MONTANA v. WYOMING AND NORTH DAKOTA

Opinion of the Court

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SUPREME COURT OF THE UNITED STATES
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No. 137, Orig.

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STATE OF MONTANA, PLAINTIFF v. STATE OF

WYOMING AND STATE OF NORTH DAKOTA

ON EXCEPTION TO THE REPORT OF THE SPECIAL MASTER

[May 2, 2011]

JUSTICE THOMAS delivered the opinion of the Court.

This case arises out of a dispute between Montana and Wyoming over the Yellowstone River Compact. Montana alleges that Wyoming has breached Article V(A) of the Compact by allowing its pre-1950 water appropriators to increase their net water consumption by improving the efficiency of their irrigation systems. The new systems, Montana alleges, employ sprinklers that reduce the amount of wastewater returned to the river, thus depriv­ ing Montana’s downstream pre-1950 appropriators of water to which they are entitled. The Special Master has filed a First Interim Report determining, as relevant here, that Montana’s allegation fails to state a claim because more efficient irrigation systems are permissible under the Compact so long as the conserved water is used to irrigate the same acreage watered in 1950. We agree with the Special Master and overrule Montana’s exception to that conclusion.

I

From its headwaters in Wyoming, the Yellowstone River flows nearly 700 miles northeast into Montana and then North Dakota, where it joins the Missouri River. Several of its tributaries, including the Clarks Fork, Tongue, Powder, and Bighorn Rivers, also begin in Wyoming and cross into Montana before joining the main stem of the Yellowstone River. This river system’s monthly and an­ nual flows, which are dictated largely by snow melt, vary widely. In 1964, for example, the flow in the Tongue and Powder Rivers was nearly 10 times the 1961 flow. App. 936. As the rivers came into heavy use for irrigation, it became expedient to build water storage facilities for preserving the heaviest flows. See First Interim Report of Special Master 6 (hereinafter Report).

Before funding new water storage facilities, Congress sought agreement as to the allocation of the Yellowstone River system among Wyoming, Montana, and North Da ­ kota. In 1932, Congress granted the States permission to negotiate a compact. See Act of June 14, 1932, ch. 253, 47 Stat. 306. Draft compacts were produced in 1935, 1942, and 1944, but none was fully agreed upon. Finally, in 1951 Montana, Wyoming, and North Dakota ratified the Yellowstone River Compact, and Congress consented to it. Act of Oct. 30, 1951, 65 Stat. 663.

The Yellowstone River Compact divides water into three tiers of priority. First, Article V(A) provides: “Appropria ­ tive rights to the beneficial uses of the water of the Yellow ­ stone River System existing in each signatory State as of January 1, 1950, shall continue to be enjoyed in accor ­ dance with the laws governing the acquisition and use of water under the doctrine of appropriation.” Id., at 666. Second, Article V(B) allocates to each State the “quantity of that water as shall be necessary to provide supplemen ­ tal water supplies” for the pre-1950 uses protected by Article V(A). Ibid. Third, “the remainder of the unused and unappropriated water” of each tributary is divided by percentage: Wyoming receives 60% of the remaining water in the Clarks Fork River, 80% in the Bighorn River, 40% in the Tongue River, and 42% in the Powder River; the rest goes to Montana. Id., at 666–667.

In February 2008, we granted Montana leave to file a bill of complaint against Wyoming for breach of the Com ­ pact. 552 U. S. 1175. Montana alleged that Wyoming had breached the Compact by consuming more than its share of the Tongue and Powder Rivers. Bill of Complaint 3, ¶8. Specifically, Montana claimed that Wyoming was ap­ propriating water for a number of new, post-1950 uses: irrigating new acreage; building new storage facilities; conducting new groundwater pumping; and increasing con­ sumption on existing agricultural acreage.1

Id., at 3–4, ¶¶ 9–12. According to Montana’s complaint, the Compact did not permit Wyoming to use water for any of these practices as long as Montana’s pre-1950 users’ rights remained unfulfilled. Id., at 3, ¶8.

In response, Wyoming filed a motion to dismiss the complaint. We appointed a Special Master and referred the motion to him. 555 U. S. __ (2008). After briefing and argument, the Special Master recommended that we deny Wyoming’s motion, because at least some of Montana’s allegations state a claim for relief. The Special Master found that “Article V of the Compact protects pre-1950 appropriations in Montana from new surface and ground ­ water diversions in Wyoming, whether for direct use or for storage, that prevent adequate water from reaching Mon ­ tana to satisfy those pre-1950 appropriations.” Report 14– 15. But the Special Master agreed with Wyoming that Montana’s allegations regarding “efficiency improvements by pre-1950 appropriators in Wyoming” do not state a claim for relief. Id., at 15. The States did not object to most of the Special Master’s findings, and we have issued orders accordingly. See 562 U. S. __ (2010); 562 U. S. __ (2010). Montana has filed an exception to the Special Master’s rejection of its increased-efficiency allegation. It is this exception that is before us.2

II

Article V(A) of the Compact states that “[a]ppropriative rights to the beneficial uses of [water] . . . existing in each signatory State as of January 1, 1950, shall continue to be enjoyed in accordance with the laws governing the acquisi ­ tion and use of water under the doctrine of appropriation.” Montana claims that its pre-1950 appropriators’ rights are not “continu[ing] to be enjoyed” because upstream pre ­ 1950 appropriators in Wyoming have increased their consumption by switching from flood to sprinkler irriga ­ tion. Montana alleges that sprinkler systems increase crop consumption of water and decrease the volume of runoff and seepage that returns to the Tongue and Powder rivers by 25% or more.3 See Montana’s Exception and Brief 3 (hereinafter Brief for Montana). As a result, even if Wyoming’s pre-1950 water users divert the same quan ­ tity of water as before, less water reaches Montana. Ac ­ cording to Montana, Article V(A) prohibits Wyoming from allowing this practice when it deprives Montana’s pre ­ 1950 users of their full water rights.

The question, therefore, is whether Article V(A) allows Wyoming’s pre-1950 water users—diverting the same quantity of water for the same irrigation purpose and acreage as before 1950—to increase their consumption of water by improving their irrigation systems even if it reduces the flow of water to Montana’s pre-1950 users. Montana makes two basic arguments: that background principles of appropriation law, to the extent they are incorporated into the Compact, do not allow such an in ­ crease in consumption; and that even if they do, the terms of the Compact amended those principles in Montana’s favor. The Special Master rejected these arguments, and so do we.

A

Because Article V(A) of the Compact protects “[a]ppropriative rights to the beneficial uses of [water]” as of 1950 “in accordance with the laws governing the acquisition and use of water under the doctrine of appro ­ priation,” we begin with an overview of appropriation doctrine.4 As the Special Master explained, if “[a]p ­ propriation law clearly proscribe[s] increases in consump ­ tion on existing acreage to the detriment of downstream appropriators, the Compact arguably would prohibit its appropriators to make from allowing Wyoming such increases to the detriment of Montana’s pre-1950 uses.” Report 65.

As is typical west of the 100th meridian, the doctrine of appropriation has governed water rights in Montana and Wyoming since the 1800’s. See, e.g., Basey v. Gallagher, 20 Wall. 670, 683 (1875). As relevant here, the doctrine provides that rights to water for irrigation are perfected and enforced in order of seniority, starting with the first person to divert water from a natural stream and apply it to a beneficial use (or to begin such a project, if diligently completed). See Hinderlider v. La Plata River & Cherry Creek Ditch Co., 304 U. S. 92, 98 (1938); Arizona v. California, 298 U. S. 558, 565–566 (1936); Wyo. Const., Art. 8, §3 (“Priority of appropriation for beneficial uses shall give the better right”). The scope of the right is limited by the concept of “beneficial use.” That concept restricts a farmer “to the amount of water that is necessary to irrigate his land by making a reasonable use of the water.” 1 C. Kinney, Law of Irrigation and Water Rights §586, pp. 1007–1008 (2d ed. 1912) (hereinafter Kinney) (internal quotation marks omitted); see also Bailey v. Tintinger, 45 Mont. 154, 176–178, 122 P. 575, 583 (1912); Quinn v. John Whitaker Ranch Co., 54 Wyo. 367, 376–380, 92 P. 2d 568, 570–571 (1939). Once such a water right is perfected, it is senior to any later appropriators’ rights and may be ful ­ filled entirely before those junior appropriators get any water at all.

For our purposes, Montana’s pre-1950 water users are similar to junior appropriators. As between the States, the Compact assigned the same seniority level to all pre ­ 1950 water users in Montana and Wyoming. See Brief for Montana 23; Brief for United States as Amicus Curiae 12. But as Montana concedes, precisely because of this equal seniority, its downstream pre-1950 users cannot stop Wyoming’s upstream pre-1950 users from fully exercising their water rights. Thus, when the rivers are low, Mon ­ tana’s downstream pre-1950 users might get no water at all because the equally senior users upstream in Wyoming may lawfully consume all of the water. Tr. of Oral Arg. 51.

Junior appropriators are not completely without rights, however. As they come online, appropriators acquire rights to the stream basically as it exists when they find it. See 2 Kinney §803, at 1403–1404. Accordingly, subject to the fulfillment of all senior users’ existing rights, under the no-injury rule junior users can prevent senior users from enlarging their rights to the junior users’ detriment. 1 W. Hutchins, Water Rights Laws in the Nineteen West ­ ern States 573 (1971) (hereinafter Hutchins).

Montana’s pre-1950 users can therefore “insist that [Wyoming’s pre-1950 users] confine themselves strictly within the rights which the law gives them, that is, to the amount of water within the extent of their appropriation which they actually apply to some beneficial use.” 2 Kinney §784, at 1366. That general proposition is undis ­ puted; the dispute here is in its application. Is a switch to more efficient irrigation with less return flow within the extent of Wyoming’s pre-1950 users’ existing appropriative rights, or is it an improper enlargement of that right to the detriment of Montana’s pre-1950 water users?

As the Special Master observed, the law of return flows is an unclear area of appropriation doctrine. Report 65 (citing Trelease, Reclamation Water Rights, 32 Rocky Mt. L. Rev. 464, 469 (1960)). The States have not directed us to any case on all fours with this one. Indeed, “[n]o west ­ ern state court appears to have conclusively answered the question.” Report 65.

Despite the lack of clarity, the Special Master found several reasons to conclude that Wyoming’s pre-1950 users may switch to sprinkler irrigation. He found that the scope of the original appropriative right includes such a change so long as no additional water is diverted from the stream and the conserved water is used on the same acre ­ age for the same agricultural purpose as before. We agree with the Special Master.5

1

First, although the no-injury rule prevents appropria ­ tors from making certain water-right changes that would harm other appropriators, a change in irrigation methods does not appear to run afoul of that rule in Montana and Wyoming. See id., at 69. Because each new appropriator is entitled to the stream as it exists when he finds it, the general rule is that “if a change in these conditions is made by [a senior] appropriator, which interferes with the flow of the water to the material injury of [the junior appropriator’s] rights, he may justly complain.” 2 Kinney §803, at 1404.

