Fed attorneys admit case for ending NYC congestion pricing has legal holes, Trump DOT memo says

Yahoo

25-04-2025

NEW YORK — Federal attorneys admitted the Trump Transportation Department's legal theories for shutting down New York's congestion toll don't hold much water in a mysteriously filed memo that popped up on the docket of the MTA's suit against the administration Wednesday night.
Formally listed as a letter from lead attorney for the government Dominika Tarczynska to Judge Lewis Liman — who is overseeing the case in Manhattan federal court — introducing a document into evidence, what the feds posted instead was an 11-page internal memo to the Department of Transportation, dated April 11, explaining gaping holes in their case and legal strategy.
'There is considerable litigation risk in defending (U.S. DOT Secretary Sean Duffy's) February 19, 2025 decision (to attempt to revoke congestion pricing authorization) against (the MTA's) claims … that the decision was contrary to law, pretextual, procedurally arbitrary and capricious, and violated due process,' wrote three of the assistant U.S. Attorneys tasked with doing just that.
'… it is unlikely that Judge Liman or further courts of review will accept the argument that (congestion pricing) was not a statutorily authorized 'value pricing' pilot under (the relevant law),' the memo continues.
Signed by Tarczynska as well as assistant U.S. attorneys David Farber and Christine Poscablo, the memo goes on to suggest that the feds 'may, however, be able to properly terminate' congestion pricing by proposing to do so 'as a matter of changed agency priorities rather than arguing (that congestion pricing) was not statutorily authorized in the first instance.'
For nearly three months, Duffy has argued — in a series of strongly worded letters and angry tweets — that he can summarily revoke an authorization given by the Biden administration that allowed New York State to toll drivers entering Midtown or lower Manhattan on federally funded roads, and use the revenues to fund MTA transit projects.
The argument has become one of the most prominent flash points in the Trump regime's efforts to bigfoot state authorities.
But the memo released Wednesday shows that even the federal attorneys have deep doubts about whether they can convince a judge to end the toll.
In declaring the death of congestion pricing, Duffy has specifically claimed that New York' congestion toll is illegal in part because there is no un-tolled route to get into the city's congestion zone.
But that argument doesn't hold up, the attorneys wrote, providing at least two instances in which the so-called 'VPPP' — the Bush-era law that allows congestion pricing — has been authorized elsewhere in the country without a toll-free alternative.
'(W)e have not identified a provision that requires there to be a non-Interstate route to a particular location, or a requirement that that route not be tolled,' they added.
Duffy has also argued that the toll is illegal because it is designed fund a list of MTA projects rather than strictly to reduce congestion.
Again, the attorneys wrote, there are 'impediments to this argument being successful.'
'As a legal matter, there is nothing in the statute that prohibits a VPPP program from having a two-fold goal, limits how tolls are to be set, or sets forth the amount of congestion reduction that is to be achieved,' the attorneys said, adding that multiple studies signed off on by the feds had indeed found the toll reduces congestion.
Instead of relying on Duffy's arguments, the attorneys proposed attempting to terminate the toll by declaring that it 'no longer effectuates the … agency priorities' of the U.S. DOT, which they say might protect against the MTA's claims 'that they were not provided due process or that the termination (of the toll) was procedurally arbitrary and capricious.'
But that's not a sure thing, the lawyers wrote, suggesting Duffy bolster the strategy by explaining in future public statements that his agency 'has decided to change the types of VPPP projects it decides to prioritize or exclude.'
Indeed, in Duffy's most recent threat to defund New York City should the toll remain in effect, the secretary seems to have taken heed of some of the memo's recommendations.
As previously reported by the Daily News, Duffy last week set his third in a line of seemingly toothless deadlines for New York to end the toll.
In his letter to Gov. Kathy Hochul announcing the deadline, Duffy acknowledged that the relevant federal law allows tolls 'to be used for transit projects,' but said 'it is unconscionable as a matter of policy that highway users are being forced to bail out the MTA transit system.'
In a statement shared by Halee Dobbins, a spokeswoman for the federal Transportation Department, officials there accused the lawyers of an intentional leak.
'Are SDNY lawyers on this case incompetent or was this their attempt to RESIST?' read a caps-locked statement shared with The News. 'At the very least, it's legal malpractice. It's sad to see a premier legal organization continue to fall into such disgrace.'
But Nicholas Biase, the spokesman for the Manhattan federal prosecutor's office which is representing the DOT, told The News Thursday that the filing had been made in error.
'Unfortunately, an attorney-client privileged document was erroneously filed on the public docket last night,' Biase said. 'This was a completely honest error and was not intentional in any way.'
'Upon realizing the error, we immediately took steps to have the document removed,' he continued. 'We look forward to continuing to vigorously advocate in the best interest of our clients, the DOT and FHWA, in this matter.'
The memo comes as the SDNY, known for bringing major white-collar crime and terrorism cases, has seen a leadership crisis in recent months following Trump's second return to power — cycling through five U.S. attorneys since December.
Weeks after Trump was elected, Manhattan U.S. Attorney Damian Williams, who aggressively pursued public corruption during his tenure, stepped down. Trump replaced Williams' successor, Edward Kim, during his first day in office with Danielle Sassoon, who quit just two weeks later rather than obeying an order from the president's new second-in-command at the Justice Department to drop the corruption case against Mayor Adams.
Sassoon was replaced by her deputy, Matthew Podolosky. Last week, Democratic Sen. Chuck Schumer said he would seek to block the nomination of Trump's pick for the prestigious role, former Securities and Exchange Commission chief Jay Clayton. On Tuesday, Trump found a workaround by placing Clayton in the job in an interim capacity.
Among his first tasks in that capacity, Clayton signed off on a request Thursday that the memo be sealed and removed from the docket.
The memo had been temporarily removed from the docket Thursday evening by Liman's order, with access restricted to only the judge and the DOT's attorneys.
Liman indicated he will likely rule on the fed's motion to seal the memo next month.
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