The U.S. Department of Transportation on Thursday said it took the extraordinary step of replacing the federal lawyers defending it in a lawsuit over New York City’s congestion pricing program, after accusing them of undermining the department’s bid to end the toll.
The move came after the Manhattan U.S. attorney’s office, which had been handling the case, said it mistakenly filed in federal court on Wednesday night a confidential memo that questioned the department’s legal strategy and urged a new approach.
In response, however, the department raised the possibility that the disclosure attempted to sabotage its efforts to halt congestion pricing. Transportation officials said they would transfer the case to the civil division of the Justice Department in Washington. The memo has since been removed from the public docket.
In the letter, dated April 11, the three assistant U.S. attorneys on the case warned that Sean Duffy, the transportation secretary, was using shaky rationale to end the tolling plan and was “exceedingly likely” to fail, the lawyers wrote.
The 11-page letter instead suggested that the department could build a stronger case if it sought to terminate the federal government’s approval of the tolling program “as a matter of changed agency priorities,” rather than stick with the previous tactic of questioning the legality of the toll.
It’s not unusual for lawyers to advise their clients confidentially in this way. But the filing telegraphed the government’s legal weaknesses in the middle of a tense fight with Gov. Kathy Hochul and transit leaders who have vowed to keep the tolling program running.
The Metropolitan Transportation Authority, which operates mass transit in New York City and the toll program, sued the Department of Transportation in February to prevent its interference.
In a statement on Thursday, the Department of Transportation called the filing of the memo “legal malpractice.”
“Are S.D.N.Y. lawyers on this case incompetent or was this their attempt to RESIST?” a spokeswoman for the department wrote.
Nicholas Biase, a spokesman for the U.S. attorney’s office, said in a statement that the filing “was a completely honest error and was not intentional in any way.” He said that the Southern District lawyers took immediate steps to remove the memo, which is subject to attorney-client privilege, from the docket.
“We look forward to continuing to vigorously advocate in the best interest of our clients,” Mr. Biase added, referring to the Transportation Department and the Federal Highway Administration. He did not immediately respond to a request for comment about the Transportation Department’s assertion that it is having the case moved to the Justice Department in Washington.
The public release of the letter was another setback in Mr. Duffy’s war on the congestion pricing toll, which he has ordered New York to stop collecting three times since February. President Trump has promised for months to kill the congestion pricing toll, claiming, without evidence, that it was bad for the local economy.
The program, the first of its kind in the nation, charges most drivers $9 to enter Manhattan below 60th Street during peak traffic, to both reduce gridlock and pollution and raise much-needed funds for the region’s mass transit system. After years of federal, state and local review, the plan was approved under the Biden administration in November 2024, and tolling began on Jan 5.
But the letter also suggests that, even if the Transportation Department’s legal argument is unconvincing, the agency could seek other means of ending the toll program. Mr. Duffy has already threatened to withhold federal funding and approval for a number of transportation projects in the city and state, if Ms. Hochul does not comply with his demands.
The Transportation Department, in its statement attacking the lawyers with the Southern District, added, “It’s sad to see a premier legal organization continue to fall into such disgrace.”
The assertion echoed recent criticism from Trump Justice Department officials about the Southern District’s handling of another prominent case, the prosecution of Mayor Eric Adams of New York. That case was also moved to the Justice Department in Washington and was dismissed, and several Southern District prosecutors, including an interim leader of the office, resigned.
Both the governor’s office and the M.T.A. said they were aware of the congestion pricing filing, but did not comment directly on it. Several legal observers, however, were already discussing the revealing legal document Thursday morning.
“Oh my god — very embarrassing,” said Roderick M. Hills Jr., a professor at New York University Law School who has written a legal brief in support of congestion pricing. “It’s a gigantic, obvious, objective blunder,” he added.
There is mounting evidence that the program is working. In the plan’s first three months, about 5.8 million fewer vehicles entered the tolling zone compared with the same time period in recent years, representing a 12.5 percent drop in traffic, according to court documents filed by the M.T.A.
But the tolling program has continued to draw opposition from many drivers who say that it has been a financial burden. Some Manhattan residents and businesses in the congestion pricing zone have also criticized the tolls, saying it has raised their costs. The program has faced multiple federal lawsuits seeking to halt it.
Mr. Duffy has argued that New York must shut off the toll for two reasons, the letter from the U.S. attorney’s office said. First, that the toll exceeded the scope of the 1990s federal program used to authorize it, because the plan didn’t offer drivers a toll-free option into the zone; second, that the toll should not prioritize the transit authority’s infrastructure upgrades over the goal of reducing traffic.
“Neither of these arguments is likely to convince the court,” the assistant U.S. attorneys who were representing Mr. Duffy wrote. The federal judge presiding over the case, Lewis J. Liman, has already rejected key elements of those theories in other suits related to congestion pricing.
Michael Gerrard, a professor at Columbia Law School who supports congestion pricing, said the letter also suggests that the federal government has no quick legal remedy to kill the program.
The M.T.A. has already challenged the premise that the Transportation Department can simply back out, arguing that the program underwent years of public review.
Jack L. Lester, a lawyer who represents New Yorkers Against Congestion Pricing Tax, a coalition suing over the tolls, said the federal government could look to other avenues to stop the program. He urged federal officials to hold public hearings to establish a record of what he called its “negative socioeconomic impacts upon small businesses and wage-earners.”
The M.T.A. said last month that the program was on track to raise $500 million in toll revenue in its first year, a major step toward financing $15 billion for critical repairs and improvements to the subway, buses and commuter railroads.
The federal government has inserted itself in recent months in a number of New York transportation projects. Last week, the Trump administration said it would take over the M.T.A.’s renovation plans for Pennsylvania Station, one of the busiest train hubs in the world. And Mr. Duffy has been a vocal critic of the subway, where he has claimed that crime is out of control, despite police reports showing otherwise.
Winnie Hu contributed reporting.
Stefanos Chen is a Times reporter covering New York City’s transit system.
Benjamin Weiser is a Times reporter covering the federal courts and U.S. attorney’s office in Manhattan, and the justice system more broadly.
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