But the no-injury rule is not absolute; it generally con ­ cerns changes in the location of the diversion and the place or purpose of use. Quigley v. McIntosh, 110 Mont. 495, 505, 103 P. 2d 1067, 1072 (1940) (“[P]lace of diver ­ sion, or place or purpose of use, may be changed only if others are not thereby injured” (internal quotation marks omitted)); see also 1 S. Wiel, Water Rights in the Western States §498, p. 532 (3d ed. 1911) (hereinafter Wiel); Mont. Code Ann. §89–803 (1947); Wyo. Stat. Ann. §41–3–104 (1977). Accordingly, certain types of changes can occur even though they may harm downstream appropriators. See D. Getches, Water Law in a Nutshell 175 (4th ed. 2009) (hereinafter Getches). For instance, an appropriator may increase his consumption by changing to a more water-intensive crop so long as he makes no change in acreage irrigated or amount of water diverted. See id., at 183; East Bench Irrig. Co. v. Deseret Irrig. Co., 2 Utah 2d 170, 179, 271 P. 2d 449, 455 (1954) (assuming that farm ­ ers may “legally increase the quantity of water consumed in irrigating their lands by changing to more water con ­ suming crops” and adding that “it would be difficult to prevent . . . such increased consumptive use”). Ordinary, day-to-day operational changes or repairs also do not violate the no-injury rule. See, e.g., 1 Wiel §56, at 51 (“Would the fact that my pump has for years dripped water onto a neighbor’s ground give him a right to say that my pump must go on leaking?”). Consumption can even be increased by adding farm acreage, so long as that was part of the plan from the start, and diligently pursued through the years. See Van Tassel Real Estate & Live Stock Co. v. Cheyenne, 49 Wyo. 333, 357–359, 54 P. 2d 906, 913 (1936) (per curiam); 1 Hutchins 377–378; St. Onge v. Blakely, 76 Mont. 1, 22–24, 245 P. 532, 539 (1926).

Improvements to irrigation systems seem to be the sort of changes that fall outside the no-injury rule as it exists in Montana and Wyoming. Those changes are not to the “place of diversion, or place or purpose of use,” Quigley, supra, at 505, 103 P. 2d, at 1072, and thus seem to be excluded, much like crop changes or day-to-day irrigation adjustments or repairs. This is also consistent with the fact that by 1950 both States had statutes regulating certain changes to water rights, but neither required farmers to take official action before adjusting irrigation methods.6 See Report 69–70, 87; id., at 69 (they “do not generally have procedures for overseeing changes in water efficiencies stemming from crop shifts or irrigation im ­ provements where there are no formal changes in the underlying water rights”). Like the Special Master, we find this to be persuasive evidence that the States consid ­ ered such changes permissible.

Montana argues that, regardless of the statutes, private lawsuits could be brought to challenge such efficiency changes. But it has not provided a single example from either State. Instead, Montana and Wyoming cases typi ­ cally describe the no-injury rule as applying to changes in point of diversion, purpose of use, and place of use. See, e.g., Maclay v. Missoula Irrig. Dist., 90 Mont. 344, 355– 357, 3 P. 2d 286, 291 (1931); Thayer v. Rawlins, 594 P. 2d 951, 955 (Wyo. 1979). The abundance of litigation over such changes—and the absence of any litigation over the sort of change at issue here—strongly implies that irriga ­ tion efficiency improvements do not violate the no-injury rule and were considered within the scope of the original appropriative right.

2

The doctrine of recapture also supports treating im ­ provements in irrigation efficiency as within the original appropriative right. Under this doctrine, an appropriator who has diverted water for irrigation purposes has the right to recapture and reuse his own runoff and seepage water before it escapes his control or his property.7 An appropriator is entitled to the “exclusive control [of his appropriated water] so long as he is able and willing to apply it to beneficial uses, and such right extends to what is commonly known as wastage from surface run-off and deep percolation, necessarily incident to practical irriga ­ tion.” Ide v. United States, 263 U. S. 497, 506 (1924) (internal quotation marks omitted); see also Arizona Pub. Serv. Co. v. Long, 160 Ariz. 429, 437–438, 773 P. 2d 988, 996–997 (1989) (“No appropriator can compel any other appropriator to continue the waste of water which benefits the former. If the senior appropriator, through scientific and technical advances, can utilize his water so that none is wasted, no other appropriator can complain”).

Montana contends that this rule does not apply when the runoff or seepage water would, if not recaptured, return to the same stream from which it was originally drawn. There is some support for Montana’s position— that a beneficial user may not reuse water at all, even while it is still on his property, if it otherwise would flow back to the same stream—especially in Utah and Colorado cases. See Deseret Irrig. Co., supra, at 180–182, 271 P. 2d, at 456–457; Estate of Steed v. New Escalante Irrig. Co., 846 P. 2d 1223, 1226 (Utah 1992); Comstock v. Ramsay, 55 Colo. 244, 252–258, 133 P. 1107, 1110–1111 (1913).8 But other authorities draw no such exception based on where the runoff or seepage is heading. See 2 Hutchins 580–582 (asserting that, even in Utah, “where the original appro ­ priator retains possession and control of the waste and seepage water from irrigation of his lands, he is entitled to reuse these waters for his own benefit and need not return them to the channel from which they were diverted” (em ­ phasis added)); Getches 139–145; Woolman v. Garringer, 1 Mont. 535 (1872). And Montana cites no case from either State here in which a court has recognized, much less found controlling, the idea that a water user may not reuse his own wastewater while it is still on his property simply because it otherwise would return to the original stream.

In fact, Montana and Wyoming appear to apply, without qualification, the basic doctrine that the original appro ­ priator may freely recapture his used water while it re ­ mains on his property and reuse it for the same purpose on the same land. For example, in Binning v. Miller, 55 Wyo. 451, 102 P. 2d 54 (1940), a man was diverting water from a creek fed largely by irrigation runoff and seepage from Binning’s property. Although the court found that the man had a right to that water once Binning’s runoff and seepage had become a natural stream, it noted that his right remained subject to Binning’s right “to use the water above mentioned for beneficial purposes upon the land for which the seepage water was [originally] appro ­ priated.” Id., at 477, 102 P. 2d, at 63. In a later case, the court explained that the man could not “secure a perma ­ nent right to continue to receive the water” because Binning “might find better ways of utilizing the water on the same land so that less waste and seepage would oc ­ cur.” Bower v. Big Horn Canal Assn., 77 Wyo. 80, 101, 307 P. 2d 593, 601 (1957).

Similarly, in Bower v. Big Horn Canal Assn., the court held that Bower could appropriate water as it seeped across his property from the Big Horn Canal toward a nearby river. Id., at 102–104, 307 P. 2d, at 602. The court added, however, that Bower’s right was subject always to the Big Horn Canal’s right: “No appropriator can compel any other appropriator to continue the waste of water which benefits the former.” Id., at 101, 307 P. 2d, at 601. Importantly, the court noted that “[i]f the senior appro ­ priator by a different method of irrigation can so utilize his water that it is all consumed in transpiration and consumptive use and no waste water returns by seepage or percolation to the river, no other appropriator can complain.” Ibid.

Finally, in Fuss v. Franks, 610 P. 2d 17 (Wyo. 1980), water was seeping from Fuss’ property and into a pit in a public right of way. Franks was the first to appropriate the water from the pit. The court upheld Franks’ appro ­ priation right because the water had already escaped from Fuss’ property. The court said that the “owner of land upon which seepage or waste water rises has the right to use and reuse—capture and recapture—such waste wa ­ ters,” but only before the water escapes his land, and “for use only upon the land for which the water forming the seepage was originally appropriated.” Id., at 20 (internal quotation marks omitted). Fuss thus had no superior right to the water that had left his property, and espe ­ cially not for reuse on other lands.

The law in Montana is similar. The Montana Supreme Court has explained that “the general rule . . . is that the owner of the right to use the water—his private property while in his possession,—may collect it, recapture it, be ­ fore it leaves his possession.” Rock Creek Ditch & Flume Co. v. Miller, 93 Mont. 248, 268, 17 P. 2d 1074, 1080 (1933); see also A. Stone, Montana Water Law 66 (1994) (noting that, according to the “early cases,” while “the water is still seeping and running off one’s own land, the landowner is free to recapture and further use it”).

The right of recapture discussed in these authorities is broad. As the Special Master recognized, the “language of the Wyoming Supreme Court . . . was expansive” in Binning, Bower, and Fuss, and “all appear to hold that an appropriator in Wyoming can increase his water use effi ­ ciency by recovering runoff on his property or through other means so long as the increased consumption is on the same land to which the appropriative right attaches.” Report 81; see also id., at 78–85; Thompson, Case Note, Water Law—Reusing Irrigation Waste Water on Different Lands: A Warning to Get a New Permit, Fuss v. Franks, 610 P. 2d 17 (Wyo. 1980), 16 Land & Water L. Rev. 71, 76 (1981) (concluding that in Wyoming, “a prior appropriator can at anytime, utilize irrigation methods that are totally consumptive, such as pumping the collected waste water back to the top of the field or installing a sprinkler system, thereby eliminating all waste of water”); Jones, Note, Rights of the Original Appropriator to Recapture Water Used in Irrigation, 11 Wyo. L. J. 39 (1956); Wille, Note, The Right to Use Waste Water Before It Re-enters the Stream, 12 Wyo. L. J. 47, 48 (1957).

The Wyoming and Montana doctrine of recapture strongly suggests that improvements in irrigation effi ­ ciency are within the original appropriative right of Wyo ­ ming’s pre-1950 water users. By using sprinklers rather than flood irrigation, those water users effectively recap ­ ture water. The sprinklers, by reducing loss due to seep ­ age and runoff, operate much like, if more efficiently than, cruder recapture systems involving ditches or pits. They are simply different mechanisms for increasing the volume of water available to the crops without changing the amount of diversion. Binning, Bower, and Fuss expressly acknowledged that in such situations, lower appropriators who have perfected their own appropriative rights are nonetheless at the mercy of the property owners from which their water flows. See 55 Wyo., at 474–477, 102 P. 2d, at 63; 77 Wyo., at 100–104, 307 P. 2d, at 601–602; 610 P. 2d, at 20. 3

Our conclusion is consistent with that of water law scholars who have considered the specific question pre­ sented in this case. One scholar asserted: “[O]f course, increasing efficiency at one site may reduce the amount of water available to downstream users who may rely on return flows from other users. [Wyoming] law, however, does not preclude more efficient uses merely because a downstream user may be injured.” Squillace, A Critical Look at Wyoming Water Law, 24 Land & Water L. Rev. 307, 331 (1989); see id., at 331, n. 156 (“For example, a farmer who traditionally consumes only 50% of the water applied to his land is free to change his crop or method of applying water so as to increase his consumption to 60%”); see also Thompson, supra, at 76 (“[A] prior appropriator can at anytime . . . instal[l] a sprinkler system, thereby eliminating all waste of water”). And a national hornbook on water law has observed:

“The rule allowing recapture and reuse of salvaged water on the original land can result in more water being consumed. For instance, if a water user is con ­ suming less than the permitted amount of water and plants a more water-intensive crop or puts in a more efficient irrigation system, most or all of the water that had previously been returned to the stream might be consumed. This can deprive other appro ­ priators of water on which they depend but it is al ­ lowed since it is technically within the terms of the original appropriation.” Getches 143–144. Montana has not identified any scholars who have reached the opposite conclusion.

