U.S. Supreme Court Carefully Avoids Commerce Clause Implications of Water Rights Dispute

The U.S. Supreme Court recently decided this this year's water law case, Tarrant Regional Water District v. Herrmann, 569 U. S. _, No. 11-889 (2013). I've written about how those of us in Florida and the Southeast should watch this one since it may have implications if our states enter into water compacts in the future. I've also written about how although this case has constitutional law implications in the dormant commerce clause, the U.S. Supreme Court didn't seem interested in addressing that issue. And indeed, it was not, which is probably why the opinion was unanimous.

Over at SCOTUSblog, Columbia Law Professor Thomas Merrill offers a good one-paragraph summary of the meat of the opinion, which interpreted the water compact between the states:

The Red River Compact allocates water between four states, including Texas and Oklahoma. Among other things, it provides that each of the four states can take twenty-five percent of the excess water in a particular subbasin in the river. Texas argued that, under the compact, it could take twenty-five percent of all of the excess water, and that it had could go into Oklahoma’s part of the subbasin to do that. Oklahoma disagreed, arguing that Texas could only take twenty-five percent of the excess water from its own part of the subbasin. The Court agreed with Oklahoma, ruling that Texas was not authorized to take water from tributaries in Oklahoma without Oklahoma’s consent.

On the question that readers of the blog are likely more interested in--the commerce clause issue--Prof. Merrill writes:

The Court also rejected the Texas water district’s dormant Commerce Clause claim, but did so in a way that deprives this part of the decision of any significance. The Court read the water district to argue that the Commerce Clause was violated because Oklahoma was discriminating against out-of-state users with respect to water that was left “unallocated” under the Compact. The argument failed, according to the Court, because there would be no unallocated water in Oklahoma unless Texas could show that Oklahoma was taking more than twenty-five percent of the excess water, and it had not asked for an accounting to establish this fact. In effect, the Court read the compact as superseding the dormant Commerce Clause with respect to the twenty-five percent share allocated to each state; a constitutional issue would be presented only if it could first be established that water was available in a state above this threshold and the state was discriminating against interstate sources with respect to the excess.

At this point you, like me, are probably asking what the significance of Tarrant will be going forward. Prof Merrill continues:

What then is significant about this decision for those not directly engaged in battles over the Red River Compact? The Court establishes, in a footnote, that a congressionally approved compact, as federal law, preempts state law that conflicts with the compact under the Supremacy Clause. It also establishes, in another footnote, that the presumption against preemption does not apply to interstate compacts, because “the States themselves have drafted and agreed to the terms” of the compact. There is some quotable language in the section about the states’ sovereign prerogative to control water resources within their territories, which will undoubtedly be trotted out in future cases involving apportionment of waters, the public trust doctrine, and the like. And portions of the Court’s opinion provide an excellent example of “pragmatic” interpretation, especially where it talks about the administrative difficulties that would be created by recognizing a cross-border right to divert water without additional guidance from Congress or the affected states.

The Tarrant Regional Water District has now been sent packing and needing to develop new water sources quickly. Its director is already facing some tough questions about whether the $6M+ dollars spent in the battle were worth it.

Water Law and the Dormant Commerce Clause - Is the Tarrant Case Much Ado about Nothing?

I've written previously about this year's water law case before the U.S. Supreme Court. Tarrant Regional Water District v. Herrmann, 11-889 (argued April 23, 2013). I've written about how this case has constitutional law implications, and that those of us in Florida and the Southeast should watch this one.

It may end up being much ado about nothing. (Sound familiar this term?) In today's oral argument, the implications of the dormant commerce clause on water law were barely mentioned. In fact, the dormant commerce clause was only mentioned three times. Suffice it to say the Justices don't seem interested in addressing that issue.

But in addressing what they were interested in, the Justices had a great deal of questions on this complex area of the law. As one report describes it,

Some questions sounded sympathetic to the thirsty Tarrant Regional Water District, which seeks Oklahoma water to serve Fort Worth-area customers. Other questions seemingly supported Oklahoma. Many questions, though, simply underscored the legal and technical complications now confronting justices dealing with what may be the biggest water law case of the year. “You read this brief that you submitted,” Justice Elena Kagan told the Obama administration attorney at one point, “and it gives you a kind of a headache.” 

At another point, Justice Antonin Scalia told a lawyer, “I don’t understand what you just said,” while Justice Sonia Sotomayor acknowledged that she “can’t make rhyme or reason” out of some provisions of a water deal. And following one drawn-out scenario that seemed to reach a dead end, Justice Stephen Breyer offered a simple one-word verbal shrug: “Anyway.” 

While some of the uncertainty may have been professed, in order to make a point, it did make clear what a different world water law can be. “They don’t address a lot of questions like this one,” attorney Charles A. Rothfeld, who represented Tarrant, noted following the seemingly inconclusive hourlong oral argument.

