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Kansas v. Colorado

ELR Citation: 31 ELR 20744
Nos. 105, 121 S. Ct. 2023/(U.S., 06/11/2001)

The U.S. Supreme Court holds that Colorado must pay damages, including prejudgment interest from the year the complaint was filed, to Kansas for violating the Arkansas River Compact. The parties entered the compact in 1949 to equitably divide and apportion Arkansas River water to the states and their citizens. The Court had previously adopted a Special Master's conclusion that Colorado violated the compact. The Special Master then recommended that damages be awarded to Kansas. Both sides filed objections to the Special Master's recommendations.

The Court first holds that the Eleventh Amendment does not preclude damages based on losses sustained by individual Kansas farmers. Kansas has a direct interest of its own and is not merely seeking recovery for the benefit of individuals who are the real parties in interest. The Court next holds that the unliquidated nature of Kansas' money damages does not bar an award of prejudgment interest. In addition, the Court holds that the Special Master correctly concluded that the economic consequences of Colorado's breach could best be remedied by an interest award that mirrors the cost of any additional borrowing the individual farmers may have been forced to undertake in order to compensate for lost revenue rather than by the lower interest rate available to states. The Court then holds, however, that although the Special Master properly determined that interest should be awarded according to fairness considerations, the Special Master erred in concluding that prejudgment interest should accrue in 1969 when Colorado knew or should have known that it was violating the compact. Given the uncertainty over the damages' scope and the fact that Kansas had the power to advance its claim as soon as it knew the compact was being violated, prejudgment interest should begin to accrue in 1985, the year the complaint was filed. Last, the Court holds that the Special Master properly determined the value of the crop losses attributable to compact violations. Colorado failed to mount an effective challenge to Kansas' experts on their own terms and failed to provide a plausible alternative estimate of crop damage. Justice John P. Stevens delivered the opinion of the Court.

Justice Sandra Day O'Connor filed an opinion concurring in part and dissenting in part, in which Justices Antonin Scalia and Clarence Thomas joined. Justice O'Connor would not award prejudgment interest to Kansas. When the compact was negotiated and approved, Colorado and Kansas could not have contemplated that prejudgment interest would be awarded in the event of the compact's breach.

Counsel for Plaintiff
John B. Draper, Special Ass't Attorney General
Attorney General's Office
Judicial Bldg.
301 SW 10th St., Topeka KS 66612
(785) 296-2215

Counsel for Defendant
David W. Robbin, Special Ass't Attorney General
Department of Law
1525 Sherman St., Denver CO 80203
(303) 866-3052