ATLANTA — A tri-state dispute threatening the water supply of roughly 3 million people in metro Atlanta is headed to an appeals court Wednesday, although some involved in the case expect that negotiations — not a court order — will bring a resolution.

Lawyers representing Georgia Gov. Nathan Deal's administration and metro Atlanta communities will ask the 11th U.S. Circuit Court of Appeals to overturn a 2009 ruling by District Court Judge Paul Magnuson that found Atlanta has little legal right to take water from Lake Lanier on the Chattahoochee River. The judge's order would cut water withdrawals from the lake to levels last seen in the 1970s, when the city was a fraction of its present size. It takes effect in July unless Georgia strikes a political settlement with neighboring Alabama and Florida.

In his own ruling, Magnuson acknowledged his decision would have a "draconian" result, though the judge considered it the only way to resolve the problem.

On that point — if nothing else — Deal's administration agrees with the lower court judge. During oral arguments on Wednesday, lawyers representing Deal's administration and other Georgia parties will argue that the U.S. Army Corps of Engineers has the legal authority to release water from Lake Lanier to metro Atlanta, contrary to Magnuson's decision.

The state also contends that Magnuson did not properly consider the harm his order would cause before setting the deadline for curtailing the region's water supply, among other issues.

For example, Gwinnett County, an Atlanta suburb of 800,000 that relies entirely on water from Lake Lanier, has said in court papers that Magnuson's order amounts to a "death penalty for subsistence by existing households and businesses, as well as future economic growth within Gwinnett."

"It's going to be cataclysmic," said John Brock, chairman and CEO of Atlanta-based Coca-Cola Enterprises and chair of the Metro Atlanta Chamber. Brock was part of a statewide taskforce that estimated Magnuson's ruling could cost metro Atlanta some $30 billion in annual economic activity were it enforced. "It's difficult to create jobs when you don't have water."

While seen as a major blow to growth-hungry Atlanta, the decision was a win for neighboring Alabama and Florida. Those states have argued that excessive water use by Atlanta harms downstream fisheries worth millions of dollars, ruins wetland habitats, and does not leave enough water for human consumption and industry.

Although the lawsuit grinds on, so do negotiations aimed at finding another way out. Deal met with the newly elected governors of Alabama and Florida in November at a San Diego meeting to discuss water problems, Deal spokesman Brian Robinson said. And their staff remains involved in confidential discussions aimed at negotiating a settlement. Even supporters of Magnuson's decision are not convinced his order will ultimately be enforced or that a final resolution will be reached in the courtroom.

Andy Smith, executive director of the Apalachicola Riverkeeper, which opposes Georgia in the ongoing lawsuit, said shellfish died in droves when a 2007 drought caused big drops in the water level of the Apalachicola River, which is formed by the convergence of the Chattahoochee and Flint rivers at Lake Seminole at the Florida line.
"It just about killed Apalachicola Bay," he said.

He said one benefit of Magnuson's order is that it forced state officials to start talking seriously about managing the river system upstream.

"We don't believe that ultimately that water will be unavailable to Atlanta," Smith said. "And maybe it will be enforced, but ultimately we got to get to a system where this river system provides water for Atlanta, but so Atlanta can't have unbridled growth."

Deal seems to be placing most of his hope in negotiations. The Republican governor recently told a group of business leaders that the state cannot expect that the appeals court will toss Magnuson's ruling. Deal, a former lawmaker, also said there was no way that Congress would intervene to solve the issue. Although Deal's administration has allowed the appeal to move forward, the governor has said he's focusing on reaching a negotiated settlement with Alabama Gov. Robert Bentley and Florida Gov. Rick Scott.

Magnuson's order has prompted Georgia to take steps to boost its hand at the bargaining table. Last year, state lawmakers approved conservation measures that require the installation of high-efficiency toilets, shower heads and faucets. Most outdoor watering also is limited to between 4 p.m. and 10 a.m., to prevent the loss of millions of gallons to evaporation at midday.

Meanwhile, Deal's administration has pitched a plan to spend $300 million to build reservoirs and water storage facilities across the state. Deal said the reservoirs could help reach an agreement by giving Georgia the ability to supplement the flow of water in disputed rivers during dry years. The project is viewed with some suspicion in Alabama, where Bentley said that if Georgia keeps taking water from upstream federal reservoirs — and takes more water from new reservoirs — the situation for Alabama may get worse.