On the Waterfront: Can Compact Agencies Sue A Signatory States?
In Waterfront Commission of New York Harbor v. Murphy, 2020 WL 3025215 (3d Cir. June 5, 2020), rev’g, 429 F.Supp.3d 1 (D.N.J. 2019), the Third Circuit decided that a state could terminate an agency created pursuant to federal law, and transfer the agency’s functions to itself.
OK, it is not quite that simple.
The Waterfront Commission, New Jersey’s Attempted Withdrawal, and Ensuing Litigation
In 1953, New York and New Jersey created the Waterfront Commission by interstate compact. Congress ratified the Compact by statute in the same year, Pub. L. No. 83-252, 67 Stat. 541 (1953). The Commission was created in response to journalistic exposés as well as separate extensive hearings conducted by the New York Crime Commission, New York Governor Thomas Dewey, and congressional committees. These efforts exposed pervasive intertwined criminal activities and corrupt hiring practice centered upon New York area ports. See, DeVeau v. Braisted, 363 U.S. 144, 149-50 (1960); New York Shipping Assn v. Waterfront Commission, 835 F.3d 344 (3d. Cir. 2016). The journalistic expose provided the basis for the widely-acclaim motion picture “On the Waterfront.”
The Waterfront Commission is a somewhat unique compact agency. It is a regulatory agency, exercising federal and state regulatory powers over interstate and international trade. While the missions of compact agencies are quite varied, most merely exercise the contracting states’ proprietary powers to construct or maintain facilities or allocate resources or responsibilities between or among states.
New Jersey has recently tired of having its ports remain under the Waterfront Commission’s jurisdiction, preferring to assume the function of policing New Jersey’s ports itself. Waterfront Commission v. Murphy, slip op. at *1. The unions and shipping association at the New Jersey ports within the Commission’s jurisdiction, which lobbied for the withdrawal bill and intervened to defend the law in Waterfront Commission v. Murphy, appear to have “tired” of the Commission in part due to the Commission’s promulgation of a requirement to combat racial and other discrimination in hiring, and the Third Circuit’s decision to uphold that requirement. See, New York Shipping Assn v. Waterfront Commission, 835 F.3d 344 (3d. 2016).
The Waterfront Commission Compact contains no provision for termination. It does provide, however, that any amendment to the Compact must be by concurrent action of New York or New Jersey. Waterfront Commission Compact, Article XVI, §1. (It also allows Congress to “alter, amend, or repeal” the Compact. Pub. L. 83-252, §2.)
New Jersey adopted legislation withdrawing its consent to the Compact and transferring its authority to the New Jersey State Police. 2017 N.J. Sess. Law Serv. ch. 324, §§ 2, 31 (West 2018) (SENATE 3502) (available on westlaw). The Governor was to notify New York and Congress of New Jersey’s withdrawal. Ninety days thereafter, New Jersey would begin collecting for itself taxes that had previously gone to the Waterfront Commission and the State Police would assume the Commission’s responsibilities in New Jersey. Id., §2(a).
To be sure, the Third Circuit did not give its imprimatur to such a mode of withdrawal from a Compact, at least in terms of substantive interstate compact law. But it did hold that the Waterfront Commission could not sue to enjoin New Jersey’s Governor from moving forward to terminate the agreement, because the suit was barred by sovereign immunity. Slip op. at *3-*5.
The “Law of the Union” Doctrine and Its Implications
Compact and compact agencies exist in an odd hybrid space between state authority and federal authority. Compacts are agreement between states, and for that reason alone generally limit unilateral action by one state. See, State ex rel. Dyer v. Sims, 341 U.S. 22, 28 (1951). But compacts, as opposed to non-compact agreements, can only be valid with Congressional consent. Thus, ratified compacts are also consider federal law, under the Law of the Union doctrine.Thus, a Compact’s interpretation is not even governed by the shared understanding of the compacting states.
The Law of the Union doctrine is longstanding, albeit subject to some criticism. See, Bernard Bell, Compact Agencies and Transparency (Part I) fn. 3 YALE J. ON REG.: NOTICE & COMMENT (May 4, 2020). Pursuant to that doctrine, compacts preempt state statutes, have a status equivalent to federal statutes, and appear to be immune from dormant Commerce Clause constraints.
The Law of the Union doctrine has implications for federal jurisdiction, particularly Eleventh Amendment immunity. The doctrine suggests that compact agencies should not be regarded as subordinate to or sub-agencies of each particular state. Nor should they be considered private citizens. Rather they should be regarded as quasi-federal entities.
