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Text: Plaintiffs claim North Carolina breached the Compact in December 1997, when (as it admits) it ceased all efforts toward obtaining a license. At that point, in their view, North Carolina was no longer “tak[ing] appropriate steps to ensure that an application for a license to construct and operate a [low-level radioactive waste storage facility] is filed with and issued by the appropriate authority,” Art. 5(C), 99 Stat. 1877. North Carolina says that once the Commission ceased providing financial assistance on December 1, and once it became clear there was insuffi­ cient funding to complete the licensing phase, there were no more “appropriate” steps to take. The Special Master concluded that the phrase “appropriate steps” in Article 5(C) was ambiguous, and that the parties’ course of per­ formance established that North Carolina was not re­ quired to take steps toward obtaining a license once it was made to bear the remaining financial burden of the licens­ ing phase. Second Report 10–24, 35–36. Plaintiffs take exception to that conclusion.

Article 5(C) does not require North Carolina to take any and all steps to license a regional-disposal facility; only those that are “appropriate.” Plaintiffs contend that this requires North Carolina to take the steps set forth in the regulations of the Nuclear Regulatory Commission govern­ ing the filing and disposition of applications for licenses to operate radioactive waste disposal facilities, 10 CFR pt. 61 (1997). Those regulations set forth some, but certainly not all, of the “steps” the State would have to take to obtain a license. But Article 5(C) does not incorporate the regula­ tions by reference, much less describe them as the appro priate steps.

We could accept Plaintiffs’ contention if “appropriate” meant “necessary” (the steps set forth in the regulation are assuredly necessary to obtaining a license). But it does not. Whether a particular step is “appropriate”— “[s]pecially suitable; fit; proper,” Webster’s Second 133— could depend upon many factors other than its mere in­ dispensability to obtaining a license. It would not be appropriate, for example, to take a step whose cost greatly exceeded whatever benefits the license would confer, or if it was highly uncertain the license would ever issue.

In determining whether, in terminating its efforts to obtain a license, North Carolina failed to take what the parties considered “appropriate” steps, the parties’ course of performance under the Compact is highly significant. See, e.g., New Jersey v. New York, 523 U. S. 767, 830–831 (1998) (SCALIA, J., dissenting); Restatement (Second) of Contracts §§202(4), 203 (1979) (hereinafter Restatement). That firmly establishes that North Carolina was not ex­ pected to go it alone—to proceed with the very expensive licensing process without any external financial assis­ tance. The history of the Compact consists entirely of shared financial burdens. From the beginning, North Carolina made clear that it required financial assistance to do the extensive work required for obtaining a license. The Commission promptly declared it was “appropriate and necessary” to assist North Carolina with the costs. App. 63. It provided the vast majority of funding for li­ censing-related activities—$80 million, compared to North Carolina’s $34 million. The Commission repeatedly noted the necessity (and propriety) of providing financial assis­ tance to North Carolina, and reiterated its dedication to sharing the substantial financial burdens of the licensing phase. See, e.g., id., at 63, 71, 145. There is nothing to support the proposition that the other States had an obli­ gation under the Compact to share the licensing costs through the Commission; but we doubt that they did so out of love for the Tarheel State. They did it, we think, because that was their understanding of how the Compact was supposed to work. One must take the Commission at its word, that it was “appropriate” to share the cost— which suggests that it would not have been appropriate to make North Carolina proceed on its own.

Nor was North Carolina required after December 19, 1997, to continue to expend its own funds at the same level it had previously (which Plaintiffs concede had satis­ fied North Carolina’s obligation to take “appropriate steps”). Once the Commission refused to provide any further financial assistance, North Carolina would have had to assume an unlimited financial commitment to cover all remaining licensing costs. Even if it maintained its prior rate of appropriations going forward, it would not have come close to covering the at least $34 million needed for the last steps of the licensing phase. And since the income from the South Carolina facility had been termi­ nated, there was no apparent prospect of funding for the construction phase (expected to cost at least $75 million). In connection with its August 1997 refusal to provide further assistance, the Commission itself had said, “[I]t will be imprudent to continue to deplete Commission resources for this purpose if a source of funds is not estab­ lished soon for the ultimate completion of the project.” Id., at 306, 307; Joint Supp. Fact Brief App. 36, 37. And in March 1998, the Commission “strongly” reiterated that “it would be imprudent to spend additional funds for licens­ ing activities if funds will not be available to complete the project.” Id., at 59. What was imprudent for the Commis­ sion would surely have been imprudent (and hence inap­ propriate) for North Carolina as well. The State would have wasted millions of its taxpayers’ dollars on what seemed to be a futile effort.

