POP QUIZ: HOW WELL DO YOU KNOW THE CONSTITUTION?

I save everything, it seems! Recently, I unearthed a copy of the final exam I gave my law school class in Constitutional Law in May, 1975. One of the questions still seems timely 35 years later. I reproduce it below. How would you answer the question? Hint: identify the issues and the arguments on both sides of the issues.

A Presidential commission on natural resources conducted a study which concluded that the nation's available water supply is limited, and unless water conservation is practiced, will be exhausted as early as within 15 years in some parts of the country. The commission noted that sources of water supply vary across the country and include wells, lakes, rivers, surface water retention ponds, and oceans. It found that although some water suppliers attempted to impose water conservation, generally such efforts were not successful and there was no consistency through the country. The commission recognized, however, that to be effective, conservation has to be observed by the ultimate user of the water.

Reacting to the commission's report, Congress passed, and the President signed, the Water Conservation Act. The Act established a federal Water Conservation Board (WCB) to develop for all water suppliers uniform national rates and rules for water service which would impose water conservation. Subsequently, the WCB promulgated graduated rates which increase as usage increases. For example, for the first 1,000 gallons of water used per month, the rate was $2, and for the next 1,000 gallons, the rate was $3. The WCB also developed rules to conserve water, such as a ban on sprinkling, car washing, and non-recycling swimming pools. If any water supplier failed to adopt or enforce the rates and rules developed by the WCB, the Act imposed a 20 per cent tax on the gross earnings of the supplier.

The Village of Leaky Pipe owns and operates its own municipal water supply system to provide water service to its residents. It obtains the water from large wells. The Village refused to adopt the WCB rates and rules, and the federal government assessed the 20 per cent tax. The Village sued to enjoin collection of the tax, but was unsuccessful in the lower courts. The United States Supreme Court agrees to hear the appeal. What ruling and why?