American Trucking Associations v. New York State Thruway Authori
Court Docket Sheet

2nd Circuit Court of Appeals

2017-00737 (ca2)

BRIEF, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg in 17-737, Appellee Bill Finch, Jose Holguin-Veras, Donna J. Luh, Joanne M. Mahoney, Robert L. Megna, New York State Canal Corporation, New York State Thruway Authority, J. Donald Rice, Jr., Stephen M. Saland and Richard N. Simberg in 17-873, FILED. Service date 09/25/2017 by CM/ECF. [2133051] [17-737, 17-873] [Entered: 09/25/2017 11:49 PM]

17-737(L) 17-873(CON) United States Court of Appeals for the Second Circuit AMERICAN TRUCKING ASSOCIATIONS, INC., WADHAMS ENTERPRISES, INC., LIGHTNING EXPRESS DELIVERY SERVICE INC., WARD TRANSPORT & LOGISTICS CORP., on behalf of themselves and all others similarly situated, AMERICAN BUS ASSOCIATION, DATTCO, INC., STARR TRANSIT CO., INC., on behalf of themselves all others similarly situated, Plaintiffs-Appellants, v. NEW YORK STATE THRUWAY AUTHORITY, Defendants-Appellees. (caption continues on reverse) On Appeal from the United States District Court for the Southern District of New York BRIEF FOR APPELLEES ERIC T. SCHNEIDERMAN Attorney General BARBARA D. UNDERWOOD State of New York Solicitor General Attorney for Appellees STEVEN C. WU 120 Broadway Deputy Solicitor General New York, NY 10271 ANDREW W. AMEND (212) 416-8022 Senior Assistant Solicitor General of Counsel Dated: September 25, 2017 (caption continues from front cover) NEW YORK STATE CANAL CORPORATION, THOMAS J. MADISON, JR., in his official capacity as Executive Director of the New York State Thruway Authority, HOWARD MILSTEIN, in his official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, DONNA J. LUH, in her official capacity as Vice-Chair of New York State Thruway Authority/Canal Corporation Boards of Directors, E. VIRGIL CONWAY, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, RICHARD N. SIMBERG, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, BRANDON R. SALL, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, J. RICE DONALD, JR., in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, JOSE HOLGUIN-VERAS, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, BILL FINCH, in his official capacity as Acting Executive Director of the New York State Thruway Authority, JOANNE M. MAHONEY, in her official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, ROBERT L. MEGNA, in his official capacity as a member of the New York State Thruway Authority/Canal Corporation Boards of Directors, STEPHEN M. SALAND, in his official capacity as a member of the New York State Thruway Authority/Canal Corporation Boards of Directors, Defendants-Appellees. TABLE OF CONTENTS Page TABLE OF AUTHORITIES...................................................................... iv PRELIMINARY STATEMENT.................................................................. 1 ISSUES PRESENTED............................................................................... 2 STATEMENT OF THE CASE................................................................... 3 A. Factual and Legislative Background........................................ 3 1. New York’s creation and funding of the Thruway Authority without federal assistance................................ 3 2. The Surface Transportation Assistance Act of 1978’s authorization of federal funding for the Thruway between 1982 and 1991...................................... 4 3. Congress’s 1991 legislation authorizing the Thruway Authority to continue collecting tolls after 1996 and use excess toll revenues for New York’s canals................ 7 a. Congress’s general provision authorizing state public authorities to collect highway tolls and use excess revenues for canals and other historic facilities.......................................................... 7 b. Congress’s special rule authorizing the Thruway Authority to collect tolls to fund New York’s canals.............................................................. 10 c. Events motivating Congress’s 1991 legislation authorizing the Thruway Authority to use highway tolls for canal purposes.............................. 11 i TABLE OF CONTENTS (cont’d) Page 4. The Thruway Authority’s use of highway tolls for canal purposes between 1992 and 2016 pursuant to congressional authorization............................................. 17 B. Procedural History................................................................... 19 1. The American Trucking Associations case...................... 19 2. The American Bus Association case................................ 22 STANDARD OF REVIEW AND SUMMARY OF ARGUMENT............ 23 ARGUMENT............................................................................................. 27 POINT I PLAINTIFFS’ DORMANT COMMERCE CLAIMS FAIL BECAUSE CONGRESS EXPRESSLY AUTHORIZED THE THRUWAY AUTHORITY TO USE TOLL REVENUES FOR THE CANALS................................................. 27 A. Congress Specifically Authorized the Thruway Authority to Allocate Excess Highway-Toll Revenues to the State’s Canal System........................................................................... 27 B. Plaintiffs’ Contrary Arguments Lack Merit........................... 31 1. Plaintiffs’ proposed reading of Congress’s language is at odds with the text it purports to interpret.............. 31 2. The legislative history and overall scheme reinforce Congress’s intent to authorize the Thruway Authority to engage in the very use of highway tolls challenged by plaintiffs.................................................... 36 ii TABLE OF CONTENTS (cont’d) Page a. Plaintiffs’ characterizations of the relevant legislative history are unavailing............................. 36 b. Plaintiffs’ interpretation of the overall legislative scheme also is unavailing....................... 39 3. Plaintiffs’ proposed reading of Congress’s language is not required by the Commerce Clause......................... 43 POINT II IN THE AMERICAN TRUCKING ASSOCIATIONS CASE, THE DISTRICT COURT PROPERLY REACHED THE ISSUE OF CONGRESSIONAL AUTHORIZATION..................................................................................... 51 A. The District Court Properly Concluded That Defendants’ Congressional-Authorization Argument Was Not Waived...................................................................................... 52 B. Even If the District Court Should Have Determined That the Argument Was Waived, There Is No Need for a Remand..................................................................................... 56 C. In Any Event, This Court Has Discretion to Reach the Congressional-Authorization Issue Regardless of Any Arguable Error in the District Court’s Analysis.................... 57 CONCLUSION......................................................................................... 58 iii TABLE OF AUTHORITIES Cases Page(s) Block v. First Blood Associates, 988 F.2d 344 (2d Cir. 1993)................................................................. 54 Brown v. City of New York, 862 F.3d 182 (2d Cir. 2017)................................................................. 23 Brown v Rawlings Financial Servs., LLC, 868 F.3d 126 (2d Cir. 2017)................................................................. 23 C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994)........................................................................ 45, 46 City of Philadelphia v. New Jersey, 437 U.S. 617 (1978).............................................................................. 45 Conn. Nat’l Bank v. Germain, 503 U.S. 249 (1992).............................................................................. 35 Evansville-Vanderburgh Airport Authority District v. Delta Airlines, Inc., 405 U.S. 707 (1972).............................................................................. 47 Fednav, Ltd. v. Chester, 547 F.3d 607 (6th Cir. 2008)................................................................ 50 Gen. Elec. Co. v. Sargent & Lundy, 916 F.2d 1119 (6th Cir. 1990).............................................................. 54 Granholm v. Heald, 544 U.S. 460 (2005)........................................................................ 45, 46 Holzager v. Valley Hospital, 646 F.2d 792 (2d Cir. 1981)........................................................... 53, 55 Lewis v. BT Inv. Managers, Inc., 447 U.S. 27 (1980).......................................................................... 45, 46 iv TABLE OF AUTHORITIES (cont’d) Cases Page Maine v. Taylor, 477 U.S. 131 (1986)........................................................................ 45, 46 Mantena v. Johnson, 809 F.3d 721 (2d Cir. 2015)................................................................. 23 Mazzei v. Money Store, 829 F.3d 260 (2d Cir. 2016)................................................................. 57 Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982)............................................................ 28, 29, 48, 49 Mid-Atlantic Building Systems Council v. Frankel, 17 F.3d 50 (2d Cir. 1994)..................................................................... 46 Monahan v. N.Y. City Dep’t of Corrections, 214 F.3d 275 (2d Cir. 2000)................................................................. 54 National Helicopter Corp. of America v. City of New York, 137 F.3d 81 (2d Cir. 1998)............................................................. 49, 50 Ne. Bancorp, Inc. v. Bd. of Governors of the Fed. Reserve Sys., 472 U.S. 159 (1985)........................................................................ 28, 45 New England Power Co. v. New Hampshire, 455 U.S. 331 (1982)........................................................................ 45, 46 Santos v. District Council of New York City and Vicinity of United Broth. of Carpenters and Joiners of America, AFL-CIO, 619 F.2d 963 (2d Cir. 1980)................................................................. 53 South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82 (1984).................................................................... 44, 45, 46 Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941 (1982)........................................................................ 45, 46 v TABLE OF AUTHORITIES (cont’d) Cases Page(s) United States v. Pub. Util. Comm’n of Calif., 345 U.S. 295 (1953)........................................................................ 45, 46 Valentine Properties Associates, LP v. U.S. Dept. of Housing and Urban Development, 785 F. Supp. 2d 357 (S.D.N.Y. 2011)................................................... 53 White v. Mass. Council of Constr. Empls., 460 U.S. 204 (1983)........................................................................ 27, 45 Laws Federal Pub. L. No. 84-627, 70 Stat. 374................................................................ 4 Pub. L. No. 95-599, 92 Stat. 2689.............................................................. 5 Pub. L. No. 100-17, 101 Stat. 132.............................................................. 6 Pub. L. No. 102-240,105 Stat. 1914................................................. passim 23 U.S.C. § 119 (1988).......................................................................... 8, 40 State Ch. 143, 1950 N.Y. Laws 653..................................................................... 4 Ch. 766, 1992 N.Y. Laws 3948........................................................... 18, 30 Ch. 54, 2016 McKinney’s N.Y. Laws 83............................................. 18, 19 Public Authorities Law § 351........................................................................................................ 3 §§ 352-353............................................................................................... 3 § 354........................................................................................................ 4 vi TABLE OF AUTHORITIES (cont’d) Miscellaneous Authorities Page(s) 137 Cong. Rec. 14774 (June 13, 1991)................................... 15, 16, 38, 42 Congress of the United States, Congressional Budget Office, Innovative Financing of Highways: An Analysis of Proposals (Jan. 1998), available at https://www.cbo.gov/sites/default/files/105th-congress-1997-1998/reports/finhways.pdf................................................................... 41 Jacobs Civil Consultants, Inc., New York State Thruway Financial Requirements and Proposed Toll Adjustments 2012-2016, available at http://www.thruway.ny.gov/news/pressrel/2804.pdf...... 34 N.Y. State Thruway Auth., Frequently Asked Questions (FAQs), http://www.thruway.ny.gov/about/faqs.html#1.................................... 3 N.Y. State Thruway Auth., General Revenue Junior Indebtedness Obligations, Series 2013A, available at http://www.thruway.ny.gov/about/financial/bond/sales/2013a-jios.pdf.................................................................................................. 34 Pataki Says Tolls on The Thruway Will Not Increase, N.Y. Times, Dec. 5, 1996, http://www.nytimes.com/1996/12/05/nyregion/pataki-says-tolls-on-the-thruway-will-not-increase.html?mcubz=3...................... 35 Surface Transportation Efficiency Act of 1991, S. 1204, 102d Cong. (1991).......................................................................................... 15 Tolls on Thruway May Not Disappear, State Will Keep Fees and U.S. Aid if Congress Passes Pending Bill, Buffalo News, Feb. 22, 1991, at A1 (available in Westlaw at 1991 WLNR 956953)......... 13 Tom Bowman, House Panel OKs Transportation Bill with More Md. Aid, Baltimore Sun, July 24, 1991 (available in Westlaw at 1991 WLNR 802675)................................................................. 16, 38 vii TABLE OF AUTHORITIES (cont’d) Miscellaneous Authorities Page(s) U.S. Department of Labor, Bureau of Labor Statistics, CPI Inflation Calculator, https://www.bls.gov/data/inflation_calculator.htm......... 35 U.S. Department of Transp., Fed. Highway Admin., Ask the Rambler, Why Does The Interstate System Include Toll Facilities?, https://www.fhwa.dot.gov/infrastructure/tollroad.cfm... 4, 39 U.S. Department of Transp., Fed. Highway Admin., Ctr. for Innovative Finance Support, Federal Tolling Programs, https://www.fhwa.dot.gov/ipd/pdfs/tolling_and_pricing/fhwa-2017-0006-0002_active_toll_agreements.pdf...................................... 17 U.S. Department of Transp., Press Release, Skinner Talks to Chamber of Commerce on Transportation Infrastructure (Feb. 14, 1991) (available in LexisNexis PRNEWS database).............. 13, 37 viii PRELIMINARY STATEMENT Plaintiffs in these consolidated appeals1 are participants in the commercial trucking and bus industries. They claim that the New York State Thruway Authority violated the Dormant Commerce Clause when it previously used a modest portion of highway tolls to fund the State’s Canal System, a cross-state waterway that the Authority also previously managed. The United States District Court for the Southern District of New York (McMahon, C.J.) correctly dismissed these claims because, as plaintiffs concede, Congress specifically authorized the Thruway Authority to allocate highway tolls to canal uses. Where Congress specifically authorizes an activity, no dormant commerce challenge can lie. This Court should affirm. Congress’s intent here was unmistakably clear. In the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA), Congress 1 On April 12, 2017, this Court ordered the consolidation of two appeals, American Trucking Associations, Inc. v. New York State Thruway Authority, No. 17-737, and American Bus Association v. New York State Thruway Authority, No. 17-873, resulting from the dismissals of two related cases by the United States District Court for the Southern District of New York (McMahon, C.J.). (ECF No. 31 in Dkt. 17-737.) This brief uses the term "plaintiffs" to refer collectively to the plaintiffs-appellants in both appeals unless otherwise specified. identified the Thruway Authority by name and provided that its toll revenues beyond those needed for highway operation, maintenance, and debt service "shall be available" for certain transportation projects, including the Canal System. (J.A. 185.) That grant of authority to use excess highway tolls on the canals is unambiguous and without limitation. Plaintiffs’ attempt to read limitations into this language finds no support in the plain text or in the purpose or structure of ISTEA. Plaintiffs in the American Trucking Associations case further argue that the district court abused its discretion in reaching the question of congressional authorization because defendants did not discover or raise this argument until years into the litigation. That claim, too, is meritless. The district court had ample discretion to reach the pure legal issue presented by defendants’ defense, and it was not barred from doing so by both parties’ failure to raise it. ISSUES PRESENTED 1. Did the district court correctly dismiss plaintiffs’ dormant commerce challenges to the New York State Thruway Authority’s allocation of a portion of highway tolls to the State Canal System on the 2 ground that Congress expressly authorized the Thruway Authority to allocate highway tolls to canal purposes? 2. Did the district court properly reach the issue of congressional authorization in disposing of the American Trucking Associations case? STATEMENT OF THE CASE A. Factual and Legislative Background 1. New York’s creation and funding of the Thruway Authority without federal assistance The New York State Thruway Authority is a public benefit corporation (also known as a public authority) that was created by the New York Legislature to construct and operate certain transportation facilities in and through the State. See N.Y. Public Authorities Law (PAL) §§ 352-353. Since its establishment, the Thruway Authority has operated the Governor Thomas E. Dewey Thruway (the "Thruway"), a 570-mile cross-state highway connecting New York City to Buffalo via Albany and continuing west to the Pennsylvania border.2 2 See PAL § 351(2) (defining "thruway"); N.Y. State Thruway Auth., Frequently Asked Questions (FAQs), http://www.thruway.ny.gov/about/faqs.html#1. 3 The Thruway’s original construction in 1950 was funded through bond issuances, a method of funding that several States adopted for similar projects in the 1940s and 1950s. The Legislature authorized the Authority to charge tolls both to repay the bonds and to support Thruway maintenance and operations. PAL §§ 354(8); see Ch. 143, § 1, 1950 N.Y. Laws 653, 655, 659 (enacting § 359(1)). Six years after the Thruway’s construction, Congress passed the Federal-Aid Highway Act of 1956, which allowed existing toll highways such as the Thruway to be incorporated into the Interstate System. See Pub. L. No. 84-627, § 113(a), 70 Stat. 374, 384. The following year, the main line of the Thruway was among approximately 2,100 miles of toll highways in fifteen States added to the Interstate System.3 2. The Surface Transportation Assistance Act of 1978’s authorization of federal funding for the Thruway between 1982 and 1991 The Federal-Aid Highway Act of 1956 provided that toll highways such as the Thruway were ineligible for federal funding even after being 3 U.S. Department of Transp., Fed. Highway Admin., Ask the Rambler, Why Does The Interstate System Include Toll Facilities?, https://www.fhwa.dot.gov/infrastructure/tollroad.cfm. 4 incorporated into the Interstate System. Toll highways first became eligible for federal funding in 1978, when Congress enacted the Surface Transportation Assistance Act of 1978, also known as the Federal-Aid Highway Act of 1978, Pub. L. No. 95-599, 92 Stat. 2689 (J.A. 205).4 Section 105 of that statute allowed federal funding for highway maintenance to be provided to a state public authority responsible for a toll highway in the Interstate System, subject to a critical condition: the authority was required to discontinue tolling once it had collected sufficient revenues to retire outstanding bonds. Id. at 2692-93 (J.A. 205-206). If the authority continued collecting tolls after paying off its outstanding debt, Section 105 required that those tolls be used to repay any federal assistance received. Id. Section 105’s requirements were effectuated through what were known as "tripartite agreements" between the relevant state public authority, the state highway department, and the U.S. Secretary of Transportation. Pursuant to Section 105, the Thruway Authority, the New York State Department of Transportation, and the U.S. Department 4 For the sake of convenience, the Joint Appendix contains the relevant legislative history. 5 of Transportation’s Federal Highway Administration entered into a tripartite agreement on July 19, 1982 (the "1982 Toll Facility Agreement"). (J.A. 166-172.) That agreement provided that (i) the Thruway Authority could receive federal funds; (ii) the Authority could continue to collect tolls until it paid off its outstanding debt, projected to occur in 1996; and (iii) if toll collection continued after the debt were paid off, any federal funds received would have to be repaid. (J.A. 167-172.) The terms of that agreement and the governing legislative framework remained in place until 1991 when Congress enacted ISTEA, the legislation at the center of this case.5 5 Congress enacted 23 U.S.C. § 119(e) in 1987 to codify the requirements for federal-state agreements concerning the use of federal funds for toll highways, but the substance of the requirements remained unchanged from the 1978 legislation. See Surface Transportation and Uniform Relocation Assistance Act of 1987, Pub. L. No. 100-17, § 116(b), 101 Stat. 132, 154 (enacting 23 U.S.C. § 119(e)(1)-(2)(A)). Congress further provided that agreements entered into under Section 105 of the 1978 legislation—such as New York’s 1982 Toll Facility Agreement— would be treated as agreements entered into under 23 U.S.C. § 119(e). Id. (enacting 23 U.S.C. § 119(e)(3)). 6 3. Congress’s 1991 legislation authorizing the Thruway Authority to continue collecting tolls after 1996 and use excess toll revenues for New York’s canals Congress enacted ISTEA in 1991 with the stated goal (among others) of fostering "a national intermodal surface transportation system," consisting of "all forms of transportation in a unified, interconnected manner." Pub. L. No. 102-240, § 2, 105 Stat. 1914, 1914 (J.A. 175) (capitalization altered). As part of that project, Congress modified the statutory framework established in 1978 to give the States substantially greater flexibility to operate toll facilities and use the resulting revenues for a variety of transportation projects—including, in the case of the Thruway Authority, New York’s historic State Canal System. Congress did so through two provisions relevant here: one applying to state entities operating toll highways in general, and one applying to the Thruway Authority in particular. a. Congress’s general provision authorizing state public authorities to collect highway tolls and use excess revenues for canals and other historic facilities In the first of the two ISTEA sections relevant here, § 1012(a), Congress adopted general provisions authorizing state public authorities 7 like the Thruway Authority to continue collecting tolls even after the retirement of their outstanding debt. Moreover, instead of having to reimburse the federal government for federal highway funds, ISTEA authorized States to use excess toll revenues instead for a wide variety of qualifying transportation projects. See ISTEA § 1012(a), 105 Stat. at 1936-38 (J.A. 182-184). Specifically, an amended version of 23 U.S.C. § 129(a) directed the U.S. Secretary of Transportation to modify existing tripartite agreements, at the request of the relevant state public authority, to allow toll collection to continue indefinitely "without repayment of Federal funds." Id., 105 Stat. at 1936, 1937 (J.A. 182, 183) (enacting provisions to be codified at 23 U.S.C. § 129(a)(1)(B), (a)(6)).6 At the same time, ISTEA gave state public authorities broad flexibility to use toll revenues to fund an array of other transportation infrastructure—consistent with Congress’s goal of promoting an 6 The pertinent language, which appears in subdivisions (a)(1)(B) and (a)(6) of § 129 as revised by ISTEA, refers to toll highways subject to tripartite agreements entered into under 23 U.S.C. § 119(e) "as in effect on the day before the date of the enactment" of ISTEA. 105 Stat. at 1936, 1937 (J.A. 182, 183). Such agreements included tripartite agreements like New York’s that had been entered into under § 105 of the Federal-Aid Highway Act of 1978. See 23 U.S.C. § 119(e)(3) (1988). See supra note 5. 8 intermodal system consisting of "all forms of transportation." The amended § 129(a)(3) thus provided that a State could "use any toll revenues in excess of amounts required" for debt service, return on private investment, and highway operations and maintenance "for any purpose for which Federal funds may be obligated by a State under this title"—i.e., Title 23. Id., 105 Stat. at 1937 (J.A. 183). Congress simultaneously expanded the list of purposes for which States could use federal funds under Title 23 to include historic transportation facilities such as canals. Specifically, ISTEA enacted a new section, 23 U.S.C. § 133, that set forth a list of projects eligible for federal assistance under Title 23 as part of a "surface transportation program." ISTEA § 1007(a)(1), 105 Stat. at 1927-28 (J.A. 177-178) (enacting 23 U.S.C. § 133 (a)-(b)). That list of eligible projects included "[t]ransportation enhancement activities," a term Congress defined in an amendment to 23 U.S.C. § 101(a)—Title 23’s definitions provision—to include "historic preservation, rehabilitation and operation of historic transportation buildings, structures, or facilities (including historic 9 railroad facilities and canals)." Id. § 1007(c), 105 Stat. at 1931 (J.A. 181) (emphasis added).7 In short, ISTEA (1) authorized state public authorities to collect tolls even after paying off their debt; (2) authorized such tolls to be used for projects eligible for federal assistance under Title 23; and (3) included canals in the list of eligible projects. b. Congress’s special rule authorizing the Thruway Authority to collect tolls to fund New York’s canals In addition to ISTEA § 1012(a)’s general authorization of state public authorities to use toll revenues for canals, Congress also enacted a "Special Rule" in ISTEA § 1012(e) that applied to two named toll facilities: the New York State Thruway and the Fort McHenry Tunnel in Maryland. 105 Stat. 1939 (J.A. 185). 7 Although the current text of 23 U.S.C. § 101(a) has been amended from time to time, "none of the amendments eliminated the statutory authorization allowing the Thruway Authority to spend excess toll revenues (i.e., toll revenues not needed for Thruway maintenance) on the canals" (J.A. 235), as the district court explained. (See J.A. 235-237.). Plaintiffs do not claim otherwise (Br. for American Trucking Associa-tions, Inc., et al. ("Pls. Br.") at 18 n.4, 33-34). 10 ISTEA § 1012(e) largely paralleled § 1012(a) but added additional language specific to New York that confirmed the Thruway Authority’s ability to use excess toll revenues for the canals. Specifically, § 1012(e) provided that excess toll revenues could be used to cover any "costs associated with transportation facilities under the jurisdiction" of the Thruway Authority, "including debt service and costs related to the construction, reconstruction, restoration, repair, operation and maintenance of such facilities." Id. At all times relevant to these appeals, the New York State Canal System was under the jurisdiction of the Thruway Authority, and hence within the scope of § 1012(e)’s special rule. See infra 17-18. c. Events motivating Congress’s 1991 legislation authorizing the Thruway Authority to use highway tolls for canal purposes Events leading up to the passage of ISTEA reinforce that Congress deliberately and specifically authorized the Thruway Authority to spend substantial toll revenues on the State’s canals. By the early 1990s, several state entities with tripartite agreements had sought and received approval to modify those agreements to allow tolling to continue even after paying off of outstanding debt. (See J.A. 142, 11 149.) To determine whether New York should also seek such a modification, the Legislature created the New York State Thruway Transition Advisory Council to study the issue. (J.A. 142-144.) The Advisory Council’s final report, issued in September 1991, recommended that tolls be continued after the Authority paid off its outstanding debt matured in 1996. (J.A. 156-157.) Contemporaneous projections indicated that surplus toll revenues would be substantial—as high as $80 million a year. (See J.A. 161, 162 (press reports from April and May 1991).) Federal policymakers likewise expressed their interest in ensuring that New York would be able to continue collecting tolls and to use such tolls for other transportation projects. In mid-February 1991, shortly after the first Bush Administration submitted to Congress one of the many bills that would eventually become part of ISTEA, Secretary of Transportation Samuel K. Skinner told the New York Chamber of Commerce that "[t]he proposed bill includes a'break’ for New York State revenues."8 Skinner explained that the Thruway "would not be required 8 U.S. Department of Transp., Press Release, Skinner Talks to Chamber of Commerce on Transportation Infrastructure (Feb. 14, 1991) (available in LexisNexis PRNEWS database). 12 to remove tolls after bonds are paid off in 1996," and that "[t]his will serve as an important source of revenue for transportation improvements beyond 1996."9 A week later, Skinner repeated at a congressional hearing that, under the Administration’s proposed bill, the Thruway Authority would be allowed to continue collecting highways tolls after retiring its debt in 1996 without having to repay federal funds.10 That point elicited comment from New York’s Senator Moynihan, who had written the Surface Transportation Assistance Act of 1978. Moynihan "said he would press for language specific to New York."11 Moynihan also was quoted as saying, "I wrote the original statute and I will be responsible for the forthcoming bill."12 Moynihan subsequently conducted a number of Field Hearings in March and April 1991 on proposals to amend Title 23’s federal-aid 9 Id. Tolls on Thruway May Not Disappear, State Will Keep Fees and 10 U.S. Aid if Congress Passes Pending Bill, Buffalo News, Feb. 22, 1991, at A1 (available in Westlaw at 1991 WLNR 956953). 11 Id. 12 Id. (quotation marks omitted). 13 highway program. One such hearing took place in Albany, New York, in early April 1991, and was attended by figures responsible for and familiar with New York’s transportation needs, including the heads of the Thruway Authority and the State Department of Transportation. At the hearing, Senator Moynihan repeatedly emphasized preserving New York’s historic State Canal System as an important goal for the State. For instance, he implored the Commissioner of the State Department of Transportation, "[d]on’t forget that canal system, will you?"; and he observed that the "canal system is just a treasure." (J.A. 209.) He similarly remarked, "Commissioner, once again, if you will just keep in mind those beloved canals of ours. They are what has made America great." (J.A. 210.) At these hearings, the chair of the Thruway Authority testified that if the Authority were allowed to continue to collect tolls after 1996, "we should consider the future financing and operation of the Thruway in the context of other major State transportation funding questions that the State faces over the next year." (J.A. 214.) Those funding questions included maintaining the State’s Canal System. Thus, by the end of the month, it was publicly reported that one of the proposed uses of the 14 Thruway Authority’s anticipated $80-million-a-year toll-revenue surplus would be helping to fund the canals. (See J.A. 161-162.) Senator Moynihan ensured that the federal legislation then under consideration would allow the Thruway’s total revenue to be used for canal purposes. The bill containing what ultimately became ISTEA § 1012 did not contain any New York-specific language when it was reported out of the Senate Committee on Environment and Public Works on June 4, 1991. (See J.A. 215.) Surface Transportation Efficiency Act of 1991, S. 1204, 102d Cong. § 112(c) (1991). Nine days later, Senator Moynihan proposed Amendment 321. 137 Cong. Rec. 14774, 14881-84 (June 13, 1991) (J.A. 216-220). That amendment introduced what ultimately became ISTEA § 1012(e)’s provision allowing the Thruway Authority in New York and the operators of the Fort McHenry Tunnel in Maryland to use excess toll revenues not only to fund "any transportation project eligible for assistance under" Title 23, but also to cover "costs associated with transportation facilities under the jurisdiction" of those two state public authorities. Id. at 14883 (J.A. 219.) In introducing the amendment, Senator Moynihan focus on the Maryland component, explaining that his language would "make possible 15 the movement of toll receipts on and off the particular systems in such a way that the State, in this case Maryland, can optimize its transportation choices and provision thereof." Id. at 14774 (J.A. 216). "[W]e very much want Maryland to do with Maryland money what Maryland thinks best." Id. The following month, the Baltimore Sun reported that the Senate’s transportation bill "would allow the state to use proceeds from Fort McHenry Tunnel tolls to finance other transportation projects around the state, after the bond issue floated to pay for construction is paid off later in the decade."13 The article noted that in Maryland (as in New York), surplus toll revenues available to finance alternative transportation projects could run into the tens of millions of dollars: only "about half of the estimated $40 million in tolls collected each year" at the Fort McHenry Tunnel was "used for operations and maintenance," and the rest "could be used for... transportation projects" elsewhere in the State.14 13Tom Bowman, House Panel OKs Transportation Bill with More Md. Aid, Baltimore Sun, July 24, 1991, at 5D (available in Westlaw at 1991 WLNR 802675). 14 Id. 16 The final version of ISTEA, including § 1012(e)’s "Special Rule," took effect on December 18, 1991. 4. The Thruway Authority’s use of highway tolls for canal purposes between 1992 and 2016 pursuant to congressional authorization In June 1992, within months of ISTEA’s enactment, the Thruway Authority made a request to the Federal Highway Administration, a component of the U.S. Department of Transportation, to allow the Thruway Authority to continue collecting tolls without having to repay federal funds and to use toll revenues in "excess of revenues needed for debt service and the actual costs of operation and maintenance" of the Thruway for all purposes permitted under ISTEA § 1012(e). (J.A. 164-165.) The Federal Highway Administration gave its approval on June 29, 1992. (J.A. 165.) That approval remains in effect today.15 In parallel, the New York Legislature took steps to effectuate the newly granted congressional authorization allowing Thruway toll 15 See U.S. Department of Transp., Fed. Highway Admin., Ctr. for Innovative Finance Support, Federal Tolling Programs (noting that tolling agreements executed prior to October 1, 2012 "will continue in force"), https://www.fhwa.dot.gov/ipd/pdfs/tolling_and_pricing/fhwa-2017-0006-0002_active_toll_agreements.pdf. 17 revenues to be used for the Canals. On August 3, 1992, New York enacted the original Article 1-A of the Canal Law, to "transfer jurisdiction over the canals to the thruway authority, which has the ability to upgrade and improve the canal system, and to maintain that system for future recrea-tional and transportation users." Ch. 766, 1992 N.Y. Laws 3948, 3948 (J.A. 221). Because ISTEA § 1012(e) authorized the Thruway Authority to use excess toll revenues to cover the "costs associated with transportation facilities under [its] jurisdiction," this transfer of jurisdiction made the Canals eligible for funding from Thruway tolls. The Authority accordingly began using excess Thruway toll revenues for the State Canal System. Throughout the time that the Canal System was under the Thruway Authority’s jurisdiction (between 1992 and 2016), the Authority expended a modest portion of highway toll revenues—between approximately 9 and 14 percent a year—on the canals.16 16 Last year, the Legislature transferred jurisdiction over the Canal System to the New York Power Authority, which is not a party to these appeals. See Ch. 54, pt. TT, § 16, 2016 McKinney’s N.Y. Laws 83, 182-83 (codified at N.Y. Canal Law § 6(1)); (J.A. 234). 18 B. Procedural History 1. The American Trucking Associations case Plaintiffs in the American Trucking Associations case, the first of the two actions giving rise to the present consolidated appeals, are a trucking industry trade group and individual trucking corporations. (J.A. 25-26.) In November 2013, they commenced their action in the United States District Court for the Southern District of New York as a putative class action, asserting that the Thruway Authority’s use of a portion of highway tolls to pay for canal purposes violated the Dormant Commerce Clause of the federal Constitution.17 (J.A. 42-43, 45.) They named as defendants the Thruway Authority; the New York State Canal Corporation, which was then a subsidiary of the Thruway Authority but now is a subsidiary of the New York Power Authority;18 and, in their official capacities, the Executive Director of the Thruway Authority and 17The American Trucking Associations plaintiffs also asserted a claim under Privileges and Immunities Clause of the Fourteenth Amendment to the federal Constitution (J.A. 43-44), but they subsequently withdrew that claim (J.A. 124). 18 See Ch. 54, pt. TT, § 14, 2016 McKinney’s N.Y. Laws at 182 (codified at Canal Law § 2(21)). 19 the directors of the Thruway Authority and the Canal Corporation. (J.A. 26-27.) Plaintiffs’ complaint made no mention of ISTEA. The district court (McMahon, J.) initially dismissed the complaint for failure to join the State of New York as a necessary party, but this Court vacated that judgment and remanded for further proceedings. (J.A. 232.) On remand, the district court proceeded to grant summary judgment to plaintiffs on liability, issuing a decision premised on the assumption—also shared by the parties—that no congressional legislation authorized the use of Thruway tolls for canal purposes. (J.A. 232-233.) The district court then ordered the parties to undertake discovery on damages and directed plaintiffs to move for class certification, which they did. (J.A. 232-233.) Before the court could rule on plaintiffs’ class-certification motion or hold a damages trial, however, defendants discovered (while reviewing documents for production) the 1992 modification to the 1982 Toll Facility Agreement that authorized the Thruway Authority to use excess highway tolls for any purpose set forth in ISTEA § 1012(e).19 Defendants 19See Defs.’ Reply Mem. of Law in Further Support of Their Mot. to Dismiss at 9, No. 13-cv-8123 (S.D.N.Y. Feb. 16, 2017), ECF No. 113. 20 promptly moved to dismiss plaintiffs’ action for failure to state a claim, invoking, inter alia, Federal Rules of Civil Procedure 12(c) and 54(b) and the court’s inherent authority. (J.A. 127.) The district court agreed with defendants that ISTEA § 1012(e) provided a complete defense to plaintiffs’ claims because no Dormant Commerce Clause claim can lie if Congress has expressly authorized state action. (J.A. 233-237, 239-240.) In this case, because Congress expressly authorized the very use of Thruway tolls challenged by plaintiffs, plaintiffs’ dormant commerce claims necessarily failed. (J.A. 234-237.) In addition, the district court rejected plaintiffs’ contention that defendants had raised this argument too late. The district court explained that defendants’ motion did not come too late for the court to grant judgment on the pleadings under Rule 12(c); that even if congressional authorization were an affirmative defense (which it was not), defendants had sufficiently raised it by pleading that the complaint failed to state a claim; and that even if defendants were required to identify congressional authorization as the particular reason why the complaint failed to state a claim, the court had discretion to construe defendants’ motion as one to amend their answer. (J.A. 239-241 & n.4.) 21 The court also explained that defendants had not waived the congressional-authorization issue, in any event, because they were unaware of it—and thus could not knowingly relinquish it—until they uncovered the "historical records" that established it. (J.A. 241-242.) The district court accordingly granted defendants’ motion and dismissed the action with prejudice. (J.A. 243.) 2. The American Bus Association case In February 2017, five days after defendants moved for dismissal of the American Trucking Associations case, the American Bus Association plaintiffs filed their lawsuit raising the same dormant commerce claims, in the same court, against the same defendants, represented by the same counsel. (J.A. 253-271.) The American Bus Association plaintiffs are a bus industry trade group and two bus companies. (J.A. 254-255.) One month later, upon dismissing the American Trucking Associations case, the district court sua sponte ordered the American Bus Association plaintiffs to show cause why their complaint should not be dismissed for the same reasons. (J.A. 242, 272 n.6.) In response, the American Bus Association plaintiffs conceded that their case was "controlled by" the American Trucking Associations decision. (J.A. 272.) 22 The district court accordingly dismissed the American Bus Association action with prejudice "for substantially the reasons discussed" in the decision and order dismissing the American Trucking Associations case. (J.A. 272.) STANDARD OF REVIEW AND SUMMARY OF ARGUMENT A district court’s grant of judgment on the pleadings is reviewed de novo, Mantena v. Johnson, 809 F.3d 721, 727 (2d Cir. 2015), as is a district court’s decision to dismiss a complaint for failure to state a claim, Brown v. Rawlings Financial Servs., LLC, 868 F.3d 126, 128 n.1 (2d Cir. 2017). A district court’s decision that a party did not waive an argument by failing to raise it earlier in the proceedings is reviewed for an abuse of discretion. Brown v. City of New York, 862 F.3d 182, 187 (2d Cir. 2017). Applying these standards here, this Court should affirm. The plain language of ISTEA §1012(e) authorized the Thruway Authority, by name, to spend surplus toll revenues on the canal—which is precisely what the Thruway Authority did here. And no challenge under the Dormant Commerce Clause can lie to attack activities authorized by Congress in the affirmative exercise of its power under the Commerce Clause. 