Court Opinion

ID: 9387570
Source: CourtListenerOpinion
Date Created: 2023-04-18 15:00:58.126254+00
Date Added: 2024-06-11T17:18:14.379940
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2022                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

                     NEW YORK v. NEW JERSEY

   ON CROSS-MOTIONS FOR JUDGMENT ON THE PLEADINGS

     No. 156, Orig. Argued March 1, 2023—Decided April 18, 2023
In 1953, New York and New Jersey exercised their authority under
  Article I, §10, of the Constitution to enter into a compact to address
  corruption at the Port of New York and New Jersey. The Waterfront
  Commission Compact established a bistate agency known as the
  Waterfront Commission of New York Harbor, to which the States
  delegated their sovereign authority to conduct regulatory and law-
  enforcement activities at the Port. The Compact does not address each
  State’s power to withdraw from the Compact.
    In 2018, New Jersey sought to unilaterally withdraw from the
  Compact, over New York’s opposition. New York filed a bill of
  complaint in this Court, and the parties then filed cross-motions for
  judgment on the pleadings, with the United States supporting New
  Jersey as amicus curiae.
Held: New Jersey may unilaterally withdraw from the Waterfront
 Commission Compact notwithstanding New York’s opposition. Pp. 3–
 9.
    (a) The interpretation of an interstate compact approved by
 Congress presents a federal question, see Cuyler v. Adams, 449 U. S.
 433, 438, the resolution of which begins with an examination of “the
 express terms of the Compact,” Tarrant Regional Water Dist. v.
 Herrmann, 569 U. S. 614, 628. Unlike certain other compacts, the
 Compact here does not address withdrawal.
    Because the Compact is silent as to unilateral withdrawal, the Court
 looks to background principles of law that would have informed the
 parties’ understanding when they entered the Compact. As relevant
 here, interstate compacts “are construed as contracts under the
 principles of contract law.” Ibid. Under the default contract-law rule
 at the time of the Compact’s formation, a contract that contemplates
 “continuing performance for an indefinite time is to be interpreted as
2                      NEW YORK v. NEW JERSEY

                                  Syllabus

    stipulating only for performance terminable at the will of either party.”
    1 R. Lord, Williston on Contracts §4:23, p. 570. Here, the States
    delegated their sovereign authority to the Commission on an ongoing
    and indefinite basis. The default contract-law rule therefore “speaks
    in the silence of the Compact” and indicates that either State may
    unilaterally withdraw. New Jersey v. New York, 523 U. S. 767, 784.
       Principles of state sovereignty also support New Jersey’s position.
    “The background notion that a State does not easily cede its
    sovereignty has informed” this Court’s “interpretation of interstate
    compacts.” Tarrant, 569 U. S., at 631. The nature of the delegation at
    issue here—delegation of a State’s sovereign power to protect the
    people, property, and economic activity within its borders—buttresses
    the conclusion that New Jersey can unilaterally withdraw.
       To be clear, the contract-law rule that governs the Compact here
    does not apply to other kinds of compacts that do not exclusively call
    for ongoing performance on an indefinite basis—such as compacts
    setting boundaries, apportioning water rights, or otherwise conveying
    property interests. Pp. 3–7.
       (b) New York’s additional arguments in support of its view that the
    Compact should be read to prohibit unilateral withdrawal are
    unpersuasive. First, New York argues that the Court should interpret
    the 1953 Compact in light of pre-1953 compacts that were silent on
    unilateral withdrawal but were understood to forbid it. But many of
    those compacts concerned boundaries and water-rights allocation—the
    very kinds of compacts that are not governed by the default contract-
    law rule authorizing unilateral withdrawal. Second, New York
    invokes international treaty law, which New York says generally
    prohibits a signatory nation’s unilateral withdrawal from a treaty
    absent express language otherwise. But international treaty practice,
    to the extent it is relevant here, is equivocal. Third, New York points
    to the past practice of the States’ resolving Commission-related
    disputes. But that practice says little about whether either State could
    unilaterally withdraw. Fourth, New York maintains that the Court’s
    decision will have sweeping consequences for interstate compacts
    generally. But the Court’s decision does not address all compacts, and
    States may propose language to compacts expressly allowing or
    prohibiting unilateral withdrawal. Pp. 7–9.
New Jersey’s motion for judgment on the pleadings granted; New York’s
 cross-motion for judgment on the pleadings denied.

