Congestion Pricing: A Case Study on Interstate Air Pollution Disputes
6.11.2024
New York’s congestion pricing program was set to take effect on June 30, 2024, notwithstanding multiple pending legal challenges.[1] Then on June 5,2024, Governor Kathy Hochul announced that she was directing the Metropolitan Transportation Authority – which is charged with implementing the program – to put the congestion pricing program on “indefinite pause.”[2] This announcement roiled the program’s proponents and left an apparent $15 million hole in the Metropolitan Transportation Authority’s (MTA) budget.[3] What this will mean for the pending lawsuits challenging aspects of the congestion pricing program is uncertain, as none of the cases has been adjudicated on the merits.
However, regardless of the outcomes of these specific legal challenges, the congestion pricing litigation is a case study on interstate air quality disputes under modern federal environmental law. Notably, among the litigants contesting the program is the state of New Jersey,[4] which has challenged the adequacy of the federal environmental review of the program conducted under the National Environmental Policy Act, among other claims.[5] In this respect, the current litigation raises interesting questions about the role of this legislation in evaluating interstate disputes and how courts should respond to cross-state environmental impacts. Moreover, because state law now requires the MTA (or its affiliate, the Triborough Bridge and Tunnel Authority) to establish a congestion pricing program, these legal disputes, or some version of them, may well return.[6]
How Did We Get Here? The Path to New York Congestion Pricing Legislation
In New York City, the effects of traffic congestion have long contributed to public health and other quality of life problems.[7] Pre-COVID-19 pandemic, 7.7 million people entered Manhattan’s Central Business District each day.[8] In the most congested part of Midtown Manhattan, the average vehicular speed is a sluggish 4.7 miles per hour.[9] Vehicular traffic results in greenhouse gas emissions as well as localized pollution.[10] In certain areas of Manhattan, concentrated levels of particulate matter and ozone are exceedingly high[11] and contribute to increased deaths and serious illnesses, such as heart and lung diseases.[12]
In response to years of advocacy, the New York State Legislature mandated the establishment of a congestion pricing program in 2019.[13] Congestion pricing programs aim to reduce traffic in heavily congested urban areas through the use of tolling or other pricing signals to deter vehicles from driving in the area designated under the program. London[14] and Stockholm,[15] among others, tout the success of their programs. For example, in London congestion pricing has reduced traffic by 30% and greenhouse gas emissions by 12%, while increasing transit ridership significantly.[16] If the MTA were to move forward with its proposal, New York would be the first jurisdiction in the United States to implement a zone-based congestion pricing model.[17]
New York’s program is intended to reduce acute traffic congestion in Manhattan and fund critical capital improvements to the MTA.[18] The state law governing the congestion pricing program directs the Triborough Bridge and Tunnel Authority to design and establish the program with input from the New York City Department of Transportation.[19] Specifically, the agency is required to “plan, design, install, construct, and maintain the central business district tolling infrastructure” as well as “implement and operate the same to collect the central business district toll.”[20] Pursuant to these legal requirements, the MTA released a plan to charge drivers a toll to enter the Manhattan Central Business District, which is comprised of Manhattan south of and including 60th Street, but excluding the FDR Drive, the West Side Highway, and the Hugh L. Carey Tunnel connection to West Street.[21] The MTA has now titled this area the “Congestion Relief Zone.”
