Murphy Socked by Lawsuit over Christie’s Decision to End Harbor Compact

New governor must deal with predecessor’s last-minute signing of law to pull New Jersey out of Waterfront Commission

NY Harbor
Within his first few hours in office, Gov. Phil Murphy was greeted with his first lawsuit, one over an action he did not even take: The Waterfront Commission of New York Harbor is trying to stop Murphy from pulling out of the bistate compact.

One of the last actions former Gov. Chris Christie took on Monday was to sign a new law that would have New Jersey State Police take responsibility for rooting out corruption along the waterfront. Legislation to do this passed with bipartisan support as lawmakers said the commission is no longer necessary and is overstepping its authority.

The commission argued before lawmakers and asserts in court papers filed Tuesday in federal court in Newark that New Jersey cannot unilaterally pull out of the 65-year old agreement with New York that created the commission in an effort to combat the extortion, racketeering, and other types of corruption that were plaguing the New York Harbor ports. The compact with New York was approved by Congress and signed into federal law by President Dwight D. Eisenhower in 1953. It requires New Jersey to get the consent of New York or Congress before it can dissolve the agreement.

Seeking permanent injunction

Michael A. Cardozo of Proskauer Rose LLP, the law firm that filed the case, said that the New Jersey law Christie enacted on Monday is clearly illegal and the commission is seeking a permanent injunction preventing Murphy from implementing it. Under the law, the governor has 30 days to notify New York, the commission, and Congress that the state is withdrawing from the compact and 90 days after that notice, the commission and compact should be dissolved.

“United States Supreme Court precedent is clear,” he said. “Unless an interstate compact provides that a state may withdraw without the consent of the other parties to the compact, such withdrawal is not permitted. Once Congress approves the compact, as it did here, the compact is governed by federal law and New Jersey lacks the power to withdraw from it.”

The complaint states that the United States Supreme Court has consistently ruled that a compact between states that is approved by Congress cannot be dissolved unless all parties agree or the compact permits a unilateral withdrawal. The papers also note that in 2015, Christie cited that as his reason for vetoing an earlier attempt by lawmakers to withdraw from the compact.

Unconstitutional issues

“I don’t understand how former Governor Christie, a former United States Attorney, who in 2015 vetoed virtually the identical law because he said it was unconstitutional, could have signed the law we have challenged,” Cardozo added.

The suit cites specific language in the compact that holds “Amendments and supplements to this compact to implement the purposes thereof may be adopted by the action of the Legislature of either State concurred in by the Legislature of the other.” And Congress reserved for itself “the right to alter, amend or repeal this Act.” Without either of those conditions, New Jersey cannot change the commission or pull out of it.

A Murphy spokesman did not return a request for comment. Christie, whose term expired at noon, made no comments on signing the bill on Monday.

The bill’s sponsors had said the commission’s overreach is negatively impacting the economic prosperity of the port. Its enactment should help the International Longshoremen’s Association, the union representing cargo and deep-sea workers on the docks. For years, the ILA has argued that the commission has too much control over hiring on the docks, and the law should nullify the commission’s ability to accept or reject applications from those seeking to become longshoremen.

The commission’s position is that its job fighting corruption and working to ensure fair hiring practices for dockworkers remains necessary. The commission is a little-known organization with jurisdiction over about 1,500 square miles in New York and New Jersey, including parts of Bergen, Hudson, Essex, and Union counties. Its $13 million budget uses no taxpayer money, but is funded by a 2 percent payroll tax that terminal operators pay on workers’ wages.

Crippling the commission

Allowing the law to go into effect “will cripple the Commission,” according to the papers it filed with the court. The new law would strip the commission of its rights, powers, and assets and transfer them to the New Jersey State Police. It would also eliminate one of the commission’s major funding sources — assessments to wages paid by New Jersey dock employers — and transfer that revenue to New Jersey State Police.

The state Legislature has passed other bills recently trying to rein in the commission, but has never been able to get them to take effect because New York lawmakers have not agreed to take any similar actions. Because both states are part of the commission, both must approve any changes to it. The nonpartisan Office of Legislative Services estimated the transfer of commission duties to State Police would cost the state a net of $2.2 million, at least initially.

Most at issue is the 5-P provision of the commission’s statute, which gives it the power to accept or reject applications for new longshoremen. The commission’s court filing states that its efforts to stop “continued discriminatory practices” in the ILA’s hiring procedures “have not been well received by some in the industry.” The ILA and others then lost a suit challenging the commission’s regulations and then began to “vigorously” lobby for the new law.

New Jersey’s law dissolving the commission also eliminates section 5-P and that would, according to the commission’s court filing, “result in a flooding of the labor supply, and the reemergence of extortion and other unfair and discriminatory hiring practices for workers in the Port.”

‘On the Waterfront’

The basis for the commission’s power goes back to the corruption that prompted the creation of the commission. As depicted in the movie “On the Waterfront,” the docks were a place where corrupt union leaders would only give the day’s jobs to union members who agreed to kick back a portion of their wages to the bosses; where mob loan sharks preyed on dock workers; and where companies were forced to make payments to union officials to avoid wildcat strikes.

In its court filing, the commission states, “Many of the conditions that led to the formation of the Commission still continue to exist on today’s waterfront. As briefly set forth below, the Commission’s current administration has tirelessly strived to: effectuate economic growth in the Port; ensure a union of waterfront workers that represents its membership rather than a privileged few; maintain a ready supply of qualified labor immediately available to satisfy employers’ needs; safeguard the ability of employers to select their own workers and, consistent with their collective bargaining agreements, assign their responsibilities and hold them accountable without the threat of disruption in the Port; severely limit the influence of organized crime, corruption and other criminal influence; and allow for a diverse workforce that reflects the makeup of the Port communities.”

Data from the Port Authority of New York and New Jersey, which is essentially a landlord over the docks, show increases in most measures of port activity over the past three years. The total amount of ocean-borne bulk and general cargo tonnage moved in 2016 was 79.8 million metric tons, up from 73.6 million the year before and 71.5 million in 2013, the low point over the past decade. The number of motor vehicles handled rose to nearly 663,000 last year, up from about 641,000 in 2014, though less than the 745,000 handled in 2013. The number of port containers — 3.6 million — was down slightly last year, but that was from a decade high of 3.66 million in 2015.

But New York Harbor is the only port with a waterfront commission overseeing day-to-day management, and sponsors of the bill charged the body has been micromanaging affairs and that is has put the ports here at a competitive disadvantage.

Although Murphy did not make any statements about the commission during his campaign, he may be sympathetic to at least trying to loosen its control over hiring. The ILA strongly backed Murphy and in a speech before union members, a video of which is posted on the union website, Murphy ends his talk to them with this promise, “We’re gonna figure out the damn Waterfront Commission once and for all.”

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