The world of interstate compacts got more complicated following two significant court decisions in 2020. In one decision, the Colorado Supreme Court concluded that the Colorado General Assembly did not have the authority to delegate to the Interstate Insurance Product Regulation Commission the power to issue a standard that differed from a Colorado legislative standard. This holding, if followed in subsequent cases in Colorado and other states for other compacts, would hurt the ability of interstate commissions to create uniform rules for use in all states. In the second decision, the U.S. Court of Appeals for the Third Circuit concluded that the Waterfront Commission of New York Harbor could not seek prospective injunctive relief to prevent the Governor of New Jersey from unilaterally withdrawing from (and thus terminating) the Waterfront Commission compact. This holding, if extended to other cases, would allow state officials to similarly violate interstate compacts with little opportunity to seek injunctive relief in federal court, which is often a more neutral venue for litigation. Other court decisions followed well-established compact law in new factual situations. This article discusses judicial, administrative and legislative developments in interstate compact law in 2020. Discussions of each case, agency action and legislative act present broadly applicable principles of law, not just the outcome for the compact at issue. For context, this article briefly summarizes the principles of law associated with the reported developments and provides citations for further reading.
Why study interstate compacts? Interstate compacts are not one of the traditional local, state or federal governments, but there are more than 200 current compacts that address subjects as varied as social services delivery; child placement; education policy; emergency and disaster assistance; corrections, law enforcement, and supervision; professional licensing; water allocation; land use planning; environmental protection and natural resources management; and transportation and urban infrastructure management. Most professionals who work in these policy areas will bump up against one or more interstate compacts from time to time, or regularly, and must know the unique principles of law applicable to compacts and compact agencies, and limitations on federal, state, and local officials when interacting with compacts.
Studying this most formal type of intergovernmental agreement also provides a framework for thinking about other forms of intergovernmental cooperation, including intergovernmental agreements that state agencies and municipalities commonly use. Finally, because compacts and compact agencies are largely separate from and independent of the federal and state governments, scholars may wish to study how these agencies develop and apply their own governance practices and how they observe state and federal legal requirements, which often require unique solutions foreign to federal and state laws and agencies.
The Compact Clause of the U.S. Constitution states, “No State shall, without the consent of Congress, . . . enter into any agreement or compact with another State or with a foreign power . . . .” Despite referring to “any agreement or compact,” the U.S. Supreme Court has concluded that the Compact Clause only applies to agreements “tending to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States,” or that encroach on the authority and power of non-compact states. For a fuller discussion of the application of the Compact Clause, see Michael L. Buenger, et al., The Evolving Law and Use of Interstate Compacts 2d ed. 68–93 (ABA Press 2016).
The most common legal issue in Compact Clause cases is whether consent is needed for a particular compact or other form of collective state action. Two cases from 2020 involved the need for consent, one illustrating the need for Congress’s consent when states amend a compact, and the other involving a rare analysis of the need for consent to a state-foreign power agreement.
In Delaware River Joint Toll Bridge Commission v. Oleksiak, the U.S. District Court for the Eastern District of Pennsylvania noted that Congress consented to the original compact between the states creating the Delaware River Joint Toll Bridge Commission in 1935 and the states had amended the Delaware River Joint Toll Bridge compact in 1953, but those amendments did not receive the consent of Congress. This case did not involve those amendments, but the court noted that it could only consider the terms of the compact that Congress approved. This dictum follows a number of other cases in which courts also noted in dicta that when a compact has the consent of Congress, amendments to that compact also require congressional consent. This Oleksiak case is also discussed below for its conclusions regarding the application of Pennsylvania law to the commission.
The Delaware River Joint Toll Bridge Commission is one of many bridge commissions created by interstate compact in the New York to Virginia region. All of these bridge compacts have congressional consent. However, the compact creating the Delaware River Joint Toll Bridge Commission differs from the other compacts because it is silent about whether and how the states may amend it, whereas all the other bridge compacts have a provision that authorizes the party states to amend the compact through new legislation “concurred in” by all party states. Congress’s consent to compacts with a “concurred in” provision acts allows the states to amend those compacts without seeking consent to the compact amendment, provided the amendment is consistent with Congress’s original grant of consent.
In U.S. v. California, the federal government sued the State of California seeking declaratory and injunctive relief that California’s cap and trade program, which it operates in conjunction with Québec, Canada, violates two provisions of the U.S. Constitution, the State Treaty Clause, which prohibits states from enacting treaties, alliances, and confederations, and the Compact Clause, which permits compacts and agreements with Congress’s consent. The Complaint alleged that California has engaged in improper foreign policy that is prohibited by the State Treaty Clause and prohibited by the Compact Clause without the consent of Congress. The Complaint also named the Western Climate Initiative, Inc. as a defendant. The Western Climate Initiative, Inc. is a non-profit corporation that assists states with administering their cap and trade programs, among other work; it is not a multistate organization.
The U.S. Supreme Court has never articulated a test to determine whether a state-foreign power agreement is a compact or agreement that requires consent under the Compact Clause or is a prohibited treaty, alliance, or confederation under the State Treaty Clause. Most state-foreign power agreements have never been submitted to Congress for consent, and Congress only rarely seeks to review state-foreign power agreements. Indeed, so rare are cases that invoke the State Treaty Clause that the State Department, the Restatement (Third) of the Foreign Relations Law of the United States, and numerous scholars only assume that courts would apply the Compact Clause test for when consent is needed to state-foreign power agreements.
The court readily disposed of both constitutional claims. Regarding the State Treaty Clause claim, the court reviewed the Supreme Court’s previous attempt in U.S. Steel Corp. v. Multistate Tax Commission to distinguish between prohibited “treaties, alliances, and confederations,” and permissible “compacts and agreements.” The Supreme Court noted, “Whateverdistinct meanings the Framers attributed to the terms in Art. I, § 10, those meanings were soon lost,” and thus turned to “contemporary literature of international law, of accords between sovereigns.” The Supreme Court ultimately suggested that prohibited treaties, alliances and confederations were of military character. In U.S. v. California, the court readily concluded that the emissions agreement between California and Québec was not “for purposes of peace and war.”
