On the Waterfront: The Legal Battle for Control over the New York/New Jersey Docks

Jordan Perlman

Edited by Kira Small, Ananya Singh, Sahith Mocharla, and Jia Lin

Introduction

On January 15, 2018, New Jersey Governor Chris Christie unilaterally withdrew New Jersey from the bi-state Waterfront Commission of New York Harbor after 65 years of partnership with New York–combating mob corruption and discrimination on the ports. Over the ensuing half a decade, the Waterfront Commission, and later New York State, bitterly fought to keep New Jersey in the Commission through a tumultuous legal battle that played out on all three levels of the federal court system. Ultimately, the Supreme Court of the United States ruled that New Jersey had the right to withdraw, notwithstanding New York’s objections, and dissolve the Commission.

Since the 2023 Supreme Court of the United States (SCOTUS) decision, each state independently regulates and polices the waterfront. However, it remains too early to judge their success. It will take several years to evaluate the decision’s financial impact and whether the docks of NY and NJ retain their preeminent position on the East Coast. Similarly, it will take time to determine whether these new entities can successfully prevent the re-emergence of organized crime on the waterfront without the overriding coordination provided by the old Waterfront Commission.

Lead-Up

In 1948, New York Sun journalist Malcolm Johnson published 24 Pulitzer Prize-winning articles exposing the deleterious influence of organized crime on the Ports of New York and New Jersey [1]. Crime on the Waterfront details how infamous mafiosi, such as Frank Costello and Charles “Lucky” Luciano, exploited various waterfront practices to enrich themselves and expand their crime syndicates [2]. The cornerstone of this corruption was the ‘shape-up,’ where pier bosses selected the day’s workers from the crowd of men that showed up at the docks each morning [3]. To increase their chance of being chosen, workers gave kickbacks directly to the bosses, or indirectly, by patronizing select shops or donating to specific fundraisers [4]. Other illicit activities included cargo theft and running gambling, loansharking, and drug-selling operations on the harbor [5].

In response to these “corrupt hiring practices” and “for the protection of the public safety, welfare, prosperity, health, peace, and living conditions of the people of the two States [New York and New Jersey],” the bi-state Waterfront Commission of New York Harbor (“Commission”) was created in 1953. Its two main goals were to eliminate criminal activity on the ports and guarantee fair hiring and employment practices [6]. The bi-state Commission eliminated the ‘shape-up’ system, creating in its place Employment Information centers through which employers hired longshore workers [7]. Additionally, the Commission confirmed and revoked worker licenses, opened the Longshore Worker's Register, and added employees to the register [8][9]. A 1989 assessment of the Commission conducted by Peter Levy revealed that the exploitation of dockworkers “diminished considerably” and racketeering became less brazen [10]. Levy ascribed the continuing presence of organized crime to the Commission’s insufficient “manpower and jurisdiction” [11].

In 2015, the Commission successfully completed three criminal investigations: 1) punishing 11 Genovese associates (the Genovese were one of the five dominant mafia crime families in New York) for racketeering and other illicit schemes; 2) sentencing Genovese members along with high-ranking International Longshoremen's Association (“ILA”) officials for a “35-year extortion scheme;” and 3) convicting an ILA Atlantic Coast District Vice President for a shakedown operation [12]. Overall, in the 2014-15 fiscal year, the Commission arrested 118 people, while seizing “over 34 pounds of heroin, 821 pounds of cocaine, 97 pounds of marijuana, 500 Oxycodone pills… [and] over $9.6M in proceeds from drug transactions and loan sharking” [13]. Despite these major accomplishments, the Commission faced dissolution by means of a bill unanimously passed by the New Jersey State Legislature in 2015  [14]. However, Governor Chris Christie vetoed the bill, arguing that New Jersey could not unilaterally withdraw from the agency [15][16].