For all of these reasons, we hold that the doctrine of appropriation in Wyoming and Montana allows appro ­ priators to improve their irrigation systems, even to the detriment of downstream appropriators. We readily ac­ knowledge that this area of law is far from clear. See supra, at 7. But the apparent scope of the no-injury rule in Wyoming and Montana, the doctrine of recapture and its broad reach in Wyoming and Montana case law, and the specific conclusions of water law scholars all point in the same direction, which also comports with the Special Master’s exhaustive discussion and findings. Accordingly, if Article V(A) simply incorporates background principles of appropriation law, it allows Wyoming’s pre-1950 water users to improve their irrigation efficiency, even to the detriment of Montana’s pre-1950 users.

B

Montana, however, takes another tack. It argues that even if background principles of appropriation law do not support its position, Article V(A) of the Compact does not protect the full scope of ordinary appropriative rights. Montana claims that the Compact’s definition of “benefi ­ cial use” restricts the scope of protected pre-1950 appro ­ priative rights to the net volume of water that was actu ­ ally being consumed in 1950. We agree with the Special Master that this argument also fails.

1

Article V(A) protects “[a]ppropriative rights to the bene ­ ficial uses of . . . water.” “Beneficial use,” in turn, is de ­ fined in Article II(H) as “that use by which the water supply of a drainage basin is depleted when usefully em ­ ployed by the activities of man.” 65 Stat. 665. Montana contends that “beneficial use” is thus defined as the amount of depletion. According to Montana, any activity that increases pre-1950 water users’ depletions in Wyo ­ ming beyond pre-1950 levels exceeds the scope of the appropriative rights that Article V(A) protects. See Brief for Montana 25–28. On this basis, Montana asserts that the Compact requires (subject to river conditions) that the same quantity of water that was reaching Montana as of January 1, 1950, continue to do so. Id., at 26.

2

We acknowledge that “beneficial use” refers to a type of use that involves some depletion, as all irrigation does. See Report 61. The part of the Compact’s definition of “beneficial use” that refers to depletion—“that use by which the water supply . . . is depleted”—is fairly clear. It begins with “that use,” and the words that follow merely explain that “that use” must be a use that “deplete[s]” the “water supply.” Nothing in the language suggests that “beneficial use” means a measure of the amount of water depleted. A “beneficial use” within the meaning of the Compact, therefore, is a type of use that depletes the water supply.

This plain reading makes sense in light of the circum ­ stances existing in the signatory States when the Compact was drafted. At that time, Wyoming had a statutory preference for irrigation, a type of depletive use, over power generation, a nondepletive use. Wyo. Stat. Ann. §71–402 (1945). It makes sense that the Compact would have been written to protect the irrigation uses that were legislatively favored and represented the predominant use of the Yellowstone River system. See Tr. of Oral Arg. 45– 47; 65 Stat. 663 (Compact Preamble) (noting that the Compact recognizes “the great importance of water for irrigation in the signatory States”).

Montana’s reading of the Compact, by contrast, does not follow from the text and would drastically redefine the term “beneficial use” from its longstanding meaning. The amount of water put to “beneficial use” has never been defined by net water consumption. The quantity of water “beneficially used” in irrigation, for example, has always included some measure of necessary loss such as runoff, evaporation, deep percolation, leakage, and seepage (re ­ gardless of whether any of it returns to the stream). So, water put to “[b]eneficial use is not what is actually con ­ sumed, but what is actually necessary in good faith.” 1 Wiel §481, at 509; see also Trelease, The Concept of Rea ­ sonable Beneficial Use in the Law of Surface Streams, 12 Wyo. L. J. 1, 10 (1957) (listing irrigation as a beneficial use and noting that “the method of application, by flood ­ ing, channeling, or sprinkling, is immaterial”); J. Sax, B. Thompson, J. Leshy, & R. Adams, Legal Control of Water Resources 131 (4th ed. 2006) (discussing normal irrigation practices and observing that the amount of water put to beneficial use “is often considerably more than the quan ­ tum actually consumed”).

If the Compact’s definition of “beneficial use” were meant to drastically redefine the term into shorthand for net water consumption, we would expect far more clarity. For example, the Compact could have stated that it would protect “only ‘the amount of water consumed for a benefi ­ cial use in each signatory state as of January 1, 1950.’ ” Report 60. Or it could have defined “beneficial use” as the “volume by which the water supply . . . is depleted.” More ­ over, if the Compact effected a dramatic reframing of ordinary appropriation principles, the rest of Article V(A), which expressly states that “the laws governing the acqui ­ sition and use of water under the doctrine of appropria ­ tion” control, would make little sense.

We agree with the Special Master that the definition of beneficial use in the Compact is unremarkable. Arti ­ cle V(A) does not change the scope of the pre-1950 appro ­ priative rights that it protects in both States.

3

Finally, if Article V(A) were intended to guarantee Montana a set quantity of water, it could have done so as plainly as other compacts that do just that. By 1950, Wyoming itself had entered into at least one compact that defined water rights in terms of depletion. The Colorado River Compact of 1922 apportioned 7,500,000 acre-feet of water per year for “the exclusive beneficial consumptive use” of several upstream States, including Wyoming. That compact specifically added that “[t]he States of the Upper Division will not cause the flow of the river at Lee Ferry to be depleted below an aggregate of 75,000,000 acre feet for any period of ten consecutive years . . . .” National Resources Planning Bd., Water Resources Comm., Inter ­ state Water Compacts, 1785–1941, p. 8 (1942). See also Republican River Compact (1943), Kan. Stat. Ann. §82a–518 (1997) (allocating water by the acre-foot for beneficial consumptive use in Kansas, Nebraska, and Colorado). And, even here in the Yellowstone River Com­ pact, Article V(B) unambiguously apportions the third tier of Yellowstone River system water by percentage. 65 Stat. 666. The notion that Article V(A) accomplishes essentially the same sort of depletive allocation with language that has a different and longstanding meaning is simply unpersuasive.

* * *

We conclude that the plain terms of the Compact protect ordinary “[a]ppropriative rights to the beneficial uses of [water] . . . existing in each signatory State as of January 1, 1950.” Art. V(A), ibid. And the best evidence we have shows that the doctrine of appropriation in Wyoming and Montana allows appropriators to improve the efficiency of their irrigation systems, even to the detriment of down ­ stream appropriators. Montana’s allegation that Wyo ­ ming has breached Article V(A) of the Compact by allow ­ ing its pre-1950 water users to increase their irrigation efficiency thus fails to state a claim. Accordingly, Mon ­ tana’s first exception to the Special Master’s First Interim Report is overruled. It is so ordered. JUSTICE KAGAN took no part in the consideration or decision of this case.

1 Montana has since clarified that increased consumption on existing acreage refers to the use of more efficient irrigation systems. The “efficiency” of irrigation for our purposes refers to the amount of wastewater that is lost, for example, to evaporation, seepage, runoff, or deep percolation. Some of the lost water returns to the river and is later available for downstream users. A more efficient irrigation system loses less water; thus, though it may draw the same volume of water from the river, net water consumption is increased.

2 Montana also raised an exception to the Special Master’s finding that if Montana can remedy the shortage of water to its pre-1950 users by curtailing its post-1950 uses without “prejudic[ing] Montana’s other rights under the Compact,” then an intrastate remedy is “the appropri­ ate solution.” Report 15. We recommitted this exception to the Special Master. 562 U. S. __ (2010).

3 For purposes of resolving Wyoming’s motion to dismiss, we take as true Montana’s allegation that the new sprinkler systems actually reduce return flow to the rivers. Wyoming has not conceded that this is true. See Wyoming’s Reply to Montana’s Exception 35, n. 6.

4 As with all contracts, we interpret the Compact according to the intent of the parties, here the signatory States. We thus look primarily to the doctrine of appropriation in Wyoming and Montana, but, like the States, we also look to Western water law more generally and authori ­ ties from before and after 1950. The States appear to have assumed that the doctrine has not changed in a way directly relevant here. We therefore do not decide whether Article V(A) intended to freeze appro­ priation law as it stood in 1949, or whether it incorporates the evolution of the doctrine over time, allowing Compact-protected rights to grow or shrink accordingly. We resolve the matter of Montana’s exception without prejudice to that issue. See Report 39–40.

5 The lack of clarity in this area of water law highlights the sensitive nature of our inquiry and counsels caution. Our original jurisdiction over cases between States brings us this dispute between Montana and Wyoming about the meaning of their congressionally approved Yellow­ stone River Compact. See U. S. Const., Art. III, §2, cl. 2; 28 U. S. C. §1251(a). Yet, because the Compact references and the parties direct us to principles of appropriation doctrine, we find ourselves immersed in state water law. See n. 4, supra. Our assessment of the scope of these water rights is merely a federal court’s description of state law. The highest court of each State, of course, remains “the final arbiter of what is state law.” West v. American Telephone & Telegraph Co., 311 U. S. 223, 236 (1940). We recognize that appropriation doctrine contin ­ ues to evolve, and there are reasonable policy arguments in favor of both States’ positions here. But it is not this Court’s role to guide the development of state water regulation. See id., at 237 (“[I]t is the duty of [federal courts] in every case to ascertain from all the available data what the state law is and apply it rather than to prescribe a different rule, however superior it may appear from the viewpoint of ‘general law’ ”). Our decision is not intended to restrict the States’ determina­ tion of their respective appropriation doctrines.

6 Mont. Code Ann. §89–803 (1947); Wyo. Stat. Ann. §71–401 (1945) (water rights “cannot be detached from the lands, place or purpose for which they are acquired” outside of specific exceptions); see also 1885 Mont. Laws p. 131, §3.

7 And in some narrowly defined circumstances, he retains this right even after the water leaves his property. See 1 Wiel §§38–40, at 37–43.

8 Colorado has a relatively unique doctrine of recapture. See Hoese, Comment, Recapture of Reclamation Project Ground Water, 53 Cal. L. Rev. 541, 544, n. 18 (1965) (noting the general doctrine of recapture, and adding that “[t]he Colorado rule, however, is to the contrary”); United States v. Tilley, 124 F. 2d 850, 858 (CA8 1941) (allowing recap­ ture by the original appropriator under Nebraska law, and noting Colorado’s opposite rule).

SCALIA, J., dissenting

SUPREME COURT OF THE UNITED STATES
_________________

No. 137, Orig.

_________________

STATE OF MONTANA, PLAINTIFF v. STATE OF

WYOMING AND STATE OF NORTH DAKOTA

ON EXCEPTIONS TO THE REPORT OF THE SPECIAL MASTER

[May 2, 2011]

JUSTICE SCALIA, dissenting.

Thanks to improved irrigation techniques, Wyoming’s farmers and cattlemen appear to consume more of the water they divert from the Yellowstone River and its tributaries today than they did 60 years ago—that is to say, less of the diverted water ultimately finds its way back into the Yellowstone. The Court interprets the Yellowstone River Compact (Compact), see Act of Oct. 30, 1951, ch. 629, 65 Stat. 663, to grant those Wyomans* the right to increase their consumption so long as they do not increase the volume of water they diverted beyond pre1950 levels. Thus, it holds, Montana cannot complain that the increased consumption interferes with its residents’ pre-1950 appropriative water rights. I disagree because the Court’s analysis substitutes its none-too-confident reading of the common law, see ante, at 7–8, and n. 5, for the Compact’s definition of “beneficial use.”