While Eleventh Amendment immunity bars a wide range of plaintiffs from suing states, Federal Maritime Com’n v. South Carolina State Ports Authority, 535 U.S. 743, 754 (2002) (“FMC v. Ports Authority”); 13 WRIGHT & MILLER, FED. PRAC. & PROC. JURIS. § 3524 (3d ed.)(available on westlaw), it does not bar the United States from suing state governments, U.S. v. Texas, 143 U.S. 621, 646, (1892); FMC v. Ports Authority, 535 U.S. at 751-52; see, Alden v. Maine, 527 U.S., 706, 755–756 (1999); 13 WRIGHT & MILLER, FED. PRAC. & PROC. JURIS. § 3524 (3d ed.). Nor does the Eleventh Amendment bar states from suing each other, id., for instance to enforce the provisions of interstate compact, Alabama v. North Carolina, 560 U.S. 330 (2010); Texas v. New Mexico, 482 U.S. 124, 130 (1987). By joining the Union, states consent to amenability to suit by the federal government, as well as suit by other states. FMC v. Ports Authority, 535 U.S. at 752; Alden v. Maine, 527 U.S., at 755. While there were no interstate compact agencies at the time of the Constitution’s framing, the creation of interstate compacts, and their ratification by Congress, are expressly envisioned in the Constitution, U.S. CONST., art. I, §10, cl. 3.
Should Compact Agencies Have the Power to Sue States?
Compact agencies arguably should have the same power to sue states as federal agencies and the United States. The Supreme Court has not resolved this question, Alabama v. North Carolina, 560 U.S. at 334 n.5 (2010). In Enterenrgy, Arkansas, Inc. v. Nebraska, 210 F.3d 887 (8th Cir. 2000), the Eighth Circuit held that Nebraska had waived its Eleventh Amendment immunity to suits to enforce provisions of Central Interstate Low-Level Radioactive Waste Commission, by entering the Compact. Id. at 896-97. However, the decision turned on the intricacies of the Compact provisions, provisions that do not appear to be replicated in the Waterfront Commission Compact.
Allowing such suits to enforce Compact provisions is critically important, but important all the more when a state seek to destroy the compact agency. A state cannot be assumed to possess the power to destroy a federal instrumentality, even one administered jointly by two or more states rather than the federal government. See, McCulloch v. Maryland, 17 U.S. 316, 435 (1819); accord, id. at 425-432. In McCulloch, the Court rejected a state’s power to tax a federal entity because the power to destroy was inherent in the power to tax. Surely the power to directly destroy the instrumentality and assume a portion of its jurisdiction is even more contrary to the structure envisioned by the Constitution’s framers.
Thus, the issue address by the Third Circuit, whether the Commission’s suit could be grounded on the Ex Parte Young exception to sovereign immunity, was irrelevant. Ex Parte Young permits private parties (and other entities that cannot directly sue states), to bring suit to enjoin a state official, here the Governor, from acting ultra vires. Slip op. at *3-*5. Through incisive analysis, the Third Circuit showed that the real party in interest was the State of New Jersey, rather than the Governor, making Ex Parte Young jurisdiction unavailable. Id. But federal entities need not rely on Ex Parte Young.
Nevertheless, does permitting compact agencies to sue compacting states mean that a “rogue” compact agency can continue in existence when the need for it has ceased or when it is has strayed from the purposes for which it was created? Note that this is not remotely the case with respect to the Waterfront Commission. See, Complaint, Waterfront Commission v. Murphy, Dkt. No. 18 Civ. 650, 2018 WL 451753, ¶¶25-27 (D.N.J. Jan. 16, 2018). 
In Alden v. Maine, the Court explained the difference between a suit against a state by the United States and suits prohibited by Eleventh Amendment immunity. In particular, suits brought “in the name of the United States [are commenced] by those who are entrusted with the constitutional duty to ‘take Care that the Laws be faithfully executed,’ U.S. Const., Art. II, § 3.” Id. at 755. Indeed, “[s]uits brought by the United States itself require the exercise of political responsibility for each suit prosecuted against a State, a control which is absent from a broad delegation to private persons to sue nonconsenting States.” Id. at 756. And with respect to almost all federal agencies, the decision to sue in federal court is centralized in the Department of Justice, which possessed litigation authority for most federal agencies.
Unlike federal agencies, the President lacks control over compact agencies. Such agencies are controlled by Commissioners appointed by the compacting states. Such an arrangement would appear to be an equivalent form of political control.
