While most water disputes in the United States have historically been located in the west, there are an increasing number of eastern disputes as well. In fact, the US Supreme Court issued two new decisions in late January regarding interstate water litigation, and both were located in the east. One of those cases opened the gate for non-state entities to participate directly as parties in interstate litigation before the Supreme Court, while the other seems to have closed the gate at least partially on interstate groundwater disputes.

Catawba River Litigation

In the first case, South Carolina v. North Carolina, the US Supreme Court issued a decision granting two non-state parties the right to intervene in interstate litigation regarding the Catawba River. While the procedural question of properly intervening parties may only be considered exciting fare to the most technocratic of water lawyers, the decision’s implications for the process of interstate water resource management within the United States are significant.

The Catawba River runs from the mountains of North Carolina southward across the interstate boundary to South Carolina, where it joins with the Santee River before flowing to the Atlantic Ocean. In 2007, South Carolina brought an original action against North Carolina before the Supreme Court, requesting that the court equitably apportion the river between the two states and set aside certain interbasin transfers approved by North Carolina. The interbasin water transfers previously approved by North Carolina included diversions to the city of Charlotte, the cities of Concord and Kannapolis, the Catawba River Water Supply Project (CRWSP) and various unnamed transferees. (Note that there were intrastate challenges to the Concord and Kannapolis transfer also, and a settlement was reached just before the Supreme Court decision that limited its size.)

The Supreme Court decided the case 5-4 on a non-ideological vote, with Justice Alito authoring the majority opinion and Chief Justice Roberts the dissent. Both groups of justices claimed to apply the standard test for intervention of non-state parties into interstate litigation, from New Jersey v. New York:

An intervenor whose state is already a party should have the burden of showing some compelling interest in his own right, apart from his interest in a class with all other citizens and creatures of the state, which interest is not properly represented by the state.

The majority applied that test to find that the CRWSP and Duke Energy Carolinas, LLC can intervene in the lawsuit, while the city of Charlotte cannot. The majority reasoned that the CRWSP is a unique bistate entity delivering water and collecting revenues on both sides of the border, with an internal balance that would not be adequately represented by the two state governments. Likewise, the majority found that Duke Energy, which owns and operates 11 dams on the Catawba River for electric generation purposes, is unique in that it holds a Federal Energy Regulatory Commission license and recently passed through the relicensing process on the basis of a 70-party settlement agreement that neither state signed nor has any interest in protecting. On the other hand, the city of Charlotte is a typical municipality and transferee of the type that North Carolina will represent in the litigation, and thus it does not need to be allowed to intervene in order to protect its interests.

The minority opinion protested that although New Jersey v. New York states the proper test, in that and other equitable apportionment precedents, the Supreme Court has never approved the intervention of an entity other than a state, the United States or an Indian tribe. The dissent argued that outcome is correct because the rights to be litigated in original jurisdiction cases are sovereign rights that non-sovereign entities can have no interest in, and because the Supreme Court is ill-equipped to handle complex water adjudications except in the special circumstances presented by sovereign disputes. On that basis, the minority would have refused all three requesting entities the right to intervene in the litigation.

This decision represents a major change in the process for equitable apportionment cases. As noted by the minority opinion, previously non-state entities were not allowed to participate as parties, although they might be heard as amicus curiae. While this decision may not allow interstate cases to “take on the characteristics of an interpleader case, with all those asserting interests in the limited supply of water jostling for their share like animals at a water hole”, it certainly opens the corral gate enough to encourage the animals to try, and the cowboys/justices of the peace may have some work to do halting the stampede and running down strays. (Like this metaphor, the new precedent established by the court can and probably will be taken too far.) I would certainly advise non-state entities to evaluate in each interstate case before the Supreme Court whether they can participate directly to protect their own interests or whether they will have to continue sitting on the fence watching the rodeo.

