574 U.S. 445 (2015) (U.S. Supreme Court)
Kansas v. Nebraska is a cornerstone decision in the law of interstate compacts and the Supreme Court's original jurisdiction.
1) Did Nebraska violate the Republican River Compact (as implemented by the 2003 Final Settlement Stipulation) by knowingly exceeding its allocation in 2005–2006? 2) If so, may the Supreme Court, in its original jurisdiction, award disgorgement in addition to compensatory damages to enforce a compact against a breaching State? 3) May the Court reform the RRCA Accounting Procedures to exclude Imported Water Supply consistent with the parties' original intent?
Interstate compacts approved by Congress are federal law enforceable by the Supreme Court in original actions. In enforcing a compact, the Court exercises broad equitable powers to "secure compliance," which can include monetary relief beyond compensatory damages where necessary to deter violations and eliminate unjust enrichment. Disgorgement is an available equitable remedy when a State acts with at least reckless disregard for its compact obligations and derives gains at a sister State's expense; it is not punitive but deterrent and restitutionary. Further, where clear and convincing evidence shows a mutual mistake in a written instrument implementing a compact (e.g., technical accounting procedures) that fails to reflect the parties' agreed intent, the Court may reform that instrument to effectuate the compact's terms, while leaving the compact itself intact. The Republican River Compact excludes from allocation "Imported Water Supply" introduced from outside the basin.
Yes. Nebraska knowingly (with reckless disregard) violated the Compact and the 2003 FSS by over-consuming Republican River water in 2005–2006. The Court awarded Kansas approximately $3.7 million in actual damages plus $1.8 million in disgorgement (totaling about $5.5 million) to deter future breaches. The Court also reformed the RRCA Accounting Procedures to properly exclude Imported Water Supply from chargeable consumption consistent with the Compact and the parties' intent. The Court declined to impose broader injunctive relief beyond what was necessary to ensure compliance.
Kansas v. Nebraska is a leading case on enforcing interstate compacts through the Supreme Court's original jurisdiction. It confirms that compacts are federal law and that the Court may deploy robust equitable tools—including disgorgement against a State—to deter and remedy knowing violations. The decision also illustrates how the Court can reform technical, negotiated accounting instruments to reflect the parties' true agreement without altering the compact itself. For law students, the case synthesizes federalism, remedies, and contract-equity doctrines in a complex, science-heavy water law setting, offering a template for analyzing multi-state disputes involving shared natural resources.