A Review of Recent Compact Litigation
by: Richard L. Masters
General Counsel
Interstate Commission for Adult Offender Supervision
Today nearly 200 compacts are in effect involving a wide range of public issues
including the environment, child welfare, water allocation, health, education, multi-state
taxation, transportation, emergency management, corrections and crime control.
Although much of the recent state activity concerning interstate compacts is in the
legislative arena, litigation concerning interstate compact issues appears to be on the
increase. Since 1975 federal and state courts have issued more than 250 opinions
involving interstate compacts. A digest of some of the more significant cases during the
period from 1975 through 2000 is available at the Council of State Government web site
at www.csg.org. (refer to National Center for Interstate Compacts, Legal Information,
"Interstate Compact Case Law, 1976-2000"). Since that time a number of additional
compact case decisions have been rendered which deserve attention. A more
comprehensive review and analysis of the cases referred to in this outline and in the
above referenced case law digest and numerous other reported decisions and legal
authorities is contained in "The Evolving Use and the Changing Role of Interstate
Compacts: A Practitioner's Guide" Buenger, Masters, McCabe & Broun, 2006
published by the American Bar Association.
Administrative Procedures and Rulemaking
Organic Cow, LLC v. Northeast Dairy Compact Commission, 164 F.Supp2d 412 ( 2001),
vacated and remanded, Organic Cow, LLC v. Ctr. for New England Dairy Compact
Research, 335 F.3d 66 (2d Cir. 2003) holding that procedural limitations under an
interstate compact where a petition seeking exemption from the regulations of the
Compact was subject to restrictions limiting the parties to presentation of up to two (2)
affidavits and a brief, without the benefit of an oral hearing were approved by the court
which found that the intent of the compact was to establish a basic structure through
which the regulatory commission created may achieve its purposes through regulatory
techniques historically associated with milk marketing and to afford the commission
broad flexibility to devise regulatory mechanisms to achieve the purposes of the compact.
This case also holds that a compact created agency is not subject to the federal
Administrative Procedures Act simply because it is sanctioned by Congress.
Commonwealth of Pennsylvania Board of Probation and Parole et al vs. Interstate
Commission for Adult Offender Supervision, (Dist. DC 2004), appeal dismissed
Commonwealth of Pennsylvania Board of Probation and Parole v. Interstate Commission
for Adult Offender Supervision, 2005 U.S. App. LEXIS 3151 (D.C. Cir. 2005), the U.S.
Dist. Court for the Dist. of Columbia denied an injunction sought by the State of
Pennsylvania against enforcement of rules promulgated by the Commission alleging the
rulemaking procedures violated the Administrative Procedures Act and various
provisions of the Interstate Compact for Adult Offender Supervision. On appeal of the
denial of the injunction a three judge panel of the U.S. Court of Appeals for the Dist. of
Columbia dismissed the appeal as moot.
Choice of Law and Forum Issues
Washington-Dulles Transport. Ltd. v. Metropolitan Washington Airports Authority, 263
F.3d 371 (4th Cir. 2001), holding that a compact provision that original jurisdiction over
compact matters is vested in the courts of Virginia and that the courts "shall in all cases
apply the law of the Commonwealth of Virginia" is a contractually valid agreement
between the parties to the compact. Moreover, even if suit is brought in federal court, the
party states have agreed that the federal courts will apply Virginia law in any dispute or
litigation. In approving this compact, Congress consented to these choice of law
provisions as binding elements in the agreement.
Civil Rights Liability under 42 U.S.C. Section 1983
Orville Lines v. Wargo, 271 F. Supp.2d 649 (W.D. PA 2003), holding that the provisions
of the Interstate Compact for the Supervision of Parolees and Probationers, the
predecessor of the Interstate Compact for the Supervision of Adult Offenders, do not
create a private right of action under 42 U.S.C. Section 1983 for those subject to its
provisions (offenders on probation or parole). The court held that nothing short of a right
unambiguously conferred by Congress would support such a cause of action and that
neither the compact language nor the consent of congress manifested an intent to create a
new individual right for adult offenders.
Conflict of Compact with Subsequent State Laws
International Union of Operating Engineers, Local 542 v. Delaware River Joint Toll
Bridge Commission, 311 F.3d 273 (3d Cir. 2002), holding that the question of whether
subsequent state legislation is binding upon a compact which was not the subject of
congressional consent was dependant upon whether the states that pass substantially
similar legislation have in effect amended a compact to impose new law. As this opinion
indicates, the courts are not in agreement.
