Cohen v. R.I. Tpk.

• Decision Date: 07 April 2011
• Docket Number: No. CA 09–153 S.,CA 09–153 S.
• Parties: Isabel S. COHEN, on behalf of herself and all others Similarly Situated, Plaintiff,v.RHODE ISLAND TURNPIKE AND BRIDGE AUTHORITY, Defendant.
• Court: U.S. District Court — District of Rhode Island

775 F.Supp.2d 439

Isabel S. COHEN, on behalf of herself and all others Similarly Situated, Plaintiff,

v.RHODE ISLAND TURNPIKE AND BRIDGE AUTHORITY, Defendant.

No. CA 09–153 S.

United States District Court, D. Rhode Island.

April 7, 2011.

Stephen R. White, Law Offices of Stephen R. White, Warwick, RI, Timothy J. Burke, Stull, Stull & Brody, Los Angeles, CA, for Plaintiffs.William E. O'Gara, Bernard A. Jackvony, Thomas R. Gonnella, Pannone Lopes Devereaux & West LLC, Providence, RI, for Defendant.

OPINION AND ORDER

WILLIAM E. SMITH, District Judge.

This is a class action challenging the constitutionality of the toll schedule for crossing the Newport/Claiborne Pell Bridge (“Newport Bridge”). The case is before the Court on the parties' cross-motions for summary judgment. For the reasons set forth below, Defendant's motion is granted and Plaintiff's motion is denied.

I. BACKGROUND ¹

Newport, located on Aquidneck Island, is one of Rhode Island's most attractive tourist destinations. It is visited by thousands of Rhode Island residents and nonresidents alike for both work and play. The Newport Bridge is one of three bridges that drivers may use to access Aquidneck Island. The other two are the Mount Hope Bridge and the Sakonnet River Bridge. Only the Newport Bridge takes drivers directly into the City of Newport; the other bridges bring drivers to the other end of the island, which must be traversed before reaching Newport.

Defendant Rhode Island Turnpike and Bridge Authority (“RITBA”) is a state entity charged with maintaining and operating the Newport and Mount Hope Bridges. Drivers cross the Mount Hope Bridge for free but must pay a toll to cross the Newport Bridge. All of RITBA's funds come from the tolls it collects at the Newport Bridge. RITBA uses all these funds to operate and maintain the Newport and Mount Hope Bridges, and to satisfy debt service. Formerly, those crossing the Newport Bridge could pay the toll by cash or token. In either event, the cost for crossing the Bridge was the same for Rhode Island residents and nonresidents. This situation changed in January 2009, when RITBA scrapped the use of tokens and promulgated a toll schedule reflecting a discount for Rhode Island residents that is not available to nonresidents. The discount applies to users of E–ZPass, an electronic toll system that automatically charges drivers who attach a small electronic device known as a transponder to their car. The new schedule is as follows: ²

Plaintiff Isabel S. Cohen is a Connecticut resident who has crossed the Newport Bridge “for many reasons, including to purchase items while in Newport,” and has paid tolls at the nonresident rate. (Joint Statement of Undisputed Facts ¶ 2, ECF No. 29.) She has now brought suit—as the representative of the certified class of “all non-Rhode Island residents who paid tolls to cross the Newport/Claiborne Pell Bridge using an E–ZPass, FastLane or other comparable system, and who did not receive the discount given to Rhode Island residents pursuant to the RI E–ZPass Discount Plan” ( id. ¶ 23)—challenging the constitutionality of the toll schedule.

As the chart makes apparent, the current toll schedule reflects at least four forms of differentiation—between: (1) Rhode Island residents and nonresidents; (2) users of Rhode Island and non-Rhode Island transponders; (3) cash payers and E–ZPass users; and (4) frequent and infrequent users. This class action challenges only the first disparity, claiming that the favorable treatment afforded to Rhode Island residents violates the Commerce Clause, the Privileges and Immunities Clause, and the Equal Protection Clause of the United States Constitution.³

II. DISCUSSION

A. Commerce Clause

The Commerce Clause provides, in pertinent part, “Congress shall have Power ... [t]o regulate Commerce ... among the several States ....” U.S. Const. art. I, § 8, cl. 3. “Though phrased as a grant of regulatory power to Congress, the Clause has long been understood to have a ‘negative’ aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce.” Oregon Waste Sys., Inc. v. Dep't of Envt'l Quality, 511 U.S. 93, 98, 114 S.Ct. 1345, 128 L.Ed.2d 13 (1994). “This ‘dormant’ Commerce Clause ‘prohibits economic protectionism—that is, regulatory measures designed to benefit in-state economic interests by burdening out-of-state competitors.’ ” Doran v. Mass. Turnpike Auth., 348 F.3d 315, 318 (1st Cir.2003) (quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 273, 108 S.Ct. 1803, 100 L.Ed.2d 302 (1988)). Plaintiff's first claim for relief is that the resident-only discount violates the dormant Commerce Clause by discriminating against nonresidents of Rhode Island.

