Decided: January 21, 2014
The Fourth Circuit Court of Appeals affirmed the district court’s dismissal of plaintiffs’ complaint attacking the legality of the toll charged by the Metropolitan Washington Airports Authority (“MWAA”) for use of the Dulles Toll Road. The Fourth Circuit held that the tolls were user fees, not taxes, under Virginia law.
In 1950, Congress authorized the construction of the Washington Dulles International Airport. The federal government acquired a right-of-way on which it constructed the Dulles Airport Access Highway, which runs exclusively to service traffic to and from the airport, and has no exits or tolls. In 1980, the Virginia Department of Transportation received an easement on which to construct a toll road within the right-of-way to serve non-airport traffic, known as the Dulles Toll Road. In 1984, the United States Secretary of Transportation proposed the formulation of a regional airport authority which would take over control of Ronald Regan Washington and Dulles International Airports from the United States. Congress passed legislation approving the compact and leased the two airports to the newly formed MWAA. Congress explicitly granted MWAA the power “to levy fees or other charges.” Nonetheless, the Dulles Toll Road continued to be operated not by MWAA but by the Virginia Commonwealth Transportation Board (“CTB”). In the ensuing decades, the Virginia General Assembly repeatedly authorized CTB to use toll revenue to fund mass transit projects within the Dulles Corridor. In 2004, it granted CTB open-ended authority to issue revenue bonds to fund a mass-transit rail project in the Dulles Corridor, to be paid with revenue s from the Dulles Toll Road. CTB then raised the Dulles Toll Road rates. Meanwhile, MWAA shared Virginia’s goal of extending the Metrorail system to Dulles Airport, which the FAA master plans called for. So that MWAA could fulfill this mandate, Virginia transferred control to MWAA, giving it the power to set tolls on the Dulles Toll Road, so long as they were exclusively used for transportation improvements within the Dulles Corridor. On appeal, plaintiffs argued that the toll paid by users of the Dulles Toll Road was an illegal tax.
Before reaching the substance of plaintiffs’ argument, the Fourth Circuit addressed the question of standing. The Fourth Circuit concluded that the plaintiffs did have standing because they suffered the concrete harm of having paid what were, in their view, inflated tolls. They sought tangible and particularized relief: they wanted their money back. Moreover, they were not so numerous, and their grievance was not so attenuated.
The substance of plaintiffs’ argument was based on the premise that, under the Virginia Constitution, the state legislature is unable to delegate its taxing authority to an independent body, like MWAA. The Fourth Circuit therefore addressed what fund-raising powers the General Assembly could have delegated to the MWAA under Virginia law, and whether the toll charged was even a tax.
To determine whether a given exaction is a tax, Virginia courts ask whether it is a bona fide fee-for-service. The “fee-for-service” inquiry does not focus narrowly on whether the fee is calculated to defray just the costs actually incurred by the user. Rather, Virginia law requires only that there be a “reasonable correlation between the benefits of the service provided and burdens of the fee paid.”
According to the Fourth Circuit, the tolls paid by drivers on the Dulles Toll Road are not taxes for precisely the reasons articulated by the Virginia Supreme Court in Elizabeth River Crossings. First, the Court reasoned that it was clear that toll road users pay the tolls in exchange for a particularized benefit not shared by the general public. The planned expansion adds multiple stops both before and after the airport, on a route that closely follows the Dulles Toll Road for the evident purpose of serving the commuters who normally travel that route. Second, the Fourth Circuit explained that drivers were not compelled by government to pay the tolls or accept the benefits of the Project facilities. The fee is both voluntarily paid and the resulting benefits are voluntarily received. Nobody is forced to drive on the Dulles Road and, therefore, the toll is voluntarily paid. Funds raised for the Metrorail expansion project directly benefit only travelers who use the Dulles Corridor, not the community as a whole. Therefore, receipt of the benefit is voluntary in that it only accrues to those who have chosen to travel in the corridor. Finally, the Court decided that the tolls were collected solely to fund the Project. The Metrorail expansion is part of the same project as the Dulles Toll Road. They run through the same narrow transit corridor, serve many of the same areas, and will benefit many of the same commuters. Because they are parts of the same project, tolls charged on the Dulles Toll Road are not transformed into taxes merely by being used to fund the Metrorail expansion. No evidence exists that the surplus tolls were diverted outside those confines or are treated, in any sense, as general revenue.
– Sarah Bishop