CHICAGO — A federal appeals panel has upheld a ruling holding the U.S. Constitution doesn’t limit what the state of Indiana and the company that operates the Indiana Toll Road can charge truck drivers.
The Indiana Finance Authority owns 156 miles of Interstate 90 across northern Indiana, connecting the Ohio border to the Chicago Skyway. Since 2006, ITR Concession Company has leased the toll road under an agreement that state lawmakers dictate toll rates. In 2018, ITR paid $1 billion to Indiana in exchange for the rights to increase tolls on heavy trucks by 35%. Truck owners and operators responded by filing suit.
According to court documents, half the trucks that use I-90 cross the entire state, while 90% of heavy truck traffic crosses at least one border. The owner-operators alleged those figures show an increase applied specifically to their vehicles violates the U.S. Constitution’s Commerce Clause, which gives Congress the ability to regulate interstate commerce. The truckers said the new targeted toll rates discriminates against interstate commerce. They further alleged the tolls are unjustified since the $1 billion isn’t directed toward I-90 maintenance or improvement in Indiana.
A federal magistrate judge recommended the suit be dismissed since Indiana is exempt from standard commerce rules as a market participant. U.S. District Judge Richard Young, of the Southern District of Indiana, agreed and dismissed the complaint for failure to state a claim. The plaintiffs, led by the Owner-Operator Independent Drivers Association, appealed to the U.S. Seventh Circuit Court of Appeals, which issued its ruling March 9.
Seventh Circuit Judge Frank Easterbrook wrote the opinion; Circuit judges Ilana Rovner and Diane Wood concurred.
The panel pointed to a 1974 U.S. Supreme Court opinion in Hughes v. Alexandria Scrap Corp., which held “that, when a state participates in — rather than regulates — the market, it is entitled to discriminate in favor of its own citizens,” according to Easterbrook. “As entrepreneurs, the Court repeatedly says, states may behave like private businesses and sell to whom they please at prices the market will bear (or at subsidized prices).”
The truckers, however, argued toll roads are different from typical services for which a government may charge, because road maintenance is an essential public obligation. Easterbrook noted that position intentionally sidesteps a 2000 Seventh Circuit opinion in Endsley v. Chicago, which established Chicago is a proprietor as relates to the Skyway, not a regulator.
“The idea that only units of government build and manage roads would come as a surprise to the people who wrote and approved the Commerce Clause,” Easterbrook wrote. “In 1787, many if not most roads, bridges, canals and similar parts of the transportation system were private ventures, often paid for by tolls.”
Easterbrook further said that system was in place for much of the 19th Century, noting “a fierce debate about the constitutionality of federal involvement in internal improvements left private entrepreneurs, with occasional state aid, as the principal managers of transport arteries” lasting until the 1950s and the beginning of the publicly owned interstate system. Yet today, he continued, private ownership persists with regard to fuel pipelines, power grids, canals, airports, bridges, ferries, harbors and railroads. Farm owners and residential developers “are expected to build and maintain their own roads,” he added.
The panel further said Indiana is allowed to use its $1 billion for any state purpose and noted truckers could use free roads to traverse the state, including two toll-free east-west interstates spanning the state’s middle and south. It also noted tolls are charged based only on miles driven with no knowledge of any truck’s origin, destination or ownership, giving further evidence of the rate’s neutrality.
The appeals panel affirmed the lower court’s decision.
The trucker plaintiffs have been represented by attorneys Paul D. Cullen Sr., Paul D. Cullen Jr., Kathleen B. Havener, Charles R. Stinson and Gregory R. Reed, of The Cullen Law Firm, of Washington, D.C., and Michael R. Limrick and Riley H. Floyd, of Hoover Hull Turner, of Indianapolis.
ITR Concession has been represented by attorneys A. Scott Chinn, Anne K. Ricchiuto and Stephanie L. Gutwein, of Faegre Baker Daniels, of Indianapolis, and Miguel A. Estrada, Matthew S. Rozen and Matt Gregory, of Gibson Dunn & Crutcher, of Washington, D.C.
The Indiana Finance Authority has been represented by attorneys Mark J. Crandley and John R. Maley, of Barnes & Thornburg, of Indianapolis.
Indiana Gov. Eric Holcomb and other state officials have been represented by the Indiana Attorney General's office.