At issue is whether we should give preclusive effect to a state court judgment on a collective bargaining matter. In a declaratory judgment action, the District Court held that despite a prior New Jersey judgment, the Delaware River Port Authority had no duty under its congressionally approved bi-state compact to recognize certain collective bargaining rights of supervisory employees. We will reverse.

In 1999 the Fraternal Order of Police, Penn-Jersey Lodge 30 ("Lodge 30") and the Policemen's Benevolent Association Intercounties Local 30 ("Local 30") sought recognition and the right to collectively bargain for supervisory law enforcement personnel from the Delaware River Port Authority (DRPA) and the Port Authority Transit Corporation (PATCO), a subsidiary of the DRPA. A majority of "superior officers" — corporals and sergeants with supervisory capacity — employed by the DRPA and the PATCO had authorized the unions to represent them as their exclusive bargaining agents.1

The DRPA sought a declaratory judgment in the United States District Court for the Eastern District of Pennsylvania that (1) the authority to fix and determine terms and conditions of employment, including compensation of the superior officers, rests solely with the DRPA; and (2) the DRPA was not required to recognize or bargain collectively with the unions. The unions contended a prior New Jersey judgment merited preclusive effect. Fraternal Order of Police, Penn-Jersey Lodge 30 v. DRPA, 323 N.J.Super. 444, 733 A.2d 545, 547 (1999), cert. denied, 162 N.J. 663, 745 A.2d 1213 (1999), cert. denied, 530 U.S. 1275, 120 S. Ct. 2743, 147 L. Ed. 2d 1007 (2000) ("Lodge 30").

There is a prior history of labor-management relations between the parties. In 1975, the DRPA voluntarily recognized Lodge 30 as the collective bargaining agent for DRPA patrol officers and until 1996, negotiated a series of collective bargaining agreements.2 In 1996, labor negotiations stalled between the DRPA and Lodge 30. After the DRPA altered the employment terms and conditions for patrol officers, Lodge 30 brought suit in New Jersey state court to "require the continuation of good faith bargaining" under the prior arrangement. Id. The New Jersey Superior Court agreed, finding New Jersey and Pennsylvania had "parallel or complementary legislation of a different nature... which ... clearly gives public employees a right to freely organize and designate representatives and also to negotiate in good faith." Id. (quotation and citation omitted). Holding the New Jersey and Pennsylvania statutes demonstrated a shared public policy favoring labor arbitration, the Superior Court granted Lodge 30's motion for summary judgment. Id. at 547-48.

The New Jersey Superior Court, Appellate Division, affirmed, holding:

Although neither of the creator states of a bi-state agency may unilaterally impose its legislative will on the bi-state agency ... the agency may be subject to complementary or parallel state legislation.... This parallel or complementary legislation need not be nearly identical and specifically apply to the agency. Rather, the public policy of both states, articulated in parallel statutes that are substantially similar but do not specifically include defendant, is applicable to a bi-state agency, although the statutory scheme of each state is not.

Id. at 551 (quotations and citations omitted). The New Jersey Supreme Court denied a petition for certification. 745 A.2d 1213 (1999). The United States Supreme Court denied certiorari. 530 U.S. 1275 (2000).

The unions cite the preclusive effect of Lodge 30. Additionally, they claim the New Jersey and Pennsylvania statutes providing collective bargaining rights to patrol officers also apply to the DRPA. See N.J.STAT.ANN. § 34:13A-1 et seq. (West 1990 & Supp.1993), PA.STAT.ANN. tit. 43, § 217.1 et seq. (1961 & Supp.1993). These "complementary" statutory schemes, the unions contend, demonstrate each legislature has "concurred in" the legislation of the other, effectively modifying the DRPA Compact.

The District Court granted the DRPA's motion for summary judgment, concluding that under federal constitutional and statutory law, the DRPA Compact can only be amended by legislation of both New Jersey and Pennsylvania that (1) "expressly applies" to the DRPA; and (2) is "substantially similar" in substance, imposing specific additional duties on the DRPA. DRPA v. Fraternal Order of Police, 135 F. Supp. 2d 596, 606-09 (E.D.Pa.2001). Because neither legislature expressly applied their state's labor laws to the DRPA, the District Court ruled the DRPA was not obligated to comply with state laws regarding union recognition and collective bargaining for law enforcement officers. Id. The District Court also rejected the unions' issue preclusion arguments, holding Lodge 30 only addressed the DRPA's obligation to bargain with a voluntarily recognized union. Id. at 609-11.3 This appeal followed.4

In 1931, the State of New Jersey and the Commonwealth of Pennsylvania legislatively created the Delaware River Port Authority to develop the ports of Philadelphia and Camden and to operate bridges and provide mass transportation across the Delaware River. N.J.STAT.ANN. § 32:3-2 et seq.; PA.STAT.ANN. tit. 36, § 3503 et seq. Under the Compact Clause of the United States Constitution, "No State shall, without the Consent of Congress... enter into any Agreement or Compact with another State." U.S. CONST. art. I, § 10, cl. 3. The United States Congress formally approved the DRPA Compact in 1932.

The DRPA is a "public corporate instrumentality of the Commonwealth of Pennsylvania and the State of New Jersey." N.J.STAT.ANN. § 32:3-2, PA.STAT.ANN. tit. 36, § 3503. But it is not an "arm" of either state. Nor is it vested with attributes of state sovereignty. Peters v. DRPA, 16 F.3d 1346, 1351-52 (3d Cir. 1994). The DRPA's powers and duties are framed entirely by the Compact. It is governed by a sixteen-member Board of Commissioners.5 A majority of each state's delegates to the Board must approve any DRPA action. Id. The Compact allows either state's legislature to grant the DRPA additional powers or impose on it additional duties by passing legislation that is "concurred in by the legislation of the other [state]." N.J.STAT.ANN. § 32:3-5, PA.STAT.ANN. tit. 36, § 3503.

Article IV(e) of the Compact provides the DRPA Commissioners the right to "appoint, hire or employ ... agents and employees, as it may require for the performance of its duties, by contract or otherwise, and fix and determine their qualifications, duties and compensation." N.J.STAT.ANN. § 32:3-5, PA.STAT.ANN. tit. 36, § 3503. Under Article IV(e), the DRPA maintains a Bureau of Police to protect the public and DRPA property. The Bureau consists of patrol officers, sergeants, and corporals, who are accorded "all of the powers ... and all of the immunities conferred by law on police officers or municipal police officers in ... the State of New Jersey and the Commonwealth of Pennsylvania." N.J.STAT.ANN. § 32:4-6, PA.STAT. ANN. tit. 36, § 3504.1. The DRPA Compact itself does not expressly grant DRPA employees collective bargaining rights. Nor does the Compact impose a duty on the DRPA's management to bargain collectively with unions.

First, we consider whether the District Court wrongfully declined to give issue preclusive effect to Lodge 30, which held that legislation need not "specifically" apply to the DRPA Compact to modify the DRPA's obligations to collectively bargain with its police officers. We exercise plenary review over this question of law.6

Under the doctrine of issue preclusion, a determination by a court of competent jurisdiction on an issue necessary to support its judgment is conclusive in subsequent suits based on a cause of action involving a party or one in privity. E.g., Kremer v. Chem. Constr. Corp., 456 U.S. 461, 485, 102 S. Ct. 1883, 72 L. Ed. 2d 262 (1982) ("[T]he usual rule is that merits of a legal claim once decided in a court of competent jurisdiction are not subject to redetermination in another forum."); Allen v. McCurry, 449 U.S. 90, 96, 101 S. Ct. 411, 66 L. Ed. 2d 308 (1980) ("Congress has specifically required all federal courts to give preclusive effect to state-court judgments whenever the courts of the State from which the judgments emerged would do so."); Montana v. United States, 440 U.S. 147, 153, 99 S. Ct. 970, 59 L. Ed. 2d 210 (1979) ("Under collateral estoppel, once an issue is actually and necessarily determined by a court of competent jurisdiction, that determination is conclusive in subsequent suits based on a different cause of action involving a party to the prior litigation."). Stated broadly, issue preclusion prevents relitigation of the same issues in a later case.7

More than two hundred years ago, the first Congress enacted the predecessor to 28 U.S.C. § 1738, the Full Faith and Credit Act, which now provides: The ... judicial proceedings of any court of any ... State, Territory, or Possession [of the United States] ... shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.

Section 1738 therefore requires state court decisions be given the same preclusive effect in federal court they would be given in the courts of the rendering state. The phrase "every court within the United States" encompasses all courts, regardless of jurisdiction. The statute directs federal courts considering the preclusive effect of another jurisdiction's prior judgment to look not to federal preclusion law or practice but to what the other jurisdiction would decide regarding its preclusive effect.8

The threshold issue on appeal is whether the District Court should have given preclusive effect to the narrow issue of the DRPA's collective bargaining obligations, previously litigated in Lodge 30.9 A federal court looks to the law of the adjudicating state to determine its preclusive effect. Greenleaf v. Garlock, Inc., 174 F.3d 352, 357 (3d Cir.1999). In New Jersey, when a judgment of a court of competent jurisdiction determines a question in issue, the judgment estops the parties and privies from relitigating the same issue in a subsequent proceeding. City of Plainfield v. Pub. Serv. Elec. & Gas Co., 82 N.J. 245, 412 A.2d 759, 765 (1980). Such a determination is conclusive on either the same or a different claim. Id. at 766.

New Jersey courts apply a five-pronged test to determine whether collateral estoppel should bar relitigation of an issue: (1) the issue must be identical; (2) the issue must have actually been litigated in a prior proceeding; (3) the prior court must have issued a final judgment on the merits; (4) the determination of the issue must have been essential to the prior judgment; and (5) the party against whom collateral estoppel is asserted must have been a party or in privity with a party to the earlier proceeding. In re Estate of Dawson, 136 N.J. 1, 641 A.2d 1026, 1034-35 (1994).10

As noted, the District Court rejected any preclusive effect of Lodge 30: The issue in this case, but not present in Lodge 30, is whether, in the absence of voluntary recognition, DRPA is obligated under the terms of the Compact to recognize and bargain collectively with the Unions.... Therefore, because the duty of the DRPA under the Compact to recognize and bargain collectively with police officers was not relevant to the cause of action or the issues involved in Lodge 30 and was not considered by the Appellate Division, Lodge 30 is not a bar to the instant action.

We disagree. Lodge 30 satisfies the requirements outlined in Dawson and has preclusive effect here. In Lodge 30, the "identical issue" — whether an "express statement" is necessary to modify the DRPA's obligations to bargain with its patrol officers — was "litigated in the prior proceeding." See 733 A.2d at 550 (referencing the DRPA's contention that only "the adoption by both Compact States of nearly identical State legislation expressly intended to apply" to the DRPA may alter the Compact); id. at 551:

The DRPA contends ... that these voluntary acts [of union recognition] do not provide any basis to impose on it the impasse-resolution procedures applicable to public employers in New Jersey to resolve the current impasse between it and its police officers.... [T]he agency may be subject to complementary or parallel state legislation. This parallel or complementary legislation need not be nearly identical and specifically apply to the agency. Rather, the public policy of both states, articulated in parallel statutes that are substantially similar but do not specifically include defendant, is applicable to a bi-state agency....

(quotations and citations of New Jersey cases omitted). There was a "final judgment on the merits." The "determination" that an express statement is unnecessary to modify the DRPA Compact was "essential to the prior judgment." And the party against whom issue preclusion is asserted was "a party or in privity with a party to the prior adjudication." As noted, the DRPA litigated both lawsuits. Cf. United States v. Silliman, 167 F.2d 607, 616-18 (3d Cir.1948).

Additional factors support our conclusion. The DRPA could have removed Lodge 30, which presented federal constitutional questions, but chose instead to litigate in state court. Also, Lodge 30 was decided less than three years ago and New Jersey courts have not called it into question in the interim. Furthermore, the Lodge 30 decision has not proven "inequitable." Nor do we review the soundness of the Lodge 30 decision. The issues in that case are not before us and have been rejected in the state appellate proceedings where the parties elected to litigate. Whether we would have reached the same result as the New Jersey court is not at issue.

The effort to distinguish the facts and issues between this litigation and Lodge 30 is unavailing. For the purposes of issue preclusion, any distinction between this litigation and Lodge 30 is legally insignificant.12 The plaintiffs in Lodge 30 sought to represent patrol officers, whose union the DRPA had recognized for more than twenty years, while the plaintiffs here seek to represent their "superior officers." It is true that there was no voluntary recognition of a bargaining unit for the superior officers. But the Lodge 30 judgment was not based on prior voluntary recognition. 733 A.2d at 551.13 The Lodge 30 court held the unions' right to negotiate was statutory, not contractual, so the "voluntary" recognition issue was irrelevant to its judgment.

Under this set of facts, we must give effect to the Lodge 30 court's determination that in the context of collective bargaining for law enforcement officers, amending the DRPA Compact does not require "express" statutory amendment by its creator states. 733 A.2d at 551 (finding the DRPA "may be subject to complementary or parallel state legislation.... [that] need not be nearly identical and specifically apply to the agency," provided the "public policy of both states, [as] articulated in parallel statutes that are substantially similar" is complementary).14 If a New Jersey state court had heard this case in the first instance, we believe it would find Lodge 30 controlling.15 Issue preclusion is proper when factual differences "are of no legal significance whatever in resolving the issue presented in both cases." United States v. Stauffer Chem. Co., 464 U.S. 165, 174, 104 S. Ct. 575, 78 L. Ed. 2d 388 (1984).

