Earthworks' Oil & Gas Accountability Project v. N.M. Oil Conservation Comm'n

• Decision Date: 24 February 2016
• Docket Number: No. S-1-SC-35824.,No. 33,451.,33,451.,S-1-SC-35824.
• Citation: 374 P.3d 710
• Court: Court of Appeals of New Mexico
• Parties: EARTHWORKS' OIL & GAS ACCOUNTABILITY PROJECT and New Mexico Wilderness Alliance, Petitioners, v. NEW MEXICO OIL CONSERVATION COMMISSION, Respondent, and New Mexico Oil & Gas Association, Intervenor.

374 P.3d 710

EARTHWORKS' OIL & GAS ACCOUNTABILITY PROJECT and New Mexico Wilderness Alliance, Petitioners,

v. NEW MEXICO OIL CONSERVATION COMMISSION, Respondent,andNew Mexico Oil & Gas Association, Intervenor.

No. 33,451.

No. S-1-SC-35824.

Court of Appeals of New Mexico.

Feb. 24, 2016.

Certiorari Denied, April 15, 2016

New Mexico Environmental Law Center, Eric Jantz, R. Bruce Frederick, Douglas Meiklejohn, Jonathan Block, Santa Fe, NM, New Mexico Wilderness Alliance, Judith Calman, Albuquerque, NM, for Petitioners.

Energy, Minerals & Natural Resources Department, William R. Brancard, Special Assistant Attorney General, Keith W. Herrmann, Special Assistant Attorney General, Santa Fe, NM, for Respondent.

Holland & Hart LLP, Michael H. Feldewert, Santa Fe, NM, for Intervenor.

OPINION

KENNEDY, Judge.

{1} Petitioners appeal the New Mexico Oil Conservation Commission's (the Commission) order promulgating a 2013 version of 19.15.17 NMAC (6/28/2013) (the 2013 Rule), which is commonly referred to as the “Pit Rule.” Petitioners make three arguments. First, they contend that the Commission had no jurisdiction to create the 2013 Rule because a previous version of the rule was the subject of a pending appeal in the courts at the time the 2013 Rule was adopted. Second, Petitioners argue that the Commission's decision to issue the 2013 Rule is arbitrary and capricious because it was contrary to the evidence received and because the Commission did not adequately set forth its reasons for changing the previous version of the Pit Rule. Third, Petitioners assert that the notice the Commission gave of its proposed rulemaking was inadequate. Petitioners request that we either vacate the Commission's order promulgating the 2013 Rule or reverse and remand the 2013 Rule to the Commission for further proceedings.

{2} We conclude that the pending appeals did not deprive the Commission of jurisdiction to promulgate the 2013 Rule. We further conclude that the Commission adequately explained its reasoning for the rule's adoption in the final rule and satisfied the statutory requirements for issuing notice. We affirm.

I. BACKGROUND

{3} In 2008, the Commission approved a version of the Pit Rule (the 2008 Rule). In 2009, the Commission amended a portion of the 2008 Rule (the 2009 Amendment). Both the 2008 Rule and its 2009 Amendment were appealed to the First Judicial District Court by entities affiliated with the oil and gas industry, and the district court certified the appeals to this Court; we stayed our proceedings on these cases. In January 2012, the Commission, acting on petitions from the New Mexico Oil and Gas Association and Independent Petroleum Association of New Mexico, announced its intention to hold hearings on the petitions. Parties who opposed the proposed rule-making secured a writ of prohibition from the First Judicial District Court in February 2012, ordering the Commission to cease proceedings to amend the Pit Rule. That writ was quashed the following month. The Commission issued its notice that it would have a public hearing on the applications, and took evidence, heard argument, deliberated, adopted the rule, and filed an order promulgating the 2013 Rule. Earthworks' Oil and Gas Accountability Project submitted a request for rehearing in an effort to have the Commission reconsider the 2013 Rule. The Commission did not act upon that request within ten days; it was deemed denied pursuant to the New Mexico Oil and Gas Act (Oil and Gas Act), NMSA 1978, Sections 70–2–1 to –38 (1935, as amended through 2015). See § 70–2–25(A). Conceding that the Oil and Gas Act, Section 70–2–25 and NMSA 1978, Section 39–3–1.1 (1999), do not provide for an appeal of Commission rulemaking, Petitioners sought a writ of certiorari under Rule 1–075 NMRA in the district court, which the district court granted. The district court subsequently certified the case to this Court. See Rule 1–074(S) NMRA.

II. DISCUSSIONA. Commission's Jurisdiction to Amend 2013 Pit Rule

{4} Petitioners assert that the Commission had no authority to amend the Pit Rule because there had not yet been a final order issued in the appeals of the 2008 Rule or the 2009 Amendment and that pending judicial appeals must stay ongoing rulemaking on the particular issue concerned. However, Petitioners direct us to no authority compelling any new rulemaking on a particular subject to be held in abeyance while the appeal of a previous rule is pending. “We assume where arguments in briefs are unsupported by cited authority, counsel after diligent search, was unable to find any supporting authority.” In re Adoption of Doe, 1984–NMSC–024, ¶ 2, 100 N.M. 764, 676 P.2d 1329. In support of their argument, Petitioners urge us to instead apply the rule that an appeal divests a lower adjudicatory tribunal of jurisdiction where it is acting in an adjudicatory capacity. Petitioners also have not provided any authority to relate a stay on appeal of agency adjudications to agency rulemaking activity. For reasons that follow, we are unpersuaded by Petitioners' argument.

