and/or raising revenue primarily for highway infrastructure” (at 34). Liman also noted USDOT threats to cut funding if New York does not comply.
Purpose of an Injunction
Liman then began his analysis of the legal standard for granting an injunction and the Conclusions of Law in the present case (at 35). He began by noting: “A preliminary injunction is an ‘extraordinary remedy’” and “”In order to justify a preliminary injunction, a movant must demonstrate: (1) irreparable harm absent injunctive relief; (2) either a likelihood of success on the merits, or a serious question going to the merits to make them a fair ground for trial, with a balance of hardships tipping decidedly in the plaintiff’s favor; and (3) that the public’s interest weighs in favor of granting an injunction” (at 34)(citations omitted). He also said: “The purpose of a preliminary injunction is not to award the movant the ultimate relief sought in the suit but is only to preserve the status quo by preventing during the pendency of the suit the occurrence of that irreparable sort of harm which the movant fears will occur” (Id.)(citations omitted).
Courts have both legal and equitable jurisdiction. Most court matters are cases “at law” where a plaintiff sues for monetary damages to compensate for the alleged misdeeds or negligence by the defendant(s). When a plaintiff alleges that money damages will not provide a sufficient remedy, courts have the authority to decide what sort of relief would be fair. That is a case “at equity.” Injunctive relief is equitable in nature. Standards for injunctive relief vary slightly from state to state, and Liman used the standard that applies in Federal courts. A preliminary injunction is temporary in nature, and more hearings are required before a judge can issue a permanent injunction. Despite the temporary nature of a preliminary injunction, a plaintiff must meet a high standard to obtain one.
Likelihood of Success on the Merits
Liman began the “Conclusions of Law” section with issues concerning Likelihood of Success on the Merits (at 35-93), spending more than half of his Opinion on those issues. He began by summarizing the plaintiffs’ claims: “Plaintiffs assert that they are likely to succeed on the merits of several of their underlying causes of action. They argue that (1) this Court has jurisdiction, (2) Secretary Duffy’s February 19 Letter is arbitrary and capricious, and (3) Defendants lack the authority to pursue any of the so-called ‘compliance measures’ outlined in the April 21 Letter” (at 35).
He found that Duffy’s directive was a “final” order (at 35-45), based on USDOT’s unwavering adherence to its position and threats of punitive action (revoking transportation funding for New York State), and that the case is ripe for review (at 45-49) because both sides have stated their positions and there is no need for further factual development. He concluded the section by saying: “Plaintiffs adequately show that their claim that Defendants acted arbitrarily and capriciously is ripe for review at this time” (at 49). He held that the present case raises issues of administrative law and policy, rather than being an action against the United States for breach of contract, which can only be heard in the Court of Federal Claims, which means that the District Court has jurisdiction to decide it (at 49-55).
The Administrative Procedure Act (APA) prohibits arbitrary and capricious actions by administrative agencies if the federal government, and states have their own APAs that govern state-level agencies. In his opinion, Liman said: “The APA serves as a ‘check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices’” (at 55) (citation omitted). He then dealt with the issues concerning USDOT arbitrariness and capriciousness (at 55-91).
Liman held (at 57-67) that Duffy had exceeded his department’s authority by unilaterally terminating the VPPP program that supports the congestion toll. He noted (at 65) that the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) authorized pilot programs, including the one at issue. He also said: “Only the recipient or subrecipient has the unfettered discretion to terminate an award” (at 58) and added: “Few, if any persons would buy bonds to support a capital project were the rule otherwise” (at 59). Regarding defendants’ argument that there must be a toll-free highway available for motorists (at 67-75), Liman said that the argument is based on the Secretary’s “misconstruction of the VPPP statute” (at 67). He added: “The Court may not accept Defendants’ post hoc rationalizations for agency action” (Id., n.65) (citations omitted). He noted that, despite the general policy against tolling interstate highways, some exceptions are permitted (at 68).
Regarding the toll revenue itself (at 75-76), Liman rejected “the Secretary’s conclusion that the VPPP did not authorize tolls that are ‘calculated based on considerations separate from reducing congestion or advancing other road-related goals’” (at 75). Duffy had objected to the use of the toll money for transit through the MTA’s capital program. Liman went on to say: “The VPPP does not contain any language excluding the consideration of other factors for determining tolling rates, and Defendants do not point to any source that supports the Secretary’s interpretation. Rather, the text of the VPPP undermines the Secretary’s legal conclusion” (Id.). He noted: “Indeed, the statutory text itself explicitly contemplates that the value pricing pilot programs that are approved under the VOOO will include those that address congestion by, in part, improving alternatives to driving” (at 76), apparently construing the concept of “transportation” broadly enough to include transit, as an alternative to Duffy’s road-based restriction. He also criticized Duffy’s “Post Hoc Policy Rationales” (at 76-80), saying: “Defendants’ policy concerns cannot support termination because the Secretary lacks the authority to terminate the VPPP Agreement on the basis of policy concerns. However, even if the Secretary did possess such authority, Defendants’ invocation of policy would still fail on the record before this Court” (at 77) (citation omitted). He also said: “The bar against considering post hoc rationalizations is not ‘useless formality’ but rather ‘serves important values of administrative law’ by promoting agency accountability and permitting ‘orderly functioning of the process of review’” and “When an agency points to policy concerns not actually examined or relied upon at the time of the action, it deprives the public and the court of the administrative record necessary to determine whether such action was ‘arbitrary, capricious, an abuse of descretion, or otherwise not in accordance with law’” (at 78, citations omitted). He added: “Under Defendants’ logic, no federal-aid highway would be tolled – a proposition that even the Secretary does not say he is adopting” (at 79).