The New Jersey Legislature’s efforts were led by state Senator Raymond Lesniak, the bill’s author. Lesniak advocated:

“The waterfront commission was formed in 1953 to eliminate control of the waterfront by organized crime. Organized crime does not control the waterfront anymore. There are reputable terminal operators and Shipping Association members who are not tied up and not controlled by organized crime, and their daily hiring practices — in terms of the employment they need to quickly move cargo in and out — are being impaired by this unnecessarily.” [17]

Lesniak’s complaints stemmed from Section 5-P of the Waterfront Commission Act which gave the Commission permission to regulate hiring on the docks–specifically, the “closed register statute” and “non-discrimination statute” [18]. The closed register statute enabled the Commission to control the number of active longshore workers [19]. Historically, the main method of transporting cargo was called “break bulk shipping” wherein items would be placed into a variety of containers such as boxes, barrels, and crates. Each item was loaded and unloaded individually in a time-consuming process, requiring numerous workers [20]. Consequently, any applicant who met the basic criteria was permitted to join the Longshore Worker’s Register, which listed the workers available for hire. However, with the advent of shipping containers in the mid-1950s, the process of loading and unloading ships required less manpower as workers unloaded containers off ships and onto trucks with the help of cranes and other machines. The adoption of shipping containers led to a surplus of workers, making the job prospects of individuals less predictable [21]. To mitigate this surplus, in 1966 both the New York and New Jersey legislatures added Section 5-P to the Act, allowing the Commission to control the opening and closing of the register [22]. The non-discrimination statute was added to Section 5-P in a 1999 amendment, strengthening the Commission’s ability to uphold its goal of ensuring fair hiring practices. The Commission was empowered to equalize the employment process and businesses were forced to sign a “fair hiring certification letter” [23].

Lesniak’s attacks parroted complaints by the major unions representing port workers. In 2016, the International Longshoremen’s Association, AFL-CIO (ILA), New York Shipping Association, Inc. (NYSA) Metropolitan Marine Maintenance Contractors Association, Inc. (MMMCA) challenged these two statutes. Ruling against the objections, the US Court of Appeals Court for the Third Circuit recognized anti-discrimination to be a foundational goal of the Commission, encompassed within the Act’s phrase “corrupt hiring practices” [24]. Both state and federal government officials made it clear in 1953 hearings that they sought to end the apparent discrimination that was ingrained in the ‘shape up’ system and diversify the workforce. As Bernard Bell wrote in the Yale Journal on Regulation:

“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.” [25]

These attacks represented a growing sentiment that the Commission had overstepped its authority and was restraining the free market. Opponents highlighted that no other East Coast state had a Commission and that its closest parallel, the Toronto Harbour Commission, was dissolved in 1999 [26]. The unions and private companies wanted to have more control over the hiring process and the unilateral ability to add workers to the register, arguing that this overregulation limited the workforce, leading to longer wait times for loading and unloading cargo [27]. As a result, business was leaving the New York/New Jersey waterfront [28]. To evidentiate their claims, Hank Sheinkopf, a political consultant speaking in support of the ILA and the Maritime Association of the Port of New York and New Jersey in 2017, stated “New York’s share of leaden containers declined from 33.5 percent in 2010 to 30.1 percent in 2015" and cargo from Asia decreased by 1.5 percent despite increasing at many other ports [29]. Anger generated from the drop in cargo, and therefore the drop in job opportunities, was intensified by the fact that the Waterfront Commission was mainly funded through payments by port employers [30].

Conversely, Port Authority of New York and New Jersey data shows that total TEUs (a measure of volume meaning twenty-foot equivalent units) increased year-over-year by 10.4 percent in 2015. In 2017 and 2018, the Harbor further increased its total TEUS by approximately 7 percent [31]. In 2019, New York Harbor registered volume increases in contrast to declines at both the Ports of Los Angeles and Long Beach; New York Harbor remains third in the country in terms of total port volume behind Los Angeles and Long Beach [32].

Another source of contention between New York and New Jersey was the latter’s belief that New York was inhibiting the Harbor’s growth [33]. The revised 2017/2018 version of the bill, once again urging the governor to withdraw from the Commission, highlighted that New Jersey’s growth since “containerization” had significantly exceeded New York’s: “Today, more than 82 percent of the cargo and 82 percent of the work hours are on the New Jersey side of the port.” Furthermore, around 90 percent of the Commission’s operating budget came from assessments of New Jersey port employers [34].

In May 2007, the New Jersey Legislature successfully voted to repeal Section 5-P. However, as a bi-state commission, the law necessitated the New York legislature to pass identical legislation [35]. New York refused to sign, blaming the ILA’s antipathy towards workforce diversity: in 2014, 99 out of the 100 workers it recommended were white [36]. In 2017, New Jersey passed a law that would give each Governor the ability to veto Commission policies [37]. Once again, New York refused to follow suit.

