Kansas v. Colorado

Background

Kansas sued Colorado over the Arkansas River, saying Colorado's post-Compact pumping of groundwater reduced river flows and violated the 1949 Arkansas River Compact. After years of proceedings, a Special Master found Colorado violated the Compact and recommended money damages measured by Kansas's losses, paid in dollars rather than water, and prejudgment interest beginning in 1969. The United States intervened because of its interest in flood control projects.

Reasoning

The Court addressed whether a State can recover money from another State under its original-action power, whether prejudgment interest is available for unliquidated damages, and when interest should start. The Court held that Kansas had a direct state interest and that the Eleventh Amendment did not bar a money award between States. The majority concluded prejudgment interest can be compensatory on unliquidated claims, approved use of individual farmers’ loss calculations and interest rates, and reviewed equitable factors to limit how far back interest runs.

Real world impact

The decision allows states to obtain money damages when a sister State breaches a water compact and confirms courts may award compensatory prejudgment interest in complex resource disputes. Here the Court narrowed the period for which interest is recoverable, which reduces the overall award. The Special Master's crop-loss methodology was largely upheld, affecting compensation for farmers and how future water-compact damages are calculated.

Dissents or concurrances

Justice O'Connor, joined by Justices Scalia and Thomas, agreed with the award of damages but dissented on prejudgment interest, arguing interest decades after the Compact was signed was unfair and not what the parties had contemplated.