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United States Trust Co. v. New Jersey

Supreme Court of the United States

Argued November 10, 1976 ; April 27, 1977

No. 75-1687

Opinion

 [*3]  [***97]  [**1508]    MR. JUSTICE BLACKMUN delivered the opinion of the Court.

 This case presents a challenge to a New Jersey statute, 1974 N.J. Laws, c. 25, as violative of the Contract Clause 2 of the United States Constitution. That statute, together with a concurrent and parallel New York statute, 1974 N. Y. Laws, c. 993, repealed a statutory covenant made by the two States in 1962 that had limited the ability of The Port Authority of New York and New Jersey 3 to subsidize rail passenger transportation from revenues and reserves.

 [****5]  The suit, one for declaratory relief,  [***98]  was instituted by appellant United States Trust Company of New York in the Superior Court of New Jersey, Law Division, Bergen County. Named as defendants were the State of New Jersey, its Governor, and its Attorney General. Plaintiff-appellant sued as trustee for two series of Port Authority Consolidated Bonds, as a holder of Port Authority Consolidated Bonds, and on behalf of all holders of such bonds. 4 

After a trial, the Superior Court ruled that the statutory repeal was a reasonable exercise of New Jersey's police power, and declared that it was not prohibited by [****6]  the Contract Clause or by its counterpart in the New Jersey Constitution, Art. IV, § 7, P3.  Accordingly, appellant's complaint was dismissed. 134 N.J. Super. 124, 338 A. 2d 833 (1975). The Supreme Court of New Jersey, on direct appeal and by per  [*4]  curiam opinion, affirmed "substantially for the reasons set forth in the [trial court's] opinion." 69 N.J. 253, 256, 353 A. 2d 514, 515 (1976). We noted probable jurisdiction. 427 U.S. 903 (1976). 5 

BACKGROUND

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431 U.S. 1 *; 97 S. Ct. 1505 **; 52 L. Ed. 2d 92 ***; 1977 U.S. LEXIS 1 ****

UNITED STATES TRUST COMPANY OF NEW YORK, TRUSTEE v. NEW JERSEY ET AL.

Prior History: APPEAL FROM THE SUPREME COURT OF NEW JERSEY

CORE TERMS

covenant, contract clause, repeal, port authority, bonds, impairment, bondholders, contracts, transportation, mass transit, deficits, Port, bridge, tolls, railroad, trial court, cases, facilities, powers, contractual obligation, Consolidated, passenger, reserves, police power, reserve fund, decisions, purposes, rights, obligations, parties

Constitutional Law, Congressional Duties & Powers, Contracts Clause, General Overview, Contracts Law, Contract Modifications, Governments, Legislation, Effect & Operation, Retrospective Operation, Interpretation