The doctrine of appropriation allocates perpetual water rights along a river, on a “first in time[,] . . . superior in right” basis, Wyoming v. Colorado, 259 U. S. 419, 459 (1922), to those who divert its flow and apply the water to a beneficial use. See Hinderlider v. La Plata River & Cherry Creek Ditch Co., 304 U. S. 92, 98 (1938). The “beneficial use” requirement does most of the legal work. It marks the types of uses that confer an appropriative right—irrigation being a paradigmatic example, see United States v. Willow River Power Co., 324 U. S. 499, 504, n. 2 (1945); and it “measure[s]” the extent of an appropriator’s claim, see Ide v. United States, 263 U. S. 497, 505 (1924); A. Tarlock, Law of Water Rights and Resources §§5:66, 5:68–5:69, pp. 5–130.3, 5–130.9 to 5– 130.10 (2010). At common law, an appropriator claims the volume of water diverted and “reasonably required” by his intended use. Id., §§5:65–5:66, at 5–127, 5–130.2; see Quinn v. John Whitaker Ranch Co., 54 Wyo. 367, 377–378, 92 P. 2d 568, 570–571 (1939).

The Compact borrows the concept of appropriation to define the rights of pre-1950 water users along the Yellowstone River and its tributaries. Article V(A) promises that “[a]ppropriative rights to the beneficial uses of the water of the Yellowstone River System existing in each signatory State as of January 1, 1950, shall continue to be enjoyed in accordance with the laws governing the acquisition and use of water under the doctrine of appropriation.” 65 Stat. 666. Article II(H) elaborates that a “Beneficial Use” is one “by which the water supply of a drainage basin is depleted when usefully employed by the activities of man.” Id., at 665 (emphasis added).

Like the common law, this definition lays out the types of uses that qualify as beneficial and the volume of water an appropriator may claim through his beneficial use. But the Compact’s focus on whether a use depletes a river’s water supply—not whether it diverts the river’s flow— significantly limits the volume of water to which Wyoming is entitled. For purposes of the Compact, Wyoming may lay claim only to its beneficial users’ net consumption of water, that is, the volume of water diverted from the river minus the volume that flows (or seeps) back into the river’s channel.

This interpretation, and only this interpretation, gives meaning to the definition’s use of the word “depleted.” I cannot write off as an accident the choice of this word rather than the word consistently used elsewhere in the Compact: “diverted.” See Sosa v. Alvarez-Machain, 542 U. S. 692, 711, n. 9 (2004). The Compact’s authors knew how to use “diverted” and “diversion” when they wanted to. Those two words appear repeatedly in other provisions of the Compact, see Arts. II(G); V(B), (C); VII(A), (C), (D), 65 Stat. 665–668; and the Compact defines them in the sentence immediately preceding the definition of “beneficial use.” See Art. II(G), id., at 665. But the Compact’s authors chose to define beneficial use in terms of depletion—the first and only time the Compact uses any derivative of the word “deplete.” It is in my view a clear indication that the Compact intends to break from the common law’s focus on diversion.

The Court reduces the Compact’s deliberate use of “depleted” to an inconsequential slip of the pen. According to today’s majority, Article II(H) speaks only to the types of uses that confer appropriative rights. “Nothing in the language,” it says, “suggests that ‘beneficial use’ means a measure of the amount of water depleted.” Ante, at 17. This is incomprehensible. On the Court’s own interpretation “beneficial use” not only defines the types of uses that confer appropriative rights, but also determines the volume of water to which the rights attach—viz., only that volume put to one of the specified types of uses. The only question before us is whether “beneficial use” measures the volume diverted or the volume depleted—and the language of the Compact makes that clear.

The Court provides no plausible explanation for use of the word “depleted” instead of “diverted.” Its best effort is the suggestion that the word was used to ensure that hydroelectric power generation and other disfavored, nondepletive uses do not confer appropriative rights. See ibid. That is highly unlikely, for two reasons. First, relying on a subtle distinction between depletion and diversion would be one of the clumsiest ways imaginable to accomplish that simple goal, if it was not already accomplished by other provisions of the Compact. One would instead have expected the Compact simply to exclude the disfavored uses from the “usefu[l] . . . activities of man,” Art. II(H), 65 Stat. 665, which confer appropriative rights. Cf. Mont. Code Ann. §85–2–102(4) (2009) (listing types of beneficial uses). Second, and even more conclusively, hydroelectric generation, water wheels, and mill races— the allegedly disfavored uses Wyoming and the United States offer up to explain the word “depleted”—are already excluded from appropriative rights (and probably from any need for appropriative rights) by the Compact’s definition of diversion: “the taking or removing of water from the Yellowstone River or any tributary thereof when the water so taken or removed is not returned directly into the channel of the Yellowstone River or of the tributary from which it is taken.” Art. II(G), 65 Stat. 665. The modifying clause seems specifically designed to exclude hydroelectric dams, water wheels and mill races, which, when they divert water from the Yellowstone or its tributaries, “retur[n it] directly into the channel . . . from which it is taken.”

The Court objects to my interpretation because the word “depleted” lacks the “clarity” necessary to “drastically redefine the term ‘beneficial use’ from its longstanding meaning,” ante, at 17. According to the Court, “[t]he amount of water put to ‘beneficial use’ has never been defined by net water consumption.” Ibid. Before making this statement, the Court has spent some 10 pages, ante, at 7–16, conducting a “sensitive . . . inquiry [that] counsels caution”; into a field (state water law) where the answer of this Court is not conclusive and hence not ipso facto correct (“it is not this Court’s role to guide”); resulting in the Court’s best guess concerning “an unclear area of appropriation doctrine”; answering a question which “ ‘[n]o western state court [not even a lower court] appears to have conclusively answered.’ ” Ante, at 7–8, and n. 5. The Court calls that hitherto unanswered question “the law of return flows,” ante, at 7, but it can more accurately be described as the question whether the volume of water to which an appropriator acquires rights is the entire volume diverted for a beneficial use, or rather only the volume depleted by the beneficial use. Which is to say that “beneficial use” has never had the “longstanding meaning” the Court posits. If it has in the past been assumed to refer to all water diverted from the stream rather than all water depleted from the stream, that is only because the issue of which of the two it means has never arisen. I find it quite extraordinary that the Court should expend such heroic efforts (imagine how many cases had to be read!) answering a state water-law question that no court of any Western State has ever answered—a question that would cross a Rabbi’s eyes—when the text in front of us provides the clear answer insofar as this Compact is concerned: “depleted.”

The Court suggests that if the Compact’s authors wanted to break from (what it considers) the common law, they should have defined beneficial use as the “volume by which the water supply . . . is depleted.” Ante, at 18 (internal quotation marks omitted). That objection seems to me to have little force when the Court cannot explain what work “depleted” is supposed to do other than indicate precisely the same concept more concisely. And the Court’s helpful drafting tip proves that speaking with greater clarity is not so easy. Following the Court’s advice would make nonsense of Article V(B) of the Compact. That provision allocates a fixed percentage “of the unused and unappropriated water” of various tributaries to each State for post-1950 “storage or direct diversions for beneficial use on new lands or for other purposes.” 65 Stat. 666. But if “beneficial use” in this last phrase means “the volume of water by which . . . the water supply is depleted,” the provision makes no sense. It would allocate a fixed percentage of unused and unappropriated water for “a volume of water by which the water supply is depleted.” It makes perfect sense, of course, if “beneficial use” means all uses that deplete the stream.

The Court also wonders why, “if Article V(A) were intended to guarantee Montana a set quantity of water,” it did not “d[o] so as plainly as other” interstate water compacts “that do just that.” Ante, at 18. This is a straw man. Montana does not demand a precise volume of water each year; nor does it insist that its pre-1950 water users always receive enough water to satisfy their pre-1950 needs. It merely asks that its pre-1950 water users occupy the same position relative to Wyoming’s pre-1950 users in 2011 as they did in 1950—that whatever would have flowed back into the Yellowstone after Wyoming appropriators’ beneficial uses in 1950 if the river then had this year’s flow, will also flow back this year. See Tr. of Oral Arg. 13, 16, 24. In dry years, that may mean some Montanans will have to make do with less or go without.

Because I think the Court’s disposition disregards the text of the Compact, I respectfully dissent. * The dictionary-approved term is “Wyomingite,” which is also the name of a type of lava, see Webster’s New International Dictionary 2961 (2d ed. 1957). I believe the people of Wyoming deserve better.

Transcript: 

ORAL ARGUMENT OF STEVE BULLOCK ON BEHALF OF PLAINTIFF

Chief Justice John G. Roberts: We will now hear argument next this morning in case 137 on our original docket, Montana v. Wyoming and North Dakota.

General Bullock.

Mr. Bullock: Mr. Chief Justice, and may it please the Court:

The Tongue and Powder Rivers are the only significant water supply in a 10,000 square mile area in Montana and Wyoming, and this Court is being asked to decide whether the compact allows Wyoming to take the return flows that Montana farmers in that area have always relied on or, instead, affords protection to both States.

Our exception should be sustained for three reasons.

First, the plain language of the compact preserves the water supply each State was receiving as of 1950.

Second, contrary to the compact's purposes, the master's interpretation would allow individual water users to alter those amounts.

And third, the master's policy determinations about efficiency add ambiguity to the principles underlying a century of western water law.

On that--

Justice Ruth Bader Ginsburg: General Bullock, would you please point to the precise language of the compact that freezes consumption, as distinguished from the amount of water diverted, which freezes consumption as of January 1st, 1950?

Mr. Bullock: --Yes, Your Honor.

In the compact it's at the appendix of the master's first interim report.

Two areas: first, the preamble provides for an equitable division/apportionment of the water; and then the operative provision, article V(A), states that the uses existing as of January 1st, 1950, in each signatory State shall continue to be enjoyed.

Justice Ruth Bader Ginsburg: Well, the uses existing is irrigation.

Mr. Bullock: Um--

Justice Ruth Bader Ginsburg: I don't see where it says, and so I can understand, the amount of water diverted can't be increased.

Mr. Bullock: --Your Honor, the whole of Article V(A) and V(B) -- I mean, no one contests that it's a full allocation of the water.

So V(B) is water after 1950.

V(A) is prior.

And in order for the status quo to be -- remain -- for the appropriative rights to beneficial uses existing in Montana as of 1950, there needs to be a water supply.

And also operative to that, it's within the definitions at article II(A) to the beneficial use.

And that's a derivation or departure from the general prior appropriation law, because it's that use by which a water supply is depleted when--

Justice Anthony Kennedy: But why doesn't the language in Article V(A) -- and this is not too helpful -- simply restate the issue before us, what is a beneficial use by the upstream owner?

Mr. Bullock: --Well, Your Honor, it need not because in article II(H) it defines what a beneficial use is, and that's that use by which the water supply of a basin is depleted.

And it's that depletion that -- as of 1950, so it wasn't a full consumption of water in Wyoming, and that depletion is the return flow upon which Montanans rely.

Justice Sonia Sotomayor: That's the essence of the argument before us.

The depletion was the amount of water that was taken from this water source to irrigate the crops.

The -- the issue now before us is whether beneficial use means consumption or it means use, isn't it?

I -- you're begging the question in my mind, because I don't -- what source do you have for the fact that a return flow is beneficial use?

Mr. Bullock: Your Honor, the return flow is the basis of Montana's water right, so that the return flow under the compact isn't actually beneficial use.

Justice Sonia Sotomayor: That's not actually true.

