Source: http://www.law.cornell.edu/supremecourt/text/434/452
Timestamp: 2013-05-20 02:50:08
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Matched Legal Cases: ['§ 10', '§ 10', '§ 10', '§ 1403', '§ 2', '§ 1', '§ 2', '§ 1', '§ 1', '§ 1', '§ 38001', '§ 10', '§ 10']

UNITED STATES STEEL CORPORATION et al., Appellants, v. MULTISTATE TAX COMMISSION et al. | Supreme Court | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews UNITED STATES STEEL CORPORATION et al., Appellants, v. MULTISTATE TAX COMMISSION et al.
434 U.S. 452 (98 S.Ct. 799, 54 L.Ed.2d 682)
[HTML] Syllabus by the Court The Multistate Tax Compact was entered into by a number of States for the stated purposes of (1) facilitating proper determination of state and local tax liability of multistate taxpayers; (2) promoting uniformity and compatibility in state tax systems; (3) facilitating taxpayer convenience and compliance in the filing of tax returns and in other phases of tax administration; and (4) avoiding duplicative taxation. To these ends, the Compact created the appellee Multistate Tax Commission. Each member State is authorized to request that the Commission perform an audit on its behalf, and the Commission may seek compulsory process in aid of its auditing power in the courts of any State specifically permitting such procedure. Individual States retain complete control over all legislative and administrative action affecting tax rates, the composition of the tax base, and the means and methods of determining tax liability and collecting any taxes due. Each member State is free to adopt or reject the Commission's rules and regulations, and to withdraw from the Compact at any time. Appellants, on behalf of themselves and all other multistate taxpayers threatened with Commission audits, brought this action in District Court against appellees (the Commission, its members, and its Executive Director) challenging the constitutionality of the Compact on the grounds, inter alia, that (1) it is invalid under the Compact Clause of the Constitution (which provides: "No State shall, without the Consent of Congress, . . . enter into any Agreement or Compact with another State"); (2) it unreasonably burdens interstate commerce; and (3) it violates the rights of multistate taxpayers under the Fourteenth Amendment. A three-judge court granted summary judgment for appellees. Held:
* The Multistate Tax Compact was drafted in 1966 and became effective, according to its own terms, on August 4, 1967, after seven States had adopted it. By the inception of this litigation in 1972, 21 States had become members.
Its formation was a response to this Court's decision inNorthwestern States Portland Cement Co. v. Minnesota, 358 U.S. 450, 79 S.Ct. 357, 3 L.Ed.2d 421 (1959), and the congressional activity that followed in its wake.
In Northwestern States, this Court held that net income from the interstate operations of a foreign corporation may be subjected to state taxation, provided that the levy is nondiscriminatory and is fairly apportioned to local activities that form a sufficient nexus to support the exercise of the taxing power. This prompted Congress to enact a statute, Act of Sept. 14, 1959, Pub.L. 86-272, 73 Stat. 555, which sets forth certain minimum standards for the exercise of that power.
It also authorized a study for the purpose of recommending legislation establishing uniform standards to be observed by the States in taxing income of interstate businesses. Although the results of the study were published in 1964 and 1965,
The complaint survived a motion to dismiss. 367 F.Supp. 107 (S.D.N.Y.1973). After extensive discovery, appellees moved for summary judgment. A three-judge District Court, convened pursuant to 28 U.S.C. 2281, rejected appellants' claim that the record would not support summary judgment. 417 F.Supp. 795, 798 (S.D.N.Y.1976). Turning to the merits, the District Court first rejected the contention that the Compact Clause requires congressional consent to every agreement between two or more States. The court cited Virginia v. Tennessee, 148 U.S. 503, 13 S.Ct. 728, 37 L.Ed. 537 (1893), and New Hampshire v. Maine, 426 U.S. 363, 96 S.Ct. 2113, 48 L.Ed.2d 701 (1976), in support of its holding that consent is necessary only in the case of a compact that enhances the political power of the member States in relation to the Federal Government. The District Court found neither enhancement of state political power nor encroachment upon federal supremacy. Concluding that appellants' Commerce Clause, Fourth Amendment, and Fourteenth Amendment claims also lacked merit, the District Court granted summary judgment for appellees.
but this Court did not have occasion expressly to apply it in a holding until our recent decision in New Hampshire v. Maine, supra.