Skamania County v. Woodall, 104 Wash. App. 525, 16 P.3d 701 (2001) holding that the
Columbia River Gorge Compact must apply Washington state law because the Columbia
River Gorge Compact language did not specifically reject such state law.
Arkansas Department of Health and Human Services v. Kandie Sue Kucera Feryanitz et
al., Cir. Ct. of Newton Co. Ark., Juv. Div. No. JV2003-20-2, (Jan. 23, 2006), declaring
the application of the Interstate Compact for the Placement of Children unconstitutional
under the equal protection clauses of the U.S. Constitution and Arkansas Constitution
based on a subsequent state legislative amendment to the compact redefining foster care
in a manner contrary to the existing definition in all other states which are members of
the compact (ICPC in effect in 50 states).
Congressional Consent
Intermountain Municipal Gas Agency v. F.E.R.C., 326 F.3d 1281 (D.C. Cir. 2003),
holding that Utah and Arizona could not by interstate agreement create a mutual
governing entity to escape the regulatory authority given to the Federal Energy
Regulatory Commission by the federal Natural Gas Act. Therefore, while Congress may
use its consent power to alter the "landscape" in which joint state action takes place,
states may not conversely use the interstate compact or similar process as a means for
avoiding or circumventing congressional authority in the absence of the explicit
agreement by Congress that such action is permissible.
U.S. ex rel. Blumenthal-Kahn Elec. Ltd. Partnership v. American Home Assurance
Company, 219 F. Supp.2d 710 (E.D. VA 2002), holding that the provisions of the Miller
Act which require a contractor to provide a performance bond prior to construction or
alteration did not apply to the Metropolitan Washington Airports Authority and the
agency created pursuant to the compact because the entity is not a "federal agency" even
though it has received congressional consent.
Heard Communications, Inc. v. Bi-State Development Agency, 18 Fed. Appx. 438 (8th
Cir. 2001), holding that congressional consent does not transform bi-state development
agency into federal administrative agency.
Friends of the Columbia Gorge v. Columbia River Gorge Commission, 108 P.3d 134
(Wash. Ct. App. 2005), holding that while state courts are required to apply federal law in
interpreting the compact, in the absence of specific procedural rules, the state court
applies state administrative law. amended by Friends of the Columbia Gorge v. Columbia
River Gorge Commission, 2005 Wash. App. LEXIS 968 (May 5, 2005).
Due Process Issues
Organic Cow, LLC v. Northeast Dairy Compact Commission, 164 F.Supp.2d 412 (2001),
vacated and remanded, Organic Cow, LLC v. Ctr. for New England Dairy Compact
Research, 335 F.3d 66 (2d Cir. 2003) holding that if constitutionally protected interests
are implicated by an action taken under an interstate compact, due process claims may be
subject to the balancing of interests called for under Mathews v. Eldridge, 424 U.S. 319
(1976). Here the questions are: what are the private interests involved; what is the risk of
error and the value of additional procedural safeguards to avoid that risk; and what are
the strengths of the compact agency's interests. In this case a corporate entity subject to
the compact was seeking an exemption from a price regulation under the compact based
on an asserted constitutionally protected property right which the court held could not be
denied without `appropriate procedural safeguards' Id at 421.
Eleventh Amendment Immunity and Sovereign Immunity
Kansas v. Colorado, 533 U.S. 1 (2001), holding that 11th Amendment immunity
precludes a direct action by citizens of Kansas against Colorado for recovery of damages
based on alleged losses sustained by individual water users.
Abdulwali v. Washington Metropolitan Area Transit Authority, 315 F.3d 302 (D.C. Cir.
2003) holding that where compact did not prescribe design specifications for metro cars;
agency made discretionary choices when it established plans, specifications, or schedules
regarding the metro system that fell within the scope of a discretionary function, and thus
sovereign immunity barred plaintiff's claims.
Watters v. Washington Metropolitan Area Transit Authority, 295 F.3d 36 (D.C. Cir.