Their water right was the beneficial use that your pre-1950 consumers used, meaning you had consumers who were irrigating their own crops who were doing other things with the water.

The rights protected are their pre-1950 uses.

You're putting -- you're -- you're still equating consumption as -- as being their use, but I don't know where you get that equation from.

Mr. Bullock: The equation, Your Honor, that consumption is the same thing as--

Justice Sonia Sotomayor: As use.

Mr. Bullock: --as use?

Justice Sonia Sotomayor: Uh-huh.

Mr. Bullock: Well, we could go actually to the special master, who himself had stated that when exploring -- I mean, the beneficial use reflects the historic consumptive use.

It's from his own textbook.

It's on page 82.

The Master says that a senior's right is limited to the amount he originally beneficially applied and consumptively used; that is, the amount received at the point of use minus the runoff.

Justice Sonia Sotomayor: Could someone pre-1950 who irrigated crops change the crops?

Mr. Bullock: It's -- it's an open question, Your Honor.

Yes, they certainly could, but not if it impacted a downstream appropriator, as per this compact.

Justice Sonia Sotomayor: How in the world do any States monitor that?

The change in crops, the change in irrigation methods, the change in anything that would cause a difference in return flow?

Let's assume global warming in some form or another evaporated more water, and so some crop area did some solar heating that caused a greater evaporation.

Is that a breach of the compact?

So two questions embedded in there.

How does any State monitor that, the change in crops or change in irrigation methods?

And, second, how far does it go in terms of the pre-1950s right to use their water?

Mr. Bullock: To the first question, Your Honor, even as of 1950, the drafters recognized that this was a fully appropriated river; it had reached its maximum practical limit.

So each individual downstream knows how much water they should be getting.

I mean, we have 80 years of measurements on one of these rivers alone, and you could go online right now and find out what the flow is at the State line occurring as of this morning.

So a piece of it that this is something we have been doing for a long time in the West as far as knowing what water is in the river, where it is, and throughout, you know, downstream appropriation.

To the second question--

Justice Anthony Kennedy: But all that shows is -- or might show in a particular case, is that the amount of water is reduced.

Now -- then the question is have the senior appropriators or the upstream appropriators reduced it in a way that's inconsistent or that's an overuse of their beneficial rights, and you're right -- again right where we started from.

And then you have to regulate exactly how each irrigator is using the appropriative rights.

Mr. Bullock: --And, Your Honor, you don't--

Justice Anthony Kennedy: So the -- so the flows don't necessarily answer the question.

Mr. Bullock: --Well, Your Honor, it's ultimately up to each State to administer their rights and their water intrastate.

But this is a compact among sovereigns.

So what we need, what Montana needs, is to get that supply of water that it was receiving as of 1950.

Chief Justice John G. Roberts: But if you've -- we've been talking about beneficial uses.

What the compact said -- says is, appropriative rights to beneficial uses.

And to me that suggests, which I always understood to be the way water law worked in the West, is you have a right to pull out water, and the appropriative right is you have the right to take out however much you were taking out, and the fact that less comes back, that's something different.

That doesn't affect your appropriation.

Mr. Bullock: Your Honor, even at the time of the compact, Wyoming recognized their paper rights, that appropriative right, was much more than the actual use occurring.

So you can't read beneficial use out of -- especially under this compact, but in any.

Even under the general common law, you only have an appropriative right for the beneficial use, and all along--

Chief Justice John G. Roberts: Well, isn't that what's going on here?

The beneficial use is the irrigation of crops.

They have an appropriative right to take out so much flow for that.

That's all they're doing.

They're doing it now, just as they were back then.

They just use up more of it once they've taken it out.

Mr. Bullock: --Mr. Chief Justice, two things, the first of which, the beneficial use is -- I mean, we can't read this definition of beneficial use out of the contract or out of the compact -- and it is a contract, actually, among States.

And also, though -- second of which, though, that it's also a fundamental tenet of prior appropriation law is the downstream irrigator takes, given the same conditions as when he first got his or her right.

Justice Stephen G. Breyer: Given the same conditions.

But is there any evidence, or can you say anything from the record or any other place, going back to 1950 -- I assume in 1950 people knew how much the different landowners were taking out of the stream of the river in Wyoming to use for irrigation and other such purposes.

They knew that.

Is there any indication they knew at that time how much each individual landowner was putting back?

I think the answer is no.

But I would be very interested if it's yes.

And I think it would help you a lot if it's yes, because I'm -- to tell you the truth, I'm pretty skeptical of the fact that they're writing an appropriation right into this about regulating something they don't even know about.

Mr. Bullock: Effectively, Your Honor, it could be yes.

Justice Stephen G. Breyer: Well, I didn't say it could be yes.

I would like you to tell me if the answer is yes, and then of course I'm going to ask you where in the record I find something that says that they knew how much each individual landowner is putting back into this river in Wyoming.

And I think you can't answer that question, can you?

Mr. Bullock: I certainly can't answer that, and they didn't need to know, from the perspective--

Justice Stephen G. Breyer: Oh, they didn't?

In other words, they didn't know how much is coming back, but you're coming in and saying what they were -- what they were regulating here is they're saying, not only you get -- you maintain a right to take out 100,000 units to do your irrigation, but you have to put back 80,000, but they didn't even know what the number was, whether it was 80, 70, or 60, and the appropriation law is ambiguous?

I think -- I think I can go that far with you to say it's ambiguous, but I don't see how I can go further.

I mean, that's my basic question.

Did you see what it was?

Was I clear?

I'm saying, how can you read this treaty to require landowners to put back amounts into the river that they didn't even know what they were?

Mr. Bullock: --First, Your Honor, the individual landowner does not have to put water back in that they didn't even know what they were.

What they do need to do is make sure that the beneficial -- the appropriative rights to beneficial uses existing in both States.

The Solicitor General pointed out that we don't break up V A A and V(B) and put one group priority over the other, but existing as of 1950 in both States shall continue to be enjoyed.

So the only way that we can continue to enjoy the rights in Montana downstream is to ensure that we have the water supplies that we had--

Justice Antonin Scalia: So you say you get the same amount of water and it's up to -- it's up to Wyoming to figure out who they have to cut down for not putting back enough to meet that amount?

You don't care what private owner it comes from?

It's up to Wyoming to figure out who has to be cut back?

Mr. Bullock: --Your Honor, I don't say we--

Justice Antonin Scalia: I'm trying to help you.

Mr. Bullock: --Sorry?

Justice Stephen G. Breyer: Yes, I think that is what -- the answer is yes, isn't it?

Mr. Bullock: Yes, but -- but, Your Honor, we don't say the exact same quantity of water.

We say under like water supplies.

Justice Antonin Scalia: Under like water supplies, yes.

Mr. Bullock: Yes.

Could you tell me the -- I didn't get the page of the special master's report which you asserted adopts your -- your definition of beneficial use.

What page was it?

Justice Anthony Kennedy: I thought you referred us, just while you're going through your notes, to page 82, and there's an intriguing footnote where the special master talks about his own -- his own book.

But that doesn't seem to me to be conclusive on your point, because he's saying the area is confused.

And his point it seems he brings up what the special -- I'm taking over your answer to Justice Scalia's question.

It is page 282.

Mr. Bullock: Footnote 15, yes, Your Honor.

Justice Anthony Kennedy: The footnote on that page, yes.

Mr. Bullock: And there he's talking about--

Justice Antonin Scalia: It seems to say what you say it says.

Justice Samuel Alito: If your understanding is correct, would the result be that landowners in Wyoming would only be allowed to consume as much as they consumed in 1950, but landowners in Montana could take advantage of improved irrigation techniques and use much more of the -- they could divert the same amount of water, but they could use much more of it?

Mr. Bullock: --No, Your Honor, that would not be the case.

Justice Samuel Alito: Why wouldn't it?

Mr. Bullock: First, for the irrigators in Montana -- I mean, one of the things -- Montana sought to have a system of interstate administration.

Montana -- or Wyoming, through storage, through curtailing consumption by post-'50 users, or otherwise can administer its water rights in however it so deems.

So ultimately, that's a decision of the State of how it administers the water rights and the consumption of that amount that it has.

For Montana, we can't increase consumption any more than the water that we would have received at that point.

So to the extent that Montana allows an individual irrigator to go to 100 percent of consumption of its water right, then in our system in Montana, we have to deal with what's going to happen to the subsequent appropriator right downstream.

Justice Ruth Bader Ginsburg: And what happens under Montana law?

Mr. Bullock: Under Montana law, if there's an injury, and that's -- that's actually -- and the special master pointed this out in another one of his footnotes, that that still would be actionable.

Like a change from flood irrigation to sprinkler irrigation, to the extent that it deprives a downstream user of waters that they're relying on, that they could bring an action.

Justice Antonin Scalia: Yes, but your people can do that.

Your people can get more use out of the same amount of water diverted by going to sprinkler irrigation, whereas the people in Wyoming can't.

That's a little unfair, it seems to me.

Right?

Mr. Bullock: Both can, Your Honor.

That -- that is -- I guess that presumption is that we would have the water to use it, and Wyoming is actually getting a lot more production by consuming a lot more of the water within its right.

Justice Antonin Scalia: Your people are entitled to take out the same amount they took out before, right?

Pre-1950?

Mr. Bullock: Under like water supply conditions.

Justice Antonin Scalia: Whereas the people in Wyoming, you say, are not entitled to take out the same amount; they are entitled only net the same amount that they had before.

Whereas downstream your people can take out the same amount and whereas before 20 percent of it used to go back into the stream, they can now make use of that whole 20 percent through sprinkler irrigation, right?

It gives you a great advantage.

I mean, maybe that's the way it was written, but -- but don't tell me that this is even-handed, because I don't--

Mr. Bullock: Your Honor, I don't think that it does give us a great advantage, because we still have to deal with the same amount of water supply that we would have had.

So at that point, if we switch to sprinkler irrigation, the first irrigator does that, there's going to be a shortage downriver unless we make it up through additional storage or other causes.

So--

Justice Anthony Kennedy: Do you have ultimate liability to Montana -- pardon me, to North Dakota for overuse?

Mr. Bullock: --We do a little bit, Your Honor.

There's the picture of the basin in the first appendix.

Justice Anthony Kennedy: Well, I won't -- I won't get into that, but it does seem to me that the Chief Justice asked the question, if you're entitled to take the water, you can use it for any purpose.

I -- I -- I take it the answer to that is it has to be a beneficial use, it has to be for approximately the same crop, but that brings us to this -- to this gray area that the special master refers to on page 82 as confusing.

And I think, was it page 65 he talks about this is a confusing area of the law?

What is your best authority for your position?

What is the -- do you have a case or a -- a -- a paragraph in a treatise that's--

Mr. Bullock: Sure.

Yes, Your Honor.

In 1992 the Utah Supreme Court framed the question: This court's called upon to determine the applicable law when the use of new technology--

Justice Anthony Kennedy: --The Utah case is your best case?

Mr. Bullock: --That's -- that's the only case that any of the parties cited that actually deals with the change from sprinkler -- or flood to sprinkler irrigation.

And what that said is if the return flow goes to the same river which it came from, that subsequent irrigators or downstream appropriators have the right to rely on that.

And I guess I would say that my second best case is the special master's own footnote.

