New York v. New Jersey

COMPACT INTERPRETATION AND ORIGINAL INTENT

New York argues that the text and structure of the Compact clearly prohibits unilateral withdrawal. Brief for Plaintiff, New York at 18-19. New York states that compacts must be interpreted based on the authors’ intent, as determined by the language and context of the compact. Id. at 17. New York maintains that, while the Compact does not contain a unilateral withdrawal provision, it establishes two ways for the Compact to end: (1) when both states agree that the compact is no longer necessary, or (2) if Congress repeals the Compact. Id. at 18-19. Thus, New York concludes that the only way for the Compact to end without congressional action is when both states agree to terminate the Compact. Id. at 21. New York claims this conclusion is supported by the fact that amendments to the Compact require unanimity. Id. at 19. Moreover, New York points out that, if the states wanted to be able to withdraw easily, they could have created parallel state agencies that could be terminated at will, but the fact that they chose to create a merged entity suggests that they intended to bind themselves until their joint task was completed. Id. at 26. Finally, New York notes that, until 2018, New Jersey officials repeatedly asserted that New Jersey could not withdraw without New York’s approval. Id. at 29. Thus, New York argues, New Jersey cannot now change its mind, and argue the Compact always allowed unilateral withdrawal. Id.

New York further asserts that allowing unilateral withdrawal would run counter to the history of compact law. Id. at 30. New York maintains that, at the time the Compact was signed, compacts traditionally required mutual withdrawal. Id. New York compares the Compact with other compacts from the same time period and alleges that, before 1953, most compacts did not explicitly mention withdrawal. Id. Moreover, New York maintains that these compacts were widely understood to require mutual termination. Id. New York states that, when states did allow unilateral withdrawal, they explicitly stated so in the terms of the compact. Id. In addition, New York argues that, unlike with contracts, courts are forbidden from reading implied conditions into compacts unless it is clear the writers intended to add the conditions. Id. at 22, 33. New York further notes that, at the time of the Compact, no bistate compact had ever authorized unanimous termination. Id. at 34. Therefore, New York concludes that the Compact’s writers would not have felt the need to explicitly require mutual termination because they would have assumed it was the default. Id. Accordingly, New York asserts that allowing unilateral termination would not only violate the writers’ intent, but also run counter to the historic principles of compact law. Id.

In response, New Jersey states that the Compact was written to allow unilateral withdrawal. Brief for Defendant at 14. New Jersey notes that compacts are a type of contract and are governed by principles of contract interpretation. Id. New Jersey alleges that, when contracts have no set end date and are designed to impose duties indefinitely, each party must have the right to unilaterally terminate the agreement. Id. at 15-16. New Jersey further asserts that, when contract duties are indefinite, courts should interpret ambiguous phrasing narrowly, in favor of allowing states to withdraw at will; otherwise, a vague contract could force duties upon an unsuspecting party in perpetuity. Id. Here, New Jersey maintains that the Compact imposes indefinite duties upon New Jersey and New York, since both states must cede regulatory and policing power to the Waterfront Commission for as long as the Compact exists. Id. at 18. As such, New Jersey concludes that the Compact must allow unilateral withdrawal. Id. In addition, New Jersey rejects New York’s contention that the Compact forbids unilateral withdrawal because it requires unanimity for amendments. Id. at 31. New Jersey points out that amending a compact is not the same as leaving it, since amendments impose new duties on both parties; by contrast, withdrawal allows a party to relinquish its prior duties. Id. at 32-33. New Jersey also points out that the Waterfront Commission cannot take action without the approval of both its commissioners (one for each state). Id. at 25. As a result, New Jersey emphasizes, each state can veto any action, and it does not make sense to allow unilateral vetoes but not unilateral withdrawals. Id. Finally, New Jersey maintains that it has never conceded that unilateral withdrawal is forbidden. Id. at 37 n.9. While New Jersey concedes that a prior governor of New Jersey thought that unilateral withdrawal was forbidden, New Jersey counters by arguing that the prior governor was unable to convince the state legislature to confirm this position. See id. Moreover, New Jersey further points out that the prior governor eventually changed his mind on the issue and ended his term in office supporting unilateral withdrawal. Id.

New Jersey also rejects New York’s claim that historical precedent forbids unilateral withdrawal without explicit authorization. Id. at 24. New Jersey states that, contrary to New York’s assertions, at the time the Compact was signed there was only one type of compact that required unanimous withdrawal: compacts which allocated property or granted permanent rights (such as water rights). Id. at 27. By contrast, New Jersey contends that the Compact only delegates regulatory authority. Id. at 29. Thus, New Jersey states that the Compact does not fall into the narrow category of compacts that require unanimous withdrawal. Id. Instead, New Jersey concludes that when the Compact was signed it was governed by the clearly established contract rule allowing for unilateral withdrawal from indefinite contracts. Id. at 15. New Jersey supports this claim by analyzing other interstate compacts. Id. at 34. According to New Jersey, the vast majority allow unilateral withdrawal, and provisions providing for unilateral withdrawal are three times more common than provisions requiring unanimity. Id. New Jersey posits that, given this history, the Compact’s writers intended to allow unilateral withdrawal. Id. at 15, 22.

STATE SOVEREIGNTY

New York argues that allowing New Jersey to unilaterally end the Compact would infringe upon New York’s sovereignty. Brief for Plaintiff at 36. New York argues that, because compacts are agreements between two co-equal sovereigns, one of their key features is their ability to permanently bind states, unless both states agree to end the agreement. Id. at 35. New York compares compacts between states to treaties between nations. Id. at 41. New York states that, when sovereigns sign treaties, they are expected to maintain their end of the bargain; countries are not allowed to renege on their promises by unilaterally withdrawing without permission. Id. New York thus concludes that, since countries cannot unilaterally withdraw from treaties, sovereign states cannot unilaterally withdraw from compacts unless given explicit permission. Id. at 42. New York claims this unanimity is especially important in compacts like the Waterfront Commission Compact. Id. at 35. New York alleges that when New York and New Jersey created the Waterfront Commission, both states voluntarily ceded some of their sovereign authority to the Commission; the resulting entity is not fully controlled by either state, and its powers and assets belong to New Jersey and New York. Id. at 35. Thus, New York warns, New Jersey cannot withdraw and decide for itself which parts of the Commission “belong” to New Jersey; if it did so, it would violate New York sovereignty by unilaterally claiming powers and assets that belong, in part, to New York. Id. at 20.

In opposition, New Jersey claims that forcing it to remain in the Compact despite its wishes violates New Jersey sovereignty. Brief for Defendant at 22. New Jersey rejects the idea that the inability to unilaterally withdraw is a crucial element of compacts and argues that sovereigns often can and do unilaterally withdraw from compacts and treaties. Id. at 41, 43. New Jersey also asserts that a state can only cede sovereign power when the compact or contract clearly outlines the power the state is giving up. Id. at 23. New Jersey argues that this is especially true when ceding police and regulatory power, since legislatures have a duty to the people to respond to new situations and changing circumstances. Id. at 20-21. According to New Jersey, when a legislature gives up its ability to withdraw from or amend a compact, it is limiting the ability of future legislatures to tweak the agreement or adopt different measures. Id. New Jersey contends that, because of the vague nature of the Compact, New Jersey was not given clear notice that it could be held responsible in perpetuity. Id. at 24. Thus, New Jersey posits, it did not sign away its sovereign powers indefinitely. Id. New Jersey concludes that disallowing unilateral withdrawal would give New York the power to violate New Jersey sovereignty, by forcing New Jersey to remain in the Compact and preventing it from regaining its sovereign authority. Id. at 43.