WESTERN STATES WATER

These news items are from the November 14 2008 newsletter of the Wester States Water Council. Highlights the litigation over that important question of "who owns the water"

LITIGATION/WATER RIGHTS
Tarrant Regional Water District v. Sevenoaks, et al.

The 10th Circuit Court of Appeals has ruled that the Tarrant Regional Water District’s lawsuit challenging the constitutionality of Oklahoma’s embargo on out-of-state water sales can continue. Tarrant, a Texas water agency with an application before the Oklahoma Water Resource Board (OWRB), is suing OWRB because it believes that the embargo violates the Commerce and Supremacy Clauses of the U.S. Constitution. In response, OWRB filed a motion to dismiss, claiming that a case in controversy did not exist, that it enjoyed immunity under the 11th Amendment, and that the district court should have abstained from hearing the case. The district court denied the motion and the 10th Circuit confirmed, ruling in Tarrant’s favor on all points.

The Circuit Court found that a case in controversy does exist because the embargo precludes OWRB from granting Tarrant’s application. Similarly, it rejected the OWRB’s claim that it enjoys 11th Amendment immunity because Tarrant’s request to overturn the embargo was a request for prospective relief that would only place Tarrant on the same footing as instate applicants. It also ruled that the denial of the OWRB’s abstention claim was not appealable on an interlocutory basis because the district court’s decision not to abstain “is capable of effective review upon entry of a final judgment in the case.” The 10th Circuit’s decision did not address the merits of the case, which can now resume in the lower federal court.

City of Hugo v. Nichols

In another case, the City of Hugo, Oklahoma, has filed suit in the U.S. District Court for the Eastern District of Oklahoma, claiming that Oklahoma’s embargo on out-of-state water sales infringes on the city’s rights under the Commerce Clause of the U.S. Constitution to sell water interstate. The complaint seeks injunctive relief prohibiting OWRB from enforcing the embargo. Hugo and Irving, Texas entered into a contract in which Hugo agreed to provide Irving with 25,000 acre-feet of water/year for 60 years. In exchange, Irving has contributed $500,000 to help Hugo in its legal challenge, and has agreed to pay Hugo $3.8M while a pipeline from Texas to Oklahoma is designed and built. If the pipeline becomes operational, Irving would pay Hugo $1.7M per year, not including the money it would pay to buy the actual water. This agreement represents the principal difference between the Hugo and Tarrant cases, and is believed to be the first of its kind between an Oklahoma water authority and a Texas customer.