SurReply — Kansas v. Colorado

&

No. 105, Original

27 2004

OFFICE OF Tit CLERK

In The

Supreme Court of the Anited States

+

STATE OF KANSAS,

Plaintiff,

v.

STATE OF COLORADO

o

On Exceptions To The Fourth Report

Of The Special Master

¢

MOTION FOR LEAVE TO FILE SUR-REPLY

AND KANSAS’ SUR-REPLY

TO THE UNITED STATES

¢

PHILL KLINE

Attorney General of Kansas

ERIC RUCKER

Chief Deputy Attorney General

DAVID DAVIES

Deputy Attorney General

HARRY KENNEDY

Assistant Attorney General!

LELAND E. ROLFS

Special Assistant Attorney General

JOHN B. DRAPER

Counsel of Record

Special Assistant Attorney General

ANDREW S. MONTGOMERY

JESSE A. BOYD

MONTGOMERY & ANDREWS, P.A.

Post Office Box 2307

Santa Fe, New Mexico 87504-2307

(505) 982-3873

April 23, 2004

—llllllllllSSSSEoEooalleeeEeee—eeeeel_l_™TO

COCKLE LAW BRIEF PRINTING CO (800) 225.6964

OR CALL COLLECT (402) 342-2631

1

MOTION FOR LEAVE TO FILE SUR-REPLY

TO THE UNITED STATES

Comes now the State of Kansas and files this Motion

for Leave to File the attached Kansas’ Sur-Reply to the

United States. The grounds for this Motion are as follows:

1. On December 8, 2003, the Court received, and

‘ordered filed, the Fourth Report of the Special Master. The

Court additionally ordered that “{e)xceptions to the Re-

port, with supporting briefs, way be filed within 45 days,”

and that “{rleplies, if any, with supporting briefs, may be

filed within 30 days.”

2. On January 22, 2004, Kansas filed Exceptions and

a supporting Brief. Replies would have been due on

February 23, 2004, but, at the request of the United

States, an extension of time until and including March 22,

‘2004 was granted. See Clerk's Letter of February 11, 2004.

3. The Brief for the United States in Opposition to

the Exceptions of Kansas (Brief for the United States or

U.S. Brief} was filed on March 22, 2004.

4. The United States, alihough a party to this action,

did not participate in the proceedings before the Special

Master that formed the basis for Kansas’ Exceptions to the

Fourth Report.

5. Kansas has had no previous opportunity to ad-

dress the newly announced positions of the United States

on the subjects addressed in the Brief for the United

States.

6. The United States has no objection to this Motion.

2

WHEREFORE, the State of Kansas moves for leave to

file the attached Kansas’ Sur-Reply to the United Scates.

Respectfully submitted,

PHILL KLINE

Attorney General of Kansas

ERIC RUCKER

Senior Deputy Attorney General

DAvID DAVIES

Deputy Attorney General

HARRY KENNEDY

Assistant Attorney General

LELAND E, ROLFS

Specia) 4 «sistant Attorney General

JOHN B. DRAPER

Counsel of Record

Special Assistant Attorney General

ANDREW S. MONTGOMERY

JESSE A. BCYD

MONTGOMERY & ANDREWS, P.A.

Post Office Box 2307

Santa Fe, New Mexico 87604-2307

(505) 982-3873

KANSAS’ SUR-REPLY

TO THE UNITED STATES

TABLE OF CONTENTS

Page

Ba Itachi lititatniderincnieusingaaniiandenentecinenseonneinia 1

HI, Summary Of ArMUMe4nit .......cccrccsrrccccssseccvcecesseeees 2

EEE er ee 2

B. Prejudgment Interest ...................ccccccceeeeees 3

mite i ebahicctitintaiiiinniiititinnniiiniitnanyiinipainiinne 4

A. Appointment of an Expert River Master

Whose Decisions Would Be Subject to

Clearly‘Erroneous Review Constitutes the

Most Efficient Way to Conclude this Liti-

CIID pitdntontnivciniensttatepuinniniateenstiinevernnene

1. The Arkansas River Compact Admini-

stration Is Not a Viable Alternative to

EEE Cn, CA

2. Contrary to the Assertion by the United

States, Appointment of a River Master

Can Be Expected to Minimize Further

Litigation on the Arkansas River............

3. Contrary to the Assertion by the United

States, All of the Court's Precedents

Support Appointment of an Expert River

Master in this Case ...............6:ccccceeceeeeees

4. This is One of Those Occasions on Which

the Court Should Appoint a River Mas-

ter to Implement Its Decree ...................

B. Kansas Should Be Entitled, Given the

Prior Balancing of Equities By the Court,

to Prejudgment Interest From 1985 on All

11

16

TABLE OF AUTHORITIES

Page

CASES

Albermarle Paper Co. v. Moody, 422 U.S. 405 (1975)....... 23

Brown v. Allen, 344 U.S. 443 (1953) .............cccccececeeeeeeerees 23

Colorado v. Kansas, 320 U.S. 383 (1943)...........:ccccceeeees 17

Green v. Biddle, 8 Wheat. 1 (1823)............cc:cccccceeseeceeeeereeees 6

Kansas v. Colorado, 185 U.S. 125 (1902).................cc008 8,17

Kansas v. Colorado, 206 U.S. 46 (1907).......cccccccecseceeeeeees 17

Kansas v. Colorado, 475 U.S. 1079 (19886).................: Iosebie 5

Kansas v. Colorado, 514 U.S, 673 (1995).............0006: 1, 5, 18

Kansas v. Colorado, 533 U.S. 1 (2001)...... 17, 21, 22, 23, 24

Kansas v. Nebraska, 525 U.S. 1101 (1999) ................... 8, 18

Kansas v. Nebraska, 538 U.S. 720 (20038)................ccccc008 18

Mississippi v. Louisiana, 506 U.S. 73 (1992).......0.0000: 9, 10

Nebraska v. Wyoming, 325 U.S. 589 (1945) ..............ccc0e 19

Nebraska v. Wyoming, 479 U.S. 1051 (1987) ...............0000. 8

Nebraska v. Wyoming, 515 U.S. 1 (1995) ...........ccceeeeeeeees cS)

