In 1892, after extensive litigation between Iowa and Nebraska the United States Supreme Court ruled that Iowa owned Carter Lake. Carter Lake became an officially incorporated city in Iowa in 1930, thirty-eight years after the litigation ended. Iowa and Nebraska had to pay the costs of the trial equally. It was ruled that Carter Lake belonged to Iowa, but they didn't get utilities for years, and they still had to pay taxes. The Supreme Court ruled that the change in the river's course did not change the boundaries and the community was still a part of Iowa. The court delayed a final decree to allow Iowa and Nebraska to reach an agreement. In the 1920s Carter Lake seceded from Iowa, intending on joining Omaha. But, Omaha didn't want to pay to extend water and sewer lines. Carter Lake lacked the basic city services, but was still taxed so they seceded from Council Bluffs. Today we have our utilities from Omaha and go to Council Bluffs schools.
Justice Brewer stated in the Supreme Court decision: Our conclusions are that notwithstanding the rapidity of the changes in the course of the channel and the washing from the one side and onto the other, the law of accretion controls on the Missouri River as elsewhere, and that not only in respect to the rights of individual landowners, but also in respect to the boundary lines between states. The boundary, therefore, between Iowa and Nebraska is a varying line so far as affected by these changes of diminution and accretion in the mere washing of the waters of the stream.
It appears, however, from the testimony, that in 1877, the river above Omaha, which had pursued a course in the nature of an ox-bow, suddenly cut through the neck of the bow and made for itself a new channel. This does not come within the law of accretion, but of that of avulsion. By this selection of a new channel, the boundary was not changed, and it remained, as it was prior to the avulsion, the center line of the old channel, and that, unless the waters of the river returned to their former bed, became a fixed and unvarying boundary, no matter what might be the changes of the river in its new channel.
We think we have by these observations indicated as clearly as is possible the boundary between the two states, and upon these principles the parties may agree to a designation of such boundary, and such designation will pass into a final decree. If no agreement is possible, then the court will appoint a commission to survey and report in accordance with the views herein expressed.
The costs of this suit will be divided between the two states, because the matter involved is one of those governmental questions in which each party has a real and vital, and yet not a litigious, interest.