A panel of judges on Wednesday appeared poised to hand Georgia a victory in the tri-state water case by sending back a ruling that could have catastrophic consequences for the metro region.

Such a victory would include vacating a looming July 2012 deadline that says metro Atlanta would get only a fraction of the water it is now getting from Lake Lanier if Georgia, Alabama and Florida cannot negotiate a water-sharing agreement by then.

During oral arguments, three judges for the 11th U.S. Circuit Court of Appeals appeared inclined to settle the issue by sending the case back to the Army Corps of Engineers, which operates Buford Dam. It would then be up to the corps to figure out how much water from the man-made reservoir can be used to meet metro Atlanta's needs.

The judges' questions and statements seemed to indicate they were leaning that way, but the judges did not rule immediately, and the resolution of the case will not be known until they do.

The judges were reviewing a 2009 order by Senior U.S. District Judge Paul Magnuson, who found it was illegal for the corps to draw water from Lake Lanier to meet the needs of 3 million metro residents. Magnuson set the July 2012 deadline and said if it is not met, metro Atlanta would only be allowed to take the same amount of water it received in the mid-1970s, when the population was less than one-third its current size.

But Judge Stanley Marcus said Wednesday that he believed this constituted an injunction and said Magnuson failed to weigh the potential harm that would result from his order.

Marcus then pointedly asked Parker Thompson, who was arguing the case on behalf of Florida, "You would have no problem with us vacating that?"

Parker, after looking back to lawyers from Alabama seated behind him, told Marcus he would not oppose it.

Seth Waxman, a lawyer arguing on behalf of Georgia and other local interests, said Magnuson's order is causing enormous economic harm to metro Atlanta. "We can't get a major industry to locate here by telling them it would be fine so long as they bring their own water," he said.

Waxman said the corps should be asked to determine whether the region can use water from Lake Lanier to meet the metro area's present needs and the region's projected water-supply needs until 2030. "For goodness sake, let the expert agency do the calculation as quickly as it can," he told the court.

In Gwinnett County, which draws its water directly from the lake, $53 billion in economic output and 300,000 jobs are at stake if Magnuson's order takes effect, said William Droze, a lawyer for the county. He asked the 11th Circuit to send the case back to the corps with instructions that it account for a waste-water treatment plant that began operation last year in Gwinnett and which is returning 40 million gallons of water to the lake every day.

The high-stakes oral arguments lasted three hours before a packed courtroom, with the judges allowing lawyers to state their cases well beyond their allotted times.

Georgia Attorney General Sam Olens, who watched the arguments seated next to Lt. Gov. Casey Cagle, said it is often hard to predict how a court will rule based on questions posed by judges during arguments. But he also added, "Clearly we look forward to the [ruling]."

Olens added that he is growing increasingly confident that a water-sharing agreement can be reached by the three states.

Alabama and Florida have contended that the metro region is using too much water and not leaving enough for its downstream neighbors. Their lawyers also contend that Congress authorized construction of Lake Lanier for three primary purposes: hydropower generation, navigation and flood control. They also argue that the corps should obtain approval from Congress before it reallocates so much of Lake Lanier's water to meet the metro area's present and future needs.

During Wednesday's session, Senior Judge R. Lanier Anderson III of Macon made it clear he thought the case should be sent back to the corps. The agency should be told that the 1946 legislation that authorized construction of Buford Dam contemplated the reservoir would assure a supply of water to metro Atlanta, and it also contemplated that the city could increase its withdrawals over time, he said.

The corps should decide whether an assured water supply to the Atlanta area would result in a minimal detriment to hydropower production at the dam, Anderson told Michael Gray, a lawyer for the corps. "It does not seem to me you've ever done that."

At one point during the arguments, Anderson stated bluntly, "We're probably going to remand this case." Neither of the other judges, Marcus and visiting Judge Richard Mills, objected to Anderson's remark when he made it.

Both Marcus and Mills pressed Gray to predict how long it would take the agency to make a final determination. When Gray said he thought it would take 24 to 30 months, both Mills and Marcus expressed frustration.

"Some things just need to give way to the shortness of life," Mills told Gray. If the court sent the case back to the corps with explicit orders on how to decide the issue, why couldn't it reach a decision in 18 months? Mills asked.

"We'll do our best," Gray replied.

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