After spirited oral arguments, it remains unclear whether the Supreme Court will support Delaware’s claim that a century-old agreement with New Jersey over jurisdiction of the Delaware River allows it to nix New Jersey’s plans to build a bond-financed liquefied natural gas plant that would violate its environmental laws. During arguments yesterday in the case of New Jersey v. Delaware, the First State argued before the high court that it must sign off on any projects that cross into Delaware’s territorial waters. “Our position can be summarized in two words: boundaries matter,” said David C. Frederick of Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC, who served as Delaware’s counsel. On the other hand, New Jersey, represented by H. Bartow Farr 3d of Farr & Taranto, contended that it had a right to take on riverside projects without Delaware’s approval, as part of the “riparian” rights of the state. The facility in question is a $500 million liquefied natural gas plant proposed by British Petroleum subsidiary Crown Landing LLC. Plans for the plant include a 2,000-foot pier and wharf, as well as three 150,000-cubic-meter storage tanks, which could potentially be financed by as much as $100 million of tax-exempt bonds. While the plant itself would be built on Garden State land, the pier would extend into the river beyond the New Jersey-Delaware state boundary, which exists at the eastern low watermark along New Jersey’s shore. Delaware has used its police powers to block construction of the wharf, saying its intended purpose, to allow for the loading and unloading of barges of chilled natural gas, violates its environmental laws. Construction would require the dredging of 1.24 million cubic yards over about 29 acres of Delaware riverbed. The official border was formally determined by the high court in a 1934 ruling in a prior dispute over the river, New Jersey v. Delaware II. While most river boundary disputes are resolved by placing the border in the center of the waterway, in this case the court interpreted a 1682 deed from the Duke of York giving land to William Penn as previously establishing the border along New Jersey’s shore. The crux of the legal debate in the current case centers around the 1905 compact, an understanding reached between the two states to settle disputes relating to river fishing. Both parties focused on specific articles in the compact to support their positions. New Jersey claimed that Article Seven of the compact established “riparian jurisdiction” as a preemptive way to preserve the state’s ability to have river access in this type of border dispute, since the compact was drafted without knowing the precise border between the states. Farr argued that the framers must have intended for some border flexibility, saying, “That right is essentially meaningless if you stop at the low watermark.” But Delaware contended that under Article Eight, territorial rights are among the things unaffected by the compact, and the state should retain the ability to control its waters. Both parties met intense scrutiny from several justices. Justice Ruth Bader Ginsburg appeared to plant herself firmly in support of Delaware, as she repeatedly called for maintaining the status quo. “Whatever was, will continue,” she said, referring to Delaware’s current practice of vetting New Jersey river projects. Justice David Souter also was largely critical of New Jersey’s reading of the compact, finding the language too vague to agree that Delaware intended to essentially hand extra land over to New Jersey. “That is such an extraordinary proposition, you’ve got to have something more specific,” he said. While less vehement, it appeared that Justices John Paul Stevens and Anthony Kennedy also gave the impression that they were in Delaware’s camp, largely as a desire to maintain the status quo.On the other hand, Chief Justice John Roberts appeared supportive of New Jersey. “There’s no doubt that New Jersey has riparian rights, including wharfing out beyond the low watermark,” he said. Justice Samuel Alito echoed Roberts’s perspective on New Jersey wharfs as a traditional riparian right. Justice Antonin Scalia had harsh words for both sides. When it came to New Jersey, he said, “The right to wharf out does not include the right to do with it whatever you like.” But he was also critical of Delaware, saying to Frederick, “You say that the police power of Delaware ... includes the power to require you to get a license to wharf out from a New Jersey site?” Justice Stephen Breyer was absent from oral arguments, and as usual, Justice Clarence Thomas remained silent. While the Supreme Court mainly hears cases on appeals, this case marked the first time the dispute was argued in court, as New Jersey invoked the original jurisdiction of the high court. According to Article Three, Section Two, of the Constitution, the Supreme Court may immediately hear cases involving disputes between states. And as is typical in interstate disputes, a special master was appointed to mediate the dispute prior to its reaching the Supreme Court for arguments. In April, special master Ralph I. Lancaster Jr., a partner at Pierce Atwood LLP in Portland, Maine, filed a 112-page report urging the high court to require the states to share regulatory authority over at least part of the project, a decision that would allow Delaware to continue stonewalling the development. However, the special master’s opinion is nonbinding, and New Jersey filed exceptions to the report, moving the case to oral arguments before the high court.