Because implementation of New York’s congestion pricing program required approval by the Federal Highway Administration for tolling on federally funded roadways, the project fell within the scope of the National Environmental Policy Act and required federal environmental review.[22] This act is a process statute that requires federal agencies to assess significant environmental impacts before taking major federal actions.[23]
After completing its environmental review in July 2023, the Federal Highway Administration determined that New York’s proposed congestion pricing program would not have a significant adverse environmental impact and that further environmental review would not be needed.[24] Specifically, it found that the program would result in significant decreases in vehicles entering Manhattan, minor decreases in regional vehicles miles traveled, and a minor increase in traffic in certain neighborhoods in New York and New Jersey.[25] These overall traffic reductions would yield significant benefits for local and regional air quality.[26]
A Wave of Litigation Challenging New York’s Congestion Pricing Program
The lawsuits challenging New York’s congestion pricing scheme began as soon as the Federal Highway Administration concluded its environmental review. In July 2023, New Jersey filed a suit alleging that it did not adequately consider New Jersey in its environmental analysis.[27] New Jersey also challenged the federal agency’s analysis of air quality impacts in New Jersey under the federal Clean Air Act’s “conformity” provisions, which require federal agencies to consider how a federal action impacts a state’s ability to conform with federal air quality standards.[28]
In November 2023, Mark Sokolich, mayor of Fort Lee, New Jersey, and a group of constituents filed a similar complaint, focusing on the specific impacts to Fort Lee, which sits at the base of the George Washington Bridge.[29] Fort Lee raised concerns about how traffic that would be diverted around the “Congestion Relief Zone” could potentially impact local air quality.[30]
Since, then several other cases were brought by various plaintiffs, including lower Manhattan community groups and residents,[31] a coalition of unions, including the United Federation of Teachers, a group of local, state, and federal elected officials from New York City and surrounding New York counties, including the Staten Island borough president.[32] Each of these suits alleges violations of the National Environmental Policy Act, claiming that the Federal Highway Administration failed to adequately analyze and mitigate impacts to environmental justice communities in New York City and surrounding areas, among other claims. In late March 2024, on the day before the MTA gave final approval to the congestion pricing tolling plan, Rockland County, New York, filed a further lawsuit alleging that the tolls would constitute an unauthorized tax in violation of state and federal constitutional provisions.[33] In late May, the Trucking Association of New York filed a lawsuit seeking to further delay the program, claiming violations under the dormant commerce clause, the federal constitutional right to travel, and preemption under the Federal Aviation Authorization Act.[34] As of the time of this writing, none of these cases has been adjudicated on the merits.
The National Environmental Policy Act as a Vehicle for Addressing Interstate Disputes
Although the National Environmental Policy Act was designed as a process statute that imposes disclosure obligations on federal agencies, New Jersey sought to utilize the federal law as a sword to challenge New York’s policy decisions in enacting and designing the state’s congestion pricing scheme. In this regard, this particular case raises interesting questions about the role of this law as a means of evaluating interstate disputes.
New Jersey raised both procedural and substantive claims challenging the adequacy of the Federal Highway Administration’s review of out-of-state environmental impacts. New Jersey argued that the agency failed to “meaningfully engage” New Jersey and its state agencies.[35] New Jersey separately claimed that it failed to properly analyze how traffic diversions resulting from the toll structure could impact air quality in New Jersey generally, and in local New Jersey environmental justice communities specifically.[36]
The Federal Highway Administration responded to these allegations by pointing to its findings that the project would result in no more than a 0.2% change in vehicle miles traveled in New Jersey as a whole, with minimal impacts on air quality.[37] The agency noted that it held multiple meetings and outreach in New Jersey[38] and convened an Environmental Justice Stakeholder Working Group and an Environmental Justice Technical Advisory Group.[39] The agency’s environmental assessment identified particular neighborhoods that could be adversely affected, including areas in Lower Manhattan, Brooklyn, and the Bronx in New York, and Orange, East Orange, Newark, and Fort Lee in New Jersey.[40] To address potential increases in pollution in those neighborhoods, the agency proposed targeted mitigation measures, such as roadside vegetation, parks and greenspace, and air filtration in schools.[41]
The Federal Highway Administration’s attention to potential mitigation measures to address impacts on environmental justice communities in New Jersey was driven, in part, by participation by the Environmental Protection Agency. The EPA submitted a letter asking for a more detailed environmental justice analysis of air quality impacts in the Bronx, Staten Island, and Bergen County, New Jersey.[42] The EPA urged more community engagement on environmental justice impacts and more attention to potential mitigation measures.[43] In the final environmental assessment, the Federal Highway Administration conducted additional study of such potential impacts, along with a more detailed discussion of mitigation measures.[44]
In this regard, the federal process appears to have served as a procedural vehicle for federal consideration of how a program operating in one state can impact the environmental health of residents in a neighboring state. This is meaningful, as it is unclear whether the MTA would have had any reason on its own to consider the health of New Jersey residents when setting up a tolling structure within the jurisdictional boundaries of New York City.[45]
New Jersey’s claims also raise important questions about who speaks for the state when engaging in interstate disputes. Two local government units within New Jersey chose to participate in the litigation. Bergen County filed a separate amicus brief in support of New Jersey’s case, and the mayor of Fort Lee and a contingent of New Jersey residents filed a separate case bringing similar claims.[46] Each of these governmental entities purport to speak for the state or a subdivision within it.
