State v. States Colorado
135 S. Ct. 1042
SCOTUS2015Background
- Republican River Compact (1943, approved by Congress) apportioned "virgin water supply originating in" the Basin among Nebraska (~49%), Kansas (~40%), and Colorado (~11%) and required joint administration by the RRCA using streamflow measurement and later-developed accounting procedures.
- Kansas sued Nebraska in earlier litigation over groundwater pumping that depletes streamflow; the States negotiated a 2002 Final Settlement Stipulation to implement Compact administration, including Accounting Procedures and a Groundwater Model and multi-year averaging rules for compliance.
- Under the 2002 Settlement, imported water (e.g., from the Platte River) was not to count toward a State’s Compact allocation; the Accounting Procedures/Model were intended to implement that exclusion.
- In the 2005–2006 accounting period Nebraska exceeded its Compact allocation by 70,869 acre-feet; Kansas sought damages and injunctive relief; Nebraska counterclaimed to reform the Accounting Procedures to avoid being charged for imported Platte River water.
- A Special Master found Nebraska knowingly exposed Kansas to substantial risk of breach, recommended Kansas be paid $3.7 million in damages plus $1.8 million partial disgorgement (but no injunction), and recommended amending the Accounting Procedures ("5-run formula") to exclude imported water. The Court adopted the Master’s recommendations.
Issues
| Issue | Kansas's Argument | Nebraska's Argument | Held |
|---|---|---|---|
| Did Nebraska breach the Compact in 2005–2006 and was the breach knowing? | Nebraska knowingly exceeded its allotment; therefore culpable. | Nebraska acted in good-faith, took steps to comply, and could not reasonably anticipate the breach. | Yes; Nebraska ‘‘knowingly exposed’’ Kansas to a substantial risk and thus knowingly failed to comply. |
| Is disgorgement (partial) an appropriate remedy beyond compensatory damages? | Disgorgement required to deter future breaches; Kansas proposed higher disgorgement. | Disgorgement improper because breach was not deliberate and award lacks contractual basis. | Court upheld partial disgorgement ($1.8M) to deter opportunistic upstream advantage given Nebraska’s reckless conduct. |
| Is an injunction ordering future compliance and enabling contempt appropriate? | Injunction needed to secure future compliance. | Not necessary given remedial alternatives and state regulatory fixes. | No injunction: RRCA reforms and threat of future disgorgement suffice; Kansas failed to show imminent risk of repeat violation. |
| Should the Accounting Procedures be reformed to avoid counting imported (Platte) water? | Procedures were agreed to; Court should not rewrite the parties’ technical agreement. | Procedures mistakenly counted imported water; reform (5-run formula) required to conform to Compact/Settlement intent. | Adopt reform: amend Procedures (5-run formula) because they materially mismeasured imported water and thus conflicted with Compact/Settlement and federal-law limits. |
Key Cases Cited
- Kansas v. Colorado, 185 U.S. 125 (1902) (establishing Court authority to equitably apportion interstate streams)
- Texas v. New Mexico, 462 U.S. 554 (1983) (the Court’s role in declaring and enforcing compact rights; equitable remedies to enforce compacts)
- Texas v. New Mexico, 482 U.S. 124 (1987) (permitting additional equitable relief to ensure compliance with interstate water compacts)
- Cuyler v. Adams, 449 U.S. 433 (1981) (congressional consent makes interstate compacts federal law)
- Porter v. Warner Holding Co., 328 U.S. 395 (1946) (federal-law public-interest cases may warrant broader equitable remedies)
- Virginian R. Co. v. Railway Employees, 300 U.S. 515 (1937) (recognizing public-interest weight in equitable relief for federal regulatory schemes)
- Kansas v. Colorado, 533 U.S. 1 (2001) (discussing remedies in compact breaches; historical remedies include water delivery)
- Kansas v. Colorado, 543 U.S. 86 (2004) (approving alteration of a measuring methodology to better effectuate compact apportionment)
- Colorado v. New Mexico, 467 U.S. 310 (1984) (deference and presumptive correctness to Special Master's factual findings in original-jurisdiction actions)