Page:Alabama v. North Carolina, 560 U.S. (2010) slip opinion.pdf/3

Rh the Compact does not permit the Commission to impose monetary sanctions in any event. The Court deems their exception that North Carolina forfeited its right to object to a monetary penalty by failing to participate at the sanctions hearing both abandoned and meritless. P. 10.

(c) Because the express terms of the Compact do not make the Commission the “sole arbiter” of disputes arising under the Compact, Texas v. New Mexico, 462 U. S. 554, 569–570, the Court is not bound by the Commission’s conclusion that North Carolina breached its obligations under the Compact. Nor does the Court apply deferential administrative-law standards of review to the Commission’s conclusion, but instead exercises its independent judgment as to both fact and law in executing its role as the “exclusive” arbiter of controversies between the States, 28 U. S. C. §1251(a). Pp. 10–12.

(d) North Carolina did not breach its contractual obligation to take “appropriate steps” toward the issuance of a license. Pp. 12–19.

(1) The Compact requires North Carolina to take only those licensing steps that are “appropriate.” The parties’ course of performance establishes that it was not appropriate for North Carolina to proceed with the very expensive licensing process without external financial assistance. Nothing in the Compact’s text or structure requires North Carolina to cover all licensing and building costs on its own. Plaintiffs’ assertion that it was understood that the host State would bear the up-front licensing and construction costs, but recoup those costs through its regional monopoly on radioactive waste disposal, is not reflected in the Compact. Pp. 13–18.

(2) Plaintiffs’ alternative argument that North Carolina repudiated its obligation to take appropriate steps when it announced it would take no further steps to obtain a license fails for the same reasons their breach theory fails. Pp. 18–19.

(e) North Carolina did not breach an implied duty of good faith and fair dealing when it withdrew from the Compact. The Compact by its terms imposes no limitation on North Carolina’s right to exercise its statutory right under Article 7(G) to withdraw from the Compact. A comparison between the Compact and other contemporaneously enacted compacts confirms the absence of a good-faith limitation in the Compact. Pp. 19–21.

2. North Carolina’s two exceptions are overruled. Pp. 21–26.

(a) It was reasonable for the Special Master to deny without prejudice North Carolina’s motion for summary judgment on the merits of Plaintiffs’ equitable claims in Counts III–V. The Special Master concluded that those claims require further briefing, argument, and, possibly, discovery. The Court approves of the Special Master’s reasonable exercise of his discretion to manage the proceedings. Pp. 21–