Kaiser Steel Corp. v. W. S. Ranch Co.

• Decision Date: 16 March 1970
• Docket Number: No. 8842,8842
• Citation: 81 N.M. 414,1970 NMSC 43,467 P.2d 986
• Parties: , 1 ERC 1188 KAISER STEEL CORPORATION, a Corporation, Plaintiff-Appellee, v. W. S. RANCH COMPANY, a Corporation, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 986

467 P.2d 986

81 N.M. 414, 1 ERC 1188

KAISER STEEL CORPORATION, a Corporation, Plaintiff-Appellee, v. W. S. RANCH COMPANY, a Corporation, Defendant-Appellant.

No. 8842.

Supreme Court of New Mexico.

March 16, 1970.

Rehearing Denied April 29, 1970.

[81 NM 414] Montgomery, Federici, Andrews, Hannahs & Morris, Seth D. Montgomery, Santa Fe, Robertson & Robertson, Ranton, for appellant.

Modrall, Seymour, Sperling, Roehl & Harris, Albuquerque, Wright & Kastler, Raton, for appellee

OPINION

MOISE, Chief Justice.

In this case, involving a simple but interesting fact situation we are called upon to answer two legal problems of first impression in this jurisdiction. These are: (1) Is § 75--1--3, N.M.S.A.1953, constitutional as applied to the parties and facts in this case? (2) Is inverse condemnation the exclusive remedy available to defendant-appellant, hereinafter referred to as 'Ranch'?

Plaintiff-appellee, hereinafter referred to as 'Kaiser,' owns a tract of land located some distance from the Vermejo River in Colfax County, New Mexico, which tract is completely surrounded by lands owned by Ranch. Kaiser also owns certain water rights in the river, which it is entitled to use for industrial purposes. See W. S. Ranch Company v. Kaiser Steel Corporation, 79 N.M. 65, 439 P.2d 714 (1968), where certain of the rights of the parties to the water were litigated.

In order for Kaiser to use the water in a coal mine being developed by it, the water had to be made available on its land. This was accomplished in 1966 by the simple expedient of Kaiser sending its employees onto the lands of Ranch, drilling some holes or wells in the stream bed, and laying a pipeline from the river source across the lands of Ranch to the coal property of Kaiser, all without seeking permission of Ranch, or undertaking to condemn under § 75--1--3, supra. This action by Kaiser was followed promptly by the filing of an action in the United States District Court, based on diversity of citizenship, wherein an injunction against further trespasses was sought, as well as compensatory and punitive damages for the past trespasses.

After the hearing, the complaint of Ranch was dismissed for failure to state a claim on which relief could be granted. On appeal, the decision of the District Court was reversed. W. S. Ranch Company v. Kaiser Steel Corporation, 388 F.2d 257 (10th Cir. 1967). Thereafter, Kaiser filed a petition for rehearing and a motion for a stay pending determination of the issues presented in a declaratory judgment action instituted by Kaiser that day in the District Court of Colfax County. Both requests were denied. On certiorari the United States Supreme Court, in a per curiam opinion, reversed the holding denying the stay, and remanded the case with directions that a stay be granted pending determination of the issues raised in the declaratory judgment action filed as set out above. Kaiser Steel Corporation v. W. S. Ranch Company, 391 U.S. 593, 88 S.Ct. 1753, 20 L.Ed.2d 835 (1968).

After issue was joined in the declaratory judgment action, Ranch filed a motion for judgment on the pleadings and Kaiser asked for summary judgment. The trial court granted summary judgment to Kaiser, and made the following determinations:

'2. The Court hereby declares that Kaiser Steel Corporation, a corporation, has, under § 75--1--3, New Mexico Statutes Annotated, 1953 Compilation, which statute is constitutional under the Constitution of the State of New Mexico, the power of eminent domain for the purpose of entry upon, and use of, the lands more particularly described in the Amended Complaint on file herein for the purpose of diversion and transportation of its recognized water rights to its York Canyon Mine and processing facilities; and

'3. That the exclusive remedy of the Defendant, W. S. Ranch Company, for the existing entry upon and use of said lands described in the Amended Complaint for the said water distribution purpose is that of 'inverse condemnation' as set forth under Section 22--9--22, New Mexico Statutes Annotated, 1953 Compilation, as Amended.'

We here consider whether the court ruled correctly on these two issues.

We restate the first question which we are called on to determine as follows: Does the New Mexico Constitution permit a taking of private property by a person, firm or corporation, for the conveyance of water for use in an industrial endeavor, specifically coal mining? Refining the issue further, it becomes one of whether the question of public use turns on the ultimate purpose for which the property was taken, or on the nature of the product (water) involved.