23 Plaintiffs nevertheless assert that Congress’s plain language in ISTEA, while allowing the Thruway Authority to spend excess highway toll revenues on the canals, did not in terms authorize the Thruway Authority to violate the Dormant Commerce Clause, and thus must be read to authorize the Authority to collect only incidental annual surpluses resulting from the impossibility of predicting with precision the total amounts of toll revenues and Thruway maintenance expenses that would be experienced from year to year. But that argument is contra-dicted by the text of ISTEA, which allowed the Thruway Authority to continue collecting the tolls it had already been collecting—tolls that were calculated to generate substantial revenue for debt obligations the Thruway Authority would no longer have once its outstanding bonds were paid off in 1996, as Congress and the first Bush Administration were well aware. Congress thus contemplated that the Thruway Authority would regularly have meaningful amounts of surplus toll revenues that ISTEA allowed to be spent on the canals. Furthermore, plaintiffs are mistaken in insisting that Congress’s legislation in the exercise of its Commerce Clause power must be read at all costs, however implausibly, to respect the limits that the Commerce 24 Clause would impose in the absence of congressional action. Plaintiffs emphasize that Congress did not specifically reference the Commerce Clause in ISTEA § 1012, but the Supreme Court has made clear that Congress need not explicitly state that an activity that it is plainly authorizing would otherwise violate the Commerce Clause in order to defeat a dormant commerce challenge. Rather, Congress’s authorization to undertake the specific activity in question itself defeats any dormant commerce challenge. And in this case, the only basis for plaintiffs’ dormant commerce challenge is that the Thruway Authority was using a portion of the highway tolls that it charged to intrastate and interstate motorists alike to fund the Canal System. But that is the very activity that Congress authorized. Finally, the district court did not abuse its discretion in determining that defendants had not waived their argument in the American Trucking Associations case by failing to raise it earlier in the proceedings. Defendants raised the defense of failure to state a claim in their answer, and the district court correctly held that they were not required to state with specificity the legal and factual grounds of that defense—assuming that congressional authorization is an affirmative 25 defense at all. Alternatively, it exercised its discretion to allow defendants to amend their answer to supply the needed specificity. And it determined that defendants’ motion for judgment on the pleadings, which preceded the damages trial, was timely under Federal Rule of Civil Procedure 12(c) and (h)(2). These points, which plaintiffs do not contest here, dispose of their argument. And, in any event, a remand would be inappropriate even if the district court had abused its discretion in determining that defendants’ congressional-authorization argument was waived. The district court plainly deemed it appropriate to reach the issue to correct a clear error and prevent injustice, and this Court has discretion to reach the issue on the same bases, in any event. 26 ARGUMENT POINT I PLAINTIFFS’ DORMANT COMMERCE CLAIMS FAIL BECAUSE CONGRESS EXPRESSLY AUTHORIZED THE THRUWAY AUTHORITY TO USE TOLL REVENUES FOR THE CANALS A. Congress Specifically Authorized the Thruway Authority to Allocate Excess Highway-Toll Revenues to the State’s Canal System. Plaintiffs’ claims fail as a matter of law and were rightly dismissed. Plaintiffs’ sole claim in both cases is that the Thruway Authority’s use of highway tolls for canal purposes violated the Dormant Commerce Clause by allocating some of the tolls paid by plaintiffs for their use of one instrumentality of interstate commerce (the Thruway) to the operation of a separate instrumentality of interstate commerce that plaintiffs did not use (the Canal System). That claim is fatally flawed because Congress has expressly authorized the Thruway Authority to use highway tolls for precisely this purpose. The Supreme Court has repeatedly recognized that "[w]here state or local government action is specifically authorized by Congress, it is not subject to the [Dormant] Commerce Clause even if it interferes with interstate commerce." White v. Massachusetts Council of Constr. Empls., 460 U.S. 204, 213 (1983). Thus, "[o]nce Congress acts, courts are not free 27 to review state taxes or other regulations under the dormant Commerce Clause." Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 154 (1982). "When Congress has struck the balance it deems appropriate, the courts are no longer needed to prevent States from burdening commerce, and it matters not that the courts would invalidate the state tax or regulation under the Commerce Clause in the absence of congressional action." Id. In sum, "[w]hen Congress so chooses, state actions which it plainly authorizes are invulnerable to constitutional attack under the Commerce Clause." Northeast Bancorp, Inc. v. Board of Governors of the Fed. Reserve Sys., 472 U.S. 159, 174 (1985). Congress plainly authorized the Thruway Authority’s use of tolls for canal purposes through ISTEA § 1012(e), 105 Stat. at 1939 (J.A. 185). In fact, Congress prescribed a procedure for the Thruway Authority to do just that. Cf. Merrion, 455 U.S. at 154 (rejecting dormant-commerce challenge to tribal tax where Congress "affirmatively acted by providing a series of federal checkpoints that must be cleared before a tribal tax can take effect"). Under that procedure, the Thruway Authority, along with the New York State Department of Transportation (collectively, the "non-Federal parties to a toll facility agreement reached before October 1, 1991, 28 regarding the New York State Thruway"), had to make a request of the U.S. Secretary of Transportation for authorization to continue collecting tolls without having to repay federal funds spent on the Thruway. Id. That done, ISTEA § 1012(e) provided that "[r]evenues collected from such tolls, after the date of such request, in excess of revenues needed for debt service and the actual costs of operation and maintenance" of the Thruway "shall be available" for either of two specified purposes: "(1) any transportation project eligible for assistance under title 23," or "(2) costs associated with transportation facilities under the jurisdiction" of the Thruway Authority. 105 Stat. at 1939 (J.A. 185). There is no question that the Thruway Authority and the New York State Department of Transportation completed this procedure. Months after ISTEA’s enactment, they made a request asking the Federal Highway Administration, "pursuant and subject to the conditions of § 1012(e)," to allow "the continuance of tolls on the New York State Thruway, without repayment of Federal funds." (J.A. 165.) The request was accepted prior to any use of Thruway toll revenues for the Canal System. (Id.) 29 Hence, under the plain terms of ISTEA § 1012(e), the Thruway Authority was free to use any excess toll revenues it collected (1) for any project eligible to receive federal assistance under Title 23, or (2) for any transportation facilities under the Thruway Authority’s jurisdiction. Either criterion describes the Canal System. First, as plaintiffs acknowledge (see Pls. Br. at 18 n.4, 33-34), the Canal System was a transportation project eligible for federal funds under Title 23 as amended by ISTEA § 1007, which expressly allowed such funds to be allocated to the "historic preservation, rehabilitation and operation of historic transportation buildings, structures, or facilities (including historic railroad facilities and canals)." Id. § 1007(c), 105 Stat. at 1931 (J.A. 181) (emphasis added). Second, the Canal System was at all relevant times a "transportation facilit[y] under the jurisdiction" (J.A 105) of the Thruway Authority (see Ch. 766, 1992 N.Y. Laws at 3948 (J.A. 221)). Thus, as plaintiffs concede, Congress directly and unambiguously authorized the use of Thruway toll revenues beyond those needed for debt service and highway operations for "various transportation-related 30 projects and facilities, among them the canals" (Pls. Br. at 34). That fact disposes of plaintiffs’ Dormant Commerce Clause claims. B. Plaintiffs’ Contrary Arguments Lack Merit. Plaintiffs concede that Congress authorized the Thruway Authority to spend at least some Thruway toll revenues on the Canal System. Yet they claim that ISTEA must be read as permitting the Authority to spend only a "modest," "limited," and "occasional" surplus of highway tolls on non-highway projects (Pls. Br. at 37, 47). Plaintiffs’ contentions are meritless. 1. Plaintiffs’ proposed reading of Congress’s language is at odds with the text it purports to interpret. Plaintiffs’ claim that ISTEA § 1012(e) authorizes only limited and occasional use of surplus Thruway tolls for the Canal System finds no support in the plain text of that statute, which contains no such qualifications. Section 1012(e) provides that "[r]evenues collected from such tolls... in excess of revenues needed for debt service and the actual costs of operation and maintenance shall be available" for other projects, including the canals. 105 Stat. at 1939 (J.A. 185). Nowhere does this language refer to a "modest," "limited," or "occasional" toll surplus: 31 instead, it straightforwardly authorizes the Thruway Authority to continue to exercise its tolling authority and use any surplus collected for other projects under its jurisdiction, including the Canal System. Plaintiffs’ atextual interpretation is further undermined—not supported—by the fact that Congress phrased its authorization in terms of a "continuance of tolls" (see Pls. Br. at 33-35) and that its language limited the uses to which surplus tolls could be put (id. at 37). Contrary to plaintiffs’ arguments, this language shows that Congress anticipated that surplus toll revenues would provide a regular and meaningful stream of income that the Thruway Authority could use for other transportation projects, including the canals. Plaintiffs argue that Congress’s use of the word "continuance" means that the tolls Congress authorized to continue "would have been roughly calculated to pay for highway maintenance" only, save for "modest" surpluses resulting from small mismatches between toll revenues and actual maintenance costs (mismatches that very well might result in deficits instead of surpluses). Id. at 36-37. But there is no basis to read the word "continuance" as anything other than a grant of authority to continue collecting tolls of whatever amount, something the 32 Thruway Authority was previously barred from doing, after satisfying its debt obligations. And there is no basis to assume that Congress meant "reduce" tolls when it authorized the Thruway Authority to "continu[e]" collecting tolls, which is what plaintiffs’ argument effectively requires. Plaintiffs’ argument rests on a false assumption: the tolls that Congress authorized to continue had been calculated not only to pay for highway maintenance, but also to repay the debt issued to construct the Thruway. Those debt payments were substantial—and once they were paid off, the Thruway was expected to have surpluses of approximately $80 million per year. (J.A. 161-162.) The tolls that Congress allowed to continue thus included a significant component sufficient to satisfy the Thruway Authority’s debt obligations. By authorizing the "continuance" of these tolls, Congress expressly authorized the Thruway Authority to continue collecting tolls set to generate a significant, regular stream of revenue in excess of that needed to operate the Thruway—not just a "modest," "limited," or "occasional" surplus (Pls. Br. at 36-37, 47). Furthermore, Congress did not direct the Thruway Authority to reduce that surplus revenue stream when the 33 Authority satisfied its outstanding debts—to the contrary, ISTEA eliminated the requirement (first imposed in 1978) that the Thruway Authority stop collecting tolls, and affirmatively allowed its tolling to continue, once it paid off its bonds. Plaintiffs therefore miss the mark in asserting that the word "continuance" in ISTEA § 1012(e) did not encompass "geometric increases that radically change both the purpose and the magnitude of the act being'continued.’" (Pls. Br. at 35.) The Thruway Authority engaged in no such "geometric increases" or radical changes after the ISTEA’s passage. To the contrary, the Thruway Authority did not increase its tolls at all between 1988 and 2005, and the increases it implemented between 2005 and 2010 were at all times below the rate of inflation.20 The Thruway Authority’s collection of tolls for the entire 20 See Jacobs Civil Consultants, Inc., New York State Thruway Financial Requirements and Proposed Toll Adjustments 2012-2016, at IV-1, available at http://www.thruway.ny.gov/news/pressrel/2804.pdf. With respect to tractor-trailers in particular, the Thruway’s toll rate today, which went into effect in 2010, is approximately 23.9 cents a mile. N.Y. State Thruway Auth., General Revenue Junior Indebtedness Obligations, Series 2013A, App. A, at 23, available at http://www.thruway.ny.gov/about/financial/bond/sales/2013a-jios.pdf. The corresponding rate prior to 2005, which was set in 1988, was 34 period between 1992 and 2016 thus straightforwardly constitutes a "continuance" of the toll collection that it had previously pursued. The only change was that, after 1992, the Thruway Authority committed a portion of the revenues it did not need for Thruway operations and debt service—approximately 10 to 12 percent of annual toll revenues—to the Canal System. But Congress expressly authorized the Thruway Authority to use its excess toll revenue in precisely this way. "Courts must presume that a legislature says in a statute what it means and means in a statute what it says there," and "[w]hen the words of a statute are unambiguous... judicial inquiry is complete." Connecticut Nat’l Bank v. Germain, 503 U.S. 249, 253-54 (1992) (quotation marks omitted). approximately 14.6 cents a mile. See Pataki Says Tolls on The Thruway Will Not Increase, N.Y. Times, Dec. 5, 1996, http://www.nytimes.com/1996/12/05/nyregion/pataki-says-tolls-on-the-thruway-will-not-increase. html?mcubz=3. The adjustment from 14.6 cents a mile in 1988 to 23.9 cents a mile in 2010 was an increase of approximately 63.6 percent. The Consumer Price Index calculated by the U.S. Department of Labor’s Bureau of Labor Statistics increased by approximately 80 percent over the same period. See U.S. Department of Labor, Bureau of Labor Statistics, CPI Inflation Calculator (80 percent increase calculated by converting $1 in December 1988 to $1.80 in January 2010), https://www.bls.gov/data/inflation_calculator.htm. 35 2. The legislative history and overall scheme reinforce Congress’s intent to authorize the Thruway Authority to engage in the very use of highway tolls challenged by plaintiffs. a. Plaintiffs’ characterizations of the relevant legislative history are unavailing. Plaintiffs attempt to support their reading of ISTEA § 1012(e) by reference to various pieces of legislative history, but their arguments are unavailing. Plaintiffs contend first that, in enacting ISTEA § 1012(e), Congress was interested only in removing the federal repayment obliga-tions it had initially imposed on toll-highway operators in 1978 as a condition of their receipt of federal highway funds (see Pls. Br. at 43). But this argument is contradicted by the plain text of § 1012(e), which not only removes the repayment obligation but further authorizes excess toll revenues to be used for other transportation projects. Equally unpersuasive is plaintiffs’ assertion that Congress expected any such excess revenue to be only "limited and occasional" (Pls. Br. at 47). This assertion ignores the wide understanding at the time that state public authorities (including the Thruway Authority) would realize substantial surplus revenue from their tolls once they paid off their construction-debt obligations. For example, the U.S. Secretary of 36 Transportation commented that allowing the Thruway Authority to continue collecting tolls after paying off its bonds in 1996 would "serve as an important source of revenue for transportation improvements beyond 1996."21 Contemporaneous revenue projections support the view reflected in those assessments that significant toll revenue surpluses would be available once debt obligations were satisfied. In 1991, the Thruway Authority Transition Advisory Council noted that "current tolls (raised to match inflation) should generate surplus funds each year, ranging from very modest in the early years to more substantial in the later years" (J.A.152), and that such surplus revenues could be used for "non-Thruway and/or expanded Thruway transportation" (J.A. 151).22 Press 21 U.S. Department of Transp., Press Release, supra (emphasis added). Likewise, the chair of the Thruway Authority testified to Senator Moynihan that if tolls were retained, the "future financing and operation of the Thruway" should be considered "in the context of other major State transportation funding questions that the State faces over the next year." (J.A. 214 (emphasis added).) Incidental toll surpluses would not suffice to address "major" funding questions. 22The Council was aware when it made these statements of Congress’s then-pending legislation allowing tolls to continue after it 37 reports, meanwhile, stated that the Thruway was expected to generate up to $80 million a year in surplus toll revenues once its bonds were paid off in 1996. (J.A. 161-162.) Likewise, the press reported that the Fort McHenry Tunnel in Maryland was expected to generate toll revenue surpluses of some $20 million a year once the bonds issued to construct the tunnel were paid off.23 Nothing in the legislative text or history evinces an intent by Congress to deprive tolling authorities in Maryland, New York, or any other State of such surplus toll revenues. To the contrary, Senator Moynihan explained that § 1012(e) was designed to "make possible the movement of toll receipts on and off the particular systems in such a way that the State, in this case, the State of Maryland, can optimize its transportation choices and provision thereof." 137 Cong. Rec. at 14774 (J.A. 216).24 paid off its bonds in 1996; its report quoted language from the Senate bill that ultimately was enacted in ISTEA § 1012(e). (J.A. 149.) 23 Tom Bowman, House Panel OKs Transportation Bill, supra. 24This language shows that plaintiffs are simply incorrect to claim that "no senator discussed the toll issue at all" (Pls. Br. at 46) when Senator Moynihan introduced the language ultimately enacted as ISTEA § 1012(e). Similarly, his references to Maryland reinforce that § 1012(e) was, as the district court concluded, a "member item" benefiting Maryland and New York (id. at 46-47). 38 b. Plaintiffs’ interpretation of the overall legislative scheme also is unavailing. Plaintiffs fare no better by asserting that, under the district court’s correct interpretation of ISTEA § 1012(e), which applies only to New York and Maryland, the more general provision in ISTEA § 1012(a) would allow "all highway authorities across the Nation... to collect tolls in limitless amounts that are wholly unrelated to use of the tolled facility by the toll-payers." Pls. Br. at 39. Section 1012(a) would have no such sweeping effect because it is largely limited to the small number of public authorities that had already constructed toll highways that were part of the Interstate System.25 Specifically, in order for a state entity to qualify for § 1012(a), that entity had to be a party to a tripartite agreement under either the pre-ISTEA version of 23 U.S.C. § 119(e) or the new version of 23 U.S.C. § 129 that ISTEA enacted. ISTEA § 1012(a), 105 Stat. at 1937 (enacting 23 U.S.C. § 129(a)(6)) (J.A. 183). The pre-ISTEA version of § 119(e) provided for agreements (such as New York’s 1982 Toll Facility Agreement) for the 25 Only approximately 6.2 percent of the Interstate System—2,900 out of 46,730 total miles—consists of toll highways. U.S. Department of Transp., Fed. Highway Admin., Ask the Rambler, supra. 39 use of federal funds to maintain toll highways that were part of the Interstate System. See 23 U.S.C. § 119 (1988). To be sure, the new version of § 129 also provided for state entities to receive federal funds for new toll highways—on the condition that they enter into tripartite agreements regarding those highways—which also could eventually be modified to allow toll collection to continue after capital costs were paid off. But such new toll highways could not be added to the Interstate System, the Nation’s predominant mode of interstate auto travel. ISTEA § 1012(a), 105 Stat. at 1936 (enacting 23 U.S.C. § 129(a)(1)(B), (D)) (J.A. 182). Section 1012(a)’s principal effect was thus limited to a relatively small group of state entities already operating toll highways on the Interstate System. Furthermore, contrary to plaintiffs’ suggestion, there is nothing "backhanded" (Pls. Br. at 39) about Congress’s decision to allow tolling authorities operating successful toll highways to allocate excess toll revenues to other transportation projects. Congress sought to foster a "national intermodal transportation system" consisting of "all forms of transportation in a unified, interconnected manner." ISTEA § 2, 105 Stat. at 1914 (J.A. 175). Congress’s establishment in ISTEA § 1007 of a surface 40 transportation program that, as plaintiffs acknowledge, "would fund not only highway construction but also transit and other projects" (Pls. Br. at 43 n.9), is a straightforward means of effectuating that purpose. And so is Congress’s provision in ISTEA § 1012(a) and (e) allowing surplus revenues generated by one aspect of the Nation’s transportation system to go toward funding the costs of others. As the Congressional Budget Office remarked in 1998, "ISTEA brought significant changes in federal policies toward toll roads," including its provisions that "[t]olls no longer had to removed once a road was paid for," and that "any money left over after providing proper maintenance could be used for other highways."26 These changes are plainly provided for in ISTEA, and there is nothing surprising about them in a landmark statute that made several important shifts in federal transportation policy to promote the interconnected, intermodal system envisioned by Congress. 26 Congress of the United States, Congressional Budget Office, Innovative Financing of Highways: An Analysis of Proposals 10 (Jan. 1998), available at https://www.cbo.gov/sites/default/files/105th-congress-1997-1998/reports/finhways.pdf. 41 Finally, whatever § 1012(a) authorized with respect to other toll facilities in other States, § 1012(e) contained additional language unambiguously authorizing tolling authorities in New York and Maryland to use excess highway toll revenues on all "transportation facilities under the jurisdiction" of those authorities. 105 Stat. at 1939 (J.A. 185). Senator Moynihan explained that § 1012(e) was meant to "make possible the movement of toll receipts on and off the particular systems" on which they were collected, 137 Cong. Rec. at 14773-74, and thus avoid any doubt that tolling authorities in New York and Maryland, at least, were authorized to use excess tolls on transportation projects distinct from the highway systems that generated them, whatever limitations might arguably apply in other States. Yet such use of excess Thruway tolls which is precisely what plaintiffs claim violated the Dormant Commerce Clause in New York. No dormant commerce challenge is available where Congress exercises its Commerce Clause power to authorize the specific activity challenged. 42 3. Plaintiffs’ proposed reading of Congress’s language is not required by the Commerce Clause. Plaintiffs contend that ISTEA § 1012(e) does not contain a sufficiently clear indication of Congress’s intent to authorize the Thruway Authority to violate the Dormant Commerce Clause. While § 1012(e) might not authorize the Thruway Authority to commit any Dormant Commerce Clause violation (such as a toll that facially discriminates against out-of-state drivers), the fatal flaw in plaintiffs’ argument is that § 1012(e) unambiguously allows the Thruway Authority to engage in the activity that is the sole basis for plaintiffs’ dormant commerce claim: the use of tolls for the canals. The gravamen of plaintiffs’ complaints is that the Thruway Authority’s imposition of tolls upon them requires vehicles "engaged in interstate commerce to bear costs" that are "above and beyond the costs associated with their use of the Thruway" (J.A. 38) and that are "unrelated to their use of the Thruway" (J.A. 266). The district court had earlier accepted plaintiffs’ theory, reasoning that the Thruway Authority’s diversion of highway tolls to the Canal System violated the Dormant Commerce Clause because "[p]laintiffs’ highway tolls are being applied toward facilities they do not use and from which they derive no 43 benefit." (J.A. 103 (emphasis added).) Under that reasoning, any use of Thruway toll revenues for canal purposes would be a dormant commerce violation. Yet, as plaintiffs now concede, Congress expressly authorized at least some use of highway toll revenues for the Canal System—the very activity that, under plaintiffs’ dormant commerce claim, would make the tolls excessive and not based on a fair approximation of plaintiffs’ use of the Thruway. ISTEA § 1012(e)’s express authorization of the use of Thruway tolls for canal purposes thus directly undercuts the plaintiffs’ core theory that any such diversion is a violation of the Dormant Commerce Clause. In arguing to the contrary, plaintiffs make much of the fact that Congress did not explicitly refer to the Commerce Clause in enacting ISTEA § 1012(a) and (e). But the Supreme Court has made clear that "[t]here is no talismanic significance to the phrase'expressly stated’" in its dormant commerce cases." South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 91 (1984). That is, Congress need not expressly state that it is authorizing a State to engage in activity that would otherwise violate the Dormant Commerce Clause; it need only clearly allow the State to engage in such activity. There are no other "magic 44 words" that Congress must use. See Northeast Bancorp, Inc., 472 U.S. at 169 (concluding there was no need to determine whether language on its face authorized regional discrimination because legislative history supplied "a sufficient indication of Congress’ intent"); White, 460 U.S. at 213 (looking to purposes of federal statutes at issue and determining that "the federal regulations for each program affirmatively permit the type of parochial favoritism" challenged). The cases cited by plaintiffs do not provide otherwise. Indeed, there are critical distinctions between this case and those cited by plaintiffs in which the Supreme Court sustained dormant commerce challenges. In nearly all of those cases, unlike this one, a State was attempting to defend a policy that facially discriminated against interstate commerce—a type of policy subject to a "virtually per se rule of invalidity," City of Philadelphia v. New Jersey, 437 U.S. 617, 624 (1978).27 Moreover, the 27 Granholm v. Heald, 544 U.S. 460, 473, 476 (2005); C & A Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383, 392 (1994); Maine v. Taylor, 477 U.S. 131, 139 (1986); Wunnicke, 467 U.S. at 99; Sporhase v. Nebraska ex rel. Douglas, 458 U.S. 941, 958 (1982); New England Power Co. v. New Hampshire, 455 U.S. 331, 339 (1982); Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 39 (1980); cf. United States v. Public Util. Comm’n of Calif., 345 U.S. 295, 310-11 (1953) (statute allowing state regulation of 45 State was attempting to defend its facially discriminatory scheme not by relying on congressional enactments that specifically authorized such discrimination, but instead by relying on far less apposite congressional language, such as a generic savings clause in a federal statute,28 or on a broad federal policy not reflected in any specific statute.29 The facts of this case are very different. First, there is no dispute that New York charges the same fees to in-state and out-of-state Thruway users, and thus does not facially discriminate against interstate hydroelectric power in certain circumstances did not carve out exception to later-established general rule barring States from regulating interstate wholesale power sales); Mid-Atlantic Building Systems Council v. Frankel, 17 F.3d 50, 52-53 (2d Cir. 1994) (affirmative grant of unrestricted authority to regulate vehicles longer than forty-eight feet could not be inferred from statute barring States from imposing vehicle-length limitations of less than forty-eight feet). 28 Granholm, 544 U.S. at 482-83; Maine, 477 U.S. at 132-33; Sporhase, 458 U.S. at 959; New England Power Co., 455 U.S. at 341; Lewis, 447 U.S. at 47-49; cf. Public Util. Comm’n of Calif., 345 U.S. at 300, 304, 311-12 (generic statement limiting federal authority over matters regulated by States did not evince intent to undo, with respect to hydroelectric power only, ban on state regulation of wholesale interstate power sales); C & A Carbone, Inc., 511 U.S. at 409-10 (O’Connor, J., concurring in the judgment) (rejecting arguments by amicus curiae that Congress had acted with specificity necessary to authorize overtly discriminatory scheme). 29 Wunnicke, 467 U.S. at 91; Sporhase, 458 U.S. at 959-60. 46 commerce. See Evansville-Vanderburgh Airport Authority District v. Delta Airlines, Inc., 405 U.S. 707, 717 (1972) (concluding that airport-usage feeds did not discriminate against interstate commerce because "both interstate and intrastate flights are subject to the same charges"). (See also J.A. 110 (rejecting plaintiffs’ claim that Thruway Authority’s tolling practices were discriminatory).) Thus, overt discrimination against out-of-state interests—a type of activity Congress rarely authorizes and can be expected to be exceptionally explicit about when it does—is not at issue. Second, there is no dispute here that Congress spoke directly to the very activity plaintiffs allege to constitute a dormant commerce violation: the use of highway tolls to support non-highway projects. Thus, there is no need here to guess at the scope of Congress’s authorization based on an unrelated or inapposite federal statute or policy. Instead, Congress expressly authorized the specific activity—the continued collection of highway tolls and the use of surplus revenues on other transportation projects—that plaintiffs challenge as a dormant-commerce violation. That express authorization is more than clear enough to defeat plaintiffs’ dormant commerce claims. As the Supreme Court has 47 explained, judicial review of state action under dormant commerce principles is intended to "safeguard[] Congress’ latent power from encroachment by the several States." Merrion, 455 U.S. at 154 (emphasis added). Here, however, Congress’s power is not latent at all: in enacting ISTEA, including § 1012(a) and (e), Congress exercised its Commerce Clause power to expressly authorize the funding of many transportation projects, including New York’s canals, by use of highway tolls. Congress thereby "struck the balance it deem[ed] appropriate" in providing for the financing of those various modes of transportation. Id. at 154. Accordingly, there is no occasion for judicial second-guessing of the balance Congress struck: "Courts are final arbiters under the Commerce Clause only when Congress has not acted." Id. at 154-55. Plaintiffs’ reasoning violates these basic principles by claiming, in effect, that Congress’s legislation must be read (however implausibly) to permit no greater burdens on interstate commerce than would be allowed in the absence of congressional action. Courts have repeatedly rejected such arguments. In Merrion, for instance, the Supreme Court explained that a tribal tax imposed pursuant to a congressional scheme was not subject to attack on dormant commerce grounds, even if such a tax would 48 have been an invalid burden on interstate commerce "in the absence of congressional action." Id. As the Court explained, "it is not our function nor our prerogative to strike down a tax that has traveled through the precise channels established by Congress, and has obtained the specific approval of the Secretary [of the Interior]." Id. at 156. So, too, it would be inappropriate in this case to invalidate a highway toll collection and revenue allocation system implemented by the Thruway Authority only after following procedures prescribed by Congress and receiving approval from the U.S. Secretary of Transportation. Similarly, in National Helicopter Corp. of America v. City of New York, this Court rejected a dormant commerce challenge to helicopter flight restrictions imposed by New York City pursuant to a federal statute delegating to state and municipal airport proprietors "the authority to adopt rational regulations with respect to the permissible level of noise created by aircraft using their airports." 137 F.3d 81, 88, 92 (2d Cir. 1998) (construing 49 U.S.C. § 41713(b)(3)). This Court did not analyze the burdens on interstate commerce imposed by the City’s flight restrictions or suggest that Congress’s legislation must be read at all costs to avoid allowing the City to impose such burdens; instead, it 49 applied the commonsense principle that because "Congress approved" the provision allowing municipal proprietors of airports to impose reasonable noise restrictions, "any action the City properly conducted pursuant to its powers as a proprietor cannot violate the Commerce Clause." Id. Likewise, in Fednav, Ltd. v. Chester, the Sixth Circuit rejected a dormant commerce challenge to a Michigan statute allowing oceangoing vessels to engage in port operations in the State only if they met permitting criteria designed to prevent the discharge of aquatic nuisance species (ANS) into state waters. 547 F.3d 607, 613, 624 (6th Cir. 2008). The Court noted that the National Invasive Species Act of 1996, 47 U.S.C. § 4701 et seq., had "expressly contemplated, and indeed encouraged, state participation in ANS prevention measures." Id. at 624. The Court accordingly determined there was no need to engage in any balancing of burdens and benefits that dormant commerce principles would otherwise require: "[w]e would lose our constitutional bearings if we were to hold that the Commerce Clause, in its dormancy, strikes down state regula-tion that Congress, in actively exercising its power under the Clause, expressly contemplated." Id. (emphasis in original). 50 In this case, Congress expressly contemplated that the Thruway Authority and similarly situated state entities would collect toll revenues exceeding their needs for highway maintenance and operations, and Congress directly authorized the allocation of those excess sums to alternative transportation projects, including the canals. Accordingly, there is no basis to hold that the Dormant Commerce Clause prevented the Thruway Authority from doing what Congress expressly authorized it to do. POINT II IN THE AMERICAN TRUCKING ASSOCIATIONS CASE, THE DISTRICT COURT PROPERLY REACHED THE ISSUE OF CONGRESSIONAL AUTHORIZATION The American Trucking Association plaintiffs assert that the district court erred in reaching defendants’ congressional-authorization argument relying on ISTEA § 1012(e), but they are mistaken. Indeed, plaintiffs concede that the district court had the discretion to reach the issue. Pls. Br. at 56. Plaintiffs nevertheless assert that the district court erred in doing so, because it concluded that defendants had not waived their congressional-authorization argument—whereas it assertedly 51 should have held that the argument was waived and then considered whether to reach it as a matter of discretion to correct a clear error or avoid manifest injustice. Pls. Br. at 56-58. Plaintiffs’ contentions are unavailing, however. The district court did not err in finding a lack of waiver, and, in any event, it made abundantly clear that, irrespective of any waiver, it had no interest in entertaining plaintiffs’ claim "because Congress has barred it" (J.A. 240). Thus, a remand to the district court would be a needless endeavor. And finally, regardless of any purported errors in the district court’s analysis, this Court has discretion to address a pure issue of law that turns on undisputed facts even if raised for the first time on appeal on appeal— and a fortiori this Court has such discretion when the issue has been expressly addressed by the district court. And this case is an excellent candidate for the exercise of such discretion. A. The District Court Properly Concluded That Defendants’ Congressional-Authorization Argument Was Not Waived. The district court appropriately determined that defendants did not waive their congressional-authorization argument. As the district court observed, defendants asserted in their answer that plaintiffs had failed 52 to state a claim, and "[t]he Federal Rules of Civil Procedure do not require that a defense be pleaded with detailed specifications." Holzager v. Valley Hospital, 646 F.2d 792, 796 (2d Cir. 1981). Thus, the fact that defendants’ answer did not mention ISTEA § 1012(e) or New York’s 1992 modifica-tion to the 1982 Toll Facility Agreement—points of which plaintiffs and defendants alike regrettably were unaware until recently—does not compel a conclusion that defendants waived their congressional-authorization argument. See id. at 795-96 ("plain language" of answer asserting lack of personal jurisdiction "was literally broad enough to encompass lack of jurisdiction" on grounds later upheld by Supreme Court).30 Furthermore, the district court properly concluded that defendants timely invoked the specific bases for their congressional-authorization argument in moving for judgment on the pleadings under 30 See also, e.g., Santos v. District Council of New York City and Vicinity of United Broth. of Carpenters and Joiners of America, AFL-CIO, 619 F.2d 963, 967 & n.4 (2d Cir. 1980) (assertion of statute-of-limitations defense in answer preserved defense despite failure to raise same defense in motion to dismiss under Rule 12(b)(6)); Valentine Properties Assocs., LP v. U.S. Department of Housing & Urban Dev., 785 F. Supp. 2d 357, 370 (S.D.N.Y. 2011) ("it is permissible for Defendants to first raise" arguments that complaint fails to state a claim "on a Rule 12(c) motion for judgment on the pleadings"), aff’d, 501 F. App’x 16 (2d Cir. 2012). 53 Rule 12(c) and 12(h)(2). (J.A. 238-241). See also General Elec. Co. v. Sargent & Lundy, 916 F.2d 1119, 1131 (6th Cir. 1990) ("alleged untimeliness" of motion for judgment on pleadings "is no bar to the dismissal" of defective claim). Moreover, this Court has repeatedly rejected waiver arguments where, as here (see J.A. 240 n.4), a district court exercises its discretion to treat a dispositive motion raising a new defense as one to amend an answer, in the absence of a showing of bad faith or prejudice to the plaintiff. For instance, in Block v. First Blood Associates, this Court held that the district court did not abuse its discretion in treating as a motion to amend defendants’ answer a motion for summary judgment asserting a statute-of-limitations defense four years into the litigation. 988 F.2d 344, 350-51 (2d Cir. 1993). As this Court explained, there was no showing of bad faith, given that defendants were not aware of the operative facts; in addition, plaintiffs had not been "prejudiced solely because of the time, effort and money they expended in litigating" their claims. Id. at 351; see also Monahan v. New York City Dep’t of Corrections, 214 F.3d 275, 284 (2d Cir. 2000) (district court did not abuse discretion in treating motion for summary judgment as motion to amend pleadings where there was 54 no bad faith and only prejudice to plaintiff was expending resources in preparing for trial). Furthermore, contrary plaintiffs’ argument, the district court did not err in determining that defendants’ unawareness of the basis of their congressional-authorization argument (until they discovered the 1992 modification to the 1982 Toll Facility Agreement) precluded a finding of waiver. As this Court explained in Holzager, a "party cannot be deemed to have waived objections or defenses which were not known to be available at the time they could first have been made, especially when it does raise the objections as soon as their cognizability is made apparent." 646 F.2d at 796 (emphasis added). There is no question here that defendants acted promptly once they knew of the legal and factual31 basis of their congressional-authorization defense. (See J.A. 242.) 31 Plaintiffs’ assertion that the district court erred by applying a knowing-waiver standard to circumstances they characterize as "ignorance of a legal argument" (Br. at 57) is incorrect, both because it is contradicted by Holzager, which involved a legal argument, see 646 F.2d at 795-96, and because defendants’ congressional-authorization argument here turned on unknown facts. ISTEA § 1012(e)’s authorization to use Thruway tolls for canal purposes was not self-executing, but required affirmative steps to be put into effect, and defense counsel was unaware of those steps until discovery of the 1992 modification to the 1982 Toll Facility Agreement. 55 B. Even If the District Court Should Have Determined That the Argument Was Waived, There Is No Need for a Remand. In any event, there is no need for a remand here, even if the district court erred in determining that defendants had not waived their congressional-authorization argument. The court made clear that it would reach the issue of a congressional bar to plaintiffs’ claims, notwithstanding any possible waiver: "Whoever was responsible for raising the issue in the first place, Plaintiffs’ claim is barred because Congress has barred it," the court wrote. (J.A. 240.) "This Court will not override Congress’ express authorization for the challenged practice." (J.A. 240.) In making these statements, the trial court effectively declared that—whether or not the defendants had made a knowing and voluntary waiver—it was appropriate to reach the merits of the congressional-authorization issue to correct a clear error. Thus, the district court’s decision to reach the issue was based on both the lack of a knowing waiver and also the need to reach the issue in order to correct a clear error or avoid a manifest injustice. Plaintiffs’ argument that this Court should 56 remand the matter to the district court to have it exercise its discretion applying that standard accordingly is without merit. C. In Any Event, This Court Has Discretion to Reach the Congressional-Authorization Issue Regardless of Any Arguable Error in the District Court’s Analysis. Finally, this Court possesses its own authority to address legal arguments raised for the first time on appeal—and that authority extends to arguments allegedly waived but nonetheless treated at length in a district court decision, especially where, as here, no fact-finding is required. See, e.g., Mazzei v. Money Store, 829 F.3d 260, 266 n.5 (2d Cir. 2016), cert. denied, 137 S. Ct. 1332 (2017). This case, in which application of a waiver doctrine could "imminently expose[] the State to massive damages claims" (J.A. 242), is an excellent candidate for the exercise of such discretion. 57 CONCLUSION For all of these reasons, the judgments should be affirmed. Dated: New York, NY September 25, 2017 Respectfully submitted, ERIC T. SCHNEIDERMAN Attorney General State of New York Attorney for State Appellees By:./s/Andrew W. Amend. ANDREW W. AMEND Senior Assistant Solicitor General 120 Broadway, 25th Floor New York, NY 10271 BARBARA D. UNDERWOOD (212) 416-8022 Solicitor General STEVEN C. WU Deputy Solicitor General ANDREW W. AMEND Senior Assistant Solicitor General of Counsel 58 CERTIFICATE OF COMPLIANCE Pursuant to Rule 32(a)(7)(C) of the Federal Rules of Appellate Procedure, Oren L. Zeve, an employee in the Office of the Attorney General of the State of New York, hereby certifies that according to the word count feature of the word processing program used to prepare this brief, the brief contains 11,131 words and complies with the type-volume limitations of Rule 32(a)(7)(B)./s/Oren L. Zeve.