New Jersey v. New York, 283 U.S. 805 (1931)....... 13, 14, 19

New Jersey v. New York, 347 U.S. 995 (1954)....... 12, 14, 19

Oklahoma v. New Mexico, 501 U.S. 221 (1991) 1...........06. 6

Rhode Island v. Massachusetts, 12 Pet. 657 (1838)............ 8

Texas v. New Mexico, 462 U.S. 554 (1983) ................ 8, 9,18

Texas v. New Mexico, 482 U.S. 124 (1987)................ passim

Texas v. New Mexico, 485 U.S. 388 (1988)............ 10, 18, 20

Texas v. New Mexico, 502 U.S. 803 (1991) ........... cc cceeeeeees 10

iil

_ TABLE OF AUTHORITIES - Continued

Page

United States v. Burr, 25 F. Cas. 30 (No. 14,692d)

ls ccesnsepsonninnbocsenss 23

Vermont v. New York, 417 U.S. 270 (1974)............ 11, 12,13

Wisconsin v. Illinois, 281 U.S. 179 (1930)...............cceeceeee 13

Wyoming v. Colorado, 298 U.S. 573 (1936).............6.. 13, 15

Wyoming v. Colorado, 309 U.S. 572 (1940) .........:cccceceeees 15

CONSTITUTIONAL PROVISIONS

ES ce oe 12

STATUTES

Arkansas River Compact, 63 Stat. 145 (1949).......... passim

EE a Sie 7

ee rmpngmennionnnets 6

EES AE oe A 7

Delaware River Basin Compact, 75 Stat. 688 (1961).......10

Pecos River Compact, 63 Stat. 159 (1949)... 24

a sn sca ersitdbnrminsticnsoncdensecess 9

SN MII, EREIUIID DP cccesccocsescocseseecsceseqcnccccsasocseseseens 17

MISCELLANEOUS

CARDOZO, THE NATURE OF THE JUDICIAL PROCESS

EEE STEEN SE Ooo OOO Oe a OE AE 23

Second Report of Special Master, Kansas v. Colo-

rado, No. 105, Orig. (Sept. 1997)..............cccceseseeeeeserereeens 1

iv

TABLE OF AUTHORITIES -— Continued

Third Report of Special Master, Karisas v. Colorado,

ERTS ane eee 17

Fourth Report of Special Master, Kansas v. Colo-

rado, No. 105, Orig. (Nov. 2003)...........0........cceeee passim

1

I. STATEMENT

The Special Master has submitted his Fourth Report

in this proceeding. Kansas has submitted six Exceptions to

the Fourth Report with its Brief in Support (Kan. Brief).

Colorado and the United States have filed replies to some

or all of the Kansas Exceptions. This Sur-Reply responds

to the Brief for the United States in Opposition to the

Exceptions of Kansas (Brief for the United States or U.S.

Brief).

Although the United States is a party, it has not

participated for the most part in proceedings before the

Special Master since the issues potentially affecting

federal agencies were disposed of in 1995. See Kansas v.

Colorado, 514 U.S. 673 (1995); Second Report of Special

Master 4 (1997). Although no federal agency will be

affected by the Court’s rulings on Kansas’ Exceptions to

the Fourth Report, the United States has nevertheless

asserted “a significant institutional interest in the proper

administration and enforcement of interstate compacts,”

and has opposed two of Kansas’ Exceptions. U.S. Brief 10.

The two issues addressed in the Brief for the United

States are (1) whether an expert river master should be

appointed to administer the final decree regarding Colo-

rado’s continued postcompact well pumping, and (2)

whether Kansas is entitled to prejudgment interest

beginning to accrue in 1985 on damages incurred before

1985 as a result of Colorado’s violations of the Arkansas

River Compact (Compact). In this Sur-Reply, the State of

Kansas examines the validity of the positions of the

United States on these two issues.

2

II. SUMMARY OF ARGUMENT

A. River Master

The State of Kansas has proposed that the decree in

this case be implemented by a Pecos-style river master in

light of Colorado’s insistence on continued postcompact

pumping and the consequent need to determine depletions

and credits each year to measure Compact compliance.

Thus, following closely the example of Texas v. New Mex-

ico, 482 U.S. 124 (1987), Kansas has recommended ap-

pointment of an expert river master whose duties will be

limited as the Court deems appropriate and whose deter-

minations will be subject to clearly erroneous review by

the Court. The United States fails to acknowledge the

success of the Pecos River Master. Rather, the United

States asserts a number of concerns of a theoretical nature

that were not concerns of the Court when it instituted the

Pecos River Master in 1987 and which have not proven to

be practical concerns during the 16 years of the Pecos

River Master’s existence.

The United States makes the questionable and un-

supported assertion that appointment of an independent,

expert river muster would actually promote adversarial

confrontations. This assertion challenges fundamental

notions that underlie this Court’s original jurisdiction and

the success of the Pecos River Master in minimizing

further litigation.

The counterproposal of the United States is to refer

such disputes as may arise in the implementation of this

Court’s decree to the Arkansas River Compact Administra-

tion. The States and Congress, however, did not create the

Administration to implement a litigated decree of this

Court. To accept this recommendation would be to upend

3

the teaching of the Court’s precedents and to encourage

unnecessary resort to this Court’s original jurisdiction.

