No.

138, Original

IN THE

Supreme Court of the United States

————

October Term 2008

————

STATE OF SOUTH CAROLINA,

Plaintiff,
v.

STATE OF NORTH CAROLINA,

Defendant.
————

FIRST INTERIM REPORT OF

THE SPECIAL MASTER

————

KRISTIN LINSLEY MYLES

Special Master
November 25, 2008
 TABLE OF AUTHORITIES
Page
Arizona v. California,
373 U.S. 546 (1963) .............................15, 18, 25, 40
Arizona v. California,
460 U.S. 605 (1983) ........................................ 25
California v. Arizona,
440 U.S. 59 (1979) .......................................... 11
Colorado v. Kansas,
320 U.S. 383 (1943) .........................................15, 18
Colorado v. New Mexico,
459 U.S. 176 (1982) ........................................ 29, 37
Connecticut v. Massachusetts,
282 U.S. 660 (1931) ........................................ 37
Hinderlider v. La Plata River & Cherry Creek
Ditch Co., 304 U.S. 92 (1938)......................... 36
Illinois v. Milwaukee,
406 U.S. 91 (1972) .......................................... 36
Kansas v. Colorado,
185 U.S. 125 (1902) ........................................ 11
Kansas v. Colorado,
206 U.S. 46 (1907) .......................................... 15, 23
Kentucky v. Indiana,
281 U.S. 163 (1930) ....................................... passim
Maryland v. Louisiana,
451 U.S. 725 (1981) ....................................... passim
Mississippi v. Louisiana,
506 U.S. 73 (1992) .......................................... 17
Missouri v. Illinois,
180 U.S. 208 (1901) ....................................... passim
(i)
 ii
TABLE OF AUTHORITIES—Continued
Page
Nebraska v. Wyoming,
295 U.S. 40 (1935) .......................................... 27
Nebraska v. Wyoming,
325 U.S. 589 (1945) ........................................ 37
Nebraska v. Wyoming,
515 U.S. 1 (1995) ............................................ 12
New Jersey v. New York,
280 U.S. 528 (1930) ........................................ 25
New Jersey v. New York,
283 U.S. 336 (1931) ........................................ 25
New Jersey v. New York,
345 U.S. 369 (1953) ....................................... passim
New York v. New Jersey,
256 U.S. 296 (1921) ........................................ 15, 40
Oklahoma v. Texas,
258 U.S. 574 (1922) ........................................ 24
Texas v. Louisiana,
416 U.S. 965 (1974) ...................................20, 23, 24
Texas v. Louisiana,
426 U.S. 465 (1976) .......................................passim
Texas v. New Jersey,
379 U.S. 674 (1965) ........................................ 19
Utah v. United States,
394 U.S. 89 (1969) .........................................passim
Wyoming v. Colorado,
259 U.S. 419 (1922) ........................................ 37
Wyoming v. Colorado,
286 U.S. 494 (1932) ........................................ 12
 iii
TABLE OF AUTHORITIES—Continued
Page
Wyoming v. Oklahoma,
502 U.S. 437 (1992) ........................................ 17
FEDERAL STATUTES
16 U.S.C. § 797(e) ................................................ 32
16 U.S.C. § 803(a)(1)............................................ 32
28 U.S.C. § 1251(a) .............................................. 11, 12
STATE STATUTES
N.C. Gen. Stat. §§ 143-215.22 ............................. 5
MATERIALS FROM CASE RECORDS
Arizona v. California, No. 8, Orig. (U.S.), Bill
of Complaint (1952)........................................ 15
OTHER AUTHORITIES
V.L. McKusick, Discretionary Gatekeeping: The
Supreme Court’s Management of Its Orig-
inal Jurisdiction Docket Since 1961, 45 ME.
L. REV. 185 (1993) .......................................... 17
 IN THE

Supreme Court of the United States

————
October Term 2008
————
No. 138, Original
————
STATE OF SOUTH CAROLINA,
Plaintiff,
v.
STATE OF NORTH CAROLINA,
Defendant.
————
FIRST INTERIM REPORT OF
THE SPECIAL MASTER
————
I.
In this original jurisdiction action, the State of
South Carolina seeks an equitable apportionment of
the Catawba River, which originates in the moun­
tains of North Carolina and flows through the west­
ern portion of that state before passing into South
Carolina at Lake Wylie. This Interim Report is sub­
mitted in connection with motions by the City of
Charlotte, North Carolina (“Charlotte”), the Catawba
River Water Supply Project (“CRWSP”), and Duke
Energy Carolinas, LLC (“Duke Energy” or “Duke”) to
intervene in the action, as well as a motion by South
Carolina for clarification or reconsideration of the
Special Master’s initial order granting the in­
tervention motions. For the reasons set forth below,
 2
the Special Master recommends that the proposed
interventions be allowed. 1
II.
This case began in June 2007 when the State of
South Carolina filed a motion for leave to file its
Complaint against the State of North Carolina. In
the proposed Complaint, South Carolina sought an
equitable apportionment of the Catawba River, and
also sought to enjoin North Carolina from approving
transfers of water from the Catawba River Basin to
other river basins in a manner inconsistent with the
requested apportionment. North Carolina opposed
the motion, in part on the ground that the flow of the
Catawba River was being addressed in proceedings
before the Federal Energy Regulatory Commission
(“FERC”) relating to a relicensing application by
Duke Energy. In August 2007, while South Caro­
lina’s motion for leave to file the Complaint was
pending, South Carolina moved for a preliminary in­
junction to prevent North Carolina from authorizing
transfers of water from the Catawba River beyond
those previously authorized. North Carolina opposed
that motion as well. On October 1, 2007, the Court
granted South Carolina’s motion for leave to file the
Complaint, and directed North Carolina to file an
Answer. On the same day, the Court denied South
Carolina’s motion for a preliminary injunction.
North Carolina filed its Answer on November 30,
2007.
South Carolina’s Complaint does not contain sepa­
rate counts or causes of action. Rather, it sets out

1
For the convenience of the Court, the prior orders and other
proceedings in this action can be accessed through the electronic
docket maintained at http://www.mto.com/sm.
 3
factual allegations concerning the Catawba River, in­
cluding a general statement of the uses each State
makes of the water from the river, facts concerning
the flow of the river, and the prayer for an apportion­
ment and for injunctive relief. South Carolina alleges
that the Catawba River is used in both North and
South Carolina for hydroelectric power, irrigation,
mining, thermoelectric water use, water supplies,
and other uses. Complaint ¶ 11. It alleges that the
Catawba River Basin is a densely populated area
that is expected to experience significant population
growth over the next decade. It alleges that the Ca­
tawba is subject to severe periodic fluctuations in wa­
ter level, and that its flow historically has been af­
fected by prolonged droughts. Id. ¶ 15. South
Carolina alleges that it and its citizens suffered harm
as a result of conditions caused by a recent drought
ending in late 2002. Id. ¶ 17.
South Carolina’s Complaint and accompanying pa­
pers focus upon the role of the Catawba in generating
hydroelectric power for use in both North Carolina
and South Carolina—a topic that bears upon the in­
tervention motion filed by Duke Energy. According
to South Carolina, after efforts in the 19th century to
make the river navigable proved unsuccessful, it
became apparent that the most productive use of the
river would be for electrical power. Motion for Leave
to File Complaint at 3. The entity now known as
Duke Energy was formed, principally to generate
power for the region’s cotton mills. Id. Duke Energy
owns and operates a system of 11 reservoirs—six in
North Carolina, four in South Carolina, and one at
Lake Wylie, on the border between the two States—
all of which are subject to a 50-year license issued to
Duke Energy by the Federal Power Commission
(“FPC”) in 1958. Id. at 3-4.
 4
South Carolina’s Complaint also cites data gener­
ated as part of the above-referenced relicensing proc­
ess pending before the FERC, the successor to the
FPC. In anticipation of the need to renew its FPC
license, which was to expire in 2008, Duke Energy
initiated a multi-stakeholder negotiation process to
address issues of concern to those using the Catawba,
including issues of water level and flow. The result
was a “Comprehensive Relicensing Agreement”
(“CRA”) among Duke and other stakeholders, in­
cluding groups from both North and South Carolina,
and specifically including the South Carolina De­
partment of Natural Resources. Duke Energy sub­
mitted the CRA as part of its relicensing application,
which remains pending before the FERC—Duke’s
original license having been extended by one year to
allow for certain approvals necessary for the new li­
cense.
South Carolina alleges in its Complaint that, as
part of the relicensing negotiations that led to the
CRA, the various stakeholders agreed that the mini­
mum continuous flow that South Carolina should re­
ceive from the Catawba River is 1,100 cubic feet per
second—or about 711 million gallons per day. Com­
plaint ¶ 15. South Carolina alleges that, because of
the fluctuations in water supply in the river, the flow
sometimes is below that level. Id. South Carolina
alleges that a scientific model developed by Duke
Energy as part of the relicensing negotiations showed
that even in its “natural” state—that is, absent the
reservoir system that currently exists—the river
often would not deliver 1,100 cubic feet per second
into South Carolina. Id. ¶ 16.
As for specific actions by North Carolina, the Com­
plaint alleges that the harms to South Carolina from
 5
reduced flow in the Catawba River have been exacer­
bated by a North Carolina statute, enacted in 1991,
that requires a person or entity wishing to transfer 2
million or more gallons of water per day from speci­
fied river basins, including the Catawba, to obtain a
permit from the North Carolina Environmental Man­
agement Commission (“EMC”). Complaint ¶ 18, citing
N.C. Gen. Stat. §§ 143-215.22G(1)(h) & 143­
215.22I(a)(1)-(2). 2 South Carolina alleges that this
statute “implicitly authorize[s]” transfers of less than
2 million gallons “without regulation by the EMC.”
Id. South Carolina alleges that the EMC has granted
at least two permits that allow the transfer of tens of
millions of gallons of water per day from the Catawba
to the Rocky River Basin—namely, a March 2002
permit allowing the Charlotte-Mecklenburg Utilities
to transfer up to 33 million gallons per day, and a
January 2007 permit allowing the Cities of Concord
and Kannapolis to transfer up to 10 million gallons
per day. Id. ¶ 20. South Carolina also points to an
existing authorization to Union County to transfer at
least 5 million gallons per day, and a pending appli­
cation by Union County to increase that authoriza­
tion by 13 million gallons per day. South Carolina
alleges that it does not know the extent to which the
North Carolina statute has “implicitly permitted”
transfers under 2 million gallons a day, or the extent
to which entities have taken advantage of an excep­
tion to the permitting requirement for transfers up to

