WASHINGTON (CN) — Once the ire of mobsters and crooked officials, the Waterfront Commission of New York Harbor is now on life support as the Garden State heads to the Supreme Court in an attempt to give the famed agency the final shake.
A regulatory agency with police power, the commission was conceived 70 years ago in a joint effort by New York and New Jersey to help them combat crime and corruption at the port.
In the early years of its tenure, the commission was wildly successful, even working as the inspiration for Pulitzer Prize-winning reporting that in turn brought about the the Oscar-winning film “On the Waterfront.” The 21st century brought fewer successes, however, and a 2009 audit observed that the commission had begun to mirror the lawlessness it was intended to halt.
Finding the commission obsolete, New Jersey passed a statute in 2018 by which it would withdraw from the compact that created the commission and abolish it. The problem is New York does not share the sentiment.
The Empire State argues that bilateral cooperation is critical for the commission to function properly. It says two sets of government officials with conflicting jurisdictional claims over the port would create labor strife, conflicts and disruptions to port operations.
“Weakening or eliminating the Commission’s ability to conduct its law-enforcement and regulatory work will also irreparably harm New York and its residents by creating more opportunities for organized crime families and other unlawful enterprises to infiltrate the Port and use it for criminal activities,” New York Solicitor General Barbara Underwood wrote in a brief from the state to the U.S. Supreme Court, where the latest chapter of the feud will unfold next week.
New Jersey's law never took effect thanks to an earlier court battle, but in 2021 the state's acting governor tendered 90 days' notice of intent to withdraw from the compact. This move led New York to bring a bill of complaint under the Contract Clause of the U.S. Constitution. The Supreme Court granted temporary relief and agreed to hear arguments over whether the compact allows one state to unilaterally withdraw.
How the justices rule in the case will extend beyond the borders of the two states. While the exact number of interstate compacts is difficult to determine, some scholars estimate about 260 compacts are in effect and that every state is a party to at least 25.
If New Jersey is allowed to withdraw from the compact, could it inspire other states to do the same in their own agreements?
“Critical to maintaining that interstate harmony and cooperation is stability of States’ rights and obligations under interstate compacts,” a group of law professors told the court in an amicus brief. “Allowing parties to unilaterally terminate indefinite interstate compacts would ‘stir up an air of uncertainty in those areas of our national life presently affected by the existence of these compacts.’ Courts have therefore unsurprisingly cautioned that ‘the suspicion of even potential impermanency would be damaging to the very concept of interstate compacts.’”
New York argues the compact prevents either state from leaving or dissolving the commission unilaterally. As interpreted by the Empire State, the compact says that any changes must be bilateral unless Congress intervenes. New York claims the commission is having trouble retaining employees and funding in light of New Jersey’s actions. A division of the state police allegedly sent a letter to commission employees encouraging them to apply for jobs in the New Jersey police force.
Leaning on principles of federalism, New York says an essential aspect of compacts between states is the inability of one party to unilaterally end the agreement.
“The core purpose of a compact is to enable States to forge stable solutions to problems that transcend their borders,” Underwood wrote. “Accordingly, a bedrock principle is that no compacting party may unilaterally terminate or alter the agreement, unless expressly authorized to do so by the compact.”
New York argues that sovereignty arguments advanced by New Jersey are misappropriated and those sovereign powers actually belong to both states.
“Under the Compact, New York and New Jersey jointly created the Commission as ‘a body corporate and politic’ and ‘an instrumentality’ of both States,” Underwood wrote. “The powers of this bistate Commission thus belong indivisibly to both New York and New Jersey. As both States understood in entering the Compact, they created ‘a single bistate agency’ for which they each bore ‘equal responsibility.’ Indeed, in creating the Commission, New York and New Jersey each agreed to relinquish to each other a part of their sovereignty.”
The Contract Clause of the Constitution says that states can not pass laws harming the obligation of contracts. New York claims New Jersey’s withdrawal from the commission meets both prongs of the court’s two-part test examining violations of the contract clause.
“The law not only impairs but entirely repudiates New Jersey’s contractual obligations under the Compact, while seizing rights under the Compact that belong jointly to New York and New Jersey,” Underwood wrote. “And the law is not drawn in any reasonable way.”
New Jersey argues the compact did not contain explicit instructions on the states’ withdrawal from the agreement and therefore does not preclude it. If compacts assumed states relinquished their right to dissolve the agreement, then states could lose their sovereign powers forever without explicit instruction, New Jersey claims.
“Were the rule otherwise, a compact’s silence could strip States of their sovereign authority in perpetuity, and the Legislature could scarcely remain accountable to the people it was elected to serve,” New Jersey Solicitor General Jeremy Feigenbaum wrote in the state’s brief.
New Jersey’s arguments rest on the foundational principles of contract law and state sovereignty. While the compact requires both states to approve amendments to the commission, New Jersey claims withdrawing from the compact is not an amendment.
“Under New York’s approach, what started as a cooperative agreement to tackle a shared, temporary problem would forever be a cudgel to bend New Jersey’s authority to its will,” Feigenbaum wrote.
The Biden administration weighed in on the case in favor of New Jersey. U.S. Solicitor General Elizabeth Prelogar told the court it should look to the text of the compact to settle the dispute. Other interstate compacts have language about the states’ ability to withdraw, Prelogar argues, but since this compact doesn’t, New Jersey should retain that power.
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