Tarrant Reg'l Water Dist. v. Herrmann

Decision Date07 September 2011
Docket NumberNo. 10–6184.,10–6184.
Citation656 F.3d 1222
PartiesTARRANT REGIONAL WATER DISTRICT, a Texas State Agency, Plaintiff–Appellant,v.Rudolf John HERRMANN; Jess Mark Nichols; Ford Drummond; Ed Fite; Jack W. Keely; Kenneth K. Knowles; Richard Sevenoaks, in their official capacities as members of the Oklahoma Water Resources Board (“OWRB”) and the Oklahoma Water Conservation Storage Commission; Linda Lambert, in her official capacity; Joseph E. Taron, in his official capacity as a member of the Oklahoma Water Resources Board and the Oklahoma Water Conservation Storage Commission, Defendants–Appellees.State of Texas, Amicus Curiae.
CourtU.S. Court of Appeals — Tenth Circuit

656 F.3d 1222

TARRANT REGIONAL WATER DISTRICT, a Texas State Agency, Plaintiff–Appellant,
v.
Rudolf John HERRMANN; Jess Mark Nichols; Ford Drummond; Ed Fite; Jack W. Keely; Kenneth K. Knowles; Richard Sevenoaks, in their official capacities as members of the Oklahoma Water Resources Board (“OWRB”) and the Oklahoma Water Conservation Storage Commission; Linda Lambert, in her official capacity; Joseph E. Taron, in his official capacity as a member of the Oklahoma Water Resources Board and the Oklahoma Water Conservation Storage Commission, Defendants–Appellees.State of Texas, Amicus Curiae.

No. 10–6184.

United States Court of Appeals, Tenth Circuit.

Sept. 7, 2011.


[656 F.3d 1226]

Kevin L. Patrick, Patrick, Miller & Kropf, P.C., Aspen, CO (Scott C. Miller, Patrick, Miller & Kropf, P.C., Aspen, CO; Clyde A. Muchmore, Harvey D. Ellis, and L. Mark Walker, Crowe & Dunlevy, Oklahoma City, OK, with him on the briefs), appearing for Appellant.Charles T. DuMars, Law & Resource Planning Associates, P.C., (Stephen Curtice, Law & Resource Planning Associates,

[656 F.3d 1227]

P.C., Albuquerque, NM, and M. Daniel Weitman, Assistant Attorney General, Oklahoma Attorney General's Office, Oklahoma City, OK, with him on the brief), appearing for Appellee.Robert B. O'Keefe, Chief, General Litigation Division, and Scot M. Graydon, Assistant Attorney General, General Litigation Division, Austin, TX, filed a brief on behalf of Amicus Curiae.Before MURPHY, GORSUCH, and MATHESON, Circuit Judges.MATHESON, Circuit Judge.
I. INTRODUCTION

Tarrant Regional Water District (“Tarrant”), a Texas state agency, applied to the Oklahoma Water Resources Board (“the OWRB”) for permits to appropriate water at three locations in Oklahoma for use in Texas. Just before filing its applications, Tarrant sued the nine members of the Oklahoma Water Resources Board (collectively “OWRB”) in the district court for the Western District of Oklahoma and sought a declaratory judgment to invalidate certain Oklahoma statutes that govern the appropriation and use of water and an injunction preventing OWRB from enforcing them.1

Tarrant alleged that the Oklahoma statutes restrict interstate commerce in water and thereby violate the dormant Commerce Clause as discriminatory or unduly burdensome. Tarrant further alleged that Congress did not authorize Oklahoma through the Red River Compact (“Compact”) to enact such laws. OWRB responded that Congress did authorize Oklahoma to adopt these statutes by consenting to the Compact.

Tarrant also claimed that the Compact preempts the Oklahoma statutes insofar as the Compact applies to Tarrant's application to appropriate water located in Reach II, Subbasin 5 of the Red River Basin.

The district court granted summary judgment for OWRB on both the dormant Commerce Clause and Supremacy Clause claims. Tarrant Reg'l Water Dist. v. Herrmann, No. CIV–07–0045–HE, 2009 WL 3922803 (W.D.Okla. Nov. 18, 2009) (unpublished) ( Tarrant I.)

After that decision, Tarrant took steps to export to Texas Oklahoma water that is not subject to the Compact. Tarrant negotiated a contract with property owners in Stephens County, Oklahoma to export groundwater to Texas and also entered a memorandum of understanding (MOU) with the Apache Tribe concerning the Tribe's potential water rights. Then in the district court Tarrant reasserted its dormant Commerce Clause challenge based on these transactions. The district court dismissed the Stephens County matter for lack of standing and the Apache Tribe matter as not ripe. Tarrant Reg'l Water Dist. v. Herrmann, No. CIV–07–0045–HE, 2010 WL 2817220 (W.D.Okla. July 16, 2010) (unpublished) ( Tarrant II.)

This appeal raises three issues. First, did Congress authorize the Compact states to protect their apportionments of water through measures that otherwise might violate the dormant Commerce Clause? Second, did the Compact preempt certain Oklahoma statutes insofar as they interfere with Tarrant's appropriating water located in the Oklahoma part of Reach II, Subbasin 5 and exporting it to Texas? Third, did Tarrant have a justiciable dormant Commerce Clause challenge to the application of certain Oklahoma statutes to

[656 F.3d 1228]

water not subject to the Compact based on the Stephens County and Apache Tribe arrangements?

Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM the grants of summary judgment on the dormant Commerce Clause and preemption issues. We AFFIRM the dismissals based on standing and ripeness.

II. BACKGROUND
A. Facts

Tarrant Regional Water District is a Texas state agency that provides water to north central Texas. The Dallas–Fort Worth metropolitan area has grown rapidly, with a corresponding need for water. This case represents Tarrant's efforts to satisfy this need with water from Oklahoma.

The Red River forms the boundary between southeastern Oklahoma and northeastern Texas. In 1955, Congress granted permission to Arkansas, Louisiana, Oklahoma, and Texas to negotiate an agreement apportioning water in the Red River Basin. See Pub.L. No. 84–346, 69 Stat. 654 (1955). In 1978, the states signed the Red River Compact, and, in 1980, Congress ratified it. See Pub.L. No. 96–564, 94 Stat. 3305 (1980). The Compact divides the Basin into five reaches and further divides the reaches into subbasins to allocate water.

To aid in understanding the Compact, the Compact's Negotiating Committee wrote Interpretive Comments so that future readers “might be apprised of the intent of the Compact Negotiating Committee with regard to each Article of the Compact.” Aplt.App. Vol. I, 248.

Tarrant seeks to export water to Texas from multiple sources in Oklahoma. Tarrant has proposed to appropriate water from Beaver Creek and Cache Creek, two Oklahoma tributaries of the Red River. Both creeks are located in Reach I, Subbasin 2. Tarrant also has applied to appropriate water from the Kiamichi River, an Oklahoma tributary of the Red River in a different area—Reach II, Subbasin 5. The Compact applies to the water from these locations.

In an attempt to access water not subject to the Compact, Tarrant has entered into an agreement with owners of groundwater rights in Stephens County, Oklahoma to export groundwater from their property to Texas. Tarrant also has signed an MOU with the Apache Tribe. Under the MOU, the parties agreed to work cooperatively to further quantify the Apache Tribe's reserved water rights and to develop mutually agreed terms for Tarrant's use of certain amounts of such water by purchase or long-term lease.

Oklahoma requires a permit to appropriate water within the state and has created the Oklahoma Water Resources Board to rule on permit applications. See Okla. Stat. tit. 82, § 105.9 (establishing the OWRB's permit application authority). Tarrant has filed permit applications for its Beaver Creek, Cache Creek, and Kiamichi River plans. Oklahoma statutes establish criteria that the OWRB must follow in deciding on applications. Some of these statutes require the OWRB to treat permits for in-state and out-of-state water use differently. See generally id. § 105 (cataloguing the criteria for water permit applications).

B. Procedural History

On November 1, 2007, Tarrant sued OWRB in the Western District of Oklahoma. It sought (1) a declaratory judgment that certain Oklahoma statutes are unconstitutional and (2) an injunction to prevent the OWRB from applying the statutes to its Beaver Creek, Cache Creek, and Kiamichi River applications. Tarrant

[656 F.3d 1229]

advanced what it labeled its Commerce Clause and Supremacy Clause arguments. Tarrant argued that the Oklahoma statutes placed burdens on interstate commerce that are unconstitutional under the dormant Commerce Clause. It also asserted that the Oklahoma statutes were preempted insofar as they conflicted with the Compact's language. Tarrant clarified that its Supremacy Clause claim concerns the Compact provision governing Reach II, Subbasin 5. Tarrant argued that this provision entitles Texas to a share of Subbasin 5 water and allows Tarrant as a Texas state agency to divert part of this share from an Oklahoma location in Subbasin 5 and export it to Texas free from the Oklahoma restrictions on out-of-state water use.1. Tarrant's Initial Complaint and Ensuing Litigation

Tarrant's initial complaint challenged two sets of statutes. The first set was enacted in 2004 and placed a five-year Moratorium on the export of water out of state:

[T]he Legislature hereby establishes a moratorium on the sale or exportation of surface water and/or groundwater outside this state pursuant to the provisions of this section. Unless otherwise repealed or revoked by the Oklahoma Legislature, the moratorium shall be in effect for a five-year period beginning on the effective date of this act.

Okla. Stat. tit. 82, § 1B(A). Another statute applied the Moratorium to

any state or tribal compact or any intergovernmental cooperative agreement, authorized pursuant to law, which is drafted in whole or in part to apportion surface water or groundwater ownership, or authorize or otherwise implement any sale or exportation of surface water or groundwater outside this state, except as authorized by the provisions of this act.

Id. 74, § 1221.A. The Moratorium expired on November 1, 2009.

The second set of challenged statutes was enacted before the Moratorium. These statutes treat applications for in-state and out-of-state water use differently. One statute requires legislative approval for out-of-state water use: “Provided, however, no contract shall be made conveying the title or use of any waters of the State of Oklahoma ... for sale or use in any other state, unless such contract be specifically authorized by an act of the Oklahoma Legislature and thereafter as approved by it.” Id. 82, § 1085.2(2). Another provision allows an exception to the general requirement that water be put to beneficial use within one year if the proposal optimized in-state water use:

If ... the proposed...

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