Kansas v. Nebraska: the United States Supreme Court Demonstrates That You Can Lead the Court to Water

• Publication year: 2022

49 Creighton L. Rev. 391. KANSAS V. NEBRASKA: THE UNITED STATES SUPREME COURT DEMONSTRATES THAT YOU CAN LEAD THE COURT TO WATER

KANSAS V. NEBRASKA: THE UNITED STATES SUPREME COURT DEMONSTRATES THAT YOU CAN LEAD THE COURT TO WATER(PRECEDENT), BUT YOU CAN'T MAKE THE COURT FOLLOW IT

Shannon Behm

I. INTRODUCTION

Historically, when the United States Supreme Court determines what remedy to apply in a lawsuit involving a dispute over an interstate compact, the Court looks to contract law.(fn1) In Kansas v. Nebraska,(fn2) the Court determined that they have broad equitable powers regarding an interstate water compact.(fn3) In Kansas, the state of Kansas sued the state of Nebraska to enforce the terms of an interstate water compact, specifically, an agreement the two states had entered into along with Colorado in 1943.(fn4) The Court decided the case in favor of Kansas, reasoning that the terms of the water compact needed to be modified in order to reflect the intentions of the states.(fn5)

This Note will first review the facts and holdings of Kansas.(fn6) This Note will then discuss the theories applied to past cases involving interstate compacts.(fn7) This Note will next illustrate that courts should apply contract law to water compact disputes, and therefore, courts should interpret compacts in accordance with their express terms.(fn8) This Note will then argue that the Court applied equitable powers in an unprecedented way by modifying the interstate compact and awarding disgorgement.(fn9) Finally, this Note will conclude that the Court established a new precedent for cases involving interstate water compacts when it applied broad equitable powers to alter the compact.(fn10)

II. FACTS AND HOLDING

In Kansas v. Nebraska,(fn11) the state of Kansas sued the state of Nebraska to determine the states' rights, under the Republican River Compact(fn12) ("Compact"), to the Republican River Basin waters ("Ba-sin").(fn13) This was not a novel issue, as this case marked the second time since 1998 that Kansas and Nebraska had asked the United States Supreme Court to decide their respective rights to the waters of the Basin.(fn14) The root of the Compact between Colorado, Kansas, and Nebraska dated back to the Dust Bowl of the 1930's.(fn15) The Republican River drains the 24,900-square-mile Basin, which originates in Colorado and flows through Nebraska and Kansas.(fn16) During the 1930's, the Basin suffered an extended drought and deadly flooding.(fn17) In response to these extreme conditions, the Federal Government recommended the construction of reservoirs and irrigation projects in the Basin to control flooding and disperse stored water.(fn18) In its proposal, the Government insisted Colorado, Kansas, and Nebraska agree to an allocation of the Basin's water resources.(fn19) Kansas and Nebraska negotiated and agreed to the Compact, which Congress later approved in 1943, as required by the United States Constitution.(fn20)

A compact is an agreement entered into by two or more states.(fn21) The major purpose of the Compact in question was to disburse the Basin waters in the most resourceful way.(fn22) The Compact also established an equitable division of the Basin waters, eliminated issues that could cause controversies, and promoted courteous interstate in-teractions.(fn23) The Compact defined the area of the Basin, which encompasses all of the land the Republican River and tributaries naturally drain in Nebraska, Colorado, and Kansas.(fn24) The states agreed to set terms on the Basin waters undepleted by human activities, referred to as the Virgin Water Supply.(fn25) The Compact made specific allocations to each state by averaging the annual Virgin Water Supply that originated in designated drainage areas of the Basin in past years; additionally, it outlined how those allocations could be increased or decreased in the future.(fn26) The allocations were set at roughly eleven percent to Colorado, forty percent to Kansas, and forty-nine percent to Nebraska.(fn27) It became the duty of the three states to administer the Compact, which authorizes the water official in each state to administer the public water supply.(fn28)