Regarding the Compact Clause claim, the court concluded that California’s cap and trade arrangement did not constitute a compact using the Supreme Court’s four “classic indicia” of a compact. The court concluded that the agreement does not satisfy the first two indicia because it does not require reciprocal action to take effect and does not impose any regional limitation. The third indicator is the creation of a joint organization or body. The Western Climate Initiative, Inc. is a joint organization, but the court concluded that it has no policymaking responsibility, so it is not the type of joint organization that would indicate a compact. Finally, the court concluded that the agreement does not satisfy the fourth indicator because there is no enforceable prohibition on unilateral modification or termination of the agreement. The court also concluded that the agreement did not enhance state authority relative to the federal government pursuant to the test for consent that the Supreme Court affirmed in U.S. Steel.
Subsequently, the district court rejected the United States’ remaining claims, and the United States has appealed to the Ninth Circuit.
In 2020, many state administrations entered into agreements with each other to manage aspects of their responses to the Covid-19 pandemic. All of these agreements are between Governors or agency officials. Not surprisingly, persons and entities challenging states’ responses to the pandemic have alleged that these agreements are invalid interstate compacts because they do not have Congress’s consent. In Bimber’s Delwood, Inc. v. James, the U.S. District Court for the Western District of New York quickly disposed of a claim that Governor Cuomo entered into an interstate compact with other regional governors in violation of the Compact Clause, concluding that the the agreement did not fall within the scope of the Compact Clause because it did not encroach upon or interfere with federal supremacy. The court then cited a passage from one of the seminal compact law cases:
There are many matters upon which different states may agree that can in no respect concern the United States. . . . If the bordering line of two states should cross some malarious and disease-producing district, there could be no possible reason, on any conceivable public grounds, to obtain the consent of congress for the bordering states to agree to unite in draining the district, and thus removing the cause of disease. So, in case of threatened invasion of cholera, plague, or other causes of sickness and death, it would be the height of absurdity to hold that the threatened states could not unite in providing means to prevent and repel the invasion of the pestilence without obtaining the consent of congress, which might not be at the time in session.
In another case that involves Covid-19 agreements, Murphy v. Lamont, the court decided several issues on summary judgment, but not the plaintiff’s claim that various Covid-19 agreements that Governor Lamont made with neighbor states violate the U.S. and state constitutions.
In Kaul v. Federation of State Medical Boards, the U.S. District Court for the District of Columbia quickly disposed of a claim that the Federation of State Medical Boards violated the Compact Clause because the Federation required congressional consent. The court cited the common refrain that consent is needed when the agreement would “[tend] to the increase of political power in the States, which may encroach upon or interfere with the just supremacy of the United States,” and concluded that consent was not needed because medical licensing “is not a federal concern but is instead ‘a vital part of a state’s police power.’”
While not incorrect, the court could have more simply concluded that an association of state licensing boards is not an interstate compact. This was a point made in a similar recent case, Federation of State Massage Boards v. Mendez Master Training Center, in which the court addressed the same argument about the Federation of State Massage Boards. In the Federation of State Massage Boards case, the court noted that the defendant’s argument alleging that the Federation is an unlawful compact rested on the “untenable premise” that the Federation qualifies as an interstate compact at all, and stated, “By definition, a state compact is an agreement, treaty, or contract among two or more states.” Nevertheless, the court principally concluded that the Federation is not an unlawful compact because it does not fall under the Compact Clause relying on U.S. Steel.
All of these Covid-19 and federation cases essentially collapse together two separate legal questions: (1) whether joint state action is a compact at all, and (2) whether a compact resulting from joint state action falls within the scope of the Compact Clause of the U.S. Constitution. To determine whether joint state action is a compact at all, courts look to specific characteristics of the states’ enactments and actions, most often citing “classic indicia” mentioned in Northeast Bancorp Inc. v. Board of Governors of the Federal Reserve System. Separately, the Compact Clause only applies to joint state action that could “tend to the increase of political power in the states, which may encroach upon or interfere with the just supremacy of the United States,” or could “enhance the political power of the [acting] States at the expense of other States.” But most telling is that interstate compacts are enacted as legislation. None of the courts in these cases addressed how these non-statutory arrangements could ever constitute a compact.
In Academy Express, LLC v. Washington Metropolitan Area Transit Authority (WMATA), the U.S. District Court for the District of Columbia applied the federal APA to a bid protest case. In doing so, the court did not resolve whether the federal APA applied, but only assumed it applied. This is the latest in a long line of cases in which courts have applied the federal APA to WMATA procurement decisions, all based on Elcon Enterprises, Inc. v. Washington Metropolitan Area Transit Authority, 977 F.2d 1472 (D.C. Cir. 1992), which only “assumed” that the federal APA applied. The application of the federal APA to an interstate compact agency is a complex question when the compact does not specify applicable administrative procedure because compact agencies are not an “agency” as defined by the federal APA. Judicial review of an agency decision needs some procedural structure and standards of review, so courts commonly apply procedure and standards of review common to APA cases, while disclaiming the direct application of the APA from which the procedure and standards of review originated.
Two WMATA cases also illustrate how courts use federal law to interpret and apply compact agency rules. In Brown v. Washington Metropolitan Area Transit Authority, and Unsuck DC Metro v. Washington Metropolitan Area Transit Authority, requestors sought disclosure of public records pursuant to the WMATA Public Access to Records Policy (PARP). PARP section 1.0 specifies that WMATA interprets its PARP consistent with the federal Freedom of Information Act (FOIA). The court construed and applied the PARP, being careful not to directly apply FOIA, but rather to use FOIA as guidance for applying PARP. This is a critical distinction for compact agencies because compact agencies must craft their rules to satisfy all of the party sovereigns. Where the parties to the compact do not directly apply federal law, the court should not directly apply it either. WMATA’s approach to choosing one existing law to guide interpretations of its PARP helps ensure a consistent application of its PARP, no matter what court is reviewing WMATA’s interpretation and application of its PARP.