    KAVANAUGH, J., delivered the opinion for a unanimous Court.
                        Cite as: 598 U. S. ____ (2023)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     United States Reports. Readers are requested to notify the Reporter of
     Decisions, Supreme Court of the United States, Washington, D. C. 20543,
     pio@supremecourt.gov, of any typographical or other formal errors.

SUPREME COURT OF THE UNITED STATES
                                   _________________

                                  No. 156, Orig.
                                   _________________

                   NEW YORK v. NEW JERSEY
  ON CROSS-MOTIONS FOR JUDGMENT ON THE PLEADINGS
                                 [April 18, 2023]

  JUSTICE KAVANAUGH delivered the opinion of the Court.
  Under Article I, §10, of the Constitution, each State
possesses the sovereign authority to enter into a compact
with another State, subject to Congress’s approval. In
1953, New York and New Jersey exercised that authority
and entered into the Waterfront Commission Compact. The
Compact created a bistate agency to perform certain
regulatory and law-enforcement functions at the Port of
New York and New Jersey. In 2018, after concluding that
the decades-old Compact had outlived its usefulness, New
Jersey sought to withdraw from the Compact. New York
opposes New Jersey’s withdrawal and contends that the
Compact does not allow either State to unilaterally
withdraw. We hold that New Jersey may unilaterally
withdraw from the Waterfront Commission Compact
notwithstanding New York’s opposition.
                                          I
  In 1951, New York and New Jersey began a joint
investigation of organized crime at the Port of New York
and New Jersey, a commercial port that spans the border of
the two States. To address corruption within the labor force
on both sides of the Port, each State enacted legislation to
form the Waterfront Commission Compact. See 1953 N. J.
2                NEW YORK v. NEW JERSEY

                     Opinion of the Court

Laws p. 1511; 1953 N. Y. Laws p. 2417. New York and New
Jersey obtained Congress’s approval of the Compact in
1953, consistent with the Compact Clause of the
Constitution. President Eisenhower signed the Compact.
See 67 Stat. 541; U. S. Const., Art. I, §10, cl. 3.
   The Compact established a bistate agency known as the
Waterfront Commission of New York Harbor.               The
Commission consists of two members, one appointed by the
Governor of New York and the other by the Governor of
New Jersey. Through the Compact, New York and New
Jersey delegated to the Commission their sovereign
authority to conduct regulatory and law-enforcement
activities at the Port. For example, the Compact authorizes
the Commission to oversee mandatory employment
licensing for waterfront workers and to conduct law-
enforcement investigations at the Port.
   Under the Compact, New York and New Jersey must
agree if they want to make any “[a]mendments and
supplements.” Art. XVI(1), 67 Stat. 557. The Compact also
recognizes Congress’s authority to “alter, amend, or repeal”
the Compact. Art. XVI, §2, ibid. But the Compact does not
address each State’s power to unilaterally withdraw: It
neither expressly allows nor expressly proscribes unilateral
withdrawal.
   The Compact and Commission have operated for 70
years. But as the decades have passed, circumstances at
the Port have changed. In 1953, roughly 70% of waterfront
employees worked on the New York side of the Port. But
by 2018, according to New Jersey, more than 80% of work
hours occurred on the New Jersey side, and more than 80%
of the Port’s cargo flowed through the New Jersey side.
New Jersey also came to view the Commission as ill-
equipped to handle 21st-century security challenges and as
a source of overregulation that impedes job growth.
   In 2018, the New Jersey Legislature passed and
Governor Christie signed a law to withdraw New Jersey
                  Cite as: 598 U. S. ____ (2023)             3

