By Brandon Gillin

March 5, 2010

In a case of original jurisdiction, the United States Supreme Court, in a 5-4 decision, held that private parties may intervene to represent their own interests in state water disputes.

The State of South Carolina brought an action against the State of North Carolina, seeking an equitable apportionment of the Catawba River. North Carolina has a statute which authorizes certain cities and state agencies to conduct upstream transfer of water from the Catawba River, which South Carolina contends, exceeds North Carolina's equitable share, particularly during droughts and low river flows.

The relief sought by South Carolina included limiting the amount of water North Carolina can transfer from the river by way of a decree of equitable apportionment which would enjoin North Carolina from authorizing transfers of water that exceed its share, and to declare the North Carolina statute invalid to the extent that it authorizes water transfers that exceed North Carolina's share.

A North Carolina state agency, an energy company, and the city of Charlotte each filed motions to intervene as defendants in the suit, contending that the current allocation of water transfers from the Catawba River into North Carolina are necessary for their own interests. South Carolina opposed each motion. The Special Master carved out a rule for when nonstate entities may intervene as defendants by the complaining state, stating that "nonstate entities may become parties to such original disputes in appropriate and compelling circumstances . . . where the nonstate entity has an independent property interest that is . . . a substantial factor in the dispute." From that rule, the Special Master determined that each intervenor had a sufficiently compelling interest to justify intervention. The Supreme Court, in an opinion written by Justice Alito, decided not to follow the Special Master's rule, and stated 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." Nonetheless, the Court concluded that the State agency and the energy company both satisfied the "compelling interest" test, and demonstrated that their interests could not be served by either state in its capacity as a party. In finding that these entities satisfied the threshold, the Court looked to such evidence as the implications to the energy company's eleven dams and reservoirs, and to the need for the energy company to sustain its operations and provide electricity to the region.

The Court concluded that the city of Charlotte, however, did not meet its burden to demonstrate a compelling interest in representing itself, stating that "Charlotte's authorized transfer [of Catawba River water] does not distinguish it in kind from other members of the class," and that "North Carolina properly represents Charlotte in this dispute over a matter of uniquely sovereign interest."

The Court's decision gives private water users a much greater ability to intervene in state water disputes, so long as they meet the "compelling interest" standard reinforced by the Court in this case. As in this case, a private water user simply had to prove a web of problems that would occur for its financial situation as a result of a complex web of water shortages, some created by humans and others not.

Charlotte's inability to intervene on its own behalf will threaten the city's "unfettered access to an ample water supply, which would then directly affect the city's ability to expand."

Perhaps those most affected by this decision are the citizens of each state, who will have to compete with the highly compelling interests of the energy company which provides them with electricity. In the future, the cost of the citizens' electricity may increase in part due to this litigation.

Sources:

South Carolina v. North Carolina, 558 U.S. ___ (2010) available at http://supremecourtus.gov/opinions/09pdf/138Orig.pdf.

Jeff Kray, Supreme Court Expands Intervention Rights to Private Water Users in Interstate Water Litigation, Feb. 22, 2010 available at http://www.martenlaw.com/news/?20100222-water-intervention-rights-expanded.

Susan Stabley, Supreme Court Excludes City in Water Suit, Charlotte Business Journal, Jan. 20, 2010 available at http://charlotte.bizjournals.com/charlotte/stories/2010/01/18/daily28.html.

Raju Chebium, Top court OKs allowing Duke Energy to intervene in Catawba River case, Greenville Online.com, Jan. 21, 2010 available at http://www.greenvilleonline.com/article/20100121/BUSINESS/1210306/Top-court-OKs-allowing-Duke-Energy--to-intervene-in-Catawba-River-case.

Justices say Duke Energy can intervene in water fight, The Daily Record, Jan. 20, 2010

available at http://mddailyrecord.com/2010/01/20/justices-say-duke-energy-can-intervene-in-water-fight.