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Case Information Statement Nj Chancery Division

Case Information Statement Nj Chancery Division

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the contract clause is one of the few limitations on state power that's directly included in the united states constitution but how does it work exactly united states trust company of new york versus new jersey provides an example in 1962 the new york and new jersey legislatures passed a statutory covenant to improve and expand public transportation and the port authority the covenant sought to protect port authority bondholders by stating that toll revenues could be used to pay bond debt but not to subsidize passenger rail service however during the national energy crisis in 1974 the two states passed laws repealing the covenant to allow toll funds to be used to subsidize rail service they hoped the new use of the toll funds would help improve the mass transit system and discourage automobile use united states trust company of new york sued new jersey in new jersey state court arguing that the covenant repeal violated the constitution's contract clause the trial court

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