Monday, January 7, 2013

U.S. Supreme Court to Hear Water Rights Dispute Implicating Commerce Clause

The U.S. Supreme Court will hear a case dealing with how an interstate water compact relates to the commerce clause. At first glance, Tarrant Regional Water District v. Herrmann, 11-889 (cert. granted Jan. 4, 2013), doesn't look to be that important outside of Texas and Oklahoma. On a closer look, though, this dispute over whether the Commerce Clause is violated by one state's interpretation of an interstate water agreement (called a "compact" under the Constitution). The Water District explains in its petition for certiorari:
The question in this case is whether the Red River Compact—an interstate agreement between Texas, Oklahoma, Arkansas, and Louisiana that was intended to assure “equitable apportionment” of water among the signatory States—authorizes Oklahoma to discriminate against Texas consumers in the allocation of water, in a manner that otherwise would violate the Commerce Clause. The Tenth Circuit held that it does, pointing to general language in the Compact that gives the signatory States authority over the water allocated to them within their borders. As a consequence, Oklahoma is using avowedly protectionist rules to prohibit the transfer of water to petitioner Tarrant Regional Water District (“Tarrant”), a political subdivision of the State of Texas responsible for supplying water to nearly two million
This holding is wrong in two fundamental respects: it departs from this Court’s emphatic direction that congressional intent to waive the requirements of the dormant Commerce Clause must be stated expressly and unambiguously; and it misreads the plain language of the Compact, which allocates an equal portion of the disputed water to Texas and thereby preempts inconsistent Oklahoma law. 
The Tenth Circuit’s holding is of enormous significance. It will encourage protectionist legislation by States that participate in the dozens of interstate water compacts that use language indistinguishable from that of the Red River Compact, creating uncertainty about the long-standing network of interstate agreements that governs the allocation of water throughout much of the Nation. More broadly, it undermines the “clear statement” rule governing congressional abrogation of the dormant Commerce Clause that this Court has held vital to prevent economic Balkanization among the States. Most immediately, it denies millions of Texas consumers water that they desperately need and were allocated by the Compact. Review by this Court accordingly is imperative.
On the Commerce Clause argument, the State of Oklahoma responds:
In passing the Compact, Congress approved a perpetual allocation to Oklahoma of water from the Red River. Tarrant argues that it is an open question whether a federal court could undo that allocation relying on the judicially-created dormant Commerce Clause. That doctrine should never be held to displace express legislation taking action regulating commerce among the States. Such a holding would create a separation of powers dispute beyond the wildest conception of the framers.  
There is no question that compacts are federal law, and “congressional consent transforms an interstate compact within [the Compact Clause of the federal constitution] into a law of the United States” such that the construction of such an agreement “presents a federal question.” Cuyler v. Adams, 449 U.S. 433, 438 (1981); see also NYSA-ILA Vacation & Holiday Fund v. Waterfront Commission, 732 F.2d 292, 298 (2d Cir. 1984). As the Cuyler Court noted, “The requirement of congressional consent is at the heart of the Compact Clause. By vesting in Congress the power to grant or withhold consent, or to condition consent on the States’ compliance with specified conditions, the Framers sought to ensure that Congress would maintain ultimate supervisory power over cooperative state action that might otherwise interfere with the full and free exercise of federal authority.” Cuyler, 449 U.S. at 439-40. The “full and free exercise of federal authority” is particularly relevant to interstate compacts apportioning water among the states.  
Because the Red River Compact is federal law, as a matter of logic and law it cannot itself violate the dormant Commerce Clause. ... The dormant Commerce Clause was said to fill in the “great silences” in the commerce clause. Hood and Sons v. DuMond, 336 U.S. 525 (1949). When Congress allows the clause to remain dormant, action is required by this Court. When Congress approves a compact, however, it breaks its silence, and replaces dormancy with action. In that case, the dormant Commerce Clause has no purpose.
But what's this case really about, you ask? As the New York Times reports, it's about money. North Texas needs this water to continue it's phenomenal growth.

SCOTUSblog has posted the parties' briefs and the amicus briefs. The decision below from the Tenth Circuit is here. As an aside, I don't follow the Florida-Georgia-Alabama water wars closely, but I wonder whether this case could have implications for it. Do any readers know?