B. Prejudgment Interest

The Court’s Opinion of June 11, 2001, set out a bright-

line rule that could be readily applied in other interstate

cases, subject to the Court’s discretion to balance the

equities in a particular case. The United States would

supplant the Court’s bright-line rule with a vague stan-

dard that would be difficult to administer in future cases.

It would also depart from the Court’s reasoning in the

cases on which the Court relied to reach its decision in this

case. In those cases, interest was applied to the amount of

damages owing at the time accrual of prejudgment inter-

est was to begin. The United States opposes such applica-

tion of prejudgment interest in this case.

The United States’ position would violate the principle

at the root of the rule announced in the Court’s Opinion,

namely, that the value of Kansas’ claim in the year in

which suit was commenced would be preserved against

diminution during the pendency of the litigation. In

contrast, the United States’ standard would ensure the

diminution of the value of the claim during the pendency

of the litigation and provide an incentive for the defendant

State to prolong the litigation. Prefiling damages, the

lion’s share of damages in this case, would be interest-free,

which would insulate from interest the very damages that

motivated the initiation of this litigation. If there had been

no post-1984 damages in this case, there would be no

prejudgment interest awarded at all under the United

States’ formulation.

4

The United States also focuses in part on the specific

amount of an interest award and implies that the princi-

ples endorsed by the Court in fashioning an award should

be driven by the dollar amount involved and not vice

versa. Finally, the United States erroneously suggests that

Kansas acquiesced in the accounting that underpins the

United States’ position. This is an unfair suggestion, given

Kansas’ unfailing support of a complete award of prejudg-

ment interest through and until the time of the Court’s

ruling that interest should begin to accrue in the year in

which the case was filed.

Ill, ARGUMENT

A. Appointment of an Expert River Master Whose

Decisions Would Be Subject to Clearly Errone-

ous Review Constitutes the Most Efficient Way

to Conclude this Litigation.

The Special Master and the State of Kansas agree

that expeditious resolution of this litigation is needed. See

Fourth Report of the Special Master 136. The United

States also seems to share this view. See U.S. Brief 14

(quoting Fourth Report 136). The Special Master and the

State of Kansas further agree that appropriate resolution

of this litigation must include a means fo assure that

Kansas will be reasonably protected from further viola-

tions of the Arkansas River Compact as a result of the

continuation of postcompact well pumping in Colorado.

See id., at 121 (“One of the most vexing issues left to be

decided in this case is how to reasonably assure that

Colorado will continue to meet its compact obligations”).

However, the United States opposes the appointment of an

expert river master, arguing that such an appointment

would prolong the litigation. Kansas believes that such an

5

appointment, with appropriate limitations and standard of

review, would greatly reduce the likelihood of further

litigation.

1. The Arkansas River Compact Administra-

tion Is Not a Viable Alternative to a River

Master.

The United States argues that the “appointment of a

river master is neither desirable nor necessary because

there is an available and preferable alternative,” namely,

the Arkansas River Compact Administration (Administra-

tion). U.S. Brief 14-15. The United States fails to acknowl-

edge, however, that it was because of the structural

inability of the Administrativn to resolve disputes related

to postcompact well pumping and Compact compliance

that this case was filed in the first place. See, e.v., Kansas

v. Colorado, 514 U.S. 673, 689 (1995) (“As late as 1985,

Colorado officials refused to permit an investigation by the

Administration of well development in Colorado”); Kansas

Brief in Support of Motion for Leave to File Complaint 8-9.

Moreover, Colorado’s primary argument against the

Motion for Leave to File Complaint in this case was that

Kansas had “an adequate means for vindicating its con-

cerns through a pending investigation by the Administra-

tion.” Colorado's Brief in Opposition to Motion for Leave to

File Complaint 1. The Court implicitly rejected the Ad-

ministration as a viable alternative for determining the

issues in this proceeding by granting Kansas leave to file

its complaint. See Kansas v. Colorado, 475 U.S. 1079

(1986) (order granting motion for leave to file complaint).

The Administration is no more able to protect the interests

of Kansas today than it was when this litigation began 18

years ago.

6

The United States argues that “(t]he Administration

is the appropriate body to resolve complex technical issues

respecting the computer model that will be used to meas-

ure Colorado’s compliance with its Compact obligations.”

U.S. Brief 10-11. This statement disregards the limita-

tions, both procedural and technical, placed on the Ad-

ministration by the States and Congress. Simply put, the

Administration cannot resolve any issue on which the

States disagree. This fundamental limitation is at the

heart of the intent of the States and of Congress in their

approval of the Arkansas River Compact. See Arkansas

River Compact (63 Stat. 145 (1949)), Art. VIII-D, App. to

Kan. Brief 12 (“Each State shall have but one vote in the

Adrninistration and every decision, authorization or other

action shall require unanimous vote”).

Although the Administration can sometimes provide a

convenient forum for the States to discuss issues on which

they can come to agreement, the Administration is an

unworkable forum in which to resolve issues on which the

States cannot agree. The Court has consistently declined

to refer compact enforcement issues to a body that can act

only with the cooperation of all the States. See Green v.

Biddle, 8 Wheat. 1, 90-91 (1823); Texas v. New Mexico, 482

U.S. 124, 133 (1987) (“That [allocation] formula was

fashioned in the course of this litigation, which was

occasioned by the inability of the Pecos River Commission,

on which Texas and New Mexico have the only votes, to

agree on how river water should be divided”); Oklahoma v.

New Mexico, 501 U.S. 221, 240-241 (1991).

