New York v. New Jersey

598 U.S. 218

• Court: Supreme Court of the United States
• Decided: April 18, 2023
• Docket: 156, Orig.
• Status: Published

Opinion

PRELIMINARY PRINT

Volume 598 U. S. Part 1 Pages 218–229

OFFICIAL REPORTS OF

THE SUPREME COURT April 18, 2023

REBECCA A. WOMELDORF reporter of decisions

NOTICE: This preliminary print is subject to formal revision before the bound volume is published. Users 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. 218 OCTOBER TERM, 2022

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 Arti- cle 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 Commis- sion 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 Com- pact, over New York's opposition. New York fled a bill of complaint in this Court, and the parties then fled 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 Com- Page Proof mission Compact Pending notwithstanding Publication New York's opposition. Pp. 223–229. (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 par- ties' 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 indefnite 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. Here, the States delegated their sovereign authority to the Commission on an ongoing and indefnite 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 Cite as: 598 U. S. 218 (2023) 219

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 indefnite basis—such as compacts setting boundaries, apportioning water rights, or otherwise conveying property interests. Pp. 223–226. (b) New York's additional arguments in support of its view that the Compact should be read to prohibit unilateral withdrawal are unpersua- sive. 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 com- pacts concerned boundaries and water-rights allocation—the very kinds of compacts that are not governed by the default contract-law rule au- thorizing unilateral withdrawal. Second, New York invokes interna- tional 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 rele- vant 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 sweep- ing consequences for interstate compacts generally. But the Court's decision does not address all compacts, and States may propose lan- guage to compacts expressly allowing or prohibiting unilateral with- drawal. Pp. 226–228. 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.

Judith N. Vale, Deputy Solicitor General of New York, ar- gued the cause for plaintiff. With her on the briefs were Letitia James, Attorney General of New York, Barbara D. Underwood, Solicitor General, Grace X. Zhou and Stephen J. Yanni, Assistant Solicitors General, and Helena Lynch, Assistant Attorney General. Jeremy M. Feigenbaum, Solicitor General of New Jersey, argued the cause for defendant. With him on the briefs 220 NEW YORK v. NEW JERSEY

Opinion of the Court

were Matthew J. Platkin, Attorney General of New Jersey, Sundeep Iyer and Jean P. Reilly, Assistant Attorneys Gen- eral, and Emily N. Bisnauth, Amy Chung, Patrick Jhoo, Na- thaniel Levy, Vivek N. Mehta, Kristina L. Miles, Daniel Resler, Jonathan W. Allen, and Sara M. Gregory, Deputy Attorneys General. Austin L. Raynor argued the cause for the United States as amicus curiae in support of defendant. With him on the brief were Solicitor General Prelogar, Deputy Solicitor General Kneedler, Deputy Assistant Attorney General Har- rington, Mark B. Stern and Alisa B. Klein.*

Justice Kavanaugh delivered the opinion of the Court. Under Article I, § 10, of the Constitution, each State pos- sesses 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 en- tered into the Waterfront Commission Compact. The Com- pact created a bistate agency to perform certain regulatory

*Briefs of amici curiae were fled for the State of Oregon by Ellen F. Rosenblum, Attorney General of Oregon, Benjamin Gutman, Solicitor General, and Peenesh Shah, Assistant Attorney General; for the State of Texas et al. by Ken Paxton, Attorney General of Texas, Brent Webster, First Assistant Attorney General, Judd E. Stone II, Solicitor General, Lanora C. Pettit, Principal Deputy Solicitor General, Benjamin Wallace Mendelson, Assistant Solicitor General, and Christopher J. F. Galiardo and Cody C. Coll, Assistant Attorneys General, and by the Attorneys Gen- eral for their respective States as follows: Treg Taylor of Alaska, Jeff Landry of Louisiana, Austin Knudsen of Montana, Aaron Ford of Nevada, Alan Wilson of South Carolina, Sean Reyes of Utah, and Jason Miyares of Virginia; for Compact Entities by Matthew S. Tripolitsiotis and Rich- ard L. Masters; for Law Professors by Jaynee LaVecchia and Michelle Pallak Movahed; for the Metropolitan Marine Maintenance Contractors' Association by Stephen B. Kinnaird, Igor V. Timofeyev, and Sean D. Unger; for Port Businesses et al. by A. Matthew Boxer and McKenzie A. Wilson; for the Waterfront Commission of New York Harbor by Seth P. Waxman, David M. Lehn, and Edward Williams; and for Jeffrey B. Litwak et al. by Scott A. Eisman and David Y. Livshiz. Cite as: 598 U. S. 218 (2023) 221

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 Wa- terfront Commission Compact notwithstanding New York's opposition. I In 1951, New York and New Jersey began a joint investi- gation 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. Laws p. 1511; 1953 N. Y. Laws p. 2417. New York and New Jersey obtained Congress's approval of the Compact in 1953, con- sistent with the Compact Clause of the Constitution. Presi- dent 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 Commis- sion 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 reg- ulatory and law-enforcement activities at the Port. For ex- ample, 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 supple- ments.” Art. XVI(1), 67 Stat. 557. The Compact also rec- ognizes Congress's authority to “alter, amend, or repeal” the Compact. Art. XVI, § 2, ibid. But the Compact does not 222 NEW YORK v. NEW JERSEY

