Reyes v. N. Tex. Tollway Auth.

Decision Date16 May 2016
Docket NumberCIVIL ACTION NO. 3:10-CV-0868-G
Citation186 F.Supp.3d 621
Parties Mirna Reyes, et al., Plaintiffs, v. North Texas Tollway Authority (NTTA), Defendant.
CourtU.S. District Court — Northern District of Texas

Jeremy R. Wilson, Wilson Law, Joe Kendall, Jamie Jean McKey, Jody Lynn Rudman, Matthew Grant Rittmayer, Kendall Law Group LLP, Walt D. Roper, The Roper Firm PC, Dallas, TX, for Plaintiffs.

Brian Covert, Richardson, TX, pro se.

Paul Edward Coggins, Jeffrey B. Mead, Robert T. Mowrey, Taylor F. Brinkman, Thomas G. Yoxall, W. Scott Hastings, Locke Lord LLP, Dallas, TX, for Defendant.

MEMORANDUM OPINION AND ORDER

A. JOE FISH, Senior United States District Judge

Before the court are the defendant's motion for summary judgment (docket entry 145) and the plaintiffs' motion for partial summary judgment and declaratory relief (docket entry 140). For the reasons stated below, the defendant's motion is granted, and the plaintiffs' motion is denied.

I. BACKGROUND
A. Factual Background

There are no disputed material facts. In 2010, the plaintiffs, through their class representatives, including named plaintiff Mirna Reyes, filed suit asserting several claims against the defendant North Texas Tollway Authority ("NTTA"). See Plaintiffs' Original Complaint (docket entry 1-5). After roughly six years of litigation, all of the plaintiffs' remaining claims against NTTA arise from their complaint that NTTA charged excessive administrative fees to users of NTTA's toll roads who failed or refused to pay their tolls. Plaintiffs' Fourth Amended Complaint ("Fourth Am. Complaint") ¶¶ 37-38, 53-72 (docket entry 114).

In 1997, the Texas legislature authorized the establishment of NTTA via the Regional Tollway Authority Act, TEX. TRANS. CODE § 366.001-366.409 (1997). Fourth Am. Complaint ¶ 14; Defendant's Answer to Plaintiffs' Fourth Amended Complaint ("Answer") ¶ 14 (docket entry 115). When NTTA was established, drivers paid tolls in one of two ways: by paying cash at a toll both, or by using a TollTag. NTTA's Motion for Summary Judgment Appendix ("NTTA's MSJ App.") at 004 (docket entry 147). A TollTag is a transponder that drivers can obtain from NTTA and affix to their vehicle's windshield. Id. The TollTag is linked to a payment account and the appropriate toll is deducted from the account each time the TollTag passes through a collection point. Id. No matter the payment method, however, all customers had to pass through gated toll booths. Id. A driver could only pass through a tolling point without paying by breaking through the gate or by "tailgating" and passing under the gate as it opened for the vehicle immediately in front of her. Id. As a result of the physical obstacles to nonpayment, only a small percentage of customers failed to pay. Id. If a driver tailgated another driver by sneaking through gate or broke through a gate, the driver would be charged an immediate $10 per-transaction administrative fee plus the driver's unpaid toll. Id. at 004-05. In addition, NTTA's only method of collecting unpaid tolls relied on a toll collector seeing the violation and writing down the vehicle's license plate number. Id. at 672-73.

In 2000, NTTA opened TollTag-Only lanes and stopped manning all toll booths on a 24-hour, 7 day-a-week basis. Id. at 005, 228, 659-61, 679-81. When it began the process of opening TollTag-Only lanes, NTTA contends that it determined that "the $10 administrative fee [was] not adequate to cover administrative costs" it incurred in collecting unpaid tolls. Id. at 005, 228. NTTA anticipated increased costs in collecting unpaid tolls through its purchase and installation of cameras, id. at 661, expansion of a back-office system to accommodate the collection process, id. , and an increase in the number of customers who would fail or refuse to pay, which would drive up the cost of identifying, pursuing, and collecting unpaid tolls. Id. at 005, 239, 661, 680-81. After looking into the issue, NTTA determined that increasing the administrative fee to $25 would be a reasonable increase sufficient to cover the anticipated cost increases.1 Id. at 005, 670-71. At all times relevant to this litigation— March 31, 2008 to August 31, 2011—drivers on NTTA roads had three payment options: a toll booth for cash and coins,2 a TollTag account, and the ZipCash system. From 2007 to 2010, NTTA gradually converted to an all-electronic toll collection ("ETC") process on its roadways, replacing manned tollbooths with a form of cashless tolling called ZipCash. Id. at 006-07. In the ZipCash system, cameras at collection points captured an image of a vehicle's license plate as the vehicle passed through a collection point. Id. at 006-07, 699 (drive first, pay later). NTTA matched the images of the license plate with the registered vehicle owner in the Texas Department of Motor Vehicle database. Plaintiffs' MPSJ App. at 121. After a vehicle travelled through an NTTA collection point a sufficient number of times, NTTA printed and mailed a ZipCash invoice to the vehicle's registered owner. Id. at 159-60. The ZipCash system functioned as a faster alternative to cash toll booths, id. , enabled more drivers to travel the roadways without toll lines, id. , and served as a backstop for the TollTag system. Id. at 103-04. NTTA charged a 50% higher rate for ZipCash tolls—called the ZipCash premium—than the TollTag rate. Id. at 006-07, 121.