In BNSF Railway Co. v. Clark County, the U.S. District Court for the Western District of Washington concluded that the federal Interstate Commerce Commission Termination Act (ICCTA) preempted a local government’s land use ordinance. Clark County had argued that its land use ordinance is required by and implements the federal Columbia River Gorge National Scenic Area Act and the Columbia River Gorge Compact. The National Scenic Area Act is Congress’s consent to the Columbia River Gorge Compact, authorizing the creation of an interstate commission, the Columbia River Gorge Commission, requiring the commission and the Secretary of Agriculture to adopt a management plan, and requiring counties to adopt land use ordinances implementing the Management Plan, which must be approved by the Secretary of Agriculture. The district court acknowledged precedent from the Surface Transportation Board (which regulates railroads) and the Ninth Circuit concluding that the ICCTA does not preempt state and local government implementation of federal environmental law, but concluded that the federal National Scenic Area Act is not the type of federal law that would survive preemption. The district court noted that Clark County enacted its National Scenic Area land use ordinance under state law authority, and reasoned that the Gorge Commission is composed of members appointed by the states and is not a federal agency and that the Gorge Commission can veto objections of the Secretary of Agriculture. The Gorge Commission and Friends of the Columbia Gorge intervened in the district court proceeding and filed appeals of the district court decision to the Ninth Circuit.
In Delaware River Joint Toll Bridge Comm’n v. Oleksiak, the U.S. District Court for the Eastern District of Pennsylvania concluded that the Pennsylvania Secretary of the Department of Labor and Industry could not, without the Bridge Commission’s consent, unilaterally interfere, direct, inspect, or regulate the Commission’s elevator operations by requiring the Commission comply with Pennsylvania’s Uniform Construction Code elevator regulations and the Commission’s tanks, pumps, and other fuel dispensing devices at the Commission’s new administration buildings at the Scudder Falls Bridge.
In 2018, the Bridge Commission began construction on new buildings, including a new four-story administration building served by elevators. In late 2018, Pennsylvania warned the Commission that it had failed to apply for a building permit for the administration building. The Commission responded that pursuant to the interstate compact creating the Commission, it was not subject to Pennsylvania’s regulatory authority, including the Uniform Construction Code (UCC). Pennsylvania asserted that it had not surrendered its sovereign police powers to ensure the safety, health, and welfare of its citizens, but offered to excuse the requirement for a building permit if the Commission would allow the state to enforce the UCC with respect to the elevators and enforce the Combustible and Flammable Liquids Act with regard to any fuel-pumping station that may be constructed. The Commission declined and continued construction and Pennsylvania threatened the Commission’s elevator subcontractor with enforcement.
The Commission sued the Commonwealth for declaratory and injunctive relief and sought a preliminary injunction. The court granted a preliminary injunction against Pennsylvania enforcing the UCC elevator requirements. The parties then filed cross motions for declaratory judgment, leading to this decision.
In granting declaratory judgment in favor of the Commission, the court concluded that it must follow the negotiated terms of the compact because, “An interstate compact, by its very nature, shifts a part of a state’s authority * * * to the agency the several states jointly create to run the compact.” The court then reviewed several decisions in which Pennsylvania, New Jersey, and federal courts concluded that neither state court may unilaterally impose duties on the Commission that the compact did not specify. The court then turned to the text of the compact, noted several provisions, and concluded, “We cannot read the Commission’s authority to make improvement to its real property as being conditioned on approval from either compacting state.” The court also rejected several of Pennsylvania’s arguments relating to the interpretation of the compact after concluding that the compact was not ambiguous.
The court applied several established principles of compact law in this decision. Most critically, the court noted, “Pennsylvania could have, consistent with the Compact, reserved its power to regulate building improvements as it did with the power to levy taxes, apply its laws of eminent domain, and protect local police authority.” This follows a long-standing principle that a state may not impose state law on a compact agency that is not reserved in the compact. The U.S. Supreme Court articulated this principle in 1823, in Green v. Biddle, its first compact case, concluding that Kentucky could not enact real property law that conflicted with the Virginia-Kentucky Compact of 1789, which preserved the application of Virginia’s real property law.
Pennsylvania appealed to the Third Circuit, which affirmed the district court. The Third Circuit rejected Pennsylvania’s arguments that the Commission’s claims were barred by the Eleventh Amendment. The Court concluded that the claim fell within the Ex Parte Young exception. In doing so, the Third Circuit did not extend its recent holding in Waterfront Commission of New York Harbor v. Governor of N.J., in which the Court concluded that suit against the Governor of New Jersey was barred by the Eleventh Amendment because the claim sought specific performance of a state contract (the Waterfront Commission Compact) and involved the public’s treasury. This Waterfront Commission case is discussed ahead.
The Third Circuit then concluded that Pennsylvania had unambiguously ceded its sovereign authority to the Bridge Commission over building safety regulations in three provisions of the compact. The first two provisions grant the Bridge Commission authority “‘[t]o acquire, own, use, lease, operate, and dispose of real property and interest in real property, and to make improvements thereon,’ as well as power over ‘all other matters in connection with[] any and all improvements or facilities which it may be authorized to own, construct, establish, effectuate, maintain, operate or control.’” The third provision grants the Commission “all other powers,” not inconsistent with the Compact.
The Third Circuit’s conclusions regarding Pennsylvania ceding its sovereignty to the Bridge Commission is consistent with the Supreme Court’s discussion and conclusions in cases dating back to its first compact law case in Green v. Biddle, noting that acceptance of the compact was an “act of the people of Kentucky in their sovereign character.” Other more recent decisions include Hess v. Port Authority Trans-Hudson Corp., in which the Court stated, “An interstate compact, by its very nature shifts a part of a state’s authority to another state or states, or to the agency the several states jointly create to run the compact,” and New Jersey v. Delaware, in which Justice Scalia in dissent stated, “There is no way the Compact can be interpreted other thanas a yielding by both States of what they claimed to be their sovereign powers.”
