Ronald Blount, head of the Taxi Workers Alliance of Pennsylvania, a union representing drivers, said that while he respected Dalzell's opinion, he still felt the city's cab companies should be repaid.
"When we're doing something wrong, I immediately get fined," he said Monday. "We would hope the PPA would have to pay, too, for having done something wrong."
Dalzell's decision is the latest development in a decade of contention between the city's cabdrivers and the authority, which oversees taxi and limousine service in the city.
Cabdrivers have accused the agency of saddling them with onerous fines, fees, and requirements - and they have repeatedly taken it to court.
In addition to the fee lawsuit filed last year, cab companies also successfully challenged a series of regulations the PPA sought to impose on city taxis in 2010.
Since taking over regulation of Philadelphia's taxis in 2004, the PPA has funded its administrative role with fees imposed on cab companies.
A PPA spokesman did not respond Monday to requests for a breakdown on how much the authority collected annually from cab companies under the old fee structure. Blount estimated that figure to be near $5 million a year.
But unlike other state agencies, which must submit an annual budget proposal for legislative approval each year, PPA's annual budget was automatically considered adopted under state law unless legislators specifically opted to vote against it.
Commonwealth Court deemed that process - and the regulatory fees set under it - unconstitutional last year, saying it violated cab companies' rights to mount a challenge through the legislative process.
Dalzell found that since the fee process also violated the companies' rights under the Constitution, Commonwealth Court's decision should apply retroactively. But determining how to do that - whether in the form of a refund or some other remedy - should be decided by a state court, he said.
John Weston, a lawyer representing Z&R Cab and Zoro, the two taxi companies that served as lead plaintiffs in the federal lawsuit, said Monday he planned to pursue their claims before a state judge.