At Va. Supreme Court, toll opponents have a final say

By Dave Forster, The Virginian-Pilot – 9/12/2013

Chief Justice Cynthia Kinser boiled down a crux of the Hampton Roads tolls case Wednesday to what seemed to be a pretty straightforward question:

Are all the pieces of the project – the Downtown and Midtown tunnels and a freeway extension – connected?

“It hinges on that, doesn’t it?” she asked an attorney for Elizabeth River Crossings, the state’s private partner in the $2 billion deal.

Kinser’s query was one of many the seven-member state Supreme Court asked of lawyers for both sides during an hour of arguments. The hearing marked the last court date for a year-old lawsuit by residents and businesses to stop the tunnel tolls.

A decision is expected as soon as November. The tolls are scheduled to start Feb. 1, unless the court strikes them down.

Other questions from the justices focused on how much freedom the Virginia Department of Transportation would have to use excess revenue from the tolls elsewhere in the state, and what a favorable ruling for the plaintiffs would mean for how road projects are funded in Virginia.

“Do you not have to also challenge the constitutionality of the 1995 act?” asked Justice William C. Mims, referring to the Public-Private Transportation Act, the legislation that authorized the tolls deal.

“We do,” replied Patrick McSweeney, the lead attorney for the plaintiffs.

Mims, a former state legislator who voted for the 1995 law, asked most of the questions that were put to McSweeney.

Steve Emmert, an appellate attorney from Virginia Beach and the online author of Virginia Appellate News & Analysis, argued an unrelated case earlier in the morning and stayed to watch the rest of the day’s docket. He said the justices were active in their questioning for the tolls case – what appellate attorneys would call a “hot bench.”

“The court is trying to determine not merely what happens in this case, but the next case and the one after that,” Emmert said. “This decision will have a life beyond the Portsmouth tunnels.”

The toll opponents have one victory under their belts: A Portsmouth Circuit Court judge ruled in May that the fees amounted to taxes, and that state legislators had unlawfully delegated their power to the state highway department to negotiate and set the fees with Elizabeth River Crossings.

VDOT and ERC appealed the ruling.

Joe Cook of Norfolk was among some 65 people who left Portsmouth in a charter bus about 7 a.m. to hear the Supreme Court arguments in person. The retiree, a former executive director of the Louisiana American Civil Liberties Union, wore a button that read “99 percent.” He said he doesn’t use the tunnels much, but he had donated about $100 to the lawsuit and has followed it from the beginning.

Cook said he worried about the tolls’ impact on working-class and lower-income people. Rush-hour commuters would be tolled $1.84, or nearly $1,000 a year.

“I thought it was a bad deal – bad government,” he said.

Kinser said during arguments that she was troubled by language in the Public-Private Transportation Act that says user fees for a qualifying project shall be set at a level that takes into account lease payments, service payments and compensation to the private entity, “or as specified in the comprehensive agreement” between the parties.

“Explain to me why that ‘or’ doesn’t let them do whatever they want,” she said to Stuart Raphael, an attorney for Elizabeth River Crossings.

Raphael said that the law provides more guidance and that the fees must be “within reason.”

VDOT’s deal with ERC calls for the toll revenue to help finance construction of a second Midtown Tunnel tube and an extension of the MLK Freeway to I-264, rehabilitation of the existing tunnels, and the cost of operating and maintaining the roads for 58 years. VDOT contributed about $420 million to the project, while ERC has committed as much as $272 million in private equity.

The company’s contract with the state allows it to make an average annual profit of 13.5 percent on its investment.

McSweeney told the justices that the project’s reliance on toll revenue from a tunnel that won’t be expanded to support expansion of another sets the case apart. The result – requiring one group of people to pay for the benefits of another – is what makes the toll a tax, he said.

He dismissed the state and ERC’s assertion that the crossings are part of an integrated transportation network. By that reasoning, he said, one could bundle every river crossing in Hampton Roads into one toll project.

“Everything in Hampton Roads is functionally related,” McSweeney said. “If you approved it, there’s no end to what you could bundle.”

Raphael pointed to multiple instances since 1956 in which the General Assembly has recognized that the tunnels are functionally interconnected.

He said it is “flat wrong” to say, as the plaintiffs do, that Downtown Tunnel users would see no benefit from the project. Raphael noted the new, direct connection they would have, via the planned freeway extension, to get to the Midtown Tunnel, as well as a projected 30-minute reduction in the average round-trip commute.

“There is clear benefit to the users of the Downtown Tunnel,” Raphael said.

The comments drew a quiet trickle of murmurs from an otherwise silent crowd.

While the Midtown Tunnel will be able to handle more traffic with a second tube, the Downtown Tunnel is expected to see less traffic at least in part because of people trying to avoid the tolls.

Elizabeth River Crossings has proceeded with work on the project while the court case is resolved. If the Supreme Court invalidates the tolls, the General Assembly might be faced with trying to salvage VDOT’s contract with the company through legislation this winter.

 

Dave Forster, 757-446-2627, dave.forster@pilotonline.com