The Legal Battles of NYC's Congestion Pricing
By Michael Ji
On January 5th, New York City managed something no other American city had ever done before: implement a congestion pricing plan. NYC’s plan required that vehicles entering the central business district—south of 60th Street in Manhattan—would be required to pay a fee, at $9 per car and $14.40 per truck. The stated goals were twofold: firstly, decrease congestion in one of the busiest districts in the world, and secondly, raise desperately needed funds for a revamp of the NYC public transit system.
Months later, it’s safe to say that the initial goals have been met. Recent data shows that roughly 1.2 million fewer vehicles were reported on NYC roads, a 7.5% decline from before the program. Travel time was cut in half, helping turn many previous skeptics into staunch supporters. Fatal crashes are down, while public transit usage, proven to be better for the environment and for efficiency, is up 10%. While some worried that a reduction in cars would potentially crush business, the opposite has actually happened—most businesses have seen commerce rise, with restaurants, for instance, seeing reservations rise by 7%. Taxi drivers in particular have been jubilant. Better yet, the plan is expected to raise over $15 billion for infrastructure revival and public transit construction, promising bigger and better MTA developments in the future. With some subway systems still using signals from the 1930s, the need for such funding to create a smoother system cannot be overstated.
Yet the road to congestion pricing, legally speaking, has been anything but smooth, mostly delayed by frivolous court battles from various opposition groups. In particular, New Jersey initially voiced heavy opposition to the plan, worrying about pollution due to a redirection in traffic away from New York . Courts remained elusive about ruling, with vague court directions asking why the plan did not account for NJ towns in their environmental impact assessment. Lawyers for NY did not interpret this as a full stoppage of the plan, but attorneys for NJ argued that it called into question the federal approval of the plan in the first place, writing that “New Jersey respectfully requests that the Court clarify that its remand also necessarily vacated the final (federal approvals) pending these further proceedings.” Without waiting for a response, NJ governor Phil Murphy filed a last-minute injunction to stop the plan, but was quickly denied.
While Governor Murphy is right to consider his own population, his concerns seem closer to a political move that happens to neglect the nuances of the congestion pricing plan. The MTA correctly pointed out that the hope for the plan was not to redirect traffic as suggested by NJ—rather, estimates and empirics from other cities indicated that the most likely outcome was a net increase in public transport use. Not only would this not cause an increase in traffic to NJ, but it would likely promote greater support for the expansion of public infrastructure, ultimately reducing vehicles on the road. But regardless, the plan had promised to provide NJ with funding to construct public health infrastructure in the worst case scenario that pollution increased, as had been done in the Bronx previously.
New Jersey’s governor wasn’t the only one embroiled in a legal battle, though. NY Governor Kathy Hochul, once defended by advocates of congestion pricing, came under legal trouble herself after she suddenly pushed back the start date of congestion pricing due to fears about how the policy would affect the political landscape in election season. This decision was not taken lightly by environmental organizations. Several immediately launched suits questioning if she had the right to pause the program, with some alleging that it “trigger[ed] what’s called an Article 78 hearing, questioning the state's failure to implement the law,” explained Columbia Law Professor Michael Gerrard. Professor Gerrard furthered that there could even “be lawsuits for potentially violating the Americans with Disabilities Act and compromising air pollution.” The City Club of NYC also filed a lawsuit, with a central argument being that Hochul lacks the authority needed to pause a program that was passed by the state legislature. City Club lawyers insisted that Hochul’s refusal to sign the final contract that would start congestion pricing constituted a “ministerial act.” They argued that such an action stopped the legislature’s expressed intent to create the program, while also neglecting to give any advance notice of a formal withdrawal. The state countered that under the 2019 Traffic Mobility Act, approval is “subject to federal law,” meaning that the governor could stop contracts for federal-state partnerships since there was no binding agreement between the MTA and the Federal Transportation Department. Hochul and other state officials eventually tried a last-ditch attempt to dismiss all of the pending suits in the case Riders Alliance v. Hochul, but their petition was denied by the New York Supreme Court.