2
In 2007, the North Carolina General Assembly repealed the
1991 statute cited by South Carolina in its Complaint, and re­
placed it with a new statute that imposes some additional
requirements on applicants for interbasin transfers. See N.C.
Gen. Stat. § 143-215.22L, effective August 31, 2007. The changes
do not appear to be material for purposes of the present Report.
 6
the full capacity of facilities that existed or were un­
der construction as of July 1, 1993. Id. ¶¶ 22-23.
South Carolina alleges that these interbasin trans­
fers from the Catawba have reduced the amount of
water flowing into South Carolina and exacerbated
the existing natural conditions and droughts that
cause low flow conditions in South Carolina. South
Carolina claims that the transfers also “are in excess
of North Carolina’s equitable share of the Catawba
River.” Complaint ¶ 24.
For its prayer for relief, South Carolina asks that
the Court enter a decree “declaring that the North
Carolina interbasin transfer statute cannot be used
to determine each State’s share of the Catawba River
and equitably apportioning the Catawba River.”
South Carolina further seeks a decree “enjoining
North Carolina from authorizing transfers of water
from the Catawba River, past or future, inconsistent
with that apportionment, and also declaring that the
North Carolina interbasin statute is invalid to the
extent that it authorizes transfers in excess of North
Carolina’s equitable apportionment as determined by
this Court’s decree.” Complaint at 10; see also id. ¶ 4.
In its Answer, North Carolina agrees that severe
drought conditions have affected the flow of the Ca­
tawba and of other rivers in the two States, but de­
nies that its own actions were the cause of any harms
to South Carolina. Answer ¶¶ 2, 17-18. In particu­
lar, North Carolina denies that any such harms were
exacerbated by the North Carolina statute regulating
interbasin transfers, or that any transfers it author­
ized—including those to Charlotte-Mecklenburg and
Union County—exceed North Carolina’s equitable
share of the Catawba River. Id. ¶¶ 3, 20(a), 21. It
contends that the flows in the Catawba River fluctu­
 7
ate “as a result of several factors, including require­
ments imposed pursuant to a license issued by
[FERC] and the operation of hydroelectric generation
facilities located on the River.” Id. ¶ 2.
North Carolina asserts a series of affirmative de­
fenses to South Carolina’s claims, including that the
issues raised by South Carolina are being addressed
in the FERC proceedings relating to Duke’s relicens­
ing application, and that South Carolina’s position
amounts to “nothing more than a difference of opin­
ion with the manner in which a FERC-regulated hy­
droelectric project stores and releases flows.” Answer
¶ 32(a). North Carolina also alleges that the reduc­
tion in flow resulting from drought conditions is
“avoidable by revisions to the operational parameters
of the several hydroelectric dams that populate the
Catawba River.” Id. North Carolina alleges, based
upon the existence of the FERC-regulated hydroelec­
tric dams and other federal interests within the
Catawba-Wateree-Santee River Basin, that the
United States is an indispensable party to the
litigation. Id. ¶ 36. To date, the United States has
not sought leave to intervene in this action, nor has
any party sought either to join it as a party or
formally to request its views.
III.
In November 2007, Duke Energy and CRWSP filed
motions for leave to intervene as defendants in this
action. In February 2008, a third motion for leave to
intervene as a defendant was filed by Charlotte.
South Carolina opposed all three motions, and North
Carolina took no position. The Special Master held a
hearing on the three motions on March 28, 2008, in
Richmond, Virginia, and, on May 27, 2008, issued an
order granting the motions. On June 27, 2008, South
 8
Carolina filed a motion for clarification or, in the al­
ternative, for reconsideration of the May 27, 2008 or­
der. The three parties who had successfully moved
for intervention (the “Intervenors”) opposed the motion.
A Telephonic Conference was held on July 17, 2008
at which the Special Master indicated that the mo­
tion would be denied.
On July 30, 2008, South Carolina requested for the
first time that the Special Master issue the May 27,
2008 order granting intervention, and any written
order denying the motion for clarification or recon­
sideration of that order, as an Interim Report to this
Court, so that South Carolina could present excep­
tions to these rulings. North Carolina and the Inter­
venors opposed the request. During a Telephonic
Conference held on August 22, 2008, the Special
Master indicated that she would grant South Caro­
lina’s request and submit an Interim Report on the
subject of intervention.
In the meantime, discovery commenced, and the
parties made progress on the preparation of a Case
Management Plan to govern the action. Following
the May 27, 2008 order granting intervention, discov­
ery also began between the parties and the Interve­
nors. On September 18, 2008, in response to disputes
among the parties and the Intervenors as to how to
proceed pending this Court’s consideration of the
question of intervention, the Special Master issued
an order governing discovery by and from the
Intervenors pending proceedings in this Court.
A separate dispute arose and was resolved con­
cerning the scope of the pleadings and of the issues
open for discovery. North Carolina contended that
South Carolina’s Complaint was limited—and that
discovery likewise should be limited—to the propriety
 9
of North Carolina’s practice of authorizing transfers
of water from the Catawba River to other river basins
in North Carolina. North Carolina further sought to
limit South Carolina’s case to the harms caused to
South Carolina by interbasin transfers during times
of drought, and on the portion of the Catawba up­
stream of Lake Wateree. South Carolina contended
that its Complaint was not so limited, and that re­
strictions on discovery at this stage would not be ap­
propriate. The Special Master resolved the dispute in
an order dated September 24, 2008. The Special
Master agreed with North Carolina that interbasin
transfers were the central focus of the Complaint,
and that the harms that South Carolina alleged fo­
cused primarily upon drought conditions and the up­
stream portion of the river as it flowed through South
Carolina, but concluded that the general prayer for
an equitable apportionment of the Catawba would
permit consideration of other factors, so that a blan­
ket limitation on discovery at the initial stage was
not warranted.
IV.
In their original motions, the three Intervenors
contended that they have substantial interests in this
dispute and should be allowed to intervene. Two of
the Intervenors, Charlotte and CRWSP, are entities
authorized to carry out the inter-basins transfers to
which South Carolina objects. Charlotte is the
largest municipality on the Catawba and is the bene­
ficiary of the March 2002 permit allowing Charlotte-
Mecklenburg Utilities to transfer up to 33 million
gallons per day. CRWSP is a joint venture between
units of government of North and South Carolina.
One of its two participants is Union County, North
Carolina, which is authorized under the North Caro­
 10
lina law to transfer up to 5 million gallons per day
from the Catawba.
Duke Energy, the third Intervenor, owns and oper­
ates a system of 11 reservoirs in both States to pro­
vide hydroelectric power to the region, pursuant to its
50-year license issued by the FPC. In its original mo­
tion, Duke contends that the impounding of water in
its reservoirs and its releases of that impounded wa­
ter play a substantial role in determining the flow of
the Catawba River. It also contends that the terms of
its current and future licenses are crucial to any con­
sideration by this Court of whether and how equita­
bly to apportion the Catawba River. Duke asserts
that its interests are not aligned with those of either
State, but that it has a strong and unique interest in
defending the conditions set forth in the CRA and
also can provide an essential link to the ongoing li­
censing proceedings before the FERC.
As noted above, the Special Master initially granted
the three motions to intervene in an order dated May
27, 2008. It was only after the parties had briefed
South Carolina’s motion for clarification or reconsid­
eration of the May 27, 2008 ruling, and after the Spe­
cial Master had indicated that the motion would be
denied, that South Carolina formally requested that
the Special Master issue the intervention ruling as
an Interim Report to this Court. Accordingly, this
Interim Report incorporates both the original ration­
ale of the May 27, 2008 order and the ruling on the
motion for clarification or reconsideration.
V.
Article III, § 2 of the Constitution gives the Court
original jurisdiction of cases “in which a state shall be
party.” “This jurisdiction is self-executing, and needs
 11
no legislative implementation.” California v. Arizona,
440 U.S. 59, 65 (1979). Congress has expanded upon
the original jurisdiction clause of Article III by pro­
viding in Section 1251(a) of Title 28 that the Court
has “original and exclusive” jurisdiction of “all con­