MOTION, to extend time, on behalf of Appellant American Bus Association, American Trucking Associations, Inc., DATTCO, Inc., Lightning Express Delivery Service Inc., Starr Transit Co., Inc., Wadhams Enterprises, Inc. and Ward Transport & Logistics Corp. in 17-737, Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-873, FILED. Service date 09/26/2017 by CM/ECF. [2134005] [17-737, 17-873] [Entered: 09/26/2017 05:17 PM]

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT Thurgood Marshall U.S. Courthouse 40 Foley Square, New York, NY 10007 Telephone: 212-857-8500 MOTION INFORMATION STATEMENT 17-737, 17-873 Docket Number(s): ________________________________________ _______________Caption [use short title]_____________________ extension of time to file reply brief Motion for: ______________________________________________ ________________________________________________________ ________________________________________________________ Set forth below precise, complete statement of relief sought: Extension of time in which to file reply brief to and including ________________________________________________________ American Trucking Associations, Inc., et al. v. N.Y. State Thruway Auth., et al. November 7, 2017. ________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________ ________________________________________________________ N.Y. State Thruway Auth., et al. American Trucking Associations, Inc. et al. OPPOSING PARTY:____________________________________________ MOVING PARTY:_______________________________________ ✔ ___Plaintiff ___Defendant ✔ ___Appellant/Petitioner ___Appellee/Respondent Evan M. Tager MOVING ATTORNEY:___________________________________ Andrew W. Amend OPPOSING ATTORNEY:________________________________________ [name of attorney, with firm, address, phone number and e-mail] Mayer Brown LLP ________________________________________________________ Office of the Attorney General _______________________________________________________________ 1999 K Street NW, Washington, DC 20006 ________________________________________________________ 120 Broadway, New York, NY 10271 _______________________________________________________________ (202) 263-3000; etager@mayerbrown.com ________________________________________________________ (212) 416-8022; Andrew.Amend@ag.ny.gov _______________________________________________________________ Southern District of New York (McMahon, C.J.) Court-Judge/Agency appealed from: _________________________________________________________________________________________ Please check appropriate boxes: FOR EMERGENCY MOTIONS, MOTIONS FOR STAYS AND INJUCTIONS PENDING APPEAL: Has movant notified opposing counsel (required by Local Rule 27.1): Has this request for relief been made below? ___Yes ___No ✔ ___Yes ___No (explain):__________________________ Has this relief been previously sought in this court? ___Yes ___No _______________________________________________ Requested return date and explanation of emergency: ________________ _____________________________________________________________ Opposing counsel’s position on motion: _____________________________________________________________ ✔ ___Unopposed ___Opposed ___Don’t Know _____________________________________________________________ Does opposing counsel intend to file a response: _____________________________________________________________ ✔ ___Yes ___No ___Don’t Know Is oral argument on motion requested? ✔ (requests for oral argument will not necessarily be granted) ___Yes ___No Has argument date of appeal been set? ✔ ___ Yes ___No If yes, enter date:_______________________________________________________ Signature of Moving Attorney: s/Evan M. Tager _________________________________ 9/26/2017 Date:__________________ ✔ Service by: ___CM/ECF ___Other [Attach proof of service] Form T F T-1080 1080 ((rev.12-13) 12 13) 17-737 (L) (consolidated with 17-873) United States Court of Appeals for the Second Circuit ______________________________ AMERICAN TRUCKING ASSOCIATIONS, INC., WADHAMS ENTERPRISES, INC., LIGHTNING EXPRESS DELIVERY SERVICE INC., WARD TRANSPORT & LOGISTICS CORP., on behalf of themselves and all others similarly situated, AMERICAN BUS ASSOCIATION, DATTCO, INC., STARR TRANSIT CO., INC., on behalf of themselves all others similarly situated, Plaintiffs-Appellants, (caption continued on inside cover) ______________________________ On appeal from final judgments of the United States District Court for the Southern District of New York, Case Nos. 1:13-cv-08123 and 1:17-cv-00782, Hon. Colleen McMahon ______________________________ PLAINTIFFS-APPELLANTS’ MOTION FOR AN EXTENSION OF TIME TO FILE REPLY BRIEF ______________________________ RICHARD PIANKA CHARLES A. ROTHFELD ATA Litigation Center EVAN M. TAGER 950 North Glebe Rd MATTHEW A. WARING Arlington, VA 22203 Mayer Brown LLP (703) 838-1889 1999 K Street NW Washington, DC 20006 (202) 263-3000 etager@mayerbrown.com Counsel for Plaintiffs-Appellants ______________________________ – v. – NEW YORK STATE THRUWAY AUTHORITY, NEW YORK STATE CANAL CORPORA-TION, THOMAS J. MADISON, JR., in his official capacity as Executive Director of the New York State Thruway Authority, HOWARD MILSTEIN, in his official ca-pacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, DONNA J. LUH, in her official capacity as Vice-Chair of New York State Thruway Authority/Canal Corporation Boards of Directors, E. VIRGIL CONWAY, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, RICHARD N. SIMBERG, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, BRANDON R. SALL, in their official capacities as members of the New York State Thruway Au-thority/Canal Corporation Board of Directors, J. RICE DONALD, JR., in their official capacities as members of the New York State Thruway Authori-ty/Canal Corporation Board of Directors, JOSE HOLGUIN-VERAS, in their offi-cial capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, BILL FINCH, in his official capacity as Acting Executive Director of the New York State Thruway Authority, JOANNE M. MAHONEY, in her official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, ROBERT L. MEGNA, in his official capacity as a member of the New York State Thruway Authori-ty/Canal Corporation Boards of Directors, STEPHEN M. SALAND, in his official capacity as a member of the New York State Thruway Authority/Canal Cor-poration Boards of Directors, Defendants-Appellees. ______________________________ Pursuant to Fed. R. App. P. 27 and Local Rule 27.1, plaintiffs-appellants respectfully move for a four-week extension of time in which to file their reply brief on the merits in this case, to and including November 7, 2017. 1. Plaintiffs filed their opening brief on July 5, 2017. See ECF No. 52. Defendants-appellees filed their answering brief on September 26, 2017. See ECF No. 61. Plaintiffs’ reply brief is currently due on October 10, 2017. See Local Rule 31.2(a)(2). 2. The two weeks currently allotted for filing the reply brief will not afford plaintiffs adequate time to respond to the arguments in defend-ants’ brief. That brief relies upon numerous materials that defendants did not cite when the parties briefed the issues presented here before the dis-trict court, and plaintiffs require additional time to review these materials and identify any additional materials necessary to respond to them. A thorough review of defendants’ new arguments by plaintiffs could be of material assistance to the Court in its consideration of the case. 3. Plaintiffs’ briefing will also be complicated by the fact that the reply brief must be reviewed and approved by counsel for two different sets of plaintiffs (Richard Pianka for the trucking industry plaintiffs in No. 17-737 and Richard Schweitzer for the bus industry plaintiffs in No. 17-1 873). Two weeks is not sufficient to review the new materials cited by de-fendants, prepare a complete draft of a reply brief, and then receive and incorporate comments from Messrs. Pianka and Schweitzer. 4. Finally, the undersigned counsel for plaintiffs at Mayer Brown LLP have several personal and professional commitments over the next two weeks. In addition to the Yom Kippur holiday, which some counsel will be observing, counsel have the following conflicting commitments: (i) a complaint to be filed later this week and a preliminary injunction motion to be filed the week of October 2 in the United States District Court for the Northern District of Texas; a reply brief in First Advantage LNS, Inc. et al. v. LexisNexis Risk Solutions, Inc., No. 653812/15 (N.Y. App. Div.), due Oc-tober 2, 2017; a reply brief in support of the motion to dismiss in Authenticom, Inc. v. CDK Global, LLC et al., No. 17-cv-318-jdp (W.D. Wis.), due October 6, 2017; an opening brief in Doe v. Heritage Academy, No. 17-16703 (9th Cir.), due October 17, 2017; and two petitions for writs of certiorari due in the United States Supreme Court in early November, in Murco Wall Products, Inc. v. Galier, and Ritz-Carlton Development Co., v. Narayan. 5. Plaintiffs have not previously moved for similar relief. 2 6. Counsel for plaintiffs contacted defendants’ counsel regarding their position on this motion. Defendants declined to take a position on the motion at this time and did not indicate whether they plan to file a re-sponse. CONCLUSION The time for filing plaintiffs-appellants’ reply brief should be extend-ed to and including November 7, 2017. 3 Respectfully submitted,/s/Evan M. Tager CHARLES A. ROTHFELD EVAN M. TAGER MATTHEW A. WARING Mayer Brown LLP 1999 K Street NW Washington, DC 20006 (202) 263-3000 etager@mayerbrown.com RICHARD PIANKA ATA Litigation Center 950 North Glebe Rd Arlington, VA 22203 (703) 838-1889 Counsel for Plaintiffs-Appellants Dated: September 26, 2017 CERTIFICATE OF COMPLIANCE Pursuant to Federal Rule of Appellate Procedure 32(g), the under-signed counsel for plaintiffs-appellants certifies that this motion: (i) complies with the type-volume limitation of Rule 27(d)(2)(A) because it contains 484 words, including footnotes and excluding the parts of the brief exempted by Rule 32(f); and (ii) complies with the typeface requirements of Rule 32(a)(5) and the type style requirements of Rule 32(a)(6) because it has been prepared using Microsoft Office Word 2007 and is set in Century Schoolbook font in a size equivalent to 14 points or larger. Dated: September 26, 2017/s/Evan M. Tager CERTIFICATE OF SERVICE I hereby certify that that on September 26, 2017, I electronically filed the foregoing motion with the Clerk of the Court using the appellate CM/ECF system. I further certify that all participants in this case are reg-istered CM/ECF users and that service will be accomplished via CM/ECF. Dated: September 26, 2017/s/Evan M. Tager

MOTION ORDER, granting motion to extend time [{{62}}] filed by Appellant American Trucking Associations, Inc., Wadhams Enterprises, Inc., Lightning Express Delivery Service Inc., Ward Transport & Logistics Corp., American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc., Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc., FILED. [2136199][68] [17-737, 17-873] [Entered: 09/29/2017 09:52 AM]

Case 17-737, Document 67, 09/29/2017, 2136192, Page1 of 1 UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT At a Stated Term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of September, two thousand seventeen. Before: Christopher F. Droney, Circuit Judge. ________________________________ American Trucking Associations, Inc., et al., ORDER Plaintiffs-Appellants, Docket Nos. 17-737(L), v. 17-873(Con.) New York State Thruway Authority, et al., Defendants-Appellees. ________________________________ Appellants move for an extension of time to file a reply brief until November 7, 2017. IT IS HEREBY ORDERED that the motion is GRANTED. For the Court: Catherine O’Hagan Wolfe, Clerk of Court

ORAL ARGUMENT STATEMENT LR 34.1 (a), on behalf of filer Attorney Mr. Evan Mark Tager, Esq. for Appellant American Bus Association, American Trucking Associations, Inc., DATTCO, Inc., Lightning Express Delivery Service Inc., Starr Transit Co., Inc., Wadhams Enterprises, Inc. and Ward Transport & Logistics Corp. in 17-737, Attorney Mr. Evan Mark Tager, Esq. for Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-873, FILED. Service date 10/09/2017 by CM/ECF. [2142843] [17-737, 17-873] [Entered: 10/09/2017 11:40 AM]

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ORAL ARGUMENT STATEMENT (Local Rule 34.1(a)) TO REQUEST ORAL ARGUMENT, FILL OUT THIS FORM AND FILE IT WITH THE CLERK WITHIN 14 DAYS AFTER THE FILING OF THE LAST APPELLEE BRIEF. IF THIS FORM IS NOT TIMELY FILED, YOU WILL NOT BE PERMITTED TO ARGUE IN PERSON. Short Title of Case: American Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth. Docket No.: 17-737, 17-873 Name of Party: American Trucking Ass'ns, Inc., et al. Status of Party (e.g., appellant, cross-appellee, etc.): Appellants Check one of the three options below: ✔ I want oral argument. An attorney whose preference depends on whether other attorneys will argue should consider conferring before I want oral argument only if requesting argument. After the appeal has been at least one other party does. scheduled for oral argument, a motion by counsel to forgo oral argument, even on consent, may be denied. I do not want oral argument. If no party wants oral argument, the case will be decided on the basis of the written briefs. If you want oral argument, you must appear in Court on the date set by the Court for oral argument. The Court may determ ine to decide a case without oral argument even if the parties request it. If you want oral argument, state the name of the person who will argue: Name: Evan M. Tager (An attorney must be admitted to practice before the Court in accordance with Local Rule 46.1.) If you want oral argument, list any dates (including religious holidays), that fall in the interval from 6 to weeks after the due date of this form, that the person who will argue is not available to appear in Court: November 21-22, 2017 $1<21(:+2:$176 72 $5*8(0867 83'$7(7+(&2857,1:5,7,1* 2) $1< &+$1*(,1 $9$,/$%,/,7< 7+(&2857 0$< &216,'(5 $)$,/85(72 83'$7($%287 $9$,/$%,/,7<:+(1 '(&,',1* $ 027,21 72 3267321($ 6(7 $5*80(17 '$7(. Filed by: Print Name: Evan M. Tager Date: 10/9/2017 Signature: s/Evan M. Tager 5HYLVHG 'HFHPEHU

ORAL ARGUMENT STATEMENT LR 34.1 (a), on behalf of filer Attorney Andrew W. Amend for Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg in 17-737, Attorney Andrew W. Amend for Appellee New York State Thruway Authority, New York State Canal Corporation, Bill Finch, Joanne M. Mahoney, Donna J. Luh, Richard N. Simberg, J. Donald Rice, Jr., Jose Holguin-Veras, Robert L. Megna and Stephen M. Saland in 17-873, FILED. Service date 10/10/2017 by CM/ECF. [2143450] [17-737, 17-873] [Entered: 10/10/2017 01:31 PM]

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ORAL ARGUMENT STATEMENT (Local Rule 34.1(a)) TO REQUEST ORAL ARGUMENT, FILL OUT THIS FORM AND FILE IT WITH THE CLERK WITHIN 14 DAYS AFTER THE FILING OF THE LAST APPELLEE BRIEF. IF THIS FORM IS NOT TIMELY FILED, YOU WILL NOT BE PERMITTED TO ARGUE IN PERSON. Short Title of Case: American Trucking Ass'ns v. N.Y. State Thruway Authority Docket No.: 17-737(L) Name of Party: N.Y. State Thruway Authority et al. Status of Party (e.g., appellant, cross-appellee, etc.): Defendants-Appellees Check one of the three options below: ✔ I want oral argument. An attorney whose preference depends on whether other attorneys will argue should consider conferring before I want oral argument only if requesting argument. After the appeal has been at least one other party does. scheduled for oral argument, a motion by counsel to forgo oral argument, even on consent, may be denied. I do not want oral argument. If no party wants oral argument, the case will be decided on the basis of the written briefs. If you want oral argument, you must appear in Court on the date set by the Court for oral argument. The Court may determ ine to decide a case without oral argument even if the parties request it. If you want oral argument, state the name of the person who will argue: Name: Andrew W. Amend (An attorney must be admitted to practice before the Court in accordance with Local Rule 46.1.) If you want oral argument, list any dates (including religious holidays), that fall in the interval from 6 to weeks after the due date of this form, that the person who will argue is not available to appear in Court: November 27-28, 2017; December 14, 2017; December 26, 2017-January 10, 2018 $1<21(:+2:$176 72 $5*8(0867 83'$7(7+(&2857,1:5,7,1* 2) $1< &+$1*(,1 $9$,/$%,/,7< 7+(&2857 0$< &216,'(5 $)$,/85(72 83'$7($%287 $9$,/$%,/,7<:+(1 '(&,',1* $ 027,21 72 3267321($ 6(7 $5*80(17 '$7(. Filed by: Print Name: Andrew W. Amend Date: 10/9/17 Signature:/s/Andrew W. Amend 5HYLVHG 'HFHPEHU

REPLY BRIEF, on behalf of Appellant American Trucking Associations, Inc., Wadhams Enterprises, Inc., Lightning Express Delivery Service Inc., Ward Transport & Logistics Corp., American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-737, Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-873, FILED. Service date 11/07/2017 by CM/ECF. [2167051] [17-737, 17-873] [Entered: 11/07/2017 05:07 PM]

