Judge Lewis J. Liman of the Southern District of New York has been busy lately, deciding cases about the new Congestion Pricing toll that the Metropolitan Transportation Authority (MTA) has been collecting since January 5, 2025. Passenger automobiles are charged $9.00 ($2.25 during nighttime hours after 9:00 PM) to enter the zone below 60th Street in Manhattan. The objects of the tolling program are to reduce traffic congestion in such places as Midtown, the historic Financial District at the island’s southern tip, and places in-between, as well as helping pay for the MTA’s capital program. As we have reported and commented, the program appears to have been successful so far.
Thanks to decisions from Liman and other judges, the tolling program has also survived a number of challenges from different groups, ranging from organizations representing aggrieved motorists to elected officials of both parties. Liman issued the latest decision supporting the program on March 3 in the matter of METROPOLITAN TRANSPORTATION AUTHORITY, et al. v. SEAN DUFFY, et al., No. 25-cv-1413 (LJL). As Secretary of Transportation in the POTUS 47 Administration, Duffy has attempted to force the MTA to terminate the toll, which the Administration has consistently opposed.
The MTA and its subsidiary, the Triboro Bridge and Tunnel Authority (TBTA), which is tasked with collecting the tolls, sued Duffy, the USDOT, the Federal Highway Administration (FHWA) and its Executive Director on February 25, 2025, for a preliminary injunction that would prevent Defendants from terminating the toll. Liman issued that injunction on May 28. Both sides moved for Summary Judgment (a legal judgment on facts not in dispute), and Liman said in his introduction: “Plaintiffs’ motion for partial summary judgment is granted, and Defendants’ motion for partial summary judgment is granted in part and denied in part (at 2).” The entire opinion, all 149 pages of it, can be downloaded below.
Liman began by recapping the factual background of the case (at 3-23), with the intent that the current opinion will be read as a companion to his opinion granting the injunction (at 3). His summary is thorough, detailing the facts of the case and its procedural history. To obtain an injunction, a party must prove that irreparable harm will occur if the requested injunction is denied, a likelihood of success on the merits, and a balance of hardships in its favor. Liman noted (at 13) that he had issued a Temporary Restraining Order (TRO) on May 27 after a hearing and converted it into a Preliminary Injunction the next day. He also noted that Duffy and his DOT were not invoking a proper basis for terminating the toll, which had been approved under the previous Administration (at 16-19) and that the Plaintiffs had demonstrated that they would be likely to succeed on the merits (at 19-21) and other required proofs.
The opinion also reviewed the procedural history of the case (at 23-25), which included requests for summary judgment and other filings, including some from non-parties who are concerned about the outcome. He then analyzed the Standard of Review (at 25-26) under the Administrative Procedure Act (APA) and summary judgement, where the movant must prove that there are no disputed issues of fact.
In the Discussion section of his opinion, Liman made a thorough analysis of a number of issues. We can’t go into detail about what he said, but we can report some of the important points that he made. He referred to his 109-page opinion in which he granted the requested injunction and continued: “At summary judgment, the parties rely on essentially that same record. The Court nonetheless has independently reviewed its prior analysis with an open mind. After doing so, the Court reaches the same ultimate conclusions it reached at the preliminary injunction stage. Rather than repeating that analysis verbatim here, the Court thus incorporates by reference its prior decision which should be read in tandem with this opinion. The Court addresses the arguments of the parties, including the Secretary, that were not fully developed at the preliminary injunction stage. To the extent that a particular argument of the parties is not fully addressed, that is because it is addressed in the preliminary injunction opinion (at 27, footnote omitted).”
Jurisdictional issues (at 27-71) included Standing of the Organizational Intervenors (at 27-28), Final Agency Action (at 29-42), Ripeness (at 42-48), and the Tucker Act (at 49-71). Within the discussion of that statute, Liman considered arguments that, “The VPPP is Not Money Mandating (at 54-59),” “Jurisdiction Lies in Federal District Court under Megapulse (at 59-68),” and “Organizational Intervenors Could Not Seek Relief in the Court of Federal Claims (at 69-71).” Liman ruled that the plaintiffs had already met their burden of establishing jurisdiction in the preliminary injunction stage of the litigation.
The judge described the defendants’ actions thoroughly and ruled that they were sufficiently “final” to allow judicial review. For example, he said: “No less an authority than the President of the United States announced on February 19 that ‘CONGESTION PRICING IS DEAD’ (at 33; docket citation omitted, emphasis in original).” He also said that the FHWA’s willingness to extend its deadline to comply with its termination order, which it characterized as a “goodwill” gesture, did not negate finality (at 36). He also noted that postponing deadlines could “indefinitely delay judicial review (at 37).” The defendants had asked the judge to declare lack of “prudential” ripeness (not a Constitutional issue), but he declined that request, saying that the defendants would continue to suffer hardship, including penalties for not complying with the Secretary’s orders, if review were delayed (at 41-47). He added that “these costs would flow directly from the Secretary’s action [and] reinforce the ripeness of the controversy (at 47-48).”