Article I, § 10, cl. 1, of the Constitutionthe Treaty Clause declares: "No State shall enter into Any Treaty, Alliance or Confederation . . . ." Yet Art. I, § 10, cl. 3the Compact Clausepermits the States to enter into "agreements" or "compacts," so long as congressional consent is obtained. The Framers clearly perceived compacts and agreements as differing from treaties.
The records of the Constitutional Convention, however, are barren of any clue as to the precise contours of the agreements and compacts governed by the Compact Clause.
This suggests that the Framers used the words "treaty," "compact," and "agreement" as terms of art, for which no explanation was required
and with which we are unfamiliar. Further evidence that the Framers ascribed precise meanings to these words appears in contemporary commentary.
Whatever distinct meanings the Framers attributed to the terms in Art. I, § 10, those meanings were soon lost. In 1833, Mr. Justice Story perceived no clear distinction among any of the terms.
Lacking any clue as to the categorical definitions the Framers had ascribed to them, Mr. Justice Story developed his own theory. Treaties, alliances, and confederations, he wrote, genera ly connote military and political accords and are forbidden to the States. Compacts and agreements, on the other hand, embrace "mere private rights of sovereignty; such as questions of boundary; interests in land situate in the territory of each other; and other internal regulations for the mutual comfort and convenience of States bordering on each other." 2 J. Story, Commentaries on the Constitution of the United States § 1403, p. 264 (T. Cooley ed. 1873). In the latter situations, congressional consent was required, Story felt, "in order to check any infringement of the rights of the national government." Ibid.
The Court's first opportunity to comment on the scope of the Compact Clause, Holmes v. Jennison, 14 Pet. 540, 10 L.Ed. 579 (1840), proved inconclusive. Holmes had been arrested in Vermont on a warrant issued by Jennison, the Governor. The warrant apparently reflected an informal agreement by Jennison to deliver Holmes to authorities in Canada, where he had been indicted for murder. On a petition for habeas corpus, the Supreme Court of Vermont held Holmes' detention lawful. Although this Court divided evenly on the question of its jurisdiction to review the decision, Mr. Chief Justice Taney, in an opinion joined by Mr. Justice Story and two others, addressed the merits of Holmes' claim that Jennison's informal agreement to surrender him fell within the scope of the Compact Clause. Mr. Chief Justice Taney focused on the fact that the agreement in question was between a State and a foreign government. Since the clear intention of the Framers had been to cut off all communication between the States and foreign powers, id., at 568-579, he concluded that the Compact Clause would permit an arrangement such as the one at issue only if "made under the supervision of the United States . . .," id., at 578. In his separate opinion, Mr. Justice Catron expressed disquiet over what he viewed as Mr. Chief Justice Taney's literal reading of the Compact Clause, noting that it might threaten agreements between States theretofore considered lawful.
For example, in Union Branch R. Co. v. East Tennessee & G. R. Co., 14 Ga. 327 (1853), the Supreme Court of Georgia rejected a Compact Clause challenge to an agreement between Tennessee and Georgia concerning the construction of an interstate railroad. Omitting any mention of Holmes v. Jennison, the Georgia court seized upon Story's observation that the words "treaty, alliance, and confederation" generally were known to apply to treaties of a political character. Without explanation, the court transferred this description of the Treaty Clause to the Compact Clause, which it perceived as restraining the power of the States only with respect to agreements "which might limit, or infringe upon a full and complete execution by the General Government, of the powers intended to be delegated by the Federal Constitution . . . ." 14 Ga., at 339.
Mr. Justice Field followed with four examples of interstate agreements that could "in no respect concern the United States": (1) an agreement by one State to purchase land within its borders owned by another State; (2) an agreement by one State to ship merchandise over a canal owned by another; (3) an agreement to drain a malarial district on the border between two States; and (4) an agreement to combat an immediate threat, such as invasion or epidemic. As the Compact Clause could not have been intended to reach every possible interstate agreement, it was necessary to construe the terms of the Compact Clause by reference to the object of the entire section in which it appears:
Although this Court did not have occasion to apply Mr. Justice Field's test for many years, it has been cited with approval on several occasions. Louisiana v. Texas, 176 U.S. 1, 17, 20 S.Ct. 251, 256, 44 L.Ed. 347 (1900); Stearns v. Minnesota, 179 U.S. 223, 246-248, 21 S.Ct. 73, 81-82, 45 L.Ed. 162 (1900); North Carolina v. Tennessee, 235 U.S. 1, 16, 35 S.Ct. 8, 13, 59 L.Ed. 97 (1914).