Finally, proponents of withdrawal alleged that society had changed and organized crime was extinct. Arguments claiming the disappearance of organized crime ignored the Commission’s statistics from FY2014-15 and FY2018-19 which showed that numerous ILA longshore worker referrals were not approved due to their organized crime ties [38][39]. Making matters worse for the Commission was a massive scandal in the 2000's [40]. Politicians contended that the only actual corruption on the waterfront was the Commission itself. Without excusing the terrible corruption at the Commission, it is important to mention that the main players involved in the scandal were from New Jersey. The New Jersey Commissioner (there was one from each state), Michael Madonna, used his influence to hire three unqualified officers, including one without the requisite college diploma and another who had failed out of the Port Authority Police Academy [41]. Madonna gave the third officer answers to an examination that he had previously failed twice, despite it being the identical exam each time. In a clear conflict of interest, Madonna represented the New Jersey State Policemen’s Benevolent Association as its president, despite also being their manager as a Commissioner [42]. Former New Jersey Prosecutor and later General Counsel for the Waterfront Commission Jon Deutsch was similarly experienced with conflicts of interest. Deutsch covered up the drug conviction of a family friend’s son and then gave him a license to work [43]. Additionally, Deutsch investigated and then participated in the questioning of the father of his close friend and former coworker, Al Cernadas, Jr. instead of recusing himself from the case. He later revealed classified information to Cernadas Jr. concerning the case. In another instance, Deutsch sanctioned and abetted a convicted felon to operate a business that the Commission should have closed [44].

After nearly 10 years of campaigning to end the Waterfront Commission, Lesniak wrote his first draft of the withdrawal bill in 2010, Governor Christie withdrew New Jersey from the Commission as he was leaving office on January 15, 2018. Governor Christie reversed his previous position without any explanation when he signed the unanimously passed bill (Chapter 324) beginning a half-decade of legal battles [45]. 

Waterfront Commission of New York Harbor v. Murphy

Immediately, New York sued incoming New Jersey Governor Phil Murphy (thus the name: Waterfront Comm'n of N.Y. Harbor v. Murphy), arguing that one state could not unilaterally withdraw from the Compact. The case, being a dispute between two states, went to the United States District Court for the District of New Jersey, a federal court. On June 1, 2018, District Judge Susan D. Wigenton granted a Preliminary Injunction preventing New Jersey’ withdrawal until the end of the trial and rejected motions for dismissal on behalf of the defendants [46]. Concerning the motions for dismissal, Judge Wigenton used the tripartite test from Lujan v. Defenders of Wildlife, to adjudicate that the Commission’s desire to “prevent its extinction” gave it standing in the case. The Commission’s dissolution (i) constituted an “injury in fact,” meeting the requirement of a concrete and particularized harm; (ii) was “fairly traceable” to the defendant’s conduct, as New Jersey's withdrawal directly caused the injury; and (iii) would be “redressed” by a favorable verdict, as such a decision could reverse or mitigate the harm caused [47].  Furthermore, Governor Murphy did not have sovereign immunity under the 11th Amendment because New York was alleging that his actions violated a federal law. According to Cuyler v. Adams, the Compact became “law of the United States” when it was approved by Congress. Finally, Judge Wigenton dismissed claims that the Commission did not have the power to sue, presenting the many instances in which the Commission delegated to its employees the ability to bring suits on its behalf. The four-pronged test established in Ferring Pharma., Inc. v. Watson Pharm., Inc. was used to grant the Plaintiff’s temporary injunction: 1) the Commission had a prima facie case, meaning there was enough evidence to merit a trial, based on a mix of previous case law and the Compact's requirement that both states must agree to the “manner and terms of the Commission’s dissolution”; 2) the preliminary injunction is the only method that adequately protects the Commission from the irreparable harm of dissolution (before a trial decides its fate); 3) the harm from the Commission’s dissolution in the meantime (both to the Commission and to the port through any confusion from new licensing and hiring practices) outweighs New Jersey’s desire to stimulate economic growth; and 4) the Commission continued existence throughout the trial is in the “public interest” [48].