Further, even if the Administration were able to

resolve disputes, it has little inherent expertise to “resolve

complex, technical issues.” U.S. Brief 14. Two thirds of the

members of the Administration are water users, not

7

technical engineering or computer modeling exp.rts. See

Arkansas River Compact, Art. VIII-C, App. to Kan. Brief

12. The Administration has no technical staff, independent

or otherwise. To the extent that technical engineering or

hydrologic issues become relevant to the Administration’s

activities, the Administration simply relies on technical

experts of the States or the Federal Government. See, e.g.,

Arkansas River Compact, Art. VIII-G, App. to Kan. Brief

14.

As demonstrated above, the Arkansas River Compact

Administration is not. equipped to resolve disputed iss\ies

such as those that the United States would have it resolve.

Its inability to make decisions on disputed issues and its

overall lack of technical expertise make the Administra-

tion an unworkable forum to resolve issues arising under

the decree in this case.

2. Contrary to the Assertion by the United

States, Appointment of a River Master Can

Be Expected to Minimize Further Litiga-

tion on the Arkansas River.

The United States makes the unsupported assertion

that appointment of a river master to resolve disputes

between the States under the decree in this case “would

likely promote continued adversarial proceedings and

prolong this litigation.” U.S. Brief 11. The State of Kansas

believes otherwise. In Kansas’ view, the presence of a

court-appointed river master to resolve disputes under the

decree would promote settlement of such disputes and

minimize further litigation, particularly because an expert

river master would be well-suited to resolve complex

technica! issues.

8

The Court itself has expressed views that appear to be

closer to those of Kansas than of the United States in this

case. In Rhode Island v. Massachusetts, 12 Pet. 657 (1838),

the State of Rhode Island sought resolution of a boundary

dispute with Massachusetts. Daniel Webster filed a motion

to dismiss the suit for want of jurisdiction. The Court

denied the motion. In the course of discussing compacts

adopted under the Compact Clause of the Constitution,

the Court stated, “Few [compacts], if any, will be made,

when it is left to the pleasure of the State in possession;

but when it is known that some tribunal can decide on the

right, it is most probable that controversies will be settled

by compact.” Jd., at 726 (quoted in Kansas v. Colorado, 185

U.S. 125, 144 (1902) (overruling Colorado’s demurrer to

Kansas’ suit for apportionment of the Arkansas River));

accord, Texas v. New Mexico, 462 U.S. 554, 569 (1983).

Likewise, when it is known that a river master can decide

issues arising under the decree in this case, it is most

probable that controversies will be settled by agreement,

thus minimizing proceedings before the river master and

proceedings directly before this Court.’

In this context, Colorado is the State “in possession” of

the resource and, as the Court suggested in Rhode Island v.

’ The United States asserts that it has encouraged the use of

alternative means of dispute resolution in original actions “as a means

to diffuse or resolve interstate disputes that might otherwise lead to

motions for leave to invoke this Court's original jurisdiction.” U.S. Brief

17 n.4. Actually, in both cases cited by the United States, motions for

leave to invoke this Court’s original jurisdiction were filed. See Ne-

braska v. Wyoming, No. 108, Orig., 479 U.S. 1051 (1987); Kansas v.

Nebrasku, No. 126, Orig., 625 U.S, 1101 (1999). It was only after this

Court had accepted the cases and had made preliminary rulings that it

was possible to resolve those interstate disputes.

9

Massachusetts, few agreements on disputed issues, if any,

will be made when it is left to the pleasure of the State in

possession. The Court discussed this issue explicitly in the

Pecos River litigation:

“(If all questions under the Compact had to be

decided. by the Commission in the first instance,

New Mexico could indefinitely prevent authorita-

tive Commission action, solely by exercising its

veto on the Commission. As New Mexico is the

upstream State, with effective power to deny wa-

ter altogether to Texas except under extreme

flood conditions, the Commission’s failure to take

action to enforce New Mexico’s obligations under

Art. III(a) would invariably work to New Mexico's

benefit.” Texas v. New Mexico, 462 U.S. 554, 568-

569 (1983).

Of course, Kansas retains its right to seek relief in this

Court under such circumstances, as the Court held in that

case, but the purpose of utilizing an expert river master,

whose decisions are subject to clearly erroneous review by

the Court, is to minimize the need to resort to this Court’s

original jurisdiction. Indeed, a concern identified by the

Court in Texas v. New Mexico was the likelihood of repeated

original actions if a river master were not appointed. See 482

U.S. 124, 134 (“Absent some disinterested authority to make

determinations binding on the parties, we could anticipate a

series of original actions to determine the periodic division of

the water flowing in the Pecos”). ,

The Court has earlier emphasized the need to utilize

its original jurisdiction sparingly. Mississippi v. Louisiana,

50€ U.S. 73, 76-77 (1992); Nebraska v. Wyoming, 616 U.S.

1, 8 (1995). Nevertheless, if disputes arise between Kansas

and Colorado over the implementation of the decree in this

10

case, only this Court has jurisdiction to resolve those

disputes. See, e.g., Mississippi v. Louisiana, 506 U.S. 73,

77-78 (1992).

The United States fails to acknowledge that the

expert Pecos River Master has functioned well and re-

quired little, if any, of the Court’s time. In the 16 years

since the appointment of the Pecos River Master, only once

has review even been sought of his decisions. See Texas v.

New Mexico, 485 U.S. 388, 394 (1988); 502 U.S. 803 (1991).

Further, no new original jurisdiction litigation has been

initiated, nor has either State sought to reopen the decree.

In addition, only written submissions, for the most part,

appear to have been employed by the Pecos River Master,

with little apparent need for hearings. See App. to Kan.

Brief 50-85. Thus, the Pecos River Master has proved to be

an efficient and effective means for implementing the

Amended Decree in Texas v. New Mexico and avoiding

further original jurisdiction litigation on the issues cov-

ered by that decree.