1. The Market Participant Doctrine

RITBA argues that the resident-only discount is immune from Commerce Clause scrutiny because, in implementing it, RITBA acts as a “market participant” and not in a governmental capacity. The market participant doctrine “differentiates between a State's acting in its distinctive governmental capacity, and a State's acting in the more general capacity of a market participant; only the former is subject to the limitations of the negative Commerce Clause.” New Energy, 486 U.S. at 277, 108 S.Ct. 1803. For example, the Supreme Court has held that a state's decision to sell the cement produced at a state-operated cement plant only to state residents did not violate the Commerce Clause, because the state was acting as a market participant in the private business of producing and selling cement, and had the right to choose with whom it would deal. Reeves, Inc. v. Stake, 447 U.S. 429, 438–40, 100 S.Ct. 2271, 65 L.Ed.2d 244 (1980). As the Second Circuit has observed, there is no bright line separating actions taken in a “governmental capacity” from those taken as a “market participant,” and a court faced with a market participant defense “must make fact-specific inquiries on a case-by-case basis” to determine on which side of the line the state action falls. Selevan v. N.Y. Thruway Auth., 584 F.3d 82, 93 (2d Cir.2009).

RITBA's market participant argument relies on Endsley v. Chicago, 230 F.3d 276, 284–86 (7th Cir.2000), which held that the actions of the City of Chicago in collecting tolls for crossing the Chicago Skyway were shielded from Commerce Clause scrutiny by the market participant doctrine. This Court is not persuaded by the attempted analogy to Endsley. To begin with, in that case, the Seventh Circuit noted that the plaintiffs “plead[ed] themselves out of court” by alleging in their complaint that “[s]ince its inception, the City has operated the Skyway as a proprietary enterprise, and not in its governmental capacity.” Id. at 284. Here, by contrast, Cohen has not shot her own Commerce Clause claim in the heart by including such a self-defeating allegation in the complaint.

But the analysis does not stop there, because the Seventh Circuit went on in Endsley to conclude that the market participant doctrine would shield Chicago's operation of the Skyway from Commerce Clause scrutiny “[e]ven if plaintiffs had not plead themselves out of court.” Id. The court reasoned that in raising funds for the upkeep and operation of the Skyway by selling revenue bonds and charging drivers a toll, “the City was acting as a property owner, using its property to raise money, not as a regulator.” Id. at 285. RITBA relies on the same logic, arguing that in charging tolls for crossing the Newport Bridge, which it owns and operates, it is acting like a private property owner.

The market participant doctrine is not as open-ended as RITBA would have the Court believe. It only “permits a State to influence ‘a discrete, identifiable class of economic activity in which [it] is a major participant.’ ” South–Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 97, 104 S.Ct. 2237, 81 L.Ed.2d 71 (1984) (brackets in original) (quoting White v. Mass. Council of Constr. Emp'rs, Inc., 460 U.S. 204, 211 n. 7, 103 S.Ct. 1042, 75 L.Ed.2d 1 (1983)). And the “market” must be “relatively narrowly defined,” lest the market participant doctrine “swallow[ ] up the rule that States may not impose substantial burdens on interstate commerce ....” South–Central Timber, 467 U.S. at 97–98, 104 S.Ct. 2237. Here, RITBA has not identified such a market, and has not pointed out how it participates in it and with whom it competes.

Nor is the bare assertion that “[c]ourts have recognized the operation of private toll roads as legitimate economic activity,” Endsley, 230 F.3d at 284, sufficient to meet the Supreme Court's requirement of identifying a narrowly-defined market. That requirement mandates the identification of an economic market in which the state actually participates in conducting the challenged activity, South–Central Timber, 467 U.S. at 97–98, 104 S.Ct. 2237, not the mere assertion that the state's conduct could be conceived of in the abstract as “legitimate economic activity,” Endsley, 230 F.3d at 284. If such a hypothetical exercise were sufficient, the market participant doctrine would sweep endlessly, encompassing every conceivable state function and “swallowing up” the negative command of the dormant Commerce Clause. For example, no one could seriously suggest that just because providing security services can constitute “legitimate economic activity,” a state acts as a market participant when it provides for the security of its citizens; quite the contrary, maintaining public security has long been regarded as a core governmental function. See, e.g., Illinois v. Gates, 462 U.S. 213, 237, 103 S.Ct. 2317, 76 L.Ed.2d 527 (1983) (referring to the duty “to provide for the security of the individual and of his property” as “the most basic function of any government”) (internal citations and quotation marks omitted); Branzburg v. Hayes, 408 U.S. 665, 690, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972) (“providing security for the...