2002), holding that an entity created pursuant to the Compact Clause of the federal
Constitution will not be presumed to qualify for 11th Amendment immunity unless there
is good reason to believe that the states structured the entity to arm it with the states' own
immunity, but even where the 11th Amendment does not offer protection such an entity
may be immune from suit under the laws of the states that created it. The Watters court
also held: "We may find a waiver of sovereign immunity `only where stated by the most
express language or by such overwhelming implications from the text [of the compact] as
will leave no room for any other reasonable construction.'" (citations omitted).
Lizzi v. Alexander, 255 F.3d 128 (4th Cir. 2001), holding that if properly conferred, a
compact created agency receiving 44% of its funding from member states may be
considered an entity of the "state" and thus shielded by 11th Amendment immunity.
Entergy, Arkansas, Inc. v. Nebraska, 68 F. Supp.2d 1093 (D. NE 1999), aff'd Entergy,
Arkansas, Inc. v. Nebraska, 241 F.3d 1979 (8th Cir. 2001), construing claims of 11th
Amendment protection by Nebraska officials as commissioners under the Central
Interstate Low-Level Radioactive Waste Compact, holding that the state and its officers
are protected in their official capacity against any claims other than declaratory and
injunctive relief.
Enforcement of Compacts and Regulations
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency, 535 U.S.
302 (2002) recognizing the validity of interstate compact regulations establishing
environmental thresholds for air quality, water quality, soil conservation, vegetation
preservation, wildlife, fisheries, noise, recreation and scenic resources and that the mere
enactment of regulations implementing a 32 month moratorium on development in the
Tahoe Basin did not constitute a per se taking of the landowners' property.
Washington-Dulles Transp., Ltd. v. Metropolitan Washington Airports Authority, 87 Fed.
Appx. 843 (4th Cir. 2004), cert denied, 125 S. Ct. 50 (Oct. 4, 2004), in regard to bidding
procedures where a disappointed bidder challenges the decision of a compact agency, the
court relying on and earlier decision in Old Town Trolley Tours v. Washington Metro.
Area Transit Commission, 129 F.3d 201 (D.C. Cir. 1997) held that where the compact
which created the regulatory entity is silent on the appropriate rulemaking standard, the
courts have generally applied the "arbitrary and capricious" standard of review.
Committee for Reasonable Regulation of Lake Tahoe v. Tahoe Regional Planning
Agency, 311 F. Supp.2d 972 (D. Nev. 2004), in which the court held that compact
agencies such as the Tahoe Regional Planning Commission have the authority to issue
rules and regulations as long as such rulemaking is within the scope of its mandate under
the compact. Judicial inquiry into the agency's actions is limited to determining whether
an act or decision is arbitrary, capricious, lacked substantial evidentiary support, or the
agency failed to proceed in a manner required by law.
Interstate Commission for Adult Offender Supervision v. Tennessee Board of Probation
and Parole et al (U.S. District Court, Eastern District of Kentucky, 04-526-KSF, 2005)
relying upon Cuyler v. Adams, 449 U.S. 433 (1981) and Carchman v. Nash, 473 U.S. 716
(1985), in the first enforcement action filed by the Commission under the provisions of
the Interstate Compact for Adult Offender Supervision the court held that an interstate
compact receiving congressional approval enjoys the status of federal law and the
administrative rules of the compact Commission function as a law of the United States
applicable to the member states under the terms of the compact and through the operation
of the Supremacy Clause of the Constitution. Thus, the terms of such compact and any
rules and regulations authorized by the compact supercede substantive state laws which
are in conflict.
Doe v. Ward, 124 F. Supp.2d 900 (W.D. PA 2000), holding that conflicting provisions of
a state statute regulating sex offenders must yield to the provisions of the Interstate
Compact for the Supervision of Parolees and Probationers because of its status as federal
law as an interstate compact sanctioned under the compact clause of the federal
Constitution.
Virginia v. Achu, 54 Va. Cir. 109 (Va. Cir. Ct. 2000), holding that the Metropolitan
Washington Airports Authority was a properly constituted compact agency, and its
regulations regarding the unlawful solicitation of passengers were constitutional and
enforceable.
Implied or Express Termination of Compacts
Virginia v. Maryland, 540 U.S. 56 (2003), holding that an interstate compact negotiated
in 1785, predating the Constitution of the United States was still in force and the Supreme
Court will resolve disputes arising under the agreement exercising its original jurisdiction
invoked by the parties.
