On behalf of the New Hampshire Motor Transport Association (NHMTA), Preti
Flaherty successfully prevented the State of New Hampshire and its Department of
Transportation, from quietly – and illegally – diverting millions of dollars in
Constitutionally-protected highway revenues for the construction and operation
of a proposed commuter rail line serving Nashua, New Hampshire and northern
Massachusetts.
The State was planning to use some $15 million in
“highway funds” (fuel taxes and registration fees paid by motor vehicle
operators) to fund its share of the rail project, despite the fact that Article
6-a of the New Hampshire Constitution provides that highway funds – which are
essentially a use tax, paid only by highway users –are to be used “exclusively
for the construction, reconstruction, and maintenance of public highways” and
cannot “be diverted to any other purpose whatsoever.” In addition to the Nashua
rail project, the State was floating long-range plans to spend hundreds of
millions on more ambitious rail projects. The NHMTA, a nonprofit New Hampshire
association consisting of trucking and motor transport businesses, retained
Preti Flaherty to challenge the State’s funding plan in the New Hampshire
Supreme Court.
In response to the challenge, the State argued that
railroads are in fact public highways, and that the project would improve roads
by reducing traffic. On behalf of the NHMTA, Preti Flaherty attorney Michael
Kaplan argued that the language of the Constitution, as approved by the citizens
of New Hampshire in 1938, clearly prohibited such diversions; that the State’s
own attorney general had previously issued an opinion that highway funds could
not be used for rail purposes; and that neither the legislature nor the
administrative agencies in New Hampshire had any right or authority to override
the State Constitution. Preti Flaherty also argued that neither the NHMTA nor
any other citizen should have to sue their own government to force them to abide
by the Constitution, as the paramount law of the State.
In a unanimous
decision issued on April 19, 2004, the New Hampshire Supreme Court agreed with
Preti Flaherty’s arguments, and ruled that the State’s planned diversion of
highway funds was indeed unconstitutional, and therefore prohibited. The Court
also ruled that the NHMTA had “conferred a substantial benefit on all highway
users” by suing to prevent the diversion of highway funds, and ordered the State
to reimburse the NHMTA for the legal fees and costs of prosecuting the
successful action against the State.
