Water Matters!

New Mexico Water Law Case Capsules | 3-1

New Mexico Water Law Case Capsules

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ew Mexico has a rich body of water law. This is a list of some of the key cases decided in New Mexico state courts with very brief descriptions of the rulings. It is intended to be a quick and handy reference guide, and not a thorough summary of the facts and law of each case. In this edition of Water Matters! we have also included a summary of new ongoing water litigation and a significant new State Engineer decision.

Bounds v. D’Antonio, No. 28,860, slip op. (N.M. Ct. App. Oct. 29, 2010). The domestic well statute, providing that the State Engineer “shall issue” permits for limited domestic uses without an assessment of water availability or consideration of impairment to others, does not on its face violate the priority doctrine or create an impermissible exception to that doctrine. The priority doctrine is not a system of administration, but rather, a broad principle. The domestic well statute creates the procedure for issuing permits for appropriation of groundwater for domestic use. Under statutory authority, the State Engineer has the continuing duty to administer water use in a manner that protects senior water rights from impairment. The State Engineer is to adopt rules and regulations to protect senior water users and the Court points to regulations such as the 2006 domestic well management regulations as a positive step. The Legislature can enact exceptions to the priority system, leaving to the State Engineer the administrative We’ve created an extensive review of determination whether to curtail domestic eleven years of litigation regarding the use when senior water rights are impaired or threatened with impending impairment Rio Grande silvery minnow. because of water shortages. The Court recognizes the concerns and issues created by the lack of regulation of domestic wells, but states that it is up to the

New Mexico Water Law Case Capsules

3-2 | Water Matters! Legislature and the State Engineer to create an efficient, effective, and fair administrative process to reach the required balance and to protect senior water rights. [On October 29, 2011 the New Mexico Supreme Court heard arguments in the appeal of this case. A decision had not been issued at the time of publication. On October 31, 2011 the State Engineer modified the Domestic Well Regulation to address the transfer of water rights into domestic wells in domestic well management areas and the transfer of domestic well rights to mutual domestic water user associations.] City of Albuquerque v. Reynolds, 71 NM 428 (1963). Conjunctive management of surface and groundwater rights is necessary to protect both kinds of users and is within the authority of the State Engineer. The State Engineer’s authority to grant or deny an application to appropriate water includes the authority to impose conditions to insure that a new appropriation does not impair existing rights. Clodfelter v. Reynolds, 68 NM 61 (1961). The right to change the point of diversion, including a change from surface to groundwater, is an inherent element of the property right in water, subject only to non-impairment of other’s water rights. Herrington v. OSE, 139 NM 80 (2006). A Templeton well need not necessarily be

The Court recognizes the concerns and issues created by the lack of regulation of domestic wells, but states that it is up to the Legislature and the State Engineer to create an efficient, effective, and fair administrative process to reach the required balance and to protect senior water rights. Bounds (2010)

located upstream of the surface point of diversion, as long as it taps groundwater that previously fed the surface supply. Kaiser Steel Corp. v. W. S. Ranch Co., 81 NM 414 (1970). For the exercise of eminent domain, the beneficial use of water is a public purpose. A water right holder may condemn a right of way in order to put water to beneficial use. Mathers v. Texaco, 77 NM 239 (1966). The State Engineer determines what constitutes “impairment.” Some lowering of the water table or some change in water quality may be projected and yet not require a finding of impairment of existing rights. Montgomery v. Lomos Altos, Inc., 141 NM 21 (2006). The State Engineer must evaluate the potential for impairment of all water rights at the move-to location and not just those of the protestants. Reynolds v. South Springs Co., 80 NM 144 (1969). Forfeiture is a statutory penalty for four continuous years of nonuse of a water right. In contrast, abandonment derives from the water rights holder’s intent to relinquish the right. A long period of nonuse, alone, does not constitute intent to abandon, but the burden shifts to the holder of the right to explain the nonuse. Rio Grande Silvery Minnow vs. Bureau of Reclamation. Environmental groups brought action in federal court under the Endangered Species Act against the Bureau of Reclamation and the U.S. Army Corps of Engineers, challenging the validity of a biological opinion issued by the U.S. Fish and Wildlife Service concerning the effects of federal water projects on an endangered species of minnow. The environmental groups complained that the biological opinion did not adequately consider all water in the Rio Grande, including that water under contract to water users such as

Water Matters! the City of Albuquerque. During the course of litigation, a new biological opinion was issued, which rendered the litigation “moot.” After numerous hearings, court decisions and appeals to the 10th Circuit Court of Appeals on various issues, a decision was rendered in April 2010 that essentially has vacated all rulings in the case. The issues raised in the case about federal use of water for endangered species are still unresolved. Please go to http://uttoncenter.unm.edu/ silvery_minnow_litigation.html for a thorough summary of the eleven years of litigation in federal court. State v. Mendenhall, 68 NM 467 (1961). Priority of a water right “relates back” to the date that the owner of the right initiated the process of putting water to beneficial use, so long as the owner is reasonably diligent in maintaining progress toward completion. State v. Pecos Valley Artesian Conservancy District, 99 NM 699 (1983). Priority administration of water rights need not await a final adjudication so long as due process rights are protected. Stennis v. City of Santa Fe, 143 NM 320 (2008). A permit from the State Engineer to drill a domestic well does not supersede a municipal ordinance restricting domestic wells. Templeton v. Pecos Valley Artesian Conservancy District, 65 NM 59 (1958). A senior surface water user, whose surface supply is impacted by junior wells, is entitled to drill a supplemental well to recover his full appropriation. The well may access only groundwater that originally fed the surface supply. Tri-State Generation & Transmission Assoc., Inc. v. D’Antonio, No. 27,802, slip op. (N.M. Ct. App. Oct. 28, 2010). The issue