On the Delaware River, the appointment of a Supreme

Court river master has been followed by the adoption of

the Delaware River Basin Compact, which incorporates

the Court’s Decree and provides for coordination between

the Delaware River Basin Commission and the Court's

River Master in the management of the Delaware River.

See Delaware River Basin Co:npact, 75 Stat. 688 (1961).

This and the Pecos River experience refute the United

States’ assertion that appointment of a river master on the

Arkansas River can be expected to “promote continued

adversarial proceedings and prolong this litigation.” U.S.

Brief 11. In fact. the opposite is much more likely.

11

3. Contrary to the Assertion by the United

States, All of the Court’s Precedents Sup-

port Appointment of an Expert River Mas-

ter in this Case.

The United States asserts that “the Court has rejected

the appointment-of a river master or similar agent in” four

cases. U.S. Brief 13 n.3. That assertion is open to consid-

erable question in three of those cases, and all four cases

support appointment of an expert river master in this

case.

In Vermont v. New York, 417 U.S. 270 (1974), Vermont

claimed that New York and International Paper Co. were

“responsible for a sludge bed in Lake Champlain and

Ticonderoga Creek that fhad] polluted the water, impeded

navigation, and constituted a public nuisance.” Jbid. With

the approval of the Special Master, the States had negoti-

ated a settlement that hinged upon the entry of a proposed

consent decree by the Court. The consent decree would

install a “South Lake Master” with “all the usual powers of

Special Masters named by (the Court],” and the mandate

to “resolve matters of controversy between the parties

after they (had) exhausted all administrative and other

remedies (except judicial review).” Jd., at 270-71. In

refusing to enter the consent decree, the Court noted that:

“[N]Jo findings of fact have been made; nor has

any ruling been resolved concerning [the] equita-

ble apportionment of the water involved ... The

proposed South Lake Master would police the exe-

cution of the settlement set forth in the Decree

and pass on to this Court his proposed resolution

of contested issues that the future might bring

forth. Such a procedure would materially change

the function of the Court in these interstate

contests. Insofar as we would be supervising the

12

execution of the Consent Decree, we would be

acting more in an arbitral rather than a judicial

manner.” /d., at 276-77 (emphasis added).

The Court contrasted the case before it with New Jersey v.

New York, 347 U.S. 995 (1954), where a river master was

appointed on the Delaware River:

“In that case (1) the rights of the parties to the

water had been determined by the Court and (2)

the sewage and industrial waste problems had

been adjudicated and resolved._All that remained

was to supervise the application of the various

formulae which the Court had decreed, based on

findings of fact.” Vermont, 417 U.S., at 275-76.

In this case, the vast majority of issues have been litigated,

there have been numerous findings of fact, there has been a

quantification of the apportionment of water pursuant to the

Arkansas River Compact, and there is a model by which

Colorado’s compliance is proposed to be measured. All that

remains is for the Court to enter a decree and “supervise the

application of the various formulae,” id., at 275-76, which was

precisely the situation on the Delaware, see ibid., and on the

Pecos, see Texas v. New Mexico, 482 U.S. 124, 134 (1987). As

the Special Master has acknowledged, this case is “remark-

ablly)” similar to Texas v. New Mexico. Fourth Report 125.

Moreover, by their settlement, Vermont and New York

were asking the Court to exceed its Article III powers.

Vermont v. New York, 417 U.S., at 277. The appointment of

a river master in this case would not cause the Court to

exceed its Article III powers. See Texas vu. New Mexico, 482

U.S. 124, 134 (1987) (“[Wle are quite sure that our juris-

diction over original actions like this provides us with

ample authority to appoint a river master and to enforce

our judgment”). Nor is the Special Master, Colorado, or the

r~

13

United States claiming that such an appointment would

exceed the Court’s Article III powers.

In addition to the important differences between this

case and Vermont noted above, the Special Master’s and

the United States’ reliance on Vermont leads to a skewed

view of earlier Supreme Court precedents. Following the

per curiam Opinion in Vermont, the Special Master. and

the United States cite Wisconsin v. lilinois, 281 U.S. 179

(1930), New Jersey v. New York, 283 U.S. 805 (1931), and

Wyoming v. Colorado, 298 U.S. 573 (1936) as instances

where the Court has refused to appoint a river master or

“similar agent.” See Fourth Report 130-131; U.S. Brief 13

n.3. But an examination of those cases shows that they

were not, in fact, such instances.

In Wisconsin v. Illinois, 281 U.S. 179 (1930) the Court,

responding to alternative proposals by Special Master

Charles Evans Hughes, chose to require the filing of semi-

annual progress reports directly with the Court instead of

appointing a commission to supervise the gradual reduc-

tion in water diversion by the City of Chicago. Id., at 198.

The Court chose between two options, both of which

provided for the Court to retain jurisdiction to supervise

implementation of its decree. The alternative chosen by

the Court actually required more direct attention by the

Court than a commission would have. The Court recog-

nized this in Texas v. New Mexico, 482 U.S. 124 (1987), a

post-Vermont decision, by eiting Wisconsin to support the

proposition that a solution involving a river master, “or a

like one, has been employed when the occasion demands.”

Texas v. New Mexico, 482 U.S., at 134.

In New Jersey-v. New York, 283 U.S. 805 (1931), the

Court ellowed the City of New York to divert 440 million

14

gallons of water per day (mgd) from the Delaware River,

subject to a minimum streamflow requirement and the

rights of the other States to conduct inspections. Jd., at

805-806. In that initial decree, the Court denied without

prejudice a request for the appointment of a river master,

but the Court retained jurisdiction and provided that any

of the parties might apply at the foot of the decree for

further relief. /d., at 807.