Liman also took notice of the Plaintiffs’ reliance interests on the VPPP agreement and the money the tolls were expected to raise that would support the MTA’s capital program (at 80-88). He said: “When an agency changes course, … it must be cognizant that longstanding policies may have engendered serious reliance interest that must be taken into account” and “It would be arbitrary or capricious to ignore such matters” (at 80)(citations omitted). He also said: “Plaintiffs claim to have reasonably and significantly relied on ‘Defendants’ interpretation of the VPPP and the VPPP Agreement in their financial planning to support and sustain the New York metropolitan region’s public transit system’” (at 81). That reliance included TBTA’s expenditure of more than $500 million to establish the tolling program and issuing $1.378 billion in short-term debt “intended to be paid from the Tolling Program’s revenues” (Id.). He also mentioned the lenders’ reliance on that anticipated revenue (at 82), and concluded: “Ultimately, none of Defendants’ arguments show that Plaintiffs’ reliance was unreasonable such that the Secretary was relieved of the requirement to assess the reliance interests, determine whether they were significant, and weigh them against competing policy concerns” (at 88)(citation omitted).
Plaintiffs also argued that the USDOT decision to terminate the VPPP Agreement carries sufficiently significant environmental effects to require an environmental review. On that issue, Liman did not hold that Defendants acted arbitrarily and capriciously by not conducting a new NEPA analysis.
Irreparable Harm
A judge must determine that “irreparable harm” would befall the plaintiff(s) if the requested relief is not granted, with the additional understanding that an award of monetary damages would not, in itself, make the plaintiff(s) whole after the harm had occurred. Liman dealt with these issues thoroughly (at 93-104). Summarizing his holding on this issue, he said: “A prohibition on a state from ‘effectuating statutes enacted by representatives of its people’ itself inflicts ‘a form of irreparable injury’” and “The TMA was adopted by the duly elected representatives of the people of the State of New York and signed by the duly elected Governor of New York. It followed years of study and was based on the conclusion that its adoption would serve the interests of those who live and work in New York, including their economic interests. The Tolling Program implements that legislation. The Secretary’s actions to purportedly revoke the VPPP Agreement and to impose sanctions to force New York to abandon that duly adopted plan itself inflicts harm on the State, its residents, and those who use its roadways and facilities that cannot be repaired with an award of money damages” (at 94-95) (citations omitted). As examples of such harm, Liman listed several projects that cannot be financed without the money from the tolling program (at 95-96). He added that, even if a court were to find later that the Defendants had acted improperly, the delay in securing such a ruling would cause irreparable harm (at 96-97), and that, if the MTA were to halt the program as Duffy demanded, that would also result in irreparable harm (at 97-98). He concluded: “Courts have repeatedly recognized the irreparable harm inherent to a situation such as the one in which Defendants have presently placed Plaintiffs, in which a plaintiff can either accede to the government’s presumptively unlawful threat or else disobey the government’s directive and expose itself to potentially devastating injury throughout the pendency of the proceedings” (at 99). He followed that statement with a few citations.
Balance of Equities
The other requirement for injunctive relief is that the plaintiff must demonstrate that the balance of equities lies in favor of granting the injunction. Liman concluded his opinion with that issue (at 103-08). He began that section by saying: “Under the last injunction factor, courts must “balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief,’ as well as ‘the public consequences in employing the extraordinary remedy of injunction’” and concluded: “Enjoining enforcement of the Secretary’s purported termination of the VPPP Agreement pending a final decision on the merits is in the public interest (at 104) (citations omitted). He noted that there is no public interest in allowing an agency to engage in unlawful, arbitrary or capricious conduct, but there is a strong public interest in forcing that agency to comply with the law” (Id.). He recapped the benefits of the program that New Yorkers would be required to forego if the injunction were not granted, saying: “In sum, the reduction in congestion caused by the Tolling Program offers not only superior environmental outcomes, but also increased productivity, improvements to health and safety, more instruction time for schoolchildren, and beneficial economic outcomes. Defendants do not seriously contest that the operation of the Tolling Programs confers these benefits or that such benefits support a preliminary injunction” (at 106). He also said that, even if the tolling program should later be held unlawful, motorist who paid the tolls (mostly through E-Z Pass) could have their money refunded (at 107-108). Thus, the balance of equities favor the injunction.
Liman enjoined the Defendants at USDOT from taking “any agency action founded on the Feb. 19, 2025 letter from Secretary Duffy to Governor Hochul purporting to terminate the VPPP Agreement and rescind federal approval for New York’s Central Business District Tolling Program, including any action to enforce compliance with a or implement (1) the Feb. 19 Letter, (2) Defendants’ purported termination of the VPPP Agreement, or (3) Defendants’ purported termination of the Tolling Program.” That included the “compliance measures” in the April 21 letter (at 108-09).
Looking Ahead
Preliminary injunctions last only for the pendency of the case, before a Final Order is issued. There will be more hearings, as both sides argue their cases, but the relief that Judge Limon granted will keep the tolls in effect while the case continues. In getting the injunction, the plaintiffs have met a high standard, as is always the case in matters of that sort. This does not mean that the injunction will necessarily be made permanent, because judges need to hear completely from both sides before that can happen. Still, the plaintiffs have demonstrated much of the reason why the tolls should continue. The present case is far from over, and I will continue to report its progress, perhaps all the way to the U.S. Supreme Court.
