The Tarrant Regional Water District ("TRWD") sued the Oklahoma Water Resources Board ("OWRB") to enjoin the OWRB from enforcing its moratorium against approval of water permits for export of water outside the State of Oklahoma. The OWRB initially defended with procedural obstacles, challenging the trial court's jurisdiction to hear the case. The trial court denied the OWRB's motion to dismiss. The OWRB appealed the trial court's rulings on Eleventh Amendment immunity and abstention.
In a decision dated October 27, 2008, the Tenth Circuit affirmed a portion of the trial court's ruling, and refused to address the remainder of the lower court's decision.
The Tenth Circuit agreed with the trial court in determining that "a fair reading of the statutes at issue demonstrates that the OWRB is arguably precluded from granting the TRWD's application. TRWD has thus shown it faces threat of injury sufficient to invoke federal jurisdiction." Thus, the lawsuit meets the "case or controversy" requirement for federal-court jurisdiction.
The Tenth Circuit rejected the OWRB's Eleventh Amendment defense, concluding that "the defendants are state officials within the ambit of the Eleventh Amendment, and they are sued in their official capacities. Moreover, the complaint purports to seek only prospective, injunctive relief ...." Thus, the TRWD's lawsuit falls within the doctrine of Ex parte Young, an old doctrine of federal court jurisdiction that holds that Eleventh Amendment immunity does not extend to a state official sued in his official capacity when the plaintiff only seeks prospective, injunctive relief. The Tenth Circuit rejected the OWRB's argument that there exist particular sovereignty issues that would require the application of the Eleventh Amendment.
Critically, in going through the analysis described above, the Tenth Circuit held that "[i]t is well established that Oklahoma does not enjoy an 'ownership interest' in water resources located in the state."
The Tenth Circuit declined to reach the issue of abstention, on the basis that a denial of a motion to abstain is not reviewable on appeal. It might have been possible for the OWRB to have obtained an order certifying the abstention issue for interlocutory appeal. Although the Tenth Circuit was silent on the issue, if the OWRB had obtained appellate review of the abstention decision, there was some level of possibility that the appellate court would have disagreed with the trial court and determined that the TRWD's lawsuit should have been delayed until the OWRB completes the current Comprehensive Water Plan, based on abstention arguments that were raised, or could have been raised, at the trial court level.