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American Trucking Associations, Inc. v. Alviti

United States Court of Appeals, First Circuit

December 5, 2019

AMERICAN TRUCKING ASSOCIATIONS, INC.; CUMBERLAND FARMS, INC.; M&M TRANSPORT SERVICES, INC.; NEW ENGLAND MOTOR FREIGHT, INC., Plaintiffs, Appellants,
v.
PETER ALVITI, JR., in his official capacity as Director of the Rhode Island Department of Transportation; RHODE ISLAND TURNPIKE AND BRIDGE AUTHORITY, Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF RHODE ISLAND [Hon. William E. Smith, U.S. District Judge]

          Charles A. Rothfeld, with whom Evan M. Tager, Colleen M. Campbell, Mayer Brown LLP, Richard Pianka, and American Trucking Associations Litigation Center, were on brief, for appellants.

          Michael W. Field, Assistant Attorney General, Deputy Chief, Civil Division, Rhode Island Office of Attorney General, with whom Peter F. Neronha, Attorney General, was on joint brief, for appellee Alviti, Jr.

          John A. Tarantino, with whom Patricia K. Rocha, R. Bart Totten, Nicole J. Benjamin, and Adler Pollock & Sheehan were on joint brief, for appellee Rhode Island Turnpike and Bridge Authority.

          Before Torruella, Lynch, and Kayatta, Circuit Judges.

          KAYATTA, CIRCUIT JUDGE.

         This appeal poses the question whether bridge and highway tolls authorized by a Rhode Island statute are taxes within the meaning of the Tax Injunction Act ("TIA"). The state statute in question authorizes the Rhode Island Department of Transportation ("RIDOT") to collect from tractor- trailers certain "tolls for the privilege of traveling on Rhode Island bridges" in order to pay "for replacement, reconstruction, maintenance, and operation" of the bridges. R.I. Gen. Laws § 42-13.1-4(a). The plaintiff trucking entities filed this lawsuit asking the United States District Court for the District of Rhode Island to enjoin the collection of those tolls as violative of the Commerce Clause of the United States Constitution. The district court dismissed the lawsuit for want of jurisdiction under the TIA, which states that "[t]he district courts shall not enjoin, suspend or restrain the assessment, levy or collection of any tax under State law where a plain, speedy and efficient remedy may be had in the courts of such State." 28 U.S.C. § 1341. For the following reasons, we find the TIA's prohibition inapplicable to the Rhode Island tolls, and reverse.

         I.

         In 2016, the Rhode Island General Assembly passed the Rhode Island Bridge Replacement, Reconstruction, and Maintenance Fund Act ("RhodeWorks"). See R.I. Gen. Laws §§ 42-13.1-1 to -9. The General Assembly found that 23% of large Rhode Island bridges were "structurally deficient" and that current funding sources were insufficient to cover the cost of maintenance. Id. § 42-13.1-2(2), (7). It also found that large commercial trucks cause over 70% of the damage to Rhode Island roads and bridges but contribute less than 20% of the revenue to fund transportation infrastructure under existing sources. Id. § 42-13.1-2(8). To eliminate that funding disparity, the General Assembly authorized RIDOT to collect tolls exclusively from large commercial trucks. Id. §§ 42-13.1-4(a), -5.

         RhodeWorks imposes a daily limit on such tolls of $40 per truck and a $20 limit on border-to-border trips along Interstate 95. Id. § 42-13.1-4(c), (d). Within those limits, RIDOT determines both the locations of toll collection and the amounts of the tolls. Id. §§ 42-13.1-7 to -8. Under RIDOT's authority, the Rhode Island Turnpike and Bridge Authority ("RITBA") collects the tolls and deposits the revenue into a special account. Id. §§ 42-13.1-3(9), -9. This account, called the "Rhode Island bridge replacement, reconstruction, and maintenance fund," can be used only "to pay the costs associated with the operation and maintenance of the toll facilit[ies]" and to fund the "replacement, reconstruction, maintenance, and operation of Rhode Island bridges." Id. §§ 42-13.1-6(a), -9. "Unexpended balances and any earnings thereon shall not revert to the general fund . . . ." Id. § 42-13.1-6(c).

