1998 -NMSC- 6, City of Las Cruces v. El Paso Elec. Co.

• Decision Date: 11 February 1998
• Docket Number: No. 23846,23846
• Citation: 954 P.2d 72,1998 NMSC 6,124 N.M. 640
• Parties: , Util. L. Rep. P 14,195, 1998 -NMSC- 6 CITY OF LAS CRUCES, a Municipal Corporation, Plaintiff, v. EL PASO ELECTRIC COMPANY, a Texas Corporation, Defendant, and Dona Ana County Board of Commissioners, Intervenor-Defendant.
• Court: New Mexico Supreme Court

Page 72

954 P.2d 72

124 N.M. 640, Util. L. Rep. P 14,195, 1998

-NMSC- 6

CITY OF LAS CRUCES, a Municipal Corporation, Plaintiff, v. EL PASO ELECTRIC COMPANY, a Texas Corporation, Defendant and Dona Ana County Board of Commissioners, Intervenor-Defendant.

No. 23846.

Supreme Court of New Mexico.

Feb. 11, 1998.

[124 N.M. 642] Nann M. Houliston, Albuquerque, Martin, Lutz & Brower, P.C., William L. Lutz, Hugh T. Brower, Las Cruces, for Plaintiff.

Law Office of T.A. Sandenaw, Jr., Thomas A. Sandenaw, Jr., Raul A. Carrillo, Jr., Las Cruces, Sidley & Austin, David F. Graham, D. Cameron Findlay, Mark B. Blocker, James W. Ducayet, Chicago, IL, Cohen & Cohen, Jane C. Cohen, David S. Cohen, Jill Z. Cooper, Santa Fe, for Defendant.

Kevin D. Elkins, Thomas R. Figart, Las Cruces, for Intervenor-Defendant.

Patrick Ortiz, Albuquerque, for Amicus Public Service Company of New Mexico.

OPINION

MINZNER, Justice.

¶1 The United States District Court for the District of New Mexico, pursuant to Rule 12-607 NMRA 1997, has certified to us this question: "Under New Mexico law, does the City of Las Cruces possess the authority to condemn a portion of El Paso Electric Company's property for use as a municipal electric utility, when that property is already devoted to a public use?" Following oral argument before this Court but prior to any disposition, the New Mexico Legislature, during the 1997 legislative session, amended NMSA 1978, § 3-24-1 (as amended 1997), to provide express authority to certain municipalities to condemn privately-owned electric utilities for use as a municipal utility. Following the enactment, we requested supplemental briefing on the issue whether the new amendments made the certified question moot. We now quash our previous order accepting certification, and decline to accept certification on the ground that, as a result of the 1997 amendment to Section 3-24-1, the issue the federal court certified is moot.

I.

¶2 The City of Las Cruces (the City) seeks to condemn property belonging to El Paso Electric Company (EPEC). EPEC has provided the City with electric service for over fifty years. EPEC also provides service to other counties, creating an integrated utility system. The City intends to take over EPEC's operations within the City's limits; however, EPEC would continue to serve the other counties which it currently serves.

¶3 In 1994, the citizens of Las Cruces approved a referendum which would allow the City to acquire an electric utility system. However, early in 1992, EPEC had instituted bankruptcy proceedings. In 1994, following the referendum, the bankruptcy court lifted the existing stay, and the City proceeded against EPEC by filing an action arguing that the City had the right to exercise eminent domain and condemn EPEC's utility within the City. EPEC removed the action to federal court. EPEC moved for summary judgment, for consolidation of both actions then pending in federal court, and for certification of an issue of first impression to this Court for resolution. The City moved for abstention or remand to the state district court in which the City initially filled an action seeking declaratory judgment. In July of 1995, the parties consented to the jurisdiction of United States Magistrate Judge Leslie C. Smith for all proceedings, including final disposition of the case filed by EPEC and also the case filed by the City. See D.N.M.LR-Civ. 73.

¶4 Judge Smith ruled on several aspects of the case. See generally City of Las Cruces v. El Paso Elec. Co., 904 F.Supp. 1238 (D.N.M.1995) (denying EPEC's motion to consolidate, granting in part EPEC's motion to dismiss, and denying both EPEC's motion for summary judgment and the City's motion for abstention.) Subsequently, following an evidentiary hearing, he entered an order granting EPEC's motion requesting certification to this Court.

