Article I, Section 10, Clause 3 — Acts Requiring Consent of Congress

ArtI.S10.C3.1.1 Overview of Duties of Tonnage

Article I, Section 10, Clause 3, prohibits states from interfering with interstate and foreign commerce by imposing duties of tonnage—charges to access a port based on a vessel’s capacity (i.e., its tonnage)—without congressional consent. States may impose other types of taxes or charges on vessels provided they do not constitute duties of tonnage or otherwise violate the Constitution.

ArtI.S10.C3.1.2 Historical Background on Duties of Tonnage

Prior to the Constitution’s enactment, many colonies, and later states, imposed duties of tonnage. While such duties most commonly applied to foreign vessels entering state ports,¹ some duties also applied to vessels from other colonies.² Colonies generally framed these duties as revenue-raising measures to provide for the public defense.³ Because colonies considered these duties to be a potential way to protect and grow their own shipping industries, they often exempted their own ships from the tonnage duties.⁴ Colonies also used duties of tonnage to retaliate economically when another colony imposed duties, offering to remove the retaliatory duties on a reciprocal basis. For example, Virginia adopted duties of tonnage in retaliation for Maryland’s decision to impose such duties. While Virginia described the duty as “unneighborly,” it insisted that “Maryland vessels must [also be subject to a duty] until [Maryland’s] laws are repealed.”⁵

During the Constitutional Convention, the delegates did not consider the question of duties of tonnage until August 1787. The committee considering whether to regulate state authority to impose these duties tabled a report that proposed prohibiting states from requiring vessels to pay duties to access their ports. The Committee concluded that tonnage duties should be “uniform throughout the United States.”⁶

When the Constitutional Convention considered the committee’s proposal in September 1787, the delegates debated whether such a clause was necessary and would appropriately balance the powers of the federal and state governments. Some delegates, including James Madison, thought the power to impose duties of tonnage qualified as regulation of trade and therefore fell exclusively within Congress’s general authority to regulate commerce.⁷ Other delegates, who viewed the Commerce Clause’s language as too vague to determine whether duties of tonnage fell within its scope, argued that the Constitution should expressly allow states to impose such duties in order to pay certain expenses, such as cleaning harbours and constructing lighthouses. Maryland delegates, James McHenry and Daniel Carroll, proposed that “no State shall be restrained from laying duties of tonnage for the purpose of clearing harbours and erecting light-houses.”⁸ Another delegate, Gouverneur Morris of Pennsylvania, thought Congress’s power to regulate commerce did not extend to duties of tonnage.⁹ The Clause’s final text addressed the conflict over the Commerce Clause’s scope and state needs for revenue from duties of tonnage by generally prohibiting states from imposing duties of tonnage unless permitted by Congress. This text was narrowly adopted with six delegations in favour, four against, and one divided.¹⁰

ArtI.S10.C3.1.3 Determining Whether a Measure Qualifies as a Duty of Tonnage

The Supreme Court first considered the Duty of Tonnage Clause in Cooley v. Board of Wardens of the Port of Philadelphia in 1851, and established what remain essential features of its jurisprudence. First, the Court concluded the term “duty of tonnage” was “well understood when the Constitution was formed” and thus should be interpreted as prohibiting states from imposing only such measures as would have been considered duties of tonnage at that time.¹ Second, by implication, states may impose other fees and charges that do not qualify as duties of tonnage, including pilot fees, wharfage, towage, and penalties imposed to enforce certain laws.² Thus, courts must determine whether or not a challenged measure constitutes a duty of tonnage. To make this determination, “it is the thing, and not the name, which is to be considered.”³ In other words, courts must consider the contents, substance, and effect of the measure to determine whether it qualifies as a duty of tonnage.