Twenty-three years later, the Court issued a new

decree approving an increase im diversions by the City of

New York to 800 mgd after the completion of certain

reservoirs, subject to certain conditions and obligutions,

and authorized diversion of 100 mgd by New Jersey, also

subject to certain conditions and obligations. Again, the

Court retained jurisdiction, but this time a river master

was also appointed. New Jersey v. New York, 347 U.S. 995

(1954).

The Delaware River Master was given certain general

duties and certain specific duties, including administering

the decree “so as to have [its] provisions ... carried out

with the greatest possible accuracy.” Jd., at 1002. The

specific duties include daily computations of streamflows

adjusted to what they would have been absent the effects

of upstream water operations and the directing of required

daily releases from reservoirs. Jd., at 1003-1004. The

Decree requires the River Master to make periodic quanti-

fications on the basis of “observation and estimates”

without specifying any formulas or methodologies. Jd., at

1003-1004. Thus, the New Jersey v. New York Delaware

River litigation demonstrates that the Court has found it

appropriate to appoint a river master where there are

recurring requirements for hydrologic calculations and

15

estimates, as there wil] be under the Arkansas River

Decree.”

Finally, the United States asserts that in Wyoming v.

Colorado, 298 U.S. 573 (1936), the Court “rejected the

appointment of a river master or similar agent.” U.S. Brief

13 n.3. On the contrary, in Wyoming, the Court merely

denied Wyoming’s request to install Wyoming measuring

devices at points of diversion inside Colorado. 298 U.S., at

585-86. There is 10 mention during the Court's discussion

of the issue, or elsewhere in the Opinion, of a request for

the appointment of a river master. In a later Wyoming v.

Colorado .Opinion, the Court referred to the issue of

measuring devices:

“With respect to the request for an order permit-

ting Wyoming to install measuring devices for

the purpose of determining the amount of water

diverted in Colorado, the Court recognized that

the problem of measuring and recording the di-

versions was a difficult one and the hope was ex-

pressed that the two States by cooperative efforts

would find a satisfactory solution. Leave was

granted to Wyoming to make a later application

if the States were unable to agree. It seems that

measuring devices have been installed.” Wyo-

ming v. Colorado, 309 U.S. 572, 578-79 (1940)

(citations omitted).

Again, nowhere in the Opinion does the Court mention the

appointment of a river master or the rejection of a request

therefor. Instead, the Court had offered direct recourse to

* This was also the situation in Texas v. New Mexico, 482 U.S. 124

(1987), as discussed below.

16

the Court if agreement could not be reached, the opposite

of what the United States is suggesting here. And, with

direct recourse to the Court available, the States, not

surprisingly, reached agreement.

As shown above, a careful reading of the cases cited in

opposition by the United States shows that they are not

contrary to the appointment of an expert river master in

this case, but, instead, affirmatively support such an

appointment.

4. This is One of Those Occasions on Which

the Court Should Appoint a River Master to

Implement Its Decree.

The United States acknowledges that the Court, “on

rare occasions, has appointed a river master to administer

interstate water rights decrees.” U.S. Brief 10. As the

Court has stated: “In exercising this power [to appoint a

river master], we have taken a distinctly jaundiced view of

appointing an agent or functionary to implement our

decrees ... But ... that solution, or a like one, has been

employed when the occasion demands.” Texas v. New

Mexico, 482 U.S. 124, 134 (1987) (citations omitted). The

Pecos litigation was clearly one of those occasions. This

litigation is another.

The United States, in its discussion of the appoint-

ment of the Pecos River Master, properly focuses on the

key considerations identified by the Court as being the

“natural propensity of these two States to disagree if an

allocation formula leaves room to do so” and the prospect

of “a series of original actions to determine the periodic

division of water.” U.S. Brief 13 (quoting Texas v. New

Mexico, 482 U.S., at 134).

17

Determining whether there is 2 “natural propensity of

these two States to disagree” is necessarily one of judg-

ment, but one can look to certain indices of disagreement

that can provide some guidance. For instance, there has

been more litigation on the Arkansas River between

Kansas and Colorado than on the Pecos River between

Texas and New Mexico. It was a concurrent resolution of

the Kansas Legislature in 1901 that resulted in the

Kansas Attorney General's initiating litigation that same

year against Colorado, which led to the articulation of the

Court’s authority and principles for allocating the waters

of interstate rivers between States. See 1901 Kan. Sess.

Laws 766; J’ansas v. Colorado, 185 U.S. 125 (1902). That

litigation, brought under the Court’s original jurisdiction,

ended with the Court’s decision in Kansas v. Colorado, 206

U.S. 46 (1907). Shortly thereafter, however, further litiga-

tion arose between Kansas and Colorado water users in

the Federal District Court for Colorado, which led, in turn,

in 1928, to the filing of further origina! litigation in this

Court, which lasted almost 16 years. See Colorado v.

Kansas, 320 U.S. 383, 387-388 (1943).

The Arkansas River Compact was thereafter negoti-

ated and approved by Congress in 1949. 63 Stat. 145

(1949). Based on Compact violations beginning in 1950,

this litigation was filed in 1985.° “Despite the diligence of

the parties and the Specia] Master,” Kansas v. Colorado,

533 U.S. 1, 16 (2001), and despite the initiation and

settlement of another interstate water dispute involving

* Compact violations by Colorado have been determined in this

litigation to have occurred in the years 1950-1984 and 1986-1996. App.

to Third Report 64, 86 (col. g).

18

these two States in a different basin, see Kansas v. Ne-

braska, 525 U.S. 1101 (1999) (order granting leave to file

bill of complaint); 538 U.S. 720 (2003) (decree approving

settlement), this case has continued unabated and unset-

tled. See App. to Fourth Report 23-26 (joint report of the

States re failure to settle despite best efforts of the Attor-

neys General). Thus, the disputes between these two

States over the Arkansas River have been on the original

docket of this Court some forty years since 1900.

