This Second Circuit decision is important both for how it navigated the Tax Injunction Act and for its “right to travel” analysis.

Cameron Browne (Tax Analysts): Second Circuit Rejects Counties’ Suit Against NYC Congestion Toll

Two New York counties failed to prove that New York City’s congestion pricing program was an unauthorized tax that violated federal and state constitutions, the Second Circuit has held.

In a July 13 decision in County of Rockland v. Triborough Bridge and Tunnel Authority, the Second Circuit dismissed Rockland and Orange counties’ challenge against New York City’s congestion pricing toll program after it determined that their claims — that the toll unconstitutionally restricted the right to travel and violated the due process, equal protection, and excessive fines clauses of the state and federal constitutions — were without merit.

The Second Circuit said that if it sided with the counties in finding that the program imposes a state tax, the TIA would bar jurisdiction over their claims. The court said that it would assume without deciding that the toll is not a state tax under the TIA and address the counties’ other claims.

Orange County argued that the program unconstitutionally restricts the right to travel, asserting that driving is often the only viable way its residents can commute to Manhattan.

The Second Circuit found that Orange County’s claim did not warrant strict scrutiny because the city could rationally conclude that a vehicle entering the central business district would contribute to congestion that the toll would reduce and imposing a point of entry would be more workable then imposing it on vehicles remaining in the district.

According to the Second Circuit, when a right to travel claim does not require strict scrutiny analysis, it is subject to the reasonableness test established in Northwest Airlines Inc. v. County of Kent. The test requires that the levy be based on a fair approximation of the use of facilities, not be excessive in relation to its benefits, and not discriminate against interstate commerce.

For more on the constitutional right to travel in the state tax context, see: Andrew Appleby, No Migration Without Taxation: State Exit Taxes, 60 Harv. J. Legis. 55 (2023).