Argument analysis: State’s veto power brings Republican River modeling dispute to the Supreme Court

October 17, 2014
Republican River Basin by District

Republican River Basin by District

From the SCOTUSblog (Ryke Longest):

On Tuesday, the Court heard arguments in an original jurisdiction dispute between Kansas, Colorado, and Nebraska over flows of a common river: the Republican River. After the states disputed the terms of their 1943 compact, they enacted a 2003 settlement stipulation. When the parties confronted a breach by Nebraska and a dispute over the water supply models they used to calculate Nebraska’s share, they reached an impasse. Kansas exercised its veto power, sending the dispute first to arbitration, then the Special Master and to the Supreme Court.

At oral argument, Kansas disputed the special master’s proposal to alter the settlement stipulation’s water accounting procedures based on a claim of mistake. Kansas spent most of its argument focused on the accounting procedures changes suggested by the special master. Kansas argued that the special master exceeded the charge and upset a carefully negotiated compromise by siding with one party. Nebraska similarly focused on the accounting issue, but characterized the carefully negotiated bargain as the principle that imported water should not be counted, with the formula representing a tool for implementation as opposed to a term. Justices pushed back on both sides.

Kansas argues Against the Five-Run Solution

Kansas Solicitor General Stephen McAllister came out forcefully arguing that the settlement stipulation itself was a carefully crafted compromise. McAllister stated that all parties were aware that the accounting procedure was subject to uncertainty. Kansas’s primary objection to the special master’s report involves the special master’s recommendation to amend the accounting procedure to implement Nebraska’s proposed “five-run solution.”

Justice Stephen Breyer pushed back on the argument against reformation, noting pointedly that, due to a mistake in the model, Nebraska’s use of “imported water” from sources outside the Republican River basin is counted against it under the settlement stipulation’s accounting procedures. Justice Breyer continued: “And nobody wanted that. That would be totally unfair. … So what do you suggest we do about the mistake? Nothing?”

McAllister responded that they should send the case back and do nothing about the mistake, since it is not a mutual mistake. He emphasized that the intersection between the “five-run solution” and other issues were highly complicated and that Nebraska had gotten concessions in other areas of the settlement which kept the accounting mistake from being unfair. McAllister pointed out the effect of groundwater recharge credits as an example: “We gave Nebraska a high credit for groundwater recharge at a percentage much higher than Colorado and Kansas get and Nebraska crowed about that as a concession they got from Kansas that was worth 15 to $20 million annually, that’s Exhibit K, 133, in the record.”

Justice Antonin Scalia asked McAllister about the role of deference in the case. McAllister said that there was no deference owed the special master and argued that the special master ignored trade-offs. McAllister asserted that the parties needed to renegotiate the entire set of trade-offs in order to be fair, rather than allowing the special master to set aside one set of trade-offs to the benefit of Nebraska and Colorado.

Chief Justice John Roberts asked what Kansas thought of its chances if the matter were sent back to the Republican River Compact Administration, for resolution. (All disputes under the compact are run first though this body, consisting of one representative of each of the three states.) McAllister responded, “Twenty-some years ago, Kansas introduced a resolution in the RRCA that said, how about we all resolve that we will comply with the compact. Kansas voted yes, Colorado voted yes, and Nebraska voted no. So this goes back a long ways.” McAllister went on to explain that its proposed disgorgement remedies against Nebraska were necessary.

The United States argues for the special master’s disgorgement remedy

Assistant to the Solicitor General Ann O’Connell argued on behalf of the United States in support of the special master’s Report. O’Connell defended disgorgement by pointing out that disgorgement must be sufficient to discourage opportunistic breach, citing to the Restatement of Restitution and Unjust Enrichment. Justice Scalia asked whether the United States was overstating case law by citing the Restatement, telling her that “I don’t think the Restatement can change our law by just saying something by consensus of law professors.” O’Connell cited back to the classic case of Texas v. New Mexico to support her position. In response to questioning about the amount of disgorgement, O’Connell avoided taking any position at odds with the special master. Justice Kagan asserted that the $1.8 million figure recommended was less than what Nebraska had gained by its breach, arguing against an equitable balancing approach.

Nebraska argues that Kansas’s veto requires the Court to break the impasse

David Cookson, Nebraska’s chief deputy attorney general, argued that the bargain Nebraska struck with Kansas was that water imported from the Platte River Basin would not be counted towards Nebraska’s allocation of the Republican River. Justice Scalia questioned whether the deal was actually that broad, suggesting instead that Nebraska had agreed to a formula, not a broader principle.

Scalia explained: “The parties knew that this formula would not be entirely accurate and they agreed to a fair price, that is, none of this water should be counted. But they said the way to figure out whether this water is coming in or not is this formula. Why shouldn’t they be held to that formula?”

Cookson responded that the settlement specifically provided the parties with the ability to modify the accounting formulas. Nebraska asked the Republican River Compact Administration to modify the accounting procedures, to which Kansas objected exercising its veto powers. The issue was then sent to arbitration and finally to the special master who recommended the change to the formula, the “five-run solution.”

Chief Justice Roberts asked Cookson if he agreed that the special master would have been powerless to change the formula if it had been part of the original compact as opposed to a later settlement. Cookson readily agreed that amending the compact would be beyond the power of the special master, citing Alabama v. North Carolina for support.