After the injunction was issued and the dismissals were denied, both parties moved for summary judgment. Summary judgment obviates a trial and allows a judge to make a decision based on submitted evidence and facts. Since there were no disagreements over evidence, the Court granted these motions in February 2018. On May 29, 2019, Judge Wigenton ruled in favor of the Waterfront Commission. As the first part of her final ruling, Judge Wigenton reiterated the Commission’s authority to sue, despite the fact that the Commissioner from New Jersey recused himself from that decision. Although the defendants argued that Waterfront General Counsel Phoebe Sorial needed both Commissioners’ approval, it was previously delegated to Sorial that she had the power to sue. Furthermore, New York Commissioner Ronald Goldstock was the only one “willing or able to express his approval” and thus his consent was sufficient [49].

Concerning unilateral withdrawal, Judge Wigenton applied the Amendment’s section of the Compact a fortiori to New Jersey’s withdrawal. A fortiori, meaning "with stronger reason," is a logical argument suggesting that if one fact is true, another related and more significant fact must also be true. Judge Wigenton reasoned that if amendments to the Compact required bilateral agreement, since termination is “the most substantial type of change,” it too must require consent from both parties. In addition, she reiterated her argument in favor of granting the preliminary injunction. Chapter 324, withdrawing New Jersey from the Commission, effectively enables it to unilaterally dictate the terms of the dissolution as opposed to the Compact which requires bi-state agreement for all changes. Judge Wigenton relied on Port Auth. Trans-Hudson Corp. v. Feeney, where Supreme Court Justice William Brennan directly opposed one-sided dissolution and stated that one state should not be completely in control over an interstate agency [50].

Judge Wigerton continued with an examination of the “Compact Drafters’ Intent,” concluding that “the legislative record underscores the importance of New York and New Jersey's cooperative efforts.” Governor Christie’s 2015 veto and subsequent statement were used as evidence in support of the Commission. Judge Wigerton cited examples of the New Jersey State Assembly trying to request Congress to repeal the Compact three times between 2015 and 2018 as evidence that Legislators knew that a compacting state couldn’t withdraw. However, a more plausible interpretation is that these Assemblymen were simply pursuing an alternative path. Finally, Ne. Bancorp, Inc. v. Bd. of Governors of the Fed. Reserve Sys. found that one bedrock feature of a compact is that one party is “not free to modify or repeal its law unilaterally” and compacts that differ on this point often expressly mention this fact. In response to Judge Wigerton’s ruling, Governor Murphy and his lawyers appealed the case to the United States Court of Appeals, Third Circuit  [51].

Waterfront Commission of New York Harbor v. Governor of New Jersey

One of the claims by the defense in its motion for dismissal was the Eleventh Amendment which dictates that states and their officials can only be sued by their own citizens. However, as Judge Wigerton mentioned in her opinion, state officials are not immune when violating federal law and therefore can be sued (the Ex parte Young doctrine). New Jersey appealed the District Court’s decision on the grounds that the ruling violated sovereign immunity and that Judge Wigerton incorrectly applied Ex parte Young [52].

In Ford Motor Co. v. Department of Treasury of Indiana the US Supreme Court decided that Ex parte Young only applied to state officials, not to the states themselves if they are the “real, substantial party in interest" [53]. New Jersey alleged in their appeal that their state was the party at interest, not its Governor. In deciding that point, the Third Circuit Court of Appeals relied on Pennhurst State Sch. v. Halderman which ruled that a state is the substantial party if the “judgment sought would expend itself on the public treasury or domain, or interfere with public administration” [54].

The Third Circuit seemingly took both parts of that Pennhurst citation into account when deciding this case in favor of the Governor and further emphasizing that state sovereign immunity is a “bedrock principle.” To prove that the “judgment sought would expend itself on the public treasury or domain,” Chief Judge D. Brooks Smith highlighted the Commission’s funding. If dissolved, payments from port employers would be redirected from the bi-state Commission to the New Jersey Treasury. Conversely, maintaining the Commission would divert funding away from the New Jersey Treasury, “thereby operate[ing] against the State,” signifying that New Jersey is the party of interest. For the latter half of Pennhurst, the Court determined that the Commission “interfered with public administration” because it “seeks ‘specific performance of a State’s contract.’” New Jersey involuntarily remaining in the Commission predominantly affects the state as opposed to a singular entity like the Governor, indicating that the state is the party in interest. Since the state is protected by sovereign immunity under the 11th Amendment, the Third Circuit Court unanimously reversed the District Court’s decision and dismissed the case on June 05, 2020 [55].

