Murphy v. Mass. Tpk. Auth., SJC–10987.

• Decision Date: 12 July 2012
• Docket Number: SJC–10987.
• Citation: 971 N.E.2d 231,462 Mass. 701
• Parties: Sandra MURPHY & others, beneficiaries, & another v. MASSACHUSETTS TURNPIKE AUTHORITY.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

462 Mass. 701

971 N.E.2d 231

Sandra MURPHY & others,¹ beneficiaries,² & another ³

v.MASSACHUSETTS TURNPIKE AUTHORITY.

SJC–10987.

Supreme Judicial Court of Massachusetts,

Middlesex.

Argued March 6, 2012.

Submitted July 12, 2012.

Donald M. Griswold (Orestes G. Brown with him) for the plaintiffs.

Kenneth W. Salinger, Assistant Attorney General, for the defendant.

Richard P. Schweitzer, of the District of Columbia, Richard Pianka & Prasad Sharma, of Virginia, & Mark K. Molloy, for American Trucking Associations, Inc., & others, amici curiae, submitted a brief.

Present: IRELAND, C.J., SPINA, CORDY, BOTSFORD, GANTS, DUFFLY, & LENK, JJ.

GANTS, J.

The issue presented in this case is whether the Massachusetts Turnpike Authority (authority) lawfully was permitted to use toll revenues collected from users of tolled roads and tunnels in the Metropolitan Highway System (MHS) to pay for overhead, maintenance, and capital costs associated with the MHS's nontolled roads, bridges, and tunnels. We conclude that it was. ⁴

Background. Before 1997, the authority owned and operated the Massachusetts Turnpike (turnpike),⁵ the Boston extension of the turnpike, ⁶ and the Sumner and Callahan Tunnels, which cross under Boston Harbor to connect downtown Boston to the East Boston section of Boston. In 1997, while the massive Boston Central Artery/Tunnel Project known as the “Big Dig” was underway, the Legislature placed within authority stewardship “the integrated system of roadways, bridges, tunnels,” and other facilities known as the MHS, which included the Boston extension and the tunnels it had owned and operated before, as well as the central artery, the central artery north area (CANA), and the Ted Williams Tunnel. G.L. c. 81A, § 3.⁷ The authority was authorized to charge tolls “for transit over or through the [MHS] or any part thereof,” and to fix and adjust the tolls so that, when supplemented by other revenues,⁸ they pay all the expenses of the MHS. G.L. c. 81A, § 10 ( b ). The authority required drivers of vehicles traveling through the Sumner and Williams Tunnels, and the Weston and Allston–Brighton interchanges of the Boston extension, to pay a toll, but did not charge a toll to drivers traveling through the Callahan Tunnel, the central artery, or the CANA.

In May, 2009, the plaintiffs, each of whom is a Massachusetts resident who has paid tolls on the MHS for at least five years, filed suit against the authority, contending that tolls collected from drivers traveling on the Boston extension and through the tolled tunnels were unconstitutional to the extent they were spent on the nontolled portions of the MHS.⁹ The plaintiffs allege that approximately fifty-eight per cent of toll revenues from the MHS were used to pay the costs of nontolled MHS facilities.¹⁰ They claim that this percentage of “excess” toll revenues is an unconstitutional tax in violation of art. 2, § 7, of the Amendments to the Massachusetts Constitution; Part II, c. 1, § 1, art. 4, of the Massachusetts Constitution; and art. 30 of the Massachusetts Declaration of Rights, and of the commerce clause of the United States Constitution. They seek an accounting and disgorgement of all monies (estimated to exceed $440 million) collected as an unlawful tax, to be paid to the Massachusetts Turnpike Toll Equity Trust (trust) on behalf on the putative class. The plaintiffs also sought an injunction forbidding the authority's use of any future toll monies to pay for expenditures for nontolled facilities.¹¹

In January, 2011, the judge allowed the authority's motion to dismiss. He noted that “toll-paying MHS users benefit in a manner not shared by other members of society insofar as they alone are entitled to use the particular roadways on which the tolls are collected, and they receive the benefit of privileged access to the Central Artery from these roadways.” Although he recognized that it was “not an easy issue,” the judge concluded that the plaintiffs had no constitutional entitlement to the expenditure of toll revenues solely on tolled facilities. He declared: “Given the unique nature of an integrated highway system, with its ever-changing classes of users, the challenged toll scheme—although clearly flawed—does not appear to be an unreasonable way of dealing with the challenges of financing an interconnected series of roadways in the face of a severe shortage of funds.” ¹² The plaintiffs filed a timely notice of appeal and we granted their application for direct appellate review.¹³ We now affirm the judge's allowance of the motion to dismiss.