In subsequent cases, the Supreme Court expanded on these principles. First, in keeping with its broad reading of the Clause, the Court clarified in In re State Tonnage Tax Cases that the prohibition on imposing duties of tonnage covers all vessels, whether traveling in interstate or intrastate commerce, reasoning that the Framers would have made any exception express.⁴ Second, in Clyde Mallory Lines v. Alabama, the Court stated expressly that the Duty of Tonnage Clause applies to “all taxes and duties regardless of their name or form, and even though not measured by the tonnage of the vessel, which operate to impose a charge for the privilege of entering, trading in, or lying in a port.”⁵

Although the Court has consistently interpreted the Clause broadly, its precise mode of determining whether a measure qualifies as a duty of tonnage has evolved in several respects. One line of cases involves measures qualifying as taxes, while another involves other fees or charges. In a series of cases decided between 1865 and 1876, the Court indicated that any tax measure that uses the tonnage of a ship to calculate the amount to charge to a vessel is a duty of tonnage.⁶ By contrast, as the Court clarified in Transportation Co. v. Wheeling, taxes that treat vessels as personal property and assessed in the “same manner as other personal property” do not violate the duty of tonnage clause, although taxes not taxed in the “same manner” may violate the clause.⁷

In 1877, the Court clarified in Packet Co. v. Keokuk that using tonnage to calculate the amount to charge a vessel is not determinative in cases not involving taxes. Rather, the court must also consider the nature of the charge in dispute.⁸ Following Keokuk, the Court has applied this more holistic approach to determine whether contested charges qualify as duties of tonnage. Thus, the Court has considered not only whether the state is using a vessel’s tonnage to assess fees, but also whether the state is imposing the fees to compensate for costs incurred by the state or municipality in providing and maintaining ports or as another means to charge vessels to access a port. Applying this method of analysis, the Court has upheld the constitutionality of fees to cover services for the safety and upkeep of wharves and locks;⁹ fees to cover quarantine services;¹⁰ annual license fees;¹¹ and fees imposed to cover the costs of providing harbor police services.¹²

ArtI.S10.C3.1.4 Personal Property Taxes and Duties of Tonnage

While the Court’s duties of tonnage jurisprudence has been consistent,¹ questions remain about how to evaluate disputed charges. In particular, the Court appears divided on how the Duty of Tonnage Clause interacts with state or municipal authority to impose personal property taxes. In the 2009 case, Polar Tankers v. City of Valdez, the Court considered a tax ordinance imposed by the City of Valdez, Alaska. The Court identified four ways the ordinance might be constitutional as a personal property tax, although the Court ultimately held the tax at issue unconstitutional on other grounds.²

Polar Tankers involved an ordinance imposing a personal property tax on “boats and vessels of at least 95 feet in length that regularly travel to the City, are kept or used within the City, or which annually take on at least $1 million worth of cargo or engage in other business transactions of comparable value in the City.”³ A majority of seven Justices held the ordinance violated the Duty of Tonnage Clause⁴ based on their findings that the ordinance applied in practice only to certain large vessels, the amount owed was effectively based on vessel capacity (i.e., tonnage), and a single entry into Valdez’s port made the vessel liable to pay the tax. Further, the City did not impose the tax to compensate for a service provided. Thus, the ordinance’s actual operation rendered it a duty of tonnage, not a personal property tax.⁵

Despite the 7-2 holding of Polar Tankers, the Justices diverged on how to approach determining whether the ordinance might qualify as a personal property tax, debating the principles and implications of the State Tonnage Tax Cases and Wheeling. Justice Stephen Breyer, writing for a plurality of four Justices, concluded that personal property taxes may be constitutional and not violate the general prohibition on duties of tonnage if vessels are taxed in the same manner as other property, as held in Wheeling. More precisely, this plurality interpreted the “same manner” requirement of Wheeling to require a state to impose similar taxes upon other businesses, effectively reading “same manner” as a non-discrimination requirement.⁶ Justice Breyer concluded that the Valdez ordinance failed this requirement, as it applied in practice almost exclusively to large vessels.⁷

By contrast, Justice John Paul Stevens, joined in dissent by Justice David Souter, argued that the “same manner” criterion, as set out in Wheeling and the State Tonnage Tax Cases, required only that a property tax on vessels be calculated based on property valuation, instead on tonnage.⁸ Chief Justice John Roberts, joined by Justice Clarence Thomas, wrote separately, contending that personal property taxes may be imposed only on a state’s citizens, not on visiting vessels.⁹ Justice Samuel Alito, in a concurrence, stated he disagreed with Justice Breyer’s view regarding taxation, but offered no further comment.¹⁰

Finally, the Constitution permits states to impose duties of tonnage with congressional consent. However, as noted in dicta by the Supreme Court, the Constitution does not specify when or how such consent must be given.¹¹ To date, the Supreme Court has not had occasion to decide when or how congressional consent would be granted.

