The Supreme Court ruled Tuesday that New Jersey can unilaterally withdraw from the longstanding Waterfront Commission Compact it has with New York to police corruption in the shipping industry in the major port the two states share.

All nine of the Supreme Court’s justices voted to dismiss arguments by New York in favor of forcing New Jersey to stay in the compact.

Justice Brett Kavanaugh wrote the nine-page majority opinion in the case, which is a victory for container shipping companies and the International Longshoreman’s Association, the union that represents dockworkers.

The ruling, which came after five years of litigation in federal district and appeals courts, hinged on the fact that the Waterfront Commission Compact does not explicitly bar either state from exiting the agreement.

New Jersey Gov. Phil Murphy in a statement said he was “thrilled” by the unanimous ruling in his state’s favor, and that “New Jersey’s sovereign right to govern our ports has been vindicated.”

“Since the first hours of our time in office, my Administration has steadfastly pursued the dissolution of the Waterfront Commission because it was the right thing to do,” Murphy said.

“Over 90 percent of commerce at our ports happens on the New Jersey side, and the New Jersey State Police, one of the finest law enforcement agencies in the nation, is more than capable of taking on the Commission’s law enforcement and regulatory responsibilities.”

The two-member Waterfront Commission was created in 1953 by New York and New Jersey to address labor corruption in the Port of New York and New Jersey. The entity oversees mandatory employment licensing for waterfront workers and conducts law enforcement probes in the port.

A year after the commission was created, the Marlon Brando movie “On the Waterfront” depicted the labor-related crime that the commission was set up to combat. The film won eight Academy Awards, including for best picture, best actor and best director.

New Jersey sought to withdraw from the Waterfront Commission in 2018, arguing that the compact had outlived its usefulness because organized crime no longer controlled hiring on the docks. The state also argued that the compact had throttled hiring on the docks.

By that time, the vast majority of cargo was being handled by workers on the New Jersey side of the port.

When the compact began, about 70% of waterfront employees worked on the New York side.

New York opposed New Jersey’s bid to exit the compact, arguing that would harm efforts to fight crime on the docks.

New York claimed that the agreement “does not allow either State to unilaterally withdraw,” Kavanaugh noted in his opinion.

However, Kavanaugh added, while the compact explicitly says that both states must agree on making any amendments or supplements, it “does not address each State’s power to unilaterally withdraw.”

“It neither expressly allows nor expressly proscribes unilateral withdrawal,” he wrote.

“That is in contrast to some other interstate companies, which do expressly allow, prohibit or limit unilateral withdrawal,” Kavanaugh wrote.

Kavanaugh also wrote that “principles of state sovereignty likewise support New Jersey’s position.”

“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,” he wrote.

“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,” Kavanaugh wrote.

New York Gov. Kathy Hochul and Attorney General Letitia James said in a statement: “We are disappointed by the Supreme Court’s decision to allow New Jersey to unilaterally withdraw from the Waterfront Commission.”

“For decades, the Waterfront Commission has been a vital law enforcement agency, protecting essential industries at the port and cracking down on organized crime,” Hochul and James said. “We will continue to do everything in our power to combat corruption and crime, protect the health of our economy, and ensure the safety of New Yorkers.”

Source: CNBC