JUSTICE BREYER would uphold Plaintiffs’ challenge on this point. He believes that the Compact obligated North Carolina to fund and complete the licensing and construc­ tion of a nuclear waste facility. Post, at 2, 4–6 (opinion concurring in part and dissenting in part). In fact, how­ ever, North Carolina was not even contractually required to “secur[e] a license,” post, at 2, but only to take “appro­ priate steps” to obtain one, Art. 5(C), 99 Stat. 1877. And nothing in the terms of the Compact required North Caro­ lina either to provide “adequate funding” for or to “beg[i]n construction” on a regional facility, post, at 2. Other con­ temporaneously enacted interstate compacts expressly provide that the host State is “responsible for the timely development” of a regional facility, Central Midwest Com­ pact, Art. VI(f), 99 Stat. 1887; Midwest Compact, Art. VI(e), id., at 1898, or “shall . . . [c]ause a regional facility to be developed on a timely basis,” Rocky Mountain Low-Level Radioactive Waste Compact, Art. III(d)(i), id., at 1903–1904. But the compact here before us has no such provision, and the contrast is telling.1 Texas v. New Mex ico, 462 U. S., at 565. Moreover, the Commission’s state­ ments described in the preceding paragraph, that it would be imprudent to commit additional resources “ ‘if a source of funds is not established soon for the ultimate comple­ tion of the project,’ ” or “ ‘if funds will not be available to complete the project,’ ” surely suggest that North Carolina is not committed to the funding by contract.

JUSTICE BREYER asserts, post, at 4–5, that the rotating­ host requirement in the Compact, see Art. 5(A), 99 Stat. 1873, necessarily implies that North Carolina is solely responsible for the licensing and construction costs of its facility. But all that requirement entails is that a party State “shall not be designated” as a host State for a second time before “each [other] party [S]tate” has taken a turn. Ibid. It can perfectly well envision that the States will take turns in bearing the lead responsibility for getting the facility licensed, supervising its construction, and operating the facility on its soil. In fact, that is just what its text suggests, since it describes the responsibility that is to be rotated as the host State’s “obligation . . . to have a regional facility operated within its borders.” Ibid. Not to construct it, or pay for its construction, but to “have [it] operated within its borders.” As noted above, other con­ temporaneously enacted compacts do spell out the obliga­ tion of the host State to construct the facility. Still others at least provide that the host State will recoup its costs through disposal fees—which arguably suggests that the host State is to bear the costs. See, e.g., Central Compact, Art. III(d), 99 Stat. 1865; Northeast Compact, Art. III(c)(2), id., at 1913. The compact before us here does not even contain that arguable suggestion.

What it comes down to, then, is JUSTICE BREYER’s intui­ tion that the whole point of the Compact was that each designated host State would bear the up-front costs of licensing and construction, but would eventually recoup those costs through its regional monopoly on the disposal of low-level radioactive waste. Post, at 5–6. He can cite no provision in the Compact which reflects such an under­ standing, and the behavior of the parties contradicts it.2 It would, moreover, have been a foolish understanding, since the regional monopoly to recoup construction costs would not be a monopoly if South Carolina withdrew and contin­ ued to operate its facility—which is exactly what hap­ pened in 1995.3 Even leaving aside the principle, dis­ cussed infra, at 21, that implied obligations are not to be read into interstate compacts, JUSTICE BREYER’s intuition fails to reflect the reality of what was implied.