Unlike the Delaware River Joint Toll Bridge Commission compact, the Port Authority of New York and New Jersey (PANYNJ) compact and several other interstate compacts allow the party states to apply state law to the agencies created in those compacts when that law is concurred in by the other state. The problem with “concurred in” provisions is that courts apply them quite differently. Generally, New York state courts apply an express intent standard to compacts, except for the compact creating the PANYNJ. The express intent standard requires that the states’ laws must be substantially similar and the states’ legislatures must expressly specify that they intend the law to apply to the compact agency. Federal courts also apply the express intent standard. New Jersey state courts do not apply the express intent standard. Instead, New Jersey state courts apply state law under a “concurred in” provision when the law to be applied is “complementary and parallel” to law in the other state. New Jersey state courts do not have a single standard for determining when laws are “complementary and parallel.” In different cases, New Jersey state courts have concluded laws are complementary and parallel when they are substantially similar, when they are somewhat similar, when regulations do not conflict with regulations in the other state, and when laws express similar public policy.
Instead of applying the express intent test to the PANYNJ, New York state courts have held state law applicable to the PANYNJ when the law regulates the external conduct of the PANYNJ and conversely, state law does not apply when it would regulate the internal conduct of the PANYNJ. This unique test for PANYNJ first appeared in Agesen v. Catherwood, and New York state courts seem to continue applying Agesen reflexively rather than for any specific reason; no decision has explained why New York state courts started using the Agesen test, or why they only apply it to the PANYNJ.
For the past few years, the PANYNJ has asked New York and New Jersey state courts to change the analytical method they use to determine whether to apply state law to the PANYNJ. In those cases, the PANYNJ moved to dismiss claims seeking to apply state law, arguing that those laws failed the “express intent” test and that New York court should abandon the Agesen standard and New Jersey courts should abandon the complimentary and parallel standard as applied to Port Authority. The states’ courts have consistently rejected the PANYNJ’s arguments to apply the more common express intent test simply because the courts did not see any reason to deviate from precedent, and that trend continued in 2020.
In Cortese v. Skanska, USA, Inc., the plaintiff, an employee of the defendant, Skanska, alleged a claim under New York’s Labor Law. In defense, Skanska argued that New York’s Labor Law did not apply to it because it was acting as a contractor for the Port Authority of New York and New Jersey and the Labor Law does not apply to Port Authority. The court noted that many provisions of the Labor Law do not apply to Port Authority itself but pointed out that the exception to applying New York’s Labor Law “is a narrow one, and defendants here—who are private corporations and thus pure creations of state law—cannot rely on it simply because they perform work pursuant to a contract with the Port Authority.”
Amica Life Ins. Co. v. Wertz is the first of the two most significant compact cases decided in 2020. The Wertz case involves a uniform standard enacted by the Interstate Insurance Product Regulation Commission pursuant to authority in the Interstate Insurance Product Regulation Compact. The Insurance Commission’s standard at issue contains a two-year suicide exclusion, whereas Colorado statutes permits only a one-year suicide exclusion. Wertz argued that Colorado’s enactment of the Insurance Compact was not valid because it authorized the interstate commission to enact rules that would supersede Colorado statutes. In 2017, the U.S. District Court for the District of Colorado expressed significant reservations that the compact was valid in Colorado and certified the question to the Colorado Supreme Court. The Colorado Supreme Court declined the certified question, and, after supplemental briefing, the U.S. District Court concluded, “to its surprise—that the Colorado Legislature may validly delegate to an administrative agency the power to promulgate a regulation that modifies a statute.”
Wertz appealed to the Tenth Circuit. In 2019, like the U.S. District Court, the Tenth Circuit certified the question to the Colorado Supreme Court, asking, “May the Colorado General Assembly delegate power to amend statutes to an interstate administrative agency?” This time, the Colorado Supreme Court accepted the question, but reframed the question more narrowly as, “May the Colorado General Assembly delegate power to an interstate administrative commission to approve insurance policies sold in Colorado under a standard that differs from Colorado statute?” In 2020, the Colorado Supreme Court concluded that the Colorado General Assembly did not have the authority to delegate to the Insurance Commission the power to issue a standard that differed from a Colorado legislative standard. The Court applied Colorado’s non-delegation doctrine, reasoning that,
the [Insurance Commission’s uniform] Standard effectively overrides Colorado statutory law for insurers doing business here.
In our view, delegating to the Commission the authority to adopt a Standard that so circumvents the clear language of [Colorado statutes] is to confer legislative powers on the Commission [which] the General Assembly may not properly do.
The Court then rejected Amica’s arguments that the Insurance Compact applies where there is conflicting state law. The Court concluded that a compact supersedes state law only when a compact has congressional consent because of federal preemption or supremacy principles. There are two problems with the Court’s conclusion. First, courts have concluded that compacts without consent also supersede conflicting state law. Second, courts typically use the contractual nature of compacts as the basis for a compact superseding conflicting state law. This was the Supreme Court’s reasoning in its first compact law case, in which the Court concluded that Kentucky’s enactment of laws that conflicted with the Virginia-Kentucky Compact of 1789 violated the Contracts Clause of the U.S. Constitution. This contractual nature of compacts remains evident in modern case law that continues to recognize that compacts supersede conflicting state law, regardless whether a compact has congressional consent. For example, the Ninth Circuit has concluded that “A state can impose state law on a compact organization only if the compact specifically reserves its right to do so.”
