State ex rel. State Eng'r v. United States, A-1-CA-33535

• Court: Court of Appeals of New Mexico
• Citation: 425 P.3d 723
• Docket Number: NO. A-1-CA-33535,A-1-CA-33535
• Parties: STATE of New Mexico EX REL. STATE ENGINEER, Plaintiff-Appellee, v. UNITED STATES of America, Defendant-Appellee, v. Navajo Nation, Defendant/Intervenor-Appellee, v. San Juan Agricultural Water Users Association, Hammond Conservancy District, Bloomfield Irrigation District, and Various Ditches and Various Members Thereof, Defendants-Appellants.
• Decision Date: 03 April 2018

425 P.3d 723

STATE of New Mexico EX REL. STATE ENGINEER, Plaintiff-Appellee,
v.
UNITED STATES of America, Defendant-Appellee,
v.
Navajo Nation, Defendant/Intervenor-Appellee,
v.
San Juan Agricultural Water Users Association, Hammond Conservancy District, Bloomfield Irrigation District, and Various Ditches and Various Members Thereof, Defendants-Appellants.

NO. A-1-CA-33535

Court of Appeals of New Mexico.

Filing Date: April 3, 2018
Certiorari Granted, August 13, 2018, No. S-1-SC-37068
Certiorari Denied, August 13, 2018, No. S-1-SC-37100

Arianne Singer, Special Assistant Attorney General, Santa Fe, NM, Utton & Kery, P.A., John W. Utton, Special Assistant Attorney General, Santa Fe, NM, for Appellee State of New Mexico, New Mexico Office of the State Engineer

United States Department of Justice Appellate Section, Environment & Natural Resources Division, John C. Cruden, Assistant Attorney General, Andrew J. Guarino, Mark R. Haag, Washington, D.C., for Appellee United States of America

Navajo Nation Department of Justice, Stanley M. Pollack, M. Kathryn Hoover, Window Rock, AZ, for Intervenor-Appellee Navajo Nation

Victor R. Marshall & Associates, P.C., Victor R. Marshall, Albuquerque, NM, for Appellants San Juan Agricultural Water Users, Hammond Conservancy District, Bloomfield Irrigation District, and Various Ditches and Various Members Thereof

Stein & Brockmann, P.A., James C. Brockmann, Jay F. Stein, Santa Fe, NM, for Bernalillo County Water Utility Authority, City of Española, and City of Gallup

Keleher & McLeod, P.A., Cassandra R. Malone, Richard B. Cole, Albuquerque, NM, for Cities of Aztec and Bloomfield

Tully Law Firm, P.A., Richard T.C. Tully, Farmington, NM, for B Square Ranch; Bolack Minerals Company, a/k/a Bolack Minerals Company Limited Partnership; Estate of Tom Bolack; a/k/a Thomas Felix Bolack, Deceased; Bolack Minerals Foundation; Tommy Bolack Revocable Trust; Estate of Juanita Velasquez, Deceased; David A. Pierce ; Maxine M. Pierce; David M. Drake; and Shawna Drake

Modrall Sperling Roehl Harris & Sisk, P.A., Maria O’Brien, Christina C. Sheehan, Zoë E. Lees, Albuquerque, NM, for BHP Billiton New Mexico Coal Inc. and Enterprise Field Services, LLC

Dumas Law Office, LLC, Jenny Dumas, Albuquerque, NM, for Jicarilla Apache Nation

Taylor & McCaleb, P.A., Elizabeth Newlin Taylor, Jolene L. McCaleb, Corrales, NM, for San Juan Water Commission

Law Office of Priscilla A. Shannon, Priscilla A. Shannon, Farmington, NM, for McCarty Trust et al., Stephen Albert McCarty, Trustee; and Estate of Mary McCarty, a/k/a Mary Louise McCarty, Deceased

Gary L. Horner, Farmington, NM, Pro Se

Public Service Company of New Mexico, Mikal M. Altomare, Corporate Counsel, Albuquerque, NM, for Tucson Electric Power Company and Public Service Company of New Mexico

Ute Mountain Ute Tribe, Office of General Counsel, Leland Begay, Associate General Counsel, Peter Ortego, Lee Bergen, Towaoc, CO, Samuel L. Winder, Albuquerque, NM, for Ute Mountain Ute Tribe

C. Brad Lane Cates, Fairacres, NM, for Amici Paul Bandy, Steve Neville, and Carl Trujillo

BLACK, Judge.

Factual and Procedural Background

425 P.3d 727

{1} In 1849, after years of intermittent warfare, the United States entered into a peace treaty with the Navajo Tribe (Navajo Nation). See Treaty With the Navaho , September 9, 1849, 9 Stat. 974 (Treaty of 1849). That treaty subjected the Navajo Nation and its people to the sovereignty and rule of the United States and recognized the existence and legitimacy of a territory to be dedicated to the Navajo Nation. At the time, the federal government aspired to change the existing Navajo pastoral culture into one of more traditional Eastern-style farming and moved the Navajo Nation onto a reservation at Bosque Redondo, in what eventually became Eastern New Mexico. Following the Civil War, the federal government realized its agricultural goals for the Navajo Nation would involve a long and expensive process for which Bosque Redondo was ill-suited. A second treaty with the Navajo Nation in 1868 returned them to a portion of their ancestral territory as their "permanent home." See Treaty With the Navaho art. 13, June 1, 1868, 15 Stat. 667, 671 (Treaty of 1868).