         American Trucking Associations, Inc., Cumberland Farms, Inc., M&M Transport Services, Inc., and New England Motor Freight, Inc. brought this suit against Peter Alviti, Jr. in his official capacity as Director of RIDOT, and RITBA intervened as a defendant. We refer to plaintiffs collectively as "American Trucking," and to defendants as "Rhode Island." American Trucking challenged RhodeWorks as unconstitutionally discriminatory against out-of-state entities under the dormant Commerce Clause. Am. Trucking Ass'ns v. Alviti, 377 F.Supp.3d 125, 127 (D.R.I. 2019). Rhode Island moved to dismiss on three grounds: (1) the district court lacked subject matter jurisdiction under the TIA; (2) principles of comity and federalism required the district court to decline subject matter jurisdiction; and (3) the Eleventh Amendment barred the suit. Id. Finding it to be a "close call," the district court dismissed the suit pursuant to the TIA and did not address the other grounds for dismissal. Id. at 128, 133.

         American Trucking timely appealed. The parties agree that Rhode Island state courts provide a "plain, speedy and efficient remedy" within the meaning of the TIA. The only dispute is whether the RhodeWorks tolls are a "tax." We review de novo. See Fothergill v. United States, 566 F.3d 248, 251 (1st Cir. 2009).

         II.

         A.

         We begin with the text of the TIA, asking whether the word "tax" includes tolls, or more precisely the tolls at issue here. The TIA contains no definition of the word "tax," so we look to the word's "ordinary . . . meaning . . . at the time Congress enacted the statute." New Prime Inc. v. Oliveira, 139 S.Ct. 532, 539 (2019) (omissions in original) (quoting Wis. Cent. Ltd. v. United States, 138 S.Ct. 2067, 2074 (2018)).

         Congress enacted the TIA in 1937. Pub. L. No. 75-332, 50 Stat. 738 (1937). When we look at whether the word "tax" was then understood to include tolls, we find something of a mixed bag, albeit one quite heavily loaded in favor of treating tolls as something other than taxes. We are aware of five pre-1937 opinions in which courts used the word "tax" to describe what otherwise might have seemed like tolls, or in some other way conflated tolls and taxes.[1] In none of these cases was the question whether a toll is a tax directly at issue. In fact, the word "toll" does not even appear in the only two federal opinions among those five cases. Rather, the Supreme Court in each of those cases simply used the term "tax" as used by the pertinent state legislature. Nevertheless, Rhode Island relies on these cases as demonstrating that calling toll-like charges "taxes" was hardly unknown.

         On the other hand, we are aware of at least six pre-1937 cases in which the issue before the court was whether a toll is a tax, and in all six of those cases the court held that a toll is not a tax.[2] Most significantly, those cases include a Supreme Court decision squarely holding that river tolls are not taxes for purposes of a due process challenge.[3] See Sands v. Manistee River Improvement Co., 123 U.S. 288, 294 (1887) (Field, J.). Sands flatly states:

There is no analogy between the imposition of taxes and the levying of tolls for improvements of highways; and any attempt to justify or condemn proceedings in the one case, by reference to those in the other, must be misleading. Taxes are levied for the support of government, and their amount is regulated by its necessities. Tolls are the compensation for the use of another's property, or of improvements made by him; and their amount is determined by the cost of the property, or of the improvements, and considerations of the return which such values or expenditures should yield.

Id.; see also id. at 297 ("By the terms tax, impost, and duty . . . is meant a charge for the use of the government, not compensation for improvements." (quoting Huse v. Glover, 119 U.S. 543, 549 (1886))).

         In deciding whether the ordinary meaning of "tax" included tolls in 1937, we also have the substantial benefit of Thomas Cooley's treatise, The Law of Taxation. The Supreme Court in 1898 described Cooley as a "text writer[] of high authority." Parsons v. District of Columbia, 170 U.S. 45, 55 (1898); accord Hill v. Kemp, 478 F.3d 1236, 1244 n.7 (10th Cir. 2007) (Gorsuch, J.) (quoting Parsons, 170 U.S. at 55). Over eighty years later, the Court cited his treatise as shedding light on Congress's understanding of a tax rule when it enacted the TIA. Rosewell v. LaSalle Nat'l Bank, 450 U.S. 503, 523-24 (1981) (citing 3 Thomas M. Cooley, The Law of Taxation § 1308 (Clark A. Nichols ed., 4th ed. 1924)). The edition of Cooley's treatise extant in 1937 when the TIA was enacted stated:

A "toll" is a "sum of money for the use of something, generally applied to the consideration which is paid for the use of a road, bridge or the like, of a public nature." The term "toll," in its application to the law of taxation, is nearly obsolete. It was formerly applied to duties on imports and exports; but tolls, as now understood, are applied most exclusively to charges for permission to pass over a bridge, road or ferry owned by the person imposing them. ...

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