Water v. D'antonio

• Decision Date: 02 December 2009
• Docket Number: No. 31,279.,31
• Citation: 226 P.3d 622,2009 NMSC 057,147 N.M. 523
• Parties: LION'S GATE WATER, Plaintiff-Respondent,v.John D'ANTONIO, Jr., State Engineer for the State of New Mexico, Defendant-Petitioner.
• Court: New Mexico Supreme Court

147 N.M. 523

226 P.3d 622

2009 NMSC 057

LION'S GATE WATER, Plaintiff-Respondent,v.John D'ANTONIO, Jr., State Engineer for the State of New Mexico, Defendant-Petitioner.

No. 31,279.

Supreme Court of New Mexico.

Dec. 2, 2009.

DL Sanders, Chief Counsel, Jonathan E. Sperber, Special Assistant Attorney General, Office of the State Engineer, Santa Fe, NM, for Petitioner.

Hubert & Hernandez, LLC, Lee E. Peters, Las Cruces, NM, for Respondent.

OPINION

CHÁVEZ, Chief Justice.

{1} This case comes to us through a long and tortuous route, wending its way from the Office of the State Engineer to this Court over the course of more than six years. The present iteration of judicial review arose when the Sixth Judicial District Court entered an interim order on May 29, 2008, finding that Respondent Lion's Gate Water's notice publication “ substantially complied” with the statutory requirement and ordering a trial de novo on “all matters either presented or which might have been presented to [the State Engineer] as well as new evidence developed since the administrative hearing.” The State Engineer appealed the interim order and the Court of Appeals denied his application for interlocutory appeal. The State Engineer then filed a petition for writ of certiorari to this Court. We granted certiorari on September 9, 2008, to review all issues raised in the petition. Lion's Gate v. D'Antonio, 2008-NMCERT-009, 145 N.M. 258, 196 P.3d 489.

{2} We hold that the district court is limited to a de novo review of the issue before the State Engineer, which was solely whether water is available for appropriation. We also hold that notice publication of an application for a permit to appropriate water in a form prescribed by the State Engineer is necessary only if water is found to be available, either through an initial determination by the State Engineer or following a ruling by the district court on appeal. The State Engineer may decline to order notice publication if he or she determines that water is unavailable because no third-party rights are implicated. Lion's Gate's publication of notice has no legal effect because (1) publication followed the State Engineer's determination that water was unavailable, making notice unnecessary; (2) Lion's Gate was not instructed by the State Engineer to publish notice, as required by statute; and (3) notice was not published in a form prescribed by the State Engineer, as required by statute. Accordingly we reverse and remand for further proceedings consistent with this opinion.

I. BACKGROUND

{3} A detailed recapitulation of the procedural history of this case and of the history of water appropriation from the Gila River is necessary to understand the current posture of this dispute. In February 2003, Lion's Gate submitted an application to the Water Rights Division of the Office of the State Engineer for a permit to appropriate new water from the Gila River in southwestern New Mexico. Applications for permits to appropriate water and appeals to district court are governed by Chapter 72 of the New Mexico statutes. The State Engineer interprets these enabling statutes to require him, if he determines that no unappropriated water is available, to summarily reject applications to appropriate water see NMSA 1978, § 72-5-7 (1985), as not being “in the form required by the rules and regulations established by him.” NMSA 1978, § 72-5-1 (1907, as amended through 1979). It is at this point that Lion's Gate's application ran afoul of the State Engineer's administrative process.

{4} As early as 1935, when United States v. Gila Valley Irrigation District (D.Ct.Ariz.1935) was entered as the first decree adjudicating Gila River water rights, water in the Gila River has been in scarce supply. By 1960, it was recognized that the Gila was overappropriated as “the supply of water presently available and which seems likely to be available in the future is not sufficient to satisfy the needs and demands of existing projects.” Special Master Report, Simon H. Rifkind, 325, 337, Dec. 5, 1960 in Ariz. v. Cal., 376 U.S. 340, 84 S.Ct. 755, 11 L.Ed.2d 757 (1964). The Gila Decree, also known as Globe Equity No. 59, served as the foundation for the 1964 apportionment in Arizona v. California of New Mexico's share of the Colorado River and its tributaries. 376 U.S. at 348-49, 84 S.Ct. 755; Rifkind at 327-28. In Arizona v. California, the United States Supreme Court, pursuant to the Gila Decree, apportioned New Mexico's share of the Colorado River, of which the Gila is a tributary. The Arizona v. California decree enjoins “[t]he State of New Mexico, its officers, attorneys, agents and employees” from “diverting or permitting the diversion of water from the Gila River,” except as provided by the decree Ariz. v. Cal., 376 U.S. at 347-48, 84 S.Ct. 755. The decree limits Gila diversions in New Mexico to 136,620 acre feet of water during any period of ten consecutive years and to 15,895 acre feet during any single year. Id. at 348, 84 S.Ct. 755. It further prohibits diversion or permitting the diversion of water from the Gila “except for use on lands determined to have the right to the use of such water” by Globe Equity No. 59. Id. at 348-49, 84 S.Ct. 755.