{2} The Colorado River drains the Colorado Plateau through the Grand Canyon. The San Juan River is the tributary of the Colorado River upon which the Four Corners region¹ relies for surface water and is the largest river in New Mexico. The aboriginal lands of the Navajo Nation originally included the entire San Juan Basin. Navajo Tribe of Indians v. United States of America , 23 Ind. Cl. Comm. 244, 251 (1970). The San Juan still runs through a considerable portion of the Navajo Nation and is a water source much coveted in this arid portion of the country.

{3} In light of the Navajo Nation’s potential claim for the majority of water in the San

425 P.3d 728

Juan River Basin, the State of New Mexico initiated a general stream adjudication to determine the water rights of the major claimants. The United States asserted claims as trustee for the Navajo Nation, and the Navajo Nation intervened on its own behalf. Following years of litigation, the State entered into settlement negotiations with the Navajo Nation and the United States. The State proposed a blueprint for a settlement and held public meetings in Farmington and Bloomfield seeking input from the non-Indian water users. In response to substantial public input, the State revised its settlement proposals.

{4} In 2005, following more than a decade of negotiation, the Navajo Nation, the United States, and the State of New Mexico (collectively, Settling Parties) reached an agreement (the Settlement Agreement) settling the Navajo Nation’s claims to water in the San Juan River Basin (the Basin). Federal legislation to approve and implement the Settlement Agreement was enacted by Congress in 2009 under the Omnibus Public Land Management Act of 2009, Northwestern New Mexico Rural Water Projects Act, Pub. L. No. 111–11, § 10301, 123 Stat. 991 (2009) (Settlement Act), and signed by the President. The New Mexico Legislature then appropriated $50 million to pay New Mexico’s cost of the Settlement Agreement and authorized the New Mexico State Engineer to bring a lawsuit seeking judicial approval regarding the State’s share of the water, pursuant to NMSA 1978, Section 72–1–12 (2005). See State of New Mexico, Office of the State Engineer, 2017 Indian Water Rights Settlement Fund Report, 3–4 (2017), available at https://www.nmlegis.gov/handouts/IAC% 20112717% 20Item% 206% 20Office% 20of% 20the% 20State% 20Engineer% 202017% 20Indian% 20Water% 20Rights% 20Settlement% 20Fund% 20Report.pdf; see also United States Department of the Interior Bureau of Reclamation, Navajo-Gallup Water Supply Project: Cost Share Agreement Between the United States and the State of New Mexico, 11 (2011), available at http://www.ose.state.nm.us/Legal/settlements/NNWRS/Navajo%1fSettlement/NGWSP-OriginalCost%1fShare%1fAgreement.pdf. In the subsequent suit the settling parties asked the San Juan County District Court to approve the water rights previously allocated in congressional legislation for the Navajo Indian Irrigation Project (NIIP), Fruitland-Cambridge Irrigation Project, Hogback-Cudei Irrigation Project, Navajo Gallup Water Supply Project (NGWSP), Animas-La Plata Project (ALP), San Juan River municipal and industrial uses, reserved groundwater, and rights based on stock, irrigation, and recreational uses as of January 1, 2011. Others with an interest in the Settlement Agreement were invited into this inter se proceeding through widely distributed radio announcements, newspaper notices, and over 19,000 first-class letters to those water rights holders who had title of record.

{5} At the initiation of the proceedings, the district court imposed an unusually stringent evidentiary burden on the Settling Parties to prove the Settlement Agreement was fair, adequate, reasonable, and in the public interest.² After giving all other water rights claimants in the Basin notice and opportunity to participate and to conduct discovery and file dispositive motions in accordance with Rule 1–071.2 NMRA, the district court entered its order granting the settlement motion for entry of partial final decrees describing the water rights of the Navajo Nation. The court then entered the partial final judgment and decree of the water rights of the Navajo Nation and the supplemental partial final judgment and decree of the water rights of the Navajo Nation (Proposed Decrees). The non-settling parties objected to several terms of the Settlement Agreement and to the inter se procedures adopted by the district court. After full briefing and argument, the district court rejected the objections and issued its order approving the

425 P.3d 729

Settlement Agreement and Proposed Decrees (the Settlement Order).³ In the Settlement Order, the district court concluded that the Settlement Agreement was fair, adequate, reasonable, and consistent with the public interest as well as all applicable laws.

{6} Appellants herein, the San Juan Acequias, are non-settling parties to the underlying proceedings that preceded the Settlement Agreement. Despite having...