¶5 We accepted certification from the federal court by order in August of 1996. In early 1997, after this Court heard oral argument on the certified question, the New Mexico Legislature amended several sections of the relevant statute. 1997 N.M. Laws, ch. 228. We ordered supplemental briefing on the question of whether or not the Legislature's actions made the certified question moot. Both parties filed briefs, and the Public Service Company of New Mexico filed an amicus curiae brief, arguing that the Legislature's actions do not moot the issue raised here. We answer here only the issue of whether or not the Legislature's actions made the certified question moot.

II.

¶6 In order to explain why the issue certified is moot, we first describe the arguments made to Judge Smith for the respective forms of relief requested by EPEC and the City, and the decisions he made as the trial judge. EPEC argued that it was entitled to summary judgment on the City's action for declaratory judgment. EPEC also argued that the City lacked any power to condemn that portion of the utility's electric distribution system within the City's limits; the argument relied on that principle of eminent domain law known as the prior public use doctrine. Under the prior public use doctrine, a municipality has no power to condemn property already dedicated to a public use, absent power conferred by the Legislature expressly or by necessary implication. See City of Albuquerque v. Garcia, 17 N.M. 445, 130 P. 118 (1913). However, the doctrine only applies if the property would be destroyed by the use to which the municipality proposed to condemn the property. See City of Raton v. Raton Ice Co., 26 N.M. 300, 191 P. 516 (1920).

¶7 The City made two responses. First, the City argued that three New Mexico statutes either individually or collectively authorized the condemnation it proposed. The three statutes were NMSA 1978, § 3-24-1(A) (1993, prior to 1997 amendment), NMSA 1978, § 3-24-5 (1981), and NMSA 1978, § 42A-3-1(A)(7) (1981, prior to 1997 amendment). Judge Smith noted that the New Mexico Legislature's grants of condemnation authority to municipalities historically have been written in "plain and unequivocal language." City of Las Cruces, 904 F.Supp. at 1250. He then concluded that the statutes on which the City relied, whether read individually or construed together, failed to provide the authority necessary for the City to condemn EPEC's utility system. Id. at 1251.

¶8 Second, the City relied on the state constitutional provisions for home rule, see N.M. Const. art. X, § 6, arguing that home rule authority was sufficient to allow municipal condemnation of public use property. Judge Smith concluded that the New Mexico State Constitution granted general powers and did not contain the necessary express or implied authority required by the prior public use doctrine. Judge Smith reasoned in his written opinion that "if, as the City contends, home rule authority is sufficient to allow municipal condemnation of public use property, then specific condemnation statutes would not be necessary." City of Las Cruces, 904 F.Supp. at 1251. ¹

¶9 Having rejected the City's responses that existing New Mexico statutes and the Constitution provided the City express or implied authority to condemn EPEC's property, Judge Smith considered the possibility that more general authority would suffice, on the basis that the use the City contemplated was actually not a destruction of the prior public use. Judge Smith noted that "joint or co-use of an electric utility system does not equal destruction, obliteration or material impairment of an existing public use," and that this "exception to the public use doctrine has been called 'compatible use' ". See City of Las Cruces, 904 F.Supp. at 1252. He suggested that there must be a factual determination whether the proposed use destroyed, obliterated, or materially impaired the existing use before a ruling could be made on the applicability of either the general prior public use doctrine or the exception for compatible use. Id. at 1256. From June 27 to July 3, 1996, he conducted a bench trial in order to make a factual determination on "destruction, obliteration or material impairment of the existing public use." Following that hearing, he issued a written order, which included the request for certification. The request contains a written decision concluding that "the City failed to meet its burden of showing that there would be no material impairment," withholding judgment on the "ultimate question of whether the City had the authority to condemn EPEC's property," incorporating stipulated facts, and setting out his own findings.

III.

¶10 We next construe the certified question. For two reasons, we do not construe the certified question as requiring a determination whether or not the City had express or implied authority to condemn EPEC's property under the New Mexico statutes as they read at the time he ruled or under the New Mexico Constitution.

¶11 First, we do not understand Judge Smith's order following the evidentiary hearing to request that determination. Judge Smith deliberately determined, before granting EPEC's motion to certify, that the City had failed to prove there would be no material impairment. Following an evidentiary hearing to determine whether there was a basis for avoiding application of the prior public use doctrine, he concluded that the City had the burden of proof on the issue, that the issue was whether the City's "proposed condemnation would not materially impair the public use of EPEC's property sought to be condemned, [and] that the City failed to meet its burden of showing there would be no material impairment." He characterized the City's plan as "conclusory, amorphous, ethereal and subject to future modifications." Further, having determined that the City's evidence failed to show no material impairment, Judge Smith did not proceed to determine, following the evidentiary hearing, either that the prior public use doctrine applied or that the compatible use exception did not. Rather, he...