South Carolina v. North Carolina

From Water Wiki

Following long-standing disputes over water allocation, South Carolina sought an equitable apportionment of the Catawba River, which starts in North Carolina and flows into South Carolina. The Court appointed a Special Master, who recommended that the Supreme Court (1) permit the City of Charlotte, N.C., the Catawba River Water Supply Project, and Duke Energy Carolinas LLC to intervene as defendants, and (2) deny South Carolina’s motion for clarification of the Special Master’s order. This case originated in the Supreme Court.

The only issue that reached the Court: can the City of Charlotte, NC, the Catawba River Water Supply Project, and Duke Energy Carolinas LLC, which are non-state entities, be allowed to intervene as defendants in a case originating in the Supreme Court about a water dispute between two states? The Court decided that Charlotte could not intervene (unsurprisingly, given past decisions involving the Delaware River and Philadelphia), but that Duke Energy and the Catawba River Water Supply Project could intervene. The success of these intervenors came as something of a suprise, given the paucity of past non-state participants in original Supreme Court equitable apportionment cases. See the discussion below for more on the Supreme Court's decision in the case.

The case on the merits was settled in November/December 2010, with a decision largely to use the previously negotiated FERC relicensing agreement as the basis for water allocation between the states and users of water from the Catawba reservoirs. Here is the settlement agreement. Wags noted that S.C. Attorney General McMaster's loss in his 2010 primary for Governor, and loss of his role as attorney general, probably had a lot to do with the case settling as quickly as it did.

Background of the Case

The Catawba River has its headwaters in the Blue Ridge Mountains of North Carolina, and flows on into South Carolina through a lake and tributary rivers for 440 miles before emptying into the Atlantic Ocean at the mouth of what is then named the Santee River. The river is a significant source of water to both states, but both states suffer declines in their volume of water available during times of drought.

South Carolina, complaining that North Carolina was taking more than its equitable share out of the Catawba, sued its neighbor directly in the Supreme Court in January 2007. It asked the Court to divide up the river’s flows between the states. North Carolina, it asserted, has allowed transfers of the Catawba’s waters of at least 48 million gallons per day, thus reducing South Carolina’s portion.

The Court allowed the suit to go forward on Oct. 1 of that year. As usual, rather than trying the case before the bench itself, the Court picked a Special Master — San Francisco attorney Kristin Linsley Myles – to recommend a decision on water allocation.

Along the way, the city of Charlotte, among the largest consumers of water transferred from the Catawba, sought to enter the case to represent its own interests. So did the Catawba River Supply Project, a group formed by two counties — one on each side of the states’ border — to transfer Catawba waters, also moved to intervene, as did the Duke Energy companies, which operates Lake Wylie into which the Catawba flows at the states’ border.

Myles examined a wide array of the Court’s prior Original cases, and fashioned a general rule on intervention for parties other than states. The proposal would allow intervention for an entity carrying out the state function that is at issue, an entity with an independent property interest that is implicated by the dispute, an entity that otherwise has a “direct stake” in the outcome, of an entity whose participation would help bring out the issues fully.

Each of the three would-be intervenors satisfied that rule, Myles concluded. The city of Charlotte’s access to the volumes of water it has been getting is directly challenged in the lawsuit, the Special Master said. The two-county project is also targeted in South Carolina’s lawsuit, and the Duke hydroelectric company’s river operations would be directly affected since the dams it operates controls the flow of the river waters and their release, Myles said.

The state of South Carolina objected to the interventions, and has now drawn the U.S. government’s support. The Myles proposal, the Solicitor General argued, breaks with the standard that the Court has laid down for water allocation disputes between states — that it, “an intervenor whose state is already a party should have the burden of showing some compelling interest in his own right, apart from his interest in a class with all other citizens and creatures of the state, which interest is not properly presented by the state.”

None of the three seeking to be a part of the Catawba controversy, the government brief said, can meet that standard: “They have the same interest as everyone in the Catawba River Basin who hopes to draw water from the river,” it said.

Decision

In an opinion by Justice Alito (joined by the unusual line-up of Justices Stevens, Scalia, Kennedy, and Breyer), the Court allowed the Catawba Project and Duke Energy – but not the City of Charlotte – to intervene in the case. The Court applied the New Jersey v. New York (1953) standard for intervention in original actions: an intervenor whose state is already a party has “the burden of showing some compelling interest” which is “apart from his interest in a class with all other citizens and creatures of the state” and which “is not properly represented by the state.” Rejecting a broader rule which the Special Master had distilled from cases in which nonstate parties participated as defendants, as well as cases in which they intervened, the Court noted that, “a compelling reason for allowing citizens to participate in one original action is not necessarily a compelling reason for allowing citizens to intervene in all original actions.”

In this case, the Court reasoned that because the Catawba Project was owned by and supplied water to one county in each state, drawing upon authority conferred by both states, it had satisfied its burden of showing an interest apart from that of other “citizens and creatures of the state.” And because both states are likely to take positions that would reduce the water available to the Project – South Carolina attributes some of its alleged harm to diversion by the Project, while North Carolina has conceded that it cannot represent the interests of that joint venture – the Project had shown that it was not properly represented by either state.

Duke Energy, the Court continued, had similarly met its burden. Here Justice Alito emphasized the “flexible process by which we arrive at a just and equitable apportionment of an interstate stream,” a task in which “there is no substitute for the exercise of an informed judgment.” Having overseen the complex negotiation of the terms of its federal license to generate hydroelectric power, Duke Energy, the Court concluded, possessed considerable expertise. Moreover, “any equitable apportionment of the river will need to take into account the amount of water that Duke Energy needs to sustain its operations and provide electricity to the region.” Thus, Duke Energy had demonstrated compelling interests which the two states (neither of which was a party to the licensing negotiations) would not adequately represent.

By contrast, the Court held that the interests of the City of Charlotte fall “squarely within the category of interests with respect to which a State must be deemed to represent all of its citizens.” “Respect for ‘sovereign dignity,’” the Court explained, “requires us to recognize that North Carolina properly represents Charlotte in this dispute over a matter of uniquely sovereign interest.”

Dissent

The Chief Justice – joined by Justices Thomas, Ginsburg, and Sotomayor – concurred in the Court’s denial of Charlotte’s motion and its rejection of the more permissive intervention standard adopted by the Special Master. However, those four justices would not have permitted the Catawba Project and Duke Energy to intervene either. The dissent reasoned that the Court’s original jurisdiction should be limited to “high claims affecting state sovereignty”: “disputes so serious that they would be grounds for war if the States were truly sovereign.” Moreover, “practical realities” render the Court “not well suited to assume the role of a trial judge.”

In particular, the Chief Justice’s dissent emphasized that the Court had never before allowed a nonstate entity to intervene in an equitable apportionment action “because the apportionment of an interstate waterway is a sovereign dispute.” By contrast, “a private entity’s interest in its particular share of the State’s water . . . is an ‘intramural dispute’ to be decided by each State on its own.” The Chief Justice further suggested that the “Special Master, and through her the Court, can have the benefit of the views of those seeking to intervene by granting them the status of amici curiae.”