Equity had long been established when the Constitution and the Judiciary Act of 1789 incorporated it into the new American legal system. In concept, it dates back to Aristotle; in implementation, at least back to the English Chancery courts. (1) These developed as "court[s] of conscience," free to provide individualized justice that could not come from the general rules of common law. (2) But despite equity's long pedigree, the scope of equitable power remains difficult to define. (3) The Supreme Court's declaration that American equity jurisdiction follows the principles of judicial remedies that developed in the Chancery courts provides a good starting point. (4) But that said, at the time the Founders imported equity from the Chancery courts, there was no consensus among their contemporaries in England as to what exactly equity was. (5) Some argued that equity judges had the power to render a just judgment any time natural law compelled a result different from the dictates of common law precedent (the "expansive view"). (6) Others saw equity merely as a parallel system that did not in essence differ from the common law: governed by precedent and bound by rules (the "restrictive" view). (7) That debate came to the United States along with equity, and it has continued to the present day. (8) The Supreme Court has always been at the center of this debate. During the first half-century of the nation's existence, the Court fluctuated from an expansive view of equity to a restrictive one and back again. (9) Recent Supreme Court opinions have given voice to both views of equity. (10)
This Note will propose a synthesis between the restrictive and the expansive views. Part I will examine a 1999 case to elucidate the principles underlying each view. Part II will review in depth a 2015 case that may indicate a shift in the Court's equity jurisprudence. Part III will use the principles from Part I and the facts from Part II to outline an effective synthesis of the two views, ensuring that courts retain the flexibility afforded by equity while seeing that flexibility cabined to particularly exigent circumstances.
GRUPO MEXICANO AND THE COMPETING VIEWS OF EQUITY
In Grupo Mexicano de Desarollo, S.A v. Alliance Bond Fund, (11) a bare majority of the Court took the restrictive view over a spirited dissent arguing for the expansive view. The facts of that case, briefly, are as follows: In anticipation of a company's impending insolvency, creditors had sought and received a temporary restraining order (TRO) preventing the company from transferring certain assets lest those assets disappear before debts could be satisfied. (12) Justice Scalia, writing for the Court, held that the district court lacked equitable power to grant the TRO. (13) According to Justice Scalia, the only equitable remedies available to federal courts are those "traditionally accorded by courts of equity"--traditionally, that is, as of 1789, when the Constitution and the Judiciary Act of 1789 adopted what then existed in equity. (14) And at that time, equity courts did not issue anything analogous to TROs for creditor protection. (15) Justice Ginsburg dissented in relevant part. Writing for herself and three other Justices, she argued that the Founders had adopted equitable principles rather than equitable practices, leaving room for evolution and expansion of equitable remedies. (16)
In following a narrow view of equity jurisdiction, Justice Scalia focused on the dangers of unbounded equity. He wrote that, "[t]o accord a type of relief that has never been available before" would mean that courts were not simply flexible, but effectively omnipotent. (17) He also noted that, to the extent that changed circumstances in business practices necessitated new remedies, Congress was in a much better position to make that assessment than the Court. (18) Justice Scalia then undertook a lengthy examination of the development of debtor-creditor law, noting that a balance had developed over time, which courts should be loath to unsettle. (19) Given these factors, expansive equity would be an unbridled power to upset a careful balance on an issue about which the Court lacks expertise--a potentially destructive capability that Justice Scalia likened to a "nuclear weapon." (20) Justice Ginsburg, on the other hand, argued for an expansive view of equity to ensure that justice be done in any given dispute between actual parties. (21) Without the power to issue a TRO, the district court would have been unable to protect the interests of the creditors--a distasteful outcome especially given the possibility that the debtor was gaming the system to buy time to dispose of its assets. (22)
Three years later, by the same 5-4 majority, the Court once again took the narrower view of equitable remedies in Great-West Life & Annuity Insurance Co. v. Knudson. (23) This case involved a provision of the Employee Retirement Income Security Act (ERISA) authorizing certain persons to initiate civil actions to obtain "appropriate equitable relief." (24) The question was whether this language precluded a claim for money due under a contractual obligation--a form of relief sounding in law, not equity. (25) Writing for the Court, Justice Scalia noted that equitable relief "must mean something less than all relief" (26) and was, in fact, limited to those remedies "typically available in equity." (27) Dissents by Justice Stevens and Justice Ginsburg called this an "ancient classification" (28) and an "obsolete distinction" (29) that had no place in a modern regulatory scheme enacted by a Congress likely unconcerned with such finer points of history. (30)
Note, however, that the battlefield had shifted. Grupo Mexicano was about whether to expand the universe of remedies to include those not available in law or equity in 1789; Great-West was about drawing the law-equity boundary line within that (unexpanded) universe. Then followed a smattering of decisions on equitable remedies which, though in some respects highly significant, did not really change the scope of equity. Three subsequent ERISA cases applied the Great-West framework. (31) Cases on injunctions and equitable defenses dealt with the availability of well-established equitable remedies in certain contexts. (32) Nothing suggested that the Court was on the verge of backing away from the restrictive view reflected in Grupo Mexicano.
THE MOOD CHANGES: KANSAS V. NEBRASKA
Kansas v. Nebraska, (33) decided in January 2015, involved a dispute between the named states, along with Colorado, over rights to water from the Republican River. While the case raised issues regarding the Court's original jurisdiction and natural resources law, it also represented a significant shift in the Court's equity jurisprudence. The Court in Kansas v. Nebraska did not explicitly overrule Grupo Mexicano; in fact, neither the majority opinion nor the three opinions concurring in part and dissenting in part so much as mentioned the case. Perhaps, given the relatively rare and unique invocation of original jurisdiction, none of the Justices thought Grupo Mexicano applied. (34) But if Kansas v. Nebraska did not overrule Grupo Mexicano, it at least represents a change in the Court's equitable mood. While the Court in Grupo Mexicano refrained from approving extraordinary equitable remedies, the Court in Kansas v. Nebraska showed no such compunction, and indeed ordered remedies perhaps beyond what was essential.
The facts of Kansas v. Nebraska, though somewhat complicated, are essential to this analysis. The waters at issue were those of the Republican River, which, along with its tributaries, irrigates farmland in both Nebraska and Kansas. (35) The river begins in Colorado, and the three states formed an interstate compact ("Compact") in 1943 to allocate a share of river water to each state: 11% to Colorado, 49% to Nebraska, and 40% to Kansas. (36) The Compact charged officials from the three states with computing the river's "Virgin Water Supply" (that is, the volume of water originating within the Republican River Basin) and ensuring that each state stayed within its allocation, but prescribed few details for how to do either task. (37) In 1997, a dispute arose over whether Nebraska's pumping of water from underground aquifers within the basin should count against its allocation. (38) Kansas argued that this activity was subject to the Compact, while Nebraska argued that it was not. (39) The Supreme Court agreed with Kansas, and the states negotiated a settlement ("Settlement") to address groundwater pumping and other Compact issues. (40) The Settlement adopted a set of "Accounting Procedures" which in turn adopted a formula called the "Groundwater Model." (41) This was not a modification of the Compact's terms, but rather a way of better calculating both the Virgin Water Supply and the volume of water used. (42) As requested by Kansas, the Groundwater Model estimated the impact of groundwater pumping on usage. (43) It also estimated the amount of "imported" water--that is, water that originated elsewhere but...