troversies between two or more States.” 28 U.S.C.
§ 1251(a).
A state invokes the Court’s original jurisdiction “as
parens patriae, trustee, guardian, or representative of
all or a considerable portion of its citizens,” and may
take actions to protect its citizens from injury to their
property, health, and comfort. Kansas v. Colorado,
185 U.S. 125, 142 (1902). The parens patriae doctrine
“is a recognition of the principle that the state, when
a party to a suit involving a matter of sovereign inter­
est, must be deemed to represent all its citizens.”
New Jersey v. New York, 345 U.S. 369, 372 (1953).
This principle is not only “a necessary recognition of
sovereign dignity,” but also “a working rule for good
judicial administration.” Id. at 373. “Otherwise, a
state might be judicially impeached on matters of
policy by its own subjects, and there would be no
practical limitation on the number of citizens, as
such, who would be entitled to be made parties.” Id.
The parens doctrine is directly implicated by ac­
tions between states to apportion waters from inter­
state rivers. Because states represent the interests of
their citizens in equitable apportionment and other
original actions, the citizens of a state that is a party
to an original action are bound by the results of that
action. Indeed, the Court has “said on many occa­
sions that water disputes among States may be re­
solved by compact or decree without the participation
of individual claimants, who nonetheless are bound
by the result reached through representation by their
 12
respective States.” Nebraska v. Wyoming, 515 U.S. 1,
22 (1995); see also Wyoming v. Colorado, 286 U.S.
494, 508-09 (1932).
These general principles, taken to their logical con­
clusion, could have produced a rule that only states—
and not municipalities, private companies, or other
interested entities—may be parties to an original ac­
tion in this Court pursuant to Article III, § 2 of the
Constitution and Section 1251(a) of Title 28. None­
theless, neither text contains any such limitation,
and the Court’s practice has been to allow non-state
entities in appropriate circumstances to join, or be
joined in, an original action, even if the non-state en­
tity is a citizen of one of the state parties and thus
would be bound by the resulting judgment under the
principles discussed above.
The Court considered this issue—and the appropri­
ate standard for a motion by such an entity to inter­
vene in an original action—in New Jersey v. New
York, 345 U.S. at 369. That case involved a motion
by the City of Philadelphia for leave to intervene in a
case brought by the State of New Jersey against the
State of New York and the City of New York to enjoin
a proposed diversion of the Delaware River for use by
the City of New York. At the outset of the case, the
Commonwealth of Pennsylvania successfully peti­
tioned the Court for leave to intervene as a plaintiff.
Id. at 371. More than two decades later, after the
City of New York moved to modify the decree entered
in the case, Philadelphia filed its own motion for
leave to intervene as a plaintiff. Id. The motion was
opposed by the parties, in part on the ground that the
presence of a non-state plaintiff (Philadelphia),
seeking affirmative relief against a defendant state
(New York), would violate the Eleventh Amendment.
 13
The Court denied Philadelphia’s motion, finding
that “Philadelphia represents only a part of the citi­
zens of Pennsylvania who reside in the watershed
area of the Delaware River and its tributaries and
depend upon those waters.” New Jersey v. New York,
345 U.S. at 373. The Court stated that if it
“evaluate[d] all the separate interests within Penn­
sylvania,” it could “be drawn into an intramural dis­
pute over the distribution of water within the Com­
monwealth.” Id. The Court also noted that, if Phila­
delphia intervened, other cities and private entities
along the river would seek to do the same. Id. To
prevent the Court’s original jurisdiction from being
“expanded to the dimensions of ordinary class ac­
tions,” the Court held that a proposed intervenor
such as Philadelphia must show “some compelling
interest in his own right, apart from his interest in a
class with all other citizens and creatures of the
state, which interest is not properly represented by
the state.” Id. at 373. Because Philadelphia was
“unable to point out a single concrete consideration in
respect to which the Commonwealth’s position does
not represent Philadelphia’s interests,” the Court de­
nied the motion. Id. at 374.
The Court did not expand upon the types of inter­
ests that might be considered sufficiently compelling
to warrant intervention. It did, however, distinguish
the position of Philadelphia from that of the City of
New York, which already was a party. As the Court
explained, New York City “was forcibly joined as a
defendant to the original action since she was the au­
thorized agent for the execution of the sovereign pol­
icy which threatened injury to the citizens of New
Jersey.” New Jersey v. New York, 345 U.S. at 375.
Unlike Philadelphia, whose sole interest in the dis­
pute was as a downstream user of water, and which
 14
sought to intervene as a plaintiff, the City of New
York was the “authorized agent” of injury and one of
the parties against which coercive relief was sought;
for these reasons, the Court noted, it had been named
as a defendant. Id. The Court found this relevant
because, unlike with Philadelphia’s proposed inter­
vention as a plaintiff seeking relief against a state,
the presence of New York in the case created “no
problems under the Eleventh Amendment.” Id. In
addition, whereas Philadelphia was situated simi­
larly to numerous other downstream users, both po­
litical subdivisions and private entities, the City of
New York stood alone with the State of New York as
being named by the plaintiff as the instrument of in­
jury—i.e., as an entity that “was planning the actual
diversion of the water for its use.” Id. at 370-71.
On other occasions the Court has allowed non-state
entities such as municipalities to be named as defen­
dants in water disputes between two states where the
municipality or other non-state entity was accused of
being the agent of injury or executing the policy to
which the complaining state objected. For example,
the Court allowed an action by the State of Missouri
against the State of Illinois and the Sanitary District
of Chicago to enjoin the latter’s discharge of sewage
into the Chicago River and from there to the Missis­
sippi River. Missouri v. Illinois, 180 U.S. 208, 242
(1901). The Court found that it was proper for Mis­
souri to name as defendants both the Sanitary Dis­
trict and the State of Illinois, because the Sanitary
District was acting pursuant to state authority as “an
agency of the state to do the very things which, ac­
cording to the theory of the complainant’s case, will
result in the mischief to be apprehended.” Id. The
Court allowed the State of Arizona to file an action to
resolve rights to the Colorado River, naming as de­
 15
fendants the State of California and seven of its pub­
lic agencies, which were accused of improperly di­
verting water from the river. Arizona v. California,
373 U.S. 546, 551 (1963); see also Arizona v. Califor­
nia, No. 8, Orig. (U.S.), Bill of Complaint, pp. 16-19
(1952). In a case primarily brought against the State
of Colorado, the Court allowed the State of Kansas to
name as defendants “a number of corporations, who
were charged to be engaged in depleting the flow of
water in the Arkansas river.” Kansas v. Colorado,
206 U.S. 46, 49 (1907). In another case by Colorado
against Kansas to settle rights to the Arkansas River,
the Court allowed Colorado to name as a defendant
the Finney County Water Users’ Association, a
Kansas organization. Colorado v. Kansas, 320 U.S.
383 (1943). The Court ultimately granted Colorado’s
request for an order enjoining Finney from
prosecuting certain pending actions against Colorado
water users. Id. at 388-91. And in New York v. New
Jersey, 256 U.S. 296, 302 (1921), the Court allowed
an action by the State of New York against the State
of New Jersey and the Passaic Valley Sewerage
Commissioners, seeking an injunction against the
discharge of sewage into Upper New York Bay—a
discharge that, according to New York, was being
carried out by the Sewerage Commission. In some of
these cases, the question arose whether the defend­
ing state was a proper party (and thus whether the
action was properly brought within the Court’s origi­
nal jurisdiction) because the alleged harm was being
carried out by the state agency, not the state itself.
See, e.g., id. at 302; Missouri v. Illinois, 180 U.S. at
242. But there was no suggestion that the state
agency was not properly named where the agency
was alleged to be the agent or instrumentality of the
harm to the complaining state.
 16
To be sure, the cases discussed in the foregoing
paragraph involved situations in which the non-state
entities were named as defendants by the complain­
ing state, and thus did not voluntarily seek the
Court’s permission to intervene. The Court made
this point in New Jersey v. New York, noting that the
City of New York, unlike the City of Philadelphia,
had been “forcibly joined” in the action. 345 U.S. at