Appeals to the Supreme Court

In response to the Third Circuit’s decision, the Commission filed a writ of certiorari–an action which asks the U.S. Supreme Court to review a lower court’s decision–on Dec 4, 2020 [56]. Citing Edelman v. Jordan, which bars any retroactive financial judgment, the Commission argued that the prospective judgment sought in this case enforced conformance with federal law in the future [57][58]. Since the Commission was requesting the Governor’s future compliance with federal laws, namely the Compact, the effect on the public treasury was only “ancillary” [59]. The Commission claimed that the Third Circuit’s reasoning concerning “specific performance” misunderstood that the Commission was not suing the Governor for breach of contract, but for violation of federal law. “Specific performance” necessitates that the Court directly manage state affairs, but the Commission was only asking that the Governor (Respondent) follow the Compact, a federal law, which does not fall under sovereign immunity [60]. The Third Circuit’s decision countered previous Eighth (Entergy, Arkansas, Inc. v. Nebraska) and Tenth (Tarrant Regional Water District v. Sevenoaks) Circuit court decisions requiring that SCOTUS hear the cases and settle the “Circuit Split” [61]. The Commission ended their brief by discussing the widespread importance of interstate compacts and how this decision threatened to hinder such cooperation in the future [62].

In response to the Commission, the Respondent published a brief arguing against granting certiorari, focusing on the “illusory” circuit split and the minute impacts of this case. In Entergy, the Compact Nebraska signed was found to include a provision which “constitute[d] a ‘clear declaration’ of consent to suit in federal court” [63]. However, there was no such provision in the Commission’s Compact. In Tarrant, the case dealt with a state’s “ownership interests in its natural resources,” materially different than the revenue dispute between the Commission and New Jersey in this case, and the ruling neither “expend[ed] itself on the public treasury or domain,” nor impacted “public administration” [64]. Addressing the miniscule impact of the trial, the Respondent argued that there were myriad alternative methods of suit involving states suing other states (what would later occur in this case), the federal government suing a breaching party, or a state forfeiting their immunity such as in Entergy. With so many possible methods of holding a state responsible, this narrow holding would only apply in the rarest of circumstances [65].

The Respondent ended its brief claiming the Commission’s dispute over whether the payments are ancillary is the very sort of case-specific dispute inappropriate for certiorari. Additionally, the suit is, in fact, against New Jersey because “[t]he general rule is that a suit is against the sovereign … if the effect of the judgment would be ‘to restrain the Government from acting, or to compel it to act’” [66]. The Supreme Court denied the petition on November 22, 2021 [67].

New York v. New Jersey

With the Commission v. Governor case finally settled, New Jersey once again gave New York formal notice of withdrawal. Desperate to prevent the Commission’s dissolution, New York (Petitioner) sued New Jersey (Respondent) in the U.S. Supreme Court which has original jurisdiction in disputes between states [68]. Although New Jersey claimed in its previous brief that one state suing another was an acceptable method of dispute (unlike the Commission’s previous suit against an official), the Commission included a large section on why “a suit within the original jurisdiction of this Court is not an adequate substitute for an Ex parte Young action.” New York maintained that at its root this case involved harm to a non-state party (the Commission) and not a state (New York) [69][70]. On March 24, 2022, the same day New York filed for preliminary relief (a motion that preserves the status quo), SCOTUS granted New York’s motion, temporarily preventing New Jersey from leaving [71].

Both sides received amici curiae briefs in support of their position. Amici curiae are people/organizations that are not a party in a legal case but submit arguments or information to the court to advocate for a particular interpretation of the law or provide context on the broader implications of the lawsuit. New Jersey received five briefs: one brief from a joint coalition of states (Texas, Alaska, Louisiana, Montana, Nevada, South Carolina, Utah, and Virginia); one brief from the Metropolitan Marine Maintenance Contractors’ Association; one from law professors Janice Griffith, David Horton, and Christopher Serkin; one brief from a variety of “Port businesses and other entities”; and a final brief on behalf of the United States. New York received four supporting briefs: one brief from the state of Oregon; one brief from three interstate compact entities including the Interstate Commission for Juveniles, the Interstate Medical Licensure Compact Commission, and the Interstate Commission of Nurse Licensure Compact Administrators; one brief from five law professors (Jeffrey B. Litwak, Bernard W. Bell, Phillip J. Cooper, Neal D. Woods, and Ann O’M. Bowman); and one from the Waterfront Commission of New York Harbor [72].

