Who has the power to settle disputes between different States Constitution

Individual states do not have jurisdiction over one another. State courts cannot hear cases involving another state. So the Constitution tasks the Supreme Court with handling disputes between state governments in Article III, Section 2, Clause 1:

The judicial Power shall extend to all Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority;—to all Cases affecting Ambassadors, other public Ministers and Consuls;—to all Cases of admiralty and maritime Jurisdiction; to Controversies to which the United States shall be a Party;—to Controversies between two or more States; between a State and Citizens of another State, between Citizens of different States,—between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

What Are Controversies Between States?

United States Library of Congress, The Constitution of the United States of America: Analysis and Interpretation

The extension of federal judicial power to controversies between states and the vesting of original jurisdiction in the Supreme Court of suits to which a state is a party had its origin in experience. Prior to independence, disputes between colonies claiming charter rights to territory were settled by the Privy Council. Under the Articles of Confederation, Congress was made "the last resort on appeal" to resolve "all disputes and differences . . . between two or more States concerning boundary, jurisdiction, or any other cause whatever," and to constitute what in effect were ad hoc arbitral courts for determining such disputes and rendering a final judgment therein. When the Philadelphia Convention met in 1787, serious disputes over boundaries, lands, and river rights involved ten states.1 It is hardly surprising, therefore, that during its first 60 years the only state disputes coming to the Supreme Court were boundary disputes2 or that such disputes constitute the largest single number of suits between states. Since 1900, however, as the result of the increasing mobility of population and wealth and the effects of technology and industrialization, other types of cases have occurred with increasing frequency.

Boundary Disputes: The Law Applied

Of the earlier examples of suits between states, that between New Jersey and New York3 is significant for the application of the rule laid down earlier in Chisholm v. Georgia that the Supreme Court may proceed ex parte if a state refuses to appear when duly summoned. The long drawn out litigation between Rhode Island and Massachusetts is of even greater significance for its rulings, after the case had been pending for seven years, that though the Constitution does not extend the judicial power to all controversies between states, yet it does not exclude any,4 that a boundary dispute is a justiciable and not a political question,5 and that a prescribed rule of decision is unnecessary in such cases. On the last point, Justice Baldwin stated: "The submission by the sovereigns, or states, to a court of law or equity, of a controversy between them, without prescribing any rule of decision, gives power to decide according to the appropriate law of the case (11 Ves. 294); which depends on the subject-matter, the source and nature of the claims of the parties, and the law which governs them. From the time of such submission, the question ceases to be a political one, to be decided by the sic volo, sic jubeo, of political power; it comes to the court, to be decided by its judgment, legal discretion and solemn consideration of the rules of law appropriate to its nature as a judicial question, depending on the exercise of judicial power; as it is bound to act by known and settled principles of national or municipal jurisprudence, as the case requires."6

Modern Types of Suits Between States

Beginning with Missouri v. Illinois & Chicago District,7 which sustained jurisdiction to entertain an injunction suit to restrain the discharge of sewage into the Mississippi River, water rights, the use of water resources, and the like, have become an increasing source of suits between states. Such suits have been especially frequent in the western states,8 where water is even more of a treasure than elsewhere, but they have not been confined to any one region.9 In Kansas v. Colorado,10 the Court established the principle of the equitable division of river or water resources between conflicting state interests.11

In New Jersey v. New York,12 where New Jersey sought to enjoin the diversion of waters into the Hudson River watershed for New York in such a way as to diminish the flow of the Delaware River in New Jersey, injure its shad fisheries, and increase harmfully the saline contents of the Delaware, Justice Holmes stated for the Court:

A river is more than an amenity, it is a treasure. It offers a necessity of life that must be rationed among those who have power over it. New York has the physical power to cut off all the water within its jurisdiction. But clearly, the exercise of such a power to the destruction of the interest of lower States could not be tolerated. And on the other hand, equally little could New Jersey be permitted to require New York to give up its power altogether in order that the River might come down to it undiminished. Both States have real and substantial interests in the River that must be reconciled as best they may be.13