ArtI.S10.C3.2 States and Military Affairs

The Supreme Court has stated that this provision contemplates the use of the state’s military power to put down an armed insurrection too strong to be controlled by civil authority,¹ and held that the organization and maintenance of an active state militia is not a keeping of troops in time of peace within the prohibition of this clause.² The Supreme Court has also held that the divestments of state power in this Clause, together with Congress’s express authority to build and maintain the Armed Forces under Article 1, Section 8, Clauses 12 and 13, reflect “a complete delegation of authority to the Federal Government to provide for the common defense” and show that the states renounced their right to interfere with national policy in this area in the plan of the Convention.³

ArtI.S10.C3.3.1 Overview of Compact Clause

The Compact Clause prohibits states from entering into “any Agreement or Compact with another State” or with a foreign government without the consent of Congress.¹ Whereas other provisions in Article I, Section 10 categorically deny states certain powers,² the Compact Clause allows states to retain what the Supreme Court has described as the sovereign right to make agreements and compacts, provided Congress consents.³

According to the Supreme Court, there is little difference between “agreements” and “compacts” in this clause.⁴ Both terms refer to contracts between governments—although a compact may reflect a more “formal and serious engagement” than an agreement.⁵ Once approved by Congress, agreements and compacts have the force of federal law.⁶ As a result, agreement and compacts have dual functions: they operate as contracts between governments and, if approved by Congress, part of the law of the United States.⁷

The ability to form compacts with other governments is a defining characteristic of sovereignty.⁸ In the Compact Clause, the Constitution adapts the sovereign’s traditional compact-making power to the American constitutional system in which both the Federal Government and the states have sovereign authority.⁹ The clause safeguards national interests by giving Congress control over matters that reach beyond state lines but are not suitable for direct federal regulation.¹⁰ It also protects states’ interests by limiting an individual state’s power to form compacts that might disadvantage other states or regional interests.¹¹

A literal reading of the Compact Clause would require congressional approval for any agreement or compact.¹² In the context of interstate compacts, however, the Supreme Court has adopted a functional interpretation in which only compacts that increase the political power of the states while undermining federal sovereignty require congressional consent.¹³ The Supreme Court has not said whether the same interpretation applies to states’ compacts with foreign governments, but the proliferation of states’ pacts¹⁴ with foreign officials suggests Congress’s approval is not required in many cases.¹⁵

ArtI.S10.C3.3.2 Historical Background on Compact Clause

The roots of the Compact Clause can be traced to interstate boundary disputes during the colonial period in American history.¹ As population in North America expanded and moved westward, some colonies sought control over greater shares of territory.² At the same time, land grants in the colonies’ royal charters were often vague and indefinite, which led to disagreements about colonial borders.³ The British legal system provided two methods for the colonies to resolve these disputes: a litigation-like process before the British Royal Commission or private negotiations between the colonies followed by settlements that were approved by the Crown.⁴ Both processes were precursors to provisions in the Constitution. The litigation-like process continued in Article III, Section 2, which gives the Supreme Court original jurisdiction over disputes between states.⁵ The private settlement process carried over into the Compact Clause.