Section 75--1--3, supra, reads as follows:

'The United States, the state of New Mexico, or any person, firm, association or corporation, may exercise the right of eminent domain, to take and acquire land right of way for the construction, maintenance and operation of reservoirs, canals, ditches, flumes, aqueducts, pipelines or other works for the storage or conveyance of water for beneficial uses, including the right to enlarge existing structures, and to use the same in common with the former owner; any such right of way for canal, ditch, pipeline, or other means for the conveyance of water shall in all cases be so located as to do the least damage to private or public property consistent with proper use and economical construction. Such land and right of way shall be acquired in the manner provided by law for the condemnation and taking of private property in the state of New Mexico for railroad, telegraph, telephone and other public uses and purposes. The engineers and surveyors of the United States, the state and of any person, firm or corporation shall have the right to enter upon the lands and waters of the state and of private persons and of private and public corporations, for the purpose of making hydrographic surveys and examinations and surveys necessary for selecting and locating suitable sites and routes for reservoirs, canals, pipelines and other waterworks, subject to responsibility for any damage done to such property, in making such surveys.'

The statute clearly provides a right in 'any person, firm, association or corporation' to condemn land right of way for 'construction, maintenance and operation' of 'canals, ditches, * * * pipelines or other works for the storage or conveyance of water for beneficial uses, * * *.'

It is the position of Ranch that if § 75--1--3, supra, is read to permit a taking for any 'beneficial use' it necessarily conflicts with the New Mexico Constitution, Art. II, § 20, which reads in its entirety, 'Private property shall not be taken or damaged for public use without just compensation.'

At the outset, there can be no question under our Constitution that the taking or damaging of private property through eminent domain is permitted for none other than a public use. Threlkeld v. Third Judicial District Court,36 N.M. 350, 15 P.2d 671, 86 A.L.R. 547 (1932). However, with this statement our problem is not answered; as a matter of fact, it only commences. What is meant by the term 'public use'? When we can arrive at a definition, we will be approaching the answer to Ranch's contention that there was no element of public use present in Kaiser's entry upon Ranch's land for the purpose of laying pipelines to convey water to its coal mine. This latter statement has a measure of support in this state in our holding in Gallup American Coal Co. v. Gallup Southwestern Coal Co., 39 N.M. 344, 47 P.2d 414 (1935).

In the Gallup case, this Court considered the meaning of 'public use' as applied to the coal mining industry. We weighed the so-called 'liberal' approach to the definition of 'public use,' as opposed to one described as 'orthodox,' and, for a second time (the first being in Threlkeld, supra), refused to embrace either one fully. While expressing some concern that upon departing 'from the 'orthodox' view, we shall find no easy or logical stopping place,' we stated we were not willing to accept the 'liberal' view so as to embrace coal mining, but did not foreclose a different result in another case. We concluded that coal mining was more 'in a class with the timber or lumbering industry' than with metal mining in Nevada, held to be a public use in Nevada, in Dayton Gold & Silver Mining Co. v. Seawell, 11 Nev. 394 (1876), or with irrigation in Utah, as determined in Nash v. Clark, 27 Utah 158, 75 P. 371, 1 L.R.A.,N.S., 208 (1904), aff'd 198 U.S. 361, 25 S.Ct. 676, 49 L.Ed. 1085, (1905), or in New Mexico, as concluded in City of Albuquerque v. Garcia, 17 N.M. 445, 130 P. 118 (1913).

This brings us to a consideration of the new or different element present in the instant case, and absent from the Gallup case. Here we are dealing with condemnation for a right of way to convey water under § 75--1--3, supra, to be used in coal mining, whereas in the Gallup case, condemnation for a road or highway right of way was at issue under § 88--401, N.M.S.A.1929 (now appearing at § 22--9--30, N.M.S.A.1953). Does the fact that the element of water has been introduced require a result different from that reached in Threlkeld, supra, and in Gallup, supra? Appellant says 'no,' whereas, appellee says 'yes.'

In approaching the problem, we would state at the outset that the fact that two different statutes (§§ 22--9--30, supra, and 75--1--3, supra) are involved is not material to our analysis. Neither do we propose to depart from the position taken in the earlier cases and hold that any 'public benefit' is equivalent to 'public use.' We remain unconvinced that all rights in private property should be left unprotected from the ambitions and plans and hopes of the advocates of unrestricted or unlimited progress. Accordingly, we here consider only if a different result from that reached in Gallup, supra, follows because of the fact that the right of way being sought is for transportation of water, as distinguished from conveyance by...