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January 14, 2015 Practice Points

Disputes over Interstate Compacts Increase

It is likely that the current interstate disputes are harbingers of future compact challenges.

By Cynthia M. Chandley, L. William Staudenmaier, Karlene E. Martorana, and Christopher W. Payne

On December 29, 2014, a special master recommended that the U.S. Supreme Court find that Wyoming failed to make deliveries of Tongue River water to Montana in accordance with the Yellowstone River Compact. However, the special master’s finding is limited to violations in just two years, 2004 and 2006, and for relatively small amounts of water—1,300 acre-feet and 56 acre-feet, respectively.  

Despite the small amount of water involved, the special master’s finding highlights a growing trend in interstate water compact disputes. Interstate compacts are contracts between two or more states setting the terms for sharing interstate streams. There are more than two dozen interstate compacts governing water allocations in the United States with Colorado a party to nine of them.

The increasing demands on water supplies from growing populations and industries, coupled with drought and over-allocated water supplies, have made interpreting, complying with, and enforcing interstate water compacts challenging for many state water managers. Interstate compacts recently challenged include the Red River Compact, the Republican River Compact, and the Rio Grande Compact.  

Interstate disputes may involve both groundwater and surface water. For example, in Wyoming v. Montana, the parties disagreed on whether the compact applies to groundwater pumping. The pending disputes also seek a variety of remedies, including equitable apportionment, monetary damages, and other contract remedies.

Interstate water disputes are not limited to states that have entered into compacts. Interstate water disputes between Mississippi and Tennessee regarding one river basin, and between Florida and Georgia regarding another river basin are currently before the U.S. Supreme Court. In these cases, there are no compacts involved.

Interstate water disputes involve multiple interested parties and take years to resolve. In the Wyoming v. Montana dispute, Montana filed its complaint in 2007 and it is still not resolved. As the special master has now issued his recommendation in this case, the Supreme Court will most likely ask the parties to file their exceptions and then may hear oral argument on these exceptions. Then, the Supreme Court may adopt, in whole or in part, the special master’s recommendations.

As populations continue to grow and more states struggle to adapt to drought conditions, it is likely that the current interstate disputes are harbingers of future compact challenges. However, states may also want to heed this forewarning and revisit the terms of their existing interstate compacts, or enter into new compacts, before they find themselves in a lengthy court battle.

Cynthia M. ChandleyL. William StaudenmaierKarlene E. Martorana, and Christopher W. Payne, Snell & Wilmer L.L.P., Phoenix, AZ

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