                      Opinion of the Court

from the Waterfront Commission Compact. See 2017 N. J.
Laws p. 2102. The statute required the New Jersey
Governor to give 90 days’ notice of the State’s intention to
withdraw. Upon withdrawal, the Commission would
dissolve, and the New Jersey State Police would take over
the Commission’s law-enforcement functions on the New
Jersey side of the Port.
  The day after enactment of the withdrawal statute, the
Commission sued in Federal District Court to stop New
Jersey from unilaterally withdrawing from the Compact.
The District Court ruled that New Jersey could not
unilaterally withdraw. Waterfront Comm’n of N. Y. Harbor
v. Murphy, 429 F. Supp. 3d 1 (NJ 2019). But the U. S.
Court of Appeals for the Third Circuit reversed and ruled
in New Jersey’s favor, determining that state sovereign
immunity barred the Commission’s lawsuit. Waterfront
Comm’n of N. Y. Harbor v. Governor of New Jersey, 961
F. 3d 234 (2020).
  In 2021, in the wake of the Third Circuit’s decision,
Acting Governor Oliver announced New Jersey’s intent to
unilaterally withdraw from the Compact. Before the
expected date of withdrawal, New York moved in this Court
for leave to file a bill of complaint and for a temporary order
preventing New Jersey’s withdrawal.                This Court
temporarily enjoined New Jersey from withdrawing from
the Compact pending final disposition of this case. The
Court later granted New York’s motion for leave to file a bill
of complaint and allowed the parties to file cross-motions
for judgment on the pleadings. In this Court, the United
States also participated as amicus curiae in support of New
Jersey’s unilateral withdrawal from the Compact.
                           II
  The question presented is straightforward: Does the
Waterfront Commission Compact allow New Jersey to
unilaterally withdraw from the Compact notwithstanding
4                    NEW YORK v. NEW JERSEY

                          Opinion of the Court

New York’s opposition? The answer is yes.
  The interpretation of the Waterfront Commission
Compact—an interstate compact approved by Congress—
presents a federal question. See Cuyler v. Adams, 449 U. S.
433, 438 (1981). To resolve the dispute over whether each
State may unilaterally withdraw, we “begin by examining
the express terms of the Compact as the best indication of
the intent of the parties.” Tarrant Regional Water Dist. v.
Herrmann, 569 U. S. 614, 628 (2013).
  Some interstate compacts expressly allow, prohibit, or
limit unilateral withdrawal.1 But this Compact does not
address withdrawal.       The Compact mentions neither
“withdrawal” nor “termination” in any relevant context.
The Compact provides for amendments, which require both
States to agree. See Art. XVI(1), 67 Stat. 557. But
unilateral withdrawal does not constitute an amendment to
the Compact and thus does not implicate the amendment
provision. The Compact also authorizes Congress to “alter,
amend, or repeal” the Compact. See Art. XVI, §2, ibid. But
Congress did not retain an exclusive right to terminate the
Compact.
  Because the Compact’s text does not address whether a
State may unilaterally withdraw, we look to background
principles of law that would have informed the parties’
understanding when they entered the Compact. This Court
has long explained that interstate compacts “are construed
as contracts under the principles of contract law.” Tarrant,
——————
  1 See, e.g., Central Interstate Low-Level Radioactive Waste Compact,

Art. VII(d), 99 Stat. 1870 (1986) (expressly allowing unilateral
withdrawal); Snake River Compact, Art. XII, 64 Stat. 33 (1950)
(expressly providing that the compact will remain in force unless
terminated by both state legislatures and consented to by Congress);
New York-New Jersey Port Authority Compact, Art. 21, 42 Stat. 179
(1921) (expressly allowing unilateral withdrawal within two years of the
compact’s formation); Delaware River Basin Compact, Art. 1, §1.6(a), 75
Stat. 691 (1961) (expressly allowing unilateral termination only after 100
years).
                  Cite as: 598 U. S. ____ (2023)             5