By contrast, the first interstate litigation on the Pecos

was initiated in this Court in 1974. See Texas v. New

Mexico, 462 U.S. 554, 557-562 (1983). That litigation

ended with the appointment of the Pecos River Master in

1988. Texas v. New Mexico, 485 U.S. 388 (1988). The

fourteen years of litigation on the Pecos in the original

jurisdiction thus constitute approximately one third of the

time consumed in original litigation on the Arkensas.

Further, impasse has arisen on the Arkansas River Com-'

pact Administration, just as it did on the Pecos River

Commission. See Kansas v. Colorado, 514 U.S. 673, 689

(1995); Texas v. New Mexico, 462 U.S. 554, 560-562 (1983).

Thus, the propensity for the two States in this case to

disagree would appear to be at least as great as in Texas v.

New Mexico.

The United States does not dispute that the allocation

formula in this case leaves room for the two States to

disagree. In fact, it emphasizes the complex nature of the

computer modeling issues that will need to be resolved in

order to implement the Hydrologic-Institutional Model (H-

I Model) or change it. The United States argues that “the

task of modeling the Arkansas River Basin is extraordi-

narily complex,” and therefore, “appointment of a river

19

master is not appropriate in the circumstances presented

here.” U.S. Brief 12.

On the contrary, the Court’s precedents would suggest

that the greater the complexity of implementation, \e

greater the need for a river master. See discussion of New

Jersey v. New York, supra, at 13-15. The Court has r~t.

found arguments based on the complexity of enfc: sement

issues sufficient to dissuade it from addressing those

issues directly. In response to the suggestion that the

Court was embarking upon an enterprise involving admin-

istrative functions beyond its province in apportioning the

waters of an interstate river, the Court has stated, “The

difficulties of drafting and enforcing a decree are no

justification for us to refuse to perform the important

function entrusted to us by the Constitution.” Nebraska v.-

Wyoming, 325 U.S. 589, 616 (1945). And if such issues are

not referred to an expert river master, then they remain

for direct resolution by the Court itself.

The United States also appears to draw a distinction

between the H-I Model, which has been used in this case

by the Special Master to determine Compact compliance,

and the “formula” for apportioning the Pecos River’s flows

in Texas v. New Mexico. See U.S. Brief 13. It is undoubt-

edly true that there have been advances in the sophistica-

tion and accuracy of hydrologic analysis through the use

of, inter alia, computer models, since Texas v. New Mexico.

That increase in sophistication and accuracy, however,

does not change the fundamental fact that both methods

for allocation are essentially formulas. With the advent of

computers, it is now more convenient and practical to

handle complex calculalions that represent hydrologic

phenomena more completely and accurately than in

earlier decades.

20

If the scope of responsibility of a river master as set by

the Court in this case is essentially the same as the scope

of responsibility for the Court’s Pecos River Master, the

greater part of the river master’s duties will be to resolve

recurring disputed data and modeling issues. See Kan.

Brief 10-11. There will also be occasions where a State

might propose a change in the H-I Model associated with

operational changes in Colorado that would go beyond the

yearly implementation issues. There is no reason to

believe that this will challenge the capabilities of an

expert river master such as Kansas has proposed. The

Pecos River Master is Neil S. Grigg, who is a Professor of

Civil Engineering at Colorado State University. See Texas

v. New Mexico, 485 U.S. 388, 394 (1988) (order appointing

river master); Tr. Vol. 168 at 51. It is an inherent part of

Kansas’ proposal, and the basis for proposing clearly

erroneous review by the Court, that the river master on

the Arkansas River also have technical expertise of a

similar degree.

The clearly erroneous standard of review has worked

well on the Pecos River, neither requiring significant time

on the part of the Court, nor allowing the river master

“largely unreviewable discretion.” See U.S. Brief 14. Thus,

the United States’ concerns create a false issue that has

not proven to be a problem on the Peeos River. There is no

reason to believe that it would prove to be a problem on

the Arkansas River.

In view of the foregoing, it would seem wise for the

Court to appoint a river master with technical expertise

and clearly specified duties, whose decisions would be

subject to clearly erroneous review, instead of explicitly or

implicitly inviting the parties fo return directly to the

Court with decree implementation issues in this case.

21

B. Kansas Should Be Entitled, Given the Prior

Balancing of Equities By the Court, to Pre-

judgment Interest From 19865 on All Damages.

Kansas understands the Court’s Opinion of June 11,

2001, to award prejudgment interest beginning in 1985 on

the damages then owing. The Court identified Kansas’

filing of this action as the event triggering the accrual of

interest in this case. Kansas v. Colorado, 533 U.S. 1, 15-16

(2001). This determination implies that interest should

accrue on the damages arising out of Kansas’ then-existing

claims because it is those claims, and not such claims as

might later arise, of which Colorado then had notice. See

ibid.

The United States does not share this understanding

of the Court’s Opinion. The United States focuses on the

methodology for calculating prejudgment interest as the

States implemented it pursuant to the Special Master's

requirements before this Court issued its Opinion (incor-

rectly suggesting that Kansas accepted that methodology).

In the United States’ view, the Court did not intend to

alter that methodology when it decided that interest

should begin to accrue only after Colorado had notice of

Kansas’ claims. U.S. Brief 21 (“[W]hen this Court deter-

mined that prejudgment interest would commence in.

