Opinion ID: 613271
Heading Depth: 3
Heading Rank: 6

Heading: Consent Analysis

Text: To determine whether Congress consented to the Oklahoma statutes, we must examine the Compact. Sporhase is distinguishable because in that case Nebraska was attempting to regulate the interstate transfer of groundwater that was not subject to an interstate compact. See Sporhase, 458 U.S. at 960, 102 S.Ct. 3456. In this case, the water is subject to the Red River Compact, and the issue is whether the Compact insulates Oklahoma's statutes from dormant Commerce Clause challenge. An interstate compact remains a legal document that must be construed and applied in accordance with its terms. Texas v. New Mexico, 482 U.S. at 128, 107 S.Ct. 2279. We recently decided whether a compact authorized state restrictions on interstate commerce and emphasized that the inquiry into Congress's intent begins with examination of the language of the compact itself. See EnergySolutions, LLC v. Utah, 625 F.3d 1261, 1271 (10th Cir. 2010); see also Montana v. Wyoming, ___ U.S. ___, 131 S.Ct. 1765, 1779, 179 L.Ed.2d 799 (2011) (interpreting the Yellowstone River Compact by looking to its plain terms.). The Compact apportions water among the four compacting states. It also authorizes the states to regulate the use of apportioned water. The broad language of key Compact provisions inoculates the Oklahoma statutes challenged here from dormant Commerce Clause attack. We reach this conclusion understanding the case law as calling for caution before insulating arguably protectionist state laws from dormant Commerce Clause scrutiny. The Compact, however, contains the clear statement of congressional authorization of state regulation that Sporhase and Wunnicke require.
The Compact explicitly defers to and recognizes plenary state authority over water use: Each Signatory State may use the water allocated to it by this Compact in any manner deemed beneficial by that state. Id. § 2.01. This provision continues: Each state may freely administer water rights and uses in accordance with the laws of that state. Id. By ratifying that Oklahoma may freely administer apportioned water and use it in any manner the state deems beneficial, Congress conferred broad regulatory authority on the state using unqualified terms.
Section 2.10 echoes and reinforces § 2.01's expansive acknowledgement of state discretion: Nothing in this Compact shall be deemed ... to interfere within its boundaries the appropriation, use, and control of water. Id. § 2.10. This reaffirmation of state control of water, in addition to state appropriation and use authority, encompasses state restrictions on what water appropriators may do with their appropriated water. Section 2.10's non-interference language might suggest no more than preservation of existing state laws without protecting them from dormant Commerce Clause attack, similar to the Federal Power Act in New England Power. See § 201(b), 41 Stat. 1063 (codified as amended at 16 U.S.C. § 824(b)). But the Compact's Interpretive Comments refute this suggestion and confirm our reading of § 2.10. As to Article II of the Compact, which includes § 2. 10, the Interpretive Comments explain that each state is free to continue its existing internal water administration, or to modify it in any manner it deems appropriate. Aplt.App. Vol. I, 251. When read in the context of the Compact as a whole, § 2.10 supports congressional consent to the states to regulate water apportioned to them. Even if the Compact had intended to preserve then-existing state water laws, it preserved some protectionist state laws. Some of the statutes that Tarrant challenges as treating in-state and out-of-state water use differently predate the signing and ratification of the Compact and would have been familiar to the Compact's drafters. See H.B. 1596, 33rd Leg., 1st Sess. (Okla.1972) (enacting OKLA. STAT. tit. 82, § 1085.22 and amending OKLA. STAT. tit. 82, § 1085.2(2) and OKLA. STAT. tit. 82, § 105.16). Accordingly, when Congress ratified the Compact and granted to each state the power to freely administer the water, it gave congressional consent to the pre-Moratorium statutes at issue here, just as Congress in the McCarran-Ferguson Act gave support to the existing and future state systems for regulating ... insurance. Prudential Ins. Co., 328 U.S. at 429, 66 S.Ct. 1142.
The foregoing general provisions demonstrate the Compact's deference to state authority. The Compact also includes specific provisions that apportion water in each subbasin and assign authority over the water to the relevant state. Tarrant's Beaver Creek and Cache Creek applications seek to appropriate water from Reach I, Subbasin 2. Section 4.02(b), which apportions Reach I, Subbasin 2, provides: The State of Oklahoma shall have free and unrestricted use of the water of this subbasin. See § 4.02(b), 94 Stat. 3305. The phrase unrestricted use does not distinguish between apportioned water that has or has not been appropriated or between apportioned water that has or has not been permitted for transport out of state. It plainly indicates that the state is not limited in how it uses its apportioned water. Identical unrestricted use language appears in many other Compact provisions apportioning water. See id. §§ 4.03(b), 5.01(b), 5.02(b), 5.04(b), 6.04(b), 7.01(b), and 8.01. Tarrant's Kiamichi River application seeks to appropriate water in Reach II, Subbasin 5. The apportionment of Reach II, Subbasin 5 is more complex because the subbasin encompasses parts of four states. We discuss § 5.05, which apportions Reach II, Subbasin 5, in detail below because it forms the basis of Tarrant's preemption claim. We conclude that § 5.05, like the Compact's other apportionment provisions, confers authority to the states to regulate water use within their respective boundaries.
The Compact states its purpose to govern the use, control and distribution of the compacted water. See id. § 1.01(a). As our discussion of the Compact provisions shows, the Compact is replete with language recognizing each state's broad regulatory authority over the water apportioned to that state. Section 1.01(a), therefore, manifests the wide scope of state authority. The word control is unqualified and, along with the words use and distribution and the Compact sections that follow, indicates that each Signatory State is authorized to regulate the appropriation and transport of apportioned water and that such authorized regulation is not limited to particular purposes.