The public engagement process built into the National Environmental Policy Act also allowed other voices to come forward and speak on behalf of New Jersey’s interests. Several New Jersey-based entities filed comments on the draft environmental assessment, providing their own perspective on how the congestion pricing program would impact New Jersey residents.[47] Later, when New Jersey brought suit challenging the environmental analysis, a coalition of 34 New Jersey local community-based organizations representing environmental, transportation, and equity-based interests filed an amicus brief heralding the benefits of congestion pricing for New Jersey and defending the National Environmental Policy Act’s public engagement process.[48] In a set of pointed arguments, the local groups identified a dissonance between New Jersey’s position in this case and the state’s choice to pursue a less rigorous review for the state’s New Jersey Turnpike expansion project.[49]
One consequence of a participatory democracy is that when administrative or judicial proceedings afford multiple opportunities for public input, this can lead to complex, and at times fractured, definitions of local representation. In the case of congestion pricing, multiple parties were able to speak on behalf of the people of New Jersey, and each was offered an opportunity to be heard. Whether this will shape the ultimate outcome remains to be seen.
The Road Forward: What Will Interstate Disputes Over Air Quality Look Like in the Future?
The congestion pricing litigation follows a long history of interstate disputes regarding cross-jurisdictional pollution, dating back to some of the earliest environmental law cases heard by the Supreme Court.[50] For example, in Georgia v. Tenn. Copper Co., the court, acting in its original jurisdiction, reviewed a 1907 challenge brought by the state of Georgia against a group of Tennessee copper companies whose operations released a noxious gas that harmed forests and agricultural crops in Georgia.[51] The court held that Georgia, which had first sought relief from the state of Tennessee, had sovereign standing to prevent harms to its citizens’ property.[52] This case and its progeny pre-dated the birth of modern environmental law and the series of federal environmental protection statutes enacted in the late 1960s and 1970s, including the National Environmental Policy Act and the Clean Air Act.
Over a century later, another set of interstate air quality disputes have garnered the court’s attention. In February 2024, the court heard oral argument on whether it should grant an emergency stay of the EPA’s “Good Neighbor” rules addressing interstate ozone pollution.[53] The litigation arose after EPA determined that 23 upwind states failed to submit adequate plans to limit their emission of ozone-forming pollutants that travel into downwind states. For each of those upwind states, the EPA issued rules to protect downwind states and their residents – including children and the elderly in particular –from high levels of cross-state ozone pollution, which can cause major health problems at high levels. The rules were promulgated pursuant to the “Good Neighbor” provision of the Clean Air Act, which instructs upwind states to reduce emissions that impact the air quality in downwind states.[54] Three states – Ohio, Indiana, and Virginia, along with a group of companies and trade associations — have challenged the EPA’s rules.[55]
In the Good Neighbor litigation, New York and New Jersey have teamed up as part of a coalition of downwind states and local governments that have joined the proceeding in defense of EPA’s rule, noting the harmful health effects of ozone-forming emissions in downwind jurisdictions.[56] The stakes of this litigation may be higher than the congestion pricing litigation, insofar as the upwind states are challenging EPA’s authority to directly regulate pollution within those upwind states. The National Environmental Policy Act plays an important role in governmental decision-making and can lead to mitigation measures, but it does not extend authority to federal agencies to directly regulate state conduct.
During oral argument, several Supreme Court justices exhibited a skepticism toward the EPA’s position in the Good Neighbor case.[57] This skepticism appears in the context of an overall willingness by the court to constrain federal agency administrative actions, particularly with regard to environmental protection.[58] It is unclear what this precarity surrounding EPA’s authority will mean for downwind states like New York and New Jersey, and what protections they will receive in the future.
