Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca2-14-03348/USCOURTS-ca2-14-03348-1/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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1 American Trucking Assn. v. N.Y. State Thruway Authority

2 Docket No. 14-3348

3

4 JON O. NEWMAN, Circuit Judge, concurring in the result:

5 I agree that the State of New York need not be joined as

6 a necessary and indispensable party in this lawsuit but for

7 only one of the reasons the Court sets forth: the Attorney

8 General of the State of New York has appeared in the case (in

9 the District Court and here) representing the Defendant10 Appellant New York State Thruway Authority, and his argument

11 that the Authority’s use of tolls to pay for maintenance of

12 the State’s Canal System does not violate the dormant Commerce

13 Clause will be exactly the same, whether asserted only on

14 behalf of the Authority or also on behalf of the State.

15 Moreover, as the State’s chief legal officer, he can be

16 expected to advance that argument as vigorously as if the

17 State were a party to this lawsuit. In urging dismissal under

18 Rule 19 of the Federal Rules of Civil Procedure, with the

19 consequence of refiling in state court because of the State’s

20 Eleventh Amendment immunity in federal court, the Attorney

21 General makes no claim that he would advance a different or

22 stronger argument on the constitutional issue in the state

23 court. “[J]oinder will not be compelled under the ‘impair or

24 impede’ provision of Rule 19(a) if the absentee’s interest is

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1 adequately represented by an existing party.” 4 Moore’s

2 Federal Practice § 19.03[3][f][ii] (2014) (footnote collecting

3 cases omitted). See Marvel Characters, Inc. v. Kirby, 726 F.3d

4 119, 134 (2d Cir. 2013).

5 I cannot agree, however, with several of the Court’s

6 other reasons and therefore concur only in the result that

7 reverses the dismissal of the suit for failure to join the

8 State as a party under Rule 19.

9 1. The Court acknowledges that “if the Thruway Authority

10 loses, the State will likely have to come up with some other

11 way to raise money for the canals,” Court op. at 15, but

12 nevertheless concludes that “New York’s financial interest in

13 the outcome of this lawsuit – however large – is too remote

14 and indirect to qualify as a valid Rule 19 interest.” Court

15 op. at 18. When a court tells people they “will likely have

16 to come up” with money upon losing a lawsuit, they would not

17 consider their interest in the lawsuit “remote.” Neither does

18 New York. Whether New York’s financial interest in the

19 lawsuit is the kind of interest that suffices for Rule 19

20 joinder is a fairly debatable issue that we need not decide,

21 but that interest is surely not “remote.”

22 2. The Court observes that “[t]he State’s interest in

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1 having another entity fulfill its constitutional obligation to

2 support the Canal System is assuredly significant, but it is

3 too remote and indirect to make it a necessary party.” Id. at

4 [14] (Emphasis added).

5 Perhaps the State’s interest in having “another entity”

6 fulfill the State’s constitutional obligation is remote and

7 speculative. After all, if the Turnpike Authority is denied

8 the use of tolls to fund the Canal System, the State can

9 choose either to have “another entity” raise and disburse the

10 needed funds or to provide the funds directly out of the

11 State’s treasury. Which means the State chooses might be

12 speculative, but the State’s need to take some action to make

13 sure the constitutionally required funds are provided is by no

means speculative. Indeed, it is certain.1 14

15 3. The Court acknowledges that “a defeat for the Thruway

16 Authority may have downstream effects that cost the State

17 money.” Id. at [17-18]. Nevertheless, the Court asserts that

18 “the State’s interest here is the same as its interest in the

19 fortunes of any other entity that contributes to a state

1 The Plaintiffs-Appellants suggest that the Thruway

Authority itself can find some revenue source other than

tolls to maintain the Canal System. That possibility is

fairly described as speculative. 

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1 function and thereby and to that extent obviates an

2 expenditure that the [S]tate might otherwise make.” Id. at

3 [18] (emphasis added). The Court offers as an example of the

4 “other entity” the American Red Cross providing flood or

5 famine relief. See id.