Moreover, several decisions of this Court have upheld a variety of interstate agreements effected through reciprocal legislation without congressional consent. E g., St. Louis & S. F. R. Co. v. James, 161 U.S. 545, 16 S.Ct. 621, 40 L.Ed. 802 (1896); Hendrick v. Maryland, 235 U.S. 610, 35 S.Ct. 140, 59 L.Ed. 385 (1915); Bode v. Barrett, 344 U.S. 583, 73 S.Ct. 468, 97 L.Ed. 567 (1953); New York v. O'Neill, 359 U.S. 1, 79 S.Ct. 564, 3 L.Ed.2d 585 (1959). While none of these cases explicitly applied the Virginia v. Tennessee test, they reaffirmed its underlying assumption: not all agreements between States are subject to the strictures of the Compact Clause.
In O'Neill, for example, this Court upheld the Uniform Law to Secure the Attendance of Witnesses from Within or Without the State in Criminal Proceedings, which had been enacted in 41 States and Puerto Rico. That statute permitted the judge of a court of any enacting State to invoke the process of the courts of a sister State for the purpose of compelling the attendance of witnesses at criminal proceedings in the requesting State. Although no Compact Clause question was directly presented, the Court's opinion touched upon similar concerns:
The reciprocal-legislation cases support the soundness of the Virginia v. Tenne see rule, since the mere form of the interstate agreement cannot be dispositive. Agreements effected through reciprocal legislation
may present opportunities for enhancement of state power at the expense of the federal supremacy similar to the threats inherent in a more formalized "compact." Mr. Chief Justice Taney considered this point in Holmes v. Jennison, 14 Pet., at 573, 10 L.Ed. 579:
The Clause reaches both "agreements" and "compacts," the formal as well as the informal.
It is also true that the precise interstate mechanism involved in this case has not been presented to this Court before. New York v. O'Neill, supra, however, involving analogous multilateral arrangements, stands as an implicit rejection of appellants' proposed limitation of the Virginia v. Tennessee rule.
for determining a corporate taxpayer's income creates a risk of multiple taxation for multistate businesses. Whether or not this risk is a real one, it cannot be attributed to the existence of the Multistate Tax Commission. When the Commission conducts an audit at the request of a member State, it uses the methods adopted by that State. Since appellants do not contest the right of each State to adopt these procedures if it conducted the audits separately,
We note first that the regulations of the Commission do not require the apportionment of nonbusiness income. They do define business income, which is apportionable under the regulations, to include elements that might be regarded as nonbusiness income in some States. P-H State & Local Tax Serv. &Par; 6100-6286 (1973). But again there is no claim that the member States could not adopt similar definitions in the absence of the Compact. Any State's ability to exact additional tax revenues from multistate businesses cannot be attributed to the Compact; it is the result of the State's freedom to select, within constitutional limits, the method it prefers.
Appellants' final claim of enhanced state power with respect to commerce is that the "enforcement powers" conferred upon the Commission enable that body to exercise authority over interstate business to a greater extent than the sum of the States' authority acting individually. This claim also falls short of meeting the standard of Virginia v. Tennessee. Article VIII of the Compact authorizes the Commission to require the attendance of persons and the production of documents in connection with its audits. The Commission, however, has no power to punish failures to comply. It must resort to the courts for compulsory process, as would any auditing agent empl yed by the individual States. The only novel feature of the Commission's "enforcement powers" is the provision in Art. VIII permitting the Commission to resort to the courts of any State adopting that Article. Adoption of the Article, then, amounts to nothing more than reciprocal legislation for providing mutual assistance to the auditors of the member States. Reciprocal legislation making the courts of one State available for the better administration of justice in another has been upheld by this Court as a method "to accomplish fruitful and unprohibited ends." New York v. O'Neill, 359 U.S., at 11, 79 S.Ct., at 571. Appellees make no showing that increased effectiveness in the administration of state tax laws, promoted by such legislation,
Appellants' final Compact Clause argument charges that the Compact impairs the sovereign rights of nonmember States. Appellants declare, without explanation, that if the use of the unitary business and combination methods continues to spread among the Western States, unfairness in taxationpresumably the risks of multiple taxationwill be avoidable only through the efforts of some coordinating body. Appellants cite the belief of the Commission's Executive Director that the Commission represents the only available vehicle for effective coordination,
Moreover, it is not explained how any economic pressure that does exist is an affront to the sovereignty of nonmember States. Any time a State adopts a fiscal or administrative policy that affects the programs of a sister State, pressure to modify those programs may result. Unless that pressure transgresses the bounds of the Commerce Clause or the Privileges and Immunities Clause of Art. IV, § 2, see, e. g., Austin v. New Hampshire, 420 U.S. 656, 95 S.Ct. 1191, 43 L.Ed.2d 530 (1975), it is not clear how our federal structure is implicated. Appellants do not argue that an individual State's decision to apportion nonbusiness incomeor to define business income broadly, as the regulations of the Commission actually dotouches upon constitutional strictures. This being so, we are not persuaded that the same decision becomes a threat to the sovereignty of other States if a member State makes this decision upon the Commission's recommendation.