This backdrop of uncertainty regarding the authority of federal agencies to directly regulate interstate air pollution offers an additional gloss to the congestion pricing litigation. Politics, like pollution, is affected by changing winds. Depending on the goals of the next presidential administration, state efforts to address local air quality and greenhouse gas emissions may take on increasing significance. The congestion pricing litigation illustrates that the National Environmental Policy Act can be one vehicle for examining how a state’s policies may affect local air pollution outside the state. The law’s built-in opportunities for broad public engagement could play an ongoing role in bringing forth multiple perspectives on how extraterritorial interests might be implicated in state policies. In the meantime, New Yorkers and New Jerseyans are left to wonder whether and when the nation’s first comprehensive congestion pricing scheme will ever get off the ground.
Christine Billy is the executive director of the Guarini Center on Environmental, Energy, and Land Use Law and an adjunct professor at New York University School of Law. Billy served for over a decade in New York City government in a variety of roles and practiced environmental law at Arnold & Porter before that. She is co-author of “Mariners at War: An Oral History of World War II.” A previous version of the article, co-authored with Janet Bering, appears in a recent issue of Municipal Lawyer, a publication of the Local and State Government Law Section. For more information, please visit NYSBA.ORG/LSGL.
[1] Compl., New Jersey v. Dep’t of Transportation, No. 2:23-cv-03885, (D.N.J. July 21, 2023); Compl., Sokolich v. Dep’t of Transportation, MTA et al., No. 2:2023-cv-21728 (D.N.J. Nov. 1, 2023); Compl. Chan v. Dep’t of Transportation, No. 23-cv-10365 (S.D.N.Y. Nov. 22, 2023); Compl., Mulgrew v. Dep’t of Transportation, MTA, etc, No. 24-cv-81 (E.D.N.Y. Jan. 4, 2024); Compl., New Yorkers Against Congestion Pricing Tax v. Dep’t of Transportation, No. 1:24-cv-00367 (S.D.N.Y. Jan. 18, 2024); Compl., County of Rockland et al. v. Triborough Bridge and Tunnel Authority and MTA, No. 7:24-cv-02285 (S.D.N.Y. Mar. 27, 2024); Compl. Town of Hempstead et al v. Triborough Bridge and Tunnel Authority et al, Docket No. 2:24-cv-03263 (E.D.N.Y. May 01, 2024); Compl. Neuhaus v. Triborough Bridge and Tunnel Authority, Docket No. 7:24-cv-03983 (S.D.N.Y. May 23, 2024); Compl., Trucking Association of New York v. Dep’t of Transportation, No. 1:24-cv-04111 (S.D.N.Y. May 30, 2024).
[2] Grace Ashford, Hochul Halts Congestion Pricing in a Stunning 11th-Hour Shift, The New York Times (Jun. 5 2024), https://www.nytimes.com/2024/06/05/nyregion/congestion-pricing-pause-hochul.html.
[3] Grace Ashford, et. al, How Governor Hochul Decided to Kill Congestion Pricing in New York, The New York Times (Jun. 9, 2024), https://www.nytimes.com/2024/06/09/nyregion/hochul-congestion-pricing.html.
[4] Compl., New Jersey v. Dep’t of Transportation, No. 2:23-cv-03885, supra note 1 (supported by an amicus brief from Bergen County). See also Compl., Sokolich v. Dep’t of Transportation, MTA et al, supra, n. 1 (brought by the Mayor of Fort Lee).
[5] See supra, n. 1; National Environmental Policy Act of 1969, as amended, 42 U.S.C. §§ 4321 et seq.
[6] MTA Reform and Traffic Mobility Act, N.Y. S. 1509–C /A. 2009–C, Part ZZZ (2019); N.Y. Veh. & Traf. Law § 1704.
[7] Chad Hughes, Congestion Pricing and the Opportunity To Confront New York City’s Air Quality Emergency, 45 Wm. & Mary Envtl. L. & Pol’y Rev. 859, 860 (2021) (arguing that congestion pricing should be set, in part, based on local air quality standards); Michael B. Gerrard & Edward McTiernan, New York’s New Congestion Pricing Law, 261(89) N.Y.L.J. (May 9, 2019).
[8] See U.S. Department of Transportation, Federal Highway Administration, Central Business District (CBD) Tolling Program Final Environmental Assessment ES-3, fig.ES-2 (April 2023), https://new.mta.info/project/CBDTP/environmental-assessment (hereinafter “EA”).
