Water Log 29.2, August, 2009

Fifth Circuit Dismisses Mississippi’s Groundwater Claim

Hood v. City of Memphis, Tennessee, No. 08-60152, 2009 WL 1564160 (5th Cir. June 5, 2009).

Joanna C. Abe, 2011 J.D. Candidate, University of Mississippi School of Law

In June, the Fifth Circuit Court of Appeals affirmed the dismissal of Mississippi’s groundwater claim against the City of Memphis and its municipal utility company, Memphis Light, Gas and Water Division (MLGW) (collectively “Memphis”) for failure to join an indispensable party. Mississippi sought damages for Memphis’s alleged misappropriation of Mississippi’s groundwater from the Memphis Sands Aquifer. Finding the water resource was subject to equitable allocation, the Fifth Circuit held that the State of Tennessee had a sovereign interest in the dispute, making Tennessee an indispensable party to the action.

Background
The controversy centered around the Memphis Sands Aquifer (the Aquifer), a water reservoir underlying portions of Tennessee, Mississippi, and Arkansas. Although the three states shared the water source, specific volumes of groundwater were not allocated between the states. Mississippi claimed that MLGW’s groundwater pumping created a “cone of depression” under Memphis which caused groundwater that would normally lie under Mississippi to flow across the border into Tennessee. Mississippi also argued that Memphis withdrew water from the Aquifer at a faster rate than it was replenished, which has caused the Aquifer’s water level to drop.
     
Indispensable Parties
Memphis sought dismissal of the case for failure to join Tennessee. Memphis claimed Tennessee was an indispensable party. Whether a party is indispensable is a fact-based decision for the court. If joinder of a party would deprive the court of jurisdiction, Rule 19(b) dictates that the court must decide whether that party is indispensable by examining several factors. The court examines the extent to which a judgment rendered in the party’s absence would prejudice that party or the existing parties; the extent to which any prejudice could be lessened or avoided by protective provisions in the judgment, shaping the relief, or other measures; whether a judgment rendered in the party’s absence would be adequate; and whether the plaintiff would have an adequate remedy if the action were dismissed. The district court held that Tennessee was an indispensable party because the court could not determine whether Memphis had misappropriated water from the Aquifer until it first determined what portion of the water belonged to Mississippi and Tennessee.
      On appeal, Mississippi argued that Tennessee had no sovereign interest in the dispute because the Aquifer was not an interstate water source subject to equitable apportionment. Mississippi maintained that it owned the groundwater resources in the state and so equitable apportionment of the Aquifer’s water was not necessary.

Equitable Apportionment
At issue was the federal common law doctrine of equitable apportionment, which governs disputes be­ tween states concerning the right to use water from an interstate stream.1 Under this doctrine, the volume of water to which each state is entitled must be equitably apportioned before one state may sue an entity for misappropriation of its share.
      The Fifth Circuit agreed with the district court’s finding that the Aquifer was an interstate water source and subject to equitable apportionment. Recognizing that Supreme Court caselaw did not speak directly on the issue, the court found that the relevant decisions supported treating aquifers as “any other part of the interstate water supply.”2 The court explained that the underground location of the water source lacked analytical significance.3 Mississippi argued that it owned the fixed share of the Aquifer that was located within its boundaries. The Fifth Circuit disagreed, noting that the Aquifer is not a fixed resource since it migrates across state boundaries.
      Supreme Court caselaw explained that a state’s boundaries did not determine the amount of an interstate water source to which that state was entitled. Because the Aquifer was an interstate water source in which Tennessee had a sovereign interest, the court held that Tennessee was a necessary party to any resolution of Mississippi’s claims in this lawsuit.

Subject-Matter Jurisdiction
After determining that Tennessee was an indispensable party, the district court found that it did not have subject-matter jurisdiction over the case be­ cause the Supreme Court has original and exclusive jurisdiction over disputes between two or more states.4            
   Mississippi argued that the district court had subject-matter jurisdiction over the case because the suit was against Memphis, not Tennessee. The Fifth Circuit noted that Mississippi’s argument ignored the fact that the suit required allocation of water rights between the states before the court could determine whether Mississippi’s water rights had been violated.

Conclusion
The court found that Tennessee was an indispensable party to the suit but could not be joined without destroying the subject-matter jurisdiction of the district and appellate courts. The court held that Mississippi must file an original action with the U.S. Supreme Court if it wishes to further pursue this claim.

Endnotes
1. Hood v. City of Memphis, Tennessee, No. 08-60152, 2009 WL 1564160 (5th Cir. June 5, 2009).
2. Id. at *8.
3. Id. at *4.
4. 28 U.S.C. A7 1251(a).

Recommended citation: Joanna C. Abe, Fifth Circuit Dismisses Mississippi’s Groundwater Claim, 29:2 WATER LOG 6 (2009).