Tarrant Reg’l Water Dist. v. Herrman

Tarrant Reg’l Water Dist. v. Herrman, 656 F.3d 1222 (10th Cir. 2011) (holding that Oklahoma statutes prohibiting Oklahoma water users from selling water to users in Texas did not violate the Commerce Clause because the Red River Compact preempted it).

This case involves a dispute between a Texas water agency (“Tarrant”) and the State of Oklahoma over water apportioned under the Red River Compact (“Compact”). Tarrant filed a claim against the Oklahoma Water Resources Board (“OWRB”) in an attempt to invalidate a number of Oklahoma statutes that limited Tarrant’s ability to acquire water in Oklahoma for use in Texas. Tarrant claimed that the statutes violated the Dormant Commerce Clause and that they were preempted by the Compact under the Supremacy Clause. Further, Tarrant argued that it had standing to bring a claim against OWRB on behalf of its agreement with the Apache tribe concerning the tribe’s ability to sell water to Tarrant. The Tenth Circuit (“court”) held against Tarrant on all counts.

In order to bring water to booming Dallas-Fort Worth, Tarrant sought to acquire water from Oklahoma in three different ways. First, it sought to appropriate water subject to the Compact from a number of Oklahoma tributaries located in basins in Oklahoma and administered by the Compact. Second, it attempted to enter into contracts with landowners in Stephens County, Oklahoma, in order to acquire groundwater. Finally, it entered a memorandum of understanding (“MOU”) with the Apache Tribe concerning the Tribe’s potential water right.

The district court granted summary judgment in favor of OWRB on the Supremacy and Commerce Clause claims and found that Tarrant’s claims for both the Stephens County groundwater and the Tribe’s MOU were not ripe for review. Tarrant appealed to the court on all issues.

Reviewing all claims de novo, the court first looked at Tarrant’s claim that the Oklahoma statutes violated the Dormant Commerce Clause. The court acknowledged that the statutes in question would normally violate Dormant Commerce Clause because they place a burden on interstate commerce by explicitly imposing additional burdens on out-of-state actors. However, because the Compact was approved by Congress as federal law, and because Congress can consent to allowing states to violate the dormant commerce clause, the court needed to examine whether the Compact sanctioned Oklahoma’s statutes. If it did, then the statutes would be allowed under the Compact even if they would otherwise have violated the Dormant Commerce Clause. While cognizant of the fact that silence on the part of Congress does not constitute consent to condone commerce clause violations, the court held that the language of the compact was sufficiently clear to show that Congress affirmatively contemplated that it was consenting to state protectionism.

The court next addressed Tarrant’s preemption argument. Tarrant argued that under the Supremacy Clause, the Compact, through conflict preemption, prohibited Oklahoma’s protectionist statutes. The court disagreed for a number of reasons. First, preemption is generally disfavored in water law when statutes are longstanding in order to protect the police power of the states. Second, the Compact specifically stated its intent not to displace state law. Third, nothing in the comments to the Compact supported preemption. Finally, a compact authorizing states to undertake protectionist policies is unlikely to preempt those same laws. In other words, if a compact specifically allows states to deal with their own water issues, then it is unlikely that the compact intended to invalidate protectionist state laws.

Next the court turned to Tarrant’s claims related to purchased groundwater from Stephens County. The court held that Tarrant did not have standing to bring this claim because it had not suffered a justiciable injury. The court reached this conclusion because the statutes Tarrant challenged only applied to surface water rather than groundwater. The court also held that the Stephens County claim was not ripe because neither Tarrant nor the Stephens County landowners had filed for a groundwater permit.

Finally, the court held that the Apache Tribe claim was not ripe because the Tribe had not yet quantified its water right, nor had it actually entered into a contract with Tarrant to export water to Texas.

Therefore, the court held in favor of OWRB on all counts. Articulating that its role is not to pass judgment on the economic policy implications of the Compact, the court held that the Compact allowed Oklahoma to enact protectionist statutes at the expense of Tarrant.