Reyes v. North Texas Tollway Auth.

• Decision Date: 14 November 2011
• Docket Number: Civil Action No. 3:10–CV–0868–G.
• Parties: Mirna REYES, et al., Plaintiffs, v. NORTH TEXAS TOLLWAY AUTHORITY, et al., Defendants.
• Court: U.S. District Court — Northern District of Texas

830 F.Supp.2d 194

Mirna REYES, et al., Plaintiffs,

v.NORTH TEXAS TOLLWAY AUTHORITY, et al., Defendants.

Civil Action No. 3:10–CV–0868–G.

United States District Court, N.D. Texas,Dallas Division.

Nov. 14, 2011.

Daniel M. Shanley, Decarlo, Connor & Shanley, Los Angeles, CA, for Plaintiff.

Robert H. Lavitt, Sean M. Leonard, Schwerin Campbell Barnard Iglitzin & Lavitt LLP, Richard H. Robblee, Robblee Brennan & Detwiler, Judd H. Lees, Williams Kastner & Gibbs, Seattle, WA, for Defendants.

MEMORANDUM OPINION AND ORDER

A. JOE FISH, Senior District Judge.

Before the court are the motions filed by the defendants, North Texas Tollway Authority (“NTTA”), Paul Wageman (“Wageman”), Allen Clemson (“Clemson”), Janice Davis (“Davis”), Kiven Williams (“Williams”), Victor Vandergriff (“Vandergriff”), and Clayton Howe (“Howe”) (collectively, the “defendants”), to dismiss the amended complaint filed by the plaintiffs, Mirna Reyes (“Reyes”), Emmanuel Lewis (“Lewis”), Jennifer Bunch (“Bunch”), and Brian Covert (“Covert”) (collectively, the “plaintiffs”) (docket entries 20, 21). For the reasons set forth below, the defendants' motions to dismiss are granted in part and denied in part.

I. BACKGROUND

A. Factual Background

This case concerns the administrative fees charged by the NTTA to tollway users who fail to pay their toll invoices on time. First Amended Complaint–Class Action (“Complaint”) ¶ 1 (docket entry 18). The plaintiffs are drivers in North Texas who have used one of the NTTA's tollways. See id. ¶¶ 37, 39, 43, 47. They bring this suit individually and on behalf of a putative class of similarly situated individuals. Id. ¶¶ 51–54. The defendants are the NTTA and some of its current or former directors or officers. Id. ¶¶ 14–20.

The NTTA allows drivers to pay the toll for a tollway in one of three ways: (1) cash, (2) a TollTag, and (3) ZipCash. Id. ¶ 25(a). ZipCash is a video tolling system which uses cameras to take a picture of a car's license plate and charge the driver the toll. Id; see also http:// www. ntta. org/ About Us/ Projects/ All ETC/ (last visited October 27, 2011). If a driver does not pay the NTTA for the toll within 30 days, the NTTA will mail the driver a “ZipCash invoice” listing the tolls owed. Id. The cost of sending out the initial invoice is approximately $3.86. Id. ¶ 25(b). “The invoice may, and usually does, contain more than one transaction.” ¹ Id. If that initial invoice is not paid within 30 days, the NTTA will send the driver a “violation invoice.” Id. ¶ 25(c). The cost of sending out a violation invoice is approximately $4.61. Id. In the violation invoice, the NTTA will assess the driver an “administrative fee” for each toll transaction for which the driver has not paid the toll. Id. ¶ 25(d). Initially, the NTTA assessed an administrative fee of $25.00 for each transaction listed on a violation invoice. Id. However, the administrative fee charged was lowered in 2010 to $8.33 per transaction. Id.

The four named plaintiffs in this case used the ZipCash system, but failed to pay their initial ZipCash invoices on time. Id. ¶¶ 36–50. As a result, they were charged hundreds or thousands of dollars in administrative fees by the NTTA. Id. They allege that the NTTA's assessment of an administrative fee per transaction (rather than per violation invoice) at either $25.00 or $8.33 per transaction violates Texas Transportation Code § 366.178, which governs situations where drivers fail or refuse to pay their tolls. See generally Complaint ¶¶ 59, 72, 81, 92.² As a result, the plaintiffs allege, their federal constitutional rights under the Due Process Clause of the Fourteenth Amendment and the Excessive Fines Clause of the Eighth Amendment, and their state constitutional rights under Sections 13, 17, and 19 of Article 1 of the Texas Constitution, were violated. Id. ¶¶ 55–61, 69–82, 88–93.

Reyes used the ZipCash method to pay tolls between May 2008 and August 2009. Id. ¶ 37. She received Zipcash invoices from the NTTA on a monthly basis, consistent with the NTTA's stated policy. Id. “When Ms. Reyes inadvertently failed to pay the invoices in a timely manner, Defendants assessed an administrative fee for each and every time she used ZipCash.” Id. Reyes claims that she was charged more than $3,000.00 in administrative fees, and that she eventually paid the NTTA $950.00 for her failure to pay her violation invoices. Id.