On March 1, 2023, SCOTUS heard arguments from both parties [73]. Speaking for the Petitioner, Deputy Solicitor General for New York Judith Vale argued that since the Compact required agreement on nearly everything, including amendments and approval of a budget, the Compact implicitly requires both states to approve its termination. Vale produced 80 contemporary compacts, explaining that, in 56 of them, the termination clause is omitted. “The history and tradition of compacts leading to 1953 shows the prevailing understanding that unilateral termination is not allowed unless the compact expressly grants that power.” In response, the justices expressed concern about the idea of one state signing over their sovereignty in perpetuity. Justice Clarence Thomas ended his first round of questions with the statement, “What I’m hearing you say is that if they say nothing about terminating it, they basically sacrifice their sovereignty permanently, unless the other party agrees,” to which Vale effectively agreed [74]. Reporter Ronald Mann summarized the reactions of other justices:

“Justice Samuel Alito characterized New York’s ‘argument [that New Jersey agreed] to surrender this sovereign authority perpetually’ as ‘an extraordinary thing’; Justice Elena Kagan found it ‘a kind of weird thing,’ and Justice Brett Kavanaugh called it ‘a big deal.’ [75]

Justices Jackson and Sotomayor contended that the Commission was never supposed to be endless, and thus, “one party can’t keep the other on the hook forever.” Sotomayor supported her reasoning with the annual reports given to each Legislature. These reports were effectively pointless if each state could only veto certain items. Justice Kagan summarized the opinion of the court, posing Vale the question, “Do you understand ordinary contract principles to cut against you?” Vale agreed. In standard contract law, if there is no intent from either party as to the end of the contract but there are continuing obligations, one party can unilaterally back out [76].

Speaking for the Respondent, Solicitor General of New Jersey Jeremy Feigenbaum argued that sovereignty was the central issue of the case. Unlike earlier rulings in the matter which dealt with state sovereignty under the 11th Amendment, this sovereignty issue focused on New York’s ability to force New Jersey to remain in the Compact. Remaining in the Commission, would deprive New Jersey of its “police powers” and, therefore, its sovereignty. New Jersey argued that it cannot be trapped, against the will of its legislature and its people, by New York until the end of time. With regards to “police powers,” Feigenbaum argued that this concession is so “momentous” that to give them up in perpetuity requires clearer language than what was present in the original Compact. At the end of his speech, Feigenbaum addressed Vale’s presentation of 80 compacts saying that nearly all of those agreements are distinct from the Commission’s Compact because they either dealt with settling property or water-rights (entirely different issues) or, for one specific compact involving the Port Authority, it had a specific provision concerning withdrawal and dealt with infrastructure instead of the continued licensing of workers [77].

By the time that Austin Raynor, Assistant to the US Solicitor General, argued in favor of the Respondents, the Justices were seemingly posing questions on how best to frame their ruling in favor of New Jersey. Justice Jackson, for one, was asking whether contract law or sovereignty would provide a better, more narrow opinion [78].

On April 18, 2023, one and a half months after oral arguments, SCOTUS issued a unanimous ruling in favor of the Respondent, New Jersey [79]. Justice Kavanaugh, writing on behalf of the court, rejected the District Court’s a fortiori argument. Since there was no clear text concerning unilateral withdrawal, SCOTUS looked to contract law: 

“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.’” [80]

Justice Kavanaugh, utilizing Feigenbaum’s sovereignty argument, explained that a fundamental right of any state is its ability to “protect the people, property, and economic activity within its borders.” The opinion rejected New York’s evidence of the history of Compacts before 1953, since they solely concerned either boundary-setting or water-rights allocations. These two groups of compacts, Justice Kavanaugh noted, are distinctly different from the Waterfront Commission and would not be impacted by the court’s decision. Justice Kavanaugh added that international treaty law, examples of past resolutions to Commission-related disputes, and the alleged “sweeping consequences” of withdrawal did not apply in this case. After five years of legal disputes, New Jersey was finally granted the ability to unilaterally withdraw from the Commission [81].