Even if appellants' factual allegations were supported by the record, they would be irrelevant to the facial validity of the Compact. As we have noted above, it is only the individual State, not the Commission, that has the power to issue an assessment whether arbitrary or not. If the assessment violates state law, we must assume that state remedies are available.
E. g., Colgate-Palmolive Co. v. Dorgan, 225 N.W.2d 278 (N.D.1974).
* The Constitution incorporates many restrictions on the powers of individual States. Some of these are explicit, some are inferred from positive delegations of power to the Federal Government. In the latter category falls the federal authority over interstate commerce.
The individual States have long been permitted to legislate, in a nondiscriminatory manner, over matters affecting interstate commerce, where Congress has not exerted its authority, and where the federal interest does not require a uniform rule. Cooley v. Board of Wardens, 12 How. 299, 13 L.Ed. 996 (1852); Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945).
No federal legislation has been enacted, nor tax treaties ratified, that would interfere with any State's efforts to apply uniform apportionment rules, unitary business concepts, or single multistate audits of corporations. Hence, leaving to one side appellants' contentions that these matters inherently require uniform federal treatment, there is no obstacle in the Commerce Clause to such action by an individual State.
In framing the Constitution the new Republic was at pains to correct the divisive factors of the Government under the Articles; and among the most important of these were "compacts witht. the consent of Congs. as between Pena. and N. Jersey, and between Virga. & Maryd." James Madison, "Preface to Debates in the Convention of 1787," 3 M. Farrand, Records of the Federal Convention of 1787, p. 548 (1937). A compact between two States necessarily achieved some object unattainable, or attainable less conveniently, by separate States acting alone. Such effects were jealously guarded against, lest "the Fedl authy be violated." Ibid. It was the Federal Government's province to oversee conduct of a greater effect than a single State could accomplish, to protect both its own prerogative and that of the excluded States.
Congress does not pass upon a submitted compact in the manner of a court of law deciding a question of constitutionality Rather, the requirement that Congress approve a compact is to obtain its political judgment:
or prior approval, that Congress be permitted to attach conditions upon its consent,
but all have faltered before arriving at a vote. Congress took the first step in the field of interstate tax apportionment with Pub.L. No. 86-272, 73 Stat. 555, passed the same year that this Court's opinion in Northwestern States Portland Cem nt Co. v. Minnesota, 358 U.S. 450, 79 S.Ct. 357, 3 L.Ed.2d 421 (1959), approved state taxation of reasonably identified multistate corporate income. A special subcommittee (the Willis Committee) was established which reported five years later with specific recommendations for federal statutory solution to the interstate allocation problem. In the Multistate Tax Commission's own words:
"The origin and history of the Multistate Tax Compact are intimately related and bound up with the history of the states' struggle to save their fiscal and political independence from encroachments of certain federal legislation introduced in Congress during the past three years. These were the Interstate Taxation Acts, better known as the Willis Bills."
For its part, the Multistate Tax Commission has made no attempt to disguise its purpose. In its First Annual Report, the Commission spoke proudly of "bottling up the Willis Bill alternative federal legislation for an extended period," but warned that "it cannot be said that the threat of coercive, restrictive federal legislation is gone." 1 Multistate Tax Commission Ann.Rep. 10 (1968). In the most recent annual report, the tone has not changed. The Commission lists as one of its "major goals" the desire to "guard against restrictive federal legislation and other federal action which impinges upon the ability of state tax administrators to carry out the laws of their States effectively." 9 Multistate Tax Commission Ann.Rep. 1 (1976). The same report pledged continued opposition to specific bills introduced in Congress restricting the States' utilization of the unitary-business concept and providing alternatives to the Compact's recommended method of apportioning multistate corporate earnings to the various States.