Bunch also used the ZipCash method to pay tolls that she incurred between November 2007 and mid-year 2009. Id. ¶ 39. “Ms. Bunch failed to pay the [ZipCash] invoices in a timely manner.” Id. In December of 2009, Bunch received a violation invoice listing fourteen transactions between May 2009 and September 2009 totaling $19.58. Id. ¶ 40. Despite the transactions being listed on one invoice, the NTTA assessed $350 in administrative fees against her—a $25 administrative fee for each transaction. Id. ¶ 40. In January of 2010, Bunch paid the fines in full. Id. ¶ 41.

Covert received a ZipCash invoice from the NTTA in December of 2009 identifying fifteen transactions between September 19, 2009 and October 23, 2009. Id. ¶ 43. “Covert failed to pay the NTTA invoices in a timely manner.” Id. In February of 2010, Covert received a violation invoice from the NTTA listing the same fifteen transactions, amounting to collective tolls of $28.16 but requiring $550 in administrative fees. Id. ¶ 44. Covert ultimately paid the NTTA $250.00 and purchased a TollTag. Id. ¶ 45.

Lewis received a violation invoice from the NTTA in November of 2009. Id. ¶ 48. The violation invoice listed tolls totaling $46.91 but required him to pay $1,546.91 in administrative fees. Id. Lewis was eventually billed “$10,000.00 in charges for approximately $300.” Id. ¶ 49. The NTTA sent the matter to collections, which Lewis alleges damaged his credit. Id.

The plaintiffs bring this action on behalf of themselves and all other individuals similarly situated, as part of a class action under FEDERAL RULE OF CIVIL PROCEDURE 23(b)(2) and 23(b)(3). Id. ¶ 51. The plaintiffs have divided the class into two subclasses. Id. Class One consists of any individual who, since 2008, paid an administrative fee over $100.00 per NTTA tollway violation invoice, and “suffered financial injury by having to pay [the] sums to the NTTA”. Id. Class Two consists of every individual who incurred an administrative fee on an NTTA tollway violation invoice that was calculated “per individual toll transaction listed on the invoice rather than the administrative costs of recovery,” and “suffered financial injury as a result.” Id.

The plaintiffs have sued the NTTA and a number of its board of directors and senior executives in their individual and official capacities. Particularly, the plaintiffs name as defendants: (1) Wageman, who was the chairman of the NTTA's board of directors from 2006 through September of 2010; (2) Vandergriff, who was vice chairman from 2007 until he succeeded Wageman as chairman in October of 2010; (3) Clemson, the NTTA's executive director; (4) Davis, its chief financial officer; (5) Williams, its director of toll collections; and (6) Howe, its assistant director of operations. Id. ¶¶ 15–20.

The defendants now move to dismiss under Federal Rule of Civil Procedure 12(b)(1) for lack of subject-matter jurisdiction and Rule 12(b)(6) for failure to state a claim for which relief may be granted. See generally Defendants' Motion to Dismiss First Amended Complaint and Brief in Support Thereof (“Defendants' Motion”) (docket entry 20). The individual defendants also argue that they are immune from the plaintiffs' suit. Defendants Paul Wageman, Allen Clemson, Janice Davis, Kiven Williams, Victor Vandergriff, and Clayton Howe's Motion to Dismiss First Amended Complaint and Brief in Support Thereof (“Individual Defendants' Motion”) (docket entry 21).

B. Statutory Background

The NTTA is governed by Chapter 366 of the Texas Transportation Code. The purposes of Chapter 366 are “the creation of regional tollway authorities to secure and acquire rights-of-way for urgently needed transportation systems and to plan, design, construct, operate, expand, extend, and modify those systems.” Id. § 366.002(a)(2). Chapter 366 “shall be liberally construed to effect its purposes.” Id. § 366.002(b). Moreover, regional tollway authorities like the NTTA have the power to “do all things necessary or appropriate to carry out the powers expressly granted by this chapter.” Id. § 366.033(a)(14).

Texas Transportation Code § 366.178(a) requires “[a] motor vehicle ... that passes through a toll collection facility ... [to] pay the proper toll.” Id. Subsections 366.178(b)-(d) control the fines and administrative fees that the NTTA can impose on drivers who fail to pay the proper toll:

(b) A person who fails or refuses to pay a toll provided for the use of a project is liable for a fine not to exceed $250, plus an administrative fee incurred in connection with the violation.

(c) If a person fails to pay the proper toll:

(1) on issuance of a notice of nonpayment, the registered owner of the nonpaying vehicle shall pay both the proper toll and the administrative fee; and

(2) an authority may charge an administrative fee of not more than $100 to recover the cost of collecting the unpaid toll.

(d) Notice of nonpayment under Subsection (c)(1) shall be sent by first-class mail and may not require payment of the proper toll and the administrative fee before the 30th day after the date the notice is mailed. The registered owner shall pay a separate toll and administrative fee for each nonpayment.

Since this case was filed, the Texas Legislature has amended Section 366.178. Act of May 27, 2011, 82nd Leg., R.S., ch. 1216, §§ 1–4,2011 Tex. Sess. Law Serv. 3247–49 (Vernon) (“S.B. 469”). S.B. 469 has no effect on tolls assessed prior to September 1, 2011. Id. § 3, 2011 Tex. Sess. Law. Serv. at 3249. Therefore, the amendments themselves have no direct effect on this case. However...