Justice Kagan picked back up the thread of Justice Scalia’s question and extended it further. She asked Cookson what would happen if the parties had negotiated over three distinct formulas and had chosen one. Under that situation, she wanted to know, would it be right to continue to use the formula chosen going forward? Cookson pushed back that changing the accounting procedures is basic process under the agreement, and that prior to the current dispute, fourteen such formula changes have been approved by the three states. Cookson continued that this time is different, because Kansas has objected. He reasoned that the exercise of a veto can kick the dispute to the Supreme Court to break the impasse created by the veto process in the compact itself, likening the problem to the one faced in the Pecos River Compact, brought before the Court in Texas v. New Mexico.

Chief Justice Roberts countered that the formula, as specific language in the contract, should control the general statement that imported water not be counted. Cookson argued that the imported water stipulation was the specific term and the formula was just the tool designed to deliver that deal.

Cookson defended Nebraska’s response as not showing an intentional violation of either the compact or the stipulation. He argued that Nebraska could not have foreseen dust-bowl-like conditions. He argued that there is no need for an injunction or for disgorgement, tangling with Justice Scalia again on how those remedies interact.

Kansas rebuts Nebraska’s argument that the formula was just a toolkit

In rebuttal, McAllister returned to Justice Kagan’s line of questioning the choice of formulas for accounting made by the parties in the settlement stipulation. McAllister pointed out that the formula that Nebraska is seeking to have reformed was actually selected by Nebraska as its first choice during settlement negotiations. Citing the result in the boundary dispute of New Hampshire v. Maine, McAllister told the Court that it had given “New Hampshire the answer we think you should give Nebraska today, which is: ‘Sorry; you made the deal, and just because you now think you have a better way of doing it doesn’t mean we should rewrite the contract.’”

In closing, Justice Sonia Sotomayor asked McAllister how much money is represented by the difference between the accounting preferred by Nebraska and that preferred by Kansas. McAllister answered with the amount of water in dispute – between 8,000 and 10,000 acre-feet. (An acre-foot is the amount of water needed to cover an acre of land to a depth of one foot, approximately 325,851 gallons.) When Sotomayor pressed for a dollar figure, McAllister told her that the special master had valued the water to Nebraska at $362 per acre-foot. On that note, the Court adjourned.

Ryke Longest is the Director of the Environmental Law and Policy Clinic and a Clinical Professor of Law at the Duke University School of Law.

More Republican River Basin coverage here.

Supreme Court hears arguments on dispute in Republican Basin — The Imperial Republican

October 16, 2014
Republican River Basin by District

Republican River Basin by District

From The Imperial Republican (Russ Pankonin):

The nine justices of the U.S. Supreme Court heard oral arguments from Kansas and Nebraska Tuesday on the 2013 findings of Special Master William Kayatta, Jr.

Kayatta issued the ruling last year in an ongoing dispute dating to 2010 between the two states over Nebraska’s overuse of water in 2006.

Kayatta recommended Nebraska pay Kansas $5.5 million—$3.7 million as the actual damages Kansas suffered by Nebraska’s overuse; and $1.8 million to Kansas for the gain Nebraska received by pumping extra water in 2006.

He also said the accounting methods used to calculate water supplies in the Republican River Basin should be revised.

Two primary issues
The oral arguments by the states and questioning by the justices Tuesday centered on two main subjects:

  • Whether Kansas was entitled to a significant disgorgement or damage payment for Nebraska’s compact violation; and
  • Whether new accounting procedures for measuring imported water supplies into the basin, sought by Nebraska and recommended by Kayatta, should be allowed.
  • Kansas Solicitor General Stephen McCallister was the first to present arguments before the high court and set out by addressing the changes in the compact accounting. He said Kansas does not agree with Nebraska and the special master that the method for calculating imported water supply should be rewritten.

    “That agreement itself (2002 settlement) was a complex set of concessions and compromises,” he told the justices.

    The water model is an estimation at best of what’s going in the basin, he said. Parties were aware of the imported water phenomenon when the agreement was reached, he added. He said it wasn’t fair the water master focused solely on what Nebraska wanted changed while Kansas had issues that weren’t addressed. Justice Sonia Sotomayor said Kansas was invited to provide a better solution to the accounting issues but did not. McAllister said they were working on one but didn’t have time to develop it.

    If contract principles were applied to the disagreement, the remedy would be to rescind the compact settlement.

    “And I don’t think you want that,” Sotomayor said. McAllister agreed that none of the states would want that.

    So if rescinding the agreement isn’t possible, she said, then it falls back to reforming or revising the contract.

    She asked McCallister, “If Kansas couldn’t come up with an alternative, why shouldn’t the court just accept the special master’s recommendation?”

    McCallister said Nebraska’s change in accounting procedures came late in the process, as a counterclaim during arbitration.

    Justice Ruth Bader Ginsburg asked about the process when the states can’t agree.

    McAllister said there’s the option of non-binding arbitration, “which we all love and almost always works out our disputes.”

    If that doesn’t work, and the states feel strongly about it, they can request a special master, he said. “But again, I don’t think we’ll get there because the parties can and have negotiated successfully.”

    Sotomayor was skeptical of this. “But I thought you had gone through the alternatives,” with no resolution, she said.

    He said they brought this case to the high court because Kansas believed there was a compact violation by Nebraska that needed a remedy.

    Disgorgement remedy

    That remedy would be for the justices to grant Kansas a significant disgorgement payment from Nebraska to get their attention, McAllister said.

    Disgorgement is defined as the forced giving up of profits obtained by illegal or unethical acts.
    Of the $80 million Kansas sought in damages, they designated $60 million as profits or unjust enrichment Nebraska received by their overuse of water.

    Justice Antonin Scalia said disgorgement payments aren’t a normal contract remedy and require an intentional violation.

