Kansas v. Colorado

• Decision Date: 07 December 2004
• Docket Number: No. 105, Orig.,105, Orig.
• Citation: 543 U.S. 86
• Parties: KANSAS v. COLORADO
• Court: U.S. Supreme Court

543 U.S. 86

KANSAS v. COLORADO

No. 105, Orig.

Supreme Court of United States.

Argued October 4, 2004.

Decided December 7, 2004.

Kansas and Colorado entered into the Arkansas River Compact (Compact) in 1949, but disagreements over the equitable distribution of the river's upper waters persisted. In 1985, Kansas charged that Colorado had violated the Compact by drilling new irrigation wells that, in Compact Art. IV-D's words, "materially depleted" the river water otherwise available "for use" by Kansas' "water users." Accepting the recommendation set forth in the First Report of the Special Master to find that Colorado had unlawfully depleted the river in violation of Art. IV-D, this Court remanded the case for remedies. Kansas v. Colorado, 514 U. S. 673, 694. In proposing remedies in his Second and Third Reports, the Master said that Colorado's Compact violation had occurred between 1950 and 1994; recommended that Colorado pay Kansas damages; divided the water losses into six categories, calculating damages somewhat differently for each; and urged that Kansas be awarded prejudgment interest on damages for losses incurred from 1969 through 1994 (the judgment's date). The Court subsequently adopted these recommendations with one exception: It held that prejudgment interest would run from 1985 (not 1969). Kansas v. Colorado, 533 U. S. 1, 15-16 (Kansas III). The Master has now filed a Fourth Report setting forth his resolution of the remaining issues. Kansas takes exception to several of his recommendations.

Held:

1. Kansas' request to appoint a River Master to decide various technical disputes related to decree enforcement is denied. This Court has appointed River Masters to help resolve States' water-related disputes only twice before, Texas v. New Mexico, 482 U. S. 124, and New Jersey v. New York, 347 U. S. 995, each time on the Special Master's recommendation, always as a discretionary matter, and only when convinced that such an appointment would significantly aid resolution of further disputes, see Vermont v. New York, 417 U. S. 270, 275. The Court is not convinced that such an appointment is appropriate here. For one thing, further disputes in this case, while technical, may well require discretionary, policy-oriented decisionmaking directly and importantly related to the underlying legal issues. These potential disputes differ at least in degree from those that the Court has asked River Masters to resolve in past cases. See, e. g., Texas v. New Mexico, supra, at 134, 135-136. Administration of the present decree will involve the highly complex computer-run Hydrologic-Institutional Model (H-I Model or Model), and resolution of many modeling disputes may well call for highly judgmental determinations of matters that are more importantly related to the parties' basic legal claims. For another thing, the need for a River Master here is diminished by the fact that the parties may be able to resolve future technical disputes through binding arbitration under Compact Art. VII or through less formal dispute-resolution methods like joint consultation with experts, negotiation, and informal mediation. The Special Master recommended all of these alternatives, while opposing appointment of a River Master because it would "simply" make it "easier to continue this litigation." Fourth Report 136. Pp. 92-94.