Other types of interstate disputes of which the Court has taken jurisdiction include suits by a state as the donee of the bonds of another to collect thereon,14 by Virginia against West Virginia to determine the proportion of the public debt of the original State of Virginia which the latter owed the former,15 by Arkansas to enjoin Texas from interfering with the performance of a contract by a Texas foundation to contribute to the construction of a new hospital in the medical center of the University of Arkansas,16 of one state against another to enforce a contract between the two,17 of a suit in equity between states for the determination of a decedent's domicile for inheritance tax purposes,18 and of a suit by two states to restrain a third from enforcing a natural gas measure that purported to restrict the interstate flow of natural gas from the state in the event of a shortage.19

More recently, in Florida v. Georgia, the Supreme Court summarized the "several related but more specific sets of principles" that govern the doctrine of equitable apportionment in interstate disputes between two states.20 Florida v. Georgia involved a dispute brought by Florida, the downstream state, against Georgia over the division of water from an interstate river basin known as the Apalachicola-Chattahoochee- Flint River Basin.21 At the outset, the Court noted that, "given the complexity of many water-division cases, the need to secure equitable solutions, the need to respect the sovereign status of the States, and the importance of finding flexible solutions to multi-factor problems, we typically appoint a Special Master and benefit from detailed factual findings."22 The Court remanded the case to the Special Master assigned to the dispute, concluding that the Special Master had not applied the proper standard to evaluate the case.23 The Court further advised that, "[c]onsistent with the principles that guide our inquiry in this context, answers need not be 'mathematically precise or based on definite present and future conditions.' Approximation and reasonable estimates may prove 'necessary to protect the equitable rights of a State.' . . . Flexibility and approximation are often the keys to success in our efforts to resolve water disputes between sovereign States that neither Congress 'nor the legislature of either State' has been able to resolve."24

In Texas v. New Jersey,25 the Court adjudicated a multistate dispute about which state should be allowed to escheat intangible property consisting of uncollected small debts held by a corporation. Emphasizing that the states could not constitutionally provide a rule of settlement and that no federal statute governed the matter, the Court evaluated the possible rules and chose the one easiest to apply and least likely to lead to continuing disputes.

In general, in taking jurisdiction of these suits, along with those involving boundaries and the diversion or pollution of water resources, the Supreme Court proceeded upon the liberal construction of the term controversies between two or more States enunciated in Rhode Island v. Massachusetts,26 and fortified by Chief Justice Marshall's dictum in Cohens v. Virginia,27 concerning jurisdiction because of the parties to a case, that "it is entirely unimportant, what may be the subject of controversy. Be it what it may, these parties have a constitutional right to come into the Courts of the Union."28

Cases Where the Court Has Declined Jurisdiction

In other cases, however, the Court, centering its attention upon the elements of a case or controversy, has declined jurisdiction. In Alabama v. Arizona,29 where Alabama sought to enjoin nineteen states from regulating or prohibiting the sale of convict-made goods, the Court went far beyond holding that it had no jurisdiction, and indicated that jurisdiction of suits between states will be exercised only when absolutely necessary, that the equity requirements in a suit between states are more exacting than in a suit between private persons, that the threatened injury to a plaintiff state must be of great magnitude and imminent, and that the burden on the plaintiff state to establish all the elements of a case is greater than the burden generally required by a petitioner seeking an injunction in cases between private parties.

Pursuing a similar line of reasoning, the Court declined to take jurisdiction of a suit brought by Massachusetts against Missouri and certain of its citizens to prevent Missouri from levying inheritance taxes upon intangibles held in trust in Missouri by resident trustees. In holding that the complaint presented no justiciable controversy, the Court declared that to constitute such a controversy, the complainant state must show that it "has suffered a wrong through the action of the other State, furnishing ground for judicial redress, or is asserting a right against the other State which is susceptible of judicial enforcement according to . . . the common law or equity systems of jurisprudence."30 The fact that the trust property was sufficient to satisfy the claims of both states and that recovery by either would not impair any rights of the other distinguished the case from Texas v. Florida,31 where the contrary situation obtained. Furthermore, the Missouri statute providing for reciprocal privileges in levying inheritance taxes did not confer upon Massachusetts any contractual right. The Court then proceeded to reiterate its earlier rule that a state may not invoke the original jurisdiction of the Supreme Court for the benefit of its residents or to enforce the individual rights of its citizens.32 Moreover, Massachusetts could not invoke the original jurisdiction of the Court by the expedient of making citizens of Missouri parties to a suit not otherwise maintainable.33 Accordingly, Massachusetts was held not to be without an adequate remedy in Missouri's courts or in a federal district court in Missouri.