    McAllister said if Nebraska only has to pay Kansas $3.7 million, there’s little incentive for compliance, especially if a dispute can drag out eight years before any possibility of recovery.
    Justice Samuel Alito, Jr. said Kayatta found Nebraska didn’t intentionally violate the compact agreement.

    McAllister said the master did find that Nebraska “knowingly exposed Kansas to a risk of violation.”

    While they didn’t purposefully violate, they did violate it, McCallister said. “I think you have to say it’s more than negligent.”

    McCallister continued, “Nothing less than a substantial disgorgement award seems to really get their attention. And here it has gotten their attention and it has also gotten Colorado’s attention.”

    Justice Dept. sides with Kansas on disgorgement

    Ann O’Connell, Assistant to the Solicitor General, U.S. Department of Justice, said disgorgement should be an available remedy when a state violates an interstate water compact.

    She said the monetary remedy would “help to stabilize compacts and ensure the states are working vigorously to meet their compact obligations.”

    Justice Scalia reiterated the need for intentional violation in contract law and asked O’Connell for cases where the high court imposed disgorgement, even in the case of intentional violation. She could not cite any.

    She did cite a case between Texas and New Mexico where disgorgement could be a possible remedy. She continued, “It certainly left that door open.”

    “For an intentional violation?” Scalia questioned. “Yes,” she replied.

    “But we’ve never done it, have we?” Scalia asked. “No. And this is a novel . . .” she said before Scalia cut her off.

    At the end of her argument, O’Connell did go on record that the Justice Department does support the special master’s recommendation to revisit the compact accounting methods.
    Nebraska wants accounting change, not high damages

    Nebraska’s Chief Deputy Attorney General, David Cookson, was the final lawyer to present arguments. He stated the compact settlement specifically says the accounting will not count imported Republican River water and requested the court approve Kayatta’s recommendation for the accounting change.
    Scalia challenged him, saying the settlement included how such a water supply be determined—by a formula—and that was agreed to.

    Cookson countered, saying the deal Nebraska agreed to was not the formula.

    “The deal we made was not to count imported water,” he said.

    He said the final settlement made it clear that accounting procedures could be modified at any time through the appropriate process.

    Cookson said Nebraska followed that process, by going to the three-state compact administration. After Kansas objected, non-binding arbitration was sought.

    “The master agreed the mistake occurred, sent it back to the RRCA (Republican River Compact Administration) to develop a solution. This was all presented to Kansas in 2007,” Cookson told the justices.

    He said the accounting procedures are a technical appendix to the settlement and were not part of the settlement agreement.

    Scalia asked if the final settlement could be amended by mutual agreement.

    Cookson said no, because the three states, in the final settlement, put in a non-severability clause that they couldn’t change it. Cookson made the distinction that the accounting procedures could be changed and cited case law where the court allowed appendixes to state settlements to be changed. In addition, he said the accounting procedures appendix was not included as part of the compact settlement when it was approved by Congress.

    Chief Justice John G. Roberts, Jr., said the settlement is an agreement between two sovereign states.

    “The idea of a special master or this court changing the nature of that agreement is a pretty radical one,” he said.

    Cookson responded, “But we’re not changing that agreement. The agreement in the final settlement stipulation is do not count imported Platte River water.”

    When negotiating the settlement, Cookson asserted the parties knew the accounting procedures would change as things moved forward. He cited roughly 14 changes that have already been made and approved by the compact administrators. He said Kayatta’s recommendation doesn’t reform the compact settlement, just the technical appendix
    on accounting procedures.

    Disgorgement not justified

    On the issue of disgorgement, Cookson said Nebraska took exception to the award because the state did not deliberately violate the compact.

    Justice Elena Kagan said the special master and Justice Department Solicitor General characterized Nebraska as “a conscious wrong-doer, that you failed to act, refused to act in the face of known risk.”

    Cookson took exception, noting that Nebraska took control of consumptive use in 2002, while the settlement was still being negotiated. In addition, through 2006, the state reduced its pumping by 500,000 acre-feet, a 35 percent reduction. He said it was not possible for Nebraska to foresee its allocations would fall even below the record lows that occurred during the Dust Bowl of the 1930s. He urged justices to understand that allocations in the settlement were based on a 10-year period of the Dust Bowl. He said it was reasonable for Nebraska to believe allocations would never go below those of the Dust Bowl.

    “And yet in ‘05 and ‘06, our allocations significantly fell below the Dust Bowl,” he told the justices.

    He said Nebraska conceded it fell short of compliance in 2006 and offered to pay Kansas its actual damages.

    Since then, Cookson said Nebraska has remained in compliance “even in the driest condition now of record in the basin.”

    For these reasons, he said Kansas’ claim of unjust enrichment “as a means of disgorging gain to Nebraska” is not appropriate.

    In rebuttal to Cookson’s arguments, McAllister said the court should give Nebraska this answer on changing the accounting method: “Sorry; you made the deal, and just because you now think you have a better way of doing it, doesn’t mean we should rewrite the contract.”

    Nebraska delegation attends

    A Nebraska delegation including representatives from the Department of Natural Resources, the Attorney General’s office and attorneys and natural resource district officials closely associated with the case attended the oral arguments. Those attending from the Upper Republican NRD included Manager Jasper Fanning, Assistant Manager Nate Jenkins and Board Member Jason Kunkel.

    The justices will now review the case and render a decision which could occur sometime before the end of the year but no later than the end of June 2015.

    More Republican River Basin coverage here.