[9] N.Y. Veh. & Traf. Law § 1701.
[10] New York City Department of Environmental Protection, Transportation Emissions, https://www.nyc.gov/site/dep/environment/transportation-emissions.page; New York City Mayor’s Office of Climate and Environmental Justices, NYC Greenhouse Gas Inventories, https://climate.cityofnewyork.us/initiatives/nyc-greenhouse-gas-inventories/.
[11] See EA, supra note 8, at 10-4, tbl.10-2.
[12] New York City Department of Health and Mental Hygiene, Air Pollution and the Health of New Yorkers: The Impact of Fine Particles and Ozone, https://www.nyc.gov/assets/doh/downloads/pdf/eode/eode-air-quality-impact.pdf .
[13] MTA Reform and Traffic Mobility Act, N.Y. S. 1509–C /A. 2009–C, Part ZZZ (2019).
[14] Congestion Charge, Transport For London, https://tfl.gov.uk/modes/driving/congestion-charge.
[15] Patrick Ercolano, Study: Stockholm Traffic Tax Helps Kids in Sweeden Breathe Easier, John Hopkins University (Mar. 2, 2017), https://hub.jhu.edu/2017/03/02/health-effects-for-children-sweden-traffic-tax/.
[16] San Francisco County Transportation Authority, Downtown Congestion Pricing Study (Feb. 2020), https://www.sfcta.org/sites/default/files/2020-02/Congestion-Pricing-Case-Studies_2020-02-13.pdf.
[17] U.S. Department of Transportation, Federal Highway Administration, Zone-Based Pricing, https://ops.fhwa.dot.gov/congestionpricing/strategies/involving_tolls/zone_based.htm.
[18] N.Y. Veh. & Traf. Law § 1701.
[19] N.Y. Veh. & Traf. Law § 1704.
[20] N.Y. Veh. & Traf. Law §§ 1704(2-a),(3)(b).
[21] N.Y. Veh. & Traf. Law § 1704(2).
[22] EA, supra note 8, at 0-1. See Intermodal Surface Transportation Efficiency Act of 1991 (Public Law 102–240 § 1012-B, 105 Stat. 1914), as amended by the Transportation Equity Act for the 21st Century (TEA–21) (Public Law No. 105–178 § 1216(a), 112 Stat. 107 (1998)); https://ops.fhwa.dot.gov/congestionpricing/value_pricing/.
[23] 42 U.S.C. § 4331(c); 40 C.F.R. § 1508.18.
[24] U.S. Department of Transportation, Federal Highway Administration, Central Business District (CBD) Tolling Program, Finding of No Significant Impact, 88 Fed. Reg. 41998 (June 28, 2023), https://new.mta.info/project/CBDTP/environmental-assessment.
[25] EA, supra note 8, at ES-13.
[26] Id. at ES-15, ch. 10.
[27] Compl., New Jersey v. Dep’t of Transportation, No. 2:23-cv-03885, (D.N.J. July 21, 2023).
[28] Id. See Clean Air Act (CAA), 42 U.S.C. § 7506(c)(1) (preventing federal agencies from, among other things, approving any activity that “does not conform to an implementation plan after it has been approved or promulgated” under the Clean Air Act and requiring agencies to conduct a “conformity analysis” to assess whether a federal action will interfere with a state’s plan for “eliminating or reducing the severity and number of violations of the national ambient air quality standards and achieving expeditious attainment of such standards.”).
[29] Compl., Sokolich v. Dep’t of Transportation, MTA et al., No. 2:2023-cv-21728 (D.N.J. Nov. 1, 2023).
[30] Id.
[31] Compl., New Yorkers Against Congestion Pricing Tax v. Dep’t of Transportation, No. 1:24-cv-00367 (S.D.N.Y. Jan. 18, 2024); Compl. Chan v. Dep’t of Transportation, No. 23-cv-10365 (S.D.N.Y. Nov. 22, 2023).
[32] Compl., Mulgrew v. Dep’t of Transportation, MTA, etc, No. 24-cv-81 (E.D.N.Y. Jan. 4, 2024).
[33] Compl., County of Rockland et al. v. Triborough Bridge and Tunnel Authority and MTA, No. 7:24-cv-02285 (S.D.N.Y. Mar. 27, 2024).
