New York Sues New Jersey for Killing Harbor Compact

NEWARK, N.J. (CN) — New Jersey Gov. Phil Murphy was greeted with a federal lawsuit Tuesday on his first day in office, for one of the final decisions of his predecessor Chris Christie: to disband a two-state agency tasked with fighting corruption in New York Harbor.

Represented by Proskauer Rose, the Waterfront Commission of New York Harbor asked for an injunction to prevent New Jersey from unilaterally disbanding the bi-state commission.

The commission, formed in 1953 through a compact with New York state, was set up to combat corruption and crime at the port. The corruption was immortalized in the 1954 movie “On the Waterfront,” which drew on reporting in the New York Sun, which won the Pulitzer Prize in 1949.

Among the real-life Waterfront Commission’s duties were combating union corruption and the infiltration of mobsters at the port. In 2016 it prosecuted 10 alleged members of the Genovese organized crime family for loan sharking and laundering drug money.

Some unions and legislators considered the commission’s enforcement onerous, and on Dec. 7 last year the New Jersey Senate approved a bill to withdraw New Jersey from the compact and transfer state revenue and New Jersey-side commission duties to the New Jersey State Police.

Christie signed the bill into law Monday, on his last full day in office.

The law essentially defunds the commission, according to the lawsuit, as revenue from New Jersey will now stay in New Jersey, which the commission calls unconstitutional because the decision must be made by both New Jersey and New York.

The law establishing the commission is “absolutely clear,” said the commission’s attorney Michael Cardozo. An attorney with Proskauer Rose, Cardozo said that, while the issue of disbanding the commission is not new, Christie’s determination that it is legal to do so is.

“Virtually an identical law passed in 2015, and someone named Gov. Christie vetoed it, saying it’s unconstitutional,” Cardozo said. “Nothing has changed in that regard.”

The 20-page lawsuit claims the law will force New York-based container- and cruise-ship terminals to rely on “untrained and inexperienced workers” to handle longshoremen’s duties.

“By restricting the ability of workers to move back and forth between the two states, the New Jersey law will cause many New York citizens who work in the harbor to either leave for steadier employment in New Jersey, or to abandon the profession altogether as a result of the diminished earning opportunities,” the complaint states.

The decision to disband the commission came after years of accusations of agency overreach by two major unions — the New York Shipping Association and the International Longshoremen’s Association.

Lawmakers from both parties hailed Christie’s decision to sign the law, calling the commission outdated. New Jersey Assemblyman Thomas Giblin, D-Clifton, told that hiring practices at the commission have become “an impediment to economic growth” at the port.

But the legality of the pullout is still in question, as the commission was established under federal law and encompasses two states. During testimony this year, Waterfront Commission Executive Director Walter Arsenault said even the New Jersey Office of Legislative Services found the new law unconstitutional.

After vetoing a similar law, Christie himself, a former federal prosecutor, said in 2015 that federal law prohibited New Jersey from unilaterally withdrawing from the compact — a fact the commission’s lawsuit notes several times.

“Even if the governor’s actions do not actually dissolve the commission, those actions and the New Jersey law will cripple the commission and leave it unable to carry out the mandate given to it under the Waterfront Compact,” the complaint states.

Cardozo added: “The commission has to worry about whether its bills will be paid. … It will be total chaos.”

Murphy has 30 days to send notice to New York state that New Jersey is pulling out of the compact; the proposed changes can take effect 90 days later.

Murphy, a former U.S. ambassador and executive at Goldman Sachs, was sworn in Tuesday.

A representative for the new governor could not be reached for comment.

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