March 29, 2018 / 4:26 PM / 6 months ago

U.S. court rejects lawsuit over New York's use of highway toll revenue

NEW YORK (Reuters) - A federal appeals court on Wednesday ruled that New York State Thruway Authority had the right to use toll revenue collected from commercial truckers to maintain upstate canals, upholding the dismissal of a lawsuit by a trucking industry group.

A unanimous three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan said that a 1991 federal law, the Intermodal Surface Transportation Efficiency Act, specifically authorized the Thruway Authority to use excess toll revenue for canals.

The decision upheld a February 2017 ruling by U.S. District Judge Colleen McMahon in Manhattan dismissing the lawsuit, which was filed in 2013 by the American Trucking Associations (ATA). The trade group argued that it was unconstitutional for the Thruway Authority to use the toll revenue for anything other than maintaining toll roads.

ATA and the office of New York Attorney General Eric Schneiderman, which represented the state Thruway Authority, could not immediately be reached for comment.

ATA originally sought an order blocking the Thruway Authority from using toll revenue for canals, and money damages for revenue it had already used.

In 2016, control of the canals were transferred from the Thruway Authority to the state’s Power Authority, making the request for a court order moot. However, ATA continued to seek damages.

McMahon handed a victory to ATA in August 2016, ruling that the use of toll revenue for canals was unconstitutional. However, the Thruway Authority then filed a new motion to dismiss the case, citing the 1991 federal law for the first time.

In her order granting that motion, McMahon called it “unfortunate” that the Thruway Authority had not made it earlier, saying that New York taxpayers had paid for “thousands of hours of unnecessary legal work.”

Nonetheless, she said the agency was right and dismissed the case.

ATA appealed, asking the 2nd Circuit to revive the case, but the panel on Thursday upheld McMahon’s interpretation of the law.

Reporting by Brendan Pierson in New York, editing by G Crosse

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