The U.S. Supreme Court Reaffirms the Contractual Nature of Compacts
By Rick Masters, Special Counsel to CSG’s National Center for Interstate Compacts
On Thursday, June 13, 2013 the U.S. Supreme Court again upheld the bedrock principle that compacts are contracts and reiterated the immutable rule that “Because interstate compacts are construed under contract law principles, see Texas v. New Mexico, 482 U. S. 124, 128, the Court begins by examining the Compact’s express terms as the best indication of the parties’ intent.” See Tarrant Regional Water District v. Herrmann, et al.at p.11. In the Tarrant case the Court was called upon to interpret the provisions of the Red River Compact which is a congressionally sanctioned agreement that allocates water rights within the Red River basin among the States of Oklahoma, Texas, Arkansas, and Louisiana.
The Tarrant Regional Water District, a Texas state agency, sought a water permit from the Oklahoma Water Resources Board (“OWRB”) to take surface water from a point in Oklahoma and the OWRB denied the permit based on Oklahoma regulations. Texas argued that federal law (the Congressionally approved compact) preempted the Oklahoma statutes and regulations at issue in this case because they prevent Texas from exercising its rights under the compact.
The Court upheld Oklahoma’s denial or the permit under the compact because the express provisions of the compact did not provide for ‘cross border access’ as did other water compacts creating such rights and that the compact’s “ silence on cross-border rights indicates that the Compact’s drafters had no intention to create any such rights in the signatory States.” Tarrant, supra. at pp 9-11. While this case does not ‘break new ground’ in the law of interstate compacts, it reinforces the view that while states can waive sovereign rights such as an absolute right to all their navigable waters, absent a specific unambiguous compact provision indicative of such an intent such a waiver will not be implied by silence.