Nebraska’s Water Use Will Cost It $5.5 Million

(CN) – Nebraska owes Kansas $5.5 million for “knowingly” consuming more than its share of water from the Republican River Basin, the U.S. Supreme Court ruled Tuesday.
     The 28-page opinion in the case, which invokes the Supreme Court’s rare original jurisdiction, upholds the finding of a special mater that Nebraska must pay Kansas for consuming too much water from the Republican River, which flows through both states.
     Originating in Colorado, the Republican River crosses the northwestern corner of Kansas into Nebraska, then cuts back into northern Kansas, draining a 24,900-square-mile watershed that irrigates the substantial agriculture in those states.
     In a compact signed in the 1930s, the three states agreed to apportion 49 percent of the water supply to Nebraska, 40 percent to Kansas and 11 percent to Colorado for “beneficial consumptive use.” The Republican River Compact Administration was formed to calculate the basin’s water supply and determine whether each state’s water use remained in its allocation.
     But in 1998, Kansas complained directly to the Supreme Court that Nebraska had constructed thousands of hydraulic groundwater wells connected to the Republican River Basin, depleting stream flow.
     A special master agreed with Kansas that groundwater pumping counted against Nebraska’s annual allotment of water, and the high court affirmed.
     A settlement reached in 2002 allowed water usage to be calculated on five-year running averages, which would be reduced to two-year averages in periods of drought. It provided that groundwater pumping would count as part of the state’s water consumption. Imported water that eventually seeps into the river would not count, however, because it did not originate in the basin.
     Kansas accused Nebraska at the first five-year review of exceeding its water allocation, and a special master agreed, finding that Nebraska “knowingly failed” to comply with the compact, consuming 70,829 acre-fee of water in excess of its share.
     The master recommended awarding Kansas $3.7 million for its loss, and $1.8 million in partial disgorgement of Nebraska’s gains, but stopped short of issuing an injunction against Nebraska.
     Both states appealed portions of the master’s report to the Supreme Court. Nebraska objected to the master’s finding that the breach was “knowing,” and Kansas sought a larger award and injunctive relief.
     The Supreme Court affirmed the master’s report 6-3 on Tuesday, finding that “Nebraska failed to put in place adequate mechanisms for staying within its allotment in the face of a known substantial risk that it would otherwise violate Kansas’s rights.”
     Nebraska’s efforts to curb its water use “came at a snail-like pace,” and its overuse actually rose from 2003 to 2005, which clearly should have indicated to state officials that it could not delay taking corrective action, Justice Elena Kagan wrote for the majority.
     “Still more important, what was too late was also too little,” Kagan added. “The water management plans finally adopted in 2005 called for only a 5 percent reduction in groundwater pumping, although no evidence suggested that would suffice. And the state had created no way to enforce even the paltry goal the plans set. The Nebraska Legislature chose to leave operational control of water use in the hands of district boards consisting primarily of irrigators, who are among the immediate beneficiaries of pumping.”
     The special master also got it right in calling for reforms to the states’ settlement agreement, the court found. As it stands, the settlement’s accounting procedures inadvertently charge a state for using imported water – a result clearly unintended by the parties.
     Kagan said a modification of the contract is necessary “to prevent serious inaccuracies from distorting the states’ intended apportionment of interstate waters.”
     Justice Anthony Kennedy joined the court’s liberals in the majority, and Chief John Roberts joined with a caveat, taking issue with the call to reform the contract.
     The court’s dissenting justices slammed the majority for acting to rewrite the state’s water-use contract, even if the mistake was written into the contract.
     “Invoking equitable powers, without equitable principles, the majority ignores the principles of contract law that we have traditionally applied to compact disputes between sovereign States,” Justice Clarence Thomas wrote, joined by Justices Antonin Scalia and Samuel Alito.
     Thomas also found that Nebraska’s breach of the compact was not deliberate, and therefore would not order disgorgement. He said the majority’s opinion “authorizes an arbitrary award of disgorgement for breach of that contract. And, it invents a new theory of contract reformation to rewrite the agreed-upon terms of that contract.”

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