{5} In New Mexico ex rel. Reynolds v. Anderson, Cause No. 16290 (D. Grant County, N.M.1967) (final judgment and decree), the Sixth Judicial District Court subsequently adjudicated the use of New Mexico's apportioned share of the Gila River system water and, pursuant to the Arizona v. California decree, enjoined the State Engineer “from permitting new uses of water within the Gila River Stream System which would cause the total of uses therefrom to exceed the limitations decreed by the United States Supreme Court in Arizona v. California[.]” Id. at 5 (emphasis added). Under the Arizona v. California decree, the total number of irrigated acres allowed in the Gila River system in New Mexico is 7,057, but according to State Engineer records, the number of adjudicated and permitted irrigated acres in New Mexico is 7,177, meaning the irrigated acreage in New Mexico exceeds the Arizona v. California decree by approximately 120 acres. Similarly, the Arizona v. California decree also limits consumptive use of water in the New Mexico Gila River system to 136,620 acre feet during any period of ten consecutive years, while State Engineer records indicate that the actual adjudicated and permitted consumptive use is 149,610 acre feet during any period of ten consecutive years, resulting in an actual consumptive use in New Mexico of 12,990 acre feet more than the decree permits. While it appears that some unappropriated water was available for water users in New Mexico following the Arizona v. California and Anderson decrees, all of that water was already spoken for by applications for permits to appropriate that had been pending before the resolution of those lawsuits.

{6} After apportionment of the Gila River had been established through the Arizona v. California decree, in 1968 Congress created an opportunity for the use of additional Gila River water in New Mexico in excess of the amounts decreed, but only by contracting for that water with the Secretary of the Interior.¹ Colorado River Basin Project Act § 304(f), 43 U.S.C. § 1524(f)(1) (2004) (providing that “the Secretary [of the Interior] shall offer to contract with water users in the State of New Mexico ... for water from the Gila River” for the consumptive use of up to an annual average of 18,000 acre feet for any given ten-year period).²,³

{7} Accordingly, the Water Rights Division of the State Engineer's Office determined that no unappropriated water was available for Lion's Gate, and summarily rejected its initial application and each of its subsequent seven amended applications pursuant to Section 72-5-7. In this regard, none of Lion's Gate's applications fared any better than dozens of previous permit applications dating back to 1969 seeking to appropriate water from the Gila.

{8} Despite the rejection of its application and amended applications, Lion's Gate initiated notice publication of its application for a permit to appropriate water on March 14, 2003. The State Engineer apparently contacted the newspaper carrying the notice to request that it terminate publication, presumably for the reason that Lion's Gate's notice did not strictly comply with NMSA 1978, Section 72-5-4 (2001), which requires the State Engineer to prescribe the notice's form to authorize its publication. After threatening litigation over the termination of its notice publication, Lion's Gate demanded an administrative hearing to review the State Engineer's summary rejection of its amended application, acknowledging that pursuant to NMSA 1978, Section 72-2-16 (1973), a hearing is required before the State Engineer's decision can be appealed to district court.

{9} Notwithstanding this acknowledgment, Lion's Gate filed an appeal of the rejection of its initial application and its first and second amended applications to the Sixth Judicial District Court on the following day. In the following weeks, Lion's Gate filed with the district court three additional appeals of the State Engineer's summary rejections of its third, fourth, fifth, sixth, and seventh amended applications. Lion's Gate argued that further administrative review by way of a hearing under Section 72-2-16 was futile, given the State Engineer's firm position on the matter. Lion's Gate also argued that the right to a de novo hearing under New Mexico Constitution Article XVI, Section 5 ⁴ and NMSA 1978, Section 72-7-1(E) (1971), ⁵ further obviated the need for additional administrative action because the district court, through the provision for de novo review, has jurisdiction over the matter. In doing so, Lion's Gate apparently changed its position within twenty-four hours, contradicting its letter to the State Engineer demanding a hearing so its application could be appealed to the...