Enforcement Authority Includes Ordering Disgorgement and Reformation of Certain Agreements

More recently, the Court, noting that proceedings under its original jurisdiction are "basically equitable," has taken the view that its enforcement authority encompasses ordering disgorgement of part of one state's gain from its breach of an interstate compact, as well as reforming certain agreements adopted by the states.34 In so doing, the Court emphasized that its enforcement authority derives both from its "inherent authority" to apportion interstate streams between states equitably and from Congress's approval of interstate compacts. As to its inherent authority, the Court noted that states bargain for water rights "in the shadow of" the Court's broad power to apportion them equitably and it is "difficult to conceive" that a state would agree to enter an agreement as to water rights if the Court lacked the power to enforce the agreement.35 The Court similarly reasoned that its remedial authority "gains still greater force" because a compact between the states, "having received Congress's blessing, counts as federal law."36 The Court stated, however, that an interstate compact's "legal status" as federal law could also limit the Court's enforcement power because the Court cannot order relief that is inconsistent with a compact's express terms.37

Controversies Between a State and Citizens of Another State

The decision in Chisholm v. Georgia38 that cases "between a state and citizens of another state" included those where a state was a party defendant provoked the proposal and ratification of the Eleventh Amendment, and since then controversies between a state and citizens of another state have included only those cases where the state has been a party plaintiff or has consented to be sued.39 As a party plaintiff, a state may bring actions against citizens of other states to protect its legal rights or in some instances as parens patriae to protect the health and welfare of its citizens. In general, the Court has tended to construe strictly this grant of judicial power, which simultaneously comes within its original jurisdiction, by perhaps an even more rigorous application of the concepts of cases and controversies than that in cases between private parties.40 This it does by holding rigorously to the rule that all the party defendants be citizens of other states41 and by adhering to congressional distribution of its original jurisdiction concurrently with that of other federal courts.42

Jurisdiction Confined to Civil Cases

In Cohens v. Virginia,43 there is a dictum to the effect that the original jurisdiction of the Supreme Court does not include suits between a state and its own citizens. Long afterwards, the Supreme Court dismissed an action for want of jurisdiction because the record did not show that the corporation against which the suit was brought was chartered in another state.44 Subsequently, the Court has ruled that it will not entertain an action by a state to which its citizens are either parties of record or would have to be joined because of the effect of a judgment upon them.45 In his dictum in Cohens v. Virginia, Chief Justice Marshall also indicated that perhaps no jurisdiction existed over suits by states to enforce their penal laws.46 Sixty-seven years later, the Court wrote this dictum into law in Wisconsin v. Pelican Ins. Co.47 Wisconsin sued a Louisiana corporation to recover a judgment rendered in its favor by one of its own courts. Relying partly on the rule of international law that the courts of no country execute the penal laws of another, partly upon the 13th section of the Judiciary Act of 1789, which vested the Supreme Court with exclusive jurisdiction of controversies of a civil nature where a state is a party, and partly on Justice Iredell's dissent in Chisholm v. Georgia,48 where he confined the term "controversies" to civil suits, Justice Gray ruled for the Court that for purposes of original jurisdiction, "controversies between a State and citizens of another State" are confined to civil suits.49

The State's Real Interest

Ordinarily, a state may not sue in its name unless it is the real party in interest with real interests. It can sue to protect its own property interests,50 and if it sues for its own interest as owner of another state's bonds, rather than as an assignee for collection, jurisdiction exists.51 Where a state, in order to avoid the limitation of the Eleventh Amendment, provided by statute for suit in the name of the state to collect on the bonds of another state held by one of its citizens, it was refused the right to sue.52 Nor can a state sue the citizens of other states on behalf of its own citizens to collect claims.53

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