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Compact Originalism in New York v. New Jersey
Michael Ramsey

In New York v. New Jersey, decided by the Supreme Court yesterday, the Justices unanimously interpreted an interstate compact (the 1953 New York-New Jersey Waterfront Commission Compact) according to background principles existing at the time the compact was formed.  The issue was whether the compact allowed New Jersey to unilaterally withdraw.  From Justice Kavanaugh's opinion for the Court: 

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....

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, 569 U. S., at 628;... 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);... 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 originally motivated the agreement’s formation have changed, for example. ...

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. 

To me this (like many such instances) indicates that originalism -- interpreting legal texts to have the meaning they had when adopted -- is just a normal thing to do outside of constitutional law.

Aside on the puzzling constitutional law of compacts:  Congress approved the Waterfront Commission Compact pursuant to Article I, Section 10 of the Constitution. 67 Stat. 541 (1953).  But I'm not sure (and neither the Court nor Congress explained) why this agreement was a compact (allowed with Congress' approval) rather than a treaty (not allowed at all) or something less than a compact (not requiring Congress' approval).

Further aside: According to the Court, President Eisenhower signed the congressional act approving the compact, so apparently Congress acted through the Article I, Section 7 process to give its approval.  It's not completely obvious that this is required, however.