But more is demonstrated by this long dispute underlying the present case: Not only has Congress failed to acquiesce in the Multistate Tax Compact, but both Congress and the Executive have clearly demonstrated that there is a federal interest in the rules for apportioning multistate and multinational income. The Executive cannot constitutionally express his federal sovereign interest in the matter an more unambiguously. He has negotiated a treaty with a foreign power and submitted that treaty to the Senate. As for the Congress, its federal sovereign interest in the topic was early established in Pub.L. No. 86-272. While the following years have produced no new legislation, the activity over the Willis Report, the Willis Bills, the successor bills, and the dozen shelvings of compact ratification bills establish at the very least that the Congress believes a federal interest is involved.
quite clearly holds that not all agreements and compacts must be submitted to the Congress. The majority's phraseology of the test as "potential impact upon federal supremacy" incorporates the Virginia v. Tennessee standard. Nor do I disagree that many interstate agreements are legally effective without congressional consent. "Potential impact upon federal supremacy" requires some demonstration of a federal interest in the matter under consideration, and a threat to that interest. In very few cases, short of a direct conflict, will the record of congressional and executive action demonstrate as clearly as the record in the present case that the Federal Government considers itself to have a valid interest in the subject matter. Examples of compacts over which no federal concern was inferable have already been suggested.
This cannot be an adequate answer even for the majority, which holds that "agreements effected through reciprocal legislation may present opportunities for enhancement of state power at the expense of the federal supremacy similar to the threats inherent in a more formalized 'compact.' " Ante, at 470 (footnotes omitted). Reciprocal legislation is adopted by each State independently, yet derives its force from the knowledge that other States are acting in identical fashion. In recognizing Compact Clause concerns even in reciprocal legislation, the majority correctly lays the premise that the absence of an autonomous authority would not be controlling.
Other troubling provisions are Art. III, § 1, requiring that all member States must allow taxpayers to apportion their income in accord with Art. IV (the substance of which is similar to the Uniform Division of Income for Tax Purposes Act); and Art. III, § 2, requiring that all member States must offer a short-form option for small-business income tax.
On its face, the ompact also provides in Art. IX for compulsory arbitration of allocation disputes among the member States at the option of any taxpayer electing to apportion his income in accord with Art. IV. Although Art. IX is not now operative (it requires passage of a regulation by the Commission to revive the arbitration mechanism), it was in effect for two and a half years. This provision binds the member States' participation, even against their will in any particular case. In two final respects, the Compact also differs significantly from reciprocal legislation. The subpoena power which the Compact makes possible (auditors can obtain subpoenas in any one of the States which have adopted Art. VIII of the Compact) is far different from what would be accomplished through reciprocal laws, in that it places an unusual "all-or-nothing" pressure on the non-Compact States. The usual form of reciprocal law is a statute passed by State Y, saying that any other State which accords Y access to its courts for the enforcement of tax obligations likewise will have access to the courts of Y. This Compact says that an outsider State will obtain reciprocal subpoena powers only as part of a package of Art. VIII Compacts Statesits own courts must be opened to all these States, and in return it will obtain Compact-wide access for judicial process needed in its own tax enforcement.
In Rhode Island v. Massachusetts, 12 Pet. 657, 726, 9 L.Ed. 1233 (1838), this Court held that the purpose of requiring the submission to Congress of a compact (in that case, regarding a boundary) between two States was "to guard against the derangement of their federal relations with the other states of the Union, and the federal government; which might be injuriously affected, if the contracting states might act upon their boundaries at their pleasure." See also Florida v. Georgia, 17 How. 478, 494, 15 L.Ed. 181 (1855). There is no want of authority for the conclusion that encroachments upon non-compact States are as seriously to be guarded against as encroachments upon the federal authority,
Under the Compact's "advisory" regulations, this type of income is apportioned among the several States where the company conducts its business. Hence, a non-Compact State will run the risk of taxing a domiciliary multistate corporation on more than 100% of its nonbusiness income, unless, of course, the State agrees to follow the rule of the Compact. Another way to view the impact on a nonmember State is that if it wished to attract a multistate corporation to become a domiciliary, it might offer not to tax nonbusiness income. But with such income being apportioned by several other States anyway, the lure of the domicile State's exemption is effectively dissipated.