Applying this non-delegation reasoning in other cases involving the Insurance Compact or other compacts could impact the ability of interstate commissions to develop uniform rules. States could include uniform standards directly into their compacts (which as explained above are enacted as state statutes) and avoid the non-delegation doctrine but doing so has its own problems. One problem is that compacts are often enacted over time. States that draft a compact would craft the uniform standards and states that weren’t part of the drafting effort would have no input into the development of those standards. Second, compacts are difficult and time-consuming to amend—amendments require all party states to agree and adopt amendments to a compact before they become effective. If the states could reach an agreement on amending uniform standards in a compact, they would still take many years for the states’ legislatures to enact them. The raison d’etre of compacts is to bring uniformity to the states’ otherwise inconsistent, disjointed and sometimes chaotic laws and manners of handling policy issues that cross state lines. Uniform rules will inevitably differ from state law in statutory or regulatory form. State legislatures actually or constructively know this when enacting a compact. Colorado’s application of the non-delegation doctrine to the Insurance Compact is contrary to the legislature’s intent for interstate cooperation in approving insurance products and making a wider range of insurance products available in Colorado. As a result of this case, Colorado may find itself unable to join many interstate compacts, leaving itself and its citizens at a competitive disadvantage relative to the states that embrace interstate cooperation in all forms.
Two cases in the U.S. District Court for the District of Maryland followed a common practice with compact cases—following decisions from other jurisdictions to ensure a uniform application of the compact. In Burns v. Washington Metropolitan Area Transit Authority, the court noted, “Many of the cases cited herein emanate from the District of Columbia Circuit. Although those rulings are non-binding, the Fourth Circuit has recognized the value in considering that court’s opinions to ‘render[] circuit law consistent in the two federal circuits most likely to hear cases in which WMATA is a party.” Similarly, in Peria v. Washington Metropolitan Area Transit Authority, the court noted, “When addressing the WMATA Compact, the Fourth Circuit looks to the District of Columbia Circuit for interpretive aid, striving to maintain consistency between the only two federal circuits likely to preside over WMATA Compact issues.”
In Aleman v. State, the Maryland Court of Appeals (Maryland’s highest court) concluded that the Interstate Agreement on Detainers (IAD), a compact involving 48 states, the federal government, and the District of Columbia, was applicable to a person who was adjudicated to be not criminally responsible and thus Maryland officials could properly return the plaintiff to Ohio to complete his sentence of incarceration there. Aleman had been convicted in Ohio and sentenced to 11 years in prison. Subsequently, Maryland lodged a detainer against Aleman and Aleman filed a request under the IAD to dispose of the detainer. Pursuant to the IAD, Ohio transferred him to Maryland. The Maryland court found Aleman mentally competent to stand trial, but ultimately found him not criminally responsible due to his mental state at the time of his crime. The court stated it would have committed Aleman to the Maryland Department of Health, but because he was brought to Maryland under the IAD, the court ordered him returned to Ohio.
Aleman argued that he should not be returned to Ohio because article VI(b) of the IAD states that “[n]o provision of [the IAD], and no remedy made available by [the IAD] shall apply to any person who is adjudged to be mentally ill.” The Maryland Court of Appeals noted that Maryland courts had not previously considered the question whether a person in Aleman’s situation should be returned to the sending state pursuant to the IAD; thus, the Court considered the terms of the IAD, legislative history, and prior case law in other jurisdictions—in this case, federal courts and Maine and Oregon state courts.
In State v. Higgenbotham, the Arkansas Supreme Court similarly considered multiple state and federal court’s decisions, all of which concluded that the IAD’s speedy trial provisions do not apply to a detainer predicated on an arrest warrant.
Reliance on other case law in other jurisdictions is a common interpretive approach in interstate compact cases. This is because there are relatively few compact cases in any one particular jurisdiction and each member state is applying the same compact text. Here, where the other jurisdictions were in accord, the Maryland and Arkansas courts unsurprisingly readily adopted those interpretations. A more difficult question arises when other jurisdictions are not in agreement. There are many elements of the IAD in which the states use different interpretations, such as whether the IAD applies to prisoners in county jails, time periods, and the definition of the term of imprisonment. In these situations, courts typically choose one, which further exacerbates the split.
Another notable split in the states’ interpretation of a compact involves the Interstate Compact on the Placement of Children (ICPC) in which the states are roughly evenly split on whether the ICPC applies to non-custodial out-of-state parents. In one case, the California Court of Appeal noted the split and lamented, “We are publishing this opinion, . . . to point out that the resulting lack of uniformity is dysfunctional, that courts and rule makers have not been able to fix it, and hence that it may call for a multistate legislative response.” In 2020, in In re R.S., the Maryland Court of Appeals became the latest state high court to take sides in this split, concluding that the ICPC does not apply to out-of-state parents.
But even states that do not apply the ICPC to out-of-state parents still use the ICPC for out-of-state parent placements. In 2020, in In re A.C., California applied the ICPC to an out-of-state parent. The Court of Appeal cited California precedent that explained,
Placement with an out-of-state parent need not follow ICPC procedure, as is plain from the statutory language[:] The ICPC governs conditions for out-of-state “placement in foster care or as a preliminary to a possible adoption.” . . . However, although “. . . ICPC compliance is not required for an out-of-state placement with a parent, nothing in the ICPC prevents the use of an ICPC evaluation as a means of gathering information before placing a child with such a parent.”
Smith v. Ripley, presents a different issue with applying compact jurisprudence to non-compact matters. The U.S. District Court for the District of Montana used a Montana Supreme Court decision applying respondeat superior liability pursuant to article I(1) of the Interstate Compact for Adult Offender Supervision (ICAOS) as precedent for applying respondeat superior liability in a non-compact child placement case involving state liability for a state employee’s tort. The court didn’t explain how a statute negotiated and adopted by all 50 states provides precedential context for common law in Montana.
Waterfront Commission of New York Harbor v. Murphy, is the second of the two most significant compact cases decided in 2020. The Waterfront Commission case involved a claim that the New Jersey Governor could not initiate withdrawal from the Waterfront Compact pursuant to authority and direction granted by a New Jersey law that former Governor Chris Christie signed on his last day in office in 2018. This bill directed the New Jersey Governor to give notice to New York of New Jersey’s withdrawal and would dissolve the commission and transfer the Waterfront Commission’s assets to the New Jersey State Police.
