A door opens for business in water disputes

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Oregon and other western states have entered agreements governing interstate water use. Stakeholders, including Oregon and California, recently signed two such agreements intended to govern the use of water in the Klamath River Basin.

But where agreements fail, lawsuits can follow.

Many issues within and outside the Klamath River Basin agreements remain unresolved and could eventually lead to litigation. A recent decision worth noting by the U.S. Supreme Court in a case titled South Carolina v. North Carolina, allows private parties to more easily participate in water disputes between states that end in federal litigation.

The Supreme Court has “original” and “exclusive” jurisdiction —that is, the right to consider the facts and the law of a case without the case first having been addressed by a lower court — in a very small number of cases. Water and resource disputes between two or more U.S. States are among them. In these cases, the court appoints an attorney, called a “special master,” to conduct a trial-like proceeding, collect evidence, and produce a recommended decision that the Supreme Court may (or may not) follow.

It is unusual, but not unheard of, for these disputes to end up in court. In the last decade, it has happened four times. Since statehood, Oregon has been a defendant three times. Twice, in 1908 and 1936, the dispute was with Washington, once over the border along the Columbia River and once over use of Walla Walla River waters. Oregon won both. In 1983, Idaho sued Oregon and Washington over management of fish in the Columbia-Snake River system (Oregon, with Washington, won again). Increasing water scarcity and rising demand make it likely that these cases will only become more common in the future.

The Supreme Court’s recent decision arose from a dispute between North Carolina and South Carolina. North Carolina authorized withdrawals from the Catawba River to provide fresh water to the cities of Concord and Kannapolis. South Carolina claimed that these withdrawals deprive it of its fair share of the Catawba River’s water, and sought “equitable apportionment” of the Catawba River between the two states, ultimately limiting North Carolina’s withdrawals.

Up until now, participation in these suits has generally been limited to the involved states, the federal government, and Indian tribes. In South Carolina v. North Carolina, however, three other entities sought to join the litigation and represent their own interests:

• • Duke Energy, operator of 11 dams and reservoirs on the Catawba and the region’s major utility;
• • The Catawba River Water Supply Project, a joint venture between North and South Carolina that treats and distributes Catawba River water to roughly 200,000 people; and
• • The City of Charlotte, the largest single user of Catawba River water.

In a divided 5-4 decision (Justices Alito, Stevens, Scalia, Kennedy, and Breyer in the majority, Chief Justice Roberts and Justices Ginsburg, Thomas, and Sotomayor in the dissent), the Supreme Court ruled that Duke Energy and the Catawba project could participate, though Charlotte could not.

The majority found it “likely that any equitable apportionment of the river will need to take into account the amount of water that Duke Energy needs to sustain its operations,” and that there is no other similarly situated entity on the river, setting Duke’s interests apart. The Catawba project was found to have a unique interest in maintaining the delicate balance between two separate states. Charlotte’s interests, the majority judges said, would be adequately represented by North Carolina. The dissenting justices worried that the ruling could turn a system intended to solve interstate disputes into “a forum for airing private interests.”

The upshot of this decision in South Carolina v. North Carolina is that the door is open to private water users to more easily intervene in water resource disputes between states. If Oregon sues or is sued by another state over water, affected private parties may now seek to join the fray.

Jeff B. Kray is a partner at Marten Law PLLC, where he leads the firm’s Water and Wetlands Practice Group. For more information see www.martenlaw.com or contact Jeff at jkray@martenlaw.com or 206.292.2608. Marten Law associate Adam Orford co-authored this article.