6 But the State’s interest here is not the same as whatever

7 interest in might have in the fortunes of the Red Cross. 

8 Worthy as such private expenditures are, they are not made in

9 lieu of a State obligation, like New York’s obligation to

maintain the canals.2 10 A decision by the Red Cross to cease

11 funding relief to flood or famine victims would be

12 unfortunate, but it would not trigger a state constitutional

13 or statutory obligation to replace such funding.

14 4. The Court contends that a financial interest,

15 sufficient for Rule 19 joinder, is “inconsistent” with Circuit

16 precedent, id. at [15], citing ConnTech Development Co. v.

17 University of Connecticut Education Properties, Inc., 102 F.3d

2 The Court’s example of a state interest in the

fortunes of a private organization would be persuasive if

the private organization had the sole responsibility for

discharging a state obligation like the obligation to

provide schools. Denial of the use of toll receipts to

discharge an obligation of that sort would indeed make the

state interest in the fortunes of the private organization

relevant. But that example would merely raise the Rule 19

issue, not resolve it. 

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1 677 (2d Cir. 1996). I see nothing in ConnTech that defeats

2 the State’s claim that it has a financial interest here.

3 That case was a suit by ConnTech to enforce an

4 arbitration award it had won for breach of its assignor’s

5 contract with Connecticut Education Properties, Inc.

6 (“UCEPI”). UCEPI unsuccessfully moved to dismiss, contending

7 that the State of Connecticut was a necessary party under Rule

8 19. The adverse judgment against UCEPI created no actual or

9 even potential liability for the State of Connecticut. Here,

10 by contrast, an adverse judgment against the Thruway

11 Authority, restricting the use of tolls, would create a

12 distinct likelihood that New York will have to find some way

13 to pay for maintenance of the canals.

14 The Court deems ConnTech relevant because the contract in

15 that case expressly insulated the State from liability for the

16 debts of UCEPI, and New York has insulated itself by statute

17 from liability for the debts of the Thruway Authority. But

18 that insulation was not decisive in ConnTech, and it is not

19 decisive here. The critical difference between the cases is

20 that the adverse judgment in ConnTech created no risk of a

financial obligation for Connecticut,3 21 whereas an adverse

3 In ConnTech, our Court relegated to a footnote the

rejection of ConnTech’s argument that Connecticut had an

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1 judgment in our case would create a serious financial risk for

2 New York.

3 There appears to be some uncertainty as to what kind of

4 financial interest would make a party necessary within the

5 meaning of Rule 19. On the one hand, it is said that the

6 “interest” of an absent party rendering it necessary must be

7 “legally protected, not merely a financial interest.” 4

8 Moore’s Federal Practice § 19.03[3][b] (2004) (internal

9 quotation marks omitted). On the other hand, that same

10 treatise says that in a suit against an insurer in states

11 permitting direct actions against insurance companies, “the

12 insurer . . . would probably be an indispensable party.” Id.

13 § 19.06[5]. Of course, an insurer in a direct action state is

14 not similarly situated to New York in the pending case, but

15 the example of such an insurer indicates that a financial

16 interest can in some circumstances make a party indispensable.

17 If toll receipts cannot be used to maintain the Canal

18 System, New York will have an obligation to arrange for

interest requiring joinder because UCEPI lacked sufficient

assets to satisfy a judgment against it and such a judgment

would “implicate the State’s treasury.” See 102 F.3d at 683

n.3. The footnote pointed out that the contract, on which

ConnTech had sued, expressly disavowed any such

responsibility by the State. In any event, the claim that

UCEPI lacked sufficient funds to pay the adverse judgment,

lacking support in the record, was entirely speculative. 

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1 replacement funding. Rather than resolve the debatable issue

2 of whether a financial obligation of that sort creates an

3 interest that renders New York necessary, I prefer to reject

4 joinder on the clear basis that New York is not an

5 indispensable party because its interests are fully protected

6 by the appearance of the Attorney General.

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