17-737 (L) (consolidated with 17-873) United States Court of Appeals for the Second Circuit ______________________________ AMERICAN TRUCKING ASSOCIATIONS, INC., WADHAMS ENTERPRISES, INC., LIGHTNING EXPRESS DELIVERY SERVICE INC., WARD TRANSPORT & LOGISTICS CORP., on behalf of themselves and all others similarly situated, AMERICAN BUS ASSOCIATION, DATTCO, INC., STARR TRANSIT CO., INC., on behalf of themselves all others similarly situated, Plaintiffs-Appellants, – v. – NEW YORK STATE THRUWAY AUTHORITY, Defendants-Appellees. (caption continued on inside cover) ______________________________ On appeal from final judgments of the United States District Court for the Southern District of New York, Case Nos. 1:13-cv-08123 and 1:17-cv-00782, Hon. Colleen McMahon ______________________________ REPLY BRIEF FOR AMERICAN TRUCKING ASSOCIATIONS, INC., WADHAMS ENTERPRISES, INC., LIGHTNING EXPRESS DELIVERY SERVICE INC., WARD TRANSPORT & LOGISTICS CORP., AMERICAN BUS ASSOCIATION, DATTCO, INC., AND STARR TRANSIT CO., INC. ______________________________ RICHARD PIANKA CHARLES A. ROTHFELD ATA Litigation Center EVAN M. TAGER 950 North Glebe Rd MATTHEW A. WARING Arlington, VA 22203 Mayer Brown LLP (703) 838-1889 1999 K Street NW Washington, DC 20006 (202) 263-3000 etager@mayerbrown.com Counsel for Plaintiffs-Appellants NEW YORK STATE CANAL CORPORATION, THOMAS J. MADISON, JR., in his offi-cial capacity as Executive Director of the New York State Thruway Authori-ty, HOWARD MILSTEIN, in his official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, DONNA J. LUH, in her official capacity as Vice-Chair of New York State Thruway Authori-ty/Canal Corporation Boards of Directors, E. VIRGIL CONWAY, in their official capacities as members of the New York State Thruway Authority/Canal Cor-poration Board of Directors, RICHARD N. SIMBERG, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, BRANDON R. SALL, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Direc-tors, J. RICE DONALD, JR., in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, JOSE HOLGUIN-VERAS, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, BILL FINCH, in his official capacity as Acting Executive Director of the New York State Thruway Authority, JOANNE M. MAHONEY, in her official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Direc-tors, ROBERT L. MEGNA, in his official capacity as a member of the New York State Thruway Authority/Canal Corporation Boards of Directors, STEPHEN M. SALAND, in his official capacity as a member of the New York State Thruway Authority/Canal Corporation Boards of Directors, Defendants-Appellees. ______________________________ TABLE OF CONTENTS Table of Authorities................................................................... iii Argument..................................................................................... 1 I. ISTEA Does Not Satisfy The Requirement Of An "Unmistakably Clear" Congressional Intent "To Alter The Limits Of State Power Otherwise Imposed By The Commerce Clause.".................................... 1 A. Defendants Disregard The Controlling Constitutional Standard................................................ 2 B. Section 1012(e) Does Not "Unmistakably" Authorize Departure From Dormant Commerce Clause Limits............................................... 6 1. The statutory language does not authorize departure from Commerce Clause limits............... 8 a. Both readings depart from ordinary usage and are inconsistent with the statutory context............................................. 9 b. Under both of defendants’ readings, Congress effected a radical, unacknowledged change in federal highway policy............................................... 14 c. Under Granholm, defendants’ alternative readings of ISTEA are not "unmistakably clear."............................. 16 2. The legislative history of Section 1012(e) confirms that Congress did not lift dormant Commerce Clause restrictions............... 20 a. The evolution of the statutory language shows that Congress did not mean to establish limitless tolling authority............................................ 20 b. The snippets extracted by defendants from extra-congressional statements do not establish the requisite "unmistakably clear" intent to i displace the strictures of the Commerce Clause.......................................... 21 II. At Minimum, ATA Must Be Remanded For Application Of The Correct Waiver Standard.................... 28 Conclusion.................................................................................. 32 ii TABLE OF AUTHORITIES Page(s) Cases Allianz Ins. Co. v. Lerner, 416 F.3d 109 (2d Cir. 2005)...................... 31 Am. Trucking Ass’ns, Inc. v. Scheiner, 483 U.S. 266 (1987)........................................................................... 4 Bogle-Assegai v. Connecticut, 470 F.3d 498 (2d Cir. 2006)................ 31 Evansville-Vandeburgh Airport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707 (1972)......................................... passim Feldnav, Ltd. v. Chester, 547 F.3d 607 (6th Cir. 2008)...................... 19 Granholm v. Heald, 544 U.S. 460 (2005).................................... passim H.P. Hood & Sons, Inc. v. DuMond, 336 U.S. 525 (1949).................... 4 Holzsager v. Valley Hospital, 646 F.2d 792 (2d Cir. 1981)................ 29 Maine v. Taylor, 477 U.S. 131 (1986)........................................... 19, 20 Mazzei v. Money Store, 829 F.3d 260 (2d Cir. 2016).......................... 31 Merrion v. Jicarilla Apache Tribe, 455 U.S. 130 (1982).............. 18, 19 Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736 (2014)....................................................................... 10 National Helicopter Corp. of America v. City of New York, 137 F.3d 81 (2d Cir. 1998).............................................................. 19 New England Power Co. v. New Hampshire, 455 U.S. 331 (1982)......................................................................... 26 Shamrock Farms Co. v. Veneman, 146 F.3d 1177 (9th Cir. 1998)......................................................... 11 South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82 (1984)..................................................................... 2, 3, 5 iii TABLE OF AUTHORITIES (continued) Page(s) United States v. Brennan, 650 F.3d 65 (2d Cir. 2011)....................... 30 Wyoming v. Oklahoma, 502 U.S. 437 (1992).................................... 2, 4 Statutes ISTEA § 1012(a)............................................................................ 14, 15 ISTEA § 1012(e)........................................................................... passim Other Authorities Fed. Highway Admin., Office of Highway Policy Information, Non-Interstate System Toll Roads in the United States (Apr. 7, 2016), goo.gl/z4GQvB................................. 15 H.R. 2950, § 120(d) (as passed the House Oct. 28, 1991)................... 27 S. Rep. No. 102-71 (1991).................................................................... 12 Tolls on Thruway May Not Disappear, State Will Keep Fees and U.S. Aid if Congress Passes Pending Bill, Buffalo News, Feb. 22, 1991 (available in Westlaw, 1991 WLNR 956953)....................................................................... 23 iv ARGUMENT I. ISTEA DOES NOT SATISFY THE REQUIREMENT OF AN "UN-MISTAKABLY CLEAR" CONGRESSIONAL INTENT "TO ALTER THE LIMITS OF STATE POWER OTHERWISE IMPOSED BY THE COMMERCE CLAUSE." Prior to enactment of ISTEA, the Thruway Authority could—and did—impose tolls that comported with the Evansville-Vanderburgh Com-merce Clause standard, subject to a requirement that it repay federal funds if it wanted to continue tolling after paying off its highway construc-tion debt. In Section 1012(e) of ISTEA, Congress changed the law by allow-ing for "the continuation of tolls without repayment of Federal funds." The question here is whether, in permitting the "continuation" of tolls that had comported with Evansville-Vanderburgh, Congress actually meant to free the Thruway Authority from complying with that constitutional limit. Defendants’ answer to this question is an exercise in misdirection. They focus on snippets of the statutory language torn from its broader con-text. And their recitation of the legislative history, which comprises mostly press reports and other third-party extra-congressional statements, offers no indication that any member of Congress—much less Congress as a whole—meant to allow for the collection of tolls in amounts that would fail the Evansville-Vanderburgh test. Accordingly, defendants have not demonstrated, with the requisite unmistakable and unambiguous clarity, 1 that Congress affirmatively intended to free them from the strictures of the Commerce Clause. A. Defendants Disregard The Controlling Constitutional Standard. In their brief, defendants are dismissive of the governing constitu-tional standard. But strict application of that standard is essential, and resolves this case. The Supreme Court has held repeatedly that Congress will not be deemed to have lifted the strictures of the dormant Commerce Clause unless its intent to do so was "unmistakably clear" (South-Central Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 91 (1984)) and "unambiguous" (Wyoming v. Oklahoma, 502 U.S. 437, 458 (1992)). Any doubt on that score is fatal to a claim that Congress displaced Commerce Clause require-ments: the "burden of demonstrating a clear and unambiguous intent on behalf of Congress" rests on those seeking to displace the dormant Com-merce Clause (id. at 458-59), and that burden is not satisfied when the statutory text "readily can be construed" to preserve Commerce Clause limits (Granholm v. Heald, 544 U.S. 460, 482 (2005)). This clear-statement requirement ensures that any congressional decision to lift Commerce Clause limits is a "collective one," "reduc[ing] significantly the risk that unrepresented interests will be adversely affect-ed by restraints on commerce." Wunnicke, 467 U.S. at 92. Under this 2 standard, an ambiguous provision that was slipped into legislation by a single member of Congress and that might not have been considered and approved by representatives from adversely affected states is not sufficient to immunize state conduct from Commerce Clause scrutiny. In saying this, we do not contend, as defendants would have it, that "Congress’s legislation must be read (however implausibly) to permit no greater burdens on interstate commerce than would be allowed in the ab-sence of congressional action" (Brief for Appellees ("Br.") 48) or that Con-gress must use "talismanic" words to lift dormant Commerce Clause re-strictions (see id. at 44).1 We do submit, however, that a court may find Congress to have lifted those restrictions only when the clear-statement requirement is satisfied. It is not enough to speculate that Congress could have had such an intent, or to show that the language used by Congress reasonably could be read to reflect such an intent; rather, Congress must "affirmatively contemplate otherwise invalid state legislation" (Wunnicke, 467 U.S. at 91) and "must manifest its unambiguous intent before a feder-1 In fact, however, as noted in our opening brief (at 29-30 & nn. 6, 7), in all the cases in which the Supreme Court found Congress to have dis-placed the dormant Commerce Clause, Congress either expressly lifted Commerce Clause restrictions or was itself responsible for the limitation on interstate commerce. 3 al statute will be read to permit or to approve … violation of the Com-merce Clause." Wyoming, 502 U.S. at 458. Although defendants’ position regarding this test is not entirely clear, they seem to suggest that the usual standard does not apply, or maybe does not apply with its ordinary force, when the dormant Com-merce Clause violation is something other than facial discrimination against interstate commerce. See Br. 46-47. If that is defendants’ position, it is wrong. As explained in our opening brief (at 13-14 n.3), the Evans-ville-Vanderburgh principle serves some of the same purposes as the Commerce Clause anti-discrimination requirement, precluding States from burdening interstate commerce or imposing fees that discriminate in practice against out-of-staters.2 There accordingly is every reason to re-quire a "clear expression of approval by Congress [to] ensure[] that there 2 Specifically, a user fee that exceeds some fair approximation of use will be less valuable to an interstate trucking or bus company than to one that operates only in intra-state commerce, and therefore necessarily will discriminate against interstate commerce in its practical operation. See Opening Br. 13-14 n.3 (quoting Am. Trucking Ass’ns, Inc. v. Scheiner, 483 U.S. 266, 291-92 (1987)). Such levies also allow States to export their tax burden to out-of-state payers who are operating in interstate commerce, thus fomenting the very interstate tension and disagreement that the Commerce Clause was intended to combat. See, e.g., H.P. Hood & Sons, Inc. v. DuMond, 336 U.S. 525, 533-34 (1949). Defendants make no re-sponse to this point. 4 is, in fact, … a collective [congressional] decision" to authorize departure from the Evansville-Vanderburgh standard, thus avoiding "the danger that one State will be in a position to exploit others." Wunnicke, 467 U.S. at 92. This principle applies fully in this case, in which defendants have sought to finance a local recreational destination disproportionately on the backs of interstate travelers. Defendants also declare that "there is no dispute here that Congress spoke directly to the very activity plaintiffs allege to constitute a dormant commerce violation: the use of highway tolls to support non-highway pro-jects." Br. 47. On that, we agree.3 But the controlling question here con-cerns the meaning of what Congress said about the permissible amount and use of those tolls. For the reasons explained in our opening brief and that we address further below, the statutory language focuses on (1) lifting 3 That said, we do disagree with defendants’ "gotcha" assertion that "plaintiffs now concede [that] Congress expressly authorized at least some use of highway toll revenues for the Canal System—the very activity that, under plaintiffs’ dormant commerce clause claim, would make the tolls ex-cessive and not based on a fair approximation of plaintiffs’ use of the Thruway" (Br. 44). As we explained in our opening brief (at 36-37), the Evansville-Vanderburgh test requires only a "fair, if imperfect, approxima-tion" of use of the tolled facility (405 U.S. at 717) in recognition that there sometimes will be incidental over-collections. Section 1012(e) identifies the permissible uses of those over-collections—which by definition do not vio-late the dormant Commerce Clause—to include spending on the Canal System. 5 the requirement that tolling cease altogether once enough tolls had been collected to pay off any outstanding bonds and (2) addressing the permis-sible use of incidental toll over-collections. It does not—and certainly does not "unmistakably" and "unambiguously"—lift dormant Commerce Clause limits so as to allow the imposition of highway tolls in unlimited amounts as a means of raising general revenues. B. Section 1012(e) Does Not "Unmistakably" Authorize De-parture From Dormant Commerce Clause Limits. In addressing the question whether Congress unambiguously au-thorized defendants to impose tolls at levels that exceed those permitted by Evansville-Vanderburgh, it is helpful to keep in mind the context in which this question arises. Prior to ISTEA, defendants were subject to two sorts of federal restrictions on the imposition of tolls. Defendants acknowledge that they were subject to the limits imposed by the dormant Commerce Clause. And defendants also were subject to a federal statutory bar, under which they would be required to repay federal funds after pay-ing off their construction bonds. There is no doubt that Section 1012(e) was principally designed to lift the statutory limit on state tolling authori-ty. Defendants must show, however, that Congress also had the simulta-neous and secondary purpose of allowing them to disregard Commerce Clause limits. 6 As to that, it is undisputed that Congress made no mention of Com-merce Clause restrictions when considering ISTEA, either in the statutory text or in the legislative history. Defendants therefore must show that, notwithstanding the complete absence of evidence that Congress affirma-tively contemplated departure from the Commerce Clause standard, it nevertheless used legislative language that must be read to unambiguous-ly permit unrestricted tolling, or somehow conveyed in the legislative his-tory that it had an unmistakably clear intent to permit such tolling. They cannot do so. Defendants’ assertion that the plain text of Section 1012(e) favors their position simply assumes its conclusion, disregarding the ordinary usage of the statutory language and the context in which those terms are used; it is revealing, and surely no accident, that defendants present only isolated snippets of the statutory terms and nowhere quote the controlling language in full and in context. And their argument from legislative histo-ry relies almost entirely on a handful of statements made outside of Con-gress, for the most part by persons who were not members of Congress— and none of which indicate an intent by any member of Congress (much less Congress as a whole) to relieve States of the strictures of the Com-merce Clause. The Supreme Court has never held that speculation prem-7 ised on such indefinite materials is sufficient to justify a departure from the governing Commerce Clause requirements. 1. The statutory language does not authorize departure from Commerce Clause limits. Defendants’ central argument is that the "plain terms" of Section 1012(e) "directly and unambiguously" authorized them to impose the tolls at issue in this case. Br. 30; see id. at 1-2, 23-24, 34-35. But defendants of-fer no reasoned support for that contention, which ignores the ordinary meaning of the statutory terms, the context in which those terms appear, and the interpretive rules that govern in cases like this one. At the outset, defendants cannot be serious in asserting that the language of Section 1012(e) supports their position unambiguously— because defendants themselves offer two very different, and mutually in-consistent, readings of the statutory text. Defendants initially maintain that "there is no basis to read the word'continuance’ [in Section 1012(e)] as anything other than a grant of authority to continue collecting tolls of whatever amount." Br. 32 (emphasis added). Under such a reading, de-fendants could collect tolls literally without limit. But evidently recogniz-ing the implausibility of this claim, defendants also offer an alternative reading: that Section 1012(e) instead authorizes "the Thruway Authority to continue collecting the tolls it already had been collecting—tolls that 8 were calculated to generate substantial revenue for debt obligations the Thruway Authority would no longer have once its outstanding bonds were paid off." Br. 24. Presumably, this very different reading would allow de-fendants to collect not "whatever amount" they want, but instead just the same amount of gross toll revenue that they received prior to enactment of ISTEA.4 Necessarily, however, the statutory language cannot "unambigu-ously" support defendants’ position when defendants themselves offer two different interpretations of that language. In fact, both proffered readings are wrong, for several reasons. a. Both readings depart from ordinary usage and are inconsistent with the statutory con-text. The key elements of Section 1012(e) provide that (1) "[n]otwithstanding sections 119 and 123 of title 23, United States Code"—the statutory provisions that required repayment of federal funds if tolling continued after the elimination of highway debt—(2) "the Secre-4 Actually, however, it is not at all clear what defendants’ second in-terpretation means or how it would apply in practice. Does it mean that tolls may be calculated to pay fictional debt obligations that never would expire? Or does it instead mean that tolls could be set at 1991 levels, ad-justed (or not) for inflation? Would it matter if increased traffic on the Thruway means that a lower toll would produce the pre-ISTEA amount of revenue? It is impossible to tell—and that uncertainty itself shows that the congressional intent asserted by defendants is not "unmistakably clear." 9 tary [of Transportation] shall allow for the continuance of tolls without re-payment of Federal funds," (3) with collections from "such tolls … in excess of revenues needed for debt service and the actual costs of operation and maintenance" available for specified uses. JA 185. All of these terms point away from defendants’ reading; as we showed in our opening brief (at 32-37), the most natural understanding of Section 1012(e)’s language, proper-ly construed in context, is that highway authorities could continue to col-lect tolls similar in nature and purpose to pre-ISTEA levies, with limits imposed on the uses that could be made of toll collections that (as inevita-bly sometimes would occur) exceed the amounts necessary for highway maintenance. This is so for several reasons. First, Section 1012(e) authorizes the collection of tolls "[n]otwithstanding" specified statutory limits on state tolling authority. But Congress is presumed to have known when it enacted Section 1012(e) that pre-ISTEA state tolls also were constrained by the requirements of Evansville-Vanderburgh, under which toll collections could not be exces-sive in relation to the government benefit received by the toll-payers. See, e.g., Mississippi ex rel. Hood v. AU Optronics Corp., 134 S. Ct. 736, 742 (2014) ("[W]e presume that Congress is aware of existing law when it passes legislation.") (quotation marks omitted). Congress could have, but 10 did not, more broadly use the "notwithstanding" clause to lift all legal lim-its (including constitutional limits) on that authority—as it explicitly has done in other statutes. See, e.g., Shamrock Farms Co. v. Veneman, 146 F.3d 1177, 1180 (9th Cir. 1998) (federal statute providing that "[n]othing in this Act or any other provision of law shall be construed to preempt, prohibit, or otherwise limit" California’s authority to regulate milk solids relieved California of the strictures of the Commerce Clause because "by using the expression'any other provision of law’ in the context it did here, Congress demonstrated its intent to encompass all law, whether it be statutory law, common law, or constitutional law") (emphasis added). This failure strongly suggests that Congress did not mean to displace Com-merce Clause limits in Section 1012(e). Second, Section 1012(e)’s references to the "continuance of tolls," and to revenues collected from "such" tolls, cannot sensibly be understood to mean tolls collected in any amount, including amounts greatly exceed-ing any previously collected—the initial reading of the statutory language proposed by defendants. See Br. 34-36. As for defendants’ second reading (which would allow the collection of tolls in amounts necessary to repay already repaid debts), it is quite a stretch to construe the statute’s au-thorization of the "continuance of tolls" to refer to tolls that have novel and 11 unprecedented purposes that did not exist prior to ISTEA. The pre-ISTEA tolls that Congress allowed to "continue" had to satisfy Evansville-Vanderburgh, and by allowing the tolls to continue Congress did not— certainly, it did not unmistakably and necessarily—authorize defendants to collect tolls that would breach the constitutional limit. In fact, the evolution of Congress’s use of "continuance" shows that the term cannot have the meaning ascribed to it by defendants. As we ex-plained in our opening brief (at 44), "continuance" originally appeared in the version of ISTEA reported out of the Senate Committee on Environ-ment and Public Works. At that point, the legislation made no provision for the use of "excess" tolls; all it did was provide that, upon request, "the Secretary [of Transportation] shall allow for the continuance of tolls with-out repayment of Federal funds." It seems plain that the import of this language was simply to lift the statutory repayment obligation, and not to confer new tolling authority on the States. The Senate Report on the bill leaves no doubt on that point: It de-scribes the legislation as providing that "States that have signed agree-ments … relating to toll bridges, toll tunnels, and approaches to toll roads on the Interstate system are relieved of the requirements that these toll facilities become toll free upon collection of tolls sufficient to retire 12 the bonded indebtedness." S. Rep. No. 102-71, at 26 (1991) (emphasis add-ed). The express congressional intent thus was to lift the statutory re-payment obligation, not to confer upon the States vast new extra-constitutional powers. And if the term "continuation" as it originally ap-peared in the legislation was not an affirmative grant of tolling authority to the States that overrode Commerce Clause limits, the term cannot have acquired that meaning when Congress subsequently left the sentence con-taining "continuation" unchanged but added additional language imposing limits on the use of toll revenue. See Opening Br. 44-47. Third, defendants place particular emphasis on the statutory lan-guage providing that tolls "collected … in excess of revenues needed" for highway operation and construction (i.e., the uses permissible under Ev-ansville-Vanderburgh) "shall be available" for specified purposes. Br. 21, 29, 30. But this text actually cuts against them. It is a very odd choice of language if, as defendants maintain, Congress affirmatively meant to lift all limits on state tolling authority; one would expect a statute with such purposes to say simply that parties previously subject to the statutory toll-ing bar "shall be permitted to collect tolls" (perhaps with a limit on the permissible uses of those tolls). The "excess" formulation that Congress ac-tually used instead suggests, in contrast, that the contemplated permissi-13 ble purposes for the newly authorized tolls were those authorized under Evansville-Vanderburgh, with the acceptable uses of incidental over-collections—the "excess of revenues needed" for highway-related uses— specified by the statute. b. Under both of defendants’ readings, Congress effected a radical, unacknowledged change in federal highway policy. Defendants likewise are unable to refute our demonstration that our reading of Section 1012(e) best accords with the broader statutory text. Defendants concede that Section 1012(e) "largely parallel[s]" Section 1012(a), which governs all federally funded toll roads (Br. 11); we showed, and defendants do not disagree, that the operative language of the two provisions is materially identical. See Opening Br. 38-39. We also showed that defendants’ readings of this language therefore would contravene the "mousehole" canon of statutory construction by positing that Congress rad-ically changed long-standing federal policy regarding highway tolls— giving every state highway authority the ability to collect tolls that are unrelated to highway usage—without any public discussion or acknowl-edgment of that sea change in policy. See id. at 39. Defendants offer two responses to this point, but both are wrong. 14 First, defendants contend that Section 1012(a) offers unlimited toll-ing authorization to only a "relatively small group of state entities" be-cause it affects only highway authorities that were parties to tripartite agreements prior to ISTEA or that receive federal funds for new highways that are not part of the Interstate System. Br. 39-40. But that assertion cannot disguise the significance of the policy change that defendants’ read-ing would effect. Even if highways subject to Section 1012(a) could not be added to the federal interstate system at the time ISTEA was enacted, many state highway authorities were parties to tripartite agreements pre-ISTEA and many state authorities operate toll facilities that are not part of the interstate system.5 All of these are subject to Section 1012(a). De-fendants implicitly concede that, under their reading of Section 1012(e), all of these entities are free to impose tolls in amounts that are unconstrained by constitutional limits—meaning that, under their reading, ISTEA effect-ed a radical (but unacknowledged) change in federal policy. 5 At least 22 states operate toll roads that fall into this category, in-cluding major thoroughfares such as the Florida Turnpike, New Jersey’s Garden State Parkway, and the Sam Houston Tollway in Houston, Texas, none of which are part of the Interstate System. Fed. Highway Admin., Of-fice of Highway Policy Information, Non-Interstate System Toll Roads in the United States (Apr. 7, 2016), goo.gl/z4GQvB. 15 Second, defendants err in contending that the dramatic change in federal policy they postulate was not enacted in a "‘backhanded’" way be-cause ISTEA "sought to foster a'national intermodal transportation sys-tem’ consisting of'all forms of transportation in a uniform, interconnected manner.’" Br. 40 (citations omitted). As noted in our opening brief (at 43 n.9), it is doubtless true that ISTEA was a big statute. But that does not explain why Congress would change a particular long-standing federal policy—that precluding the use of highway tolls for general revenue-raising purposes—without any public discussion or acknowledgment. There is, however, an obvious explanation for Congress’s failure to articu-late this change in policy: It had no intent to effectuate such a dramatic departure. c. Under Granholm, defendants’ alternative readings of ISTEA are not "unmistakably clear." For all of these reasons, we submit that the plain language of Sec-tion 1012(e) does not authorize the use of Thruway toll revenue to pay for the Canal System. But even if we are wrong on that—that is, even if de-fendants have made a plausible case for one of their contrary readings— defendants still must lose. Plausibility is not enough for defendants to 16 prevail: They must show that the congressional intent to displace dormant Commerce Clause limits is "unmistakably clear." Here, it is not. The point is proved by the Supreme Court’s holding in Granholm. As explained in our opening brief (at 40-42), that case was, in its material re-spects, quite similar to this one: A state asserted that a federal statute, there the Webb-Kenyon Act, lifted Commerce Clause restrictions. Read lit-erally and in isolation, that Act did authorize the challenged state legisla-tion by prohibiting the interstate transportation of liquor received or pos-sessed "in violation of any law of [the receiving] State." 544 U.S. at 481. But the Supreme Court held that Webb-Kenyon did not displace the dormant Commerce Clause because the Act "expresses no clear congres-sional intent to depart" from Commerce Clause limitations and "readily can be construed" to authorize only those state laws that comport with Commerce Clause requirements. Id. at 482. Granholm thus strongly sup-ports our contention that, because Section 1012(e) also "expresses no clear congressional intent to depart" from Commerce Clause limitations and "readily can be construed" as authorizing only those state laws that com-port with Commerce Clause requirements, it must be so construed. Although defendants do not specifically address Granholm, they ap-parently mean to distinguish it on two grounds. Both are insubstantial. 17 First, defendants include Granholm in their list of decisions that address facial discrimination against interstate commerce. Br. 45 n.27. But this observation, although correct, is quite beside the point. The limi-tation on state authority recognized in Evansville-Vanderburgh, which governs here, is every bit as much a part of dormant Commerce Clause doctrine as is the limit on facial discrimination against interstate com-merce. See note 2, supra. Second, defendants list Granholm among those cases in which a taxing authority sought to defend its departure from Commerce Clause re-quirements by relying on "a generic savings clause in a federal statute." Br. 46 & n.28. But even accepting defendants’ dubious suggestion that there is a meaningful distinction between a "generic savings clause" and any other provision of federal law, their contention that Granholm in-volved a "generic savings clause" is simply wrong. The language of the Webb-Kenyon Act addressed in Granholm was the central provision of that Act, adopted advisedly and after close consideration by Congress. See Granholm, 544 U.S. at 481. It was no more a "generic savings clause" than is Section 1012(e). Accordingly, Granholm is controlling here. The various other decisions upon which defendants rely to support their contrary contention are inapposite. Merrion v. Jicarilla Apache 18 Tribe, 455 U.S. 130, 155-56 (1982) (cited at Br. 48-49), turned on the fact that the challenged tribal tax "need[ed] specific federal approval to take effect." Congress therefore had to specifically approve the particular chal-lenged levy, placing it in "a posture significantly different from a chal-lenged state tax." Id. Here, needless to say, Congress has not specifically approved the challenged state toll. Nor does National Helicopter Corp. of America v. City of New York, 137 F.3d 81 (2d Cir. 1998) (cited at Br. 49-50) support defendants’ cause. There, this Court—in a perfunctory two sentences—read the federal law at issue to "‘specifically authorize[]’" the challenged municipal rule. 137 F.3d at 92 (citation omitted). That holding—which predates, and therefore took no account of, Granholm—says nothing about whether the entirely differ-ent language of Section 1012(e) "specifically authorizes" excessive highway tolls. Feldnav, Ltd. v. Chester, 547 F.3d 607 (6th Cir. 2008) (cited at Br. 50) likewise is off-point. There, the Sixth Circuit held that the federal statute at issue lifted dormant Commerce Clause restrictions on the theo-ry that Congress "contemplated" and "encouraged" the challenged state ac-tion. Id. at 624. But here, for all the reasons discussed above, Congress has 19 not been shown to have "contemplated" or "encouraged" tolls that exceed the Evansville-Vanderburgh limits.6 2. The legislative history of Section 1012(e) confirms that Congress did not lift dormant Commerce Clause restrictions. Defendants’ discussion of Section 1012(e)’s legislative history gets them no further. Defendants take virtually no account of the actual indicia of congressional intent. Instead, they direct most of their attention to ex-tra-congressional materials—most of which they mischaracterize and none of which have any bearing on what Congress intended Section 1012(e) to accomplish. a. The evolution of the statutory language shows that Congress did not mean to estab-lish limitless tolling authority. We addressed the relevant legislative history in our opening brief (at 44-48), tracing the development of the language that ultimately was en-acted as Section 1012(e). As we showed, the language originated in a pro-vision that provided only for cancellation of the pre-ISTEA federal repay-6 In addition, the Sixth Circuit’s analysis is wrong. Precisely the same federal "encouragement" of state action upon which the Feldnav court re-lied was present in Maine v. Taylor, 477 U.S. 131 (1986). But the Supreme Court held this insufficient to override Commerce Clause strictures be-cause there was no "unambiguous statement of any congressional intent whatsoever'to alter the limits of state power otherwise imposed by the Commerce Clause.’" Id. at 139 (citation omitted). 20 ment obligation and made no reference to excess toll revenues at all; then was modified with the addition of a proviso establishing express limits on the permissible uses of excess toll revenues; and finally was modified fur-ther with the addition of the substantially similar language that was en-acted as Section 1012(e). As we explained, it is hardly likely that a provi-sion that began with no authorization to collect excess toll revenues and then was narrowed was nonetheless intended to enact an extraordinary and unprecedented expansion of state tolling authority. Defendants offer no response to this commonsense point. b. The snippets extracted by defendants from extra-congressional statements do not estab-lish the requisite "unmistakably clear" intent to displace the strictures of the Commerce Clause. Unable to identify anything in the actual legislative history of ISTEA suggesting that Congress intended to free state tolling authorities from the strictures of the Commerce Clause, defendants instead point to a handful of statements made by persons or entities outside Congress. They suggest that these scattered statements indicate that the speakers ex-pected post-ISTEA tolls to generate substantial excess revenue. For sever-al reasons, this analysis is wrong. 21 First, defendants mischaracterize the meaning or significance of most of the snippets upon which they rely. This is the complete list:  Defendants assert that "[c]ontemporaneous projections indi-cated that surplus [Thruway] toll revenues would be substan-tial—as high as $80 million a year" (Br. 12)—if tolls were to continue at pre-ISTEA levels after the Thruway Authority paid off its debt; defendants return several times to the purported projection of an $80 million annual surplus. See. Br. 15, 38. But these projections of a surplus originated with the Thruway Authority itself and appear in press reports that predated by more than a month the introduction of the amendment that ul-timately became Section 1012(e). JA 161-62. The reports con-tain no suggestion that any member of Congress was aware of the purported projections, let alone intended to authorize the collection of such amounts.  Defendants assert that "[f]ederal policymakers likewise ex-pressed their interest in ensuring that New York would be able to continue collecting tolls and to use such tolls for other transportation projects." Br. 12. But one of the two statements supporting this claim, made by then-Transportation Secretary 22 Samuel Skinner to the Chamber of Commerce in February 1991 (see id. at 12-13), long predates the introduction of the Senate bill that became ISTEA; Skinner likely was referring simply to the possibility of lifting the statutory repayment ob-ligation. The second statement, from congressional testimony by Skinner a week later, referred only to allowing the continu-ation of tolls on the Thruway and said nothing about the collec-tion or use of tolls for purposes other than highway mainte-nance. See Br. 13.7  Defendants invoke an April 1991 field hearing conducted by Senator Moynihan—and only Senator Moynihan—in Albany. 7 Defendants also cite a press account of a statement by Senator Moynihan responding to Secretary Skinner’s February 1991 testimony. Br. 13. But even assuming that statements reported only in a local newspaper were a valid basis for discerning the intent of Congress, this statement cuts against defendants’ position. Addressing Secretary Skinner’s testimo-ny that highway authorities would be allowed to continue tolling after highway debt had been repaid, Senator Moynihan is reported to have said that "he would press for language specific to New York." Tolls on Thruway May Not Disappear, State Will Keep Fees and U.S. Aid if Congress Passes Pending Bill, Buffalo News, Feb. 22, 1991, at A1 (available in Westlaw, 1991 WLNR 956953). This suggests only that Senator Moynihan would seek New York-specific language voiding the repayment obligation, the subject of the Skinner testimony; there is no reason to imagine that Sena-tor Moynihan instead had in mind a vast (but unexpressed) expansion of state tolling authority. 23 Br. 14-15. But as we discussed in our opening brief (at 49-50), Senator Moynihan’s passing references to the Canal System at this hearing were addressed to the Commissioner of the New York Transportation Department, not to Thruway officials; neither Senator Moynihan nor anyone else at the hearing sug-gested using Thruway tolls as a funding source for the Canal System; and the most relevant statement made at the hearing, by the chairman of the Thruway Authority, indicated that the Authority’s interest was only "‘in eliminating the requirement to reimburse the Federal Government if tolls remain on the Thruway.’" Opening Br. 50 (citation omitted). The chairman expressed no interest in using Thruway tolls to fund the Canal System. Defendants offer no response to our description of the field hearing.8 8 Defendants declare that, some weeks after the hearing, "it was pub-licly reported that one of the proposed uses of the Thruway Authority’s an-ticipated $80-million-a-year-toll-revenue surplus would be helping to fund the canals." Br. 14-15. This refers to a press report that the Thruway Au-thority Transition Advisory Council, considering the possibility of a toll surplus, was "looking at … ideas" for the use of such funds, including (among many others) the "suggestion[] that Thruway funds be used … to maintain the state Erie Canal system." JA 162. But there is no suggestion in the press report that any member of Congress was aware of these mus-24  Defendants point to an article appearing in the Baltimore Sun a month after the introduction of Amendment 321, which stat-ed that the bill "would allow the state [i.e., Maryland] to use proceeds from Fort McHenry Tunnel tolls to finance other transportation projects around the state, after the bond issue floated to pay for construction is paid off later in the decade." Br. 16. But although the story notes the observation of Mary-land transportation officials that about half of the estimated $40 million in Tunnel tolls collected each year pre-ISTEA was used for operations and maintenance, it offers no support for the supposition that any member of Congress intended to allow the intentional, continued collection of excess toll amounts, let alone that such collections could be used for purposes that would violate the dormant Commerce Clause. Second, even if accurately described, defendants’ list of newspaper stories and off-point comments would be wholly immaterial. The totality of this evidence consists of three brief press accounts mentioning toll author-ities’ self-interested projection of the possibility of toll surpluses; two ings, let alone intended to authorize the unlimited use of Thruway funds for such purposes. 25 statements by the Secretary of Transportation that long predated intro-duction of the governing statutory language and say nothing about the use of excess toll revenue; and a field hearing at which the use of excess toll revenues was not addressed at all. Indeed, aside from the field hearing attended by Senator Moynihan, defendants offer no evidence that any member of Congress was the origin of any of these statements, let alone any indication that they reflect Congress’s intent in enacting Section 1012(e). Again, the controlling question here is whether the statute and its drafting history reflect an "unmistakably clear" congressional intent to override the dormant Commerce Clause. The materials cited by defend-ants manifestly fail to satisfy that standard. Cf. New England Power Co. v. New Hampshire, 455 U.S. 331, 342 (1982) (discounting statement made by a single member of Congress because "[r]eliance on such isolated frag-ments of legislative history in divining the intent of Congress is an exer-cise fraught with hazards"). Third, defendants cite only one element of actual legislative history: a brief statement made by Senator Moynihan during Senate consideration of an amendment to ISTEA that predated the language that became Sec-tion 1012(e). Br. 16, 38, 42. He stated, in full: 26 In the spirit of our legislation, Senators SARBANES and MIKULSKI have asked if we can-not make possible the movement of toll receipts on and off the particular systems in such a way that the State, in this case Maryland, can optimize its transportation choices and provision thereof. And we very much want Maryland to do with Maryland money what Maryland thinks best. JA 216. Defendants read this brief statement to mean that Congress in-tended to allow highway authorities to collect tolls in limitless amounts (or, perhaps, to collect tolls in amounts that previously had been used to repay highway debt) and use those tolls for non-highway purposes. Br. 38. This vague comment, however, cannot support the weight that de-fendants place upon it. Even assuming that the statement is relevant to the amendment that became Section 1012(e)—notwithstanding that it re-fers neither to New York nor to the Thruway and contains no explanation of prospective statutory language at all—it does not remotely suggest what Congress ultimately had in mind in that not-yet-drafted provision. It says nothing at all about the amount of toll revenues that Maryland, or any State, would be authorized to collect. It is fully consistent with the under-standing that Senators Sarbanes and Mikulski had in mind the disposition of incidental toll over-collections.9 And Senator Moynihan is unlikely to 9 Although defendants ignore the genesis of Section 1012(e)’s special treatment of the Fort McHenry Tunnel, that reference originated in the 27 have described as "Maryland money" tolls extracted by Maryland from in-terstate travelers for the purpose of funding unrelated transportation pro-jects. His statement therefore surely does not evince the requisite "unmis-takably clear" congressional intent to override the dormant Commerce Clause. II. AT MINIMUM, ATA MUST BE REMANDED FOR APPLICATION OF THE CORRECT WAIVER STANDARD. In response to our argument that, at minimum, a remand is warranted in ATA because the district court applied an erroneous standard for waiver, defendants argue first that their congressional-authorization defense was preserved by their answer and, in the alternative, that their motion to dismiss was properly construed as a House. Under the heading "Voiding of Certain Agreements for Fort McHenry Tunnel," this bill provided that the Secretary of Transportation was to "permit the continuation of tolls without repayment of federal funds and shall provide that all toll revenues received from operation of the tun-nel will be used" for repayment of costs of construction, maintenance and operation of the tunnel, and, "to the extent that toll revenues exceed the amount necessary" for those purposes, for other purposes permissible un-der Title 23. H.R. 2950, § 120(d) (as passed by House, Oct. 28, 1991). Like the Senate bill, the House language focused congressional attention on elimination of the statutory repayment obligation (it was, after all, titled "Voiding of Certain Agreements"); it then addressed the use of "excess" toll revenues, "to the extent" that "toll revenues exceed the amount neces-sary for" maintenance and debt. Nothing in this history suggests that the special treatment of Fort McHenry was designed either to create a new source of general state revenue or to override Commerce Clause limits. 28 timely motion for judgment on the pleadings or a motion to amend their answer. Br. 52-54. But these arguments are red herrings. We are not contending here that defendants waived their congressional-authorization defense by failing to include it in their answer or their first motion to dismiss. Instead, our argument is that defendants waived this argument by failing to raise it until after the district court had entered summary judgment against them on the merits and the time for moving for reconsideration of that ruling had expired. When they finally address that question, defendants parrot the dis-trict court’s reasoning, arguing that they could not have waived the de-fense of congressional authorization because they did not know that it was available to them. Br. 55. As we already have explained, however, a par-ty’s lack of knowledge will not excuse its waiver of a legal argument.10 10 Defendants are badly mistaken in suggesting that this Court held in Holzsager v. Valley Hospital, 646 F.2d 792 (2d Cir. 1981) that a knowing-waiver standard applies to legal arguments. The question in Holzsager was whether the defendant had waived a personal-jurisdiction argument that was barred by Second Circuit precedent when the suit began and was made possible only by a Supreme Court decision issued while the case was pending. Id. at 794-95. This Court held that the defendant’s lack of "clair-voyance" and its failure to raise the argument before the Supreme Court ruled did not amount to waiver. Id. at 796. Defendants here are not rely-ing on any newly announced decision, as the defendant in Holzsager did; 29 Opening Br. 57. Defendants protest that their congressional-authorization defense "turned on unknown facts" (Br. 55 n.31), but that explanation is no more availing. Defendants appear to concede that they were aware of the legal basis for their defense—i.e., ISTEA. See id. (arguing that "ISTEA § 1012(e)’s authorization to use Thruway tolls for canal purposes was not self-executing, but required affirmative steps to be put in effect" of which defense counsel was unaware "until discovery of the 1992 modification to the 1982 Toll Facility Agreement"). Given that knowledge, defendants should have known well before 2017 that the 1982 agreement had been modified—particularly as they acknowledge that New York itself modi-fied the agreement. Br. 53. They have only themselves to blame for their purported ignorance of the modification, and they certainly should not be rewarded for failing to investigate it sooner. Defendants next argue that there is "no need" for remand because the district court "made clear" that it would reach the congressional-authorization issue notwithstanding any waiver. Br. 56. But it is not the role of this Court to play judicial mind reader. Rather, when a district court applies the wrong legal standard, this Court "must vacate the judg-the congressional-authorization exception to the dormant Commerce Clause is a venerable (albeit narrow) doctrine. 30 ment and remand so that the district court can apply the correct stand-ard." United States v. Brennan, 650 F.3d 65, 131 (2d Cir. 2011). In any event, defendants’ contention that the district court would necessarily excuse their waiver under the correct standard is wrong. The district court said nothing to indicate that it was intent on excusing any waiver. It simply ruled on the issue under the standard it believed to be correct—i.e., whether defendants and their counsel "actually knew about" the purported congressional authorization before they filed their motion. JA 241. There is no way to know what the district court would decide un-der the proper standard, and this Court should decline defendants’ invita-tion to speculate about the matter.11 Finally, defendants argue that this Court should exercise its own discretion to reach "arguments allegedly waived but nonetheless treated at length in a district court decision." Br. 57 (citing Mazzei v. Money Store, 11 The district court’s statement that plaintiffs’ claim is barred, "[w]hoever was responsible for raising the issue in the first place" (JA 240), was not a ruling on waiver. The court made that statement in order to explain why, in its view, it did not matter whether congressional au-thorization is an element of plaintiffs’ claim or an affirmative defense. 31 829 F.3d 260, 266 n.5 (2d Cir. 2016)).12 The Court should decline this invi-tation, as well. Although this Court retains the authority to reach argu-ments in the first instance, "the circumstances normally'do not militate in favor of’" doing so. Bogle-Assegai v. Connecticut, 470 F.3d 498, 504 (2d Cir. 2006) (quoting Allianz Ins. Co. v. Lerner, 416 F.3d 109, 114 (2d Cir. 2005)). That is particularly true where defendants "proffer no reason for their failure to raise the arguments" and do not "suggest that there will be any great injustice" if this Court does not address them. Allianz, 416 F.3d at 114. Defendants suggest that this Court should excuse their waiver in or-der to shield them from exposure to "massive damages claims." Br. 57. But financial liability often results from a party’s waiver, and defendants would remain free to argue to the district court that their waiver should be enforced only as to the named plaintiffs in ATA, not the absent class members, thereby limiting their potential liability by orders of magnitude. CONCLUSION The district court’s judgment should be reversed. 12 Mazzei offers no support for defendants’ request that this Court over-look their waiver, as the defendants there chose not to argue waiver. 829 F.3d at 266 n.5. 32 Respectfully submitted,/s/Evan M. Tager CHARLES A. ROTHFELD EVAN M. TAGER MATTHEW A. WARING Mayer Brown LLP 1999 K Street NW Washington, DC 20006 (202) 263-3000 etager@mayerbrown.com RICHARD PIANKA ATA Litigation Center 950 North Glebe Rd Arlington, VA 22203 (703) 838-1889 Counsel for Plaintiffs-Appellants Dated: November 7, 2017 CERTIFICATE OF COMPLIANCE Pursuant to Federal Rule of Appellate Procedure 32(g), the under-signed counsel for plaintiffs-appellants certifies that this brief: (i) complies with the type-volume limitation of Local Rule 32.1(a)(4)(B) because it contains 6,999 words, including footnotes and ex-cluding the parts of the brief exempted by Rule 32(f); and (ii) complies with the typeface requirements of Rule 32(a)(5) and the type style requirements of Rule 32(a)(6) because it has been prepared using Microsoft Office Word 2007 and is set in Century Schoolbook font in a size equivalent to 14 points or larger. Dated: November 7, 2017/s/Evan M. Tager CERTIFICATE OF SERVICE I hereby certify that that on November 7, 2017, I electronically filed the foregoing brief with the Clerk of the Court using the appellate CM/ECF system. I further certify that all participants in this case are reg-istered CM/ECF users and that service will be accomplished via CM/ECF. Dated: November 7, 2017/s/Evan M. Tager

NOTICE OF HEARING DATE ACKNOWLEDGMENT, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg, FILED. Service date 12/06/2017 by CM/ECF. [2187837] [17-737] [Entered: 12/06/2017 11:28 AM]

Case 17-737, Document 77-1, 12/04/2017, 2185958, Page1 of 1 United States Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007 ROBERT A. KATZMANN CATHERINE O'HAGAN WOLFE CHIEF JUDGE CLERK OF COURT Date: December 04, 2017 DC Docket #: 13-cv-8123 Docket #: 17-737cv DC Court: SDNY (NEW YORK Short Title: American Trucking Associations v. New York CITY)DC Docket #: 17-cv-782 State Thruway Authori DC Court: SDNY (NEW YORK CITY) DC Judge: McMahon NOTICE OF HEARING DATE Argument Date/Time: Thursday, January 25, 2018 at 10:00 a.m. Location: Thurgood Marshall U.S. Courthouse, 40 Foley Square, New York, NY, 10007, 17th Floor, Room 1703 Time Allotment: 10 minutes per side. Counsel and non-incarcerated pro se litigants presenting oral argument must register with the courtroom deputy 30 minutes before argument. A motion or stipulation to withdraw with or without prejudice must be filed no later than 3 business days prior to the scheduled date of argument. The Court will consider the motion or stipulation at the time of argument, and counsel's appearance is required with counsel prepared to argue the merits of the case. If a stipulation to withdraw with prejudice is based on a final settlement of the case, the fully-executed settlement must be reported immediately to the Calendar Team, and a copy of it must be attached to the stipulation. Inquiries regarding this case may be directed to 212-857-8595. ------------------------------------------------------------------------------------------------------ Counsel must file the completed form in accordance with Local Rule 25.1 or 25.2. Pro Se parties must submit the form in paper. Name of the Attorney/Pro Se presenting argument: Andrew W. Amend Firm Name (if applicable): N.Y. State Office of the Attorney General Current Telephone Number: (212) 416-8022 The above named attorney represents: ( ) Appellant/Petitioner (X) Appellee-Respondent ( ) Intervenor 12/6/2017 Date: _____________________ /s/Andrew W. Amend Signature: ________________________________

NOTICE OF HEARING DATE ACKNOWLEDGMENT, on behalf of Appellant American Trucking Associations, Inc., Lightning Express Delivery Service Inc., Wadhams Enterprises, Inc. and Ward Transport & Logistics Corp., FILED. Service date 01/12/2018 by CM/ECF. [2213256] [17-737] [Entered: 01/12/2018 04:09 PM]

United States Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007 ROBERT A. KATZMANN CATHERINE O'HAGAN WOLFE CHIEF JUDGE CLERK OF COURT Date: December 04, 2017 DC Docket #: 13-cv-8123 Docket #: 17-737cv DC Court: SDNY (NEW YORK Short Title: American Trucking Associations v. New York CITY)DC Docket #: 17-cv-782 State Thruway Authori DC Court: SDNY (NEW YORK CITY) DC Judge: McMahon NOTICE OF HEARING DATE Argument Date/Time: Thursday, January 25, 2018 at 10:00 a.m. Location: Thurgood Marshall U.S. Courthouse, 40 Foley Square, New York, NY, 10007, 17th Floor, Room 1703 Time Allotment: 10 minutes per side. Counsel and non-incarcerated pro se litigants presenting oral argument must register with the courtroom deputy 30 minutes before argument. A motion or stipulation to withdraw with or without prejudice must be filed no later than 3 business days prior to the scheduled date of argument. The Court will consider the motion or stipulation at the time of argument, and counsel's appearance is required with counsel prepared to argue the merits of the case. If a stipulation to withdraw with prejudice is based on a final settlement of the case, the fully-executed settlement must be reported immediately to the Calendar Team, and a copy of it must be attached to the stipulation. Inquiries regarding this case may be directed to 212-857-8595. ------------------------------------------------------------------------------------------------------ Counsel must file the completed form in accordance with Local Rule 25.1 or 25.2. Pro Se parties must submit the form in paper. Name of the Attorney/Pro Se presenting argument: Charles Rothfeld Firm Name (if applicable): Mayer Brown LLP Current Telephone Number: (202) 263-3233 The above named attorney represents: (x) Appellant/Petitioner () Appellee-Respondent () Intervenor Date: _____________________ January 12, 2018 /s/ Charles Rothfeld Signature: ________________________________

LETTER, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg, &lt;EDIT by Clerk's Office&gt; RECEIVED. Service date 03/01/2018 by CM/ECF.[2247268] [17-737] [Entered: 03/01/2018 01:37 PM]

STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL ERIC T. SCHNEIDERMAN BARBARA D. UNDERWOOD ATTORNEY GENERAL SOLICITOR GENERAL March 1, 2018 Ms. Catherine O'Hagan Wolfe Clerk of Court United States Court of Appeals for the Second Circuit 40 Foley Square New York, NY 10007 American Trucking Associations, Inc. v. New York State Thruway Authority, Nos. 17-737(L), 17-873(CON) Dear Ms. Wolfe: The above-referenced consolidated appeals were argued before a panel of this Court on January 25, 2018. At the conclusion of argument, the presiding judge requested that counsel arrange for a transcript of to be prepared and supplied to the Court. We accordingly submit the attached transcript for the panel's consideration. Thank you very much for your assistance. Respectfully submitted, /s/Andrew W. Amend Andrew W. Amend (212) 416-8022 andrew.amend@ag.ny.gov Attachment cc: Counsel of record (via ECF) 120 BROADWAY, NEW YORK N.Y. 10271-0332 • PHONE (212) 416-8020 • FAX (212) 416-8962 *NOT FOR SERVICE OF PAPERS http://www.ag.ny.gov Page 1 1 14-3348 2 ------------------------- 3 UNITED STATES COURT OF APPEALS 4 FOR THE SECOND CIRCUIT 5 ------------------------- 6 AMERICAN TRUCKING ASSOCIATIONS, INC., 7 WADHAMS ENTERPRISES, INC., 8 LIGHTNING EXPRESS DELIVERY SERVICE INC., 9 WARD TRANSPORT & LOGISTICS CORP., 10 on behalf of themselves and all others similarly 11 situated, 12 Plaintiffs-Appellants, 13 ------------------------- 14 v. 15 ------------------------- 16 NEW YORK STATE THRUWAY AUTHORITY, NEW YORK STATE 17 CANAL CORPORATION, 18 THOMAS J.MADISON, JR., in his official capacity 19 as Executive Director of the New York State 20 Thruway Authority, 21 HOWARD MILSTEIN, in his official capacity as 22 Chair of the New York State Thruway 23 Authority/Canal Corporation Boards of Directors, 24 DONNA J. LUH, in her official capacity as Vice- 25 Chair of New York State Thruway Authority/Canal Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 2 1 Corporation Boards of Directors, 2 E. VIRGIL CONWAY, in their official capacities as 3 members of the New York State Thruway 4 Authority/Canal Corporation Board of Directors, 5 RICHARD N. SIMBERG, in their official capacities 6 as members of the New York State Thruway 7 Authority/Canal Corporation Board of Directors, 8 BRANDON R. SALL, in their official capacities as 9 members of the New York State Thruway 10 Authority/Canal Corporation Board of Directors, 11 J. RICE DONALD, JR., in their official capacities 12 as members of the New York State Thruway 13 Authority/Canal Corporation Board of Directors, 14 JOSE HOLGUIN-VERAS, in their official capacities 15 as members of the New York State Thruway 16 Authority/Canal Corporation Board of Directors, 17 Defendants-Appellees. 18 19 ON APPEAL FROM THE UNITED STATES DISTRICT COURT 20 FOR THE SOUTHERN DISTRICT OF NEW YORK 21 22 23 B E F O R E: 24 CALABRESI, CABRANES and LOHIER 25 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 3 1 P R O C E E D I N G S 2 HON. JOSE A. CABRANES: American 3 Trucking Association versus New York State 4 Thruway Authority, et al. 5 Go ahead, Mr. Rothfeld. 6 MR. ROTHFELD: Thank you, Your Honor. 7 I am Charles Rothfeld of Mayer Brown, 8 representing the appellants in this matter. 9 Under the Commerce Clause of the U.S. 10 Constitution, the New York State Thruway cannot 11 use tolls that are collected on the thruway for 12 purposes that are unrelated to the thruway, 13 unless Congress has specifically set aside that 14 Commerce Clause limitation. 15 HON. RAYMOND LOHIER JR.: Am I right, I 16 just want to make sure that I understand 17 precisely what we're being asked to do. That 18 this appeal, as it's developed, is purely a 19 matter of statutory construction to determine 20 whether 1210(e) is sufficiently clear to evidence 21 Congress's intent to validate this tolling 22 scheme; is that correct? 23 MR. ROTHFELD: I think that that's 24 right. I mean, there -- the standard that 25 governs -- Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 4 1 HON. RAYMOND LOHIER JR.: It's not a 2 constitutional issue, it's a -- 3 MR. ROTHFELD: Well, it -- 4 HON. RAYMOND LOHIER JR.: -- statutory 5 interpretation? 6 MR. ROTHFELD: It is, but it has 7 significant constitutional overtones, because the 8 Supreme Court has said, very clearly and 9 emphatically, what the standard that is -- 10 applies to this kind of argument. 11 HON. GUIDO CALABRESI: Yeah, but that 12 issue is not currently the issue before us. That 13 is, if we were to decide for you that this 14 statute does not exempt this from the Commerce 15 Clause, we presumably would send it back and say, 16 to the district court, in view of this statute 17 being here and all the other things, other 18 dormant Commerce Clause decisions, including a 19 recent one of this Court, which the Supreme Court 20 just yesterday, or the day before denied cert on, 21 is this violation? We know the district court 22 originally, a very long time ago, said it thought 23 it was a violation, but that isn't before us. 24 So but -- and in any event, it said 25 that without the benefit of whatever gravitation Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 5 1 pull on the Dormant Commerce Clause, which is a 2 messy issue, this statute would have. So that 3 the constitutional issue is not before us. The 4 issue is does this statute take you out of it so 5 that we don't ever get to the other things; is 6 that right? 7 MR. ROTHFELD: That is absolutely 8 right. Now as you note, the district court, did 9 some time ago, issue a preliminary summary 10 judgment for the plaintiffs in this case. And if 11 the case goes back down to the district court -- 12 when the dismissal came, the parties were 13 actually engaged in class action certification 14 issues and discovery as to the merits. 15 HON. GUIDO CALABRESI: Let's get back 16 to this statute and why the statute, which on its 17 face sounds as if it applies directly to this, it 18 even mentions canals, doesn't exempt. 19 MR. ROTHFELD: Well, I think we have to 20 look at the language of the statute. 21 HON. GUIDO CALABRESI: Yeah. 22 MR. ROTHFELD: And there are two 23 sentences of the statute that are relevant here. 24 The first one says that, "notwithstanding 25 specifically statutory -- federal statutory Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 6 1 limits on the tolling authority, the Secretary of 2 Transportation would allow tolling to continue, 3 the continuance of tolls." 4 HON. RAYMOND LOHIER JR.: Well, what 5 would you have Congress say in every case? Or 6 what would you have us require Congress to say in 7 every case? Because you're making, from this 8 clause, the notwithstanding clause, an argument 9 that Congress needs to say more, it needs to 10 refer to notwithstanding any other provision of 11 any law. And yet in the second sentence it 12 specifically refers to this tolling system. 13 MR. ROTHFELD: Well, let me respond, 14 sort of, to both sentences. On the first, it 15 refers to the continuance of tolls. The tolls 16 that were in place at the time Congress passed 17 the statute had to comply with the Dormant 18 Commerce Clause, I think everybody agrees on 19 that. 20 And so Congress said, these tolls, 21 which -- 22 HON. GUIDO CALABRESI: Excuse me. Your 23 argument is an argument of context, not of text. 24 I'm not saying context may not be relevant, but 25 in terms of what the statute, the text, the text Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 7 1 is mighty clear, it speaks specifically to this. 2 Now, you are asking us to say, but the 3 context of this statute, when it was passed, and 4 what it was doing about tolling, is such that we 5 shouldn't read it as being that clear. And that 6 may be an argument, but it's very hard for me, 7 given that we have cases that statutes exempting 8 from the Commerce Clause don't need to mention 9 the Commerce Clause. If that weren't so, you 10 could say they needed to mention it. 11 MR. ROTHFELD: Well -- 12 HON. GUIDO CALABRESI: But we have 13 cases which say they don't need to mention. I 14 don't know what the statute could have said more. 15 You can argue context, but I don't see how you 16 can argue text. 17 MR. ROTHFELD: Well, I guess I would 18 disagree with that, Your Honor, because the text 19 on the face of it, I think is ambiguous. The 20 text allows the continuance of tolls. Tolls, 21 generally speaking, comply with the Dormant 22 Commerce Clause. These tolls imposed by the 23 Thruway did comply with the Dormant Commerce 24 Clause at the time of the enactment. And so 25 continuance of tolls doesn't have independent Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 8 1 meaning, it has to take its meaning from the 2 situation of what it was enacted. 3 HON. RAYMOND LOHIER JR.: Well, it says 4 "Shall allow for the continuance of tolls without 5 repayment of federal funds." So -- 6 MR. ROTHFELD: That's correct. And so 7 the tolls that were being collected at the time 8 were tolls that had to comply with Dormant 9 Commerce Clause restrictions. The continuance of 10 tolls, in that setting, would seem to me the 11 continuance of tolls subject to the Commerce 12 Clause restriction. 13 The other part of the statute, which 14 you've also mentioned, involving excess tolls and 15 the uses that can be made of those tolls, there 16 are two ways of looking at that statute -- at 17 that language. When it refers to "excess toll 18 collections" the way we look at it, at the -- the 19 standard that applied, the Commerce Clause 20 standard that applies, is not a precise standard. 21 It requires only a rough correlation between the 22 amount of the tolls collected and the uses that 23 are made by the toll payer. And therefore, 24 necessarily, there will inevitably be excess toll 25 collections even when one is complying with the Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 9 1 Dormant Commerce Clause standard. 2 And we think Congress was saying, in 3 those situations, these excess tolls must be used 4 in a particular way. The State's position, the 5 Thruway's position is no, no when Congress said 6 excess tolls it was specifically authorizing the 7 State to intentionally collect excess tolls in 8 unlimited amounts. We think if that's what 9 Congress had in mind it would have used very 10 different language. 11 Waiving the Commerce Clause limitation 12 is an extraordinary thing. The Supreme Court has 13 found perhaps only a half a dozen times, in the 14 last century, that Congress meant to do that. 15 You would think, if Congress meant to do that it 16 would have been affirmative. 17 HON. GUIDO CALABRESI: But what would 18 you -- let's go back to what Judge Lohier has 19 said. What would you, as a matter of text, have 20 wanted this statute to say that would have made 21 it clearer that it was not doing what appellees 22 say that it did? 23 MR. ROTHFELD: I think that the statute 24 could have said the State is authorized to 25 collect tolls in this amount, collect tolls Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 10 1 notwithstanding any restriction of federal law, 2 statutory or otherwise, as it has said in other 3 statutes. 4 And I think, if I may, I'll reserve the 5 remainder of my time since I'm running short. 6 Thank you. 7 MR. AMEND: May it please the Court, 8 Andrew Amend for the Thruway Authority 9 defendants. 10 The district court rightly dismissed 11 Plaintiff's Dormant Commerce claims because the 12 Dormant Commerce principles operate only where 13 Congress has not acted, and here it has. 14 Specifically, it authorized the New York State 15 Thruway Authority -- 16 HON. RAYMOND LOHIER JR.: Is it the 17 Thruway Authority's position that the State, and 18 I understand that this --retrospective damages 19 and that things have changed, but that the State 20 here could have imposed a toll, instead of 9 to 21 14 percent, of 100 percent? 22 MR. AMEND: They would have been 23 required, under the terms of the statute, to 24 provide for roadway maintenance and operations 25 first. So the amount that they were permitted to Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 11 1 spend on the canals was the amount that they were 2 collecting that exceeded that. And under the 3 exact same tolls, which the Thruway Authority was 4 collecting before this statute and continued to 5 collect after this statute, until 2005, 6 approximately 14 percent of what the Thruway 7 Authority was collecting when the statute was 8 enacted, was going to debt service. And Congress 9 knew that the debt would eventually be retired 10 and that when that happened the same tolls -- 11 HON. RAYMOND LOHIER JR.: Fourteen 12 percent margin? 13 MR. AMEND: Exactly. Would generate 14 excess revenue that Congress -- 15 HON. RAYMOND LOHIER JR.: How about if 16 the debt service had been 50 percent had been 17 going to debt service, would that language that 18 we have before us have permitted the Thruway 19 Authority to use the entirety of the 50 percent 20 after its debt was paid off, to use that for the 21 canal? 22 MR. AMEND: Yes. 23 HON. RAYMOND LOHIER JR.: Okay. So any 24 amount, frankly? 25 HON. GUIDO CALABRESI: What you're Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 12 1 saying, am I understanding you to say, that this 2 statute in effect said, you, Thruway Authority, 3 can raise the toll to whatever is necessary to 4 maintain the canals. That doesn't mean that 5 you're exempt from the Dormant Commerce Clause 6 for everything else in the world, but as far as 7 canals are concerned, we're telling you that you 8 can use it. 9 Now, they may have known how much was 10 being spent or so on, but as far as these canals 11 are concerned, you are exempt from it? 12 MR. AMEND: Yes. That's exactly what 13 Congress said when it said, you can continue to 14 collect your tolls and you can use them for these 15 specified purposes. 16 And that's not a crazy thing at all for 17 Congress to have done. It was creating a new 18 massive transportation reform that wanted to 19 encourage development of interconnected 20 alternative modes of transportation. 21 HON. GUIDO CALABRESI: Opposing 22 counsel, not so much before us here, but in their 23 brief, suggests that the context of this statute, 24 whatever this textual language was, was a context 25 that said that was in the direction of increasing Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 13 1 the amount of allowing tolls to be done in an 2 area where previously tolls were not allowed at 3 all and that this wasn't meant to exempt from the 4 Commerce Clause but simply to allow you to 5 collect tolls. 6 Now, that's a context argument, say 7 that's how you should read this language. What 8 is your answer to that? 9 MR. AMEND: Our answer is that the 10 context, actually far from helping my friend, 11 supports the Thruway Authority's position. They 12 cite, in their reply brief, Senate Report 102-71 13 at Page 26. That Senate Report addresses not 14 only language that eventually became Section 15 1012(e) of ISTEA, but also Section 1012(a) of 16 ISTEA, which is the more general provision. And 17 Congress there said that after a debt is retired, 18 tolls may be continued -- this is a quote from 19 the report, "tolls may be continued for use on 20 any transportation project eligible under Title 21 23." 22 The House Report that included language 23 -- or that accompanied the bill that eventually 24 became ISTEA, that's House Report Number 102-171, 25 says, at Page 25 and Page 80, that as to the new Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 14 1 toll highways it was authorizing, that, "Toll 2 revenues would be required to be used, first to 3 pay off debt from the project being funded and to 4 operate and maintain the facility during the 5 period of repayment and would provide a 6 reasonable rate of return on capital invested by 7 private parties. After the period of repayment 8 the State could use tolls, both to operate and 9 maintain the facility, and to fund other 10 transportation projects within the state." So - 11 - 12 HON. GUIDO CALABRESI: So you're 13 saying, to the extent that they go to context, 14 then that opens things up to legislative history 15 and that if you look at legislative history, 16 rather than just the history, the legislative 17 history cuts your way. And that -- you didn't 18 cite, if you go to legislative history, you can 19 also start asking what Senator Moynihan said, who 20 was quite explicit about what he said, now, you 21 know, that's legislative history and we worry 22 about that, but once you get out from text to 23 doing other things why not look at that as well. 24 Is that so? 25 MR. AMEND: Yes. Our answer is that Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 15 1 the text is clear, it's quite clear, as multiple 2 of Your Honors have remarked. 3 But if, arguendo, one thought there 4 were some question and that it was therefore 5 appropriate to look at legislative history and 6 extra legislative history, all of that points in 7 our direction. 8 HON. GUIDO CALABRESI: Now, can one, 9 when one is talking about explicitly exempting 10 from the Commerce Clause, look beyond text? I 11 believe there are some cases which say either the 12 text or the history make explicit that the clause 13 should not apply; is that right? 14 MR. AMEND: There are -- yes, there are 15 cases that say you can look to text and to 16 legislative history. 17 HON. GUIDO CALABRESI: New England 18 Power. 19 MR. AMEND: New England Power, White v. 20 Massachusetts Council of Construction Employers. 21 So all of the -- 22 HON. RAYMOND LOHIER JR.: Well, the 23 question -- 24 MR. AMEND: Yes. 25 HON. RAYMOND LOHIER JR.: -- or the Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 16 1 question -- at least part of my question is, why 2 shouldn't it be the rule, given how 3 extraordinarily rare it is that Congress will 4 legislate in this way, to ask that Congress be 5 more express? That is, that in addition to a 6 reference to the statutory limitations, it either 7 more broadly says notwithstanding any provision 8 of federal law, or even more expressly says, 9 notwithstanding any Commerce Clause issues? 10 MR. AMEND: A couple of reasons. One, 11 Your Honor, as Judge Calabresi has noted, there 12 is case law, including Supreme Court case law, 13 that says that Congress does not have to say, in 14 terms of whether in the text or the legislative 15 history, we are abrogating Commerce Clause 16 limitations. What has to be clear is that 17 Congress authorized the activity that would 18 otherwise be governed by the Dormant Commerce 19 Clause. And that makes sense because -- 20 HON. RAYMOND LOHIER JR.: I agree -- 21 well, I agree with that. 22 MR. AMEND: Right. Sorry. 23 HON. RAYMOND LOHIER JR.: But here we 24 have a clause that your friend has pointed us to 25 that just refers to the statutory limitations. Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 17 1 MR. AMEND: In the first sentence -- 2 HON. RAYMOND LOHIER JR.: Yes. Yes. 3 MR. AMEND: -- but the second sentence 4 speaks directly to the Dormant Commerce issue 5 that is presented here, which is how you use the 6 tolls that you collect. And here Congress spoke 7 directly to that issue. And it didn't say, you 8 can use those tolls for anything, it said, you 9 can use the tolls for specified purposes, which 10 include specifically, the canals. 11 In addition, we didn't -- this isn't 12 self-executing language. New York, after this 13 language was passed, duly went to the Federal 14 Highway Administration, got the Federal Highway 15 Administration's approval to modify its 16 tripartite agreement, which included its ability 17 to use tolls in this way. There's an annual 18 audit compliance provision, on Page 165 of the 19 joint appendix, that you know, pursuant to which 20 the Thruway Authority has made available audit 21 information every year to the Federal Highway 22 Administration. It's never complained, it's 23 never said, give us our money back. 24 HON. GUIDO CALABRESI: Let me ask you 25 what may sound a bit of a theoretical question, Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 18 1 but that's me. The violations of a Dormant 2 Commerce Clause are not anything that is that 3 easy. I mean, you know, it's easy if you're 4 putting it to the tariff or something of that 5 sort, but there are any number of things which 6 states do that may or may not violate the 7 Commerce Clause and the question of tolls and how 8 much and that is one of those things. I mean, 9 you can do something, and you can't do something 10 else. 11 Why, as a general matter, would it not 12 be better to say this statute becomes part of a 13 question of whether the Dormant Commerce Clause 14 has been violated and that we should say, not an 15 exemption, which after all leaves you completely 16 free, but that this becomes part of what the 17 district court should consider in deciding 18 whether the particular system that New York has 19 set up is discriminatory or is not acceptable 20 under this vague thing that is the Commerce 21 Clause? It is informing what violations of a 22 Dormant Commerce Clause are by the existence of a 23 statute. Why wouldn't that be a better way of 24 handling it? 25 MR. AMEND: The case law is clear, Your Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 19 1 Honor, that where Congress authorizes an activity 2 when it is exercising its commerce power, and 3 there is perhaps no more classic example of 4 Congress affirmatively authorizing its commerce 5 power than in -- 6 HON. GUIDO CALABRESI: Your answer is, 7 that might be so if Congress were less clear, but 8 here they were clear enough. 9 MR. AMEND: Here they were clear enough 10 and Congress does not need to say, as an aside, 11 when it legislates under the commerce power, "and 12 by the way, we're removing the limits that would 13 otherwise apply under the Dormant Commerce Clause 14 if we weren't legislating, when we are 15 legislating." 16 And I would finally just say one last 17 thought on that point. This isn't like Congress 18 was acting under Section 5 of the 14th Amendment 19 where there had to be a violation and they had to 20 act in a way that was proportioned to the 21 violation that they found. This is Congress 22 legislating to encourage the movement of tolls on 23 and off different highway systems. 24 HON. RAYMOND LOHIER JR.: Congress can 25 do whatever -- virtually whatever it wants to do Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 20 1 in this area? 2 MR. AMEND: That is correct. And what 3 it did here was what the Thruway Authority then 4 proceeded to implement. Thank you, Your Honor. 5 MR. ROTHFELD: Judge, just a couple of 6 very quick points. We've been discussing text 7 and context. We think that both support us here. 8 And I'll just -- I'll turn to the text first. 9 The Supreme Court has said, in cases 10 like Granholm v. Heald, that if the text can 11 plausibly be read to preserve Commerce Clause 12 limitations, it must be read that way. You know, 13 tie goes to the taxpayer, not to the state, 14 because if it can be read both ways, necessarily, 15 it's not unambiguous, the congressional intent is 16 not absolutely clear, as it must be to displace 17 the Dormant Commerce Clause. 18 There are two sentences of the ISTEA 19 legislation that we're talking about. The first 20 says we are lifting statutory limitations, and as 21 Judge Lohier, as you pointed out, does not say 22 anything at all about the constitution. You 23 would think -- 24 HON. RAYMOND LOHIER JR.: You know, as 25 your adversary pointed out, as I've -- I think Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 21 1 I've determined, the Supreme Court has never 2 required that level of clarity. 3 MR. ROTHFELD: Well, but particularly 4 as a matter of -- 5 HON. RAYMOND LOHIER JR.: You know, the 6 question is, is it clear enough, not could it be 7 even clearer. 8 MR. ROTHFELD: Well, is it completely, 9 as the Supreme Court said, absolutely unambiguous 10 that Congress was contemplating action that 11 otherwise was affirmatively barred to the State 12 and has been intending to permit them. I just 13 as, I think as a matter of ordinary statutory 14 construction, if Congress could have lifted both 15 expressly, it listed -- lifted one expressly and 16 didn't mention the other, you would think it -- 17 HON. GUIDO CALABRESI: My question of 18 that is, unless you are saying that they must 19 mention the Commerce Clause, which we have said 20 no, that they -- the Supreme Court has said no, 21 that the robotic language, to coin a phrase, is 22 not necessary. 23 MR. ROTHFELD: (Indiscernible). 24 HON. GUIDO CALABRESI: Then, what is 25 it, I mean what makes something clear? You can Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 22 1 always, in every case, then say, oh, but they 2 could have said this or that. But unless they 3 are required to say Commerce Clause, don't we 4 just read it and see what it seems to be? Isn't 5 that what we do with text? 6 MR. ROTHFELD: I don't disagree with 7 that, Your Honor, but I can imagine -- I'll give 8 you an example. If Congress passed a law that 9 said New York may discriminate against citizens 10 of New Jersey in the imposition of a tax rate, 11 and didn't mention the commerce clause, I think 12 we would agree that that was authorizing 13 discrimination that otherwise would violate the 14 commerce clause, because it's expressly stating 15 something, the State is allowed to do it it was 16 not allowed to do it before. 17 HON. GUIDO CALABRESI: (Indiscernible) 18 say -- I mean, you know, if they say 19 discriminate, you're talking discriminate in what 20 way. Obviously under the Commerce Clause, I 21 mean, that -- 22 MR. ROTHFELD: Well, in the rates of 23 taxation for example, I mean that would be 24 sufficient, I would say. But that's not what 25 Congress did here. There are, again, two Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 23 1 sentences here. One says, "may continue -- the 2 continuance of tolls," that could be consistent 3 with Commerce Clause standards or not. And 4 because previously it had to comply with the 5 Commerce Clause, I think the logical reading of 6 that is Congress intended to continue that. 7 The second sentence of the ISTEA 8 legislation says, "excess tolls shall be 9 available for these purposes." And as I say, 10 there were two ways in which Congress could have 11 had in mind excess tolls. One is our way, which 12 is applying the ordinary Commerce Clause 13 standard. Inevitably there are excess tolls that 14 are collected, and I think Congress was saying, 15 when you collect these excess tolls, here is what 16 you can use them for. 17 The State says, no, no when Congress 18 said excess tolls, it was affirmatively 19 authorizing the State to collect excess tolls in 20 any amount, as I think my friend acknowledges, 21 any amount, using the toll collection mechanism 22 of the highway as a means of raising general 23 state revenue. That was a dramatic departure 24 from what the federal tolling policy had been for 25 generations. Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 24 1 HON. RAYMOND LOHIER JR.: What are the 2 damages, or what's your view of the damages in 3 this case? 4 MR. ROTHFELD: We had just -- gotten 5 into the damages discovery when this -- I think 6 if the class were certified and total damages 7 were collected, it would be in the range of $100 8 million, something like that, but we have not 9 really gotten into that at this point. 10 HON. JOSE A. CABRANES: And you think 11 that's in your client's -- your clients think 12 that this is in their interest that the State not 13 be able, effectively, to maintain the New York 14 Thruway or the Erie Canal or whatever. 15 MR. ROTHFELD: No. Well, the State can 16 maintain the thruway, and we do not deny that 17 under the Commerce Clause, for purposes of 18 maintenance of the facility, states may impose 19 tolls, user fees, that's perfectly fine. What we 20 are saying is that the Erie Canal, which is not 21 really a transportation facility in the real 22 sense, it's not used to interstate commerce, that 23 -- 24 HON. JOSE A. CABRANES: It's what made 25 America great. Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 25 1 MR. ROTHFELD: It did, 150 years ago. 2 And we -- as -- 3 HON. JOSE A. CABRANES: According to 4 Senator Moynihan. 5 MR. ROTHFELD: Yes. We endorse Senator 6 Moynihan's views that the Erie Canal was a great 7 thing, and in its day. But interstate truckers, 8 who get no benefit from the Erie Canal, should 9 not be forced to pay for it. 10 HON. GUIDO CALABRESI: But is the point 11 of a Dormant Commerce Clause to say that states 12 may not do things that individual industries and 13 so on don't like? Is it a kind of Lochner, okay? 14 Or is it to keep tariffs or commerce from being 15 hindered? Because if it is the latter, rather 16 than the former, we have to look at what Congress 17 is saying and say, this does not amount to the 18 kind of tariff discrimination which blocks a 19 national economy, which is what the Dormant 20 Commerce Clause, I would have thought, was there 21 to do, not particularly to protect individual 22 people. 23 The Commerce Clause is not there to 24 protect individual people. Of course individual 25 people, if they're hurt by it, can bring the Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 26 1 suit. But what's the object of it? It's to make 2 a national economy, not to protect truckers, or 3 busers, or teachers, or anybody else. 4 MR. ROTHFELD: I agree with you on 5 that, Your Honor. But I think that the nature of 6 this kind of levy is precisely what the Commerce 7 Clause was designed for and as the Supreme Court 8 has articulated. Because allowing this kind of 9 fee to be imposed lets a state export its tax 10 burden to the residents of other states, and 11 that's exactly what New York is trying to do 12 here. It is trying to pay for a local facility -- 13 HON. GUIDO CALABRESI: Yeah, and the 14 question is, did Congress say that to this extent 15 it can do it? 16 MR. ROTHFELD: That is the question. 17 HON. GUIDO CALABRESI: Yeah, that's the 18 question. 19 HON. RAYMOND LOHIER JR.: Under its 20 Commerce Clause it could do it and you're saying 21 it should have been clearly if it intended to do 22 -- to allow this? 23 MR. ROTHFELD: That's exactly right. I 24 mean, the tie goes to the taxpayer because the -- 25 and just I'll make this one final point, Your Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 27 1 Honor. 