Memphis Sand Aquifer Litigation

In the second case, the Supreme Court appeared to go in the opposite direction, closing the gate to interstate groundwater litigation. The State of Mississippi had filed a motion for leave to file a complaint against the city of Memphis, Tennessee, alleging that the city water utility was over-pumping the Memphis Sand Aquifer and drawing Mississippi’s groundwater across the interstate boundary to its detriment. The Supreme Court denied the motion without prejudice, but also without a written decision explaining its rationale or what Mississippi would need to do differently if it decides to file an amended complaint.

The Supreme Court did summarily cite two interstate water precedents. In Colorado v. New Mexico, the Supreme Court had considered when it is appropriate in an equitable apportionment case to enjoin an existing water diversion in one state in favor of a potential future diversion in another. The Supreme Court stated that:

Our cases establish that a state seeking to prevent or enjoin a diversion by another state bears the burden of proving that the diversion will cause it ‘real or substantial injury or damage.’

As a rule of proof at trial in that case, the Supreme Court held that the state seeking an injunction bears the initial burden of proof that the diversion will cause substantial injury, and after such proof is made, the burden shifts to the other state to show that the existing diversion should be allowed to continue under the principles of equitable apportionment. The second cited opinion, in Virginia v. Maryland, merely cited the Colorado v. New Mexico case for the same general proposition.

The Supreme Court’s summary citation of the rule from Colorado v. New Mexico is ambiguous, and can be interpreted in at least three ways. One theory is that the Court decided the complaint filed by Mississippi did not allege a proper cause of action because it did not assert a substantial injury recognized by the Court, in this case an injury to the groundwater aquifer. It is true that prior interstate water cases have involved surface water disputes, but it seems scientifically and jurisprudentially outdated for the Court to deny that a substantial injury can occur based on one state’s alleged over-pumping of groundwater from a shared aquifer. The state courts have dealt with groundwater disputes for over a century in the United States, and the problem of over-extraction from interstate groundwater aquifers is a significant one. If this was the Supreme Court’s rationale, the outcome seems contrary to the purpose of its original jurisdiction, which is to resolve intractable issues between the sovereign states.

A second theory is that the Supreme Court did not believe Mississippi had carried its initial burden of proof in showing a substantial injury. That outcome, however, seems to misplace the timing of the test in Colorado v. New Mexico. The normal timing for application of such burden-shifting rules is after the party bearing the burden has presented its prima facie case at trial, or perhaps following a motion for summary judgment. Such a decision would not normally be made on the basis of a complaint alone, unless, as covered by the first theory, the complaining state would never be able to state a claim because the injury alleged was of an insufficient type.

A third theory is based on the Supreme Court’s simultaneous denial of certiorari for a 5th Circuit decision on the same groundwater dispute, Hood ex rel. Mississippi v. City of Memphis, that held Mississippi could not sue Memphis in the lower federal courts. The 5th Circuit decision was based on Mississippi failing to name the State of Tennessee as a necessary and indispensable party. Under this theory, in order to obtain redress Mississippi would need to sue Tennessee in an original action before the Supreme Court. There is a certain logic to such a theory, except that the two cases cited by the Supreme Court in its denial of Mississippi’s motion for leave to file a complaint had nothing to do with such a procedural rationale.

In the end, Mississippi has apparently been left in the position of having no recourse against Memphis in any federal court forum for alleged over-pumping of a shared groundwater aquifer. Without the threat of litigation, Memphis is unlikely to make any future concessions to Mississippi, and the Supreme Court decisions seem to close any gate to joint sustainable management of the Memphis Sand Aquifer, except perhaps in an original jurisdiction action against Tennessee. Since the Supreme Court did not explain its decisions, it is unknown whether that was the intended result. In any event, although other states (or non-state entities per South Carolina v. North Carolina) in interstate groundwater disputes may be discouraged by this decision, it is likely that some state, some day will make a run at the Supreme Court again on this issue, and hopefully they will receive a fuller answer.