Congressional consent is not required for all compacts. In 1845, the New Hampshire Supreme Court (17 N.H. 200) rejected the argument that an 1819 New Hampshire statute and an 1821 Maine statute authorizing construction of a bridge over navigable waters (the Piscataqua River) without congressional consent violated the compact clause of the U.S. Constitution. The court opined that no constitutional provision precluded each of the two states from authorizing the erection of a bridge to the middle of the river.
In 1893, the U.S. Supreme Court, in Virginia v. Tennessee (148 U.S. 503 at 520), specifically held such consent is required only for a compact tending to increase "the political power or influence" of the party states and to encroach "upon the full and free exercise of federal authority." An interstate compact regulating accounting clearly would not be a political compact requiring the consent of Congress for execution.
The United States Steel Corporation challenged the constitutionality of the Multistate Tax Compact on the ground that it lacked congressional consent. In 1978, the Supreme Court (434 U.S. 452 at 473) upheld the compact's constitutionality by declaring it did not "authorize the member states to exercise any powers they could not exercise in its absence."
Most compacts are submitted to Congress for its grant of consent, but a small number of compacts have been executed without such submittal and grant of consent. Congress can grant its consent prior to (permissive) and subsequent to (ratifying) enactment of a compact by the concerned state legislatures. In addition, Congress is free to grant consent-in-advance for each compact entered into by states or blanket approval in advance for all compacts relating to a specific subject.
The Supreme Court, in 1823's Green v. Biddle (21 U.S. 1), noted the U.S. Constitution places no limitations on the duration of consent, and consent statutes typically do not contain a sunset clause. Chief Justice Charles Evans Hughes opined in 1937 (302 U.S. 134 at 148) that Congress may impose conditions in granting its consent. In granting consent, Congress typically reserves the right to "alter, amend, or repeal" its consent to a compact and always reserves its authority over navigable waters.
President Franklin D. Roosevelt in 1939 vetoed a bill granting consent-in-advance to states to enter into compacts relating to Atlantic Ocean fishing on the ground that their provisions were too general. Two years later, he disallowed the Republican River Compact, but in 1943 he signed a bill granting the consent of Congress to a modified compact (57 Stat. 86).
Congressional consent effects. Does congressional consent convert an interstate compact into federal law? The Supreme Court has changed its answer to this question. The Court opined in 1938 (304 U.S. 92) that such consent does not make a compact the equivalent of a U.S. treaty or statute. In 1940, however, the Court (310 U.S. 92) held that an interstate compact approved by Congress involving a federal question is subject to the Court's review.
In 1981, the Court (449 U.S. 433) issued a momentous decision opining that congressional consent makes a compact federal law in addition to state law. U.S. courts since 1874 (87 U.S. 590) had been required to apply the interpretation of a concerned state law by the highest court in the state. The reversal of this precedent allowed the court to interpret the concerned Pennsylvania statute and disregard its interpretation by the Pennsylvania Supreme Court. The U.S. Court of Appeals for the District of Columbia Circuit in 1997 opined: "While the Compact [Washington Area Metropolitan Transit Compact] may be treated as a federal law, it does not follow that the Commission is a federal agency government by the Administrative Procedure Act." (129 F.3d 201 at 204)
Is a public authority created by an interstate compact with congressional consent cloaked with immunity from suit in federal court by the Eleventh Amendment to the U.S. Constitution? The Supreme Court (513 U.S. 30) in 1994 answered this question in the negative, explaining that the Port Authority Trans-Hudson Corporation is a self-financing entity and that subjecting it to suit in the U.S. District Court does not place a burden upon either the New Jersey or the New York treasury.
The proposed Interstate Insurance Product Regulation Compact would establish a commission funded entirely by fees paid by insurance companies when filing products and apparently would not be cloaked with Eleventh Amendment immunity from suit. Nevertheless, it is improbable the commission would be sued, because its functions would be limited to the establishment of regulatory standards and
the acceptance of filings by insurance companies.
Are federal statutes containing inconsistent provisions invalidated by the grant of congressional consent to an interstate compact? Courts would probably hold that such consent repeals conflicting federal statutes. What effect would a new congressional statute with conflicting provisions have on an interstate compact previously granted consent by Congress? The conflicting provisions in the consent would be repealed, with the exception of any vested rights protected by the Fifth Amendment to the U.S. Constitution.
The grant of consent suggests that Congress may enforce compact provisions, but enforcement in practice usually is left to courts. The validity of a compact may be challenged in state or U.S. court. Similarly, an individual or a state may bring suit to enforce the provisions of a compact. The Eleventh Amendment forbids a U.S. court to consider a suit in law or equity against a state brought by a citizen of a sister state or a foreign nation. A citizen, however, can challenge a compact or its execution in a state or U.S. court against an individual or in a proceeding to prevent a public officer from enforcing a compact. A suit brought in a state court could be removed to the U.S. District Court under provisions of the Removal of Causes Act of 1920 (41 Stat. 554) on the ground that the state court "might conceivably be interested in the outcome of the case."
States party to an interstate compact have occasionally filed an original suit in the Supreme Court seeking an interpretation of one or more compact provisions. For example, Kansas filed a suit against Colorado in an attempt to resolve disputes pertaining to the Arkansas River Compact. In 1955, the Court (514 U.S. 669) ruled unanimously in favor of Colorado. Kansas continued its disagreement with Colorado by filing another original suit against Colorado. The Supreme Court (533 U.S. 1) in 2001 rejected Colorado's contention that a special master's recommendation of a damages award for Colorado's violation of the compact was barred by the Eleventh Amendment on the grounds that the damages were losses suffered by individual Kansas farmers.