    Republican River Basin: “You want more than damages” — Antonin Scalia

    October 15, 2014
    Republican River Basin by District

    Republican River Basin by District

    From Omaha World-Herald (Joseph Morton):

    The court heard oral arguments Tuesday in the latest twist of the 1943 Republican River Compact signed by Kansas, Nebraska and Colorado. The case pits Nebraska against Kansas — not only over the amount of money Nebraska owes, but also to set the ground rules for what are sure to be future battles over the use of a critical but stressed resource.

    Justices had sharp questions for both sides. They expressed skepticism about Kansas’ claim for higher damages as well as Nebraska’s desire to rewrite the formula used to calculate water usage.

    As is typical in such interstate disputes, a special master earlier had reviewed the case for the court. He found that Nebraska owes $5.5 million — $3.7 million in basic damages with an additional $1.8 million attributed to the gains made by Nebraska farmers as a result of the violations. Nebraska is challenging the extra $1.8 million penalty.

    Kansas Solicitor General Stephen McAllister, however, urged the justices to go significantly higher in penalizing Nebraska, contending that Nebraska’s actual gains were much larger than $3.7 million, or even $5.5 million. If Nebraska winds up with more in benefits than it is penalized for the excess water, he said, it will have no incentive to work hard at compliance in a future drought.
    Justice Antonin Scalia focused on the extra penalty that Kansas is seeking.

    “You want more than damages,” Scalia told McAllister. “You want to say, ‘I not only want to receive what it cost me, what your violation cost me, but I want in addition to receive any benefits that you got from the violation.’ … That’s not a normal contract remedy.”

    Justice Samuel Alito pointed out that Nebraska’s violations of the compact had been ruled unintentional. But McAllister said Nebraska knew it was exposing Kansas to risk and described it as “more than negligent” on Nebraska’s part.

    “These were massive violations on Nebraska’s part, knowing they were in trouble and just really not taking any kind of adequate steps,” McAllister said.

    Nebraska Chief Deputy Attorney General David Cookson defended Nebraska’s efforts to stay in compliance
    with the compact and to mitigate the situation once the problems were revealed. Still, he faced questions from Justices Elena Kagan and Ruth Bader Ginsburg, both of whom cited the special master’s findings that while Nebraska’s violations were not an intentional breach, the state should have seen what was coming.

    “The special master also said essentially … that you were a conscious wrongdoer, that you failed to act, refused to act in the face of a known risk,” Kagan said to Cookson. She said the special master found that “unless there was some very lucky fortuitous thing that happened, the quite foreseeable effect of your actions was going to be that Kansas didn’t have enough water.”

    Cookson said Nebraska does not agree with the findings about what Nebraska should have known or the idea that it took no action.

    “Nebraska seized control of its consumptive use in 2002 while it was still negotiating the compact, and through 2006 reduced its pumping (by 35 percent),” Cookson said. “At the same time, however, Nebraska could not reasonably foresee that its allocations were going to fall even below the historical low period of record in this basin, which was the Dust Bowl.”

    Nebraska also has asked the court to go along with the special master’s finding that the formula for calculating water usage should be reworked because it is unfair. Chief Justice John Roberts expressed skepticism about taking such a step, however.

    “The idea of a special master or this court changing the nature of that agreement is a pretty radical one,” Roberts said.

    The court is expected to rule before the end of the year.

    After the arguments, Cookson told The World-Herald that it’s impossible to gather from the court’s questions which way the justices are leaning. They often play devil’s advocate and push harder on the side they ultimately agree with in order to sharpen the arguments in their favor.

    “The court was very engaged,” Cookson said. “They asked questions that pushed the boundaries of both sides’ arguments.”

    More Republican River Basin coverage here.

    Supreme Court Justices to wade into decades-old water use dispute — E&E Publishing

    October 14, 2014

    From E&E Publishing (Jeremy P. Jacobs):

    The Supreme Court tomorrow will wade into a decades-long water use dispute between Kansas and Nebraska.

    At issue is a localized disagreement among the two states and Colorado over an interstate compact that allocates water from the 430-mile Republican River.

    The river — which rises in Colorado, crosses the northwest tip of Kansas before crossing into Nebraska, and then re-enters north-central Kansas — travels a sparsely populated area. It drains a nearly 25,000-square-mile watershed, and more than 1.8 million acres of land is irrigated using its water to grow crops like corn, soybeans and milo.

    Use of the river has been contentious since the three states sought to create a compact in the early 1940s. President Franklin Roosevelt vetoed the first version, and later signed the congressionally ratified compact in 1943.

    The case is narrow in scope and is unlikely to yield a ruling from the justices with broad implications.

    Kansas has long claimed that Nebraska is using more than its allotment. The state first took the case to the Supreme Court in 1999, claiming that Nebraska’s groundwater pumping was depleting the river.

    That case led to a 2003 settlement that added groundwater to the terms of the compact.

    However, by May 2010, Kansas claimed that Nebraska used about 79,000 acre-feet more than its allotment in 2005 and 2006. It again asked the high court to review the case, and the court, for the second time, appointed a federal judge — or “special master,” in court parlance — to resolve the dispute.

    The judge’s report found that Nebraska did knowingly violate the compact in 2005 and 2006, but has since taken steps to come into compliance. It recommended requiring Nebraska to pay Kansas $5.5 million, roughly the equivalent of the water Kansas lost plus a $1.8 million penalty.

    It also recommended amending how the states administer the compact by changing its accounting procedures to include water entering the basin that is not part of the Republican River’s “virgin water supply.” “Imported water” drains into the basin every year from the Platte River, which sits at a higher elevation to the north.

