Facts of the Case

New York and New Jersey had established a Port Authority to enhance water-bound business between the two states. In 1974, the states repealed a 1962 bond agreement which limited the Authority to administer commercial and passenger railroad subsidies.

Question

In repealing the 1962 agreement, did the states violate the Contract Clause?

Conclusion

The repeal violated the Constitution. Justice Blackmun argued that the states could have implemented a less drastic solution to encourage people to use commuter train services in lieu of driving their cars. (State leaders thought the increase in bridge fares that would occur with the agreement's repeal would cause this to occur.) Furthermore, since the need to facilitate mass transportation in the New York metropolitan area had been a concern long before 1962, the states could not justify their action as a response to unforeseen circumstances.