In 2018, the U.S. District Court for the District of New Jersey granted a preliminary injunction prohibiting the Governor of New Jersey from giving notice to New York. That decision was the first in which a compact agency successfully enjoined one of its creator states from unilaterally withdrawing from or terminating a compact. The district court concluded that the Waterfront Commission was likely to succeed on the merits of showing that the Waterfront Compact preempts New Jersey’s law. The court observed that the Waterfront Commission compact does not explicitly address how a state may withdraw from or end a compact and that the court could not rewrite the compact to allow New Jersey to do so through unilateral legislation. The court also observed that the Waterfront Commission compact has a “concurred-in” provision, and that allowing one state to unilaterally dictate the manner and terms of the commission’s dissolution and distribution of assets was inconsistent with the compact’s requirement that any change to the compact must occur through concurring legislation.
In 2019, the district court granted summary judgment in favor of the Waterfront Commission and made its preliminary injunction permanent. In 2020, the New Jersey Governor and New Jersey Legislature appealed the decision to the Third Circuit, which dismissed the case, concluding that the State of New Jersey, not the Governor, was the true party in interest and the state enjoyed Eleventh Amendment immunity, and that the Ex parte Young doctrine did not apply.
At the end of 2020, the Waterfront Commission filed a petition for certiorari in the U.S. Supreme Court, giving three reasons for granting the petition. First, the Third Circuit’s decision did not properly apply the Supreme Court’s decisions applying Ex parte Young. Second, the Third Circuit’s decision created a split in the circuits because “the Eighth and Tenth Circuits have held that a suit seeking injunctive relief against state officials to prevent their noncompliance with a congressionally approved interstate compact to which the State is a party does not run afoul of the Eleventh Amendment.” Third, the question presented is important because “Under the court of appeals’ reasoning, state officials could act in blatant violation of an interstate compact, and the federal courts would be powerless to compel those state officials to comply with federal law.”
With over 200 interstate compacts and thousands of authorities for local, regional, and state governments to enter into interlocal agreements nationwide, it is difficult to capture the range of administrative activities by compact agencies, non-compact intergovernmental agencies, and other agencies that bump into compact and intergovernmental agencies in their own work. This section highlights administrative actions of federal agencies and interstate compact agencies actions that illustrate important principles of compact law and administration.
In 2020, the U.S. Centers for Medicare and Medicaid Services recognized interstate compact licenses as valid and full licenses for the purpose of meeting federal license requirements, allowing practitioners with those licenses to bill for services provided to persons enrolled with Medicare. This clarification helps ensure interstate compact licenses and privileges to practice as equal to licenses obtained through intrastate licensing programs. It is also an important recognition of the legal effect of rights that administrative actions can create pursuant to interstate compacts.
The Interstate Medical Licensure Compact is a recent compact that became operational in 2017. In 2020, the interstate commission’s Rules Committee recommended to the full commission that it develop a non-binding administrative procedure to guide the commission Executive Committee’s authority to pursue litigation actions against member boards for non-compliance with the compact. The draft guidance provides for an opportunity for the member board involved in the proposed legal action to present its position to the Commission before the full Commission votes whether to initiate legal action. This opportunity is important because an interstate commission’s enforcement action against a party state is a potentially controversial action that can cause discord in the implementation of a compact or cause a state to withdraw from the compact.
The Recognition of Emergency Medical Personnel Licensure Interstate Compact (“EMS Compact”) allows qualified EMS personnel to work across state border on a short-term intermittent basis by granting a privilege to practice. In 2020, the Interstate Commission for EMS Personnel Practice became operational and began accepting applications for privileges. The Commission voted to become operational in response to states hearing urgent requests to use out-of-state personnel to help staff ambulances soon after the start of the COVID-19 pandemic even though the Coordinated Database of persons practicing under the compact privilege was not yet complete. The states agreed to use manual processes to confirm licenses until the database was operational. This issue illustrates an administrative issue for compacts. The EMS Compact specified that it became effective as an agreement between the states and to create interstate commission upon enactment by 10 states; however, the compact did not specify conditions before accepting applications for privileges to practice. In new compacts, new interstate commissions need time for states to appoint interstate commission members and for those new members to orient themselves, create their bylaws and rules, hire staff, and establish the infrastructure necessary for carrying out the compact. Drafters of compacts should consider whether to include more detail on conditions necessary for the interstate commission to start the regulatory program specified in the compact or leave discretion to the commission.
In 2020, the Interstate Insurance Product Regulation Commission contracted for an independent Governance Assessment Report and an independent Business Assessment Report. The Governance Assessment Report contains several recommendations for internal governance, but also includes substantial discussion and recommendations for how the Insurance Commission can maintain the compact after the Amica decision. Responding to the Amica decision, the report principally opines that the Insurance Compact received implied congressional consent in 2006 when Congress approved the District of Columbia joining the Insurance Compact and discusses how the Insurance Commission might go about recognizing implied consent, and issues associated with acknowledging and not acknowledging implied consent. The importance of asserting implied consent is that it would allow the Insurance Commission to claim that the compact is federal law in accordance with Cuyler v. Adams, and thus supersedes state statutes and regulations under the Supremacy Clause of the U.S. Constitution.
Governance and business assessments are important tools for interstate compact agencies because they remind the agency of its unique position as a multistate entity that brings states together for joint implementation of the states’ compact and of basic principles of compact law and administration, which differ from state agencies. Other compact agencies that have conducted recent assessments include the Great Lakes Commission in 2019 and the Columbia River Gorge Commission in 2014.
Congress did not enact any bills relating to interstate compacts, but there were several bills relating to interstate or cross-border medical practice in response to the COVID-19 pandemic. None advanced to a committee vote.
The Suppress COVID-19 Act of 2020, introduced in the Senate and House, would have given congressional consent for States to enter into interstate compacts “for cooperative effort and mutual assistance in procuring COVID-19 tests and supplies for such tests.” In addition to providing congressional consent to any interstate compacts for procuring COVID-19 tests, the bill provided $25 billion in funding for procuring testing supplies. Of that amount, $20 billion would be made immediately available to all states, which could then forward the money to interstate compacts, and $5 billion would be reserved for states that enter into any compact authorized by the Act.