In the period after the Revolutionary War but before the Constitution was adopted, the Articles of Confederation shifted the British system of compact-making slightly. The Articles of Confederation allowed the states to negotiate independently and form compacts, but they required approval from the newly created Congress rather than the Crown.⁶ Despite the requirement for congressional consent, several states entered into interstate compacts without seeking approval during the Articles of Confederation period.⁷

At the Constitutional Convention, James Madison cited states’ unapproved compacts as one reason to strengthen the National Government’s general power over the states in a new system of government.⁸ Later in the convention, the Committee of Detail included what would become the Compact Clause in its drafts of the Constitution,⁹ and the Committee of Style revised the clause into its final form.¹⁰ Minor elements of the Compact Clause differ from the Articles of Confederation,¹¹ but the clause retained its basic structure in which states can form agreements and compacts with one another and with foreign governments, provided Congress consents.¹²

Apart from Madison’s remark about unapproved compacts, the Framers said little about the Compact Clause during the Constitutional Convention and state ratification debates.¹³ In the Federalist No. 44, Madison wrote that the “particulars” of the Compact Clause “are either so obvious, or have been so fully developed, that they may be passed over without remark.”¹⁴ Despite Madison’s confidence that the clause is self-explanatory, compact-making practice has evolved, and disagreements have required courts to interpret the Compact Clause’s scope and requirements.¹⁵

ArtI.S10.C3.3.3 Subject Matter of Compacts

As instruments based on the combined powers of Congress and the states, compacts have a broad base of authority that can be leveraged for many governmental endeavors.¹ For many years after the Constitution was adopted, boundary disputes were the predominate subject of all compacts and agreements.² After the turn of the twentieth century, states began to use interstate compacts more often as a tool for solving complex regional problems.³ States made compacts to apportion interstate water bodies, particularly rivers in the Western United States,⁴ and to manage interstate resources and properties, such as oil and gas,⁵ fisheries,⁶ and parks.⁷ States also began to use compacts for major public undertakings and infrastructure projects, such as the Port of New York and New Jersey.⁸

During this time, Congress began to pass legislation that provided advance consent to whole classes of compacts on some subjects. In one notable example, Congress passed legislation consenting to any interstate compact for the prevention of crime.⁹ This law led to several widely adopted compacts addressing probationers’ and parolees’ travel between states and other law enforcement matters.¹⁰

Interstate compact usage eventually evolved to address an even wider range of issues. Congress authorized compacts addressing subjects as varied as education,¹¹ urban planning,¹² tourism and historic preservation,¹³ tax,¹⁴ emergency aid,¹⁵ fire prevention,¹⁶ transportation,¹⁷ sewage disposal,¹⁸ and radioactive waste management.¹⁹

Some compacts create administrative bodies empowered to implement the compact’s requirements.²⁰ For example, in West Virginia ex rel. Dyer v. Sims, the Supreme Court addressed the Ohio River Valley Sanitation Compact, which authorized an interstate commission to issue orders requiring compliance with sewage disposal restrictions in interstate waterbodies.²¹ A West Virginia state court deemed the compact invalid under the theory that it unlawfully delegated the state’s sovereign power to a body outside the state.²² The Supreme Court, however, reasoned that the “Framers left the [s]tates free to settle regional controversies in diverse ways[,]” including by delegating a state’s traditional sovereign authority to an interstate compact commission.²³

Unlike interstate compacts, Congress has given consent to a much smaller set of agreements between states and foreign governments.²⁴ The nature of states’ pacts with foreign governments can be “elusive,” as one Compact Clause scholar described it,²⁵ because states often make international pacts without seeking congressional approval.²⁶ Congress has approved state agreements with foreign governments on some distinct subjects, such as agreements for transnational highway infrastructure and bridges²⁷ and compacts with Canadian providences and territories for cross-border fire prevention²⁸ and emergency management.²⁹

In a unique case, Congress authorized the Great Lakes Basin Compact—which included several states, Ontario, and Quebec—but declined to allow the Canadian provinces to join.³⁰ Executive Branch officials believed Canadian participation would conflict with an existing treaty between the United States and Canada and interfere with the Federal Government’s powers over foreign affairs.³¹

ArtI.S10.C3.3.4 Congressional Consent to Compacts

The Constitution does not dictate the timing or manner in which Congress must consent to a compact. The Supreme Court has interpreted the Constitution’s silence to mean that Congress may use its wisdom and discretion to choose how and when it gives consent.¹ In an 1893 case, the Supreme Court stated that Congress ordinarily should provide authorization before the states join and carry out a compact, but Congress may consent later if the compact addresses an issue that is best considered after its “nature is fully developed[.]”² The Court has further explained that Congress can consent to a compact either in advance or by giving approval after the states already negotiated and joined the compact.³