During the relevant time period, a ZipCash customer had 30 days, plus a 5 day grace period, to pay the ZipCash invoice without incurring any additional fees. NTTA's MSJ App. at 007. If the customer failed or refused to pay the ZipCash invoice within 35 days, NTTA sent the customer a Late Notice, which required payment of the unpaid tolls, plus a per invoice $1.503 Late Notice4 fee. Id. The Late Notice gave the customer 15 days from the date on the Late Notice to pay the unpaid tolls and the $1.50 or $2.50 Late Notice fee. Id.

If a customer failed or refused to pay the Late Notice invoice within 15 days, NTTA sent the customer a Violation Invoice requiring payment of the unpaid tolls and an administrative fee of $25 for each unpaid toll—the fee at issue here—within 30 days.5 Id. at 007, 775-76.

NTTA offered customers alternatives to paying the full amount of the administrative fee. For example, if the driver paid the unpaid tolls on the Violation Invoice by the due date, NTTA would reduce her administrative fees by up to 67% to $8.33 per unpaid toll. Id. at 008, 775-76. Under another payment alternative, NTTA reduced the administrative fees charged on the Violation by up to 67% to $8.33 per unpaid toll, if the customer opened a TollTag account and paid all unpaid tolls. Id. Under the TollTag option, during certain promotional periods, NTTA would excuse 100% of the administrative fees if the customer paid all unpaid tolls and agreed to open a TollTag account. Id. If the customer failed or refused to pay the Violation Invoice by the due date, NTTA sent the customer's outstanding balance to a third-party collection agency, which attempted to collect the debt for 180 days. Id. at 007-08. If the collection agency was unsuccessful, NTTA forwarded the customer's account to the Texas Department of Public Safety for issuance of a criminal citation. Id. at 008.

The facts pertaining to the named plaintiffs illustrate how the administrative fees escalated if the customer failed or refused to pay the unpaid tolls. The plaintiff Jennifer Bunch was charged $350.00 in administrative fees on $19.58 in unpaid tolls. Plaintiffs' MPSJ App. at 211. Among other fees at other times, the plaintiff Deborah Gilbert was charged $125.00 in administrative fees on a single invoice. Id. at 306. The plaintiff Mirna Reyes was charged at least $3,700.00 in administrative fees on $135.50 in unpaid tolls. Id. at 212-20. The plaintiff Emmanuel Lewis was charged $10,050.00 in administrative fees on $387.50 in unpaid tolls.6 Id. at 222-35.

At all times during the relevant time period, NTTA's Customer Service Center ("CSC") representatives were available by phone or in person to speak with customers to resolve unpaid tolls and administrative fees, answer questions, and were empowered with discretion and authority to reduce or excuse administrative fees based on the customer's individual circumstances. NTTA's MSJ App. at 008. As NTTA transitioned to all-ETC, the number of customers who used NTTA's roadways and the number of customers who used the cashless system increased dramatically. Id. at 009. As ZipCash customers increased in number, so too did customers who incurred administrative fees. Id. As the number of customers who incurred administrative fees increased, so too did customer complaints within the Dallas-Fort Worth area. Id. ; Plaintiffs' Appendix Attached in Support of Their Opposition to NTTA's Motion for Summary Judgment ("Plaintiffs' Opp. App.") at 129-58 (docket entry 166).

In response to the complaints NTTA received and the complaints broadcast through local news, NTTA re-examined whether the administrative fee was set at an appropriate level. NTTA's MSJ App. at 009; Plaintiffs' Opp. App. at 129-58. NTTA compared its administrative fees to those of other toll agencies, NTTA's MSJ App. at 605, 688-91, listened to customers to understand their frustration, id. at 605, and compared its administrative fees to its costs of collecting unpaid tolls. Id. at 360-61, 559-61, 609-13. NTTA compared its fees and costs using data generated from an activity-based cost model prepared by Pat Louthan, a contractor engaged by NTTA to model NTTA's costs. Id. at 359-61, 483-87, 557, 559-61, 682-84. Using expense data collected from NTTA's general ledger, Louthan allocated all of NTTA's direct and indirect costs into various activities performed by NTTA, including all of the various activities that go into the collection of unpaid tolls. Id. at 611, 682-84. Focusing on only the activities taking place from the Late Notice stage onward, NTTA compared exactly how much was...

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