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ARTICLE · 15 APRIL 2015

Broken Promises As Good Business?

Fox Rothschild LLP
Fox Rothschild LLP
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In an opinion involving downstream water rights under an interstate compact, the Court touched on an issue of profound importance to business-people trying to navigate the law in their every-day practice.

United StatesLitigation, Mediation & Arbitration
Jacob Perskie
Jacob Perskie
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In February, the United States Supreme Court handed down a decision in Kansas v. Nebraska, ___ U.S. ____ (2015).  In an opinion involving downstream water rights under an interstate compact, the Court touched on an issue of profound importance to business-people trying to navigate the law in their every-day practice: the freedom to engage in an efficient breach of contract.

At issue in Kansas v. Nebraska was Nebraska's breach of an interstate compact between Kansas and Nebraska regarding the apportionment of water in the Republican River Basin.  In short, Nebraska took more water than it was entitled to take, and at issue was whether it was appropriate for a special master to have ordered Nebraska – in addition to paying compensatory damages of $3.7M – to "disgorge" an additional $1.8M in gains obtained through breach of the compact.

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