Aftermath

New Jersey

Chapter 324 entrusted the management of New Jersey’s ports to the New Jersey State Police, who then established the Port Security Section [82]. The Port Security Section comprises three divisions: the Port Operations & Investigations Bureau, the Port Compliance Bureau, and the Port Regulatory & Licensing Bureau [83].

The Port Operations & Investigations Bureau protects the ports from crime. The Port Investigations Unit conducts protracted investigations specifically into organized crime often in partnership with federal agencies and departments such as the Department of Homeland Security and the FBI. Meanwhile, the Port Operations Unit addresses the day-to-day security of the Port of New Jersey through the training and oversight of private Security Officers, video surveillance, and handling any confidential information [84].

The Port Compliance Bureau regulates Port employers through its Audit & Compliance Unit which ensures that each employer has a clean payroll and is paying the required assessments to the State Treasury. These assessments fund the Port Security Section similar to how assessments on employers funded the Waterfront Commission of New York Harbor and the current New York Waterfront Commission. The Port Discovery & Adjudication Unit is also under the Port Compliance Bureau and disciplines current workers through scheduling and managing hearings. New York and New Jersey both maintain license suspensions and revocations as punishments for workers on the Waterfront. Decasualization, which is taking employees off the Longshore Workers Registry if they fail to make themselves available for work at least 90 days out of every six months, is administered by this unit [85].

Finally, the Port Regulatory & Licensing Bureau certifies new workers through the Port Licensing and Background Unit and manages the Telephonic Hiring Employment Information Center (THEIC) using the Port Employment & Hiring Unit [86].

New York

The New York Waterfront Commission, established by Governor Kathy Hochul three months after the Supreme Court decision, currently manages the Port of New York [87]. When drafting the new laws governing the Commission, the Governor and Legislature changed sections of the original compact to better reflect cultural shifts. Gendered language such as longshoreman or port watchman became longshore worker and security officer, and addiction to drugs and other substances is no longer punishable [88][89].

The revisions also strengthened the Commission's powers. Definitions for coercion, inimical association, and discrimination became broader, giving the Commission more latitude. The Commission can now regulate gambling within “five hundred feet” of waterfront terminals. Originally, its jurisdiction was only within five feet of the ports. Stevedore’s licenses last for five years, up from two, while temporary licenses for both stevedores and workers are effective for six months instead of one. Most importantly, the Waterfront Commission became a permanent state agency, whereas the bi-state compact wished for “the termination of governmental regulation and intervention at the earliest opportunity” [90][91].

The modern-day Commission is comprised of four divisions. The Police Division employs both law enforcement personnel and intelligent analysts who investigate organized crime, including relationships between members of organized crime and longshore workers, and other criminal operations on the ports. The Law, Licensing & Employment Information Center (EIC) Division authorizes and rescinds licenses through administrative hearings while also managing the THEIC and the decasualization program. The Audit & Control Division assesses each employer, raising funds for the Commission, while the Information Technology Division oversees the Commission’s technology [92].

Impact

Despite glaring differences in organizational structure, the laws governing each body are nearly identical. The only difference is New Jersey’s governing document omits section 5-P. The Legislature's 2007 elimination of this provision was in limbo until the commission dissolved. While carrying out their charters, New York is more likely than New Jersey to revoke licenses in cases of inimical association. These are where a port worker is alleged to have a relationship with someone tied to organized crime that could lead to the appearance of impropriety. Meanwhile, New Jersey is less forgiving of prior convictions, whereas New York tries harder to rehabilitate ex-cons, even felons. Finally, the assessment rate on employer’s payrolls is 1.6 percent in New York for FY 2024-2025, but 1.5 percent in New Jersey [93][94].

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[1] Sean Murphy, An Underworld Syndicate: Malcolm Johnson’s “On the Waterfront” Articles, The Pulitzer Prizes, www.pulitzer.org/article/underworld-syndicate-malcolm-johnsons-waterfront-articles (last visited Oct 6, 2024).

[2] Malcolm Johnson, Underworld Syndicate, with Ties Abroad, Runs Vast Empire of Crime, Reputed to Include Waterfront Rackets Here, (1948), www.pulitzer.org/winners/malcolm-johnson (last visited Oct 6, 2024).

[3] Julia Pjevach, A Comparative Look at the Response to Organized Crime in the Ports of New York-New Jersey and Vancouver, 6 Cardozo International and Comparative Law Review 283 (2022).