375. But the cases also clearly illustrate the Court’s
consistent practice of permitting defendant status for
non-state entities that have a legitimate and logical
place in the controversy, including as the agent or in­
strumentality of the wrongdoing alleged by the com­
plaining state. Both types of cases—those in which a
non-state entity is named as a defendant as an origi­
nal matter, and those, such as the present case, in
which such an entity seeks to intervene as a defen­
dant—implicate concerns over the purposes of the
Court’s original jurisdiction, and the need corre­
spondingly to limit the parties that may participate
in original actions. But in both types of cases, the
Court’s precedents would appear to allow non-state
entities to become defendants in appropriate circum­
stances. Such circumstances include, as the above
cases show, those in which the non-state entity is the
“authorized agent” for a transfer or diversion of water
challenged by the complaining state. See, e.g., id. at
375.
There also is not a compelling logical distinction
between original jurisdiction cases in which the com­
plaining state names an entity as a defendant, and
those in which a party seeks to intervene as a defen­
dant. The maxim that the plaintiff is the “master of
its complaint” has less force in original jurisdiction
cases, because it is the Court—and not the
complaining state—that ultimately decides whether
 17
and in what form the Court’s original jurisdiction will
be exercised. Even in cases between states, the Court
may limit its original jurisdiction or decline to
exercise such jurisdiction altogether. See, e.g.,
Mississippi v. Louisiana, 506 U.S. 73, 76-77 (1992);
Wyoming v. Oklahoma, 502 U.S. 437, 450 (1992). See
also V.L. McKusick, Discretionary Gatekeeping: The
Supreme Court’s Management of Its Original
Jurisdiction Docket Since 1961, 45 ME. L. REV. 185
(1993). If a case does not “sufficiently implicate the
unique concerns of federalism” underlying the grant
of original jurisdiction, Maryland v. Louisiana, 451
U.S. 725, 743 (1981), the Court may deny leave to file
a bill of complaint. A state seeking to initiate
litigation in the Court may not simply file a
complaint, but must file a motion seeking leave under
the Court’s Rule 17, which allows a complaint only in
“appropriate cases.” Wyoming v. Oklahoma, 502 U.S.
at 451. Among the factors the Court considers is “the
nature of the interest of the complaining State,
focusing on the seriousness and dignity of the claim.”
Mississippi v. Louisiana, 506 U.S. at 77 (citations
omitted).
Consistent with these principles, the Court also
has power to control the parties to an original action.
If the plaintiff state seeks leave to file a complaint
that unnecessarily names non-state parties, the Court
may either deny the request or dismiss the non-state
parties. For example, the Court has dismissed non­
state parties named as defendants by the complain­
ing state where the Court found that their interests
would be represented sufficiently by the defendant
state. In Kentucky v. Indiana, the Court made clear
that party states are deemed to represent the inter­
ests of all of their citizens unless “relief is properly
sought as against” the individual citizen. 281 U.S.
 18
163, 173 (1930). That case involved an interstate
compact between the party states to build a bridge
across the Ohio River. Indiana citizens sued in state
court to enjoin the construction of the bridge, and the
resulting delay caused Indiana to breach the
compact. Kentucky sought leave to file a bill of
complaint against (1) Indiana, to compel specific per­
formance of the contract and (2) the private plaintiffs
in the state court action, to enjoin prosecution of that
action. The Court granted leave to file the complaint,
but later dismissed it as to the individual defendants,
holding that they had no “interest whatever with re­
spect to the contract and its performance other than
that of the citizens and taxpayers, generally, of Indi­
ana, an interest which that state in this suit fully
represents.” Id. at 174.
In Kentucky v. Indiana, the Court expressly noted
that “[a]n individual citizen may be made a party
where relief is properly sought as against him, and in
such case he should have suitable opportunity to
show the nature of his interest and why the relief
asked against him individually should not be
granted.” 281 U.S. at 173-74. But where the relief
sought is “merely incidental to the complete relief to
which the complainant would be entitled if it should
prevail as against the defendant state”—such as the
injunction against the prosecution of the individual
defendants’ state court suit—the individual defen­
dant has “no standing to litigate on his own behalf
the merits of a controversy which, properly viewed,
lies solely between the states.” Id. at 174. In other
words, consistent with New Jersey v. New York, Mis­
souri v. Illinois, Arizona v. California, and Colorado
v. Kansas, one circumstance in which a citizen of a
party state may properly become a party in an
original action is where non-incidental relief is
 19
sought against it by the plaintiff. Cf. Texas v. New
Jersey, 379 U.S. 674 (1965) (private company allowed
as a party in original jurisdiction action concerning
which state could take title to property deemed
abandoned by the company).
The Court also has allowed non-state entities to be
parties to original actions where they have a “direct
stake” in the action, although there is little precedent
for what type of “direct stake” will suffice. In Mary­
land v. Louisiana, eight states filed an original action
against the State of Louisiana, challenging a tax it
was imposing on natural gas brought into the state.
451 U.S. at 734. The Court allowed intervention by
17 natural gas pipeline companies, which the Court
found had a “direct stake in this controversy” because
the tax fell on such entities as owners of the gas; the
Court also noted that participation by the pipeline
companies would assist in “a full exposition of the
issues” and that it is “not unusual to permit
intervention of private parties in original actions.”
Id. at 745 n.21. Thus, the Court allowed intervention
even though the states challenging the tax could have
been deemed to represent the pipelines’ interests.
The deciding factor appeared to be that the effect of
the tax fell directly on the pipelines, making their
interest more compelling than that of an average
citizen of an affected state and making their
expertise and knowledge valuable to a “full ex­
position” of the issues. Id.
In another case, Texas v. Louisiana, the Court al­
lowed intervention by a non-state party whose prop­
erty interests were at stake. That case involved
boundary disputes between and among Texas, Lou­
isiana and the United States, including a dispute
over the lateral seaward boundary between Texas
 20
and the United States extending into the Gulf of
Mexico. 426 U.S. 465, 466 (1976). In connection with
that issue, the United States claimed title to islands
in the Sabine River. Id. The City of Port Arthur,
Texas filed a motion to intervene, and the Court
granted the motion. Texas v. Louisiana, 416 U.S. 965
(1974). The Court later explained that Port Arthur
“was permitted to intervene for the purposes of pro­
tecting its interests in the island claims of the United
States.” 426 U.S. at 466. In Utah v. United States,
394 U.S. 89 (1969), the Court addressed a dispute be­
tween the State of Utah and the United States over
title to the Great Salt Lake, including lands that had
been exposed and rendered usable due to the shrink­
age of the lake over the years. Morton International,
Inc., a private company, sought to intervene in order
to quiet its title to certain of the lands at issue. The
Court noted that, if Utah had sought to rely upon
Morton’s title to the lands to defeat the claims of the
United States, the motion “would have had a sub­
stantial basis,” because “if Utah sought to invoke
Morton’s title to avoid payment to the United States,
it would seem fairest to permit Morton to speak for
itself.” Id. at 92. Although the Court ultimately
denied the motion because a stipulation between the
United States and Utah had rendered the issue of
Morton’s title irrelevant, the Court’s analysis
suggests that if one of the state parties would rely
substantially upon the ownership interests of a
private party, fairness may dictate allowing that
party to join the action. Id. at 92-93.
From these authorities may be distilled the follow­
ing rule that governs the motions here: Although the
Court’s original jurisdiction presumptively is re­
served for disputes between sovereign states over
sovereign matters, non-state entities may become
 21
parties to such original disputes in appropriate and
compelling circumstances, such as where the non­
state entity is the instrumentality authorized to carry
out the wrongful conduct or injury for which the
complaining state seeks relief, where the non-state
entity has an independent property interest that is
directly implicated by the original dispute or is a sub­
stantial factor in the dispute, where the non-state en­
tity otherwise has a “direct stake” in the outcome of
the action within the meaning of the Court’s cases
discussed above, or where, together with one or more