[34] Compl., Trucking Association of New York v. Dep’t of Transportation, No. 1:24-cv-04111 (S.D.N.Y. May 30, 2024).
[35] Plaintiff’s Motion for Summary Judgment at 39, New Jersey v. Dep’t of Transportation, No. 2:23-cv-03885 (D.N.J., Nov. 10, 2023) (hereinafter “NJ Motion for Summary Judgment”).
[36] Id. at 3.
[37] Defendants’ Cross-Motion for Summary Judgment and Opposition to Plaintiff’s Motion for Summary Judgment at 30-32, New Jersey v. Dep’t of Transportation, No. 2:23-cv-03885, (D.N.J.) (hereinafter “FHWA Cross-Motion for Summary Judgment”).
[38] Id. at 39
[39] EA supra note 8, at 0-1.
[40] Id. at ES-38.
[41] EA supra n. 8 at ES-22, ES-50 n.32.
[42] See Letter from Lisa F. Garcia, Environmental Protection Agency Region 2 (Sept. 23, 2022), EA, supra note 8, at Appendix 18C-467.
[43] See id.
[44] EA, supra note 8, at 0-3; Dave Colon, EPA Endorsed Congestion Pricing After MTA Resolved Initial Concerns, StreetsBlogNYC, Feb. 13, 2024, https://nyc.streetsblog.org/2024/02/13/exclusive-epa-endorsed-congestion-pricing-after-mta-resolved-initial-concerns.
[45] But c.f. National Pork Producers Council v. Ross, 598 U.S. 356, 381-82 (2023) (Gorsuch, J.) (giving credence to the idea that states may consider the social policy implications of conduct outside their territorial boundaries in some contexts).
[46] See supra note 1.
[47] EA, supra note 8, at Appendix 18C.
[48] See Brief of Amici Curiae EmpowerNJ, et al., in Support of Defendants’ Cross Motion for Summary Judgment, New Jersey v. Dep’t of Transportation, No. 2:23-cv-03885 (D.N.J. Dec. 15, 2023).
[49] Id. at 23.
[50] Noah Hall, Political Externalities, Federalism, and a Proposal for an Interstate Environmental Impact Assessment Policy, 32 Harv. Env’t L. Rev. 50, 62-70 (2008). See also, e.g., Richard L. Revesz, Federalism and Interstate Environmental Externalities, 144 U. Pa. L. Rev. 2341 (1996); Jonathan H. Adler, Jurisdictional Mismatch in Environmental Federalism, 14 N.Y.U. Envtl. L.J. 130, (2005); Thomas W. Merrill, Golden Rules for Transboundary Pollution, 46 Duke L.J. 931, 932 (1997).
[51] Georgia v. Tenn. Copper Co., 206 U.S. 230, 237 (1907).
[52] Id. at 238.
[53] See Ohio v. EPA, Sup. Ct. Case No. 23-1183 (D.C. Cir ) (2024).
[54] EPA, Federal “Good Neighbor Plan” for the 2015 National Ambient Air Quality Standards, 88 Fed. Reg. 36654 (June 5, 2023).
[55] Ohio v. EPA, supra note 53.
[56] Brief for States of New York, Connecticut, Delaware, Illinois, Maryland, Massachusetts, New Jersey, Pennsylvania, and Wisconsin, and the District of Columbia, the City of New York, and Harris County, Texas, Respondents in Opposition to Applications for Stays 4 Ohio v. EPA, Sup. Ct. Case No. 23-1183.
[57] Amy Howe, Supreme Court Likely To Block EPA Ozone Regulation, SCOTUSblog, Feb. 21, 2024, https://www.scotusblog.com/2024/02/supreme-court-likely-to-block-epa-ozone-regulation/.
[58] See, e.g., West Virginia v. EPA, 142 S. Ct. 2587, 2609 (2022); Sackett v. Environmental Protection Agency, 598 U.S. (2023); Jody Freeman & Matthew Stephenson, The Anti-Democratic Major Questions Doctrine, Sup. Ct. Rev. 1 (2023) (describing the Supreme Court’s narrowing of federal agency authority to address pressing environmental issues through the Major Questions Doctrine).
