Arizona Hires Sullivan & Cromwell, Preparing $4M Legal Fight Over Colorado River Rights

Arizona’s hiring of one of the country’s top law firms signals the state’s readiness to take its Colorado River water fight to court. Governor Katie Hobbs’ office announced on March 23, 2026, that Sullivan & Cromwell had been retained by the Arizona Department of Water Resources. The firm will represent the state in potential disputes over river water allocation and federal operating guidelines.

Arizona’s already committed $3 million to a Colorado River Litigation Fund set up in 2025. State lawmakers are considering adding approximately $1 million more during the 2026 budget process. That would bring the total legal commitment to around $4 million.

The move comes after years of failed negotiations. Seven Colorado River states have spent three years trying to agree on new water-sharing guidelines for after 2026. They missed a federal deadline in November 2025. They missed another in February 2026. Talks remain deadlocked.

The current operating agreement for the river expires on October 1, 2026. The Department of Interior has set that same date as the deadline for finalizing new guidelines. If states don’t reach a deal, the federal government could step in and impose its own rules. Arizona’s leaders don’t want that to happen.

The current river operating agreement expires October 1, 2026 — the same deadline Interior set for finalizing new guidelines.

The Bureau of Reclamation released a draft environmental impact statement in January 2026 with five possible alternatives for managing the river. Arizona rejected all five and asked for the statement to be pulled back entirely.

Arizona could sue the federal government if it imposes unfavorable guidelines. The state might also go after Upper Basin states like Colorado. Arizona’s argument centers on the 1922 Colorado River Compact, which requires Upper Basin states to deliver 7.5 million acre-feet of water annually to the Lower Basin. Cases like this could go straight to the Supreme Court.

Arizona isn’t alone in getting ready for a legal battle. Colorado’s attorney general has built a litigation team. California and Nevada have also hired counsel. Water officials in Colorado say Arizona and California have both threatened Supreme Court action. Legal experts and state officials anticipate potential Supreme Court litigation could begin within months. Complicating any potential resolution, the seven basin states are also negotiating guidelines that, according to some analyses, could require mandatory cuts ranging from 1.3 million to 3.2 million acre-feet in severe water years. Adding urgency to the dispute, Lake Powell and Lake Mead are both sitting at less than a third of their capacity, raising fears that prolonged drought could push the reservoirs toward dead pool status within decades. This year’s snow drought and record-high temperatures have further stressed the watershed, darkening the outlook for river levels heading into what could be a landmark legal confrontation.

✅ Claims in this article were verified using AI-assisted fact-checking.