Judicial Interpretation of Compact Language
Alabama v. Bozeman, 533 U.S. 146 (2001), holding that a congressionally sanctioned
interstate compact under the compact clause of the federal Constitution has the status of
federal law and is subject to federal construction.
New York v. Hill, 528 U.S. 110 (2000), holding that by transforming an interstate
compact into federal law, congressional consent gives rise to federal questions subject to
federal construction and resolution.
Entergy Arkansas, Inc. v. Nebraska, 358 F.3d 528 (8th Cir. 2004), cert. denied sub nom
Nebraska v. Central Interstate Low-Level Radioactive Waste Commission, 2004 WL
1874952 (U.S. Aug. 23, 2004), where the Court looked to the Restatement (2d) of
Contracts to decide whether an interstate commission acted in good faith in denying a
license, a question of fact reviewed for clear error.
New York State Dairy Foods v. Northeast Dairy Compact Commission, 26 F. Supp.2d
249 (D. Mass 1998), aff'd 198 F.3d 1 (1st Cir. 1999), cert. denied, 529 U.S. 1098 (2000),
holding that in the interpretation and enforcement of interstate compacts courts are
constrained to effectuate the terms of the compact as a binding contract so long as those
terms do not conflict with constitutional principles.
Standing and Indispensable or Interested Parties
Alabama v. North Carolina, 540 U.S. 1014 (2003), holding that a compact commission is
not precluded from being an interested party to a suit between states and the presence of a
compact commission as an interested party is not fatal to invoking the Supreme Court's
original jurisdiction so long as the suit unequivocally involves states suing states in their
sovereign capacity.
American Greyhound Racing, Inc. v. Hull, 305 F.3d 1015 (9th Cir. 2002), applying
F.R.C.P. 19 to answer whether the Arizona tribes with gaming compacts entered pursuant
to A.R.S. Section 5-601(A) are indispensable parties. This case also stands for the
proposition that in resolving questions related to standing to participate in the
adjudicative process involving an interstate compact with congressional consent will be
answered under federal law and will be based upon an analysis of which stakeholders are
"parties" with standing to benefit from the procedural requirements of such an interstate
compact. Under F.R.C.P. 19(a) joinder of such a party occurs if any of the following
requisites are met: (1) in the person's absence complete relief cannot be accorded among
those already parties, or (2) the person claims an interest relating to the subject matter of
the action and is so situated that the disposition of the action in the person's absence may
(i) as a practical matter impair or impede the person's ability to protect that interest or (ii)
leave any of the persons already parties subject to a substantial risk of incurring double,
multiple, or otherwise inconsistent obligations by reason of the claimed interest. Id. at
1022.
State or Federal Status of an Interstate Compact Entity
Heard Communications, Inc. v. Bi-State Development Agency, 18 Fed. Appx. 438 (8th
Cir. 2001), holding that congressional consent does not transform bi-state development
agency into federal administrative agency.
Murray v. Oregon, No. 9700012CC (Wasco County Cir. Ct., Mar. 4, 2002) appeal filed
No. A117707 (Or. App. Mar. 28, 2002), lower court held that the Columbia River Gorge
Commission, an interstate compact entity, is an Oregon state agency for the purpose of
holding the State of Oregon liable in inverse condemnation for an action of the
Commission.
Tort Liability for Negligent Supervision
Hansen v. Scott, 645 N.W.2d 223 (N.D. 2002) cert denied, 537 U.S. 1108 (2003),
Daughters brought an action in connection with the murder of their parents by a parolee
who had been transferred to North Dakota for parole supervision by Texas officials. The
plaintiffs alleged that the employees of the Texas compact office which was responsible
for administering the interstate compact for the supervision of this offender failed to
notify North Dakota officials about his long criminal history and dangerous propensities
and sought to hold the Texas employees liable on their wrongful death, survivorship, and
42 U.S.C. Section 1983 claims. The Supreme Court of North Dakota held the tort claim
justified the exercise of personal jurisdiction over the Texas employees because of their
affirmative action of requesting North Dakota to supervise a Texas parolee constituted
activity in which they purposefully availed themselves of the privilege of sending the
parolee to North Dakota and thus could have reasonably anticipated being brought into
court in North Dakota to defend these claims and the exercise of personal jurisdiction
comports with due process.
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