[4] Nathan Ward, Dark Harbor: The War for the New York Waterfront (1st ed. ed. 2010)

[5] Julia Pjevach, A Comparative Look at the Response to Organized Crime in the Ports of New York-New Jersey and Vancouver, 6 Cardozo International and Comparative Law Review 283 (2022).

[6] New York State, Legislature. “Waterfront Commission Act.” N.Y. Laws, c. 882, 1953, https://www.wcnyh.gov/docs/wcnyh_act.pdf.

[7] Bradley v. Waterfront Comm. 12 N.Y. 2d 276 (1963)

[8] Linehan v. Waterfront Commission, 347 U.S. 439 (1954) 

[9] NOW, etc. v. Waterfront Com. of New York Harbor, 468 F. Supp. 317, 319 (S.D.N.Y. 1979)

[10] Peter B. Levy, The Waterfront Commission of the Port of New York: A History and Appraisal, 42 Industrial and Labor Relations Review 508 (1989), https://www.jstor.org/stable/2524026 (last visited Oct 6, 2024).

[11] Peter B. Levy, The Waterfront Commission of the Port of New York: A History and Appraisal, 42 Industrial and Labor Relations Review 508 (1989), https://www.jstor.org/stable/2524026 (last visited Oct 6, 2024).

[12] Waterfront Commission of New York Harbor, Waterfront Commission of New York Harbor Annual Report 2014-2015, (2015), waterfront.ny.gov/system/files/documents/2023/11/2014-2015_wcnyh_annual_report.pdf (last visited Oct 6, 2024).

[13] Waterfront Commission of New York Harbor, Waterfront Commission of New York Harbor Annual Report 2014-2015, (2015), waterfront.ny.gov/system/files/documents/2023/11/2014-2015_wcnyh_annual_report.pdf (last visited Oct 6, 2024).

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[15] Christie, Chris. Conditional Veto: Senate Bill No. 2277. https://www.google.com/url?q=http://www.njleg.state.nj.us/&sa=D&source=docs&ust=1733350193807762&usg=AOvVaw3fSuZtjhMGttUJeM80F7vf.

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[47] Waterfront Comm'n of N.Y. Harbor v. Murphy, Case No. 18-650, (D.N.J. Jun. 1, 2018)

[48] Waterfront Comm'n of N.Y. Harbor v. Murphy, Case No. 18-650, (D.N.J. Jun. 1, 2018)

[49] Waterfront Comm'n of N.Y. Harbor v. Murphy, 429 F. Supp. 3d 1, (D.N.J. 2019)

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[51] Waterfront Comm'n of N.Y. Harbor v. Murphy, 429 F. Supp. 3d 1, (D.N.J. 2019)

[52] Waterfront Comm'n of N.Y. Harbor v. Governor of N.J., 961 F.3d 234 (3d Cir. 2020)

[53] Ford Motor Co. v. Dep't of Treasury, 323 U.S. 459 (1945)

[54] Waterfront Comm'n of N.Y. Harbor v. Governor of N.J., 961 F.3d 234 (3d Cir. 2020)

[55] Waterfront Comm'n of N.Y. Harbor v. Governor of N.J., 961 F.3d 234 (3d Cir. 2020)

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[63] Grewal, Gurbir S., et al. Respondents’ Joint Brief in Opposition to Certiorari.

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[66] Grewal, Gurbir S., et al. Respondents’ Joint Brief in Opposition to Certiorari.

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[68] “Governor Murphy”: Governor Murphy and Acting Attorney General Platkin Oppose New York’s Last-Minute Effort to Prevent New Jersey’s Withdrawal from the Waterfront Commission, Insider NJ (2022), www.insidernj.com/governor-murphy-and-acting-attorney-general-platkin-oppose-new-yorks-last-minute-effort-to-prevent-new-jerseys-withdrawal-from-the-waterfront-commission/ (last visited Oct 6, 2024).

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[70]  Waxman, Seth P. On Petition for a Writ of Certiorari to the United States Court of Appeals for the Third Circuit.

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[73] Transcript of Oral Argument at 2 New York v. New Jersey, 598 U.S. 218 (2023) (No. 22O156)

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[80] New York v. New Jersey, 598 U.S. 218 (2023)

[81] New York v. New Jersey, 598 U.S. 218 (2023)

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