2 The reason the Supreme Court has 3 articulated this very strict standard is that 4 because this kind of fee is exporting the tax 5 burden and is impeding interstate commerce, it is 6 absolutely essential that representatives of 7 other states know that they are authorizing this 8 kind of commerce impeding activity. And unless 9 the legislation in its -- either in its face or 10 clearly in its context is sufficiently clear, 11 they will not know that and therefore the State 12 gets to export its tax burden. 13 HON. GUIDO CALABRESI: (Indiscernible) 14 if that is so, that this is being done, does it 15 matter that senators like Moynihan are saying, 16 hey, this is what we're doing so that the 17 senators from other states know that -- what is 18 going on? That is, you know, your argument now 19 is one which might make legislative history or 20 the statements of individual senators become 21 relevant in a way that, because of Justice 22 Scalia's very well taken points, so often they 23 are not? I mean, Senator Moynihan said, you 24 know, that's what we're doing. 25 MR. ROTHFELD: I know my time has Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 28 1 expired, Your Honor. But -- 2 HON. JOSE A. CABRANES: That's okay, 3 I'll give Mr. Amend an opportunity to surreply a 4 bit. But go -- we're giving you some extra time. 5 Go ahead. 6 MR. ROTHFELD: All right. But Judge -- 7 just to answer Judge Calabresi's question, I 8 think in fact it would be best if Congress, in 9 the text of the legislation, made clear that it 10 was displacing the Dormant Commerce Clause 11 limitation so that one didn't have to go the 12 legislative history. And the further away one 13 gets from absolutely clear text, the more 14 difficult it is to conclude that Congress had an 15 (indiscernible) intent. And in fact -- 16 HON. RAYMOND LOHIER JR.: Well, if you 17 just look at Senator Moynihan's statement, if -- 18 and if that were the entirety of the history or 19 series of statements, isn't it very clear that he 20 would have sanctioned what the Thruway Authority 21 did here? 22 MR. ROTHFELD: I think not at all. I 23 think -- 24 HON. RAYMOND LOHIER JR.: Not at all? 25 MR. ROTHFELD: -- that he -- I think Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 29 1 Senator Moynihan made one statement on the floor 2 of the Senate that bears on this question, 3 referring to -- 4 HON. JOSE A. CABRANES: In committee -- 5 he was the senior Democrat on the committee at 6 the time when the Democrats controlled the 7 Senate, had been chairman of the committee before 8 he became chairman of Finance. And there is some 9 -- if you're doing legislative history at all, 10 there's some weight to the views of the manager 11 of legislation or the -- and was he actually the 12 manager? He may have been the manager. 13 MR. ROTHFELD: Yeah, I don't deny that 14 Senator Moynihan's views are entitled to weight. 15 I -- 16 HON. JOSE A. CABRANES: Considerable 17 weight. 18 MR. ROTHFELD: -- but our suggestion is 19 that his views are not supportive of the Thruway 20 here, that the only statement of Senator Moynihan 21 that the Thruway identifies that actually talks 22 about this question refer to the portion of ISTEA 23 that refers to the Maryland component of this, 24 the Fort McHenry Tunnel. 25 HON. JOSE A. CABRANES: Maryland. And Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 30 1 he indicated that in effect New York would have 2 the same benefit, right? 3 MR. ROTHFELD: And what he said there 4 was that Senator Sarbanes and Mikulski said that 5 they thought it would be a good thing if toll 6 revenues could be moved on and off particular 7 transportation systems so that the State could 8 maximize its transportation policy. I think that 9 could be entirely consistent with -- 10 HON. RAYMOND LOHIER JR.: Focused on 11 Fort McHenry? 12 MR. ROTHFELD: On Fort McHenry, and 13 that could be entirely consistent with Dormant 14 Commerce Clause standards, so long as it's an 15 integrated transportation network, then users of 16 one road are going to benefit from improvements 17 that are made to other roads. So it's not at all 18 clear, from that statement, that Senator Moynihan 19 was thinking about departures from the Dormant 20 Commerce Clause, in any respect. 21 The other aspects of Senator Moynihan 22 that's gotten the most attention in the briefing 23 is comments that he made in a field hearing in 24 Albany. And if one looks closely at what he said 25 and what others said, he was not referring to Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 31 1 toll revenues at all. The only mention of toll 2 revenue there was made by the director of the 3 Thruway, who didn't say anything about excess 4 tolls, he was saying he wanted to be able to 5 continue tolling after the repayment of the debt, 6 as a matter of changing the federal statutory 7 repayment policy. 8 HON. JOSE A. CABRANES: Thanks very 9 much, Mr. Rothfeld. 10 MR. ROTHFELD: Great. Thank you, Your 11 Honor. 12 HON. JOSE A. CABRANES: Let's give Mr. 13 Amend a chance to at least take a minute or so to 14 respond to your extended reply. 15 Go ahead. 16 MR. AMEND: Thank you, Your Honor. 17 First, I would just like to clarify that the 18 state canal system does continue to be a 19 commercial instrumentality of interstate and 20 international freight shipping, tens of thousands 21 of tons of cargo a year ply its waters. 22 HON. RAYMOND LOHIER JR.: It's not just 23 purely for entertainment? 24 MR. AMEND: It is not purely for 25 entertainment. The history also, given my Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 32 1 adversary discussion -- 2 HON. JOSE A. CABRANES: Friend. 3 MR. AMEND: Sorry. He is my friend. 4 As Justice Roberts has admonished us to address 5 each other. 6 The legislative history reinforces that 7 Congress knew that it was authorizing exactly 8 what Senator Moynihan said he was going to 9 authorize. The language that ends up being in 10 Section 1012(e) says, "any transportation 11 facility that is under the jurisdiction of the 12 Maryland Authority and the New York State Thruway 13 Authority." That is clear enough that there 14 doesn't have to be a specific nexus to the use of 15 the Thruway or the Fort McHenry Tunnel. 16 Specifically, in addition -- 17 HON. RAYMOND LOHIER JR.: I don't think 18 that that's what -- 19 MR. AMEND: Well -- 20 HON. RAYMOND LOHIER JR.: -- your 21 friend is actually arguing, but go ahead. 22 MR. AMEND: I'm sorry. I understood 23 him to be saying that when Senator Moynihan spoke 24 he was envisioning movement of toll money off of 25 the highway that generated it, in a way that Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 33 1 should somehow comply with -- that would somehow 2 still benefit the specific users of that highway 3 that generated the revenue. And the language -- 4 there's nothing in what he -- in Senator 5 Moynihan's language that suggests that. The 6 language that ultimately became ISTEA 1012(e) 7 refutes that. 8 In addition, Senator Simms spoke after 9 the Conference Committee had finally -- in which 10 Senator Moynihan was, again, a major player -- 11 finally hashed out 1012, what became 1012(a) and 12 1012(e). Senator Simms speaking, this is at 137 13 Congressional Record 34930, says that there is, 14 Congress is establishing, "a toll facilities 15 program in which federal funding will be allowed 16 for expansion of toll highways, bridges or 17 tunnels. The revenue generated might be 18 considered for other transportation 19 improvements." 20 In the years following the adoption of 21 ISTEA, not only New York but a number of states, 22 began using funds, you know, toll revenues for 23 other specified purposes that were not connected 24 directly to the system that generated them. The 25 Pennsylvania Turnpike Commission, for example, Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 34 1 supplies or pays approximately $450 million a 2 year for mass transit in Pennsylvania. 3 And I'd like to finally, if I could, 4 conclude with one last thought in response to 5 whether the Dormant Commerce Clause is there to, 6 you know, erect a barrier to things that certain 7 industries don't like. On June 12, 1991, along 8 with Senator Moynihan, Lana Batts, a 9 representative of the American Trucking 10 Associations, appeared on the McNeil Lehrer News 11 Hour and was asked, point blank, "What, from your 12 perspective, would be the downside of the 13 Moynihan bill becoming law?" That was the bill 14 that Senator Moynihan had recently introduced 15 that included, at least at that point, the 16 language that eventually became 1012(a) of ISTEA. 17 And Ms. Batts said in response, quote -- or her 18 response included these two statements, "There is 19 far too much reliance paid on tolls and new toll 20 facilities." And, "The highway user should not 21 be viewed as a piggy bank for all 22 transportation." 23 So American Trucking Associations was 24 aware of what was going on, it complained about 25 it, Congress passed this law anyway. Thank you Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 35 1 very much. 2 HON. JOSE A. CABRANES: And it's a 3 piggy bank in your view. 4 MR. AMEND: We are permitted to use 5 tolls -- 6 HON. JOSE A. CABRANES: 7 (Indiscernible). 8 MR. AMEND: -- in a way that we would 9 not have otherwise been permitted to. 10 HON. JOSE A. CABRANES: Yeah. It's a 11 metaphor. Yeah. Okay. Thank you very much. 12 We'll reserve decision. And it would 13 be helpful, I think, if counsel, after today, 14 make arrangements for the preparation of a 15 transcript of the argument, which I think has 16 been very good and would benefit all of us. 17 MR. AMEND: Absolutely, Your Honor. 18 HON. JOSE A. CABRANES: Thanks very 19 much. Thank you. 20 HON. GUIDO CALABRESI: Very good 21 argument. 22 HON. JOSE A. CABRANES: Yeah, very 23 good. 24 25 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 Page 36 1 C E R T I F I C A T I O N 2 3 I, Sonya Ledanski Hyde, certify that the 4 foregoing transcript is a true and accurate 5 record of the proceedings. 6 7 8 9 __________________________________ 10 11 Veritext Legal Solutions 12 330 Old Country Road 13 Suite 300 14 Mineola, NY 11501 15 16 Date: February 16, 2018 17 18 19 20 21 22 23 24 25 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [& - authority] Page 1 & 9 agreement 17:16 appellants 1:12 & 1:9 9 10:20 agrees 6:18 3:8 ahead 3:5 28:5 appellees 2:17 1 a 31:15 32:21 9:21 100 10:21 24:7 ability 17:16 al 3:4 appendix 17:19 1012 13:15,15 able 24:13 31:4 albany 30:24 applied 8:19 32:10 33:6,11,11 abrogating 16:15 allow 6:2 8:4 13:4 applies 4:10 5:17 33:12 34:16 absolutely 5:7 26:22 8:20 102-171 13:24 20:16 21:9 27:6 allowed 13:2 apply 15:13 19:13 102-71 13:12 28:13 35:17 22:15,16 33:15 applying 23:12 11501 36:14 acceptable 18:19 allowing 13:1 26:8 appropriate 15:5 12 34:7 accompanied allows 7:20 approval 17:15 1210 3:20 13:23 alternative 12:20 approximately 137 33:12 accurate 36:4 ambiguous 7:19 11:6 34:1 14 10:21 11:6 acknowledges amend 10:7,8,22 area 13:2 20:1 14-3348 1:1 23:20 11:13,22 12:12 argue 7:15,16 14th 19:18 act 19:20 13:9 14:25 15:14 arguendo 15:3 150 25:1 acted 10:13 15:19,24 16:10,22 arguing 32:21 16 36:16 acting 19:18 17:1,3 18:25 19:9 argument 4:10 6:8 165 17:18 action 5:13 21:10 20:2 28:3 31:13 6:23,23 7:6 13:6 1991 34:7 activity 16:17 19:1 31:16,24 32:3,19 27:18 35:15,21 2 27:8 32:22 35:4,8,17 arrangements addition 16:5 amendment 19:18 35:14 2005 11:5 17:11 32:16 33:8 america 24:25 articulated 26:8 2018 36:16 address 32:4 american 1:6 3:2 27:3 23 13:21 addresses 13:13 34:9,23 aside 3:13 19:10 25 13:25 administration amount 8:22 9:25 asked 3:17 34:11 26 13:13 17:14,22 10:25 11:1,24 asking 7:2 14:19 3 administration's 13:1 23:20,21 aspects 30:21 300 36:13 17:15 25:17 association 3:3 330 36:12 admonished 32:4 amounts 9:8 associations 1:6 34930 33:13 adoption 33:20 andrew 10:8 34:10,23 4 adversary 20:25 annual 17:17 attention 30:22 450 34:1 32:1 answer 13:8,9 audit 17:18,20 affirmative 9:16 14:25 19:6 28:7 authority 1:16,20 5 affirmatively 19:4 anybody 26:3 1:23,25 2:4,7,10 5 19:18 21:11 23:18 anyway 34:25 2:13,16 3:4 6:1 50 11:16,19 ago 4:22 5:9 25:1 appeal 2:19 3:18 10:8,15 11:3,7,19 8 agree 16:20,21 appeals 1:3 12:2 17:20 20:3 80 13:25 22:12 26:4 appeared 34:10 28:20 32:12,13 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [authority's - comply] Page 2 authority's 10:17 brief 12:23 13:12 century 9:14 clearly 4:8 26:21 13:11 briefing 30:22 cert 4:20 27:10 authorize 32:9 bring 25:25 certain 34:6 client's 24:11 authorized 9:24 broadly 16:7 certification 5:13 clients 24:11 10:14 16:17 brown 3:7 certified 24:6 closely 30:24 authorizes 19:1 burden 26:10 27:5 certify 36:3 coin 21:21 authorizing 9:6 27:12 chair 1:22,25 collect 9:7,25,25 14:1 19:4 22:12 busers 26:3 chairman 29:7,8 11:5 12:14 13:5 23:19 27:7 32:7 c chance 31:13 17:6 23:15,19 available 17:20 changed 10:19 collected 3:11 8:7 c 3:1 36:1,1 23:9 changing 31:6 8:22 23:14 24:7 cabranes 2:24 3:2 aware 34:24 charles 3:7 collecting 11:2,4,7 24:10,24 25:3 b circuit 1:4 collection 23:21 28:2 29:4,16,25 cite 13:12 14:18 collections 8:18,25 b 2:23 31:8,12 32:2 35:2 citizens 22:9 comments 30:23 back 4:15 5:11,15 35:6,10,18,22 claims 10:11 commerce 3:9,14 9:18 17:23 calabresi 2:24 clarify 31:17 4:14,18 5:1 6:18 bank 34:21 35:3 4:11 5:15,21 6:22 clarity 21:2 7:8,9,22,23 8:9,11 barred 21:11 7:12 9:17 11:25 class 5:13 24:6 8:19 9:1,11 10:11 barrier 34:6 12:21 14:12 15:8 classic 19:3 10:12 12:5 13:4 batts 34:8,17 15:17 16:11 17:24 clause 3:9,14 4:15 15:10 16:9,15,18 bears 29:2 19:6 21:17,24 4:18 5:1 6:8,8,18 17:4 18:2,7,13,20 becoming 34:13 22:17 25:10 26:13 7:8,9,22,24 8:9,12 18:22 19:2,4,11,13 began 33:22 26:17 27:13 35:20 8:19 9:1,11 12:5 20:11,17 21:19 behalf 1:10 calabresi's 28:7 13:4 15:10,12 22:3,11,14,20 23:3 believe 15:11 canal 1:17,23,25 16:9,15,19,24 18:2 23:5,12 24:17,22 benefit 4:25 25:8 2:4,7,10,13,16 18:7,13,21,22 25:11,14,20,23 30:2,16 33:2 11:21 24:14,20 19:13 20:11,17 26:6,20 27:5,8 35:16 25:6,8 31:18 21:19 22:3,11,14 28:10 30:14,20 best 28:8 canals 5:18 11:1 22:20 23:3,5,12 34:5 better 18:12,23 12:4,7,10 17:10 24:17 25:11,20,23 commercial 31:19 beyond 15:10 capacities 2:2,5,8 26:7,20 28:10 commission 33:25 bill 13:23 34:13,13 2:11,14 30:14,20 34:5 committee 29:4,5 bit 17:25 28:4 capacity 1:18,21 clear 3:20 7:1,5 29:7 33:9 blank 34:11 1:24 15:1,1 16:16 complained 17:22 blocks 25:18 capital 14:6 18:25 19:7,8,9 34:24 board 2:4,7,10,13 cargo 31:21 20:16 21:6,25 completely 18:15 2:16 case 5:10,11 6:5,7 27:10 28:9,13,19 21:8 boards 1:23 2:1 16:12,12 18:25 30:18 32:13 compliance 17:18 brandon 2:8 22:1 24:3 clearer 9:21 21:7 comply 6:17 7:21 bridges 33:16 cases 7:7,13 15:11 7:23 8:8 23:4 33:1 15:15 20:9 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [complying - enactment] Page 3 complying 8:25 continuance 6:3 decide 4:13 dismissal 5:12 component 29:23 6:15 7:20,25 8:4,9 deciding 18:17 dismissed 10:10 concerned 12:7,11 8:11 23:2 decision 35:12 displace 20:16 conclude 28:14 continue 6:2 12:13 decisions 4:18 displacing 28:10 34:4 23:1,6 31:5,18 defendants 2:17 district 2:19,20 conference 33:9 continued 11:4 10:9 4:16,21 5:8,11 congress 3:13 6:5 13:18,19 delivery 1:8 10:10 18:17 6:6,9,16,20 9:2,5,9 controlled 29:6 democrat 29:5 doing 7:4 9:21 9:14,15 10:13 conway 2:2 democrats 29:6 14:23 27:16,24 11:8,14 12:13,17 corp 1:9 denied 4:20 29:9 13:17 16:3,4,13,17 corporation 1:17 deny 24:16 29:13 donald 2:11 17:6 19:1,4,7,10 1:23 2:1,4,7,10,13 departure 23:23 donna 1:24 19:17,21,24 21:10 2:16 departures 30:19 dormant 4:18 5:1 21:14 22:8,25 correct 3:22 8:6 designed 26:7 6:17 7:21,23 8:8 23:6,10,14,17 20:2 determine 3:19 9:1 10:11,12 12:5 25:16 26:14 28:8 correlation 8:21 determined 21:1 16:18 17:4 18:1 28:14 32:7 33:14 council 15:20 developed 3:18 18:13,22 19:13 34:25 counsel 12:22 development 20:17 25:11,19 congress's 3:21 35:13 12:19 28:10 30:13,19 congressional country 36:12 different 9:10 34:5 20:15 33:13 couple 16:10 20:5 19:23 downside 34:12 connected 33:23 course 25:24 difficult 28:14 dozen 9:13 consider 18:17 court 1:3 2:19 4:8 direction 12:25 dramatic 23:23 considerable 4:16,19,19,21 5:8 15:7 duly 17:13 29:16 5:11 9:12 10:7,10 directly 5:17 17:4 e considered 33:18 16:12 18:17 20:9 17:7 33:24 e 2:2,23,23 3:1,1 consistent 23:2 21:1,9,20 26:7 director 1:19 31:2 3:20 13:15 32:10 30:9,13 27:2 directors 1:23 2:1 33:6,12 36:1 constitution 3:10 crazy 12:16 2:4,7,10,13,16 easy 18:3,3 20:22 creating 12:17 disagree 7:18 22:6 economy 25:19 constitutional 4:2 currently 4:12 discovery 5:14 26:2 4:7 5:3 cuts 14:17 24:5 effect 12:2 30:1 construction 3:19 d discriminate 22:9 effectively 24:13 15:20 21:14 22:19,19 d 3:1 either 15:11 16:6 contemplating discrimination damages 10:18 27:9 21:10 22:13 25:18 24:2,2,5,6 eligible 13:20 context 6:23,24 discriminatory date 36:16 emphatically 4:9 7:3,15 12:23,24 18:19 day 4:20 25:7 employers 15:20 13:6,10 14:13 discussing 20:6 debt 11:8,9,16,17 enacted 8:2 11:8 20:7 27:10 discussion 32:1 11:20 13:17 14:3 enactment 7:24 31:5 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [encourage - hey] Page 4 encourage 12:19 exempting 7:7 field 30:23 given 7:7 16:2 19:22 15:9 final 26:25 31:25 endorse 25:5 exemption 18:15 finally 19:16 33:9 giving 28:4 ends 32:9 exercising 19:2 33:11 34:3 go 3:5 9:18 14:13 engaged 5:13 existence 18:22 finance 29:8 14:18 28:4,5,11 england 15:17,19 expansion 33:16 fine 24:19 31:15 32:21 enterprises 1:7 expired 28:1 first 5:24 6:14 goes 5:11 20:13 entertainment explicit 14:20 10:25 14:2 17:1 26:24 31:23,25 15:12 20:8,19 31:17 going 11:8,17 entirely 30:9,13 explicitly 15:9 floor 29:1 27:18 30:16 32:8 entirety 11:19 export 26:9 27:12 focused 30:10 34:24 28:18 exporting 27:4 following 33:20 good 30:5 35:16 entitled 29:14 express 1:8 16:5 forced 25:9 35:20,23 envisioning 32:24 expressly 16:8 foregoing 36:4 gotten 24:4,9 erect 34:6 21:15,15 22:14 former 25:16 30:22 erie 24:14,20 25:6 extended 31:14 fort 29:24 30:11 governed 16:18 25:8 extent 14:13 26:14 30:12 32:15 governs 3:25 essential 27:6 extra 15:6 28:4 found 9:13 19:21 granholm 20:10 establishing 33:14 extraordinarily fourteen 11:11 gravitation 4:25 et 3:4 16:3 frankly 11:24 great 24:25 25:6 event 4:24 extraordinary free 18:16 31:10 eventually 11:9 9:12 freight 31:20 guess 7:17 13:14,23 34:16 f friend 13:10 16:24 guido 4:11 5:15,21 everybody 6:18 23:20 32:2,3,21 6:22 7:12 9:17 f 2:23 36:1 evidence 3:20 fund 14:9 11:25 12:21 14:12 face 5:17 7:19 27:9 exact 11:3 funded 14:3 15:8,17 17:24 facilities 33:14 exactly 11:13 funding 33:15 19:6 21:17,24 34:20 12:12 26:11,23 funds 8:5 33:22 22:17 25:10 26:13 facility 14:4,9 32:7 further 28:12 26:17 27:13 35:20 24:18,21 26:12 example 19:3 22:8 g h 32:11 22:23 33:25 fact 28:8,15 g 3:1 half 9:13 exceeded 11:2 far 12:6,10 13:10 general 13:16 handling 18:24 excess 8:14,17,24 34:19 18:11 23:22 happened 11:10 9:3,6,7 11:14 23:8 february 36:16 generally 7:21 hard 7:6 23:11,13,15,18,19 federal 5:25 8:5 generate 11:13 hashed 33:11 31:3 10:1 16:8 17:13 generated 32:25 heald 20:10 excuse 6:22 17:14,21 23:24 33:3,17,24 hearing 30:23 executing 17:12 31:6 33:15 generations 23:25 helpful 35:13 executive 1:19 fee 26:9 27:4 give 17:23 22:7 helping 13:10 exempt 4:14 5:18 fees 24:19 28:3 31:12 hey 27:16 12:5,11 13:3 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [highway - lehrer] Page 5 highway 17:14,14 i interest 24:12 k 17:21 19:23 23:22 identifies 29:21 international keep 25:14 32:25 33:2 34:20 imagine 22:7 31:20 kind 4:10 25:13,18 highways 14:1 impeding 27:5,8 interpretation 4:5 26:6,8 27:4,8 33:16 implement 20:4 interstate 24:22 knew 11:9 32:7 hindered 25:15 impose 24:18 25:7 27:5 31:19 know 4:21 7:14 history 14:14,15 imposed 7:22 introduced 34:14 14:21 17:19 18:3 14:16,17,18,21 10:20 26:9 invested 14:6 20:12,24 21:5 15:5,6,12,16 16:15 imposition 22:10 involving 8:14 22:18 27:7,11,17 27:19 28:12,18 improvements issue 4:2,12,12 5:2 27:18,24,25 33:22 29:9 31:25 32:6 30:16 33:19 5:3,4,9 17:4,7 34:6 holguin 2:14 include 17:10 issues 5:14 16:9 known 12:9 hon 3:2,15 4:1,4 included 13:22 istea 13:15,16,24 l 4:11 5:15,21 6:4 17:16 34:15,18 20:18 23:7 29:22 6:22 7:12 8:3 9:17 33:6,21 34:16 lana 34:8 including 4:18 10:16 11:11,15,23 j language 5:20 16:12 11:25 12:21 14:12 8:17 9:10 11:17 increasing 12:25 j 1:24 2:11 15:8,17,22,25 12:24 13:7,14,22 independent 7:25 j.madison 1:18 16:20,23 17:2,24 17:12,13 21:21 indicated 30:1 jersey 22:10 19:6,24 20:24 32:9 33:3,5,6 indiscernible joint 17:19 21:5,17,24 22:17 34:16 21:23 22:17 27:13 jose 2:14 3:2 24:10 24:1,10,24 25:3,10 law 6:11 10:1 16:8 28:15 35:7 24:24 25:3 28:2 26:13,17,19 27:13 16:12,12 18:25 individual 25:12 29:4,16,25 31:8,12 28:2,16,24 29:4,16 22:8 34:13,25 25:21,24,24 27:20 32:2 35:2,6,10,18 29:25 30:10 31:8 leaves 18:15 industries 25:12 35:22 31:12,22 32:2,17 ledanski 36:3 34:7 jr 1:18 2:11 3:15 32:20 35:2,6,10,18 legal 36:11 inevitably 8:24 4:1,4 6:4 8:3 35:20,22 legislate 16:4 23:13 10:16 11:11,15,23 honor 3:6 7:18 legislates 19:11 information 17:21 15:22,25 16:20,23 16:11 19:1 20:4 legislating 19:14 informing 18:21 17:2 19:24 20:24 22:7 26:5 27:1 19:15,22 instrumentality 21:5 24:1 26:19 28:1 31:11,16 legislation 20:19 31:19 28:16,24 30:10 35:17 23:8 27:9 28:9 integrated 30:15 31:22 32:17,20 honors 15:2 29:11 intended 23:6 judge 9:18 16:11 hour 34:11 legislative 14:14 26:21 20:5,21 28:6,7 house 13:22,24 14:15,16,18,21 intending 21:12 judgment 5:10 howard 1:21 15:5,6,16 16:14 intent 3:21 20:15 june 34:7 hurt 25:25 27:19 28:12 29:9 28:15 jurisdiction 32:11 hyde 36:3 32:6 intentionally 9:7 justice 27:21 32:4 lehrer 34:10 interconnected 12:19 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [level - particular] Page 6 level 21:2 margin 11:12 minute 31:13 nexus 32:14 levy 26:6 maryland 29:23 modes 12:20 note 5:8 lifted 21:14,15 29:25 32:12 modify 17:15 noted 16:11 lifting 20:20 mass 34:2 money 17:23 notwithstanding lightning 1:8 massachusetts 32:24 5:24 6:8,10 10:1 limitation 3:14 15:20 moved 30:6 16:7,9 9:11 28:11 massive 12:18 movement 19:22 number 13:24 limitations 16:6 matter 3:8,19 9:19 32:24 18:5 33:21 16:16,25 20:12,20 18:11 21:4,13 moynihan 14:19 ny 36:14 limits 6:1 19:12 27:15 31:6 25:4 27:15,23 o listed 21:15 maximize 30:8 29:1,20 30:18,21 o 2:23 3:1 36:1 local 26:12 mayer 3:7 32:8,23 33:10 object 26:1 lochner 25:13 mchenry 29:24 34:8,13,14 obviously 22:20 logical 23:5 30:11,12 32:15 moynihan's 25:6 official 1:18,21,24 logistics 1:9 mcneil 34:10 28:17 29:14 33:5 2:2,5,8,11,14 lohier 2:24 3:15 mean 3:24 12:4 multiple 15:1 oh 22:1 4:1,4 6:4 8:3 9:18 18:3,8 21:25 n okay 11:23 25:13 10:16 11:11,15,23 22:18,21,23 26:24 n 2:5 3:1 36:1 28:2 35:11 15:22,25 16:20,23 27:23 national 25:19 old 36:12 17:2 19:24 20:21 meaning 8:1,1 26:2 once 14:22 20:24 21:5 24:1 means 23:22 nature 26:5 opens 14:14 26:19 28:16,24 meant 9:14,15 necessarily 8:24 operate 10:12 14:4 30:10 31:22 32:17 13:3 20:14 14:8 32:20 mechanism 23:21 necessary 12:3 operations 10:24 long 4:22 30:14 members 2:3,6,9 21:22 opportunity 28:3 look 5:20 8:18 2:12,15 need 7:8,13 19:10 opposing 12:21 14:15,23 15:5,10 mention 7:8,10,13 needed 7:10 ordinary 21:13 15:15 25:16 28:17 21:16,19 22:11 needs 6:9,9 23:12 looking 8:16 31:1 network 30:15 originally 4:22 looks 30:24 mentioned 8:14 never 17:22,23 overtones 4:7 luh 1:24 mentions 5:18 21:1 p m merits 5:14 new 1:16,16,19,22 messy 5:2 p 3:1 maintain 12:4 1:25 2:3,6,9,12,15 metaphor 35:11 page 13:13,25,25 14:4,9 24:13,16 2:20 3:3,10 10:14 mighty 7:1 17:18 maintenance 12:17 13:25 15:17 mikulski 30:4 paid 11:20 34:19 10:24 24:18 15:19 17:12 18:18 million 24:8 34:1 part 8:13 16:1 major 33:10 22:9,10 24:13 milstein 1:21 18:12,16 making 6:7 26:11 30:1 32:12 mind 9:9 23:11 particular 9:4 manager 29:10,12 33:21 34:19 mineola 36:14 18:18 30:6 29:12 news 34:10 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [particularly - right] Page 7 particularly 21:3 position 9:4,5 26:14,16,18 28:7 reliance 34:19 25:21 10:17 13:11 29:2,22 remainder 10:5 parties 5:12 14:7 power 15:18,19 quick 20:6 remarked 15:2 passed 6:16 7:3 19:2,5,11 quite 14:20 15:1 removing 19:12 17:13 22:8 34:25 precise 8:20 quote 13:18 34:17 repayment 8:5 pay 14:3 25:9 precisely 3:17 r 14:5,7 31:5,7 26:12 26:6 reply 13:12 31:14 r 2:8,23 3:1 36:1 payer 8:23 preliminary 5:9 report 13:12,13,19 raise 12:3 pays 34:1 preparation 35:14 13:22,24 raising 23:22 pennsylvania presented 17:5 representative range 24:7 33:25 34:2 preserve 20:11 34:9 rare 16:3 people 25:22,24,25 presumably 4:15 representatives rate 14:6 22:10 percent 10:21,21 previously 13:2 27:6 rates 22:22 11:6,12,16,19 23:4 representing 3:8 raymond 3:15 4:1 perfectly 24:19 principles 10:12 require 6:6 4:4 6:4 8:3 10:16 period 14:5,7 private 14:7 required 10:23 11:11,15,23 15:22 permit 21:12 proceeded 20:4 14:2 21:2 22:3 15:25 16:20,23 permitted 10:25 proceedings 36:5 requires 8:21 17:2 19:24 20:24 11:18 35:4,9 program 33:15 reserve 10:4 35:12 21:5 24:1 26:19 perspective 34:12 project 13:20 14:3 residents 26:10 28:16,24 30:10 phrase 21:21 projects 14:10 respect 30:20 31:22 32:17,20 piggy 34:21 35:3 proportioned respond 6:13 read 7:5 13:7 place 6:16 19:20 31:14 20:11,12,14 22:4 plaintiff's 10:11 protect 25:21,24 response 34:4,17 reading 23:5 plaintiffs 1:12 26:2 34:18 real 24:21 5:10 provide 10:24 restriction 8:12 really 24:9,21 plausibly 20:11 14:5 10:1 reason 27:2 player 33:10 provision 6:10 restrictions 8:9 reasonable 14:6 please 10:7 13:16 16:7 17:18 retired 11:9 13:17 reasons 16:10 ply 31:21 pull 5:1 retrospective record 33:13 36:5 point 19:17 24:9 purely 3:18 31:23 10:18 refer 6:10 29:22 25:10 26:25 34:11 31:24 return 14:6 reference 16:6 34:15 purposes 3:12 revenue 11:14 referring 29:3 pointed 16:24 12:15 17:9 23:9 23:23 31:2 33:3 30:25 20:21,25 24:17 33:23 33:17 refers 6:12,15 8:17 points 15:6 20:6 pursuant 17:19 revenues 14:2 16:25 29:23 27:22 putting 18:4 30:6 31:1 33:22 reform 12:18 policy 23:24 30:8 q rice 2:11 refutes 33:7 31:7 richard 2:5 question 15:4,23 reinforces 32:6 portion 29:22 right 3:15,24 5:6,8 16:1,1 17:25 18:7 relevant 5:23 6:24 15:13 16:22 26:23 18:13 21:6,17 27:21 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [right - taken] Page 8 28:6 30:2 see 7:15 22:4 sounds 5:17 statute 4:14,16 5:2 rightly 10:10 self 17:12 southern 2:20 5:4,16,16,20,23 road 30:16 36:12 senate 13:12,13 speaking 7:21 6:17,25 7:3,14 roads 30:17 29:2,7 33:12 8:13,16 9:20,23 roadway 10:24 senator 14:19 25:4 speaks 7:1 17:4 10:23 11:4,5,7 roberts 32:4 25:5 27:23 28:17 specific 32:14 33:2 12:2,23 18:12,23 robotic 21:21 29:1,14,20 30:4,18 specifically 3:13 statutes 7:7 10:3 rothfeld 3:5,6,7,23 30:21 32:8,23 5:25 6:12 7:1 9:6 statutory 3:19 4:4 4:3,6 5:7,19,22 33:4,8,10,12 34:8 10:14 17:10 32:16 5:25,25 10:2 16:6 6:13 7:11,17 8:6 34:14 specified 12:15 16:25 20:20 21:13 9:23 20:5 21:3,8 senators 27:15,17 17:9 33:23 31:6 21:23 22:6,22 27:20 spend 11:1 strict 27:3 24:4,15 25:1,5 send 4:15 spent 12:10 subject 8:11 26:4,16,23 27:25 senior 29:5 spoke 17:6 32:23 sufficient 22:24 28:6,22,25 29:13 sense 16:19 24:22 33:8 sufficiently 3:20 29:18 30:3,12 sentence 6:11 17:1 standard 3:24 4:9 27:10 31:9,10 17:3 23:7 8:19,20,20 9:1 suggestion 29:18 rough 8:21 sentences 5:23 23:13 27:3 suggests 12:23 rule 16:2 6:14 20:18 23:1 standards 23:3 33:5 running 10:5 series 28:19 30:14 suit 26:1 s service 1:8 11:8,16 start 14:19 suite 36:13 11:17 state 1:16,16,19,22 summary 5:9 s 3:1 set 3:13 18:19 1:25 2:3,6,9,12,15 supplies 34:1 sall 2:8 setting 8:10 3:3,10 9:7,24 support 20:7 sanctioned 28:20 shipping 31:20 10:14,17,19 14:8 supportive 29:19 sarbanes 30:4 short 10:5 14:10 20:13 21:11 supports 13:11 saying 6:24 9:2 significant 4:7 22:15 23:17,19,23 supreme 4:8,19 12:1 14:13 21:18 simberg 2:5 24:12,15 26:9 9:12 16:12 20:9 23:14 24:20 25:17 similarly 1:10 27:11 30:7 31:18 21:1,9,20 26:7 26:20 27:15 31:4 simms 33:8,12 32:12 27:2 32:23 simply 13:4 state's 9:4 sure 3:16 says 5:24 8:3 situated 1:11 statement 28:17 surreply 28:3 13:25 16:7,8,13 situation 8:2 29:1,20 30:18 system 6:12 18:18 20:20 23:1,8,17 situations 9:3 statements 27:20 31:18 33:24 32:10 33:13 solutions 36:11 28:19 34:18 systems 19:23 scalia's 27:22 sonya 36:3 states 1:3 2:19 30:7 scheme 3:22 sorry 16:22 32:3 18:6 24:18 25:11 t second 1:4 6:11 32:22 26:10 27:7,17 17:3 23:7 t 36:1,1 sort 6:14 18:5 33:21 secretary 6:1 take 5:4 8:1 31:13 sound 17:25 stating 22:14 section 13:14,15 taken 27:22 19:18 32:10 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [talking - ways] Page 9 talking 15:9 20:19 thinking 30:19 31:4 34:19 35:5 23:16 32:14 35:4 22:19 thomas 1:18 tons 31:21 user 24:19 34:20 talks 29:21 thought 4:22 15:3 total 24:6 users 30:15 33:2 tariff 18:4 25:18 19:17 25:20 30:5 transcript 35:15 uses 8:15,22 tariffs 25:14 34:4 36:4 v tax 22:10 26:9 thousands 31:20 transit 34:2 v 1:14 15:19 20:10 27:4,12 thruway 1:16,20 transport 1:9 vague 18:20 taxation 22:23 1:22,25 2:3,6,9,12 transportation 6:2 validate 3:21 taxpayer 20:13 2:15 3:4,10,11,12 12:18,20 13:20 veras 2:14 26:24 7:23 10:8,15,17 14:10 24:21 30:7 veritext 36:11 teachers 26:3 11:3,6,18 12:2 30:8,15 32:10 versus 3:3 telling 12:7 13:11 17:20 20:3 33:18 34:22 vice 1:24 tens 31:20 24:14,16 28:20 tripartite 17:16 view 4:16 24:2 terms 6:25 10:23 29:19,21 31:3 truckers 25:7 26:2 35:3 16:14 32:12,15 trucking 1:6 3:3 viewed 34:21 text 6:23,25,25 thruway's 9:5 34:9,23 views 25:6 29:10 7:16,18,20 9:19 tie 20:13 26:24 true 36:4 29:14,19 14:22 15:1,10,12 time 4:22 5:9 6:16 trying 26:11,12 violate 18:6 22:13 15:15 16:14 20:6 7:24 8:7 10:5 tunnel 29:24 32:15 violated 18:14 20:8,10 22:5 28:9 27:25 28:4 29:6 tunnels 33:17 violation 4:21,23 28:13 times 9:13 turn 20:8 19:19,21 textual 12:24 title 13:20 turnpike 33:25 violations 18:1,21 thank 3:6 10:6 today 35:13 two 5:22 8:16 virgil 2:2 20:4 31:10,16 toll 8:17,23,24 20:18 22:25 23:10 virtually 19:25 34:25 35:11,19 10:20 12:3 14:1,1 34:18 thanks 31:8 35:18 23:21 30:5 31:1,1 w u theoretical 17:25 32:24 33:14,16,22 wadhams 1:7 u.s. 3:9 thing 9:12 12:16 34:19 waiving 9:11 ultimately 33:6 18:20 25:7 30:5 tolling 3:21 6:1,2 want 3:16 unambiguous things 4:17 5:5 6:12 7:4 23:24 wanted 9:20 12:18 20:15 21:9 10:19 14:14,23 31:5 31:4 understand 3:16 18:5,8 25:12 34:6 tolls 3:11 6:3,15 wants 19:25 10:18 think 3:23 5:19 6:15,20 7:20,20,22 ward 1:9 understanding 6:18 7:19 9:2,8,15 7:25 8:4,7,8,10,11 waters 31:21 12:1 9:23 10:4 20:7,23 8:14,15,22 9:3,6,7 way 8:18 9:4 understood 32:22 20:25 21:13,16 9:25,25 11:3,10 14:17 16:4 17:17 united 1:3 2:19 22:11 23:5,14,20 12:14 13:1,2,5,18 18:23 19:12,20 unlimited 9:8 24:5,10,11 26:5 13:19 14:8 17:6,8 20:12 22:20 23:11 unrelated 3:12 28:8,22,23,25 30:8 17:9,17 18:7 27:21 32:25 35:8 use 3:11 11:19,20 32:17 35:13,15 19:22 23:2,8,11,13 ways 8:16 20:14 12:8,14 13:19 23:15,18,19 24:19 23:10 14:8 17:5,8,9,17 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400 [we've - york] Page 10 we've 20:6 weight 29:10,14 29:17 went 17:13 white 15:19 world 12:6 worry 14:21 y yeah 4:11 5:21 26:13,17 29:13 35:10,11,22 year 17:21 31:21 34:2 years 25:1 33:20 yesterday 4:20 york 1:16,16,19,22 1:25 2:3,6,9,12,15 2:20 3:3,10 10:14 17:12 18:18 22:9 24:13 26:11 30:1 32:12 33:21 Veritext Legal Solutions 212-267-6868 www.veritext.com 516-608-2400

