Supreme Court Finds New Jersey and Delaware Share Jurisdiction

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SandBar 7:2, July, 2008 Supreme Court Finds New Jersey and Delaware Share Jurisdiction New Jersey v. Delaware, 128 S. Ct. 1410 (U.S. 2008). Joseph Rosenblum, J.D. For the third time in 130 years, the Supreme Court has ruled on a boundary dispute between the State of New Jersey and the State of Delaware concerning jurisdiction over activities in the Delaware River. In 1877, fishing rights were the issue. In 1934, it was a disagreement over oysters. In the most recent incarnation of New Jersey v. Delaware, the Supreme Court addressed the authority of Delaware to deny permits for and prevent construction of a liquefied natural gas (“LNG”) plant proposed by British Petroleum and approved by New Jersey.1 Background The LNG plant, along with storage tanks and other structures, was to be located in New Jersey. However, its erection and operation would have required dredging in parts of the Delaware River and construction of a 2,000-foot pier extending roughly 1,500-feet towards Delaware. The LNG plant was approved by both the Federal Energy Regulatory Commission and New Jersey. British Petroleum also sought permits from Delaware because the pier extended into the state’s submerged lands. Delaware denied the request, determining that the LNG plant was a heavy industry facility within Delaware’s coastal zone, and thus was prohibited under Delaware’s Coastal Zone Act. In 2005, invoking the Supreme Court’s “original jurisdiction” for disputes between states, New Jersey brought suit against Delaware challenging Delaware’s authority to deny the LNG plant. The Supreme Court appointed a special master to review the issues, and in April 2007 the special master filed a report agreeing with Delaware’s interpretations of a 1905 Compact between the two states, and concluding that Delaware had the authority to deny construction of the LNG plant. The special master’s recommendation in such a case is nonbinding, and the Supreme Court subsequently heard the case, with Justice Stephen Breyer recusing himself because he owns British Petroleum stock. Riparian Rights Under a 1934 Supreme Court case, Delaware owns the entire river and riverbed along the impacted portion of the Delaware River, from the Delaware shore to the low-water mark on the New Jersey bank. However, jurisdictional authority is significantly complicated by a 1905 compact between the two states that provides that “each state may, on its own side of the river, continue to exercise riparian jurisdiction of every kind and nature.”2 Citing this agreement as to “riparian jurisdiction” under the compact, New Jersey thus argued that it had the sole right to approve development projects extending into the river, even though Delaware retained control and ownership of the river itself. Delaware on the other hand asserted regulatory authority over structures located within its boundaries, including those portions of the River adjudged to be part of Delaware under the 1934 decision. The Court ultimately ruled 6-2 in favor of Delaware with Justice Ginsburg penning the decision for the Court. According to the Court, New Jersey retained ordinary riparian rights; however, its jurisdiction under the compact is not exclusive over unusual or extraordinary projects. Distinguishing the term “riparian jurisdiction” from the broader term “exclusive jurisdiction,” used in similar compacts, the Court held that New Jersey and Delaware have overlapping authority to regulate riparian projects of extraordinary character extending offshore of New Jersey’s domain into the river over which Delaware is sovereign. The Court found that the proposed LNG plant “goes well beyond the ordinary or usual.”3 The court noted that two or three supertankers would arrive for unloading each week surrounded by a moving safety zone that would restrict other vessels 3,000 feet ahead and behind, and 1,500 feet to the sides. While in transit, these tankers would pass densely populated areas. The Court also found noteworthy that New Jersey had in the past admitted Delaware’s permitting authority over projects in the Delaware River. For example, in 1980 New Jersey submitted a coastal management plan to the Secretary of Commerce stating “that any New Jersey project extending beyond mean low water must obtain coastal permits from both states.”4 Similarly, New Jersey itself had sought Delaware’s approval to refurbish a stone pier located in the Delaware River and extending past the low-water mark on the New Jersey shore. Conclusion In a scathing dissent, Justice Scalia, joined by fellow New Jersey native Justice Alito, questioned the Court’s definition of extraordinary, asking whether “a pink wharf, or a zig-zagged wharf qualify?”5 Justice Scalia suggested that rather than using established legal principles, the Court reached its conclusion based on environmental concerns, noting that “if New Jersey had approved a wharf of equivalent dimensions, to accommodate tankers of equivalent size, carrying tofu and bean sprouts, Delaware could not have interfered.”6 Delaware’s victory will keep British Petroleum’s LNG plant from locating in the contested site. Whether the plant will be relocated to another site, as is suggested by the majority, or whether New Jersey will be left without the economic benefits promised by such a large development, as expressed by the dissent, is still unclear. As a practical matter, by finding against New Jersey, the Court seems to have recognized Delaware’s jurisdiction to apply its environmental laws and regulations to similar projects extending from the New Jersey side of the river. Endnotes 1. Delaware’s denial of a permit to construct the LNG plant was met with threats from New Jersey of withdrawing state pension funds from Delaware banks, which in turn prompted Delaware to considered authorizing the National Guard to more aggressively protect its border. New Jersey v. Delaware, 128 S. Ct. 1410, 1418 (U.S. 2008). 2. New Jersey v. Delaware, 128 S. Ct. 1410 (U.S. 2008). 3. Id. at 1427. 4. Id. at 1426. 5. Id. at 1437 (Scalia, J. dissenting). 6. Id. at 1439.
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SandBar 7:2, July, 2008

New Jersey v. Delaware, 128 S. Ct. 1410 (U.S. 2008).