                      Opinion of the Court

569 U. S., at 628; see also Alabama v. North Carolina, 560
U. S. 330, 359 (2010) (Kennedy, J., concurring in part and
concurring in judgment); Texas v. New Mexico, 482 U. S.
124, 128–129 (1987); Green v. Biddle, 8 Wheat. 1, 92 (1823).
To that end, the Court has looked to “background principles
of contract law” to interpret compacts that are silent on a
particular issue. Mississippi v. Tennessee, 595 U. S. ___,
___ (2021) (slip op., at 10); see Tarrant, 569 U. S., at 628,
633.
  To be sure, background rules of contract interpretation
may not override a compact’s terms. Alabama, 560 U. S.,
at 351–352. This Court has said that a compact “is not just
a contract,” but also “a federal statute enacted by Congress”
that preempts contrary state law. Id., at 351; see Tarrant,
569 U. S., at 627, n. 8. But when the compact does not
speak to a disputed issue, background contract-law
principles have informed the Court’s analysis.
  Under the default contract-law rule at the time of the
Compact’s 1953 formation, as well as today, a contract (like
this Compact) that contemplates “continuing performance
for an indefinite time is to be interpreted as stipulating only
for performance terminable at the will of either party.” 1
R. Lord, Williston on Contracts §4:23, p. 570 (4th ed. 2022);
see also, e.g., Restatement (Second) of Contracts §33,
Comment d, p. 94 (1979); 1 S. Williston, Law of Contracts
§38, p. 59 (1920); Compania Embotelladora Del Pacifico,
S. A. v. Pepsi Cola Co., 976 F. 3d 239, 245 (CA2 2020); In re
Miller’s Estate, 90 N. J. 210, 219, 447 A. 2d 549, 554 (1982);
Zimco Restaurants, Inc. v. Bartenders and Culinary
Workers Union, Local 340, 165 Cal. App. 2d 235, 240 (1958);
Fulghum v. Selma, 238 N. C. 100, 103–104, 76 S. E. 2d 368,
370–371 (1953); Bailey v. S. S. Stafford, Inc., 178 App. Div.
811, 815, 166 N. Y. S. 79, 82 (1917). Parties to a contract
that calls for ongoing and indefinite performance generally
need not continue performance after the contractual
relationship has soured, or when the circumstances that
6                NEW YORK v. NEW JERSEY

                     Opinion of the Court

originally motivated the agreement’s formation have
changed, for example. See Delta Servs. & Equip., Inc. v.
Ryko Mfg. Co., 908 F. 2d 7, 11 (CA5 1990); Jespersen v.
Minnesota Min. & Mfg. Co., 183 Ill. 2d 290, 295, 700 N. E.
2d 1014, 1017 (1998).
   That default contract-law rule—that contracts calling for
ongoing and indefinite performance may be terminated by
either party—supports New Jersey’s position in this case.
Through the Waterfront Commission Compact, New York
and New Jersey delegated their sovereign authority to the
Commission on an ongoing and indefinite basis. And the
Compact contemplates the Commission’s exercise of that
authority on an ongoing and indefinite basis. The default
contract-law rule therefore “speaks in the silence of the
Compact” and indicates that either State may unilaterally
withdraw. New Jersey v. New York, 523 U. S. 767, 784
(1998).
   Principles of state sovereignty likewise support New
Jersey’s position. “The background notion that a State does
not easily cede its sovereignty has informed our
interpretation of interstate compacts.” Tarrant, 569 U. S.,
at 631. Here, the Compact involves the delegation of a
fundamental aspect of a State’s sovereign power—its ability
to protect the people, property, and economic activity within
its borders—to a bistate agency. The nature of that
delegation buttresses our conclusion that New York and
New Jersey did not permanently give up, absent the States’
joint consent or congressional action to terminate the
Compact, their authority to withdraw from the Compact
and to exercise those sovereign police powers at the Port as
each State sees fit.
   We draw further guidance from the fact that, as is
undisputed, New York and New Jersey never intended for
the Compact and Commission to operate forever. See Brief
for New York 19, 26; Brief for New Jersey 33, n. 8; Tr. of
Oral Arg. 69, 100–101. Given that the States did not intend
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                     Opinion of the Court