of the above circumstances, the presence of the non­
state entity would advance the “full exposition” of the
issues.
VI.
The City of Charlotte is the largest municipality
and provider of water supply and wastewater treat­
ment services in the Catawba River Basin. Charlotte
is the entity in North Carolina vested with authority
to carry out the large majority of the inter-basin
transfers of which South Carolina complains. In the
Complaint, South Carolina objects to three specific
inter-basin authorizations for the transfer of water
from the Catawba River—those granted to Charlotte-
Mecklenburg Utilities, Concord and Kannapolis, and
Union County—complaining that these transfers im­
properly reduce the flow of water into South Caro­
lina. Such transfers, South Carolina says, exacerbate
existing natural flow and drought conditions that
contribute to low flow in the Catawba, thereby caus­
ing harm to South Carolina. As to the Charlotte
transfer in particular, South Carolina states:
In March 2002, the [North Carolina Environ­
mental Management Commission] granted the
application by the Charlotte Mecklenburg Utili­
 22
ties to transfer up to 33 million gallons per day
from the Catawba River Basin to the Rocky River
Basin, more than double the 16 million gallons
per day limit that had previously applied. This
permit, moreover, was granted in the midst of
the severe drought affecting the Catawba River
from 1998 through 2002, and these inequitable
withdrawals of water from the Catawba River
necessarily exacerbated the harms that drought
was imposing on South Carolina and its citizens.
Complaint ¶ 20(a).
As noted above and discussed in more detail in the
September 14, 2008 order regarding the scope of the
action, the focus of South Carolina’s Complaint is the
North Carolina inter-basin transfer statute and a
small number of authorizations granted under that
statute for transfers of water from the Catawba—
including the permit held by Charlotte. In this
respect, Charlotte’s claimed interest is not just that
of a user of water—a type of interest that the Court
generally has not considered sufficiently “compelling”
to justify intervention. See New Jersey v. New York,
345 U.S. at 373. Rather, Charlotte—which, like the
City of New York in New Jersey v. New York, is the
entity effectuating the “actual diversion of the water
for its use,” 345 U.S. at 370-71—is the “authorized
agent” of a large part of South Carolina’s claimed
injury. Id. at 375. An injunction invalidating all or a
portion of North Carolina’s inter-basin transfer
statute or the permits granted thereunder would
affect Charlotte directly, such that it should be
permitted to defend itself. Utah v. United States, 394
U.S. at 92. Even though Charlotte has not been
named by South Carolina as a defendant, for
practical purposes non-incidental relief is sought
 23
against it, and it “should have suitable opportunity to
show the nature of [its] interest and why the relief
against [it] individually should not be granted.”
Kentucky v. Indiana, 281 U.S. at 173-74.
That North Carolina already is a party to this ac­
tion should not foreclose intervention by Charlotte.
In New Jersey v. New York, the Court stated that in­
tervention may be allowed where the compelling in­
terest shown by the proposed intervenor is “not prop­
erly represented by the state.” 345 U.S. at 373.
Although the Court did not elaborate on this stan­
dard, there is no indication the Court intended this to
mean that there must be a conflict of interest or some
other disabling factor that would prevent the party
state from representing the proposed intervenor’s in­
terests. As noted above, the Court has allowed mu­
nicipalities and other entities to participate as defen­
dants in original actions where their interests are
directly challenged, such as where the complaining
state challenges a diversion of water to that munici­
pality. It has done so even where the state in which
the municipality was located was a party to the ac­
tion and had interests aligned with those of the mu­
nicipality. See, e.g., New Jersey v. New York, 345
U.S. at 375; Missouri v. Illinois, 180 U.S. at 242;
Kansas v. Colorado, 206 U.S. at 49.
In the context of motions to intervene, the Court
has allowed intervention where a concrete property
right or other interest of the intervenor was at issue,
even where it appeared that one of the party states
would assert that same interest in support of its
claim or defense. As discussed above, the Court al­
lowed Port Arthur, Texas to intervene in a case in­
volving a boundary dispute among Texas, Louisiana
and the United States. Texas v. Louisiana, 416 U.S.
 24
965. Boundary disputes between states, like other
original actions, implicate core sovereign interests.
Although Texas presumably could have represented
Port Arthur’s interests, the Court allowed Port Ar­
thur to intervene for the “purposes of protecting its
interests in [certain real property].” Texas v. Louisi­
ana, 426 U.S. at 466. See also Maryland v. Louisi­
ana, 451 U.S. at 745 n.21 (allowing intervention by
oil companies, even though the complaining states
would have advanced the same interests as the inter­
venors); Utah v. United States, 394 U.S. at 92 (noting
that intervention motion by private company would
have “substantial basis” if the responding state would
rely upon that company’s title to defeat claims of the
United States). Under these precedents, the fact that
North Carolina’s interests may be similar to Char­
lottes’ does not preclude it from appearing and de­
fending its transfer permit. See Kentucky v. Indiana,
281 U.S. at 173-74.
South Carolina objects that the Court never has
permitted a private person or non-sovereign entity,
including a municipality, to intervene in an original
equitable apportionment action. But this frames the
issue too narrowly: There is no special rule applica­
ble only to equitable apportionment cases that pre­
cludes intervention by non-sovereigns. To the con­
trary, original jurisdiction actions by definition
implicate sovereign interests, and the Court’s prece­
dents firmly establish that non-state entities may
participate in original actions in appropriate circum­
stances. As noted above, the Court has allowed non­
sovereigns to intervene in other types of original ac­
tions. See Texas v. Louisiana, 426 U.S. at 466; Okla­
homa v. Texas, 258 U.S. 574, 581 (1922); Maryland v.
Louisiana, 451 U.S. at 745 n.21. The Court has al­
lowed intervention in water disputes between states,
 25
albeit by third-party states or other sovereigns. See
Arizona v. California, 460 U.S. 605, 614-15 (1983)
(allowing Indian tribes to intervene); New Jersey v.
New York, 280 U.S. 528 (1930) (allowing state to in­
tervene). The Court has allowed plaintiff states to
join non-sovereigns in original actions involving wa­
ter disputes between states. See New Jersey v. New
York, 283 U.S. 336 (1931); Missouri v. Illinois, 180
U.S. at 242; Arizona v. California, 373 U.S. at 551.
The Court also has recognized that there are situa­
tions where the intervention of a citizen of a party
state in an equitable apportionment action may be
appropriate. See New Jersey v. New York, 345 U.S. at
373.
Charlotte’s entitlement to intervene thus should
not turn on whether a municipality previously has
been allowed to intervene in this particular type of
original action. For the reasons set out above,
Charlotte has presented an interest sufficiently com­
pelling and concrete to warrant intervention for the
limited purpose of protecting its interest in defending
the current inter-basin transfer regime, and its own
permit in particular. See Kentucky v. Indiana, 281
U.S. at 174. Because Charlotte’s right to intervene
turns on its status as one of the recipients of the
three interbasin transfers that South Carolina identi­
fies in its Complaint, there is a practical limitation on
the number of similarly situated entities that would
be entitled to be made parties. New Jersey v. New
York, 345 U.S. at 373.
VII.
CRWSP’s motion to intervene is similar analyti­
cally to Charolotte’s. CRWSP describes itself as a
joint venture of units of government of North Caro­
lina and South Carolina. The two participants in the
 26
joint venture are Lancaster County Water and Sewer
District (“Lancaster”) and Union County. Lancaster
is a special purpose district organized under the laws
of South Carolina to furnish retail water and sewer
services within Lancaster County, South Carolina.
Union County is a North Carolina county that sup­
plies water and sewer services within its borders.
Union County is authorized under the North Caro­
lina inter-basin transfer statute to transfer up to 5
million gallons per day from the Catawba River
Basin.
Under the joint venture arrangement, Union
County and Lancaster jointly own a water plant, site
piping, and other real and personal property of
CRWSP. The CRWSP plant is located in Lancaster
County, South Carolina, which is where all of
CRWSP’s intake from the Catawba River occurs, in­
cluding the water that Union County withdraws un­
der North Carolina law. In total, CRWSP may draw
36 million gallons of water per day from the Ca­
tawba, and 5 of these 36 million gallons represent the
Union County transfer about which South Carolina
complains.
South Carolina argues that CRWSP is not a proper