Joseph Rosenblum, J.D.

For the third time in 130 years, the Supreme Court has ruled on a boundary dispute between the State of New Jersey and the State of Delaware concerning jurisdiction over activities in the Delaware River. In 1877, fishing rights were the issue. In 1934, it was a disagreement over oysters. In the most recent incarnation of New Jersey v. Delaware, the Supreme Court addressed the authority of Delaware to deny permits for and prevent construction of a liquefied natural gas (“LNG”) plant proposed by British Petroleum and approved by New Jersey.1

Background

The LNG plant, along with storage tanks and other structures, was to be located in New Jersey. However, its erection and operation would have required dredging in parts of the Delaware River and construction of a 2,000-foot pier extending roughly 1,500-feet towards Delaware. The LNG plant was approved by both the Federal Energy Regulatory Commission and New Jersey. British Petroleum also sought permits from Delaware because the pier extended into the state’s submerged lands. Delaware denied the request, determining that the LNG plant was a heavy industry facility within Delaware’s coastal zone, and thus was prohibited under Delaware’s Coastal Zone Act.

In 2005, invoking the Supreme Court’s “original jurisdiction” for disputes between states, New Jersey brought suit against Delaware challenging Delaware’s authority to deny the LNG plant. The Supreme Court appointed a special master to review the issues, and in April 2007 the special master filed a report agreeing with Delaware’s interpretations of a 1905 Compact between the two states, and concluding that Delaware had the authority to deny construction of the LNG plant. The special master’s recommendation in such a case is nonbinding, and the Supreme Court subsequently heard the case, with Justice Stephen Breyer recusing himself because he owns British Petroleum stock.

Riparian Rights

Under a 1934 Supreme Court case, Delaware owns the entire river and riverbed along the impacted portion of the Delaware River, from the Delaware shore to the low-water mark on the New Jersey bank. However, jurisdictional authority is significantly complicated by a 1905 compact between the two states that provides that “each state may, on its own side of the river, continue to exercise riparian jurisdiction of every kind and nature.”2 Citing this agreement as to “riparian jurisdiction” under the compact, New Jersey thus argued that it had the sole right to approve development projects extending into the river, even though Delaware retained control and ownership of the river itself. Delaware on the other hand asserted regulatory authority over structures located within its boundaries, including those portions of the River adjudged to be part of Delaware under the 1934 decision.

The Court ultimately ruled 6-2 in favor of Delaware with Justice Ginsburg penning the decision for the Court. According to the Court, New Jersey retained ordinary riparian rights; however, its jurisdiction under the compact is not exclusive over unusual or extraordinary projects. Distinguishing the term “riparian jurisdiction” from the broader term “exclusive jurisdiction,” used in similar compacts, the Court held that New Jersey and Delaware have overlapping authority to regulate riparian projects of extraordinary character extending offshore of New Jersey’s domain into the river over which Delaware is sovereign.

The Court found that the proposed LNG plant “goes well beyond the ordinary or usual.”3 The court noted that two or three supertankers would arrive for unloading each week surrounded by a moving safety zone that would restrict other vessels 3,000 feet ahead and behind, and 1,500 feet to the sides. While in transit, these tankers would pass densely populated areas.

The Court also found noteworthy that New Jersey had in the past admitted Delaware’s permitting authority over projects in the Delaware River. For example, in 1980 New Jersey submitted a coastal management plan to the Secretary of Commerce stating “that any New Jersey project extending beyond mean low water must obtain coastal permits from both states.”4 Similarly, New Jersey itself had sought Delaware’s approval to refurbish a stone pier located in the Delaware River and extending past the low-water mark on the New Jersey shore.

Conclusion

In a scathing dissent, Justice Scalia, joined by fellow New Jersey native Justice Alito, questioned the Court’s definition of extraordinary, asking whether “a pink wharf, or a zig-zagged wharf qualify?”5 Justice Scalia suggested that rather than using established legal principles, the Court reached its conclusion based on environmental concerns, noting that “if New Jersey had approved a wharf of equivalent dimensions, to accommodate tankers of equivalent size, carrying tofu and bean sprouts, Delaware could not have interfered.”6

Delaware’s victory will keep British Petroleum’s LNG plant from locating in the contested site. Whether the plant will be relocated to another site, as is suggested by the majority, or whether New Jersey will be left without the economic benefits promised by such a large development, as expressed by the dissent, is still unclear. As a practical matter, by finding against New Jersey, the Court seems to have recognized Delaware’s jurisdiction to apply its environmental laws and regulations to similar projects extending from the New Jersey side of the river.

Endnotes

1. Delaware’s denial of a permit to construct the LNG plant was met with threats from New Jersey of withdrawing state pension funds from Delaware banks, which in turn prompted Delaware to considered authorizing the National Guard to more aggressively protect its border. New Jersey v. Delaware, 128 S. Ct. 1410, 1418 (U.S. 2008).

2. New Jersey v. Delaware, 128 S. Ct. 1410 (U.S. 2008).

3. Id. at 1427.

4. Id. at 1426.

5. Id. at 1437 (Scalia, J. dissenting).

6. Id. at 1439.