Another pair of bills, the Temporary Reciprocity to Ensure Access to Treatment (TREAT) Act, would have provided that professionals may provide in-person or telemedicine care in jurisdictions other than where they are licensed, extending up to 180 days after the end of the COVID-19 emergency.
Another COVID-19 bill, the Equal Access to Care Act, would have facilitated telemedicine, specifying that during a public health emergency a licensed professional providing telemedicine care in another state as if that professional was licensed in the other state without need to obtain a license in the other state.
Another bill introduced in the House would condition state funding from the federal Bureau of Health Workforce on the state adopting the Interstate Medical Licensure Compact. The bill would make any state that has not joined the Interstate Medical Licensure Compact within three years from the enactment of the Act ineligible for any funds or assistance from the Bureau of Health Workforce of the Health Resources and Services Administration of the Department of Health and Human Services. Although this bill did not mention COVID-19, media reported the sponsors invoking the pandemic while promoting the bill.
One new interstate compact, the Audiology and Speech Therapy Licensure Compact was rolled out to the states in late 2019 and already enacted by six states in 2020: Utah, Wyoming, Louisiana, Oklahoma, West Virginia, and North Carolina. Once the compact is enacted by at least ten states, it will become active. The compact allows an audiologist or speech therapist licensed in one member state to practice in the other states in the compact. Six more states have legislation pending for 2021 to enact the compact, so it will likely become active in 2021. This is the seventh professional licensure compact in recent years.
The American Occupational Therapy Association and the National Board for Certification in Occupational Therapy approved the Occupational Therapy Licensure Compact developed with the assistance of The Council of State Governments National Center for Interstate Compacts. This new compact was rolled out to the states at the end of 2020, so state legislators may begin introducing bills to enact the compact in 2021. The compact requires 10 states to enact it before it goes into effect.
Several sources proposed the creation of an interstate compact to procure COVID-19 tests and other needed supplies to deal with the COVID-19 pandemic this year. A report from the Harvard Global Health Institute reported that individually, states faced a scarcity in tests, long wait times for results, and high prices, and that an interstate compact for testing would provide “the necessary scale to solve such coordination problems and rapidly improve speed, volume, pricing and diversification in testing.” By buying in bulk, states could also negotiate for better prices and give an incentive for firms to increase testing capacity. The governors of six states (Maryland, Michigan, Ohio, Louisiana, Massachusetts, and Virginia) signed a letter of intent with the Rockefeller Foundation to “establish one or more intergovernmental cooperative purchasing agreements to align and consolidate common state requirements for rapid testing technology.”
State governors created several regional agreements to coordinate strategies for closing or opening their economies in response to the pandemic; however, no state legislatures passed legislation that would create these agreements as formal interstate compacts or would create other interstate compacts related to either COVID-19 tests or closing/reopening plans in 2020.
Fourteen states introduced bills this year that would create an interstate compact to give cash prizes for curing diseases. The Solemn Covenant of the States to Award Prizes for Curing Diseases was enacted Ohio in 2019, but no other state has yet joined. The compact would become binding if two states join, and if six states join, the “Solemn Covenant of States Commission” would be created. This commission would choose ten diseases based on criteria provided in the legislation, including the severity and public health expenses caused by the disease, and award prizes to any group that finds a cure. The prize would be equal to the “most recent estimated total five-year savings in public health expenses” caused by the disease. According to the sponsor of the Ohio bill, a cure for Alzheimer’s would net a prize between $12 billion and $25 billion, with a compact of ten average-sized states. In return for the prize, the prize winner would transfer the patent and other intellectual property to the commission, which would make the cure “widely available . . . including by arranging or contracting for the manufacturing, production, or provision” of the new drug or cure.
Fifteen states introduced legislation for compacts that would limit incentives for corporations to locate to a specific state. The compacts have a few different names in the various states that have introduced them; for example, the Florida bill specifies an “Agreement to Phase Out Corporate Giveaways,” while Hawaii’s bill specifies an “Interstate Compact to Phase Out Corporate Welfare.” The titles of the bills are not significant; but the substance of the agreement must be substantively similar, which they are not. All of the bills propose a compact to solve the problem of states and local governments competing in a “race to the bottom” to offer corporations incentives, using taxpayer money, to locate in their jurisdictions, and all of the bills contain findings that note “[c]orporate giveaways are among the least effective use of taxpayer dollars to create and maintain jobs.” To avoid this “prisoner’s dilemma” where all states have an incentive to act against their collective interest, the compact bills would prohibit each member state from “offering or providing any company-specific tax incentive or company-specific grant to any entity” in order to induce that entity to relocate to the member state. There would be exceptions for grants to train employees, grants from local governments, and grants to induce companies to stay in a state. So far, none of the bills have passed.
Illinois and Iowa introduced substantially identical bills to create a new compact authorizing a new Quad Cities Regional Metropolitan Authority to undertake riverfront development and regional planning for land use, transportation and infrastructure, economic development, cultural and recreation amenities, education, and natural resources. Neither bill passed out of committee, but the cooperation between the states in having similar bills is notable and may result in a compact in future legislatures.
In 2020, the Alliance for Sensible Markets created a new strategy to develop interstate commerce for cannabis through an interstate compact. The website for the Alliance for Sensible Markets describes its strategy in two steps: “1. Governors of at least two legal or legalizing states agree to an interstate compact to regulate commerce between them; and (2) forward [to] Congress for approval in 2021.” There is no compact text and no bills were introduced in 2020 to create a cannabis compact. The concept for an interstate compact to manage cannabis issues is not new. For example, in 2018, Canna Law Blog suggested an interstate compact between Oregon and California to manage oversupply of production in Oregon.
Legislators periodically file bills seeking to create a compact on politically charged subjects. Such bills are more akin to political statements rather than serious attempts to create interstate compacts. In 2020, Mississippi Representative William Arnold, Chair of the Mississippi House Interstate Cooperation Committee introduced several bills to enact compacts with no apparent advance interstate cooperation. One compact would resemble existing agreements on education tuition reciprocity; the others involve subjects that are almost assuredly unconstitutional or would require congressional consent: a compact of the southern states for the purpose of operating as Second Amendment Sanctuary States; a compact of the southern states for the purpose of prohibiting the advertisement of obscene and pornographic content on social media platforms accessed in the southern states; a compact with southern states for the purpose of expanding market access to health insurance and the Interstate Compact for Human Trafficking. The Second Amendment Sanctuary States compact bill died in in the House Interstate Cooperation Committee and the others passed through the committee but no further.