It's 6912, where he says that, you know, even though State change procedures don't typically apply to crop or -- changes in crop irrigation techniques, this does not mean there's no way to challenge increases in efficiency.

Downstream water users, for example, could sue to enjoin an upstream appropriator from increasing consumption or to force the upstream appropriator to replace lost runoff.

Justice Antonin Scalia: --I would think your best point is not all of that stuff, but simply the definition section, which very clearly makes a distinction between beneficial use and diversion.

And your point is that what is guaranteed is not the diversion right that existed pre-1950, but the beneficial use right, which is the net use of the water, not -- not the total amount diverted.

If -- if there were not both of those definitions, it seems to me it would be a little -- your case would be a little harder.

But with the two of those definitions there and with V(A) using beneficial use rather than -- it could have said diversion, appropriative right to diversion, but it didn't say that.

It said to beneficial use.

Well, why -- why define beneficial use that way if you don't mean it?

That's your best point, isn't it?

Mr. Bullock: I -- I -- I agree, Your Honor.

[Laughter]

I was trying to -- I believe Justice Kennedy asked for a case or a treatise, so that's--

Justice Antonin Scalia: Well, all right.

Mr. Bullock: --But I agree that the plain language -- and especially in an area where there's so much ambiguities the special master acknowledges, why change the status quo of what was occurring?

And that's--

Chief Justice John G. Roberts: I don't understand why that's a good -- good answer.

I mean, the beneficial use is that use by which the water supply is depleted.

Well, the use here is irrigation.

It doesn't say irrigation up to the technological development in 1950.

They're still taking out the same amount of water for that beneficial use.

They're using it to irrigate.

And if they get better at it so they use more, well, that's just too bad for you.

Mr. Bullock: --Your Honor, but they're depleting more from the basin, and that's -- you can have beneficial use for non-consumptive purposes.

Justice Stephen G. Breyer: That's back where -- that's where I was here.

See, I can't get too far.

I mean, you have the word "depletion" in that definition.

I -- I -- that might help you.

But I'm thinking in accordance with the doctrine of appropriation, what does that doctrine, that legal doctrine, say about use and return?

That's why we're -- we're -- why I was thinking it seems totally unclear.

It talks about seepage, the cases, which I gather is different from return.

Okay.

So could they have really meant net?

And what struck me is that they couldn't, which -- which you were beginning to address, too, is that they couldn't have meant net because the water law at that time is unlikely to have meant net for the reason that they didn't -- you don't know what's coming back.

Do you see?

It's not just -- I see your point.

Your point is, well, Wyoming knew how much was going into Wyoming.

But that's not my point.

My point is what -- what's the water law?

What's the law of appropriation at that time in respect to return flows?

And if people didn't measure return flows in general, I suspect in an ambiguous area they would have analogized it to seepage, which is what the -- what the special master thought.

Mr. Bullock: Your Honor, the seepage cases, though, deal with adjoining landowners--

Justice Stephen G. Breyer: Yes, they--

Mr. Bullock: --not the same river flow, and the special master acknowledged that.

Justice Stephen G. Breyer: --Uh-huh.

Mr. Bullock: That -- and I guess what I was earlier trying to explain is certainly each appropriator knows how much water it would -- would be receiving, what the flows typically are, and they all basically judge on it.

But I guess if there is any ambiguity -- and the law wasn't necessarily clear as of 1950 on conversions from flood to sprinkler irrigation, but what we were trying to do is preserve those uses in both States existing as of January 1st, 1950, and we can't do that without a water supply.

Other than the text, I think that the next place that one would look in interpreting the compact would be the legislative history.

And I think that the report to the Senate was real good in saying that -- and this is part of -- it's appended to motion -- Montana's brief in response to the motion to dismiss the bill of complaint.

At 3a it says:

"It's clear then that the demand of one State upon another for a supply different from that now obtaining under present conditions of supply and diversion is not contemplated, nor would such a demand have a legal standing. "

So what they were trying to do in 1950 was protect what each State was doing.

Justice Antonin Scalia: Where was that again, where at?

Mr. Bullock: That's at 3a of the appendix, Montana's motion -- or the response to Wyoming's motion to dismiss the bill of complaint.

Justice Ruth Bader Ginsburg: General, assume that you're right, that what was guaranteed was the same amount of water flowing into Montana as in 1950, and I -- I take it you don't care how Wyoming deals with this, but what -- if you're right, what could Wyoming do?

It can't tell the -- the farmers, go back to the old way of irrigating or go back to a different crop?

Mr. Bullock: No -- I mean, no, Justice Ginsburg.

Wyoming could choose to reduce groundwater pumping.

They could choose to curtail irrigation on post-1950.

They could choose to release storage.

I mean, they've -- they've built, I think, 15 new reservoirs in Wyoming since the date of the compact.

They could choose to release water from that to fulfill those rights.

Justice Ruth Bader Ginsburg: So, you say it doesn't -- they don't -- Wyoming doesn't have to know whether farmer A or farmer B is taking more than they took in 1950 -- I mean, is using more than they used in 1950; they just have to know what the total amount is, and Wyoming can make that up?

Mr. Bullock: Yes, Your Honor.

Justice Sonia Sotomayor: So really -- I'm sorry.

The issue is, are both of you -- both of you have pre and post-1950 users?

Mr. Bullock: Yes, Your Honor.

Justice Sonia Sotomayor: All right.

And I -- I guess this goes to the second question, which was sort of not really addressed.

The special master said, well, you could cut back your post-1950 users and satisfy all of the needs of your pre-1950 users.

Why isn't that the answer?

Why isn't that an answer that should be respected, because you can satisfy all of the pre-1950 needs that you have potentially?

Mr. Bullock: No, Your Honor, we can't necessarily satisfy all the needs.

The drafters did say even as of 1950 that this basin reached its maximum practicable limit for irrigation, and that's from the October -- the last of the drafters meetings.

So -- so, the water supply as of then, without additional storage, had already hit that limit.

And ultimately what we need, though, is each State will administer intrastate, but we still should be able to rely on the ability to get a supply of water to meet those needs as of 1950 under like water supply conditions.

Justice Sonia Sotomayor: Before any 1950 use, post-1950 users are permitted?

Mr. Bullock: We're still at the stage of discovery, but, yes, likely that's how it would occur, Your Honor.

Justice Sonia Sotomayor: So why isn't this a premature lawsuit?

Because I think really the essence of your claim is we need the pre-1950 water flow.

We don't care who it comes from.

And what -- all the special master said, in my mind, was the difference -- you can't look to what the pre-1950s were doing in this situation, but I haven't addressed what the posts are going to do or have been doing and whether that's right, and that's depriving you of the water flow.

I don't know if he answered that question: Are you in fact entitled to a minimum amount of water flow?

That's really what should be the point of the issue, isn't it?

Mr. Bullock: It is, or that quantity under like water supply conditions.

I don't think it's premature.

We have tried to administer this compact, actually made calls in 2004 and 2006; and as a result of not getting the water, knowing -- believing we're in a water-short time, that's when we filed this action.

I would like to reserve my time if I may.

Chief Justice John G. Roberts: Thank you, counsel.

Mr. Michael.

ORAL ARGUMENT OF PETER KENNETH MICHAEL ON BEHALF OF DEFENDANT WYOMING

Mr. Michael: Mr. Chief Justice, and may it please the Court:

This Court has identified in previous questioning, this case at this point in this issue involves whether a Wyoming or a Montana diverter may change cropping patterns, may change various technologies in irrigated agriculture, and change up and down depending on the year and the fouling of the land and that sort of thing, the amount of water that is actually consumed by crops; and I think the Court has identified the critical fact that a water right, a classic western water right, appropriate right as in article V(A), is made up of the right to divert water at a head gate in an irrigation situation, put it on a defined quantity of land and use it for a purpose, irrigation, that's defined by the State.

Wyoming has had such a -- a system in place for many years, and controls those issues but does not and has not attempted to measure consumptive.

Justice Anthony Kennedy: But what is the controlling principle in answering the question that I think you properly put?

Could these irrigators switch to something like rice which absorbs a tremendous amount of water, or are they -- when they switch crops it must be reasonably close to the earlier beneficial use?

What is -- what is the standard that we look to, to answer that question?

Mr. Michael: The standard is the standard of waste of practical irrigation.

Justice Anthony Kennedy: Standard of?

Mr. Michael: Waste, of not wasting water in practical irrigation.

The irrigation right is a general right, and if rice were to double the amount of consumptive use by the crop, that would be permissible if the previous use had not been affected by an abandonment action, because the amount of water was being reasonably used for the former crop and the crop has changed.

So it's not a question of -- of percentage change.

Justice Sonia Sotomayor: I thought--

Mr. Michael: It's a question--

Justice Anthony Kennedy: Suppose the first -- suppose the first crop absorbs 50 percent of the water and returns 50 percent by seepage.

The second crop that they switch to still absorbs just 50 percent of the water but because of the -- of the pattern, the other 50 percent just evaporates?

Mr. Michael: --The -- the way that the water is -- there's -- there's a basket, Your Honor.

There's a basket that starts with a quantity that's taken at the head gate, 4 cubic feet per second put on the -- on the field.

And within that quantity there -- there is multiple -- two components, basically.

The amount consumed by the crop -- I should say the amount consumed by the crop or depleted by other elements, ditches, seepage, other types of things, deep percolation into the ground -- and -- and the other component which is water that's not lost but can return or go somewhere.

It's not evaporated, there's no -- transpiration.

So there's just two components.

And if that -- if that quantity, that division changes, that's perfectly permissible within the use of the water right.

And the reason for that was set out in Wiel's -- Samuel Wiel's text in 1911, carried forward in texts and cases ever since, that -- and in the Binning case, a 1940 case in Wyoming; which is the water while it's in the stream in the public common is -- is not under the possession and control, the personal property control of the irrigator.

Justice Antonin Scalia: But we're dealing here with a compact which has a text, and -- and what the water law of Wyoming or of Montana happened to be cannot overrule the text, and I am -- I'm hung up on the fact that article V(A) says appropriated rights to the beneficial uses of the water of the Yellowstone River System existing as of January 1, 1950: appropriated rights not to diversion, not to diversion for beneficial uses, but appropriated rights to the beneficial uses, which is defined -- which is defined in the compact to say that use by which the water supply of a drainage basin is depleted when usefully employed.

And it could have said diversion, but it didn't say that, and I notice that the government's brief uses -- seems to use the words interchangeably, depletion and diversion.

They're not interchangeable.

They're defined quite separately in this thing; and besides which I find it implausible that Montana signed on to,

"we don't know how much water we're going to get, it depends, you know, upon how much stuff was -- was flowing back before, but we're not guaranteed that that will be flowing back again. "

You combine those two things, and I -- I -- what do you do about that definition?

Mr. Michael: Your Honor, the definition has two components, the classic beneficial -- the component that would come from a classic beneficial use definition, which is useful employment for activities of man, a beneficial purpose, which -- a nonwasteful purpose, that's a start.

Justice Antonin Scalia: That's not how it's defined.

Mr. Michael: That's -- that's the last portion, that's the second part.

Justice Antonin Scalia: Well, that's fine.

Mr. Michael: The first part is use by which the water supply of a drainage basin is depleted.

And in the western United States a drainage basin, appropriated water is not all the water in the air and on the land and dropping from the sky; appropriated water is water confined in a water course.

The Binning case made that clear, until the water returned from the field into a water course it was not appropriable by the downstream user.