party because it is a mere user of water, and the pur­
pose of an equitable apportionment action is to decide
the rights of the party states as between each other
and not among individual users. CRWSP is seeking
to intervene not as a mere user of water, however,
but as an entity carrying out the “actual diversion of
water” that has been challenged by the plaintiff state.
New Jersey v. New York, 345 U.S. at 375. CRWSP is
in a position similar to Charlotte and the City of New
York in New Jersey v. New York. Although CRWSP’s
entitlement under North Carolina law is smaller
 27
than Charlotte’s, it is one of the three transfers
targeted by South Carolina in the Complaint. Like
Charlotte, CRWSP is the “authorized agent for the
execution of the sovereign policy which threaten[s]
injury to the citizens of [South Carolina].” Id. at 375.
CRWSP asserts that neither North Carolina nor
South Carolina can represent its interests fully be­
cause its corporate structure combines entities of
both States. It contends that it is not fully a citizen
of either State and that both States treat it as an in­
dependent and competitive third-party user of the
Catawba River. This argument is not compelling,
standing alone, as a basis for intervention. If CRWSP
were an ordinary user of water—and not an “author­
ized agent” of injury with a direct stake in defending
its North Carolina authorized transfer—the fact that
its participants are citizens of both of the competing
party states likely would not provide it with a suffi­
ciently compelling basis to intervene in an original
action. As South Carolina argues, municipalities
cannot combine to form a sovereign. Rather, munici­
palities are creatures of state law, and any rights
they enjoy “can rise no higher than those of [the
party state.]” Nebraska v. Wyoming, 295 U.S. 40, 43
(1935).
Although CRWSP’s dual citizenship status does
not provide an independent basis for intervention,
CRWSP, like Charlotte, has a “compelling interest in
[its] own right, apart from [its] interest in a class
with all other citizens and creatures of the state,
which interest in not properly represented by the
state.” New Jersey v. New York, 345 U.S. at 373-74.
For the same reasons as with Charlotte, CRWSP
should be allowed to appear separately in order to de­
fend its transfer, which is the subject of South Caro­
 28
lina’s claim for relief. CRWSP has a compelling in­
terest in defending its ability to execute the transfer
challenged by South Carolina and should be allowed
to intervene for that limited purpose.
VIII.
Duke Energy is positioned differently from Charlotte
and CRWSP. Duke is not the immediate target of a
request by South Carolina for injunctive relief, and
thus does not fall squarely within the cases in which
a non-state entity was the “authorized agent” of in­
jury to the complaining state was made a party.
Nonetheless, for several reasons, Duke has several
strong and independent interests that could affect, or
be affected by, the outcome of this proceeding.
First, the outcome of any equitable apportionment
of the Catawba will be affected by Duke’s extensive
development of the river over the course of the last
century—and those operations in turn would be af­
fected by any decree in this action. Since the early
20th century, both before and pursuant to its 1958
FPC license, Duke has operated reservoirs along the
Catawba in North and South Carolina that allow it to
generate hydroelectric power and supply cooling
water for its nuclear power and coal-fired plants in
the Catawba River basin. This system of waterworks
has altered the Catawba from what would have been
its natural flow absent such works. Duke asserts—
and South Carolina does not dispute—that Duke’s
hydroelectric plants effectively control the flow of the
Catawba through the impounding of water in
reservoirs and the release of that impounded water.
Any attempt to quantify the water that naturally
would be available to South Carolina absent the com­
plained-of transfers in North Carolina will require an
analysis of Duke’s operations and the flows that it is
 29
required to maintain from its reservoirs into South
Carolina. In addition, the “existing economies” cre­
ated by Duke’s operations—most notably businesses
and communities dependent upon its facilities and
operations, and others that depend upon Duke’s ex­
tensive use of the Catawba for hydroelectric pur­
poses—likely will be an important consideration. See
Colorado v. New Mexico, 459 U.S. 176, 187 (1982).
And because Duke controls the flow of the Catawba
River—and in particular the outflow at Lake Wylie
through which the Catawba flows into South Caro­
lina—any Court-ordered alteration of the flow would
be carried out by Duke and would directly affect its
operations.
Second, and relatedly, the terms of Duke’s existing
and prospective licenses, as well as the negotiated
terms agreed upon by relevant stakeholders through
the CRA, are relevant to the proceedings here. Both
Duke’s existing 1958 FPC license and the agreed-to
terms for its prospective FERC license set minimum
flow requirements under various conditions, includ­
ing times of drought. Duke’s existing FPC license re­
quires it to release specified amounts of impounded
water at locations in North and South Carolina, in
consultation with state agencies. Most notably,
Duke’s reservoir at Lake Wylie, which straddles the
border between the States, is the immediate source of
water from the Catawba flowing into South Carolina,
and Duke’s existing FPC license requires Duke to
maintain a minimum average daily flow of 411 cubic
feet per second into South Carolina from the Wylie
dam. The CRA submitted with Duke’s application for
a new license requires increased flow rates during
periods of normal rainfall and drought periods. It
also sets a Low Inflow Protocol requiring conserva­
tion measures that become more stringent as low
 30
flow conditions increase. Duke contends with some
force that if a new license is granted, the issues of
equitable apportionment raised by this action will
have to be addressed in the context of the new mini­
mum daily flow and other requirements. In addition,
although the findings and recommendations in the
CRA are not binding here, many of the same factors
addressed in the agreement—such as natural flow,
existing uses, and effect of drought conditions—would
be considered in an apportionment inquiry. Duke
correctly notes that it will provide a direct link to the
CRA negotiations process and the FERC proceedings
that will foster “a full exposition of the issues.”
Maryland v. Louisiana, 451 U.S. at 745 n.21.
Even more significantly, there is a strong possibil­
ity that the terms agreed to by the relevant stake­
holders in the CRA will be directly at issue in this
litigation, thus triggering Duke’s direct interest in
preserving that agreement and its existing and pro­
spective licenses. The terms of the CRA are central
to the defenses asserted by North Carolina, which
contends, in essence, that the CRA provides South
Carolina with more than enough water to meet its
needs, thus obviating this proceeding. Although
South Carolina has equivocated on whether it in­
tends to challenge the CRA in the action—for exam­
ple, South Carolina claims that the CRA establishes
a relevant benchmark for its entitlement to water
from the Catawba, and cites data developed during
the CRA negotiations, but at the same time appears
to claim that the scientific models and assumptions
underlying the CRA are subject to challenge or at
least questionable—it seems clear that the terms
memorialized in the CRA and mandated by any
ensuing Duke license will be challenged, or relied
upon, by one or both parties in this action. Cf. Utah
 31
v. United States, 394 U.S. at 92. If the scientific data
and conclusions that support the CRA, which in turn
is the principal support for Duke’s license application,
will be placed in issue, it would seem fair and equita­
ble to allow Duke to defend those data and conclu­
sions, as well as the CRA and license application
themselves. For this reason alone, Duke has a strong
and direct stake in the outcome of this proceeding.
See Maryland v. Louisiana, 451 U.S. at 745 n.21.
Third, at a minimum, the Court in this action
would likely consider the process that Duke orches­
trated as part of its relicensing application, namely
the multi-stakeholder negotiation that resulted in the
CRA. That process involved the participation and
approval of multiple entities, including state natural
resources departments, other state agencies, public
water suppliers, local governments, and interest
groups, among others, and produced detailed analy­
ses and studies of the historical flow of the Ca­
tawba—both with and, hypothetically, without
Duke’s operations—as well as the historical, present,
and projected uses of the river. South Carolina itself
cites these studies in its Complaint, as does North
Carolina in its Answer. See Complaint ¶ 16; Answer
¶ 16. The agreement among relevant stakeholders—
including South Carolina’s Department of Natural
Resources—almost certainly will be considered in any
equitable apportionment analysis, which would look
to existing uses and needs of those affected by the
flow of the river, including the stakeholders that
3
joined the CRA.