But under the Waterfront Commission Compact, each of the two Commission members is appointed for a fixed three-year term. Moreover, even assuming each state’s commissioner were amenable to control despite their fixed tenure, the states’ governors might need to act in concert to exercise even such indirect control over the compact agency.
In this particular case, given the delegation of power to initiate litigation to the Commission’s General Counsel and the recusal of the New Jersey member, the Waterfront Commission commenced its action against New Jersey without a Commission vote and without any participation by the New Jersey Commissioner. See, Waterfront Commission v. Murphy, 2018 WL 2455927, *4-*6 (D.N.J. June 1, 2018). The problem with a two-state compact agency, like the Waterfront Commission, is magnified when there is a multi-state compacting agency nominally accountable to officials from several states.
Yet such a lack of accountability could easily have been addressed in the drafting of the compact itself; the states and Congress contemplated that the need for the Waterfront Commission might come to an end. But, in any event, such a lack of accountability cannot become an implicit grant of power to compact states to withdraw from the compact when they determine, in their sole discretion, that the compact is inconvenient or no longer useful.
Granted, in such circumstances, perhaps at least one contracting state, or the federal government, should be required to take the political responsibility of initiating suit on its own. If the continued existence of the compacting agency is insufficiently valuable for another compacting state or the United States to bring suit in their own names, then perhaps the Court should uphold an Eleventh Amendment challenge made by the state whose efforts to withdraw from the Compact are at issue. However, the failure to bring such an action and to allow a compact agency to lapse, without taking formal steps to end it is itself a means of avoiding political accountability.
The Third Circuit’s decision Waterfront Commission v. Murphy is fundamentally flawed. It will be interesting to see if the Waterfront Commission petitions for Supreme Court review.
And, of course, the State of New York could always file an original action to enforce the Compact’s obligations.
 As the Supreme Court explained in DeVeau v. Braisted, 363 U.S. 144 (1960), Congress’ review of the proposed Compact was not “perfunctory.” Rather, “Congress had independently investigated the evils that gave rise to the Waterfront Commission Acts, and the Subcommittee of the Senate Committee on Interstate and Foreign Commerce had in a Report endorsed the state legislative solution embodied in these Acts.” Id. at 149-50.
 In its withdrawal legislation, the New Jersey Legislature “finds,” that “[t]he commission has . . . has exercised powers that do not exist within the authorizing compact, by dictating the terms of collective bargaining agreements of organized labor, and by requiring stevedoring companies to hire and retain independent inspectors to examine company operations . . . Further, the commission, despite changes in the industry to drive out organized crime’s influence, has over-regulated the businesses at the port in an effort to justify its existence as the only waterfront commission in any port in the United States. As a result, the commission has become an impediment to future job growth and prosperity at the port.”
The findings cleverly allege that “[t]he commission has itself been tainted by corruption in recent years,” without noting that the corruption was discovered and the leadership of the Commission completely revamped in or around 2009. Ralph Blumenthal, Corruption Found at Waterfront Watchdog, N.Y. Times (Aug. 11, 2009); Waterfront Commission Officials Accused of Corruption at N.J., N.Y. Ports (Aug. 11, 2009). So far as I am aware, there have been no allegations of corruptions with regard to Waterfront Commission since that time. Interestingly, New Jersey did not seek to withdraw from the Commission in 2009, when wide-scale corruption at the Commission was revealed.
 The unions and shipping associations challenged the Commission’s requirement that employers in the industry certify that the selection of laborers had been “made in a fair and nondiscriminatory basis” in accordance with federal and state equal employment opportunities laws.
 “Where Congress has authorized the States to enter into a cooperative agreement, and where the subject matter of that agreement is an appropriate subject for congressional legislation, the consent of Congress transforms the States’ agreement into federal law under the Compact Clause.” Cuyler v. Adams, 449 U.S. 433, 440 (1981); see N.Y. v. Hill, 528 U.S. 110, 111 (2000).
Some interstate agreements must be approved by Congress, namely those that form a “combination tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States” are compacts that must be approved by Congress.” U.S. Steel Corp. v. Multi-State Tax Comm’n, 434 U.S. 452 (1978); Virginia v. Tennessee, 148 U.S. 503, 517-19 (1893). Others can be approved by Congress and become compacts, even though they would be valid non-compact agreements without congressional approval. Still others cannot qualify as compacts because they neither encroach on federal supremacy nor are proper subjects for federal regulation. See, Metro. Area Transit Auth. v. One Parcel of Land, 706 F.2d 1312, 1317 n.9 (4th Cir.1983).