As the number of compacts has increased over time, Congress has developed different ways of providing consent. Congress frequently approves specific compacts,⁴ but it also has given approval in advance to broad classes of compacts.⁵ Congress has, at times, given consent for an indefinite period;⁶ other times it has put an end date on its authorization.⁷ When approving a compact, Congress can consent to the participating states’ later adoption of legislation that implements the compact.⁸ Congress also can impose conditions on its consent, provided the conditions are “appropriate to the subject” and do not exceed a constitutional limitation.⁹

Congress’s consent to a compact can be inferred from the circumstances and need not be expressly stated.¹⁰ For example, when a compact sets up a formal procedure for resolving an interstate problem, such as arbitration, the Supreme Court has held that consent can be inferred if Congress expressed approval of the proceedings’ results.¹¹

ArtI.S10.C3.3.5 Requirement of Congressional Consent to Compacts

One of the most common questions to arise in Compact Clause cases is whether congressional consent is required for a particular state commitment.¹ The plain language of the Compact Clause suggests congressional approval is mandatory for “any” compact with another state or foreign government,² but the Supreme Court has not adopted a literal interpretation of the clause in all cases. In the context of interstate compacts, the Supreme Court has held that only compacts that increase states’ power and diminish federal supremacy need Congress’s consent.³ The Court has not said whether the same interpretation applies to states’ compacts with foreign governments, but the frequency with which states make international pacts suggests congressional approval often is unnecessary.⁴

The closest the Supreme Court has come to invalidating a compact for lack of congressional approval came in a non-controlling 1840 opinion about a state’s agreement with a foreign official.⁵ In Holmes v. Jennison, the Governor of Vermont ordered a resident of Quebec (then part of Great Britain) arrested and returned to Quebec to stand trial for murder even though the United States did not have an extradition treaty with Britain at the time.⁶ A crucial legal issue—whether the Supreme Court had jurisdiction—turned on the whether the Governor of Vermont had arrested the fugitive under an informal “agreement” with Canadian authorities within the meaning of the Compact Clause.⁷ The case ultimately ended with an equally divided court on the jurisdiction issue,⁸ with four Justices determining that the governor made an agreement that should have been submitted to Congress for consent.⁹ This four-Justice opinion, written by Chief Justice Roger Taney, was based on a literal interpretation of the Compact Clause that viewed congressional approval as necessary for “every agreement, written or verbal, formal or informal, positive or implied, by the mutual understanding of the parties.”¹⁰

Chief Justice Taney’s opinion has been influential, and the Supreme Court later cited it positively,¹¹ but the view that all pacts between states and foreign governments require Congress’s consent has not been supported in practice.¹² To the contrary, states often conclude pacts with foreign officials without congressional approval, and the Supreme Court eventually developed a new line of cases that more narrowly interprets the congressional consent requirement in the context of interstate compacts.¹³

In 1893, the Supreme Court expressed doubt in Virginia v. Tennessee that Congress must approve every interstate compact regardless of its relevance to the Federal Government.¹⁴ The Virginia Court saw no reason congressional approval would be necessary for compacts “to which the United States can have no possible objection” or desire to interfere.¹⁵ The Court gave several examples of hypothetical agreements that would not concern the United States, such as two states contracting to send exhibits to the Chicago World’s Fair via the Erie Canal.¹⁶ Rather than require congressional approval in every case, the Virginia Court reasoned that interstate compacts only need Congress’s consent if they have the potential to “increase of political power in the states, which may encroach upon or interfere with the just supremacy of the United States.”¹⁷

In later cases, the Supreme Court repeated Virginia’s test for determining when congressional consent is necessary and clarified how it applies to modern interstate compacts.¹⁸ In U.S. Steel Corp. v. Multistate Tax Commission, for example, the Supreme Court held that a compact creating uniform rules for state taxation of multistate corporations did not require congressional consent even though it increased the states’ bargaining power in relation to the taxed companies.¹⁹ Virginia’s test does not focus on whether the compact makes the states more influential in general, the U.S. Steel Corp. Court explained, but whether it could enhance the states’ power in relation to the Federal Government.²⁰