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 employ- ees worked on the New York side of the Port. But by 2018, according to New Jersey, more than 80% of work hours oc- curred on the New Jersey side, and more than 80% of the Port's cargo fowed through the New Jersey side. New Jer- sey also came to view the Commission as ill-equipped to han- dle 21st-century security challenges and as a source of over- regulation that impedes job growth. In 2018, the New Jersey Legislature passed and Governor Christie signed a law to withdraw New Jersey from the Wa- terfront 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 Jer- sey 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 unilater- ally withdraw from the Compact. Before the expected date of withdrawal, New York moved in this Court for leave to fle a bill of complaint and for a temporary order preventing Cite as: 598 U. S. 218 (2023) 223

New Jersey's withdrawal. This Court temporarily enjoined New Jersey from withdrawing from the Compact pending fnal disposition of this case. The Court later granted New York's motion for leave to fle a bill of complaint and allowed the parties to fle cross-motions for judgment on the plead- ings. In this Court, the United States also participated as amicus curiae in support of New Jersey's unilateral with- drawal from the Compact. II The question presented is straightforward: Does the Wa- terfront Commission Compact allow New Jersey to unilat- erally withdraw from the Compact notwithstanding New York's opposition? The answer is yes. The interpretation of the Waterfront Commission Com- pact—an interstate compact approved by Congress—pre- sents 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 ad- dress withdrawal. The Compact mentions neither “with- drawal” 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 unilat-

1 See, e. g., Central Interstate Low-Level Radioactive Waste Compact, Art. VII(d), 99 Stat. 1870 (1986) (expressly allowing unilateral with- drawal); 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); Dela- ware River Basin Compact, Art. 1, § 1.6(a), 75 Stat. 691 (1961) (expressly allowing unilateral termination only after 100 years). 224 NEW YORK v. NEW JERSEY

eral withdrawal does not constitute an amendment to the Compact and thus does not implicate the amendment provi- sion. 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' un- derstanding when they entered the Compact. This Court has long explained that interstate compacts “are construed as contracts under the principles of contract law.” Tarrant, 569 U. S., at 628; see also Alabama v. North Carolina, 560 U. S. 330, 359 (2010) (Kennedy, J., concurring in part and con- curring 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 par- ticular issue. Mississippi v. Tennessee, 595 U. S. –––, ––– (2021); 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 indefnite 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, Com- Cite as: 598 U. S. 218 (2023) 225

ment d, p. 94 (1979); 1 S. Williston, Law of Contracts § 38, p. 59 (1920); Compania Embotelladora Del Pacifco, 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 indefnite performance generally need not continue performance after the contractual relationship has soured, or when the circumstances that 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 indefnite 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 indefnite basis. And the Compact contemplates the Commission's exercise of that au- thority on an ongoing and indefnite 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 Jer- sey's position. “The background notion that a State does not easily cede its sovereignty has informed our interpreta- tion 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 bor- ders—to a bistate agency. The nature of that delegation 226 NEW YORK v. NEW JERSEY

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 author- ity to withdraw from the Compact and to exercise those sov- ereign police powers at the Port as each State sees ft. We draw further guidance from the fact that, as is undis- puted, 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 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 indefnite basis. But that rule does not apply to other kinds of com- pacts that do not exclusively call for ongoing performance on an indefnite 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 sup- port of its view that the Compact nonetheless should be read to prohibit unilateral withdrawal. But none is persuasive. Cite as: 598 U. S. 218 (2023) 227

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 under- stood 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. As New York acknowledges, however, many of those pre- 1953 compacts concerned boundaries and water-rights alloca- tion. 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 with- drawal. New York offers no persuasive evidence that the background understanding of withdrawal from boundary and water-rights compacts also applied to compacts that exclu- sively call for ongoing performance on an indefnite 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 with- draw from a compact that was silent as to withdrawal and that required an ongoing and indefnite 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 pro- hibited unilateral withdrawal. See Snake River Compact, Art. XII, 64 Stat. 33; see also, e. g., Goose Lake Basin Com- pact, 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 identifes no clear historical practice in support of its view that compacts calling for ongoing and indefnite performance and that were silent on withdrawal were understood as of 1953 to prohibit unilateral withdrawal. 228 NEW YORK v. NEW JERSEY

Second, New York invokes international treaty law. Ac- cording 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 interna- tional treaty practice is relevant here, it is equivocal. Schol- ars have “long debated” whether nations may unilaterally withdraw from treaties that do not expressly authorize with- drawal. 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 ac- knowledges 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 indefnite 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 Water- front Commission Compact notwithstanding New York's op- Cite as: 598 U. S. 218 (2023) 229

position. We therefore grant New Jersey's motion for judg- ment on the pleadings and deny New York's cross-motion. It is so ordered.

Reporter’s Note

The attached opinion has been revised to refect the usual publication and citation style of the United States Reports. The revised pagination makes available the offcial United States Reports citation in advance of publication. The syllabus has been prepared by the Reporter of Decisions for the convenience of the reader and constitutes no part of the opinion of the Court. A list of counsel who argued or fled briefs in this case, and who were members of the bar of this Court at the time this case was argued, has been inserted following the syllabus. Other revisions may include adjustments to formatting, captions, citation form, and any errant punctuation. The following additional edits were made:

None