Thinking bigger picture on a politically charged subject, in 2020, the New York Times published an opinion suggesting that American federalism might be overhauled through regional coalitions of states. The opinion notes that many federal agencies create districts or divisions that may have different rules and provocatively asks,
Are progressives in the Pacific states willing to see abortion banned in the South if it means securing a regional pact to provide universal health insurance to every person, citizen or otherwise, in those western states? Are conservatives in the heartland prepared to accept severely reduced federal subsidies in exchange for more autonomy?
Interstate compacts already create regional policy on topical issues, but this opinion seems to envision regional coalitions with different policy solutions in lieu of a single federal solution for all states.
Kentucky enacted a bill to fix its Interlocal Cooperation Act, which authorizes local government and state agencies to enact intergovernmental agreements and specifically authorizes agreements between entities in Kentucky and entities in other states. The Interlocal Cooperation Act originated as suggested legislation by the Council of State Governments and the U.S. Advisory Commission on Intergovernmental Relations. One provision of the Interlocal Cooperation Act is that agreements between entities in two states “have the status of an interstate compact.” This “status of an interstate compact” provision has no basis in law and neither the Council of State Governments nor the Advisory Commission on Intergovernmental Relations explained why this provision was included. Kentucky revised its enactment of this provision to specify that an agreement between a Kentucky entity and an entity in another state “may” have the status of an interstate compact, which is a more accurate statement of law.
Maryland enacted a bill creating a task force to make recommendations about fishing license penalty reciprocity between Maryland and the Potomac River Fisheries Commission. The bill requires the Maryland Governor to invite Virginia (the other member of the Potomac River Fisheries Commission) to co-chair the task force. The task force must study several topics including the possibility of penalty reciprocity with Virginia, and “actions the Potomac River Fisheries Commission can take, consistent with the Interstate Wildlife Violator Compact, to prohibit a person from participating in a fishery under the Potomac River Fisheries Commission’s jurisdiction if the person’s license to catch, sell, buy, process, transport, export, or otherwise deal in fish in Maryland has been suspended or revoked.” This bill is necessary because the Wildlife Violator Compact involves states and would not allow reciprocal discipline taken by the Potomac River Fisheries Commission.
The bill specifies, “That it is the intent of the General Assembly that the Task Force established by this Act constitute a commission to study and make recommendations concerning revision and amendments to the Potomac River Compact of 1958, as described in Article IV, Section 5, of the Compact.” This bill has the hallmarks of a successful approach to amending the compact—focusing on a specific problem with an inclusive process and the support and assistance of the compact commission. Concurrently, the Potomac River Fisheries Commission enacted a new regulation providing that the Commission may refuse to issue a license to a person whose license has been restricted, suspended, or revoked by Maryland or Virginia.
A bill in Pennsylvania would have prohibited Pennsylvania from enacting any compact that has a term or more than 10 years or that provides for automatic renewal or extension of the compact. The bill was introduced and quickly died, never being reported out of committee. Compacts commonly specify perpetual effect until withdrawal or termination; this bill could have prevented Pennsylvania from enacting any compact with perpetual effect because Pennsylvania would not be committing to the same terms as the other states enacting those compacts.
Virginia enacted a bill to study the feasibility of a Medical Excellence Zone Program allowing telehealth and establishing reciprocal licensing agreements and streamlined applications for persons within the zone. The Council of State Governments and several interstate licensing commissions commented to the Alliance for Connected Care, which is leading the effort to establish the Medical Excellence Zone, explaining that it would duplicate existing professional licensing interstate compacts without providing the same public protection and accountability as the compacts do; conflict with those existing compacts; and cause confusion in multistate licensing.
The state budget passed in Washington this year included funding for an office to study the replacement of the Interstate 5 bridge across the Columbia River, including studying “different governance structures for a bridge authority that would provide for the joint administration of the bridges over the Columbia river between Oregon and Washington.” Areas of study will include the “feasibility and necessity of an interstate compact in conjunction with the national center for interstate compacts.” A previous effort to replace the bridge failed in 2013 because the Washington legislature failed to provide $450 million in construction funds to match the funds provided by the Oregon legislature.
New York enacted a bill to join the Interstate Compact on Anti-Doping and Drug Testing Standards, which regulates horse-racing in the compact states. Maryland and Delaware enacted the compact in 2018, making the compact operational. This compact allows the states to act cooperatively to create uniform “breed-specific” rules for which medications would be allowed and which would be prohibited, and coordinate testing for such substances. The compact creates a commission consisting of the chairperson of each state’s racing commission or that person’s designee, and the commission is tasked with enacting rules about which horse-racing drugs would be permitted and which would be prohibited, which will have the force of state rules and regulations. A majority of delegates on the commission may propose a rule, but a super-majority of 80% of delegates is required to enact a new rule. Although three states have now enacted the compact, giving it the force of law, the compact commission does not appear to be in operation yet.
The Virginia House passed a bill to join the National Popular Vote Interstate Compact (NPVIC). The state Senate will hear the bill in the 2021 session. The compact states agree to award their presidential electoral votes to the winner of the national popular vote if enough states join to represent a majority in the Electoral College. Therefore, the compact would effectively create a popular vote election for U.S. President if enough states join. The compact has been passed by 15 states and the District of Columbia, representing 196 electoral votes, out of the 270 needed to reach a majority in the electoral college. Virginia would add 13 electoral votes, if the compact passes the state Senate and is signed by the governor. Meanwhile, the South Dakota legislature passed a concurrent resolution “supporting the Electoral College” and declaring the NPVIC unconstitutional. For more information about this compact, the National Popular Vote Compact website has a book for download.