So this definition -- by using the--

Justice Anthony Kennedy: Are you addressing the word depleted?

Mr. Michael: --I'm addressing the word supply of the drainage basin; and then it is depleted.

Use by which the supply, the water supply of a drainage basin is depleted.

Justice Anthony Kennedy: Are you saying that "depleted" means only what's withdrawn and it's not calculated by -- with reference to what is returned?

Mr. Michael: That's correct.

Justice Stephen G. Breyer: Obviously you're saying -- to read it with a different emphasis.

Justice Scalia read it with -- beneficial use is that use by which the water supply of a drainage basin "is depleted" when usefully employed by the activities of man.

And you read it, by which the water supply of a drainage basin is depleted

"when usefully employed by the activities of man. "

so that it is a definition in respect to how you use it, not amount.

But if you emphasize the word depleted, it could be read as referring to amounts, and not quality of use, not nature.

Justice Antonin Scalia: Why don't you emphasize both of them?

I'm willing to emphasize both, but you can't write out the "depleted" out of the -- how does your definition of depleted differ from -- from diversion?

Mr. Michael: If you had a--

Justice Antonin Scalia: Is the diversion for a beneficial use the same thing as a depletion?

Mr. Michael: --May I give an example?

In a -- in a river, the Tongue River, if there is a, if there is a water wheel -- Montana allows water rights, 1912 case, Hennessy v. Featherman, allows a water right to push a water wheel.

That water flowing down the river does not, does not -- is not diverted.

Nevertheless it -- it would allow a water right.

This definition differentiates that.

In this definition under the compact, water that is diverted for agriculture that is diverted is a beneficial use, but there's a small segment of -- of what could be a legitimate water right that is excluded.

Justice Antonin Scalia: No, but I mean, to -- to do that, the definition would have read the term beneficial use is defined to be that use by which the water -- that use by which the water -- that use "for which" the water supply of a drainage basin is diverted, for useful employment by the activities of man, and that's not what it says.

To the contrary, it makes a clear distinction between depletion and the previous definition of diversion.

Mr. Michael: I--

Justice Antonin Scalia: I was trying to give that stark difference some effect in the later sections of V(A).

Mr. Michael: --Let me say this, Your Honor, if I might.

The -- you will find in -- in the compact, in article V(B), the use of both diversion and beneficial use.

Justice Antonin Scalia: Okay.

Mr. Michael: And so we have two -- those terms are both used.

And in V(B) the drafters made a distinction; they said direct diversions or storage would be covered by V(B), and then they said how diversions are counted.

Justice Antonin Scalia: Where -- where -- what part of V(B) are you talking about?

Mr. Michael: I'm talking about at the bottom of V(B) where you're talking about the three -- the third-tier rights.

Justice Antonin Scalia: The point of measurement shall be below the last diversion?

Mr. Michael: No, no, 5B.

In the first text, the first paragraph of 5B, towards the bottom, the text says:

"And the remainder of the unused and unappropriated water is allocated to each State for storage and direct diversions for beneficial use on new lands. "

Justice Sonia Sotomayor: --Excuse--

Justice Antonin Scalia: For -- exactly.

I mean, there it talks about diversions for beneficial use and not depletion for beneficial use.

I mean, I think that's something different.

Justice Sonia Sotomayor: --Counsel, could I -- could you answer, do you see a difference?

Finish that, and then could I just clarify something from what you were just reading?

Mr. Michael: I think there's a difference in that the -- in practical terms, the depletion -- the depletion and the beneficial use definition, a diversion would be the only way to deplete that.

And that's -- that's the point.

The only way to make it through a depletion--

Justice Anthony Kennedy: So once again, you're saying that depletion is a calculation of what is taken without reference to what returns?

Mr. Michael: --Yes, Your Honor.

Justice Anthony Kennedy: And your best authority for that is?

Mr. Michael: The best authority, I think, is the Special Master's discussion of this, that the only practical way water supply of the drainage basin would be -- the quantities of water in the rivers themselves would be depleted would be through a diversion.

So there's really no reason to make a distinction.

Chief Justice John G. Roberts: Just to follow up on Justice Kennedy's point, because I think it's important: So you were reading -- when it says "is depleted", you think all you have to show is that it's less than when you started, and once that is shown, it is depleted.

Then you're saying, but we can deplete as much as we want?

Mr. Michael: Yes, depletion would be moving it from this glass of water, if that was the river, and it reduces the quantity of water in the river.

That would be a depletion.

Chief Justice John G. Roberts: And you don't care how much?

You're saying this is a beneficial use because it depletes some of the water, it takes some away, and once we have gotten over that hurdle, all bets are off and we can deplete as much as we want.

Mr. Michael: Yes.

And of course--

Chief Justice John G. Roberts: Well, I guess to get back to the point, wouldn't the normal word be "divert"?

Mr. Michael: --It may well be, Your Honor.

There's some problems with this definition.

It self-defines itself using "usefully" twice, so we have some drafting issues with this.

Justice Sonia Sotomayor: So could I go back to my question, which is twofold?

The first is, the solicitor general recommends that we defer the decision on remedies in this case, and Montana seems to agree.

Do you agree as well?

The second question presented.

Mr. Michael: That has been deferred, is my understanding.

Justice Sonia Sotomayor: My problem with this is -- and I think I need to understand what the fight is about here, or what the dispute is about -- it really does seem to me that it is a question of remedies, not about whether you're taking more water rights through irrigation or not.

If I understand this compact right, both of you are protected in your pre-1950 beneficial uses.

Each of you appear, under the terms of Article V, to be entitled to get enough water to fill those uses.

The next section, the one that you read earlier, lets you use things in the future for post-1950 uses, but only if the water supply's protected pre-1950 beneficial uses have received all they're entitled to.

Neither of you are entitled or -- to take anything post-1950 until pre-1950 is protected.

That's how I read Article V.

Am I reading it wrong?

Because it seems to me that the only time that we get into a dispute -- and this is the part that I think your adversary may be right about, ultimately -- is it's not a consumptive compact, but it's a use compact, and both of you are entitled to get a full -- that's what I'm reading Article V to say, to get enough water to satisfy the beneficial uses before anybody's entitled to post-1950 water.

Tell me what in the language of Article V suggests something different than that understanding.

Mr. Michael: I disagree -- the language in Article V that disagrees with that is the very first few words, "appropriative rights".

Appropriative rights do not guarantee that any water user or any group of water users will be satisfied.

1934 was a horrendously dry year in the basin, 50 percent -- flows were 50 percent less than normal.

In those kinds of years, the river -- the river dried up that year in parts of the river, so--

Justice Sonia Sotomayor: But this is not happening today, is it?

Mr. Michael: --Oh, yes.

It happened in 2004.

Justice Sonia Sotomayor: All right, but that's an isolated year.

In most years, are you putting water to post-1950 use -- to post-1950 uses or not?

Have you been regularly putting water to post-1950 uses?

Mr. Michael: Both States, at times.

Yes, last year, all post-1950 users got satisfied, very wide.

But the point is that only the appropriative rights, which is not a guarantee of a quantity of water.

So the first clause of the compact, Article V(A), does not establish a quantity of water, and there are many compacts that do this.

They establish a quantity of water.

Justice Sonia Sotomayor: I don't disagree.

Mr. Michael: Quite simply--

Justice Sonia Sotomayor: I don't disagree, but as I read the Article, it says, you put all the water that's available to pre-1950 appropriated uses.

You then go, as I read the second part of this article, to any water supplies that each State has until you fulfill those 1950 appropriated uses.

And then it apportions, between the two of you, post-1950 percentages of the excess water that you're entitled to have.

Am I correct about that structure?

Mr. Michael: --Yes, and on an ongoing basis.

It's not a quantity.

None of this is done in quantity.

Justice Sonia Sotomayor: Exactly.

Mr. Michael: It's all done in a system that's dynamic.

Justice Sonia Sotomayor: But that's why -- I do understand the remedies were deferred, but to the extent that we were to rule that appropriated rights included the right to change irrigation methods or crops -- we don't have to reach crops, because that's not at issue here -- in the end, you're only entitled to take the appropriated uses, including irrigation rights, that existed pre-1950.

Are they entitled to get as much water as necessary to satisfy their pre-1950 rights or not?

Mr. Michael: No.

Justice Sonia Sotomayor: Before you can use post-1950 water?

Mr. Michael: Yes.

Yes, before -- when -- on those particular dates.

On those particular dates, if there are pre-1950 rights in Montana that are not satisfied on that river and there's post-1950 rights in Wyoming, the Special Master has ruled, contrary to Wyoming--

Justice Sonia Sotomayor: Why aren't you taking more of the percentage that way of post-1950 waters?

The compact says, post-1950, you can take whatever percentage it was.

I've forgotten what percentage that might have been.

Mr. Michael: --60 percent.

Justice Sonia Sotomayor: Whatever it was.

60 percent; they're entitled to 40.

Does that mean you can take a hundred percent, because there happens to be more water that they can satisfy the pre-1950's users with?

Why aren't they entitled to their 40 percent of whatever that big basin is so they can give more water to post-1950 users, that they can exploit their full 40 percent?

Mr. Michael: Your Honor, I'm not following, because there's a distinction between each class of water.

Justice Sonia Sotomayor: Yes, I understand that.

Mr. Michael: And in your -- in your question, I'm not following which class you are referring to.

Justice Sonia Sotomayor: I'm answering this only -- I'm asking this because I know we've deferred decision on the remedy, but for me that is so integral to the issue here because when they talk about being entitled to a water flow, I see that as being entitled to a pre-1950 satisfaction of water needs or beneficial uses before anybody gets 19 -- post-1950 water.

And, so, I see the only issue before us, because remedies have been put aside, as to whether the beneficial use includes some percentage increase because of irrigation demands, but so what?

It just means it's going to limit post-1950 users.

It's not going to limit the rights of the pre-1950 users.

Everybody's entitled to change their irrigation methods, everybody's entitled to change their crops.

They appear not to be entitled to put the water to a new use, whatever -- however that's defined.

We don't need to get there today, but I'm not sure how you're entitled to post-1950 uses while they're still not satisfied in 1950 use.

Mr. Michael: We -- Wyoming is not entitled on the same river to take post-1950 water when there is a pre-1950 use in Montana that's not satisfied.

The Special Master has held that.

Pre-1950's--

Justice Sonia Sotomayor: The question is what?

Mr. Michael: --He has -- the Special -- I'm sorry.

The Special Master has recommended that.

The Court actually has granted that.

Chief Justice John G. Roberts: Just before you sit down, I don't know why you think we have deferred the remedy question?

It's presented.

It's been briefed.

I don't know why you think we've deferred it.

Whether or not Montana has to take care of intrastate uses, that's what I understand the remedy question to be.

You briefed it.

Mr. Michael: Well, no, my understanding was the Court had simply sent it back to the Special Master for consideration, that's all.

Chief Justice John G. Roberts: Well, thank you.

Thank you, counsel.

Mr. Michael: Thank you.

Chief Justice John G. Roberts: Mr. Jay, maybe you can help clarify something.

The -- the second question presented, which involves what Montana has to do before, that's still before us, right?