    The original compact did not include water that migrated from the Platte River, and the judge reasoned that use of the imported water should not count against a state’s Republican River allotment.

    The judge suggested that the Supreme Court adopt a “five-run solution” proposed by Nebraska and backed by Colorado that more accurately reflects groundwater consumption and imported water.

    Tomorrow morning, the justices will consider each state’s exceptions to the report’s recommendations. Kansas, for example, does not want to rewrite the compact’s accounting procedures and is seeking more money from Nebraska for its violations. It is also seeking an injunction to bar Nebraska from taking too much water from the basin.

    Nebraska, on the other hand, contests the $1.8 million penalty to be awarded to Kansas and takes exception to the judge’s conclusion that it “knowingly failed” to comply with the compact.

    The Obama administration has also weighed in on the dispute and has urged the justices to uphold all of the judge’s recommendations.

    “The United States supports the Master’s report,” Solicitor General Donald Verrilli wrote in court documents, adding that the government supports “overruling the parties’ exceptions.”

    The court will rule on Kansas v. Nebraska and Colorado by the end of next June.

    From the Kearney Hub (David Hendee):

    Nebraska’s regulatory landscape is significantly different now from when the state consumed more Republican River water than allocated in 2006.

    So is some of the physical landscape in and around the basin in southwest and south-central Nebraska.

    There are stricter regulations on how much underground water farmers may pump to irrigate cropland. Two pipeline projects pour water into the Republican River to supplement flows during dry periods. And there are fewer acres of irrigated cropland.

    Nebraska’s biggest challenge under a 71-year-old interstate compact that shares the river water with Kansas and Colorado has been staying within its allotment in dry years. Now the state should never again find itself violating the compact in dry years, said Dean Edson, executive director of the Nebraska Association of Resources Districts.

    “Everything’s in place,’’ he said. “Taxpayers are protected, the aquifer is protected and the irrigated-acre tax base of rural communities in the basin is protected.’’

    New state laws, tighter regulations and innovative projects by the Upper, Middle and Lower Republican Natural Resources Districts and the Twin Platte NRD have made the difference since 2007, Edson said.

    The estimated 1.1 million irrigated acres in Nebraska’s portion of the river basin represent what is believed to be the largest area of regulated groundwater use in the eight-state region that overlies the Ogallala Aquifer, a vast underground reservoir of fresh water.

    No other state has more stringent water-pumping regulations than Nebraska, Edson said. Allocations in Nebraska’s Republican basin have declined to between 9 and 13 inches annually. That’s approximately 45 percent less than allowed in neighboring Kansas, Edson said.

    Rules and regulations have helped produce rising aquifer levels in some regions, stabilized levels in others and significantly slowed rates of decline elsewhere, he said. Further reductions in water use are assured by requirements agreed to with the State of Nebraska that groundwater pumping volumes decrease by 20 percent, to 1998-2002 levels. An additional 5 percent reduction is required by 2015.
    Nearly two years ago, four Natural Resources Districts bought 19,500 acres southwest of North Platte that lie squarely between the Platte and Republican Rivers. About 15,800 of those acres were irrigated and now are retired from irrigated production.

    A six-mile pipeline is taking water from about 30 wells that would have been used to irrigate crops on that land and delivering it to the Republican via Medicine Creek. The 42-inch-diameter pipeline was used for the first time this year to meet Nebraska’s flow obligations to Kansas.

    “Without this project, severe and sudden reductions in water allocations might have to have been imposed on irrigators in the basin,’’ Edson said.

    Edson said the willingness of landowners to impose a $10 per irrigated acre tax on themselves made the project possible.

    “I’ve not met anyone yet who wants their taxes raised, but if we don’t augment stream flows, we’d be looking at the forced shutdown of at least 300,000 irrigated acres, or nearly a third of the irrigated acres in the basin,’’ he said. “It’s pretty doggone cheap compared to what they could lose. It would be devastating.’’

    A similar project in the southwest corner of the state retired 3,260 irrigated acres in Dundy County. Water that would have been consumed by crops is sent seven miles through a 24-inch pipeline to Rock Creek for delivery into the Republican River.

    From Supreme Court of the US Blog (Ryke Longest):

    Origins of the Republican River Compact

    The Republican River begins in Colorado on the eastern side of the Rocky Mountains, then flows through part of Kansas. The river then crosses and into Nebraska before crossing back into Kansas, where it then turns southeasterly. In Junction City, Kansas, it joins with the Smoky Hill River to become the Kansas River, a tributary of the Missouri River.

    More than 24,000 square miles of watershed on the Great Plains support the flow of the Republican River. This territory contains rich agricultural soils and relatively abundant average annual rainfall. During the Great Depression, the three states and the federal government planned to use the Republican River for water resource development. This area was at the western edge of the Great Plains Dust Bowl, which experienced horrific dust storms in 1934 through 1935 that carried tons of soil through the air as far as the Atlantic Ocean.

    Federal relief programs were mobilized to help the residents respond to the terrible conditions. A devastating flood on the Republican River in 1935 hastened along state and federal planning to create both flood control and irrigation projects. Federal agencies endorsed the need for the projects as well as their feasibility, but the Bureau of Reclamation warned that they should not go forward until the three states entered into a compact.

