DOJ memo warns courts will toss congestion pricing ban

ALBANY, N.Y. (NEXSTAR) — A Justice Department memo warned that the federal government will probably lose its bid to cancel congestion pricing in New York City. The letter urged officials to use a different legal argument to defend their move to eliminate the program.

On behalf of the defendants—the U.S. Department of Transportation and the Federal Highway Administration—in a lawsuit against the feds, the April 11 memo was uploaded to the court docket on Wednesday. It said, “The Court is unlikely to uphold FHWA’s stated rationale for terminating the [Central Business District Tolling Program] agreement.” It's available to read at the bottom of this story, written by assistant U.S. attorneys to a senior DOT trial attorney.

According to a spokesperson from Gov. Kathy Hochul's office, "We’re aware of this filing, which doesn’t change the facts: congestion pricing is legal, it’s working, and the cameras are staying on." The cameras in question refer to the technology used to identify cars and assess charges to drivers.

New York launched congestion pricing on January 5, charging vehicles entering Manhattan below 60th Street with few exceptions. The CBDTP is supposed to cut traffic and pollution while funding public transit, improving New Yorkers' quality of life.

A large portion of the income from the tolls would go to the Metropolitan Transportation Authority. They run most transit in and around New York City, and the state contributes billions to its operating budget each year. It's among the most heavily used and extensive transportation networks on the planet, helping to drive the entire region's massive economy.

In February, Transportation Secretary Sean Duffy withdrew previous federal approval, arguing that the state had no legal basis to implement a "cordon pricing" model. He cited the 1991 Value Pricing Pilot Program, letting states experiment with tolls on federal highways. MTA sued, and the April 11 memo poked holes in the feds' own argument.

The memo warned of “considerable litigation risk” under the Administrative Procedure Act, a federal law on agency rulemaking. According to Duffy, cordon pricing falls outside the VPPP’s intended meaning of “value pricing." But judges would likely reject the argument under the APA’s "arbitrary or capricious" standard, because those pricing terms are very broadly defined.

Congestion pricing means charging drivers more during peak traffic hours. Value pricing refers to authorizing toll programs addressing gridlock and paying for transit. Cordon pricing charges vehicles that cross a given threshold.

The courts will rely on precedent rather than definitions, and FHWA has allowed cordon pricing and value pricing since 2006, the lawyers who wrote the memo pointed out. Instead, they suggested realigning their defense to focus on what's allowed by the federal Office of Management and Budget.

The attorneys advocated for citing the shift in subjective policy goals rather than an objective but vague breach of statutory limitations. That's because OMB regulations let agencies cancel federal grants or cooperative agreements if a project "no longer effectuates [...] agency priorities."

The lawyers recommended that DOT send a notice of termination under those regulations. They said the letter should explain the change in policy. They also warned, "Where there is very little written justification for an agency’s action," the court could authorize additional discovery, "including requests for production of emails and depositions of agency officials, including the Secretary in particular."

And beyond discovery, embracing this legal strategy could also require more review into the environmental impact. Since February, Republican federal officials like Duffy have agreed with some state lawmakers that the tolls only represent an MTA cash grab. The DOJ lawyers pointed to previous court findings that MTA spending successfully eases congestion by increasing transit ridership. According to the memo, nothing prevents a pilot program from having both goals—better transit and fundraising.

"Last night's leak screams the quiet part loud," reads a statement from the NYC-based public transit adovacy group the Riders Alliance. "The feckless feds have no case against New York's immensely successful congestion relief program."

Requests for comments to the DOJ, DOT, MTA, and FHWA went unanswered as of press time.

Directions to New York to cancel congestion pricing came with deadlines—first March 21, then April 20. Since New York missed both dates, Duffy wrote another word of warning to Hochul, still citing the VPPP on April 21. He gave new deadlines: May 21 to stop collecting tolls and May 28 for the FHWA to begin enforcement. That would include cutting off financial support for projects in New York City and blocking construction approvals and permits.

Related video: Governor Hochul holds an MTA press conference after receiving Secretary Duffy's letter in February:

Take a look at the memo document below: