New Jersey and Delaware have clashed over the Delaware River for more than two centuries. The most recent dispute was over a proposed natural gas unloading wharf on the New Jersey shore. Pursuant to the Supreme Court's decision in New Jersey v. Delaware II, Delaware owns the riverbed immediately adjacent to the New Jersey shore. Since the 1970s, Delaware has been regulating these lands to prevent certain industrial uses. However, a 1905 interstate compact between New Jersey and Delaware gave New Jersey the right to exercise "riparian jurisdiction" over improvements appurtenant to its shores. Projects which extend from the New Jersey shore into the Delaware riverbed thus need approval from both New Jersey and Delaware. This concurrent jurisdiction led to the recent controversy: New Jersey wanted to allow the disputed natural gas unloading facility so that it might gain associated jobs and tax revenues; Delaware sought to prevent construction due to the industrial nature of the wharf.

Delaware refused to issue a permit for the proposed project, and the dispute quickly escalated. New Jersey threatened to withdraw state pension funds from Delaware banks; Delaware countered, threatening to utilize the National Guard to protect its riverbed territory. The climax of hysteria was reached when a New Jersey legislator inquired into re-commissioning a World War II battleship, the U.S.S. New Jersey. The ship, currently a museum piece on the Camden waterfront, would apparently have been used to repel an armed invasion of the New Jersey shore.

New Jersey eventually sought legal remedy, and the state filed a complaint against Delaware in the United States Supreme Court. New Jersey claimed that it had the exclusive authority over improvements appurtenant to its shores, and sought to enjoin Delaware from exercising police power over such improvements. Delaware claimed that as sovereign over the riverbed, it retained police power over New Jersey improvements which extended beyond New Jersey territory. The Court assigned the case to a Special Master. The Special Master determined that the 1905 compact granted New Jersey the right to extend improvements into Delaware territory, but that Delaware retained its police power to exclude such improvements. The Court upheld the recommendations of the Special Master, but also held that Delaware only had the authority to exclude from the riverbed New Jersey improvements which exhibited "extraordinary character." However, this novel "extraordinary character" test seems to have appeared in the Court's analysis without previous instance.

In Part II, this Note outlines the common law riparian rights that form the background of the controversy in New Jersey v. Delaware III and compares the facts and holding of the present case with the similar case of Virginia v. Maryland. Part III reconciles the recommendations made by the Special Master in each case and shows that these suggestions, though well-reasoned, nevertheless did not resolve the issue at the heart of New Jersey v. Delaware III. Finally, this Note examines the shortcomings of the Court's extraordinary character test and proposes a reasonableness test in its stead.