Discussion. a. State constitutional claims. We have decided numerous cases where a charge that is characterized as a fee by a municipality or a State or local board is claimed to be an unconstitutional tax. See, e.g., Denver St. LLC v. Saugus, 462 Mass. 651, 970 N.E.2d 273 (2012)( Denver St.) (town requires payment of inflow and infiltration charge to obtain permit for new sewer connections); Silva v. Attleboro, 454 Mass. 165, 908 N.E.2d 722 (2009)( Silva ) (towns assess charge for issuance of burial permit); Nuclear Metals, Inc. v.Low–Level Radioactive Waste Mgt. Bd., 421 Mass. 196, 656 N.E.2d 563 (1995) (State board responsible to ensure proper disposal of low-level radioactive wastes annually assesses persons licensed to possess, use, or transfer radioactive materials amount sufficient to defray board's annual costs); Bertone v. Department of Pub. Utils., 411 Mass. 536, 583 N.E.2d 829 (1992) (municipal lighting plant's “hook-up charge” for new connections to system); Southview Coop. Hous. Corp. v. Rent Control Bd. of Cambridge, 396 Mass. 395, 486 N.E.2d 700 (1985) (city's rent control board assesses charge based on percentage of rents and capital improvements for landlord to file petition for rent adjustment); Emerson College v. Boston, 391 Mass. 415, 416, 419, 462 N.E.2d 1098 (1984)( Emerson College ) (Legislature conferred on city authority to impose additional charge to property owners of buildings requiring “fire fighting capacity” that exceeds 3,500 gallons per minute for “augmented fire services availability”). In each of these cases, if the fee were truly a tax, it would be unconstitutional because the relevant governmental entity had not been authorized by the Legislature to levy, assess, or collect a tax, see, e.g., Silva, supra at 168–169, 908 N.E.2d 722; or because it would be a property tax that was not proportional or reasonable, see Emerson College, supra at 418 & n. 5, 462 N.E.2d 1098. In determining whether a charge functions as a fee rather than a tax, we recognize that there are two types of fees: user fees, where a fee is assessed for the use of the governmental entity's property or services; and regulatory fees, where a fee is assessed as part of government regulation of private conduct. See Denver St., supra at 652, 970 N.E.2d 273; Emerson College, supra at 424–425, 462 N.E.2d 1098. Where a charge is characterized as a user fee, we determine whether the charge satisfies three criteria: (1) it is charged “in exchange for a particular government service which benefits the party paying the fee in a manner ‘not shared by other members of society,’ ” (2) it is “paid by choice, in that the party paying the fee has the option of not utilizing the governmental service and thereby avoiding the charge,” and (3) it is not collected “to raise revenues but to compensate the governmental entity providing the services for its expenses.” Denver St., supra, quoting Emerson College, supra.¹⁴

Here, too, the plaintiffs claim that the MHS tolls are unconstitutional taxes. But the plaintiffs acknowledge that the Legislature authorized the authority “to charge and collect” tolls for travel on the MHS, G.L. c. 81A, § 10 ( b ), and that these tolls are constitutional to the extent they are used solely to pay the costs of tolled roads and tunnels in the MHS. They contend that the tolls become an unconstitutional tax where they are used to pay the costs of the nontolled roads, tunnels, and bridges. In other words, according to the plaintiffs, the tolls are lawful user fees when applied to pay the expenses of the tolled roads and tunnels, but an unconstitutional tax when applied to pay the expenses of the nontolled roads, tunnels, and bridges.

To prevail, the plaintiffs' State constitutional claims must pass through two jurisprudential checkpoints. First, in collecting tolls on only certain parts of the MHS and using those toll revenues to pay the expenses of the entire MHS, the authority was doing precisely what the Legislature authorized it to do. In G.L. c. 81A, § 10 ( b ), the Legislature authorized the authority to “charge and collect” tolls “for transit over or through the [MHS] or any part thereof ” (emphasis added), thus allowing the authority to charge tolls on only part of the MHS. And the Legislature mandated that the authority fix and adjust the amount of the tolls so that, together with any other revenue collected, they yield an amount that will cover the costs of the entire MHS, not just the tolled portions, including principal and interest on bonds associated with the MHS. See id. (“Such tolls shall be so fixed and adjusted as to provide, at a minimum, a fund sufficient with other revenues, if any, to pay [ a ] costs incurred ... related to the [MHS] including, but not limited to, the cost of owning, constructing, maintaining, ... improving, ... policing, [and] administering ... the [MHS]; and [ b ] the principal ... and the interest on notes or bonds relating to the [MHS]” [emphasis added] ). Contrast G.L. c. 6C, § 13 ( c ), inserted by St.2009, c. 25, § 8 (effective July 1, 2009, tolls collected “shall be applied exclusively” for costs related to tolled infrastructure). That a governmental entity acts in accordance with the authority granted to it by the Legislature does not resolve the constitutional challenge, because the legislative authority may itself be unconstitutional,see, e.g., Emerson...