    The states had agreed to terms within a few years, but President Franklin Delano Roosevelt vetoed the first attempted compact in response to objections by federal agencies. On December 31, 1942, on their second attempt, the federal government and Colorado, Kansas, and Nebraska agreed to an interstate compact to allocate water flowing in the Republican River. This compact was then ratified by the state legislatures, approved by Congress and signed into law by the President on May 26, 1943. However, rather than resolving all controversy about water allocation between the parties, the compact merely moved the locus of the disputes. Since its signing, disputes between the states over water use focus on the compact’s terms.

    Origin of disputes under the Compact

    Flows in the Republican River have been declining for decades, with reduced flows in nearly all its tributaries. The reduced flows alarm farmers in all three states who rely on irrigation to keep crops at profitable yields. As the primary downstream users, Kansans look to the compact to protect them from overuse by upstream users. As the state with the largest allocation, Nebraskans look to the compact to protect their farmers from unreasonable demands from Kansans.

    When use increases and flows decrease, disputes follow. As the aphorism often attributed to Mark Twain goes, “Whiskey is for drinking, but water is for fighting.” Disputes among users and their political leaders come quickly behind the spread of economic prosperity.

    Under the compact, disputes first flow through the Republican River Compact Administration, which consists of one representative of each of the three states. Following ratification, all states needed to change water resource allocation laws within their respective states to ensure compliance with the new compact’s requirements. In 1945, Kansas enacted a statute that combined allocation of groundwater and surface water into a unified permitting system using prior appropriation principles. In Nebraska, allocation of groundwater remained subject to restriction by common law principles of reasonable use within the context of correlative rights as set forth in the 1933 case of Olson v. City of Wahoo. The state codified these principles in 1975 and later adjusted its groundwater law in 1996 with amendments under LB 108, promoted by Nebraska Governor Ben Nelson. Nebraska’s efforts under LB 108 were clearly designed to prevent allocation of groundwater in a way that causes violations of an interstate compact. Yet its critics maintain that these efforts hampered management by putting the fox in charge of the henhouse (local Natural Resource Districts).

    Groundwater’s special place

    When the compact was signed, one of its key purposes was to remove all causes that “might lead to controversies.” Yet, within its key terms lay the seed of controversy: the term “Virgin Water Supply.” It was defined as the “water supply within the Basin undepleted by the activities of man.” Nebraska interpreted the caveat “within the basin” to exclude groundwater pumping from the scope of activities that deplete the Virgin Water Supply. The compact defines “basin” as the “area naturally drained by the Republican River and its tributaries.” Nebraska’s argument unduly restricted the scope of the Virgin Water Supply by taking the groundwater that drains into the Republican River and its tributaries out of the compact.

    In many places, the Republican River is a gaining stream, one where groundwater from alluvial and surficial aquifers seeps into the riverbed. Excluding groundwater from allocation formulas in a gaining stream will always lead to problems unless groundwater pumping from alluvial and surficial aquifers is completely prohibited. In a gaining stream system, these aquifers are just as important sources to stream flow as the surface tributaries. However, these flows are harder to measure, model, and quantify.

    Litigation before the Supreme Court: Round I

    In 1999, the Supreme Court granted Kansas’s motion for leave to file a bill of complaint. Kansas complained that Nebraska had violated the compact by allowing proliferation of thousands of groundwater wells that were connected to the Republican River. Kansas’s complaint asserted that Nebraska’s regulatory apparatus failed to prevent the violations into the future, and it asked for damages and a decree commanding Nebraska to meet its delivery obligations under the compact. Nebraska sought leave to file a motion to cismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) and presented affirmative defenses to Kansas’s complaint. Nebraska’s Rule 12(b)(6) motion was limited to the question whether the compact applied to groundwater consumptive use within Nebraska. Colorado responded that groundwater from alluvial aquifers was included within the compact but groundwater from the deeper Ogallala aquifer was not. The Court appointed a special master to preside over the hearing, after which the special master’s report recommended that Nebraska’s motion be denied. In June 2000, the Supreme Court denied Nebraska and Colorado’s exceptions and sent the case back. Following a series of memoranda on various issues by the special master, the parties negotiated a settlement stipulation.

    Republican River Compact settlement stipulation

    The settlement stipulation imposed additional obligations on the parties beyond those required by the Compact itself. All parties waived any claims against each other arising prior to 2002, and the stipulation required a drilling moratorium on wells within the Republican River Basin. It also explicitly recognized that groundwater was a component of the Virgin Water Supply. Beyond that, the parties to the current dispute disagree about significant aspects of the settlement stipulation as well as the special master’s report. While the stipulation established that the scope of covered water was water originating in the basin, there arose a dispute over the method of accounting for “imported water” – water that was originally part of the neighboring Platte River Basin but now percolates into the Republican River. In places, this seeping imported water had raised the water table by ten feet. The special master has proposed changing the accounting procedure so that Nebraska may use water imported from the Platte. Kansas vehemently objects that this change violates the terms of the compact.

    Each state will argue objections to the special master’s report. Expect to hear Kansas argue forcefully in favor of the Court strengthening its disgorgement remedies against Nebraska and requesting injunctive relief. Nebraska will argue that the special master’s disgorgement remedy was too harsh. Nebraska also admits that it overused its allocation for the year 1996, but that in so doing it did not violate the compact but took steps immediately thereafter to reduce consumptive use and to pay Kansas for its actual damages. Kansas also objects to the special master’s proposed amendment to the settlement stipulation, a remedy defended by Nebraska.

    Colorado will argue that the disgorgement is not allowed for unintentional violations by Nebraska and that the proposed award represents a windfall for Kansas. The Solicitor General will argue that the special master’s report falls within the scope of the broad discretion afforded the Supreme Court in fashioning remedies for breaches of compacts. He will defend the partial disgorgement remedy as protective against efficient breach concerns, but he will also argue against Kansas’s request for injunctive relief. It will be interesting to see whether the Court inquires about injunctive relief as a further protection against efficient breach concerns.