for the agreement to be perpetual, it would not make much
sense to conclude that each State implicitly conferred on the
other a perpetual veto of withdrawal.
   In sum, background principles of contract law, reinforced
here by principles of state sovereignty and the fact that the
States did not intend for the Compact to operate forever,
indicate that New Jersey may unilaterally withdraw from
the Waterfront Commission Compact. To be clear, the
contract-law rule that we apply today governs compacts
(like this Compact) that are silent as to unilateral
withdrawal and that exclusively call for ongoing
performance on an indefinite basis. But that rule does not
apply to other kinds of compacts that do not exclusively call
for ongoing performance on an indefinite basis—such as
compacts setting boundaries, apportioning water rights, or
otherwise conveying property interests. Both New York
and New Jersey agree that States may not unilaterally
withdraw from compacts that are silent as to withdrawal
and that set boundaries, apportion water rights, or
otherwise convey property interests. See Brief for New
York 3–4, 30, 38; Brief for New Jersey 27–29; Tr. of Oral
Arg. 30, 44, 55.
                             III
   New York advances several additional arguments in
support of its view that the Compact nonetheless should be
read to prohibit unilateral withdrawal. But none is
persuasive.
   First, New York invokes the history of compacts before
1953. In New York’s view, many pre-1953 compacts were
silent on unilateral withdrawal but nonetheless were
understood to forbid it. New York says that when States at
that time wanted to allow unilateral withdrawal, the
compacts would expressly provide for it. And New York
adds that we should interpret the 1953 Compact in light of
that practice.
8                NEW YORK v. NEW JERSEY

                      Opinion of the Court

   As New York acknowledges, however, many of those pre-
1953 compacts concerned boundaries and water-rights
allocation. See Brief for New York 3–4, 30; Tr. of Oral Arg.
30, 33. Those compacts, as we have explained, are not
governed by the default contract-law rule authorizing
unilateral withdrawal. New York offers no persuasive
evidence that the background understanding of withdrawal
from boundary and water-rights compacts also applied to
compacts that exclusively call for ongoing performance on
an indefinite basis by an interstate agency. Indeed, just
three years before the Compact here was formed, the
United States explained to this Court that a compacting
State could unilaterally withdraw from a compact that was
silent as to withdrawal and that required an ongoing and
indefinite exercise of sovereign authority. See Brief for
United States in West Virginia ex rel. Dyer v. Sims, O. T.
1950, No. 147, pp. 23–24, 26–27. In addition, New York
overlooks that some compacts, including one formed three
years before this Compact, expressly prohibited unilateral
withdrawal. See Snake River Compact, Art. XII, 64 Stat.
33; see also, e.g., Goose Lake Basin Compact, Arts. V,
VII(B), 98 Stat. 292 (1984). That language would have been
unnecessary if New York were correct about the pre-1953
practice.
   In short, New York identifies no clear historical practice
in support of its view that compacts calling for ongoing and
indefinite performance and that were silent on withdrawal
were understood as of 1953 to prohibit unilateral
withdrawal.
   Second, New York invokes international treaty law.
According to New York, international law generally
prohibits a signatory nation’s unilateral withdrawal from a
treaty absent express language otherwise. But to the
extent that international treaty practice is relevant here, it
is equivocal. Scholars have “long debated” whether nations
may unilaterally withdraw from treaties that do not
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                      Opinion of the Court

expressly authorize withdrawal.         L. Helfer, Exiting
Treaties, 91 Va. L. Rev. 1579, 1592 (2005). And although
the Vienna Convention on the Law of Treaties (to which the
United States is not a party) provides that nations
generally may not withdraw from a treaty absent express
authorization, the Convention acknowledges that the
nature of the treaty may nonetheless imply a right of
withdrawal. Art. 56(1), May 23, 1969, 1155 U. N. T. S. 331;
see also J. Brierly, The Law of Nations 240 (4th ed. 1949).
   Third, New York points out that New York and New
Jersey have resolved Commission-related disputes in the
decades since 1953. According to New York, that practice
suggests that the Compact prohibits unilateral withdrawal.
But the States’ past success in resolving disputes says little
about whether New York or New Jersey could unilaterally
withdraw if and when either State wanted to do so.
   Fourth, New York argues that allowing New Jersey to
withdraw would have sweeping consequences for interstate
compacts generally. But our decision today only addresses
a compact that (i) is silent on unilateral withdrawal;
(ii) calls for ongoing and indefinite performance; and
(iii) does not set boundaries, apportion water rights, or
otherwise convey property interests. Moreover, for any
current and future compacts, States can propose language
expressly allowing or prohibiting unilateral withdrawal if
they wish to do so.
                       *    *     *
  New Jersey may unilaterally withdraw from the
Waterfront Commission Compact notwithstanding New
York’s opposition. We therefore grant New Jersey’s motion
for judgment on the pleadings and deny New York’s cross-
motion.
                                          It is so ordered.