Hochul’s actions should spark concern among constituents and politicians alike. If a project that has been planned for years can be shut down by one person as soon as they believe the next election is at risk, it calls into question how effective the NY government truly is. Luckily, however, congestion pricing seems to demonstrate how constituents can block such a cancellation using existing legal pathways. It is reassuring that environmental groups and legal experts alike agreed for their own reasons that such a program cannot be thrown out the window by a rogue governor. Hopefully, Hochul and other politicians will keep this situation in mind when they weigh future legislation, especially when so much is at stake.
Despite initial appearances, Hochul eventually turned out to not be the main challenge to congestion pricing. Congestion pricing was initially approved by the Federal Highway Administration (FHA), since the plan included some federal roads controlled by the FHA. The Biden administration was eager to approve the plan, but since the return of President Trump to office, the future of congestion pricing has remained uncertain. Trump, in February, moved to reverse federal approval and block the pricing plan through his Transportation Secretary, Sean Duffy. Duffy argued that the FHA had never before approved a program that “uses cordon pricing or that does not provide a toll-free option.” Some law professors have indicated that as the first congestion pricing plan in the US, there was a possibility of Supreme Court intervention. Bill Araiza of Brooklyn Law School noted that “This is the kind of administrative, interpretive decision of a statute that the Supreme Court really likes to get its hands on more and more.”
Legal scholars and the MTA alike have pointed out the ridiculousness of the FHA’s argument. The MTA has struck back in federal court, seeking a judicial order that would confirm that the FHA lacked the authority to reverse an agreement that was already in place. Experts generally agreed that there was no legal reason for the MTA to consider backing down, given their recent successes and the hurdles that the Trump Administration would have to jump through. In their statement to the court, the MTA argued that the “DOT did not cite any basis in the statute authorizing it to reverse the approval it had provided just three months earlier, following a four-year intensive review process.” This request seems likely to succeed—Pace University law Professor Bennett Gershman argued that congestion pricing’s success in past court challenges could be an indication that judges intend to uphold the program.
As for the Supreme Court, while it’s true that the FHA can appeal the decision as much as they like, most experts also agree that even with the low possibility of intervention, a win for the Trump Administration would be practically impossible. In an interview with YVote, Georgetown Professor David Super seemed to agree with the MTA’s stance. He argued that the federal government was essentially making up justification for intervention when none had existed in the initial agreement signed. “There is nothing else there. They can’t undo what’s already been done,” he said. He continued that the cancellation was without much precedent and firmly outside of what the federal government would normally be allowed to do. Noah Kais, an assistant professor at University of Michigan Law School, even said that the case was so clear cut that the Supreme Court wouldn’t be bothered to take a look. The conservative super-majority wouldn't be of much help in this situation, Professor Super added. He pointed out that the Court was conservative because they followed conservative principles rather than conservative people, and “one of those principles is restricting the federal government’s ability to override state decisions for ideological reasons.” Still, he concurred with Professor Kazis in considering such a situation to be unlikely in the first place. “This is not a case I would expect the Supreme Court to hear, because they only hear cases with significant legal questions. There’s nothing here that needs to be clarified,” he remarked.
The most recent news about congestion pricing indicated that NY and the Trump administration have agreed to push the deadline for pulling authorization until October 2025, allowing both sides to prepare motions for court. Thankfully, this would allow the MTA to reach its end-year goal of 500 million dollars in income, delaying an incoming crisis for at least another year.
But the very possibility that congestion pricing not just in NY, but across the US, could be put to death in the coming months is frightening for climate activists, economists, and the American people. Congestion pricing has been proven to work—in Stockholm and Singapore, congestion pricing has been a major factor in reducing vehicles on the road and boosting other methods of transportation. While not the only solution, it should be left as an option for other American cities to try out after seeing how well NYC is doing and will continue to do if it is uninterrupted. A legal win for the MTA would be good news for other hopefuls considering congestion pricing, with the nation as a whole likely to follow the courts’ ruling. Legal experts raised the alarm over a potential precedent that could threaten other states’ projects that relied on the same concepts as NY’s did, in places such as Texas, Florida, and California, in the rare case of a loss. While unlikely to change much, it is still concerning that Trump’s challenge has occurred in the first place. Until the case is settled, we must all hope that the courts will deny Trump his vengeance and give NYC a fighting chance.