Feds accidentally upload internal memo admitting plan to kill NYC congestion pricing is ‘very unlikely’ to succeed — before quickly deleting it

Lawyers for the Department of Transportation accidentally uploaded an internal memo detailing the federal agency’s plan to kill congestion pricing in New York — and admitting that the legal strategy is “very unlikely” to succeed.

The 11-page filing, which was on a court docket and then quickly deleted late Wednesday, lists the holes in Transportation Secretary Sean Duffy’s legal arguments to stop the tolling program that hits drivers entering Manhattan below 60th Street with a $9 fee.

The three government lawyers tasked with defending Duffy’s move did offer an other possible legal avenue to halt the scheme, but noted it, too, carried risks.

Duffy recently also warned Gov. Kathy Hochul there would be “serious consequences” — including the loss of possibly billions in federal funding for roadway construction projects in New York — if she continues to buck his order to stop the tolls.

A DOT spokesperson confirmed Thursday that as a result of the gaffe, the attorneys from the Southern District of New York would be replaced by others in the Department of Justice’s Civil Division based in Washington DC.

“Are SDNY lawyers on this case incompetent or was this their attempt to RESIST? At the very least, it’s legal malpractice,” said spokeswoman Halee Dobbins. “It’s sad to see a premier legal organization continue to fall into such disgrace.”

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The memo was filed with Manhattan federal court, on the docket for the Metropolitan Transportation Authority’s lawsuit against the DOT seeking to stop the feds from halting the controversial program.

The mistakenly-filed letter, dated April 11, cast doubt on Duffy’s argument that the feds have the right to pull approval for the first-in-the-nation scheme — which was given the green light during the Biden administration under a DOT pilot program.

“It is unlikely that Judge [Lewis] Liman or further courts of review will accept the argument that the [congestion pricing plan] was not a statutorily authorized ‘value pricing’ pilot under the Value Pricing Pilot Program,” the letter reads.

“We have been unable to identify a compelling legal argument to support this position,” the lawyers continued, citing numerous examples of courts giving local governments space to try “novel social and economic experiments.”

The attorneys were also skeptical about Duffy’s argument that congestion pricing violates federal law because it doesn’t offer a toll-free alternative for drivers.

And Duffy has pointed out that the toll amount was set based on how much money the state needs to raise for the MTA — and not as a way to actually alleviate gridlock on Manhattan’s busiest streets.

“Neither of these reasons … is likely to convince the court,” the memo said.

“It is very unlikely that Judge Liman or further courts of review will uphold the Secretary’s decision on the legal grounds articulated in the letter,” the lawyers wrote.

They also noted that since other than Duffy’s decision itself, there appears to be “no other material supporting or explaining the DOT’s change of position,” that could put the agency at risk of “extra-record discovery … including requests for production of emails and depositions of agency officials, including the Secretary in particular.”

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The lawyers pointed out another avenue where Duffy could potentially kill the plan through the Office of Management and Budget “as a matter of changed agency priorities.” But they noted that argument could also be smacked down in court.

A letter Duffy sent to Hochul this week after the feds’ second deadline for the MTA to stop collecting the tolls — which included a “formal ‘notice of termination'” — appears to indicate he’s on board with shifting strategy.

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But the lawyers noted the so-called “cooperative agreement” between the MTA and the feds “does not have any explicit termination provisions,” and that any change could trigger another review process to “assess the environmental impacts of terminating” the congestion pricing scheme.

Liman, the judge in the case, agreed to temporarily seal the document Thursday after the interim Manhattan US Attorney, Jay Clayton, wrote him a pleading letter, calling the memo “attorney-client privileged / attorney work product.”

Clayton, whose first day on the job was Monday, said the feds had meant to upload a letter to the judge, and instead mistakenly filed the internal memo.

He said it took about 15 minutes for the feds to realize their “inadvertent filing of a privileged communication.”

The judge stopped short of granting Clayton’s request for a permanent seal, wondering whether the feds’ “inadvertent publication of the document waives any applicable privilege.”

Dobbins, the DOT spokesperson, slammed the SDNY, suggesting without proof that the attorneys could have filed the memo intentionally.

“SDNY’s memo doesn’t represent reality. Kathy Hochul’s congestion pricing war against the working class was hastily approved by the Biden Administration after Donald Trump was elected,” she added. “Taxpayers already financed the highways that Hochul is now shutting down to the driving public and there is no free alternative. This is unprecedented and illegal. If New York doesn’t shut it down, the Department of Transportation is considering halting projects and funding for the state.”

The letter that the prosecutors had intended to file, according to Clayton, was one clarifying — at the judge’s request — whether they intended to submit any administrative records beyond Duffy’s Feb, 19 letter announcing the DOT was pulling its approval of the congestion pricing plan.

“At this juncture, Federal Defendants can confirm that the administrative record will include several documents in addition to Secretary Duffy’s February 19, 2025 letter,” the letter reads.

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But that line claim seemingly contradicts the accidentally-filed insider memo, in which prosecutors wrote that there was a lack of administrative records “other than the Secretary’s decision itself,” potentially placing the DOT at risk.

In a recent hearing in the case, the government attorneys have deferred questions about the Trump administration’s move to kill congestion pricing to Duffy, saying that the former reality TV star was still “evaluating” what his next moves were if Hochul continues to insist the tolling cameras are staying put.

Hochul’s press secretary Avi Small said her office was aware of the memo mishap and repeated her mantra that “the cameras are staying on.”

Transit advocates were quick to celebrate the inadvertent sharing of the internal memo.

“Last night’s leak screams the quiet part loud. The feckless feds have no case against New York’s immensely successful congestion relief program,” said Riders Alliance policy and communications director Danny Pearlstein.

“Bus riders and drivers will enjoy faster commutes and subway riders will be winning reliable signals and accessible stations for a very long time to come.”

— Additional reporting by Josh Christenson