1. Distinctions Between Rulemaking and Adjudication

{5} Throughout their argument that the Commission had no jurisdiction to issue the 2013 Rule, Petitioners repeatedly conflate an administrative agency's adjudicatory authority with an agency's rulemaking authority. These two types of administrative authority are quite distinct in their application and function. While rulemaking creates generally applied standards to which an agency and individuals are held, adjudication is the resolution of particular disputes involving specific parties and specific problems, by applying such rules. See Uhden v. N.M. Oil Conservation Comm'n, 1991–NMSC–089, ¶ 7, 112 N.M. 528, 817 P.2d 721 (holding that acting on petition to create an exception to the Oil Conservation Rule with statewide application that will apply to limited situation and specific parties is “adjudicative rather than rulemaking”); see Rauscher, Pierce, Refsnes v. Taxation and Revenue Dep't, 2002–NMSC–013, ¶ 42, 132 N.M. 226, 46 P.3d 687 (quoting Yesler Terrace Cmty. Council v. Cisneros, 37 F.3d 442, 448 (9th Cir.1994) );¹ Rayellen Res., Inc. v. N.M. Cultural Props. Review Comm'n, 2014–NMSC–006, ¶ 27, 319 P.3d 639 (citing In re Application of Timberon Water Co., 1992–NMSC–047, ¶ 23, 114 N.M. 154, 836 P.2d 73 (categorizing administrative action as regulatory when it furthers the public interest under the state's police powers and adjudicatory when it is based on adjudicating a private right rather than implementing public policy)).

{6} It is well established that the Legislature can properly delegate rulemaking power to administrative agencies through an enabling statute. New Energy Econ., Inc. v. Shoobridge, 2010–NMSC–049, ¶ 14, 149 N.M. 42, 243 P.3d 746 (per curiam). Our Legislature delegated concurrent rulemaking authority under the Oil and Gas Act to the Oil Conservation Division and the Commission. See Section 70–2–11(B) ; Section 70–2–12(B). Given this distinction, we hold that the Commission's actions in promulgating the 2013 Rule were regulatory rather than adjudicatory.

2. Judicial Action May Not Preemptively Stop Administrative Rulemaking That is Otherwise Permissible

{7} We note that Petitioners' action to obtain a writ of prohibition against the Commission to prevent the proceedings that resulted in the 2013 Rule currently on appeal was ultimately quashed, and Petitioners did not appeal the final order. Our Supreme Court's opinion in Shoobridge, 2010–NMSC–049, 149 N.M. 42, 243 P.3d 746, presents an instructive view on nearly identical facts. In Shoobridge, parties opposing a rulemaking obtained a preliminary injunction prohibiting the Environmental Improvement Board from conducting the administrative proceedings necessary to adopt a regulation. Id. ¶¶ 2–3. The Environmental Improvement Board petitioned our Supreme Court for a writ of superintending control or prohibition to vacate the injunction. Id. ¶ 4. The Supreme Court granted the writ, ordering the district court to dissolve the injunction and remanding the case to the agency to conduct its rulemaking proceedings. Id. In doing so, our Supreme Court rejected the idea that a court could enjoin the rulemaking process, reasoning that the separation of powers doctrine did not permit such a result:

When the Legislature lawfully delegates authority to a state agency to promulgate rules and regulations, may a court intervene to halt proceedings before the agency adopts such rules or regulations? This question is one of substantial public interest because court intervention in administrative proceedings before the adoption of rules or regulations may thwart the public's right to participate in such proceedings. We hold that a court may not intervene in administrative rule-making proceedings before the adoption of a rule or regulation[.] ... [T]he separation of powers doctrine forbids a court from prematurely interfering with the administrative processes created by the Legislature.

Id. ¶ 1.

{8} Petitioners' contention that the Commission lacked authority to promulgate the 2013 Rule because of pending appeals related to the 2008 Rule and 2009 Amendment is similar to the petitioner's argument in Shoobridge. To forestall rulemaking in this way would permit the courts to halt agency rulemaking proceedings prior to the issuance of a new rule. See id. (“[A] court may not intervene in administrative rule-making proceedings before the adoption of a rule or regulation.”). Administrative agencies routinely promulgate superseding rules on various topics. See, e.g., State ex rel. Stapleton v. Skandera, 2015–NMCA–044, ¶ 3, 346 P.3d 1191 (discussing 6.69.8 NMAC (08/30/2012), which governs teacher evaluations in public schools and superseded 6.69.4 NMAC (09/30/2003, as amended through 06/15/2009)).²

{9} Thus, to the extent that the 2013 Rule changed the 2008 Rule and the 2009 Amendment, the previous rule(s) are repealed by implication. Because the...