NEW CASE MANAGER, Atasha Joseph, ASSIGNED.[2267269] [17-737, 17-873] [Entered: 03/29/2018 09:44 AM]

United States Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007 ROBERT A. KATZMANN CATHERINE O'HAGAN WOLFE CHIEF JUDGE CLERK OF COURT Date: March 29, 2018 DC Docket #: 13-cv-8123 Docket #: 17-737cv DC Court: SDNY (NEW YORK Short Title: American Trucking Associations v. New York CITY)DC Docket #: 17-cv-782 State Thruway Authori DC Court: SDNY (NEW YORK CITY) DC Judge: McMahon NOTICE OF CASE MANAGER CHANGE The case manager assigned to this matter has been changed. Inquiries regarding this case may be directed to 212-857-8522.

OPINION, affirming the district court judgment, by GC, JAC, RJL, C.JJ., FILED.[2267289] [17-737, 17-873] [Entered: 03/29/2018 09:54 AM]

Case 17-737, Document 86-1, 03/29/2018, 2267289, Page1 of 21 17‐737 (L) American Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth. In the United States Court of Appeals For the Second Circuit ________ AUGUST TERM 2017 No. 17‐737 (L), 17‐873 (Con) AMERICAN TRUCKING ASSOCIATIONS, INC., WADHAMS ENTERPRISES, INC., LIGHTNING EXPRESS DELIVERY SERVICE INC., WARD TRANSPORT & LOGISTICS CORP., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, AMERICAN BUS ASSOCIATION, DATTCO, INC., STARR TRANSIT CO., INC., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, Plaintiffs‐Appellants, v. NEW YORK STATE THRUWAY AUTHORITY, NEW YORK STATE CANAL CORPORATION, THOMAS J. MADISON, JR., IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF THE NEW YORK STATE THRUWAY AUTHORITY, HOWARD MILSTEIN, IN HIS OFFICIAL CAPACITY AS CHAIR OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, DONNA J. LUH, IN HER OFFICIAL CAPACITY AS VICE‐CHAIR OF NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, E. VIRGIL CONWAY, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, RICHARD N. SIMBERG, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, BRANDON R. SALL, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL Case 17-737, Document 86-1, 03/29/2018, 2267289, Page2 of 21 2 No. 17‐737 (L) CORPORATION BOARD OF DIRECTORS, J. RICE DONALD, JR., IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, JOSE HOLGUIN‐VERAS, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, BILL FINCH, IN HIS OFFICIAL CAPACITY AS ACTING EXECUTIVE DIRECTOR OF THE NEW YORK STATE THRUWAY AUTHORITY, JOANNE M. MAHONEY, IN HER OFFICIAL CAPACITY AS CHAIR OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, ROBERT L. MEGNA, IN HIS OFFICIAL CAPACITY AS A MEMBER OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, STEPHEN M. SALAND, IN HIS OFFICIAL CAPACITY AS A MEMBER OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, Defendants‐Appellees. ________ Appeal from the United States District Court for the Southern District of New York. Nos. 1:13‐cv‐08123 and 1:17‐cv‐00782 — Colleen McMahon, Chief District Judge. ________ ARGUED: MARCH 6, 2018 DECIDED: MARCH 29, 2018 Case 17-737, Document 86-1, 03/29/2018, 2267289, Page3 of 21 3 No. 17‐737 (L) Before: CALABRESI, CABRANES and LOHIER, Circuit Judges. Plaintiffs‐Appellants American Trucking Associations, Inc. and all those similarly situated appeal from the judgment of the U.S. District Court for the Southern District of New York (Colleen McMahon, Chief District Judge) granting a motion to dismiss of Defendants‐Appellees New York State Thruway Authority and its aligned state entities. Plaintiffs‐Appellants claim that the New York State Thruway Authority violated the Dormant Commerce Clause when it used surplus revenue from highway tolls to fund the State of New York's canal system. The District Court dismissed this claim, concluding that Congress authorized the Thruway Authority to allocate highway tolls to canal uses. We AFFIRM the District Court's judgment. ________ CHARLES A. ROTHFELD, Evan M. Tager, Matthew A. Waring, Mayer Brown LLP, Washington, DC; Richard Pianka, ATA Litigation Center, Arlington, VA, for Plaintiffs‐Appellants. ANDREW W. AMEND, Senior Assistant Solicitor General, of counsel, (Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, on the brief), for Eric T. Schneiderman, Case 17-737, Document 86-1, 03/29/2018, 2267289, Page4 of 21 4 No. 17‐737 (L) Attorney General, State of New York, for Defendants‐Appellees. ________ JOSÉ A. CABRANES, Circuit Judge: The questions presented are: (1) whether the District Court correctly dismissed the Dormant Commerce Clause claims of plaintiffs, challenging the authority of defendants to allocate surplus highway toll revenues to New York's canal system; and (2) whether the District Court properly determined that defendants did not waive the argument that Congress authorized them to depart from the Dormant Commerce Clause. American Trucking Associations, Inc. and its fellow plaintiffs (jointly, "ATA") claim that the New York State Thruway Authority and its aligned state entities (jointly, the "Thruway Authority") violated the Dormant Commerce Clause when it used surplus revenue from highway tolls to fund New York State's Canal System ("the Canal System"). The District Court dismissed this claim, finding that Congress specifically authorized the Thruway Authority to allocate highway tolls to canal uses. ATA further claims that the District Court abused its discretion in reaching the question of congressional authorization because the Thruway Authority did not discover or raise this argument until several years into the litigation. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page5 of 21 5 No. 17‐737 (L) We conclude that Congress evinced unmistakably clear intent to authorize the Thruway Authority to allocate highway tolls to support the Canal System. We also conclude that the District Court had discretion to reach the question of congressional authorization. Accordingly, we AFFIRM the judgment of the District Court. I. BACKGROUND A. The Thruway Authority's Tolling Powers The New York State Thruway Authority is a public benefit corporation, created in 1950 by the New York State Legislature to construct and operate transportation facilities.1 Since its establishment, it has operated the Governor Thomas E. Dewey Thruway System (the "Thruway"), a 570‐mile cross‐state highway that is a "major artery of interstate commerce in the Northeast" United States and a "critical route for commercial truckers serving the region."2 New York originally funded the Thruway through bond issuances, and authorized the Thruway Authority to charge tolls both to repay the bonds and to support maintenance and operations.3 In 1 See N.Y. Public Authorities Law ("PAL") §§ 352‐353. 2 Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., 795 F.3d 351, 354 (2d Cir. 2015). 3 PAL § 354(8); see also Ch. 143, § 1, 1950 N.Y. Laws 653, 655, 659 (enacting PAL § 359(1)). See generally ROBERT A. CARO, THE POWER BROKER 15‐19, 615‐31, 633‐34 (1974) (discussing Robert Moses's use of public authorities to shape infrastructure in New York, his utilization and expansion of the concept of public Case 17-737, Document 86-1, 03/29/2018, 2267289, Page6 of 21 6 No. 17‐737 (L) 1956, Congress passed the Federal‐Aid Highway Act, which incorporated existing toll highways, including the Thruway, into the Interstate Highway System, but prohibited the use of any federal funds to construct or improve such highways.4 The Thruway and other toll highways became eligible for federal financial support only when, in 1978, Congress enacted the Surface Transportation Assistance Act ("STAA").5 Section 105 of that statute mandated that, in order to receive federal financial aid, state public authorities responsible for toll highways in the Interstate Highway System had to discontinue levying tolls once they had collected sufficient revenues to retire outstanding bonds.6 If those authorities failed to make a toll road free once they had collected sufficient tolls to retire authorities, the role of bond issuances in raising financing for and perpetuating public authorities, and the role of tolls in sustaining public authorities). 4 See Pub. L. No. 84‐627, § 113(a), 70 Stat. 374, 384 (1956). 5 Pub. L. No. 95‐599, 92 Stat. 2689 (1978). 6 § 105, 92 Stat. at 2692‐93. Section 105's requirements were effectuated through "tripartite agreements" between the relevant state public authority, the state highway department, and the U.S. Secretary of Transportation. Pursuant to section 105, the Thruway Authority, the New York State Department of Transportation, and the U.S. Department of Transportation's Federal Highway Administration entered into a Tripartite Agreement in July 1982. Among other provisions, the Agreement provided that the Thruway Authority could continue to collect tolls until it paid off its outstanding debt, projected to occur in 1996. See J.A. 167‐72. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page7 of 21 7 No. 17‐737 (L) those bonds, STAA required them to repay the federal government for the financing it had provided them.7 Against this background, Congress enacted the Intermodal Surface Transportation Efficiency Act of 1991 ("ISTEA"), the statute at issue here.8 Through ISTEA, Congress sought to foster "a National Intermodal Transportation System," consisting of "all forms of transportation in a unified, interconnected manner."9 To do so, ISTEA freed states from their obligation under the STAA to repay the federal government should they continue to collect tolls after retiring outstanding debts, and granted them greater flexibility to operate toll facilities and use toll revenues for a variety of transportation projects. Two provisions of ISTEA stand at the heart of this case. The first, section 1012(a), authorized state public authorities to collect highway tolls without repaying the federal government, so long as those funds "will be used first for debt service, for reasonable return on investment of any private person financing the project, and for the costs necessary for the proper operation and maintenance of the toll facility."10 Once a state certified adequate maintenance, it could use 7 § 105, 92 Stat. at 2693 ("[I]f, for any reason, a toll road receiving Federal assistance under this section does not become free to the public upon collection of sufficient tolls, as specified in the preceding sentence, Federal funds used for projects on such toll road pursuant to this section shall be repaid to the Federal Treasury[.]"). 8 23 U.S.C. § 129; Pub. L. No. 102‐240, 105 Stat. 1914 (1991). 9 § 2, 105 Stat. at 1914. 10 § 1012(a)(3), 105 Stat. at 1936‐37. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page8 of 21 8 No. 17‐737 (L) any excess toll revenues "for any purpose for which Federal funds may be obligated by a State under [Title 23]."11 As part of ISTEA, Congress simultaneously broadened the list of purposes for which states could use federal funds under Title 23. The expanded list included "transportation enhancement activities," such as "historic preservation, rehabilitation and operation of historic transportation buildings, structures, or facilities (including historic railroad facilities and canals) ."12 In the second provision, section 1012(e), Congress enacted a "Special Rule" that largely paralleled section 1012(a) but added specific conditions regarding two toll facilities: the New York State Thruway and the Fort McHenry Tunnel in Maryland. Regarding the Thruway, it provided that the Thruway Authority could use excess toll revenues to cover "costs associated with transportation facilities under [its] jurisdiction. . ., including debt service and costs related to the construction, reconstruction, restoration, repair, operation and maintenance of such facilities."13 11 Id. 23 U.S.C. § 101(a); ISTEA § 1007(c), 105 Stat. at 1931 (emphasis added). 12 Although the text of 23 U.S.C. § 101 has been amended from time to time, as the District Court stated, "none of the amendments eliminated the statutory authorization allowing the Thruway Authority to spend excess toll revenues (i.e., toll revenues not needed for Thruway maintenance) on the canals." Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., 238 F. Supp. 3d 527, 534 (S.D.N.Y. 2017). 13 § 1012(e), 105 Stat. at 1939. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page9 of 21 9 No. 17‐737 (L) Following the passage of ISTEA, in 1992 the New York State Legislature directed the Thruway Authority to assume management of the Canal System.14 At all times relevant to these appeals, the Thruway Authority managed the Canal System. B. The Canal System The rise of the Interstate Highway System, a marvel of American infrastructure, cemented the decline of perhaps the most awesome earlier such marvel: the New York Canal System. That system is "a network of waterways that stretches across upstate New York, including the Erie, Oswego, Champlain, Cayuga, and Seneca Canals."15 In the nineteenth century, it served as "the model for canal‐ building throughout the world" and fueled "the unprecedented development and prosperity that came not alone to New York State but to. . . the whole country."16 In the words of Senator Daniel Patrick Moynihan of New York—then chairman of the Water Resources, Transportation, and Infrastructure Subcommittee of the Senate Committee on Environment and Public Works, and the principal architect of ISTEA—the Canal System is "what has made America great."17 14 N.Y. Canal Law § 6. 15 Am. Trucking Ass'ns, 795 F.3d at 355 (internal quotation marks omitted). Roy G. Finch, The Story of the New York State Canals 4 (rev. ed. 1998), 16 https://www.canals.ny.gov/history/finch_history_print.pdf. Field Hearings Before the S. Comm. on Env't & Public Works and the Subcomm. on 17 Water Res., Transp., & Infrastructure, 102nd Cong. 305 (Apr. 5, 1991) (statement of Case 17-737, Document 86-1, 03/29/2018, 2267289, Page10 of 21 10 No. 17‐737 (L) As road and air transportation proliferated, however, the Canal System largely became "a recreational byway, drawing pleasure boats, fishing lines and the occasional canal fan."18 Traditionally supported through taxpayer funds and managed by the New York Department of Education, the Canal System, as noted, was transferred to the management of the Thruway Authority in 1992.19 The Thruway Authority began funding the Canal System principally through excess highway toll revenues. Between 1992 and 2016, it expended approximately 9 to 14 percent of Thruway tolls to the Canal System.20 Sen. Daniel Patrick Moynihan, member, S. Comm. on Environment and Public Works), J.A. 210. Legislators from both parties credited Senator Moynihan "with masterminding much of the legislation." Lindsey Gruson, Transit Bill Seen as Boon to Metro Area, N.Y. TIMES, Nov. 27, 1991, https://www.nytimes.com/1991/11/27/nyregion/transit‐bill‐seen‐as‐boon‐to‐ metro‐area.html. For the history of ISTEA's passage, see Richard F. Weingroff, Creating a Landmark: The Intermodal Surface Transportation Act of 1991, PUB. ROADS, Nov.‐Dec. 2001, https://www.fhwa.dot.gov/publications/publicroads/01novdec/istea.cfm. Jesse McKinley, Afloat on the Erie Canal: Sonar Gear, Ferris Wheel Parts and Beer 18 Tanks, N.Y. TIMES, May 28, 2017, https://www.nytimes.com/2017/05/28/nyregion/erie‐canal‐rebound‐commercial‐ shipping.html. In recent years, however, the Canal System has experienced an uptick in commercial shipping thanks to its "use as a niche waterway for cargo whose size or weight make it impossible, impractical or too expensive to haul any other way," including electrical turbines, Navy equipment, pedestals for a Ferris wheel under construction in Staten Island, and even giant tanks of beer. Id. 19 Ante, note 14. Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., 199 F. Supp. 3d 855, 879 20 (S.D.N.Y. 2016), vacated, 238 F. Supp. 3d 527 (S.D.N.Y. 2017). In 2016, the New York State Legislature transferred jurisdiction over the Canal System to the New Case 17-737, Document 86-1, 03/29/2018, 2267289, Page11 of 21 11 No. 17‐737 (L) C. Procedural History In November 2013, ATA, a trucking industry trade group, and three of its members brought a class action suit against the Thruway Authority, the New York State Canal Corporation, and certain Thruway officials, alleging that they violated the Dormant Commerce Clause by using Thruway tolls to fund the Canal System.21 In August 2014, the District Court dismissed the complaint for failure to join the State of New York as a necessary party.22 The following year, we vacated that judgment and remanded for further proceedings.23 On remand, in August 2016, the District Court granted partial summary judgment to the ATA, finding that the allocation of Thruway tolls to the Canal System violated the Dormant Commerce Clause.24 At the time, the Thruway had not yet contended that Congress had expressly authorized the use of Thruway tolls for canal York Power Authority, which is not a party to these appeals. See N.Y. Canal Law § 5. The Legislature shifted control as a means of providing financial relief to the Thruway Authority, which had been spending roughly $87 million annually for canal operations and debt. See Rick Karlin, NY Power Authority to Absorb Canal System, TIMES UNION (Albany), Apr. 6, 2016, https://www.timesunion.com/local/article/NY‐Power‐Authority‐to‐absorb‐canal‐ system‐7233185.php. 21 J.A. 22‐45. Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., No. 13 Civ. 8123, 2014 WL 22 4229982, at *6‐7 (S.D.N.Y. Aug. 6, 2014). 23 Am. Trucking Ass'ns, 795 F.3d at 360‐61. 24 Am. Trucking Ass'ns, 199 F. Supp. 3d at 878. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page12 of 21 12 No. 17‐737 (L) purposes, and neither the District Court nor the parties considered any such authorization. Before the District Court could rule on ATA's class‐certification motion or hold a damages trial, however, the Thruway Authority discovered information indicating that Congress had indeed authorized it to devote surplus highway toll revenue toward the Canal System.25 It moved to dismiss plaintiffs' action for failure to state a claim. On February 28, 2017, the District Court granted that motion, finding that "Congress decided, with great specificity, to exempt the New York State Thruway Authority's expenditure of excess toll revenues on the New York State Canal System from the reach of the Dormant Commerce Clause."26 The District Court expressed displeasure with the fact that the Thruway Authority failed to discover its defense of congressional authorization for so long, but it ultimately rejected ATA's claim that the Thruway Authority had waived that argument by raising it too late.27 Accordingly, the District Court vacated its order of August 10, 2016 granting ATA's motion for partial summary judgment and denying defendants' cross‐motion for summary judgment.28 On February 1, 2017, while the ATA case was pending, the American Bus Association ("ABA") and several of its members filed 25 Am. Trucking Ass'ns, 238 F. Supp. 3d at 532. 26 Id. at 541. 27 Id. at 540‐41. 28 Id. at 541. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page13 of 21 13 No. 17‐737 (L) a parallel action against the Thruway Authority and the other defendants, raising the same Dormant Commerce Clause claims. Soon after the District Court dismissed ATA, it entered an order dismissing the ABA case "[f]or substantially the reasons discussed by the court" in ATA.29 II. DISCUSSION A. Standard of Review We review a district court's grant of a motion to dismiss de novo.30 We review for abuse of discretion a district court's decision that a party did not waive an argument by failing to raise it earlier in the proceedings.31 B. Whether Congress Authorized the Thruway Authority to Allocate Excess Highway Tolls to the Canal System ATA contends that Congress did not evince an "unmistakably clear" intent to authorize the Thruway Authority to allocate excess revenues from highway tolls to the Canal System.32 The Thruway 29 J.A. 272. 30 Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003). 31 Brown v. City of New York, 862 F.3d 182, 187 (2d Cir. 2017). 32 See S.‐Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 91 (1984). Case 17-737, Document 86-1, 03/29/2018, 2267289, Page14 of 21 14 No. 17‐737 (L) Authority, on the other hand, argues that Congress did expressly authorize it to do so. We agree with the Thruway Authority. The Commerce Clause gives Congress the power "to regulate Commerce. . . among the several states."33 The Supreme Court has long recognized that the Commerce Clause "also limits the power of the States to erect barriers against interstate trade"—the so‐called Dormant Commerce Clause.34 Under the Dormant Commerce Clause, a highway toll is constitutional only if it is "based on some fair approximation of use or privilege for use. . . and is neither discriminatory against interstate commerce nor excessive in comparison with the governmental benefit conferred."35 The Supreme Court has also recognized, however, that "[w]here state or local government action is specifically authorized by Congress, it is not subject to the [Dormant] Commerce Clause even if it interferes with interstate commerce."36 In issuing such an authorization, "Congress must manifest its unambiguous intent."37 Put another way, "Congress' intent and policy to sustain state legislation from attack under the Commerce Clause [must be] 33 U.S. CONST. art. I, § 8, cl. 3. 34 Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 35 (1980). 35 Evansville‐Vanderburgh Airport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707, 716‐17 (1972); see also Nw. Airlines, Inc. v. Cty. of Kent, Mich., 510 U.S. 355, 362‐63 (1994). 36 White v. Mass. Council of Constr. Emp'rs, Inc. 460 U.S. 204, 213 (1983). 37 Wyoming v. Oklahoma, 502 U.S. 437, 458 (1992). Case 17-737, Document 86-1, 03/29/2018, 2267289, Page15 of 21 15 No. 17‐737 (L) 'expressly stated.'"38 That said, "[t]here is no talismanic significance to the phrase 'expressly stated,'" which "merely states one way of meeting the requirement that for a state regulation to be removed from the reach of the [D]ormant Commerce Clause, congressional intent must be unmistakably clear."39 In other words, Congress need not expressly state that it is authorizing a state to engage in activity that would otherwise violate the Dormant Commerce Clause; it need only clearly allow the state to engage in such activity. The plain language of ISTEA manifestly contains such "unmistakably clear" evidence of an intent to authorize the Thruway Authority to use excess highway toll revenues for canal purposes. ISTEA section 1012 permitted the Thruway Authority to allocate excess toll revenues (1) to any transportation facilities under the Thruway Authority's jurisdiction or (2) for any project eligible to receive federal assistance under Title 23.40 The Canal System meets both conditions. On the first score, the New York State Legislature in 1992 transferred jurisdiction of the Canal System to the Thruway Authority, which maintained jurisdiction at all times relevant to this appeal. And on the second score, as part of ISTEA, Congress modified Title 23 to define canals as eligible for federal assistance. ATA acknowledges this fact—thereby conceding that Congress plainly 38 Sporhase v. Nebraska, ex rel. Douglas, 458 U.S. 941, 960 (1982). 39 S.‐Cent. Timber Dev., 467 U.S. at 91 (emphasis added). 40 23 U.S.C. § 101(a); ISTEA § 1012(e), § 1007(a)‐(c). Case 17-737, Document 86-1, 03/29/2018, 2267289, Page16 of 21 16 No. 17‐737 (L) authorized the Thruway Authority to use at least some excess highway toll revenues for canal purposes.41 Having (quietly) made this concession, ATA is left to argue that, while Congress authorized the Thruway Authority to devote some excess toll revenue to the Canal System, it still meant to limit the amount of such allocations. Read in context, ATA contends, section 1012(e) is best understood to lift the prior statutory limit on state tolls, permitting the Thruway Authority merely to continue tolling regimes as they existed at the time of ISTEA's enactment. To support its interpretation, ATA points to phrases in the statute, such as "allow for the continuance of tolls."42 The ordinary meaning of "continuance," according to ATA, is "[t]o remain in the same state."43 And its use thus indicates that Congress expected any post‐ISTEA tolls to be substantially similar in nature and purpose. Since the tolls that Congress permitted to continue in 1992 were 41 Pls. Br. at 18 n.4 ("The district court concluded that the Canal System was a project eligible for assistance under Title 23. . ., a determination that is not at issue in this appeal."). It is true that "[w]e do not consider an argument mentioned only in a footnote to be adequately raised or preserved for appellate review." United States v. Restrepo, 986 F.2d 1462, 1463 (2d Cir. 1993). Here, however, ATA makes an admission, not an argument. And ATA concedes this point again in its main brief. Pls. Br. at 33‐34 (noting that the second sentence of ISTEA section 1012(e) provides that revenues collected from tolls in excess of those needed for debt service and operation and maintenance can be used for "specified purposes (including various transportation‐related projects and facilities, among them the canals)"). 42 Pls. Br. at 33‐34 (quoting ISTEA section 1012(e)) (emphasis in original). 43 Id. at 34 (quoting Webster's II New Riverside University Dictionary 305 (1984)). Case 17-737, Document 86-1, 03/29/2018, 2267289, Page17 of 21 17 No. 17‐737 (L) calculated to pay for highway maintenance, they could not have been used to fund unrelated projects at any substantial level. In our view, there is no basis to interpret the word "continuance" as freezing in place the tolling regime at the time of ISTEA's enactment. Instead, a plain reading of the statute reveals that Congress meant to permit the Thruway Authority to continue collecting tolls of whatever amount without having to repay federal funds—something that it was previously barred from doing once it satisfied its debt obligations. If and when the Thruway Authority did so, it would have surplus revenue on hand to devote to other transportation projects, an outcome that ISTEA not only contemplated but expressly sanctioned. Here, too, ATA makes a critical admission. It acknowledges that the District Court's conclusion that "nothing in ISTEA caps the amount of excess toll revenue that can be used to support transportation enhancement activities," such as canals, is "perhaps true as a literal matter."44 Inasmuch as ATA concedes that Congress authorized the Thruway Authority to allocate excess toll revenues for canal purposes, and likewise concedes that it is "true as a literal matter" that ISTEA contains no language limiting the amount of 44 Am. Trucking Ass'ns., 238 F. Supp. 3d at 536; Pls. Br. at 39‐40. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page18 of 21 18 No. 17‐737 (L) revenue for allocation, its argument necessarily relies merely on context, not text.45 45 But if anything, the context militates in favor of recognizing that Congress intended to authorize the Thruway Authority to devote excess highway toll revenue to the Canal System. Senator Moynihan, who, as noted above, was the mastermind of ISTEA, sought as a general matter to devolve transportation policy to states and cities. Ante, note 17. As The New York Times put it, the bill gave states "freedom in how they spend Federal transportation money," for the first time allowing them "to choose the projects they think they most need rather than hav[ing] to follow a Federal model." Richard L. Berke, Senate Approves Bill to Overhaul Transportation, N.Y. TIMES, June 20, 1991, https://www.nytimes.com/1991/06/20/us/senate‐ approves‐bill‐to‐overhaul‐transportation.html. To achieve that goal, Senator Moynihan proposed that highway money be "fungible," such that states could use funds on other modes of transportation, such as mass transit. See Weingroff, ante note 17. It is worth noting that ATA opposed the measure for precisely this reason, fearing that by permitting states to devote resources to other transportation projects, the bill would "threaten[] the future of America's highways." Id. More specifically, Senator Moynihan pressed from the beginning for language specific to New York that would permit the state to maintain tolls as a source of revenue, declaring that he would "be responsible" for coordinating the bill's passage. Tolls on Thruway May Not Disappear, State Will Keep Fees and U.S. Aid if Congress Passes Pending Bill, BUFFALO NEWS, Feb. 22, 1991, at A1, available at 1991 WLNR 956953. As the drafting process began, he conducted several Field Hearings in which he urged the Commissioner of the New York State Department of Transportation not to "forget that canal system," and called the Canal System "just a treasure." Field Hearings, ante note 17, at 304; J.A. 209. Moynihan's interest in finding financing for the Canal System is hardly surprising; he was widely known as a "longtime aficionado of the canal and its lore." Joseph Berger, U.S. Allots $120 Million for Banks of Erie Canal, N.Y. TIMES, Nov. 26, 1996, http://www.nytimes.com/1996/11/26/nyregion/us‐allots‐120‐ million‐for‐banks‐of‐erie‐canal.html. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page19 of 21 19 No. 17‐737 (L) The text is clear: Congress manifested its unambiguous intent to authorize the Thruway Authority to allocate excess toll funds to the Canal System. Although ISTEA does not expressly invoke the Commerce Clause or state its intent to abrogate Dormant Commerce Clause limitations, it need not do so if congressional intent is unmistakable—as it is here. C. Whether the Thruway Authority Forfeited Its Argument That Congress Authorized It to Depart from the Commerce Clause We next address whether the Thruway Authority forfeited its argument that Congress authorized it to allocate excess highway toll revenues to the Canal System.46 Later, when the bill that would become ISTEA emerged from the Senate Committee on Environment and Public Works without any New York‐specific language, Senator Moynihan proposed an amendment, which would eventually become section 1012(e). The amendment allowed the state agencies in charge of the New York State Thruway and the Fort McHenry Tunnel in Maryland to use excess highway toll revenues to cover transportation facilities under Title 23, as well as those "under the jurisdiction" of those agencies. 137 Cong. Rec. 14774, 14883 (June 13, 1991). In introducing the amendment, Senator Moynihan highlighted how Maryland could allocate tolls raised from the Fort McHenry Tunnel. He explained that section 1012(e) was designed to "make possible the movement of toll receipts on and off the particular systems in such a way that the State, in this case Maryland, can optimize its transportation choices and provision thereof." Id. at 14774. "We very much want Maryland to do with Maryland money what Maryland thinks is best." Id. 46 The forfeiture question applies only in ATA, not in ABA. The plaintiffs in ABA filed suit only in February 2017, after the Thruway Authority had discovered its congressional‐authorization defense. In ATA, however—originally filed in 2013—the Thruway Authority failed to raise that defense for over three years. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page20 of 21 20 No. 17‐737 (L) ATA argues that the Thruway Authority failed to raise its argument regarding congressional authorization for more than three years after ATA filed its complaint and for almost six months after the District Court granted partial summary judgment on liability in favor of ATA. That failure, according to ATA, constitutes forfeiture. Yet ATA concedes that, regardless of whether the Thruway Authority indeed forfeited its argument, the District Court had discretion to reach the merits to correct a clear error.47 As we have explained, Congress's intent in ISTEA section 1012(e) to exempt the Thruway Authority from the Dormant Commerce Clause was unmistakably clear. Thus, regardless of whether the District Court relied on the proper standard for forfeiture, it had discretion to reach the merits of the Thruway Authority's defense.48 47 Pls. Br. at 56. 48 ATA argues that the District Court applied an erroneous legal standard by reasoning that because the Thruway Authority did not know of its defense previously, it could not have waived or forfeited it. Id. That standard, according to ATA, does not apply to waivers or forfeitures of legal arguments, and, instead, the District Court should have asked whether "'the need to correct a clear error or prevent manifest injustice' justified considering defendants' belated argument," Id. at 57 (quoting Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 104 (2d Cir. 2013)). Since the District Court had discretion to reach the merits, we need not reach the question of whether it applied the proper legal standard. Case 17-737, Document 86-1, 03/29/2018, 2267289, Page21 of 21 21 No. 17‐737 (L) III. CONCLUSION In summary, we hold as follows: (1) Congress evinced an "unmistakably clear" intent to authorize the Thruway Authority to depart from the strictures of the Dormant Commerce Clause by allocating surplus highway toll revenues to New York's Canal System; (2) Congress placed no limits on the amount of such surplus highway toll revenue that the Thruway Authority could allocate to the Canal System; (3) The District Court correctly granted defendants' motion to dismiss on the basis of Congressional authorization and vacated its previous order granting plaintiffs' motion for partial summary judgment; and (4) The District Court had discretion to reach the merits of the Thruway Authority's defense that Congress had authorized it to devote surplus highway toll revenues to the Canal System. For the foregoing reasons, we AFFIRM the judgment of the District Court. Case 17-737, Document 86-2, 03/29/2018, 2267289, Page1 of 1 United States Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007 ROBERT A. KATZMANN CATHERINE O'HAGAN WOLFE CHIEF JUDGE CLERK OF COURT Date: March 29, 2018 DC Docket #: 13-cv-8123 Docket #: 17-737cv DC Court: SDNY (NEW YORK Short Title: American Trucking Associations v. New York CITY)DC Docket #: 17-cv-782 State Thruway Authori DC Court: SDNY (NEW YORK CITY) DC Judge: McMahon BILL OF COSTS INSTRUCTIONS The requirements for filing a bill of costs are set forth in FRAP 39. A form for filing a bill of costs is on the Court's website. The bill of costs must: * be filed within 14 days after the entry of judgment; * be verified; * be served on all adversaries; * not include charges for postage, delivery, service, overtime and the filers edits; * identify the number of copies which comprise the printer's unit; * include the printer's bills, which must state the minimum charge per printer's unit for a page, a cover, foot lines by the line, and an index and table of cases by the page; * state only the number of necessary copies inserted in enclosed form; * state actual costs at rates not higher than those generally charged for printing services in New York, New York; excessive charges are subject to reduction; * be filed via CM/ECF or if counsel is exempted with the original and two copies. Case 17-737, Document 86-3, 03/29/2018, 2267289, Page1 of 1 United States Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007 ROBERT A. KATZMANN CATHERINE O'HAGAN WOLFE CHIEF JUDGE CLERK OF COURT Date: March 29, 2018 DC Docket #: 13-cv-8123 Docket #: 17-737cv DC Court: SDNY (NEW YORK Short Title: American Trucking Associations v. New York CITY)DC Docket #: 17-cv-782 State Thruway Authori DC Court: SDNY (NEW YORK CITY) DC Judge: McMahon VERIFIED ITEMIZED BILL OF COSTS Counsel for _________________________________________________________________________ respectfully submits, pursuant to FRAP 39 (c) the within bill of costs and requests the Clerk to prepare an itemized statement of costs taxed against the ________________________________________________________________ and in favor of _________________________________________________________________________ for insertion in the mandate. Docketing Fee _____________________ Costs of printing appendix (necessary copies ______________) _____________________ Costs of printing brief (necessary copies ______________ ____) _____________________ Costs of printing reply brief (necessary copies ______________) _____________________ (VERIFICATION HERE) ________________________ Signature

JUDGMENT, FILED.[2267374] [17-737, 17-873] [Entered: 03/29/2018 10:47 AM]

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ______________________________________________ At a Stated Term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of March, two thousand and eighteen. Before: Guido Calabresi, José A. Cabranes, Raymond J. Lohier, Jr., Circuit Judges, ____________________________________ JUDGMENT American Trucking Associations, Inc., Wadhams Enterprises, Docket No. 17-737 (L), 17-873 Inc., Lightning Express Delivery Service Inc., Ward Transport (Con.) & Logistics Corp., on behalf of themselves and all others similarly situated, American Bus Association, DATTCO, Inc., Starr Transit Co., Inc., On behalf of themselves all others similarly situated, Plaintiffs - Appellants, v. New York State Thruway Authority, New York State Canal Corporation, Thomas J. Madison, Jr., in his official capacity as Executive Director of the New York State Thruway Authority, Howard Milstein, in his official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, Donna J. Luh, in her official capacity as Vice-Chair of New York State Thruway Authority/Canal Corporation Boards of Directors, E. Virgil Conway, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Richard N. Simberg, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Brandon R. Sall, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, J. Rice Donald, Jr., in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Jose Holguin-Veras, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Bill Finch, in his official capacity as Acting Executive Director of the New York State Thruway Authority, Joanne M. Mahoney, in her official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, Robert L. Megna, in his official capacity as a member of the New York State Thruway Authority/Canal Corporation Boards of Directors, Stephen M. Saland, in his official capacity as a member of the New York State Thruway Authority/Canal Corporation Boards of Directors, Defendants - Appellees _______________________________________ The appeal in the above captioned case from a judgment of the United States District Court for the Southern District of New York were argued on the district court's record and the parties' briefs. Upon consideration thereof, IT IS HEREBY ORDERED, ADJUDGED and DECREED that the judgment of the district court is AFFIRMED. For the Court: Catherine O=Hagan Wolfe, Clerk of Court

JUDGMENT MANDATE, ISSUED.[2285051] [17-737, 17-873] [Entered: 04/20/2018 05:05 PM]