The Supreme Court has also suggested that some engagements between states do not qualify as agreements or compacts at all.²¹ In Northeast Bancorp, Inc. v. Board of Governors of Federal Reserve System,²² Supreme Court rejected a Compact Clause challenge on the rationale that a system for reciprocal state legislation²³ lacked four “classic indicia of a compact” in the constitutional sense.²⁴ According to Court, those indicia are: (1) the creation of a joint organization or body; (2) conditioning one state’s action on the actions of other states; (3) restrictions on states’ ability to modify or repeal their laws unilaterally; and (4) a requirement for reciprocal constraints among all states.²⁵ The Northeast Bancorp, Inc. Court also held that, even if it assumed a compact existed, the scheme was authorized under existing federal banking law,²⁶ and therefore could infringe federal supremacy under the Virginia standard for congressional consent.²⁷

After Northeast Bancorp, Inc., the Supreme Court’s interstate compact jurisprudence appears to establish a two-part inquiry for determining whether congressional consent is necessary: is the arrangement at issue a “compact or agreement” for constitutional purposes, and, if so, does it belong in that class of compacts described in Virginia that require congressional approval because it affects federal supremacy?²⁸ Unless the answer to both questions is “yes,” consent is not mandatory.

While the Supreme Court’s interstate compact cases are the most well-developed jurisprudence on the congressional consent issue, the Court has never held that these cases apply to states’ international pacts with foreign governments.²⁹ Some scholars argue that two types of compacts present different concerns and should not share the same standard.³⁰ The greater weight of authority adopted in lower courts and Executive Branch statements, however, suggests Virginia applies in both scenarios.³¹

ArtI.S10.C3.3.6 Legal Effect and Interpretation of Compacts

Once Congress consents to a compact, the compact “transforms” from a contract between governments into a law of the United States.¹ As federal law, a congressionally approved compact preempts inconsistent state law,² and no court may order relief inconsistent with its terms.³ The Supreme Court has held that boundaries established by congressionally approved interstate compacts bind the states’ citizens and are conclusive as to their rights.⁴ The Court also has held that compacts that equitably apportion interstate waterbodies can affect private property rights.⁵

The Supreme Court has final authority to decide a compact’s meaning and validity.⁶ The Court need not defer to state courts’ views on whether a compact complies with the law of the states that joined it. Thus, in West Virginia ex rel. Dyer, the Supreme Court declined to adopt the highest state court in West Virginia’s interpretation of whether an interstate compact complied with the West Virginia state constitution⁷ even though the Court ordinarily defers to state courts’ interpretation of their own state law.⁸

The Supreme Court often hears interstate compact cases through the Constitution’s grant of original jurisdiction to hear disputes between states.⁹ This means that interstate compact cases with only states as parties go directly to the Supreme Court without proceedings in lower courts. The Supreme Court views its role in these cases as different from its more standard disputes on appellate jurisdiction.¹⁰ It approaches original jurisdiction cases in an “untechnical spirit” that allows the Court to mold the process in a way that best promotes the ends of justice.¹¹

When private litigants are parties to cases involving compacts, the suits do not fall under the Supreme Court’s original jurisdiction, but they can still be heard in federal courts because they require interpretation of compacts in their status as federal law.¹² A compact that permits a state entity to “sue and be sued” waives the state’s sovereign immunity provided under the Eleventh Amendment and can permit a private party to sue a state entity.¹³

Along with being federal law, compacts are contracts between states or between states and foreign governments.¹⁴ As a result, the Supreme Court has, at times, used contract law remedies and principles in compact cases.¹⁵ In Green v. Biddle, the Court held that interstate compacts fall under the protection of the Contract Clause,¹⁶ which prohibits states from passing laws that impair contract rights.¹⁷ At the same time, there are limits on how far the Supreme Court will treat compacts as ordinary contracts. In Alabama v. North Carolina, the Court declined to read an implied duty of good faith and fair dealing into an interstate compact even though the Court acknowledged every contract imposes that duty.¹⁸