2. Kansas' exception to the Special Master's prejudgment interest calculation is overruled. The calculation and Kansas' objection grow out of this litigation's special history. The Master initially calculated prejudgment interest on the basis of "considerations of fairness," Third Report 97, dividing the prejudgment period into three temporal subcategories: (1) an Early Period between 1950, when Colorado's unlawful water depletion began, and 1968, when Colorado should first have known about it; (2) a Middle Period between 1969 and 1985, when Kansas filed its complaint; and (3) a Late Period between 1985 and 1994, when judgment was entered, id., at 107. The Master adjusted damages from all three periods for inflation, but he awarded additional prejudgment interest only from 1969 to the judgment date, for a total damages award, including prejudgment interest, of $38 million. Ibid. The Kansas III Court accepted the Master's equitable approach, 533 U. S., at 11, but applied its own "considerations of fairness" in concluding that "prejudgment interest should begin to accrue" as of 1985, id., at 12-15, and n. 5. On remand, the Master therefore calculated prejudgment interest from 1985 onward on Late Damages alone. Kansas' argument that the Master should have calculated prejudgment interest (from 1985) on all damages—i. e., on Early, Middle, and Late Damages—would make good sense in an ordinary case. But the question here is not about the ordinary case, but rather what Kansas III's prejudgment interest determination meant in that case's special context. For one thing, the Court there did not seek to provide compensation for all of Kansas' lost investment opportunities; rather, it sought to weigh the equities. For another, it was apparent that the Master's earlier determination involved both a decision about when to begin to calculate interest (1969) and what to calculate that interest upon (Middle and Late Damages only). Saying nothing about the Master's total exemption of Early Damages, id., at 14, the Court changed the when (from 1969 to 1985), but not the methodology for calculating the what. In context, the Court's silence fairly implies acceptance, not rejection, of the Master's underlying methodology, which now yields a post-1985 interest calculation based upon Late Damages only. This view is reinforced by the resulting numbers. Were the Court now to accept Kansas' argument, the final damages award would be roughly $53 million, not the, $38 million originally calculated by the Master. The Court cannot reconcile that numerical result with its acceptance in Kansas III of the Master's equitable approach and with its own equitable determination, which implied a modest adjustment of the $38 million award in Colorado's favor, not, as Kansas now seeks, a major adjustment of the award in Kansas' favor. Ibid. Pp. 95-99.

3. Kansas' exception to the Special Master's recommendation that the H-I Model be used with a 10-year measurement period to determine Colorado's future Compact compliance is overruled. Kansas seeks, in place of the 10-year period, a 1-year period. Kansas points to Compact Art. V-E(5), which says that there "shall be no allowance or accumulation of credits or debits for or against either State." Kansas argues that a 10-year period averages out oversupply and undersupply during the interim years, with the likely effect of awarding Colorado a "credit" in dry years for oversupply in wet years. Adding that Art. IV-D forbids Colorado to deplete the river water's "availability for use," Kansas says that the 10-year period effectively frees Colorado from the obligation to compensate Kansas for years (within the 10-year period) when overpumping may have made water "unavailable" for Kansas' use. Kansas also notes that the parties and the Master have heretofore used a 1-year measuring period in calculating past damages. The Court is not persuaded by these arguments. The Compact's literal words are not determinative. Its language essentially forbids offsetting debits with "credits," but it does not define the length of time over which a "credit" is measured. Any measurement period inevitably averages interim period flows just as it overlooks interim period lack of water "availability." At the same time, practical considerations favor the Master's approach. The Master found that Model results over measurement periods less than 10 years are highly inaccurate, but that the Model functioned with acceptable accuracy over longer periods of time. Moreover, Kansas is unlikely to suffer serious harm through use of a 10-year period because Colorado has developed a river water replacement plan to minimize depletions. Assuming, as Kansas argues, that the Compact's framers expected annual measurement with no carryover from year to year, those framers were likely unaware of the modern difficulties of complex computer modeling and, in any event, would have preferred accurate measurement. The fact that both parties earlier agreed to use annual measurement is not determinative here because that stipulation was made before the Master fully examined the model's accuracy. Pp. 99-103.

4. Also overruled is Kansas' exception to the Special Master's recommendation that the final amounts of water replacement plan credits to be applied toward Colorado's compact obligations be determined by the Colorado Water Court and appeals therefrom. Kansas argues that the Water Court is a state court, that Colorado cannot be its own judge in a dispute with a sister State, West Virginia ex rel. Dyer v. Sims, 341 U. S. 22, 28, and that this Court must pass on every essential question, e. g., Oklahoma v. New Mexico, 501 U. S. 221, 241. Kansas' objection founders, however, upon additional language in the Master's full recommendation—and his attendant analysis—making clear that all replacement credits are subject to Kansas' right to seek relief under this Court's original jurisdiction; that Colorado's replacement plan rules affect the rights, not only of Kansas water users, but also of Colorado senior water users; that both groups have similar litigation incentives; and that permitting the Colorado Water Court initially to consider challenges to credit allocations will help prevent inconsistent determinations. The full recommendation will help avoid potential conflict and adequately preserves Kansas' rights to contest any adverse Water Court determination. Pp. 103-104.

5. Kansas' exception to the Special Master's finding that Colorado complied with the Compact between 1997 and 1999 is overruled. Kansas' objection rests on its claim that the Master...