ORAL ARGUMENT OF WILLIAM M. JAY, ON BEHALF OF THE UNITED STATES, AS AMICUS CURIAE, SUPPORTING DEFENDANTS

Mr. Jay: Mr. Chief Justice--

Chief Justice John G. Roberts: I know you want us -- you don't want us to reach it, but it's still before us.

Mr. Jay: --Mr. Chief Justice, and may it please the Court:

The Court entered an order stating that it would hold oral argument only on Montana's first exception, and that the second exception would be recommitted to the Special Master.

So for that -- for that reason the parties have addressed only the first exception in this argument today.

Justice Sonia Sotomayor: Could you -- but your brief, before we entered that order, said the Special Master was right, that they have to satisfy their needs from pre -- post-1950 users.

Why?

Aren't they entitled to their 40 percent of how much excess water there may be after their pre-1950 users have been satisfied in full?

Doesn't this compact say both of their pre-1950 users have to be satisfied first?

Mr. Jay: Both of their pre-1950 users have to be satisfied first, yes, we agree with that, so that no one in Wyoming is supposed to be taking post-1950 water until pre-1950 users in Montana are satisfied.

We agree with that.

The -- the point on which -- that the Court has sent back to the Special Master is what happens if pre-1950 users in Montana are not satisfied but they could be because Montana post-1950 users in Montana are also diverting water.

But what we think the -- the question squarely before the Court here is whether the right to recapture water gained from increased efficiency is part of the pre-1950 appropriative right, and that matters when there's not enough water in the river for both states to satisfy their pre-1950 appropriative rights.

Forget about post-1950's, there's not enough water.

Justice Stephen G. Breyer: And so on your theory in that situation where there isn't enough for all the pre-1950 people, it's Wyoming that gets all the water?

And on their theory, it's surprising -- surprise, surprise -- it's Montana that gets all the water?

[Laughter]

And there's no way to read this contract -- this compact so it's share and share alike?

Mr. Jay: Both States have affirmatively rejected the idea of a middle ground like that, Justice Breyer--

Justice Stephen G. Breyer: There's no fair way to decide this case?

Mr. Jay: --Well -- well, Justice Breyer, we -- we submit that enforcing the compact according what -- what the States signed up for is--

Justice Antonin Scalia: Is fair.

Mr. Jay: --Precisely.

Chief Justice John G. Roberts: I thought that was the way appropriation law works in the west, I mean, the person who gets it, gets it?

[Laughter]

Mr. Jay: Provided they--

Justice Antonin Scalia: The person who doesn't get it, gets it.

[Laughter]

Chief Justice John G. Roberts: Well, I mean, I don't mean -- isn't that the difference between eastern water law and western water law?

In the east you try to allocate everything fairly so everyone is treated fairly, and I thought in the west, for reasons of efficiency, it's first come first serve.

Mr. Jay: --And here the States decided not to do that on an interstate basis.

They said that -- that all pre-1950 users would be on the same footing as between the States.

So that Montana cannot complain if -- as long as Wyoming's water users pre-1950 are not exceeding their pre-1950 right, Montana has no remedy and there is no breach.

They concede that on page 20 of that surreply.

Justice Ruth Bader Ginsburg: Mr. Jay, I thought that the Special Master, very important to him was the meaning of a appropriate -- appropriative rights, and he said that the Wyoming law is just as you've described, that is, the farmer can use all that water; and he said Montana law is uncertain, but Wyoming law is not out of line with the general approach.

Suppose it had been a case, suppose Montana law, instead of being uncertain, was diametrically opposite Wyoming law, then what happens under this compact?

Mr. Jay: Under this compact, Justice Ginsburg, the appropriative rights existing in each signatory State as of January 1st, 1950 are water preserved and carried for by article V(A).

Each water user in -- in each State has exactly the same rights that he had on January 1st, 1950.

Now, in Montana perhaps that might not include the right to recapture efficiencies; but we know, for example, that -- that a Montana water user could divert more water per acre because Montana had a more generous concept of beneficial use for irrigation per acre than Wyoming did.

The compact simply carries forward all existing appropriative rights, and the drafters consciously rejected the idea that they should come up with some kind of interstate administration system putting the two States' rights on equal footing.

They carried forward each element in the bundle of sticks that a rights holder had on January 1st, 1950, subject to the single override of the definition of beneficial use; and I would like to turn to that because Justice Scalia's colloquy with Mr. Michael brought that out.

In article II(H) there's a definition of beneficial use.

What the compact's definition of beneficial use does is specify that nondepletive uses don't count.

Hydropower is a classic example.

Hydropower in the main channel is something that one could get an appropriative right for under some western water law.

Justice Anthony Kennedy: Could you -- and this is II--

Mr. Jay: II(H), which is on page A4 to the appendix to the special master's report.

That's the definition of beneficial use.

What it does not do is specify that depletion is the measure of beneficial use.

It says beneficial use is not the use to the extent that the water supply is depleted; it's the use -- it's a use by which the water supply is depleted.

Because irrigation means water goes out and doesn't come -- and some of it doesn't come back, irrigation is a depletive use.

It's recognized by the compact.

Justice Antonin Scalia: Well, hydropower would -- would not constitute a diversion.

Mr. Jay: But a mill race would, Justice Scalia.

A mill race takes water out of the river.

You turn the wheel of your grist mill with it, and then the water comes back to the river.

Justice Antonin Scalia: Well, but that -- that's a diversion.

Mr. Jay: Yes, that's a diversion, but not a depletion.

Justice Antonin Scalia: It means the taking or removing of water when the water so taken or removed is not returned directly into the channel of the Yellowstone River.

So if you have a mill race, the water comes through the mill race, goes right back; it's -- it's not even a diversion.

You don't have to qualify as a beneficial use.

Mr. Jay: But the -- the point, Justice Scalia, article V(A) doesn't use diversion, and that -- that's precisely the point, it doesn't use diversion; it uses -- it uses beneficial use.

And any -- any--

Justice Antonin Scalia: Why doesn't it use diversion if it means what you say?

Mr. Jay: --Because they -- it didn't use diversion because it wasn't quantifying them.

Where -- what diversion is used in article V(B) because the diversion is--

Justice Antonin Scalia: Of course it's quantified.

I mean the whole purpose is you can't take any more than you were taking before.

It has to be quantified somehow.

Mr. Jay: --It's not quantified in the sense -- as Justice Breyer pointed out, no one -- they didn't write down, especially in Montana, because as the special master said on page 22, Montana didn't have a centralized system of rights; they didn't know exactly how much was being diverted in Montana.

They certainly didn't know how much was being consumed or how much was being returned to the river.

Joint appendix 585 there's a Federal Power Commission report that says that it is almost impossible to make an accurate determination of return flow.

So what -- what the drafters did was they, for the pre-1950 rights, they said we're not going to cap -- quantify them at all, we're going to grandfather them in, freeze them in place.

Justice Stephen G. Breyer: So your linguistic argument is they didn't use the word diversion because they didn't want to throw the mill race example into the definition; is that right?

Mr. Jay: My argument, Justice -- my argument, Justice Breyer, is that they didn't want mill races or hydropower to count.

Justice Stephen G. Breyer: They didn't want mill races in the definition, so they didn't purposely use diversion, that's why they used the word depletion.

Mr. Jay: They used the word depletion, but they didn't make the amount of depletion the measurement -- that is the point.

Justice Antonin Scalia: A mill race is not a diversion.

Justice Stephen G. Breyer: Correct, and they wanted that.

Mr. Jay: A mill race is a diversion under the common understanding of that term, Justice Scalia.

It may--

Justice Antonin Scalia: Not under the definition.

Mr. Jay: --No, not under the special definition used for Article V(B), but--

Chief Justice John G. Roberts: You keep saying everybody gets the same beneficial use they had prior to 1950, but -- even though that may mean they can't do it.

In other words they may have a right to get 50 cubic whatever for irrigation, but there may not be any water there for them to use it because of the increased efficiencies upstream.

Mr. Jay: --That -- that is true, Mr. Chief Justice, but that has always been the case under western water law that the appropriative right is a priority, that when it's your turn and there's enough water, you get to take the amount of water to which you have a right.

But it was clear in Wyoming on January 1st, 1950 that the appropriative right -- so long as you took the same quantity from the river, you took it from the same point on the river, you put it to the same use, irrigation, on the same acreage -- that you could then change crops, for example.

Justice Anthony Kennedy: --In II -- in II(H), do you think beneficial use is hereby defined as -- by which water supply is depleted -- we're looking at "depleted".

Do you define depleted as what is taken without any reference to what is returned?

Mr. Jay: I -- I think that that's right.

I think I agree, Justice Kennedy, but it has to be a depletive use in the sense that some water -- some water has to come out that doesn't come back.

So it's not -- it's not the same -- the mill -- a mill race is not a depletion, even though some water, some water comes out because it then -- because it then comes back.

Justice Anthony Kennedy: Well, I mean, that -- that's the key to this case, I take it.

Wyoming is telling us that what goes back is irrelevant so long as what is taken is for a recognized beneficial use?

Mr. Jay: The reason it's irrelevant, Justice Kennedy, is that -- for two reasons.

Depletion is not the measure of beneficial use.

It's a -- it is a criterion for beneficial use.

The use has to be a depletive one; but it's not the measure of the beneficial use.

And the second point, Montana seeks to equate consumption with depletion, and that's just -- that's not correct, either.

We urge the Court to overrule the exception.

Thank you, Mr. Chief Justice.

Chief Justice John G. Roberts: Thank you, Mr. Jay.

General, you have two minutes left.

REBUTTAL ARGUMENT OF STEVE BULLOCK ON BEHALF OF PLAINTIFF

Mr. Bullock: Mr. Chief Justice, members of the Court:

Briefly, as Justice Scalia pointed out this is a compact, and it's a compact between two different States, and Montana gave up things, a right of priority administration across State lines as a result of that.

Justice Breyer, as an issue of fairness, we don't get all the water.

We only get water supply under like conditions.

We are now the downstream appropriator, so -- but one example, if half the water is flowing now that it was, as of 1950, Montana may not get anything at that point, because just by the virtue of some say it's "highology", whoever is higher on the river gets to take first.

So we -- we don't get to fulfill our rights.

All we get is to ensure that given a like supply of water, that our rights shall continue to be enjoyed as it existed as of 1950.

Justice Sonia Sotomayor: How many years has there been not enough water to fill all pre-19 -- forget about whether there was post-1950 use.

How many years are we talking about in which there has been not enough water to fill everybody's?

Mr. Bullock: And -- Your Honor, we have done no discovery at all.

This is still at the motion to dismiss the complaint.

That's what the hydraulics and the engineers will ultimately determine.

We made calls in 2004 and 2006.

We said, wait a minute, we're not getting enough water here, and we believe it's the -- the pre-1950 uses that are depleting that.

Will you give us water?

Ultimately why we're here is to sort this out.

I guess, I would also point out that there was some discussion about an appropriative right is the right to use a quantity of water.

That makes sense other than if you're in a compact, and Montana gets no water.

The Solicitor General even pointed out then in his brief at a footnote; he said well, what we might do, then, is that Montana could bring an equitable apportionment action for the pre-1950 water.

That highlights the, I think to me, the illogic of just focusing on the rights and not looking at the uses and how much each State was consuming, because at that point I'll be right back here saying we want the same water under like conditions that we had in 1950.

Thank you, Your Honor.

Chief Justice John G. Roberts: Thank you, General, counsel.

The case is submitted.