Since the suit began, four StatesFlorida, Illinois, Indiana, and Wyominghave withdrawn from the Compact, see 1976 Fla.Laws, ch. 76-149, § 1; 1975 Ill.Laws, No. 79-639, § 1; 1977 Ind.Acts, No. 90; 1977 Wyo.Sess.Laws, ch. 44, § 1. Two others California and South Dakotahave joined it, see Cal.Rev. & Tax.Code Ann. § 38001 (West Supp.1977); S.D.Comp.Laws Ann. § 10-54-1 (Supp.1977), for a current total of 19 members.
Title I of Pub.L. 86-272, codified as 15 U.S.C. 381-384, essentially forbids the imposition of a tax on a foreign corporation's net income derived from activities within a State, if those activities are limited to the solicitation of orders that are approved, filled, and shipped from a point outside the State.
Article II consists of definitions. Article III permits small taxpayersthose whose only activities within the jurisdiction consist of sales totaling less than $100,000to elect to pay a tax on gross sales in lieu of a levy on net income. The Uniform Division of Income for Tax Purposes Act, contained in Art. IV, allows multistate taxpayers to apportion and allocate their income under formulae and rules set forth in the Compact or by any other method available under state law. It was approved by the National Conference of Commissioners on Uniform State Laws and the American Bar Association in 1957. Article V deals with sales and use taxes. Article IX provides for arbitration of disputes, but is not in effect. Article XI disclaims any attempt to affect the power of member States to fix rates of taxation or limit the jurisdiction of any court. Finally, Art. XII provides for liberal construction and severability.
"[T]hose compacts, which are accomplished once for all, and not by successive acts,are no sooner executed then they are completed and perfected. If they are valid, they have in their own nature a perpetual and irrevocable effect . . . ." Id., at 208.
This distinction between supposedly ongoing accords, such as military alliances, and instantaneously executed, though perpetually effective agreements, such as boundary settlements, may have informed the drafting in Art. I, § 10. The Framers clearly recognized the necessity for amicable resolution of boundary disputes and related grievances. See Virginia v. West Virginia, 246 U.S. 565, 597-600, 38 S.Ct. 400, 404-405, 59 L.Ed. 1272 (1918); Frankfurter & Landis, The Compact Clause of the ConstitutionA Study in Interstate Adjustments, 34 Yale L.J. 685, 692-695 (1925). Interstate agreements were a method with which they were familiar. Id., at 694, 732-734. Although these dispositive compacts affected the interests of the States involved, they did not represent the continuing threat to the other States embodied in a "treaty of alliance," to use Vattel's words. E. Vattel, supra, at 192.
Corrigan, Interstate Corporate Income TaxationRecent Revolutions and a Modern Response, 9 Vand.L.Rev. 423, 441-442 (1976).
The dissent appears to argue that the political influence of the member States is enhanced by this Compact, making it more difficultin terms of the political processto enact pre-emptive legislation. We may assume that there is strength in numbers and organization. But enhanced capacity to lobby within the federal legislative process falls far short of threatened "encroach[ment] upon or interfer[ence] with the just supremacy of the United States." Federal power in the relevant areas remains plenary; no action authorized by the Constitution is "foreclosed," see post, at 491, to the Federal Government acting through Congress or the treaty-making power.
Title 15 U.S.C. 381-384, passed in 1959 as Pub.L. No. 86-272, 73 Stat. 555, limits the jurisdictional bases open to States whereby taxation authority may be exerted. More comprehensive federal regulation of this area has often been proposed; see ante, at 456 n. 4.
The pioneer article in the compact literature, Frankfurter & Landis, The Compact Clause of the ConstitutionA Study in Interstate Adjustments, 34 Yale L.J. 685 (1925), recognized the preferability of compacts to litigation in light of the political factors that could be balanced in the process of submitting and approving a compact. See id., at 696, 706-707. This Court has also observed the peculiar amenability of some problems to settlement by compact rather than litigation. See Colorado v. Kansas, 320 U.S. 383, 392, 64 S.Ct. 176, 180, 88 L.Ed. 116 (1943). See also F. Zimmermann & M. Wendell, The Interstate Compact Since 1925, pp. 102-103 (1951).