That the litigation concerns federal law does not alter the analysis in this case.16 Compacts, though approved by Congress, are contracts between states. These contracts rarely contain uniform terms. As Justice Frankfurter observed:

Since a Compact comes into being through an Act of Congress, its construction gives rise to a federal question. But a federal question does not require a federal answer by way of a blanket, nationwide substantive doctrine where essentially local interests are at stake. A Compact, is after all, a contract. Ordinarily, in the interpretation of a contract, the meaning the parties attribute to the words governs the obligations assumed in the agreement. Similarly, since these States had the freedom to waive or to refuse to waive immunity granted by the Eleventh Amendment, the language they employed in the Compact, not modified by Congress, should be limited to the legal significance that these States have placed upon such language, not to avoid the obligations they undertook, but to enforce the meaning of conventional language used in their law.

Petty v. Tenn.-Mo. Bridge Comm'n, 359 U.S. 275, 285, 79 S. Ct. 785, 3 L. Ed. 2d 804 (1959) (Frankfurter, J., dissenting) (citations omitted); see also Hess, 513 U.S. at 43-44, 115 S. Ct. 394.

State courts may answer federal questions.17 The unions and the DRPA agreed to litigate this issue of federal law in New Jersey courts. If those courts answered federal questions erroneously, it remained for state appellate courts, and ultimately for the United States Supreme Court, to correct any mistakes. Error in a prior judgment is not a sufficient ground for refusing to give it preclusive effect. Cf. Salazar v. United States Air Force, 849 F.2d 1542, 1548 (5th Cir.1988) (finding a prior state court decision "wrong and unacceptable," but holding that under 28 U.S.C. § 1738, a later federal court was bound to enforce it "[n]o matter how intrinsically erroneous the state district court's unappeased judgment"). New Jersey courts have found that New Jersey and Pennsylvania, the parties to the Compact, have not required an "express statement" to modify the DRPA's obligations to collectively bargain with its patrol officers.18 Under this set of facts, that determination must be granted preclusive effect.19

The United States Supreme Court has cautioned that a "question or right distinctly adjudged in the original action cannot be disputed in a subsequent action, even though the determination was reached upon an erroneous view or by an erroneous application of the law," where "a party ... freely and without reservation submits his federal claims for decision by the state courts ... and has them decided there." Montana, 440 U.S. at 163, 99 S. Ct. 970 (quotation and citation omitted); see also Fed. Dept. Stores, Inc. v. Moitie, 452 U.S. 394, 398, 101 S. Ct. 2424, 69 L. Ed. 2d 103 (1981) ("A judgment merely voidable because based upon an erroneous view of the law is not open to collateral attack."). Were we sitting on the New Jersey courts, we might have interpreted the respective statutes and the DRPA's obligations to its patrol officers differently. But we may not reconsider the New Jersey judgment.

We turn now to a matter not considered by the District Court.20 Because the District Court found no "express statement" authorizing collective bargaining, it did not consider whether New Jersey and Pennsylvania law enforcement labor laws, providing police officers the right to organize and collectively bargain, were "complementary and parallel." As noted, the District Court refused to grant preclusive effect to Lodge 30's determination that an "express statement" was not necessary to modify the DRPA's collective bargaining obligations for law enforcement officers. For the same reasons, the District Court should have given preclusive effect to Lodge 30's holding New Jersey and Pennsylvania law enforcement labor laws apply to the DRPA.

Lodge 30 held that New Jersey and Pennsylvania have enacted parallel legislation that gave law enforcement employees the right to freely organize and designate representatives for good-faith negotiations. 733 A.2d at 548-49. The court elaborated:

Our review of each state's enactments governing police and fire labor relations, the New Jersey Police and Fire Public Interest Arbitration Reform Act and the Pennsylvania Collective Bargaining by Policemen or Firemen Act, reveals that each state has made a policy decision in favor of public interest arbitration for police officers. Certainly, there are some differences in each scheme.... Although we discern some differences in each state's legislation governing public employer-employee labor disputes, we conclude that those differences do not negate the basic public policy of each state that their public employees are entitled to engage in collective negotiations with their employer. The discrepancies are not so significant to render the two statutory schemes substantially dissimilar. Thus, the New Jersey statutes and the Pennsylvania statutes are complementary and parallel.

Id. at 552-54 (citations omitted).

The DRPA suggests the differences between the statutory schemes are too numerous to label them "complementary." There are some "differences" — including the different bargaining rights of first-level supervisors in New Jersey and Pennsylvania.21 But for our purposes, the New Jersey courts have declared the similarities between the schemes significant enough to label them "complementary."

Therefore, we will give preclusive effect to the determination that DRPA and PATCO supervisory law enforcement officers have the right to bargain collectively with management.22 But we express no opinion on other issues relating to bi-state compacts that fall outside the specific context of labor negotiations with DRPA and PATCO law enforcement employees.

For the foregoing reasons we will reverse and remand for proceedings consistent with this opinion.23