If you're as perplexed about all this as the Justices seemed to be, here is a great backgrounder article, complete with a graphic of exactly what water rights this compact covers. In the end, though, the Supreme Court will be addressing a very basic question: can Oklahoma keep Texas away from its water?

Must Congress Approve an Interstate Water Compact's Restrictions on Interstate Commerce? An Update on the Tarrant Case

I reported in January that the U.S. Supreme Court would hear a case dealing with how an interstate water compact relates to the commerce clause. Tarrant Regional Water District v. Herrmann, 11-889 (cert. granted Jan. 4, 2013). 

As Megan Herzog discussed at Legal Plant, the case "could have consequences for urban metropolises seeking to satisfy their growing populations’ water demand as climate change impacts water supply reliability, as well as for states experimenting with protectionist policies to preserve natural resources within their borders." She further thinks that "it is unlikely that the Supreme Court will reach a Commerce Clause analysis, but let us nonetheless take Tarrant as an opportunity to evaluate whether anti-export laws like Oklahoma’s hold water. Efficiently managing scarce resources in the face of climate change requires an interstate market; the kind of retaliation-bating, “what’s mine is mine” mentality that Oklahoma displays in its anti-export water laws is not productive." Another commentator, a water law attorney, wrote that the decision below "bodes poorly for water right holders in a broad range of relations with their respective states, and will likely have an impact on the interpretation of other interstate stream compacts or interstate water transfers in streams without compacts in place."

Some of my readers will probably recall that Florida is not a signatory to a water compact. Even so, it was in the past, and will probably have to work one out in the future with Alabama and Georgia. We have seen our own water wars here, though they haven't been as severe as those the Wall Street Journal describes in its backgrounder on Tarrant . So this will be a case for us in the Southeast to watch, since it could determine what that future compact will look like. One blogger explained the potential implications of the case outside of Oklahoma, Texas, and Arkansas:

[I]t’s the Water District’s constitutional argument that the [we] should pay attention to. The Water District claims that the “protectionist” character of the Red River Compact violates the dormant Commerce Clause of the U.S. Constitution. The Commerce Clause of Article 1 of the U.S Constitution gives Congress the exclusive authority to regulate interstate commerce. The dormant Commerce Clause is the legal theory that because Congress regulates interstate commerce, States cannot enact legislation that unreasonably restricts interstate commerce and prevents States from being “protectionist” with their natural resources. 

According to the Water District, the Supreme Court has consistently required that Congress unambiguously acknowledge and approve a statute’s or a Compact’s unreasonable restrictions on interstate commerce .... In the Water District’s view, Congress has to explicitly approve the restrictive nature of the Compact and Congress’ intent cannot be gleaned by looking at the restrictive language in the Red River Compact as a whole. 

Thus, if the Red River Compact falls, other compacts may be subject to challenge. The District's opening brief and supporting amicus briefs have been filed. The questions presented are: 

1. Whether the Red River Compact, which allocates to each of the signatory States an “equal share” of the water in a specified subbasin, preempts discriminatory Oklahoma laws that prevent certain signatory States from obtaining their equal share of that water.
2. Whether Congress’s approval of Compact language providing that the Compact shall not “be deemed ... to interfere” with each State’s “appropriation, use, and control of water .. not inconsistent with its obligations under this Compact” manifests an unmistakably clear congressional consent to discriminatory state laws.

On the first question, the District states that the decision below is unsupportable because the plain language of the "Red River Compact guarantees Texas equal rights to the use of specified water." On the Commerce Clause question, which is probably more interesting for readers of this blog, the District summarizes its argument: 

Oklahoma’s discriminatory water legislation, which would preclude Texas users from obtaining water located in but not apportioned to Oklahoma, also cannot survive scrutiny under the Commerce Clause. That legislation, which discriminates on its face against out-of-state water users, is virtually per se unconstitutional. Although recognizing that principle, the Tenth Circuit thought that Congress authorized Oklahoma’s legislation by approving the Compact. But such authorization is found only when Congress expressly announces its approval for discriminatory state laws. The provisions of the Compact invoked by the court of appeals, however, say nothing whatsoever about the Commerce Clause or state authority to discriminate against interstate commerce. It is immaterial that some provisions of the Compact generally defer to state water law; as this Court has recognized, such general language must be understood as deferring only to valid state law, an ingredient of which is conformity with the requirements of the Commerce Clause.

The United States, though, wrote in its amicus brief that the Supreme Court should vacate and remand the case because the interstate compact preempts Oklahoma state law, and that the Commerce Clause question shouldn't be reached. We'll see how Oklahoma responds soon.

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
people. 

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?