The three states acted in accordance with the Compact from 1942 until 1998, when Kansas filed a complaint with the United States Supreme Court claiming Nebraska established thousands of wells that were connected to the Republican River, which increased Nebraska's pumping of groundwater.(fn29) Kansas claimed that Nebraska's increased pumping of groundwater violated the Compact because the pumping depleted the Basin's stream flow, and therefore, counted against Nebraska's water allotment.(fn30) Nebraska argued groundwater pumping was outside the scope of the Compact.(fn31) As a result, the Court appointed a Special Master to decide the issue.(fn32) A Special Master is a judicial officer who is appointed by a court to exercise a specific function and make decisions which are reviewed by the appointing court.(fn33) After the Special Master interpreted the Compact in favor of Kansas, the states entered into negotiations aimed at clarifying the Compact's terms on groundwater pumping.(fn34) The negotiations resulted in a Final Settlement Stipulation ("Settlement"), which the states signed in 2002.(fn35)

The States agreed that the Settlement could not change their respective rights under the Compact and instead would only clarify the terms of the Compact in order to promote compliance with the Com-pact.(fn36) The Settlement promoted accurate accounting for the supply and use of the Basin's water and detailed mechanisms to help the states remain within their prescribed allocations.(fn37) The Settlement implemented water accounting procedures based on two and five year running averages to help anticipate year-to-year fluctuations in water supply.(fn38) Additionally, the Settlement clarified that when a state pumps groundwater, that groundwater will count as a portion of the state's consumption of allocated water in the amount that it depletes the Basin's stream flow.(fn39) Finally, the Settlement reinforced the Compact's term that excluded imported water from the accounting of each state's water use.(fn40)

Unfortunately, the Settlement proved unsuccessful and both states complained of its inefficiency by 2007.(fn41) Kansas complained that Nebraska was substantially exceeding its allotment of water, while Nebraska argued that it was not exceeding its allotment of water because the Settlement's procedures were improperly charging it for use of imported water.(fn42) After attempting non-binding arbitration and failing to agree over these concerns, Kansas brought this current claim to the United States Supreme Court.(fn43) The case was again referred to a Special Master who determined Nebraska had knowingly consumed in excess of its prescribed share of water; the Special Master proposed that Nebraska pay Kansas $3.7 million for its water loss and an additional $1.8 million in partial disgorgement of its gains.(fn44) The Special Master also recommended implementing Nebraska's request to modify the Settlement's accounting procedures to guarantee that its terms would not charge the states for the use of imported water.(fn45) Both Nebraska and Kansas filed exceptions to the Special Master's ruling in the United States Supreme Court.(fn46) An exception is a formal objection to a court's ruling.(fn47) Nebraska objected to the award of partial disgorgement and Kansas objected to the changing of the Settlement's accounting procedures.(fn48) The Court reviewed the Special Master's findings and ultimately overruled the states' exceptions and adopted the recommendations made by the Special Master.(fn49)

In reviewing and affirming the Special Master's recommendations, the Court noted its original jurisdiction over this case was equitable in nature.(fn50) In doing so, the Court recognized its inherent authority to equitably distribute interstate streams among states in order to stop an inequitable taking of water by upstream states.(fn51) However, the Court clarified that when states enter into compacts with one another, the tribunal's authority shifts from apportioning to declaring rights and enforcing the compact.(fn52) This is exactly what happened when Kansas and Nebraska entered into the Compact.(fn53) Without a compact a court has authority to equitably apportion interstate streams; but when a compact is involved, the role of the Court is only to declare the states' rights under the compact and carry out the compact's terms.(fn54) The Court further explained that its equitable remedies are not all eliminated by the existence of a compact, and therefore, it may still invoke equitable principles consistent with the Compact to provide effective relief for violations.(fn55)

The Court determined the appropriate remedy in a breach of a compact and settlement case is relief consistent with the terms of the compact.(fn56) Both states agreed that Nebraska had overconsumed its allotment of water, and therefore, the $3.7 million loss to Kansas was an appropriate remedy.(fn57) The Court's decision to award $1.8 million in disgorgement was the result of the Special Master's finding that Nebraska knowingly breached the Compact terms.(fn58) Although Kansas and Nebraska had entered into a compact, the Court exercised its authority in granting equitable relief to ensure compliance with the Compact's terms.(fn59)

The...