The final jurisdictional argument that the government officials raised was that the case essentially sounds in contract, and the Tucker Act “vests exclusive jurisdiction over this dispute in the Court of Federal Claims (at 49).” Liman noted that only money damages are available in that court, and he had previously concluded that this case does not fall within the Tucker Act (at 50). He analyzed the rights that the plaintiffs claimed and found them to be non-contractual, outside the scope of the Tucker Act. He also noted that no equitable relief that could be granted to Plaintiffs would require the Federal Government “making a payment to the Plaintiffs, or to any other entity (at 54).” Therefore, the Court of Federal Claims would not be an appropriate forum for the present case (at 58 and 64). Further, intervenors making environmental arguments also sought injunctive relief, because a money judgment from the Court of Federal Claims would not give them the injunctive relief they want (at 69).
The next set of issues concerned Plaintiffs’ APA (Administrative Procedure Act) Claims (at 71-132).
The first set of arguments claimed: “The Secretary’s Legal Grounds for Termination were Arbitrary and Capricious (at 72-89).” Arguments concerning that issue were: “The VPPP Allows the Secretary to Permit Cordon Pricing (at 73-83),” and “Funds Generated by a Value Pricing Program are Not Limited to Use on Highway Infrastructure (at 83-89).” The next argument alleged: “The Secretary’s Termination Cannot be Supported by Post Hoc Policy Rationales (at 89-98).” The next topic was “Reliance Interests (at 98-102).” Liman then considered the arguments that “The Secretary Does Not Have the Authority to Terminate the VPPP Agreement for Policy Reasons (at 102-32).” Included in that set are arguments concerning Federal Regulations (at 103-118), the Christian Doctrine (at 118-121), that “The VPPP Does Not Limit the Secretary to the Awards Terminable At Will (at 121-28),” and “The Sovereign Authority Doctrine Does Not Give the Secretary the Power to Terminate (at 128-32).”
Liman began the APA section of his opinion by ruling that the Secretary’s legal grounds for terminating the tolling program were arbitrary and capricious (at 72). In short, he did not find support for Duffy’s contentions. He defended the practice of “cordon pricing” that the toll creates, because a toll is permissible to mitigate congestion under the FHWA, and a non-tolled option is not required (at 74). In addition, he mentioned other statutes and programs designed to reduce motor vehicle travel (at 76).
The opinion noted that “The Secretary concluded that Congress deprived the agency of the right to approve the program because ‘the primary consideration of the toll rates here is to raise revenue for an MTA capital program.’ The Secretary dedicates a single paragraph to this argument in his summary judgment brief. The problem with the Secretary’s argument is not its brevity. It is that it has no basis in the statute (at 83-84, citations omitted).” He added: “The statute specifically envisions that the funds generated through a tolling program may be spent on means of transportation that offer alternatives to a congested roadway (at 84).” Another example of such a policy is the Congestion Mitigation and Air Quality (CMAQ) program. Another criticism of Duffy’s policy was that it used post hoc policy rationales. He quoted the Supreme Court saying: “It is a ‘foundational principle of administrative law’ that judicial review of agency action is limited to ‘the grounds that the agency invoked when it took action (at 89, citation omitted)’ and added that an agency ‘cannot make up new reasons in the course of litigation and assert that those – and not the stated reasons – were the basis of its action … The policy rationales in the April 21 Letter were exactly such post hoc rationalizations (at 90).'” In response to the argument that the tolling program harms lower-income motorists, Liman said: “Low-income workers are anticipated to be beneficiaries of the Tolling Program, as they are disproportionately reliant on the public transit options that the Tolling Program seeks to improve (at 94).” He summarized his response to those arguments by saying: “It is difficult to imagine more arbitrary and capricious decision-making that than at issue here. ‘Agency action is arbitrary and capricious if a reviewing court cannot discern from the record that the agency action was the product of reasoned decision making (at 97, citation omitted).'” He also held that it was reasonable for the MTA and TBTA to rely on the revenue that the tolling program could reasonably be expected to raise and explained why (at 98-102).