3
In addition to its arguments discussed in the text, Duke
asserts that it is charged with protecting public interests recog­
nized by federal law and protected by Duke’s license under the
Federal Power Act—citing various statutory provisions that
 32
In sum, the outcome of this action will affect Duke
directly because Duke has significant control over the
flow of the Catawba River, will be affected directly by
any change in flow, and may have to alter its prac­
tices and the CRA if the assumptions underlying that
agreement are altered through this litigation. Its in­
terests are at least as compelling, if not more so, than
the 17 pipelines companies that were allowed to in­
tervene in Maryland v. Louisiana, supra.
IX.
In its motion for clarification or reconsideration of
the May 27, 2008 order granting intervention, South
Carolina offers several reasons why that order should
be limited or changed. In a telephonic hearing held
on July 17, 2008, the Special Master indicated that
the motion would be denied. Following South Caro­
lina’s subsequent request that the intervention issue
be addressed in an Interim Report—a request that
was granted after briefing from the parties—the Spe­
cial Master indicated that both the original reasons
for the May 27, 2008 order and the reasons for the
denial of the motion for clarification or reconsidera­
tion would be set forth in the Interim Report.

govern FERC’s own duties and the requirements for licenses

issued by FERC. See, e.g., 16 U.S.C. § 797(e) (FERC must take
into account certain considerations in issuing licenses); 16
U.S.C. § 803(a)(1) (setting forth conditions for licenses). But
none of the provisions and regulations cited by Duke states that
Duke itself must determine and act upon the public interest,
except indirectly by complying with the terms and conditions
of its license as established by FERC through its own public
interest obligations under the governing statutes and regula­
tions. Accordingly, this “public interest” theory is not a factor in
the analysis reflected in this Interim Report.
 33
South Carolina’s request for “clarification” turns on
an artificially narrow construction of the May 27,
2008 order. At various points in the order (and in the
analysis above), the Special Master stated that the
Intervenors had an interest in the outcome of this ac­
tion, or in the relief sought. South Carolina reads
these references to say that the Intervenors’ interests
are limited to the relief that might be awarded in
connection with any equitable apportionment. Under
this reading, the Intervenors would have no interest
in what the parties have called “Phase One” of the
action, variously (and sometimes inconsistently) de­
fined by the parties as being limited to the harms suf­
fered by South Carolina, and/or the uses in North
Carolina that have caused or contributed to those
harms. South Carolina seeks to “clarify” that any
participation by the Intervenors must be limited to
the remedial phase (“Phase Two”) and that they may
not participate in what might be called the liability
phase (“Phase One”).
South Carolina’s argument misperceives the basis
for the May 27, 2008 order. The order did indicate
that each of the Intervenors has an interest in the
outcome of this action—that is, in preventing one or
both of the state parties from obtaining the relief that
they seek. In the case of Charlotte and CRWSP, the
interest is in preventing a disposition inconsistent
with the existing authorizations for interbasin trans­
fers challenged in South Carolina’s Complaint, in­
cluding its request for injunctive relief. In the case of
Duke, the interest is in preserving existing opera­
tions and the negotiated outcome set out in the CRA
and in Duke’s pending license application, to the ex­
tent that either state might seek an outcome contrary
to the existing or agreed-to status quo. Although ei­
ther or both of these interests may be identified by
 34
reference to a preferred outcome of the action, that
does not mean that the only interest that the
Intervenors have is in the remedial phase. Rather,
as with any litigant, they have an interest in the
liability proceedings that could lead to the adverse
result—including, for example, the question whether
South Carolina has suffered harm as a result of
particular interbasin transfers within the State of
North Carolina (a “Phase One” question). To put the
matter another way, the fact that it is the ultimate
relief sought that may adversely affect the In­
tervenors does not logically or legally mean that their
interests are limited to the remedial phase.
The May 27, 2008 order did indicate that the mo­
tions to intervene would be granted only for limited
purposes. This was based upon the simple principle,
conceded by the Intervenors, that an intervenor’s
participation in an original case should be directed
toward protecting that intervenor’s interests and not
as a means to litigate all aspects of the dispute, even
those that do not affect the intervenor. See, e.g., Ken­
tucky v. Indiana, 281 U.S. at 173-74; Utah v. United
States, 394 U.S. at 92. As the Special Master indi­
cated at the July 17, 2008 hearing, particular issues
or objections relating to participation by Intervenors
may be addressed as part of the case management
process.
That said, the limitation that South Carolina pro­
poses—participation by Intervenors only in Phase
Two—does not make practical sense in light of the
nature of the Intervenors’ interests and the manner
in which discovery is proceeding. South Carolina ap­
pears to concede that Phase One would involve not
only issues of harm to South Carolina, but also the
uses and activities in and by North Carolina that al­
 35
legedly are causing that harm. The Intervenors have
an interest in addressing these Phase One issues, in­
cluding the existence or nonexistence of harm to
South Carolina from the Intervenors’ own activities.
South Carolina asserts that it is not the specific
uses of water in North Carolina that must be ad­
dressed in Phase One, but rather the cumulative uses
in North Carolina that produce an alleged reduction
in flow into South Carolina. Under this theory, any
decree by the Court would simply limit North Caro­
lina to a fixed amount of water that North Carolina
could allocate to uses within the state—thus render­
ing irrelevant any consideration of particular existing
uses by the Intervenors or other users. South Caro­
lina cites no precedent supporting such a narrow con­
ception of the apportionment inquiry—one that
seems at odds with this Court’s practice of engaging
in a detailed consideration of existing uses and other
conditions as part of an equitable apportionment
analysis. Whatever parameters ultimately will de­
fine the various “Phases” of this action—a matter
that currently is being addressed through the discov­
ery and case management processes—it seems
unlikely that the sole consideration for “Phase One”
will be whether South Carolina has suffered a cu­
mulative reduction in flow from the Catawba. In­
deed, as a practical matter, the parties already have
agreed that certain discovery may cover both Phase
One and Phase Two in order to avoid duplication,
thus complicating any proposed effort to limit par­
ticipation to one Phase or the other.
For these reasons, South Carolina’s request for
“clarification” of the May 27, 2008 order is not well
taken.
 36
X.
South Carolina also requested that the Special
Master reconsider the merits of the May 27, 2008 or­
der. This request was made before South Carolina
asked the Special Master to issue an Interim Report
on the subject of intervention. For the reasons that
follow, South Carolina’s arguments do not provide a
basis for denying intervention.
South Carolina’s principal argument with respect
to the two municipal entities, Charlotte and CRWSP,
is that the May 27, 2008 order placed too much em­
phasis on the authorizations held by these entities to
transfer water from the Catawba River Basin under
North Carolina’s interbasin transfer statute. This
argument takes several forms, none of which would
appear to change the result reached in the May 27,
2008 order.
First, South Carolina argues that the authoriza­
tions held by these entities cannot justify interven­
tion because they are created solely by state law, and
this Court has made clear that federal common law—
not state law—governs the equitable apportionment
analysis. See Illinois v. Milwaukee, 406 U.S. 91, 103,
105 & n.7 (1972); Hinderlider v. La Plata River &
Cherry Creek Ditch Co., 304 U.S. 92, 110 (1938). Ac­
cording to South Carolina, state law permits and
other authorizations are irrelevant because they
would be overridden by whatever apportionment the
Court makes as a matter of federal common law.
This argument does not accurately state the role of
state law in the equitable apportionment analysis.
Although federal common law ultimately controls any
equitable apportionment by this Court, state law is
not irrelevant. Indeed, in some cases, the Court has
looked to state law as the federal common law rule in
 37
the case—as, for example, where both states rec­
ognize the same state law water rights rules and the
Court determines that following those rules is the
most fair and equitable course. This has occurred
with some regularity, for example, in cases where
both states parties follow the rule of prior appropria­
tion. See, e.g., Nebraska v. Wyoming, 325 U.S. 589,
618 (1945); Colorado v. New Mexico, 459 U.S. 176,
183 (1982); Wyoming v. Colorado, 259 U.S. 419, 470
(1922). State law also plays an indirect role where
state law rights or other interests or uses are consid­
ered as part of the equitable apportionment analysis.
See Connecticut v. Massachusetts, 282 U.S. 660, 670­
71 (1931) (equitable apportionment analysis depends
“upon a consideration of the pertinent laws of the
contending States and all other relevant facts”). The
Court consistently has held that state law, and water
uses authorized by state law, are to be considered
and weighed as the circumstances require.
Here, it is likely that state-created rights and in­