Case 17-737, Document 98-1, 04/20/2018, 2285051, Page1 of 2 MANDATE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT ______________________________________________ At a Stated Term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 29th day of March, two thousand and eighteen. Before: Guido Calabresi, José A. Cabranes, Raymond J. Lohier, Jr., Circuit Judges, ____________________________________ JUDGMENT American Trucking Associations, Inc., Wadhams Enterprises, Docket No. 17-737 (L), 17-873 Inc., Lightning Express Delivery Service Inc., Ward Transport (Con.) & Logistics Corp., on behalf of themselves and all others similarly situated, American Bus Association, DATTCO, Inc., Starr Transit Co., Inc., On behalf of themselves all others similarly situated, Plaintiffs - Appellants, v. New York State Thruway Authority, New York State Canal Corporation, Thomas J. Madison, Jr., in his official capacity as Executive Director of the New York State Thruway Authority, Howard Milstein, in his official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, Donna J. Luh, in her official capacity as Vice-Chair of New York State Thruway Authority/Canal Corporation Boards of Directors, E. Virgil Conway, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Richard N. Simberg, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Brandon R. Sall, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, J. Rice Donald, Jr., in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Jose Holguin-Veras, in their official capacities as members of the New York State Thruway Authority/Canal Corporation Board of Directors, Bill Finch, in his official capacity as Acting Executive Director of the New York State Thruway Authority, Joanne M. Mahoney, in her official capacity as Chair of the New York State Thruway Authority/Canal Corporation Boards of Directors, Robert L. Megna, in his official capacity as a member of the New York State Thruway Authority/Canal Corporation MANDATE ISSUED ON 04/20/2018 Boards of Directors, StephenDocument Case 17-737, M. Saland, 98-1, in his 04/20/2018, official capacity 2285051, Page2 of 2 as a member of the New York State Thruway Authority/Canal Corporation Boards of Directors, Defendants - Appellees _______________________________________ The appeal in the above captioned case from a judgment of the United States District Court for the Southern District of New York were argued on the district court's record and the parties' briefs. Upon consideration thereof, IT IS HEREBY ORDERED, ADJUDGED and DECREED that the judgment of the district court is AFFIRMED. For the Court: Catherine O=Hagan Wolfe, Clerk of Court Case 17-737, Document 98-2, 04/20/2018, 2285051, Page1 of 21 17‐737 (L) American Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth. In the United States Court of Appeals For the Second Circuit ________ AUGUST TERM 2017 No. 17‐737 (L), 17‐873 (Con) AMERICAN TRUCKING ASSOCIATIONS, INC., WADHAMS ENTERPRISES, INC., LIGHTNING EXPRESS DELIVERY SERVICE INC., WARD TRANSPORT & LOGISTICS CORP., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, AMERICAN BUS ASSOCIATION, DATTCO, INC., STARR TRANSIT CO., INC., ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, Plaintiffs‐Appellants, v. NEW YORK STATE THRUWAY AUTHORITY, NEW YORK STATE CANAL CORPORATION, THOMAS J. MADISON, JR., IN HIS OFFICIAL CAPACITY AS EXECUTIVE DIRECTOR OF THE NEW YORK STATE THRUWAY AUTHORITY, HOWARD MILSTEIN, IN HIS OFFICIAL CAPACITY AS CHAIR OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, DONNA J. LUH, IN HER OFFICIAL CAPACITY AS VICE‐CHAIR OF NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, E. VIRGIL CONWAY, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, RICHARD N. SIMBERG, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, BRANDON R. SALL, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL Case 17-737, Document 98-2, 04/20/2018, 2285051, Page2 of 21 2 No. 17‐737 (L) CORPORATION BOARD OF DIRECTORS, J. RICE DONALD, JR., IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, JOSE HOLGUIN‐VERAS, IN THEIR OFFICIAL CAPACITIES AS MEMBERS OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARD OF DIRECTORS, BILL FINCH, IN HIS OFFICIAL CAPACITY AS ACTING EXECUTIVE DIRECTOR OF THE NEW YORK STATE THRUWAY AUTHORITY, JOANNE M. MAHONEY, IN HER OFFICIAL CAPACITY AS CHAIR OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, ROBERT L. MEGNA, IN HIS OFFICIAL CAPACITY AS A MEMBER OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, STEPHEN M. SALAND, IN HIS OFFICIAL CAPACITY AS A MEMBER OF THE NEW YORK STATE THRUWAY AUTHORITY/CANAL CORPORATION BOARDS OF DIRECTORS, Defendants‐Appellees. ________ Appeal from the United States District Court for the Southern District of New York. Nos. 1:13‐cv‐08123 and 1:17‐cv‐00782 — Colleen McMahon, Chief District Judge. ________ ARGUED: MARCH 6, 2018 DECIDED: MARCH 29, 2018 Case 17-737, Document 98-2, 04/20/2018, 2285051, Page3 of 21 3 No. 17‐737 (L) Before: CALABRESI, CABRANES and LOHIER, Circuit Judges. Plaintiffs‐Appellants American Trucking Associations, Inc. and all those similarly situated appeal from the judgment of the U.S. District Court for the Southern District of New York (Colleen McMahon, Chief District Judge) granting a motion to dismiss of Defendants‐Appellees New York State Thruway Authority and its aligned state entities. Plaintiffs‐Appellants claim that the New York State Thruway Authority violated the Dormant Commerce Clause when it used surplus revenue from highway tolls to fund the State of New York's canal system. The District Court dismissed this claim, concluding that Congress authorized the Thruway Authority to allocate highway tolls to canal uses. We AFFIRM the District Court's judgment. ________ CHARLES A. ROTHFELD, Evan M. Tager, Matthew A. Waring, Mayer Brown LLP, Washington, DC; Richard Pianka, ATA Litigation Center, Arlington, VA, for Plaintiffs‐Appellants. ANDREW W. AMEND, Senior Assistant Solicitor General, of counsel, (Barbara D. Underwood, Solicitor General, Steven C. Wu, Deputy Solicitor General, on the brief), for Eric T. Schneiderman, Case 17-737, Document 98-2, 04/20/2018, 2285051, Page4 of 21 4 No. 17‐737 (L) Attorney General, State of New York, for Defendants‐Appellees. ________ JOSÉ A. CABRANES, Circuit Judge: The questions presented are: (1) whether the District Court correctly dismissed the Dormant Commerce Clause claims of plaintiffs, challenging the authority of defendants to allocate surplus highway toll revenues to New York's canal system; and (2) whether the District Court properly determined that defendants did not waive the argument that Congress authorized them to depart from the Dormant Commerce Clause. American Trucking Associations, Inc. and its fellow plaintiffs (jointly, "ATA") claim that the New York State Thruway Authority and its aligned state entities (jointly, the "Thruway Authority") violated the Dormant Commerce Clause when it used surplus revenue from highway tolls to fund New York State's Canal System ("the Canal System"). The District Court dismissed this claim, finding that Congress specifically authorized the Thruway Authority to allocate highway tolls to canal uses. ATA further claims that the District Court abused its discretion in reaching the question of congressional authorization because the Thruway Authority did not discover or raise this argument until several years into the litigation. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page5 of 21 5 No. 17‐737 (L) We conclude that Congress evinced unmistakably clear intent to authorize the Thruway Authority to allocate highway tolls to support the Canal System. We also conclude that the District Court had discretion to reach the question of congressional authorization. Accordingly, we AFFIRM the judgment of the District Court. I. BACKGROUND A. The Thruway Authority's Tolling Powers The New York State Thruway Authority is a public benefit corporation, created in 1950 by the New York State Legislature to construct and operate transportation facilities.1 Since its establishment, it has operated the Governor Thomas E. Dewey Thruway System (the "Thruway"), a 570‐mile cross‐state highway that is a "major artery of interstate commerce in the Northeast" United States and a "critical route for commercial truckers serving the region."2 New York originally funded the Thruway through bond issuances, and authorized the Thruway Authority to charge tolls both to repay the bonds and to support maintenance and operations.3 In 1 See N.Y. Public Authorities Law ("PAL") §§ 352‐353. 2 Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., 795 F.3d 351, 354 (2d Cir. 2015). 3 PAL § 354(8); see also Ch. 143, § 1, 1950 N.Y. Laws 653, 655, 659 (enacting PAL § 359(1)). See generally ROBERT A. CARO, THE POWER BROKER 15‐19, 615‐31, 633‐34 (1974) (discussing Robert Moses's use of public authorities to shape infrastructure in New York, his utilization and expansion of the concept of public Case 17-737, Document 98-2, 04/20/2018, 2285051, Page6 of 21 6 No. 17‐737 (L) 1956, Congress passed the Federal‐Aid Highway Act, which incorporated existing toll highways, including the Thruway, into the Interstate Highway System, but prohibited the use of any federal funds to construct or improve such highways.4 The Thruway and other toll highways became eligible for federal financial support only when, in 1978, Congress enacted the Surface Transportation Assistance Act ("STAA").5 Section 105 of that statute mandated that, in order to receive federal financial aid, state public authorities responsible for toll highways in the Interstate Highway System had to discontinue levying tolls once they had collected sufficient revenues to retire outstanding bonds.6 If those authorities failed to make a toll road free once they had collected sufficient tolls to retire authorities, the role of bond issuances in raising financing for and perpetuating public authorities, and the role of tolls in sustaining public authorities). 4 See Pub. L. No. 84‐627, § 113(a), 70 Stat. 374, 384 (1956). 5 Pub. L. No. 95‐599, 92 Stat. 2689 (1978). 6 § 105, 92 Stat. at 2692‐93. Section 105's requirements were effectuated through "tripartite agreements" between the relevant state public authority, the state highway department, and the U.S. Secretary of Transportation. Pursuant to section 105, the Thruway Authority, the New York State Department of Transportation, and the U.S. Department of Transportation's Federal Highway Administration entered into a Tripartite Agreement in July 1982. Among other provisions, the Agreement provided that the Thruway Authority could continue to collect tolls until it paid off its outstanding debt, projected to occur in 1996. See J.A. 167‐72. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page7 of 21 7 No. 17‐737 (L) those bonds, STAA required them to repay the federal government for the financing it had provided them.7 Against this background, Congress enacted the Intermodal Surface Transportation Efficiency Act of 1991 ("ISTEA"), the statute at issue here.8 Through ISTEA, Congress sought to foster "a National Intermodal Transportation System," consisting of "all forms of transportation in a unified, interconnected manner."9 To do so, ISTEA freed states from their obligation under the STAA to repay the federal government should they continue to collect tolls after retiring outstanding debts, and granted them greater flexibility to operate toll facilities and use toll revenues for a variety of transportation projects. Two provisions of ISTEA stand at the heart of this case. The first, section 1012(a), authorized state public authorities to collect highway tolls without repaying the federal government, so long as those funds "will be used first for debt service, for reasonable return on investment of any private person financing the project, and for the costs necessary for the proper operation and maintenance of the toll facility."10 Once a state certified adequate maintenance, it could use 7 § 105, 92 Stat. at 2693 ("[I]f, for any reason, a toll road receiving Federal assistance under this section does not become free to the public upon collection of sufficient tolls, as specified in the preceding sentence, Federal funds used for projects on such toll road pursuant to this section shall be repaid to the Federal Treasury[.]"). 8 23 U.S.C. § 129; Pub. L. No. 102‐240, 105 Stat. 1914 (1991). 9 § 2, 105 Stat. at 1914. 10 § 1012(a)(3), 105 Stat. at 1936‐37. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page8 of 21 8 No. 17‐737 (L) any excess toll revenues "for any purpose for which Federal funds may be obligated by a State under [Title 23]."11 As part of ISTEA, Congress simultaneously broadened the list of purposes for which states could use federal funds under Title 23. The expanded list included "transportation enhancement activities," such as "historic preservation, rehabilitation and operation of historic transportation buildings, structures, or facilities (including historic railroad facilities and canals) ."12 In the second provision, section 1012(e), Congress enacted a "Special Rule" that largely paralleled section 1012(a) but added specific conditions regarding two toll facilities: the New York State Thruway and the Fort McHenry Tunnel in Maryland. Regarding the Thruway, it provided that the Thruway Authority could use excess toll revenues to cover "costs associated with transportation facilities under [its] jurisdiction. . ., including debt service and costs related to the construction, reconstruction, restoration, repair, operation and maintenance of such facilities."13 11 Id. 23 U.S.C. § 101(a); ISTEA § 1007(c), 105 Stat. at 1931 (emphasis added). 12 Although the text of 23 U.S.C. § 101 has been amended from time to time, as the District Court stated, "none of the amendments eliminated the statutory authorization allowing the Thruway Authority to spend excess toll revenues (i.e., toll revenues not needed for Thruway maintenance) on the canals." Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., 238 F. Supp. 3d 527, 534 (S.D.N.Y. 2017). 13 § 1012(e), 105 Stat. at 1939. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page9 of 21 9 No. 17‐737 (L) Following the passage of ISTEA, in 1992 the New York State Legislature directed the Thruway Authority to assume management of the Canal System.14 At all times relevant to these appeals, the Thruway Authority managed the Canal System. B. The Canal System The rise of the Interstate Highway System, a marvel of American infrastructure, cemented the decline of perhaps the most awesome earlier such marvel: the New York Canal System. That system is "a network of waterways that stretches across upstate New York, including the Erie, Oswego, Champlain, Cayuga, and Seneca Canals."15 In the nineteenth century, it served as "the model for canal‐ building throughout the world" and fueled "the unprecedented development and prosperity that came not alone to New York State but to. . . the whole country."16 In the words of Senator Daniel Patrick Moynihan of New York—then chairman of the Water Resources, Transportation, and Infrastructure Subcommittee of the Senate Committee on Environment and Public Works, and the principal architect of ISTEA—the Canal System is "what has made America great."17 14 N.Y. Canal Law § 6. 15 Am. Trucking Ass'ns, 795 F.3d at 355 (internal quotation marks omitted). Roy G. Finch, The Story of the New York State Canals 4 (rev. ed. 1998), 16 https://www.canals.ny.gov/history/finch_history_print.pdf. Field Hearings Before the S. Comm. on Env't & Public Works and the Subcomm. on 17 Water Res., Transp., & Infrastructure, 102nd Cong. 305 (Apr. 5, 1991) (statement of Case 17-737, Document 98-2, 04/20/2018, 2285051, Page10 of 21 10 No. 17‐737 (L) As road and air transportation proliferated, however, the Canal System largely became "a recreational byway, drawing pleasure boats, fishing lines and the occasional canal fan."18 Traditionally supported through taxpayer funds and managed by the New York Department of Education, the Canal System, as noted, was transferred to the management of the Thruway Authority in 1992.19 The Thruway Authority began funding the Canal System principally through excess highway toll revenues. Between 1992 and 2016, it expended approximately 9 to 14 percent of Thruway tolls to the Canal System.20 Sen. Daniel Patrick Moynihan, member, S. Comm. on Environment and Public Works), J.A. 210. Legislators from both parties credited Senator Moynihan "with masterminding much of the legislation." Lindsey Gruson, Transit Bill Seen as Boon to Metro Area, N.Y. TIMES, Nov. 27, 1991, https://www.nytimes.com/1991/11/27/nyregion/transit‐bill‐seen‐as‐boon‐to‐ metro‐area.html. For the history of ISTEA's passage, see Richard F. Weingroff, Creating a Landmark: The Intermodal Surface Transportation Act of 1991, PUB. ROADS, Nov.‐Dec. 2001, https://www.fhwa.dot.gov/publications/publicroads/01novdec/istea.cfm. Jesse McKinley, Afloat on the Erie Canal: Sonar Gear, Ferris Wheel Parts and Beer 18 Tanks, N.Y. TIMES, May 28, 2017, https://www.nytimes.com/2017/05/28/nyregion/erie‐canal‐rebound‐commercial‐ shipping.html. In recent years, however, the Canal System has experienced an uptick in commercial shipping thanks to its "use as a niche waterway for cargo whose size or weight make it impossible, impractical or too expensive to haul any other way," including electrical turbines, Navy equipment, pedestals for a Ferris wheel under construction in Staten Island, and even giant tanks of beer. Id. 19 Ante, note 14. Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., 199 F. Supp. 3d 855, 879 20 (S.D.N.Y. 2016), vacated, 238 F. Supp. 3d 527 (S.D.N.Y. 2017). In 2016, the New York State Legislature transferred jurisdiction over the Canal System to the New Case 17-737, Document 98-2, 04/20/2018, 2285051, Page11 of 21 11 No. 17‐737 (L) C. Procedural History In November 2013, ATA, a trucking industry trade group, and three of its members brought a class action suit against the Thruway Authority, the New York State Canal Corporation, and certain Thruway officials, alleging that they violated the Dormant Commerce Clause by using Thruway tolls to fund the Canal System.21 In August 2014, the District Court dismissed the complaint for failure to join the State of New York as a necessary party.22 The following year, we vacated that judgment and remanded for further proceedings.23 On remand, in August 2016, the District Court granted partial summary judgment to the ATA, finding that the allocation of Thruway tolls to the Canal System violated the Dormant Commerce Clause.24 At the time, the Thruway had not yet contended that Congress had expressly authorized the use of Thruway tolls for canal York Power Authority, which is not a party to these appeals. See N.Y. Canal Law § 5. The Legislature shifted control as a means of providing financial relief to the Thruway Authority, which had been spending roughly $87 million annually for canal operations and debt. See Rick Karlin, NY Power Authority to Absorb Canal System, TIMES UNION (Albany), Apr. 6, 2016, https://www.timesunion.com/local/article/NY‐Power‐Authority‐to‐absorb‐canal‐ system‐7233185.php. 21 J.A. 22‐45. Am. Trucking Ass'ns, Inc. v. N.Y. State Thruway Auth., No. 13 Civ. 8123, 2014 WL 22 4229982, at *6‐7 (S.D.N.Y. Aug. 6, 2014). 23 Am. Trucking Ass'ns, 795 F.3d at 360‐61. 24 Am. Trucking Ass'ns, 199 F. Supp. 3d at 878. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page12 of 21 12 No. 17‐737 (L) purposes, and neither the District Court nor the parties considered any such authorization. Before the District Court could rule on ATA's class‐certification motion or hold a damages trial, however, the Thruway Authority discovered information indicating that Congress had indeed authorized it to devote surplus highway toll revenue toward the Canal System.25 It moved to dismiss plaintiffs' action for failure to state a claim. On February 28, 2017, the District Court granted that motion, finding that "Congress decided, with great specificity, to exempt the New York State Thruway Authority's expenditure of excess toll revenues on the New York State Canal System from the reach of the Dormant Commerce Clause."26 The District Court expressed displeasure with the fact that the Thruway Authority failed to discover its defense of congressional authorization for so long, but it ultimately rejected ATA's claim that the Thruway Authority had waived that argument by raising it too late.27 Accordingly, the District Court vacated its order of August 10, 2016 granting ATA's motion for partial summary judgment and denying defendants' cross‐motion for summary judgment.28 On February 1, 2017, while the ATA case was pending, the American Bus Association ("ABA") and several of its members filed 25 Am. Trucking Ass'ns, 238 F. Supp. 3d at 532. 26 Id. at 541. 27 Id. at 540‐41. 28 Id. at 541. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page13 of 21 13 No. 17‐737 (L) a parallel action against the Thruway Authority and the other defendants, raising the same Dormant Commerce Clause claims. Soon after the District Court dismissed ATA, it entered an order dismissing the ABA case "[f]or substantially the reasons discussed by the court" in ATA.29 II. DISCUSSION A. Standard of Review We review a district court's grant of a motion to dismiss de novo.30 We review for abuse of discretion a district court's decision that a party did not waive an argument by failing to raise it earlier in the proceedings.31 B. Whether Congress Authorized the Thruway Authority to Allocate Excess Highway Tolls to the Canal System ATA contends that Congress did not evince an "unmistakably clear" intent to authorize the Thruway Authority to allocate excess revenues from highway tolls to the Canal System.32 The Thruway 29 J.A. 272. 30 Miller v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003). 31 Brown v. City of New York, 862 F.3d 182, 187 (2d Cir. 2017). 32 See S.‐Cent. Timber Dev., Inc. v. Wunnicke, 467 U.S. 82, 91 (1984). Case 17-737, Document 98-2, 04/20/2018, 2285051, Page14 of 21 14 No. 17‐737 (L) Authority, on the other hand, argues that Congress did expressly authorize it to do so. We agree with the Thruway Authority. The Commerce Clause gives Congress the power "to regulate Commerce. . . among the several states."33 The Supreme Court has long recognized that the Commerce Clause "also limits the power of the States to erect barriers against interstate trade"—the so‐called Dormant Commerce Clause.34 Under the Dormant Commerce Clause, a highway toll is constitutional only if it is "based on some fair approximation of use or privilege for use. . . and is neither discriminatory against interstate commerce nor excessive in comparison with the governmental benefit conferred."35 The Supreme Court has also recognized, however, that "[w]here state or local government action is specifically authorized by Congress, it is not subject to the [Dormant] Commerce Clause even if it interferes with interstate commerce."36 In issuing such an authorization, "Congress must manifest its unambiguous intent."37 Put another way, "Congress' intent and policy to sustain state legislation from attack under the Commerce Clause [must be] 33 U.S. CONST. art. I, § 8, cl. 3. 34 Lewis v. BT Inv. Managers, Inc., 447 U.S. 27, 35 (1980). 35 Evansville‐Vanderburgh Airport Auth. Dist. v. Delta Airlines, Inc., 405 U.S. 707, 716‐17 (1972); see also Nw. Airlines, Inc. v. Cty. of Kent, Mich., 510 U.S. 355, 362‐63 (1994). 36 White v. Mass. Council of Constr. Emp'rs, Inc. 460 U.S. 204, 213 (1983). 37 Wyoming v. Oklahoma, 502 U.S. 437, 458 (1992). Case 17-737, Document 98-2, 04/20/2018, 2285051, Page15 of 21 15 No. 17‐737 (L) 'expressly stated.'"38 That said, "[t]here is no talismanic significance to the phrase 'expressly stated,'" which "merely states one way of meeting the requirement that for a state regulation to be removed from the reach of the [D]ormant Commerce Clause, congressional intent must be unmistakably clear."39 In other words, Congress need not expressly state that it is authorizing a state to engage in activity that would otherwise violate the Dormant Commerce Clause; it need only clearly allow the state to engage in such activity. The plain language of ISTEA manifestly contains such "unmistakably clear" evidence of an intent to authorize the Thruway Authority to use excess highway toll revenues for canal purposes. ISTEA section 1012 permitted the Thruway Authority to allocate excess toll revenues (1) to any transportation facilities under the Thruway Authority's jurisdiction or (2) for any project eligible to receive federal assistance under Title 23.40 The Canal System meets both conditions. On the first score, the New York State Legislature in 1992 transferred jurisdiction of the Canal System to the Thruway Authority, which maintained jurisdiction at all times relevant to this appeal. And on the second score, as part of ISTEA, Congress modified Title 23 to define canals as eligible for federal assistance. ATA acknowledges this fact—thereby conceding that Congress plainly 38 Sporhase v. Nebraska, ex rel. Douglas, 458 U.S. 941, 960 (1982). 39 S.‐Cent. Timber Dev., 467 U.S. at 91 (emphasis added). 40 23 U.S.C. § 101(a); ISTEA § 1012(e), § 1007(a)‐(c). Case 17-737, Document 98-2, 04/20/2018, 2285051, Page16 of 21 16 No. 17‐737 (L) authorized the Thruway Authority to use at least some excess highway toll revenues for canal purposes.41 Having (quietly) made this concession, ATA is left to argue that, while Congress authorized the Thruway Authority to devote some excess toll revenue to the Canal System, it still meant to limit the amount of such allocations. Read in context, ATA contends, section 1012(e) is best understood to lift the prior statutory limit on state tolls, permitting the Thruway Authority merely to continue tolling regimes as they existed at the time of ISTEA's enactment. To support its interpretation, ATA points to phrases in the statute, such as "allow for the continuance of tolls."42 The ordinary meaning of "continuance," according to ATA, is "[t]o remain in the same state."43 And its use thus indicates that Congress expected any post‐ISTEA tolls to be substantially similar in nature and purpose. Since the tolls that Congress permitted to continue in 1992 were 41 Pls. Br. at 18 n.4 ("The district court concluded that the Canal System was a project eligible for assistance under Title 23. . ., a determination that is not at issue in this appeal."). It is true that "[w]e do not consider an argument mentioned only in a footnote to be adequately raised or preserved for appellate review." United States v. Restrepo, 986 F.2d 1462, 1463 (2d Cir. 1993). Here, however, ATA makes an admission, not an argument. And ATA concedes this point again in its main brief. Pls. Br. at 33‐34 (noting that the second sentence of ISTEA section 1012(e) provides that revenues collected from tolls in excess of those needed for debt service and operation and maintenance can be used for "specified purposes (including various transportation‐related projects and facilities, among them the canals)"). 42 Pls. Br. at 33‐34 (quoting ISTEA section 1012(e)) (emphasis in original). 43 Id. at 34 (quoting Webster's II New Riverside University Dictionary 305 (1984)). Case 17-737, Document 98-2, 04/20/2018, 2285051, Page17 of 21 17 No. 17‐737 (L) calculated to pay for highway maintenance, they could not have been used to fund unrelated projects at any substantial level. In our view, there is no basis to interpret the word "continuance" as freezing in place the tolling regime at the time of ISTEA's enactment. Instead, a plain reading of the statute reveals that Congress meant to permit the Thruway Authority to continue collecting tolls of whatever amount without having to repay federal funds—something that it was previously barred from doing once it satisfied its debt obligations. If and when the Thruway Authority did so, it would have surplus revenue on hand to devote to other transportation projects, an outcome that ISTEA not only contemplated but expressly sanctioned. Here, too, ATA makes a critical admission. It acknowledges that the District Court's conclusion that "nothing in ISTEA caps the amount of excess toll revenue that can be used to support transportation enhancement activities," such as canals, is "perhaps true as a literal matter."44 Inasmuch as ATA concedes that Congress authorized the Thruway Authority to allocate excess toll revenues for canal purposes, and likewise concedes that it is "true as a literal matter" that ISTEA contains no language limiting the amount of 44 Am. Trucking Ass'ns., 238 F. Supp. 3d at 536; Pls. Br. at 39‐40. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page18 of 21 18 No. 17‐737 (L) revenue for allocation, its argument necessarily relies merely on context, not text.45 45 But if anything, the context militates in favor of recognizing that Congress intended to authorize the Thruway Authority to devote excess highway toll revenue to the Canal System. Senator Moynihan, who, as noted above, was the mastermind of ISTEA, sought as a general matter to devolve transportation policy to states and cities. Ante, note 17. As The New York Times put it, the bill gave states "freedom in how they spend Federal transportation money," for the first time allowing them "to choose the projects they think they most need rather than hav[ing] to follow a Federal model." Richard L. Berke, Senate Approves Bill to Overhaul Transportation, N.Y. TIMES, June 20, 1991, https://www.nytimes.com/1991/06/20/us/senate‐ approves‐bill‐to‐overhaul‐transportation.html. To achieve that goal, Senator Moynihan proposed that highway money be "fungible," such that states could use funds on other modes of transportation, such as mass transit. See Weingroff, ante note 17. It is worth noting that ATA opposed the measure for precisely this reason, fearing that by permitting states to devote resources to other transportation projects, the bill would "threaten[] the future of America's highways." Id. More specifically, Senator Moynihan pressed from the beginning for language specific to New York that would permit the state to maintain tolls as a source of revenue, declaring that he would "be responsible" for coordinating the bill's passage. Tolls on Thruway May Not Disappear, State Will Keep Fees and U.S. Aid if Congress Passes Pending Bill, BUFFALO NEWS, Feb. 22, 1991, at A1, available at 1991 WLNR 956953. As the drafting process began, he conducted several Field Hearings in which he urged the Commissioner of the New York State Department of Transportation not to "forget that canal system," and called the Canal System "just a treasure." Field Hearings, ante note 17, at 304; J.A. 209. Moynihan's interest in finding financing for the Canal System is hardly surprising; he was widely known as a "longtime aficionado of the canal and its lore." Joseph Berger, U.S. Allots $120 Million for Banks of Erie Canal, N.Y. TIMES, Nov. 26, 1996, http://www.nytimes.com/1996/11/26/nyregion/us‐allots‐120‐ million‐for‐banks‐of‐erie‐canal.html. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page19 of 21 19 No. 17‐737 (L) The text is clear: Congress manifested its unambiguous intent to authorize the Thruway Authority to allocate excess toll funds to the Canal System. Although ISTEA does not expressly invoke the Commerce Clause or state its intent to abrogate Dormant Commerce Clause limitations, it need not do so if congressional intent is unmistakable—as it is here. C. Whether the Thruway Authority Forfeited Its Argument That Congress Authorized It to Depart from the Commerce Clause We next address whether the Thruway Authority forfeited its argument that Congress authorized it to allocate excess highway toll revenues to the Canal System.46 Later, when the bill that would become ISTEA emerged from the Senate Committee on Environment and Public Works without any New York‐specific language, Senator Moynihan proposed an amendment, which would eventually become section 1012(e). The amendment allowed the state agencies in charge of the New York State Thruway and the Fort McHenry Tunnel in Maryland to use excess highway toll revenues to cover transportation facilities under Title 23, as well as those "under the jurisdiction" of those agencies. 137 Cong. Rec. 14774, 14883 (June 13, 1991). In introducing the amendment, Senator Moynihan highlighted how Maryland could allocate tolls raised from the Fort McHenry Tunnel. He explained that section 1012(e) was designed to "make possible the movement of toll receipts on and off the particular systems in such a way that the State, in this case Maryland, can optimize its transportation choices and provision thereof." Id. at 14774. "We very much want Maryland to do with Maryland money what Maryland thinks is best." Id. 46 The forfeiture question applies only in ATA, not in ABA. The plaintiffs in ABA filed suit only in February 2017, after the Thruway Authority had discovered its congressional‐authorization defense. In ATA, however—originally filed in 2013—the Thruway Authority failed to raise that defense for over three years. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page20 of 21 20 No. 17‐737 (L) ATA argues that the Thruway Authority failed to raise its argument regarding congressional authorization for more than three years after ATA filed its complaint and for almost six months after the District Court granted partial summary judgment on liability in favor of ATA. That failure, according to ATA, constitutes forfeiture. Yet ATA concedes that, regardless of whether the Thruway Authority indeed forfeited its argument, the District Court had discretion to reach the merits to correct a clear error.47 As we have explained, Congress's intent in ISTEA section 1012(e) to exempt the Thruway Authority from the Dormant Commerce Clause was unmistakably clear. Thus, regardless of whether the District Court relied on the proper standard for forfeiture, it had discretion to reach the merits of the Thruway Authority's defense.48 47 Pls. Br. at 56. 48 ATA argues that the District Court applied an erroneous legal standard by reasoning that because the Thruway Authority did not know of its defense previously, it could not have waived or forfeited it. Id. That standard, according to ATA, does not apply to waivers or forfeitures of legal arguments, and, instead, the District Court should have asked whether "'the need to correct a clear error or prevent manifest injustice' justified considering defendants' belated argument," Id. at 57 (quoting Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 104 (2d Cir. 2013)). Since the District Court had discretion to reach the merits, we need not reach the question of whether it applied the proper legal standard. Case 17-737, Document 98-2, 04/20/2018, 2285051, Page21 of 21 21 No. 17‐737 (L) III. CONCLUSION In summary, we hold as follows: (1) Congress evinced an "unmistakably clear" intent to authorize the Thruway Authority to depart from the strictures of the Dormant Commerce Clause by allocating surplus highway toll revenues to New York's Canal System; (2) Congress placed no limits on the amount of such surplus highway toll revenue that the Thruway Authority could allocate to the Canal System; (3) The District Court correctly granted defendants' motion to dismiss on the basis of Congressional authorization and vacated its previous order granting plaintiffs' motion for partial summary judgment; and (4) The District Court had discretion to reach the merits of the Thruway Authority's defense that Congress had authorized it to devote surplus highway toll revenues to the Canal System. For the foregoing reasons, we AFFIRM the judgment of the District Court.

ERRATA SHEET, for Opinion dated 03/29/2018, by Judge JAC. FILED.[2303922] [17-737, 17-873] [Entered: 05/16/2018 09:40 AM]

17-737 (L), 17-873 {CON) - - ------- American Truckirig v, NY State Thruway Authority., 886 F.3d 238 (2d Cir, 2018) Errata Found in Softcovet edition of F .Jd Page Col. Linc Delete Insert 243 rught 1s "State" such that it reads '' .. . and rnanaged by the New York State Deputmcnt. .. " 244 Right 15 "Education" "Transportation," such that it reads "New York State Department of T11lnspottation" Copies hive been sent by chambers to: X Panel Members So ordered: X West Publishing X Clerk "> ....:f _.j <{ 0 _;_! l .U CTI _..)• w x: ~ ("......, ~:: -':! > ...:i: Ou_ U.S. Circuit Judge ·~r >O May 15, 2018 I;.J \.D '.,,e r- 0 >- ~:.t::::::::. ""T .;..10 .,, du u... - e;t:;J c:= C"-' <./)::::>

ITEMIZED BILL OF COSTS, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg, FILED. Service date 06/19/2018 by CM/ECF.[2327759] [17-737] [Entered: 06/19/2018 11:40 AM]

Case 15-2181, Document 188-3, 06/06/2018, 2318663, Page1 of 2 United States Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007 ROBERT A. KATZMANN CATHERINE O'HAGAN WOLFE CHIEF JUDGE CLERK OF COURT Date: June 06, 2018 DC Docket #: 21-mc-102 Docket #: 15-2181cv DC Court: SDNY (NEW YORK Short Title: In Re: World Trade Center Lowe CITY)DC Docket #: 10-cv-4226 DC Court: SDNY (NEW YORK CITY)DC Docket #: 21-mc-102 DC Court: SDNY (NEW YORK CITY)DC Docket #: 21-mc-102 DC Court: SDNY (NEW YORK CITY)DC Docket #: 06-cv-7384 DC Court: SDNY (NEW YORK CITY)DC Docket #: 21-mc-103 DC Court: SDNY (NEW YORK CITY) DC Judge: Hellerstein VERIFIED ITEMIZED BILL OF COSTS Counsel for _________________________________________________________________________ Intervenor-Appellant respectfully submits, pursuant to FRAP 39 (c) the within bill of costs and requests the Clerk to prepare an itemized statement of costs taxed against the ________________________________________________________________ Defendant-Appellee and in favor of _________________________________________________________________________ Intervenor-Appellant for insertion in the mandate. $1,515 Docketing Fee _____________________ 7 $2,410.20 Costs of printing appendix (necessary copies ______________) _____________________ 7 $337.60 Costs of printing brief (necessary copies ______________ ____) _____________________ Case 15-2181, Document 188-3, 06/06/2018, 2318663, Page2 of 2 7 $250.80 Costs of printing reply brief (necessary copies ______________) _____________________ (VERIFICATION HERE) ________________________ /s/ Andrew Amend Signature UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT In RE: WORLD TRADE CENTER LOWER Docket Nos. MANHATTAN DISASTER SITE LITIGATION 15-2181-cv(L) 15-2283-cv(Con) ALTYNOWICZ, FOREMSKA, ACOSTA, 15-2285-cv(Con) AKOULOV, BALCER, CAMPUZANO, 15-2487-cv(Con) CIBOROWSKI, DOBROWOLSKI, GLOWATY, 15-2506-cv(Con) JASTRZEBOWSKI, KUCHARSKI, MORENO, 15-2687-cv(Con) PERZYNASKA, RETELSKI, WSZOLKOWSKI, ZALEWSKI, Plaintiffs-Appellants, VERIFICATION OF ITEMIZED BILL OF STATE OF NEW YORK, COSTS Intervenor-Appellant, -v- BATTERY PARK CITY, ET AL., Defendants-Appellees. Andrew W. Amend, an attorney admitted to practice before this Court, affirms the following under penalty of perjury: 1. I am Senior Assistant Solicitor General in the office of Barbara D. Underwood, Attorney General of the State of New York, the attorney for intervenor-appellant. I am familiar with the matters set forth in this verification based on my review of this Office's policies and case file. 2. In an opinion issued on June 6, 2018, this Court vacated the judgment of the District Court for the Southern District of New York (Hellerstein, J.) and remanded the case for further proceedings. 3. I make this Verification in support of the intervenor-appellant's Bill of Costs so that costs may be taxed against defendant-appellee and in favor of intervenor-appellant for insertion in the mandate pursuant to Federal Rules of Appellate Procedure 39. 4. The costs for reproduction set forth on the annexed Itemized and Verified Bill of Costs were necessarily incurred by intervenor-appellant in this appeal and are reasonable in amount. 5. The costs were calculated based on the rates listed in the attached memorandum from the Office of the Attorney General: a. reproduction costs: 20¢ per page b. binding: $1 per document c. cover: $75 d. record preparation: $150 6. Based on these rates, the cost to intervenor-appellant for reproduction of papers is $2998.60, calculated as follows: Brief & Special Appendix: 219.20 (98 pgs x 7* x 20¢ + 7 [binding] + 75 [cover]) *7 copies based on 6 filed; 1 office copy Reply Brief: 147.80 (47 pgs x 7* x 20¢ + 7 [binding] + 75 [cover]) *7 copies based on 6 filed; 1 office copy Supplemental Brief: 118.40 (26 pgs x 7* x 20¢ + 7 [binding] + 75 [cover]) *7 copies based on 6 filed; 1 office copy Supplemental Reply Brief: 103.00 (15 pgs x 7* x 20¢ + 7 [binding] + 75 [cover]) *7 copies based on 6 filed; 1 office copy 2 Joint Appendix: 2410.20 (1663 pgs x 7* x 20¢ + 7 [binding] + 75 [cover]) *7 copies based on 6 filed; 1 office copy. . Total $2,998.60 7. Total recoverable reproduction costs is of $2,998.60. should be taxed against defendant-appellee and in favor of intervenor-appellant. 8. In addition, as a result of the course of proceedings before the district court, intervenor-appellant filed three notices of appeal in order to protect intervenor-appellant's rights. The appeal fee is $505; thus, the cost of filing three appeals is $1,515. 9. Therefore, total recoverable reproduction costs plus the appeal fees is $4,513.60 should be taxed against defendant-appellee and in favor of intervenor-appellant for insertion in the mandate. Dated: June 13, 2018 New York, NY. /s/ Andrew W. Amend. Andrew W. Amend Senior Assistant Solicitor General 3 STATE OF NEW YORK OFFICE OF THE ATTORNEY GENERAL TO: FROM: Barbara D. Underwood MEMORANDUM Michael Lefebvre, Director, Budget and Fiscal Management t. RE: Costs in Litigation and Reproduction Rates for Appellate Court DATE: March 22, 2011 \'Vhenevcr possible, bureaus should seek all costs as authorized by federal or state statute or rule, including docketing fees and reproduction of documents. The following rates for the reproduction of appellate papers apply when these costs are to be charged to or shared with an individual or firm outside the Department of Law. ' 1. When legal papers are reproduced by an outside commercial printer, we charge the acrual costs (to the legally permitted maximum) as indicated on the payment voucher/invoice from the printer.· 2. \\'hen reproduction is perfonned in our own printing units, we will charge as follows: RATES FOR CALCULATION OF COSTS Rate Notes Pet page c.h;uge for all documents .20 motion papers, briefs, or rtcords Binding perdocument 1.00 e.g., thirteen copies of a brief= $13 Cover 75.00 flat fee, including preparation of reproduction Miscellaneous preparation fees a flat fee per case that covers 2nd Circuit and Appellate Divisions 150.00 scanning and OCR conversion, Court of Appeals 50.00 producing tables of contents, page headings (for state coutt: cases) 1bis administrative memorandum supersedes the 1993 memoranda goYerning reproduction and preparation costs for legal printing or legal documents on appeal. Costs for reproduction of documents under the Freedom oflnformation Law arc set under a separate memorandum.

DEFECTIVE DOCUMENT, ITEMIZED BILL OF COSTS, [100], on behalf of Appellee E. Virgil Conway in 17-737, FILED.[2327779] [17-737, 17-873] [Entered: 06/19/2018 11:50 AM]

United States Court of Appeals for the Second Circuit Thurgood Marshall U.S. Courthouse 40 Foley Square New York, NY 10007 ROBERT A. KATZMANN CATHERINE O'HAGAN WOLFE CHIEF JUDGE CLERK OF COURT Date: June 19, 2018 DC Docket #: 13-cv-8123 Docket #: 17-737cv DC Court: SDNY (NEW YORK Short Title: American Trucking Associations v. New York CITY)DC Docket #: 17-cv-782 State Thruway Authori DC Court: SDNY (NEW YORK CITY) DC Judge: McMahon NOTICE OF DEFECTIVE FILING On June 19, 2018 the itemized bill of costs, on behalf of the appellees, was submitted in the above referenced case. The document does not comply with the FRAP or the Court's Local Rules for the following reason(s): ______ Failure to submit acknowledgment and notice of appearance (Local Rule 12.3) ______ Failure to file the Record on Appeal (FRAP 10, FRAP 11) ______ Missing motion information statement (T-1080 - Local Rule 27.1) ______ Missing supporting papers for motion (e.g, affidavit/affirmation/declaration) (FRAP 27) ______ Insufficient number of copies (Local Rules: 21.1, 27.1, 30.1, 31.1) ______ Improper proof of service (FRAP 25) ______ Missing proof of service ______ Served to an incorrect address ______ Incomplete service (Anders v. California 386 U.S. 738 (1967)) ______ Failure to submit document in digital format (Local Rule 25.1) ______ Not Text-Searchable (Local Rule 25.1, Local Rules 25.2), click here for instructions on how to make PDFs text searchable ______ Failure to file appendix on CD-ROM (Local Rule 25.1, Local Rules 25.2) ______ Failure to file special appendix (Local Rule 32.1) ______ Defective cover (FRAP 32) ______ Incorrect caption (FRAP 32) ______ Wrong color cover (FRAP 32) ______ Docket number font too small (Local Rule 32.1) ______ Incorrect pagination, click here for instructions on how to paginate PDFs (Local Rule 32.1) ______ Incorrect font (FRAP 32) ______ Oversized filing (FRAP 27 (motion), FRAP 32 (brief)) ______ Missing Amicus Curiae filing or motion (Local Rule 29.1) ______ Untimely filing ______ Incorrect Filing Event _xx___ Other: the itemized bill of costs was filed in the wrong case. Inquiries regarding this case may be directed to 212-857-8522.

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Description
61
09/25/2017
BRIEF, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg in 17-737, Appellee Bill Finch, Jose Holguin-Veras, Donna J. Luh, Joanne M. Mahoney, Robert L. Megna, New York State Canal Corporation, New York State Thruway Authority, J. Donald Rice, Jr., Stephen M. Saland and Richard N. Simberg in 17-873, FILED. Service date 09/25/2017 by CM/ECF. [2133051] [17-737, 17-873] [Entered: 09/25/2017 11:49 PM]
62
09/26/2017
MOTION, to extend time, on behalf of Appellant American Bus Association, American Trucking Associations, Inc., DATTCO, Inc., Lightning Express Delivery Service Inc., Starr Transit Co., Inc., Wadhams Enterprises, Inc. and Ward Transport & Logistics Corp. in 17-737, Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-873, FILED. Service date 09/26/2017 by CM/ECF. [2134005] [17-737, 17-873] [Entered: 09/26/2017 05:17 PM]
68
09/29/2017
MOTION ORDER, granting motion to extend time [62] filed by Appellant American Trucking Associations, Inc., Wadhams Enterprises, Inc., Lightning Express Delivery Service Inc., Ward Transport & Logistics Corp., American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc., Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc., FILED. [2136199][68] [17-737, 17-873] [Entered: 09/29/2017 09:52 AM]
69
10/09/2017
ORAL ARGUMENT STATEMENT LR 34.1 (a), on behalf of filer Attorney Mr. Evan Mark Tager, Esq. for Appellant American Bus Association, American Trucking Associations, Inc., DATTCO, Inc., Lightning Express Delivery Service Inc., Starr Transit Co., Inc., Wadhams Enterprises, Inc. and Ward Transport & Logistics Corp. in 17-737, Attorney Mr. Evan Mark Tager, Esq. for Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-873, FILED. Service date 10/09/2017 by CM/ECF. [2142843] [17-737, 17-873] [Entered: 10/09/2017 11:40 AM]
71
10/10/2017
ORAL ARGUMENT STATEMENT LR 34.1 (a), on behalf of filer Attorney Andrew W. Amend for Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg in 17-737, Attorney Andrew W. Amend for Appellee New York State Thruway Authority, New York State Canal Corporation, Bill Finch, Joanne M. Mahoney, Donna J. Luh, Richard N. Simberg, J. Donald Rice, Jr., Jose Holguin-Veras, Robert L. Megna and Stephen M. Saland in 17-873, FILED. Service date 10/10/2017 by CM/ECF. [2143450] [17-737, 17-873] [Entered: 10/10/2017 01:31 PM]
74
11/07/2017
REPLY BRIEF, on behalf of Appellant American Trucking Associations, Inc., Wadhams Enterprises, Inc., Lightning Express Delivery Service Inc., Ward Transport & Logistics Corp., American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-737, Appellant American Bus Association, DATTCO, Inc. and Starr Transit Co., Inc. in 17-873, FILED. Service date 11/07/2017 by CM/ECF. [2167051] [17-737, 17-873] [Entered: 11/07/2017 05:07 PM]
11/09/2017
CASE CALENDARING, for argument on 01/25/2018, SET.[2169343] [17-737, 17-873] (Text entry; no document attached.)
78
12/06/2017
NOTICE OF HEARING DATE ACKNOWLEDGMENT, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg, FILED. Service date 12/06/2017 by CM/ECF. [2187837] [17-737] [Entered: 12/06/2017 11:28 AM]
79
01/12/2018
NOTICE OF HEARING DATE ACKNOWLEDGMENT, on behalf of Appellant American Trucking Associations, Inc., Lightning Express Delivery Service Inc., Wadhams Enterprises, Inc. and Ward Transport & Logistics Corp., FILED. Service date 01/12/2018 by CM/ECF. [2213256] [17-737] [Entered: 01/12/2018 04:09 PM]
01/25/2018
CASE, before GC, JAC, RJL, C.JJ., HEARD.[2221412] [17-737, 17-873] (Text entry; no document attached.)
82
03/01/2018
LETTER, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg, <EDIT by Clerk's Office> RECEIVED. Service date 03/01/2018 by CM/ECF.[2247268] [17-737] [Entered: 03/01/2018 01:37 PM]
85
03/29/2018
NEW CASE MANAGER, Atasha Joseph, ASSIGNED.[2267269] [17-737, 17-873] [Entered: 03/29/2018 09:44 AM]
86
03/29/2018
OPINION, affirming the district court judgment, by GC, JAC, RJL, C.JJ., FILED.[2267289] [17-737, 17-873] [Entered: 03/29/2018 09:54 AM]
90
03/29/2018
JUDGMENT, FILED.[2267374] [17-737, 17-873] [Entered: 03/29/2018 10:47 AM]
98
04/20/2018
JUDGMENT MANDATE, ISSUED.[2285051] [17-737, 17-873] [Entered: 04/20/2018 05:05 PM]
99
05/16/2018
ERRATA SHEET, for Opinion dated 03/29/2018, by Judge JAC. FILED.[2303922] [17-737, 17-873] [Entered: 05/16/2018 09:40 AM]
100
06/19/2018
ITEMIZED BILL OF COSTS, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg, FILED. Service date 06/19/2018 by CM/ECF.[2327759] [17-737] [Entered: 06/19/2018 11:40 AM]
100
06/19/2018
ITEMIZED BILL OF COSTS, on behalf of Appellee E. Virgil Conway, J. Rice Donald, Jr., Bill Finch, Jose Holguin-Veras, Donna J. Luh, Thomas J. Madison, Jr., Joanne M. Mahoney, Robert L. Megna, Howard P. Milstein, New York State Canal Corporation, New York State Thruway Authority, Stephen M. Saland, Brandon R. Sall and Richard N. Simberg, FILED. Service date 06/19/2018 by CM/ECF.[2327759] [17-737] [Entered: 06/19/2018 11:40 AM]
101
06/19/2018
DEFECTIVE DOCUMENT, ITEMIZED BILL OF COSTS, [100], on behalf of Appellee E. Virgil Conway in 17-737, FILED.[2327779] [17-737, 17-873] [Entered: 06/19/2018 11:50 AM]
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