Coveting Their Neighbor’s Water: the Importance of Hood v. City of Memphis

The interstate water wars have gone underground. For more than a century, the U.S. Supreme Court has been the arbiter of last resort to settle fights between states over the right to use surface streams that cross state lines. But now, the high Court may be asked to settle a long-standing feud between Mississippi and Tennessee over a vast underground formation—the Memphis Sand aquifer, which underlies about 10,000 square miles of Arkansas, Tennessee, Mississippi, and Kentucky.

The stakes are high, and the rhetoric inflammatory. Mississippi sued the City of Memphis, seeking hundreds of millions of dollars in damages and claiming that Memphis is stealing Mississippi’s “share” of the aquifer. The problem is that no one has ever determined the two states’ respective “shares” of the aquifer, and that Tennessee (and not merely Memphis) must be part of any lawsuit that makes such a determination. In June, the Fifth Circuit Court of Appeals affirmed the dismissal of Mississippi’s claims in Hood v. City of Memphis, holding that Tennessee is an “indispensable party” to the action. Further, the court said, Mississippi had filed its action in the wrong court because only the Supreme Court has the authority to decide such an interstate dispute.

Mississippi will likely try again, this time in the Supreme Court. That would be a case to watch for at least two reasons.

First, it would present the Supreme Court with its first opportunity to apply the doctrine of “equitable apportionment”—the fair allocation of water among neighboring states—to groundwater. Although the Court has divided up three surface watercourses—the Laramie River (1922), the Delaware River (1931), and the North Platte River (1945)—it has yet to venture underground. According to the Fifth Circuit, the Supreme Court should not treat groundwater any differently than surface water in terms of equitable apportionment because the “Aquifer flows, if slowly, under several states, and it is indistinguishable from a lake bordered by multiple states or from a river bordering several states depending upon it for water.”

Second, it would be the first equitable apportionment of the modern environmental era. Much has happened since the Supreme Court’s 1945 division of the North Platte River, including the passage of virtually all of the nation’s major environmental laws. Today, ecological concerns would add a third competing voice to those of Mississippi and Tennessee.

If the Supreme Court decides to hear the case, how should it adapt the century-old equitable apportionment doctrine to encompass both groundwater and modern environmental sensibilities?

The Court should help those that help themselves. That is, the Court should not look kindly upon a state (such as Tennessee) that covets its neighbor’s water, but fails to rigorously regulate its own internal water use and fails to aggressively conserve water for the natural environment. Nor should the Court favor those that rely heavily upon groundwater (such as western Tennessee and most of Mississippi), if the facts demonstrate that such underground sources are being depleted more rapidly than they are naturally replenished through precipitation and runoff.

For far too long, many states have neglected to regulate underground water. As the Wisconsin Supreme Court explained in the 1974 case State v. Michels Pipeline Construction, Inc., the old common-law rule allowing landowners to suck out as much groundwater as they can, regardless of impacts upon their neighbors, was based upon a “feeling that the ways of underground water were too mysterious and unpredictable to allow the establishment of adequate and fair rules for regulation of competing rights to such water.” Even today, with our expanded hydrogeological knowledge, many states have not yet moved to “conjunctive management” of surface and groundwater resources, instead treating them as two distinct entities.

Notably, the current dispute is not about the availability of water so much as it is about the availability of inexpensive, relatively high-quality groundwater. Despite its location on the Mississippi River, Memphis relies heavily upon groundwater, operating the largest three-service public utility (supplying light, gas, and water) in the nation. The utility enjoys one of the most extensive artesian water systems in the world, drawing from a naturally-pressurized aquifer that pushes water toward the surface without the need for expensive electrical pumps. Overall, the western portion of Tennessee (including Memphis) relies almost exclusively upon groundwater for its potable supply, although the state as a whole acquires only 36% of its total public supply from groundwater.

Despite this regionally-intensive reliance upon groundwater, Tennessee does little to regulate the resource, and fails to recognize the physical interrelationship of ground and surface supplies (in fact, state law provides a significant exemption from regulation of inter-basin transfers when the source is groundwater). Moreover, Tennessee does not have a modern, comprehensive code to regulate either surface or groundwater. Instead, for groundwater, the state relies upon the so-called “American rule,” allowing landowners to withdraw as much groundwater as they can from wells on their property, provided only that they make “reasonable use” of the water and that they do not unreasonably interfere with their neighbors’ right to do the same.

In contrast, Mississippi has adopted a comprehensive permit system to govern the use of both surface and groundwater. Among other things, the law restricts water consumption to “reasonable and beneficial use,” encourages conservation, and provides for environmentally-protective minimum surface flows and groundwater levels.

Despite these efforts, Mississippi does not provide an ideal model. It depends upon groundwater more than any other state, withdrawing approximately 89% of its public water supply from underground sources (as compared to Tennessee’s 36%).

These facts should give the Court plenty to consider if it agrees to resolve the dispute. The case would provide a valuable opportunity to finally bring the doctrine of equitable apportionment into the 21st century.