The opinion included an extended discussion about why the Secretary does not have authority to terminate the Value Pilot Pricing Program (VPPP) agreement for policy reasons. Liman also said that there was no term in the agreement that allowed the agency to terminate it unilaterally (at 102). He noted that the TBTA could terminate the agreement by deciding to discontinue collecting the tolls (at 110), but also noted: “the Secretary does not point to a provision of the VPPP Agreement that even hints at the notion that, regardless of the investment the Plaintiffs have made in the Project, their compliance with the terms of the agreement, and the success they have achieved, the Secretary retains the right to terminate at any time and without any notice simply because his Department has different goals and different priorities than it had when it approved the agreement (at 111).” After a long discussion of procurement and terminability of grants, Liman said: “Each Secretary must have the power to make a commitment if Congress’s objectives are to be satisfied (at 125).” Regarding the argument that if a statute allows an official to establish a program, that also brings the authority to disestablish one. The opinion disputed that argument, saying: “If the Secretary has the power to establish a program, he or she must have the power to commit to a program (Id.).” Liman granted summary judgment to the Plaintiffs on Count I (the Administrative Procedure claims).
The Plaintiffs and organizational intervenors argued that the Secretary’s actions were (ultra vires) going beyond the scope of his authority. Liman granted the Secretary summary judgment on that claim, since he had granted the relief that the Plaintiffs had requested. He concluded the portion of his opinion that dealt with issues other than remedies by saying: “The Court has decided that the agency acted contrary to law and violated the APA when it concluded that Congress deprived it of the authority to sign the VPPP Agreement. But that is because the February 19 Letter violated the APA, not because of the failure to consider the environmental impact of its action (at 139, footnote omitted).”
Finally, he turned to issues concerning Remedy (at 140-48). He started the discussion by listing the remedies that the Plaintiffs had requested and then said: “The Court must vacate the February 19, and the April 21 Letters and the actions taken through them. Under the APA, courts are instructed to ‘hold unlawful and set aside’ agency actions found to be ‘arbitrary, capricious, … or otherwise not in accordance with law. The Secretary’s actions were arbitrary and capricious, an abuse of discretion, and not in accordance with law. Accordingly, his actions purporting to terminate that agreement, including the February 19 Letter and the April 21 Letter, are vacated. The VPPP Agreement is restored and the FHWA approval of the CBDTP [Central Business District Tolling Program] is reinstated. Plaintiffs are thereby relieved of the obligation to cease tolling operations. Plaintiffs are restored to their position prior to the issuance of the February 19 Letter (at 140-41, citation omitted).” He also did not order a remand (at 141). The opinion defended the issuance of a declaratory judgment in the present case: “A declaratory judgment is appropriate here. It would serve a useful purpose in clarifying and settling the legal relations in issue and afford relief from uncertainty and insecurity (at 143).”
Liman described the judgment he was issuing: “Plaintiffs are therefore entitled to declaratory judgment that the Secretary is permitted to terminate the VPPP only pursuant to the terms expressly stated therein, that the Defendants’ termination of the VPPP Agreement was unlawful, and that any attempt to enforce the February 19 Letter or the April 21 Letter would be unlawful. Defendants may not terminate the VPPP Agreement under subsection 200.340(a)(4), the incorporation of that provision through the Christian doctrine, inherent powers under the VPPP, or the exercise of the Secretary’s powers under the unmistakability doctrine (at 144-45).” He also added: “Plaintiffs request also a declaration that the Defendants ‘may not terminate [the VPPP] except with the Project Sponsors’ approval.’ As Defendants argue that declaration sweeps too far (at 145, citation omitted).” Although Liman criticized what appeared to be the Defendants’ lack of good faith toward the Plaintiffs (at 146), he also said: “However, Plaintiffs have not made out a sufficient showing to support permanent injunctive relief (Id.).” He explained that he could not enjoin [POTUS 47], who is not a party to the case, and that the Defendants are allowed to keep fighting for their case, including taking an appeal (Id.). He also said: “Finally, Plaintiffs are not entitled to an injunction prohibiting ‘Defendants from withdrawing, cancelling, delaying, rescinding, or withholding federal funding from Plaintiffs without constitutional and statutory authority’ because it would be overbroad … Since the Court has vacated the February 19 Letter and the April 21 Letter, Defendants would have no lawful right to take action on the basis of them (at 147).”
Judge Liman’s opinion is 149 pages long. It is also far-reaching and thorough, dealing with many issues that the parties had raised. It would require a Case Comment in a Law Review to deal with all of the substantive and procedural issues in the case. All we could do is deliver a brief summary of the opinion and note some of the highlights. At this point, at least in theory, the February 19 and April 21 threats to the Congestion Pricing toll have been neutralized. The tolls are still being collected, and contemporary accounts continue to say that the program continues to be successful in pursuing its goals. Duffy and the other DOT Defendants are allowed to take an appeal, and it is reasonable to expect that they will pursue one. Duffy and the other leaders of the current Administration, including POTUS 47 strongly oppose the Congestion Pricing program, and it does not appear that the losing side on appeal to the Second Circuit would take such a loss without filing a Petition to the Supreme Court to take the case. Whether or not they will review the case remains to be seen. Wherever the case is going, we will keep an eye on it. At least we can hope that this article has heightened your understanding of the dispute underlying Congestion Pricing, even though the opinion was too detailed to report it.