 Petty v. Tennessee-Missouri Bridge Comm’n, 359 U.S. 275, 278-82 (1959); See, American Sugar Refining Co. v. Waterfront Comm’n of N.Y. Harbor, 55 N.Y.2d 11, 25, 432 N.E.2d 578, 584, 447 N.Y.S.2d 685, 691 (N.Y. 1982)(“American Sugar”).
 Lake Tahoe Watercraft Recreation Ass’n v. Tahoe Reg’l Planning Agency, 24 F. Supp. 2d 1062, 1069 (E.D. Cal. 1998)(finding the Tahoe compact preempted state claims based on conflicting state constitutional and statutory provisions of both compact states).
 American Sugar, 55 N.Y.2d at 29-30, 432 N.E.2d at 586-87, 447 N.Y.S.2d at 693-94 (because a compact provision is “federal law,” conflicts between compact provisions and federal statutes cannot be resolved by “preemption” analysis, but by an analysis of whether one “impliedly repeals” another); NYSA-ILA Vacation & Holiday Fund v. Waterfront Comm’n of N.Y. Harbor, 732 F.2d 292, 298 (2d Cir. 1984) (Waterfront Compact provision approved by Congress, being “federal” law, not preempted by ERISA); see, DeVeau v. Braisted, 363 U.S. 144, 153 (1960).
 The weight of authority supports the proposition that compacts are immune from dormant Commerce Clause attack. Intake Water Co. v. Yellowstone River Compact Comm’n, 769 F.2d 568 (9th Cir. 1985) (Congressionally-approved Compact, being federal and not merely state law, is immune from dormant Commerce Clause attack); Waterfront Comm’n of N.Y. Harbor v. Constr. & Marine Equip. Co., Inc., 928 F. Supp. 1388, 1404 (D.N.J. 1996) (same); Lake Tahoe Watercraft Recreation Ass’n, 24 F. Supp. 2d at 1070 (same).
However, compact agency actions not mandated by the Compact itself may be subject to dormant Commerce Clause restraints. At least one court has demanded a clear expression of congressional intent to relieve the compact agency from the dormant Commerce Clause’s strictures. N.Y. State Dairy Foods, Inc., v. Northeast Dairy Compact Comm’n, 198 F.3d 1 (1st Cir. 1999).
 Virginia Office for Protection and Advocacy v. Stewart, 563 U.S. 247, 265 (2011). For a discussion of the law regarding federal court jurisdiction to resolve conflicts between a state and its subdivisions, see, Bernard W. Bell, Adjudicating Internecine Quarrels, YALE J. ON REG.: NOTICE & COMMENT (July 29, 2019),
 Interestingly, in the context of the showing needed to obtain a preliminary injunction, one federal court has distinguished the Waterfront Commission from a private litigant. Waterfront Comm’n v. Constr. & Marine Equip. Co., 928 F. Supp. at 1398-99. The Court explained that although private litigants must establish irreparable harm and the absence of other remedies, the Waterfront Commission did not have quite the same obligation. As an entity created by law and invested with the responsibility to fulfill the purpose of its statute by regularizing the waterfront labor supply and thus combating crime, the Commission need make no showing of irreparable injury other than that injury to the public which Congress found inherent in the conduct made unlawful under the compact. Id.
 Indeed, some courts have used precisely that term. See, e.g., Seal & Co. v. WMATA, 768 F. Supp. 1150, 1156 (E.D. Va. 1991); Coalition for Safe Transit, Inc. v. Bi-State Development Agency, 778 F. Supp. 464, 467 (E.D. Mo. 1991).
 Connecticut Dep’t of Envtl. Protect. v. OSHA, 356 F.3d 227, 234 (2nd Cir. 2004).
 “No State shall, without the Consent of Congress . . . enter into any Agreement or Compact with another State, or with a foreign Power.”
 Granted the law of intergovernmental tax immunity has been revised since McCulloch, though largely in line with the scope of federal immunity from taxation contemplated by Justice Marshall in his opinion for the Court in McCulloch.
 Interestingly, in Enterenery the Eighth Circuit held that the Compact agency could proceed against Nebraska state officials on an Ex Parte Young theory, 210 F.3d at 897-88.
 Even the withdrawal legislation acknowledges the need to continue efforts to “regulate port-located business to ensure fairness and safety,” address “matters of fair hiring and employment discrimination,” and investigate “any criminal activity in the ports of northern New Jersey.” Withdrawal Act, §§1(c), 1(d). The bill expresses a preference that this be done by a patchwork of general jurisdiction agencies that have many competing demands for their attention and resources. Id.