Tuesday, February 24, 2015

Supreme Court finds Nebraska liable for ‘reckless’ water use

KANSAS CITY, KAN. – The U.S. Supreme Court today found Nebraska “recklessly” overused Republican River water in 2005 and 2006, and the court took the unprecedented step of ordering Nebraska to give up a portion of its unjust economic gains from keeping and using Kansas water, Attorney General Derek Schmidt said.

In a 28-page majority opinion, the court unanimous agreed that Nebraska “knowingly” violated the Republican River Compact and took water that belonged to Kansas.

As a remedy, the Supreme Court ordered by a 6-3 vote that Nebraska not only must pay Kansas’ actual damages from loss of water during those two dry years but also must “disgorge” a portion of the economic gain Nebraska received from higher yields from irrigating crops with water that should have been sent downstream to Kansas.

“Nebraska recklessly gambled with Kansas’s rights, consciously disregarding a substantial probability that its actions would deprive Kansas of the water to which it was entitled,” Justice Elena Kagan wrote for the court’s majority. “That is nearly a recipe for breach [of the Compact that governs sharing of Republican River water]—for an upstream State to refuse to deliver to its downstream neighbor the water to which the latter is entitled. And through 2006, Nebraska took full advantage of its favorable position, eschewing steps that would effectively control groundwater pumping and thus exceeding its allotment. In such circumstances, a disgorgement award appropriately reminds Nebraska of its legal obligations, deters future violations, and promotes the Compact’s successful administration.”

Schmidt noted that the Supreme Court never before had ordered disgorgement of an upstream state’s unjust gains as a remedy in an interstate water dispute.

“Legally, this is a groundbreaking case that vindicates Kansas’s rights as a downstream state,” Schmidt said. “We brought this lawsuit to encourage our neighbors to live up to their obligations in future dry periods. I’m hopeful this strong and clear Supreme Court order will have that effect.”

The Supreme Court ordered Nebraska to repay Kansas $3.7 million to compensate for Kansas’s actual economic losses during 2005-06 and another $1.8 million as partial disgorgement of Nebraska’s unjust gains from illegally using Kansas water.

That $5.5 million recovery will be used to fully reimburse the attorney general’s office for its roughly $4.5 million in bringing the lawsuit and defending Kansas water rights, making the State of Kansas whole for its cost of litigation. The remainder will be available to the legislature to designate for other purposes as provided by law.

The Supreme Court also ordered technical changes to the calculation of future water flows from the Platte River basin into the Republican River basin as requested by Nebraska. The decision to order that reformation of the accounting procedure was 5-4.