United States Trust Co. v. New Jersey
United States Supreme Court
431 U.S. 1, 97 S.Ct. 1505, 52 L.Ed.2d 92 (1977)
In 1962, New York and New Jersey adopted laws prohibiting the use of toll revenues from the Port Authorities of those states from being used to subsidize railroad passenger service. The purpose of the laws was to assure those holding Port Authority bonds that the toll funds would remain available to pay that debt. In 1974, during the energy crisis of the 1970s, New York and New Jersey adopted additional laws to repeal the earlier prohibition and to permit the use of toll funds to improve rail transit. United States Trust Co. (plaintiff) brought suit in New Jersey state court against the State of New Jersey (defendant) claiming that a New Jersey statute permitting the use of toll funds for rail transit violated the Contract Clause of the U.S. Constitution, which prohibits states from making any law impairing the obligation of contracts. The trial court upheld the statutory repeal as a valid exercise of state police power, and the New Jersey Supreme Court affirmed. United States Trust Co. appealed to the United States Supreme Court.
Rule of Law
Holding and Reasoning (Blackmun, J.)
Concurrence (Burger, C.J.)
Dissent (Brennan, J.)
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