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A Review of Recent Compact Litigation

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    A Review of Recent Compact Litigation by: Richard L. Masters General Counsel Interstate Commission for Adult Offender Supervision Today nearly 200 compacts are
    Message 1 of 1 , Feb 20, 2009
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      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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