New Mexico Water Law Case Capsules | 3-3

The New Mexico Constitution contains nothing to indicate that a determination of the elements of water rights is consigned exclusively to the judicial branch. Tri-State (2010)

is whether the State Engineer acted within the scope of authority granted by the Legislature in promulgating Active Water Resource Management regulations. The AWRM regulations were intended to address the Legislature’s mandate to develop an expedited process for water rights priority administration. The State Engineer has the authority to adopt rules to administer water right priorities for the purpose of curtailing water rights in the event of a shortage, relying upon adjudication decrees of the courts and licenses issued by the State Engineer. The State Engineer does not have the authority to rely on other evidence, such as subfile orders, offers of judgment, or evidence resulting from a hydrographic survey, because this evidence has not been subject to general review and objection by others. The New Mexico Constitution contains nothing to indicate that a determination of the elements of water rights is consigned exclusively to the judicial branch. Nor do basic principles of separation of powers prohibit administrative agencies from engaging in the processes of making factual and legal determination respecting the rights of individuals. The legislature has the authority to grant the State Engineer the authority to promulgate regulations such as those at issue, but it must do so in direct, clear and certain terms. [On November 9, 2011 the New Mexico Supreme Court heard arguments in the appeal of this case. A decision had not been issued at the time of publication.]

New Mexico Water Law Case Capsules

3-4 | Water Matters! State of New Mexico, ex rel. State Engineer v. The United States of America, et al. (San Juan River Adjudication.) Case No: AB07-1. Nov. 30, 2011. Individual water owners using a community ditch are necessary parties in a lawsuit adjudicating the rights of the individual owners; the community ditch cannot represent the diverse interests of the individual water owners. In contrast, when the community ditch pursues an interest it has in common with its individual users, it does have legal standing to act on behalf of its members. This does not mean that the members automatically become parties to the lawsuit, nor does it mean that a law firm representing the ditch necessarily represents the members. That authority may be derived from the governing documents of the ditch, if they so provide. Carangelo v. D’Antonio, No. 26,757, Slip op. (N.M. Ct. App. Nov. 28, 2011). Consumption of water is not required to establish a beneficial use of water. The City of Albuquerque (now the Albuquerque Bernalillo County Water Utility Authority) was granted a permit to divert surface water from the Rio Grande and then return it to the river without consuming any of it. The City did not assert ownership of the diverted water, based on the fact that the water diverted was not consumed and therefore not put to beneficial use. The New Mexico Supreme Court ruled that the State Engineer must

On August 8, 2011 the New Mexico Attorney General filed a lawsuit against the United States Bureau of Reclamation regarding a purported change in accounting of the water to be delivered to Texas from the Rio Grande.

reconsider the application and the resulting permit because the non-consumptive use of water can be considered a beneficial use, requiring the appropriation of the Rio Grande surface water to be diverted for non-consumptive beneficial use.

Ongoing Litigation State of New Mexico v. United States, et al., U.S. Dist. Ct. 11-cv-691. On August 8, 2011 the New Mexico Attorney General filed a lawsuit against the United States Bureau of Reclamation regarding a purported change in accounting of the water to be delivered to Texas from the Rio Grande. In Late July 2011, the BOR allegedly reclassified 65,000 acre feet of New Mexico water on its accounting sheets so that the water could be made available for release to Texas. In 2008 a new Operating Agreement was implemented between Elephant Butte Irrigation District (EBID) and El Paso County Water Improvement District No. 1 (EPCWID). The new Agreement changed the method of allocation of Rio Grande Project waters. The complaint filed by the Attorney General’s Office alleges the new operational protocol results in a dramatic shift in the net allocation of project water supplies in the ratio of 38% to EBID and 62% to EPCWID, a reversal of the historic allocation percentages of 57% to EBID and 43% to EPCWID.

Water Matters!

State Engineer Administrative Decision A water development company submitted an application to transfer 6,600 acre-feet of groundwater from the Fort Sumner reach of the Pecos River to the Santa Fe River via a pipeline. The New Mexico Interstate Stream Commission, the State Land Commissioner, the Bureau of Reclamation, and cities along the Pecos River downstream of Fort Sumner protested the application. They argued that the drawdown of water would impact individual wells, have an adverse impact on agriculture in the area, and negatively impact the habitat of the federally protected Bluntnose shiner. The State Engineer denied the application based on a lack of specificity, which made it impractical to evaluate impairment of other water rights or whether granting it would be contrary to conservation or detrimental to the public welfare (the application failed to name an actual end user of the water or a place of beneficial use. Attorneys for the water development

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They argued that the drawdown of water would impact individual wells, have an adverse impact on agriculture in the area, and negatively impact the habitat of the federally protected Bluntnose shiner.

company have filed a notice of appeal in the New Mexico 10th Judicial District. A similar application has been filed to transfer 54,000 acre-feet of groundwater from the Plains of San Augustin to the Middle Rio Grande. This application has been protested by more parties than any other application in the past, including the U.S. Department of Agriculture, the Bureau of Reclamation, the Bureau of Land Management, the Navajo Nation, six pueblos, and local towns and villages. A State Engineer administrative hearing on the application will begin February 7, 2012 in Socorro. Updated by Gregory Chakalian and Adrian Oglesby (2011).