    More Republican River Basin coverage here.

    One Farm at a Time, USDA Helps Landowners Conserve Water in Ogallala Region

    September 26, 2014

    Here’s the blog post from the US Department of Agriculture:

    James Pike has tackled an important and thorny issue in Laramie County, Wyoming – water conservation. More specifically, this district conservationist with USDA’s Natural Resources Conservation Service (NRCS) has diligently worked to encourage farmers and ranchers in the region that is fed by the Ogallala Aquifer to use water wisely.

    Stretching from western Texas to South Dakota, the Ogallala Aquifer supports nearly one-fifth of the wheat, corn, cotton and cattle produced in the United States. Underlying about 225,000 square miles of the Great Plains, water from the aquifer is vital to agricultural, cities and industry, making up 30 percent of all groundwater used for irrigation in America.

    NRCS’ Ogallala Aquifer Initiative aims to reduce aquifer water use, improve water quality and enhance the economic viability of croplands and rangelands in Colorado, Kansas, Oklahoma, Nebraska, New Mexico, Texas, South Dakota and Wyoming.

    Too many wells combined with inefficient irrigation have made water conservation a volatile topic in Wyoming.

    The result of Pike’s hard work for Wyoming so far: 1 trillion gallons of water saved annually or 3,000-acre feet. To put acre feet into perspective, in the United States, one acre foot of water is used by a suburban family of five each year.

    The former Agricultural Water Enhancement Program, or AWEP, provides farmers like Mike Poelma, who grows wheat on 125 acres, with financial incentives to not use underground water source for crops – only rainwater.

    Poelma hopes his one irrigation well and two smaller wells will eventually recharge with water. But he knows it’s not an easy fix and will take some time.

    Additionally, AWEP also provides financial assistance for practices for better efficient water use. The program has helped save energy that would have gone to growing marginal crops. From 2010 to 2014, NRCS invested about $2 million through the program in Laramie County.

    The 2014 Farm Bill has many other programs are available to landowners who want to help conserve water, including the Environmental Quality Incentives Program, which is the program that now funds NRCS’ Ogallala Aquifer Initiative.

    This initiative in the eight states saved enough water during fiscal 2010 and 2011 to provide water for over 53,000 families or 265,000 people.

    More Ogallala aquifer coverage here and here.

    “The goal is to work together to find methods for conserving the precious lifeblood of our basin” — Deb Daniel

    September 9, 2014

    From Circle of Blue (Brett Walton):

    Following a regional trend, Colorado’s water board is likely to approve a $US 160,000 grant on Friday that will help farmers in the state’s northeastern plains reckon with a water-scarce future.

    Researchers at Colorado State University will use the state funds to answer a simple but profound question that is blowing across the American Great Plains like a stiff wind: What does water conservation mean for farming families, their towns, and their livelihoods?

    Requested by the Water Preservation Partnership, a coalition of a farm group and all of the region’s water management districts, the two-year academic study reflects an important development in the nation’s grain belt…

    “There is concern now over the rate of pumping,” Chris Goemans, an agricultural economist at Colorado State and one of the study leaders, told Circle of Blue. “The question is, what do we do and what happens if we do that?”

    If current practices continue, wells in some counties will be dry within a decade, with disastrous economic and social consequences for rural communities. Faced with this prospect, the people of the plains, from Nebraska to Texas and now Colorado, are beginning to tighten the spigot and embrace, sometimes grudgingly, water conservation…

    The Water Preservation Partnership, which recently marked its first anniversary, was created to find a local solution to the problem of groundwater depletion. It takes as a model a similar grassroots success story in northwest Kansas.

    “The goal is to work together to find methods for conserving the precious lifeblood of our basin,” Deb Daniel told Circle of Blue. Daniel is general manager of the Republican River Water Conservation District, one of 10 members of the partnership.

    Eight of the partners are groundwater management districts. Farmers in these districts account for 80 percent of the water used in northeastern Colorado and half of regional economic output. Altogether, the nine-county region withdraws nearly twice as much water each year as filters back into the aquifer, according to recent research. The annual deficit is 488 million cubic meters (396,000 acre-feet), roughly twice what Denver uses in a year.

    The members see the writing on the wall for the aquifer if current behaviors continue, and they support a reduction in water use. Doing so will keep water in the ground longer, but not forever. The demands of irrigation are far too great. Still, the farmers want a clearer idea of the changes that conservation might bring.

    “The WPP believes we must follow the lead of groups in Kansas, Texas and elsewhere who have developed grassroots, self-governing policies, by imposing pumping policies upon ourselves,” the members wrote in their application for state funding. “The challenge is determining what the policies should be, taking into consideration their economic feasibility for our agricultural producers and rural communities as well as their regional support.”[...]

    Researchers at Colorado State University, which will contribute $US 48,000 to the project, will develop four products. First, they will use computer models to analyze the relationship between water use and agricultural production over the next 100 years. Several levels of conservation will be assessed, showing a range of possible outcomes.

    Farmers in northwest Kansas, for example, are in the second year of a five-year plan to reduce water use by 20 percent. Their economic performance under the restrictions is being assessed by Kansas State University in a separate, ongoing study.

    Next, the Colorado State University researchers will fan out into the community to educate farmers about the results of the modeling.