terests, including the authorizations held by Char­
lotte and CRWSP to transfer water from the Catawba
River Basin for use by their customers and citizens,
will be considered in any equitable apportionment of
the Catawba. For example, “the extent of established
uses” and “the damage to upstream areas as
compared to the benefits to downstream areas if a
limitation is imposed on the former” are among the
factors the Court has considered. Nebraska v. Wyo­
ming, 325 U.S. at 618. The Court also would take
into account the degree to which users and customers
have come to rely upon those state law transfer
rights. In light of the Court’s consistent practice of
considering state law interests and uses as part of an
equitable apportionment analysis, South Carolina’s
 38
assertion that such interests are irrelevant seems
overstated.
South Carolina next asserts that the May 27, 2008
order inappropriately cast South Carolina’s case as
being focused on interbasin transfers, when in fact
such transfers were only “mentioned” as part of a
broader equitable apportionment analysis looking to
the cumulative effect of all North Carolina uses of
the Catawba River. This broader approach, South
Carolina argues, sets this action apart from the cases
cited above in which a municipality was named as a
defendant because it was the instrumentality of the
complained-of injury. But a fair reading of South
Carolina’s Complaint and other papers, including its
preliminary injunction motion, shows that interbasin
transfers are not merely “mentioned,” but are the
primary if not exclusive means by which South Caro­
lina claims to have been harmed. The focus on trans­
fers is so pervasive that North Carolina—with sub­
stantial justification—tried to limit the action and
any ensuing discovery to the question of interbasin
transfers. Although the Special Master concluded
that such a limitation was not warranted at this
stage, that decision was based upon South Carolina’s
prayer for relief, the corresponding breadth of per­
missible discovery, and the preliminary stage of the
proceedings. The decision did not conclude that in­
terbasin transfers are not central to the Complaint
(they are) or that South Carolina did not seek to en­
join the transfers to these municipalities authorized
by North Carolina (it does).
South Carolina next repeats its argument that this
Court’s cases in which municipalities were named as
defendants—cited in the May 27, 2008 order—are ir­
relevant because the non-state parties in those cases
 39
were named as defendants by the complaining state,
as opposed to being granted leave to intervene by the
Court. South Carolina notes that this Court never
has granted leave to a non-state entity to intervene
in an equitable apportionment case—a point dis­
cussed in the May 27, 2008 order and again above. It
is true that there is no direct precedent permitting
intervention under the circumstances presented here,
but nor is there direct precedent denying interven­
tion. The closest case is New Jersey v. New York, in
which the City of Philadelphia sought to intervene as
a plaintiff in a long-pending action by the State of
New Jersey against the City of New York and the
State of New York. As discussed above, the other
parties opposed the motion, in part because addition
of Philadelphia as a plaintiff would violate the Elev­
enth Amendment. In denying the motion, the Court
distinguished Philadelphia from the City of New
York, which had been named by New Jersey as a de­
fendant. 345 U.S. at 375. The Court noted that New
York City “was forcibly joined as a defendant to the
original action since she was the authorized agent for
the execution of the sovereign policy which threat­
ened injury to the citizens of New Jersey,” and went
on to note that its presence as a defendant created
“no problems under the Eleventh Amendment.” Id.
With the exception of being “forcibly joined,” these
same factors are present here with respect to Char­
lotte and CRWSP.
Finally, South Carolina argues that the interests of
Charlotte and CRWSP can be represented by North
Carolina, so that there is no need for them to inter­
vene as parties. Although this argument draws upon
the test for intervention articulated in New Jersey v.
New York, 345 U.S. at 373, the fact remains that this
Court has allowed intervention by non-state entities
 40
in numerous cases where it was likely that one or
more of the state parties would advance positions
that would protect the non-state entity’s interest.
See, e.g., Texas v. Louisiana, 426 U.S. at 466 (allow­
ing Port Arthur, Texas to intervene in a case in which
Texas was a party and presumably would have ad­
vanced the same interests); Maryland v. Louisiana,
451 U.S. at 745 n.21 (permitting intervention by oil
companies, even though the complaining states had
the same interests). In these cases, the Court ap­
pears to have concluded that an entity whose con­
crete interests were directly at stake should have an
opportunity to “speak for itself.” See Utah v. United
States, 394 U.S. at 92. And in the municipality cases
discussed above, where the requested coercive relief
would directly affect the municipality’s interests, the
Court allowed the municipality to be named as a
party defendant even though its interests clearly
were aligned with those of the defendant state or
states. See, e.g., Missouri v. Illinois, 180 U.S. at 242;
Arizona v. California, 373 U.S. at 551; New York v.
New Jersey, 256 U.S. at 302. All of these cases are
consistent with the general rule that a non-state en­
tity may properly be a party to an original action
where it has a “direct stake” in the controversy. See
Maryland v. Louisiana, 451 U.S. at 745 n.21. That
rule applies to Charlotte and CRWSP, whose vested
state interests are directly challenged by South
Carolina’s Complaint.
As for Duke Energy, South Carolina argues that
the May 27, 2008 order was erroneous in several re­
spects, but none of these arguments changes the con­
clusions reached in that order.
South Carolina first argues that Duke’s interests
are not threatened in this action because South
 41
Carolina’s Complaint seeks to reduce consumption by
North Carolina—a result that would increase the wa­
ter available to Duke for power generation. But, as
Duke notes, Duke also has an interest in defending
the flow requirements agreed to in the CRA against
any demand by either party that would threaten or
deviate from those requirements. South Carolina has
not indicated clearly whether it is seeking an alloca­
tion that would be inconsistent with these flow re­
quirements—i.e., that would require a flow greater
than that provided for by the CRA (or Duke’s existing
license). What the Complaint does clearly state is
that the Catawba River is subject to reduced flow
conditions, that these conditions are exacerbated by
North Carolina’s interbasin transfers, and that the
Court should issue a decree granting South Carolina
some unspecified apportionment of water from the
river. As discussed above and in the May 27, 2008
order, it would be difficult if not impossible to analyze
the request by South Carolina for a greater appor­
tionment of water than it currently is receiving with­
out reference to the flow requirements of the CRA,
given that it is those flow requirements—and not
solely the uses of water by North Carolina—that im­
mediately govern how much water from the Catawba
makes its way into South Carolina. At a minimum,
the minimum flow requirements of the CRA are
highly relevant to the question of actual or potential
harm to South Carolina’s interests.
South Carolina argues that reference to the CRA
in this action would be improper because it would
amount to “review” of a FERC order—a remedy that,
by statute, must be sought exclusively in the Court of
Appeals and not through an original proceeding in
this Court. South Carolina does not refer to any au­
thority for the proposition that mere consideration of
 42
license requirements as part of an equitable appor­
tionment analysis would constitute impermissible
“review” of the administrative order granting the li­
cense. Duke’s professed objective in this proceeding
is to defend the CRA and any FPC or FERC license
that it holds; if any other party, such as South Caro­
lina, seeks to invalidate the license as part of an ap­
portionment request, then the concern offered by
South Carolina would be presented more directly. It
seems unwise and unnecessary to prejudge at this
stage the legal issues that would arise if the eq­
uitable allocation sought by either party would re­
quire invalidation of a license granted by FERC pur­
suant to its operative statute—issues that presumably
would be the subject of legal briefing and might
warrant soliciting the views of the United States. It
suffices here to say that Duke has a strong interest in
defending its license and the CRA that supports its
pending license application.
Finally, it is noteworthy that South Carolina has
identified no concrete prejudice from intervention by
Duke. To the contrary, since the May 27, 2008 inter­
vention order was issued, South Carolina has issued
extensive discovery to Duke, including discovery
seeking to test the scientific models used to support
the flow requirements used in the CRA and in Duke’s
pending license application. Even if South Carolina
had tried to “plead around” the CRA—which it did
not—the issue has been squarely raised and pre­
sented by North Carolina, both on the issue of harm
to South Carolina and in its affirmative defenses.
The only apparent prejudice from Duke’s participa­
tion would be a more zealous defense of the CRA than
would be provided if intervention were denied.
Again, if the CRA is to be placed in issue, Duke
should be permitted to defend it.
 43
XI.
For the reasons stated above, the Special Master
recommends that the Court permit the interventions
of Charlotte, CRWSP, and Duke Energy, and deny
South Carolina’s motion for clarification or reconsid­
eration of the May 27, 2008 order.
Respectfully submitted,

KRISTIN LINSLEY MYLES

Special Master
560 Mission Street, 27th Floor
San Francisco, CA 94105
November 25, 2008