Kansas v. Colorado
The Supreme Court largely upheld a special master's recommendation that Colorado pay Kansas money damages for violating the Arkansas River Compact by allowing excessive groundwater pumping, rejecting Colorado's argument that the Eleventh Amendment blocked any award tied to individual farmers' losses.
The Court also ruled that Kansas could recover prejudgment interest on the unliquidated damages, but only starting in 1985 rather than 1969, trimming years of interest Colorado would otherwise have owed.
How it got here: Kansas invoked the Court's original jurisdiction in 1986; after liability and remedy findings by a Special Master, both states filed exceptions to his third report on damages.
The Case in Depth
What happened
Kansas and Colorado share the Arkansas River under a 1949 congressionally approved compact meant to settle water disputes between the states. Colorado allowed groundwater pumping that depleted the river's flow in violation of the compact, harming Kansas farmers who depended on the water. Kansas sued Colorado in the Supreme Court's original jurisdiction seeking money damages for the resulting crop losses.
The question before the Court
After Colorado broke an interstate water-sharing agreement with Kansas, how much money did it owe, and could that award include decades of interest?
Why it matters
The ruling confirms that states can sue each other for real money damages over broken water-sharing agreements, not just orders to change behavior, and that interest can run on those damages even when the exact amount was uncertain for years. Farmers and states relying on interstate water compacts get a clearer sense of how compact violations will be remedied financially.
What changes now
The case returns to the Special Master to prepare a final judgment calculating the exact damages Colorado owes Kansas, applying the interest start date of 1985 and the crop-loss methodology the Court upheld. This is not a final money judgment itself but a ruling on the legal rules that will govern that final calculation.
What this does not decide
The Court did not set a final dollar amount owed by Colorado; it decided only the legal rules (Eleventh Amendment applicability, availability and start date of interest, and validity of the crop-loss method) that the Special Master must now apply to calculate a final judgment.
Concurrences and dissents
Dissent in part — Justice O'Connor
“There is nothing fair about awarding prejudgment interest as a remedy for the Compact's breach when all available evidence suggests that the signatories to the Compact neither intended nor contemplated such an unconventional remedy.”O'Connor's core objection to awarding any prejudgment interest.
Justice O'Connor agreed with the majority on the Eleventh Amendment and crop-loss issues but disagreed sharply on prejudgment interest. She argued that in 1949, when the compact was signed, courts rarely if ever awarded prejudgment interest on unliquidated, hard-to-ascertain damages, especially for breach of a contract between governments. She concluded Colorado and Kansas could not have anticipated liability for interest, so awarding any prejudgment interest was unfair and inconsistent with the compact's likely intent.
How the Court got there
The legal reasoning, step by step
- The Court applied its rule that the Eleventh Amendment, which normally bars private citizens from suing a state in federal court, does not block one state from recovering money damages from another state in an original action, so long as the suing state has its own direct interest rather than acting as a mere stand-in for its citizens.
- Because Kansas had controlled the litigation from the start and would control any recovery, the Court found Kansas was pursuing its own interest in enforcing the compact, even though part of the damages formula measured losses to individual farmers.
- On prejudgment interest, the Court noted that courts had long ago abandoned the old common-law rule denying interest on unliquidated claims (claims whose dollar amount isn't fixed in advance), instead treating interest as necessary to fully compensate an injured party for delay in payment.
- The Court agreed with the Special Master that interest should be governed by fairness rather than awarded automatically, and found that in 1949 Colorado could not have been certain interest would follow automatically from a compact breach, supporting a fairness-based rather than automatic approach.
- Weighing the equities, the Court concluded interest should run from 1985, when Kansas filed its complaint, rather than 1969, because the scope of damages remained genuinely uncertain in the interim and Kansas held the power to start the process of quantifying its claim sooner.
- On the crop-loss calculation, the Court found Colorado's expert testimony too speculative to override Kansas's linear-relationship model between water use and crop yield, so it left the Special Master's damages methodology intact.
Doctrinal impact
Cases affected by this decision
Reaffirms Funkhouser v. J. B. Preston Co. (290 U.S. 163)
Court relies on this 1933 case rejecting the liquidated/unliquidated distinction as a basis for interest awards.
Reaffirms Texas v. New Mexico (482 U.S. 124)
Court relies on this case as establishing that states may recover money damages from other states for compact violations.