1985, rather than in 1969, the Court did not intend to

change the method by which the States had determined to

calculate the interest award.”). Rather, the United States

argues, the Court envisioned a specific amount of damages

to be awarded, and the Court’s determination that interest

should begin accruing in 1985 did not reflect a sentiment

to uward more interest than that generated by the prior

methodology. /bid. (citing App. to Fourth Report 14).

22

Kansas disagrees with the United States’ assumption

that the Court had in mind a specific damages figure to

which Kansas should be limited. The Court’s determina-

tion that interest should begin accruing in 1985 surely

signifies more than some dollar figure that the Court

envisioned for Kansas’ damages award. It signifies, if

nothing else, that once litigation is initiated and a defen-

dant State is put on notice of the plaintiff State’s claims,

the defendant State should not be exempt from interest on

the damages arising out of those claim3. In this case the

Court ruled that interest should not accrue before Kansas’

filing of suit due to “the uncertainty over the scope of

damages that prevailed” until that time and the fact that

only Kansas had the power to begin the process of quanti-

fying those damages. 533 U.S., at 16. But when Kansas

did begin that process and removed any remaining uncer-

tainty about the claims it was asserting, there was no

longer any reason to exempt Colorado from tne accrual of

interest on Kansas’ claims. The prior methodology for

calculating interest would exempt Colorado from interest

on all damages arising out of claims existing at the time of

filing of the complaint. Interest would accrue only on

damages arising thereafter. Indeed, if Kansas had in-

curred no additional damages after the filing of suit, the

Court’s award of interest would have been meaningless.

There is nothing in the Court’s Opinion to support such a

result.

Arguing that the Opinion does reflect an intention to

exempt from the accrual of interest all damages existing

as of the filing of suit, the United States cites the “unique

history and equities” of this origina] action; it would

distinguish the Court’s awards of interest in original

actions from principles guiding such awards in cases

23

outside the Court’s original jurisdiction. U.S. Brief 21-22.

The United States emphasizes that the Court awarded

interest as an exercise of discretion rather than on the

basis of “a ‘rigid theory of compensation for money with-

held.’” Jd., at 22 (quoting Kansas v. Colorado, 533 U.S., at

15).

Kansas agrees that the Court’s decision to award

interest was and is discretionary. But the discretionary

nature of the decision is no indication that the Court

intended to exempt Colorado from interest on the damages

existing at the time this action was filed. To say that a

decision is discretionary is not to say that it should be

undertaken without the guidance of neutral principles.

See, e.g., Albermarle Paper Co. v. Moody, 422 U.S. 405, 416

(1975) (“[D)iscretionary choices are not left to a court’s

‘inclination, but to its judgment; and its judgment is to be

guided by sound legal principles’”) (quoting United States

v. Burr, 25 F. Cas. 30, 35 (No. 14,692d) (C.C.D. Va. 1807)

(Marshall, C.J.)); Brown v. Allen, 344 U.S. 443, 496 (1953)

(“We must not invite the exercise of judicial impression-

ism. Discretion there may be, but ‘methodized by analogy,

disciplined by system.’ ... Discretion without a criterion

for its exercise is authorization of arbitrariness”) (Frank-

furter, J.) (quoting CARDOZO, THE NATURE OF THE JUDICIAL

PROCESS 139, 141 (1921)). In this original action, in par-

ticular, the precedents that the Court cited in deciding to

award interest are exclusively from outside its original

jurisdiction. See Kansas v. Colorado, 633 U.S., at 10-15.

Those same precedents compel the conclusion that pre-

judgment interest sho.lld accrue on damages owing at the

time an action is filed rather than only on such new

damages as the plaintiff may incur while the action is

pending. See Kan. Brief 29 (citing cases).

24

The United States argues that it is fair to exempt all

damages incurred as of the filing of suit from interest

reflecting lost investment opportunities. U.S. Brief 22. It

points to “the uncertainties attending the availability of

money damages and prejudgment interest as a remedy

for violation of an interstate compact at the time the

Arkansas River Compact was negotiated.” Jbid. (citing

opinion of O'Connor, J., concurring in part and dissenting

in part).

A majority of the Court has ruled, however, that,

despite uncertainties about whether interest would be

imposed as a matter of course, Colorado had notice when it

signed the Compact that interest could be awarded as part

of an equitable remedy: “{Wle are confident that, when it

signed the Compact, Colorado was on notice that it might

be subject to prejudgment interest if such interest was”

necessary to fashion an equitable remedy ....” Kansas v.

Colorado, 533 U.S., at 14; accord, Texas v. New México, 482

U.S. 124, 130 (1987) (holding that Court’ could award

money damages for breach of Pecos River Compact despite

“the lack of specific provision for a remedy in case of

breach”). The equitable. considerations that justified

deferring the accrual of interest to the time of suit con-

versely justify an award of interest on the damages then

owing. Colorado had indisputable knowledge of Kansas’

claims by. that time, and the process of adjudicating those

claims was underway. An award of interest on the dam-

ages then owing is consistent with — and, indeed, neces-

sary to — the equitable remedy that the Court has

fashioned for Colorado’s breach of the Compact.

25

IV. CONCLUSION

The Exceptions of the State of Kansas to the Fourth

Report of the Special Master that have been challenged by

the United States should be sustained.

Respectfully submitted,

PHILL KLINE

Attorney General of Kansas

ERIC RUCKER

Senior Deputy Attorney General

DAVID DAVIES

Deputy Attorney General

HARRY KENNEDY

Assistant Attorney General

LELAND E. ROLFS

Special Assistant Attorney General

JOHN B. DRAPER

Counsel of Record

Special Assistant Attorney General

ANDREW S. MONTGOMERY

JESSE A. BOYD

MONTGOMERY & ANDREWS, ).A.

Post Office Box 2307

Santa Fe, New Mexico 87504-2307

(505) 982-3873