    Then farmers will take a survey that asks what types of policies they prefer for achieving the reductions in water use. Goemans, the economist, said that policies will fall into one of two categories: those that put a price on water and those that put a cap on how much farmers use.

    Lastly, the researchers will combine the modeling results and the survey preferences in a set of recommended policies…

    The Colorado State University study has the conditional support of the state water board, said Rebecca Mitchell, head of the water supply planning section.

    Mitchell told Circle of Blue that approval of the grant on Friday is “likely” though the state wants to see a few more letters of support to ensure the project has wide appeal. The board itself is interested, viewing the study as a template for analyzing water conservation policies in other areas of the state.

    More Ogallala aquifer coverage here and here.

    The Last Drop: America’s Breadbasket Faces Dire Water Crisis — NBC News

    July 15, 2014
    Significant portions of the Ogallala Aquifer, one of the largest bodies of water in the United States, are at risk of drying up if it continues to be drained at its current rate. Courtesy of MSU

    Significant portions of the Ogallala Aquifer, one of the largest bodies of water in the United States, are at risk of drying up if it continues to be drained at its current rate. Courtesy of MSU

    From (Brian Brown):

    The scope of this mounting crisis is difficult to overstate: The High Plains of Texas are swiftly running out of groundwater supplied by one of the world’s largest aquifers – the Ogallala. A study by Texas Tech University has predicted that if groundwater production goes unabated, vast portions of several counties in the southern High Plains will soon have little water left in the aquifer to be of any practical value.

    The Ogallala Aquifer spreads across eight states, from Texas to South Dakota, covering 111.8 million acres and 175,000 square miles. It’s the fountain of life not only for much of the Texas Panhandle, but also for the entire American Breadbasket of the Great Plains, a highly-sophisticated, amazingly-productive agricultural region that literally helps feed the world.

    This catastrophic depletion is primarily manmade. By the early eighties, automated center-pivot irrigation devices were in wide use – those familiar spidery-armed wings processing in a circle atop wheeled tripods. This super-sized sprinkler system allowed farmers to water crops more regularly and effectively, which both significantly increased crop yields and precipitously drained the Ogallala.

    Compounding the drawdown has been the nature of the Ogallala itself. Created 10 million years ago, this buried fossil water is–in many places—not recharged by precipitation or surface water. When it’s gone, it’s gone for centuries…

    “The depletion of the Ogallala is an internationally important crisis,” says Burke Griggs, Ph.D., consulting professor at the Bill Lane Center for the American West at Stanford University. “How individual states manage the depletion of that aquifer will obviously have international consequences.”[...]

    “We’re headed for a brick wall at 100 miles per hour,” says James Mahan, Bruce Spinhirne’s father-in-law and a plant physiologist at the USDA’s Agricultural Research Service lab in Lubbock. “And, really, the effects of climate change are branches hitting the windshield along the way.”

    From (Brian Brown):

    Last August, in a still-echoing blockbuster study, Dave Steward, Ph.D., and his colleagues at Kansas State University, informed the $15 billion Kansas agricultural economy that it was on a fast track to oblivion. The reason: The precipitous, calamitous withdrawal rates of the Ogallala Aquifer.

    The Ogallala is little known outside this part of the world, but it’s the primary source of irrigation not just for all of western Kansas, but the entire Great Plains. This gigantic, soaked subterranean sponge – fossil water created 10 million years ago – touches eight states, stretching from Texas all the way up to South Dakota, across 111.8 million acres and 175,000 square miles.

    The Ogallala supports a highly-sophisticated and amazingly-productive agricultural region critical to the world’s food supply. With the global population increasing, and as other vital aquifers suffer equally dramatic declines, scientists acknowledge that if the farmers here cannot meet ever-growing food demands, billions could starve.

    Steward’s study predicted that nearly 70 percent of the portion of the Ogallala beneath western Kansas will be gone in 50 years. He’s not the kind of person to shout these results; he speaks slowly and carefully. Yet, he has the evident intensity of one who’s serving a greater purpose. “We need to make sure our grandkids and our great grandkids have the capacity to feed themselves,” he says.

    Now the chief executive of the state, himself from a farming family, is using Steward’s report as a call to action.

    “One of the things we [have] to get over … is this tragedy of the commons problem with the Ogallala,” says Governor Sam Brownback, a Republican who at age 29 was the youngest agriculture secretary in state history. “It’s a big common body of water. It’s why the oceans get overfished … You have a common good and then nobody is responsible for it.”

    “That’s one of the key policy issues that you have to get around,” Brownback says in his roomy, towering office at the capitol in Topeka. “Everyone has to take care of this water.”

    In that spirit, a tiny legion of farmers and landowners in the northwest corner of Kansas, where the Rockies begin their rise, have just begun year two of what could be one of the most influential social experiments of this century.

    The group is only 125 in number but controls 63,000 acres of prime farmland in Sheridan County. Collectively, voluntarily, they have enacted a new, stringent five-year water conservation target, backed by the force of law and significant punishments.

    The Local Enhanced Management Act, or LEMA, is the first measure of its kind in the United States. Specifically, the farmers are limiting themselves to a total of 55 inches of irrigated water over five years – an average of 11 inches per year…

    “So now we have the high morality of the need to protect the ecosphere. But it’s legal to rip the tops off mountains. It’s legal to drill in the Arctic. It’s legal to drill in the Gulf. It’s legal to build pipelines. It’s legal to send carbon into the dumping ground called an atmosphere. So we’ve not yet reconciled the high moral with the legal.” [Wes Jackson]

    More Ogallala aquifer coverage here and here.


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