Bounds v. New Mexico ex rel. D’Antonio, 306 P.3d 457 (N.M. 2013) (holding that (i) the New Mexico Domestic Well Statute (“DWS”), requiring the state engineer to issue domestic well permits without also determining the availability of unappropriated water, did not violate prior appropriation principles as required by the New Mexico Constitution; and (ii) the plaintiffs failed to bring forth how the DWS deprived holders of senior appropriation rights of a property interest).
Horace Bounds (“Bounds”), a farmer and rancher in the Mimbres basin in southwestern New Mexico, brought forth a facial constitutional challenge against New Mexico’s DWS, which requires the state engineer to issue domestic well permits without also determining the availability of unappropriated water. On June 15, 2006, Bounds filed an action for declaratory judgment in the Sixth Judicial District Court (“district court”), arguing three counts in his complaint. The first count asked the district court to rule the DWS unconstitutional as it requires the state engineer to issue domestic well permits without also acknowledging the availability to unappropriated water, to the detriment of senior water holders and in violation of New Mexico’s prior appropriation standard. The second count asked for a ruling that the issuance of domestic well permits, in accordance with the DWS, constituted as a United States Constitution and New Mexico Constitution taking without compensation. Lastly, Bounds asked for an injunction preventing the state engineer from issuing new domestic well permits without also determining if unappropriated water was also available. The New Mexico Farm and Livestock Bureau (“NMFLB”), an independent and nongovernmental agency representing many farm and ranch families, filed a motion to intervene, which the district court granted. The state engineer then filed a motion for summary judgment arguing clear legislative intent in the language of the DWS.
The district court (i) ruled the DWS unconstitutional as a matter of law as it concluded that the DWS was an impermissible exception to the prior appropriation standard and (ii) found Bounds unable to show any injury to his existing senior water rights as a result of the DWS, thereby rejecting his takings claim. The state engineer appealed the district court’s constitutional holding to the Court of Appeals, which then reversed the district court’s holding and found the New Mexico Legislature had authority to enact statutes in pursuit of the administration of the appropriation and use of surface and groundwater. The Court of Appeals also recognized the prior appropriation doctrine, contained in Article XVI of the New Mexico Constitution, as setting forth only general and broad principles. The Court of Appeals explained that the priority administration process is not stringently ruled by the priority doctrine because it is the Legislature’s duty to enact statutes that govern the administration of appropriation and the use of surface and groundwater. Bounds and NMFLB (“Petitioners”) then each filed petitions of certiorari to the Supreme Court of New Mexico (“Court”) to review the Court of Appeals’ constitutional holding.
The Court addressed two of the Petitioners’ challenges: (i) the DWS required the state engineer to issue domestic well permits without acknowledging whether there was unappropriated water available, thereby violating the prior appropriation doctrine required by the New Mexico Constitution; and (ii) the failure to provide notice prior to the state engineer’s issuance of those domestic well permits violated the Petitioners’ rights to due process.
First, the Court considered Petitioners’ facial constitutional challenge de novo. In considering a facial constitutional challenge, the Court considers only the text of the statute and not its application. Article XVI, Section 2 of the New Mexico Constitution states, “[P]riority of appropriation shall give the better right.” With the language of the DWS in mind, the Court argued that the language “better right” only gives guidance when two existing water rights are in conflict. The Court acknowledged that the DWS was a permitting statute; however, it was silent on how the state engineer planned to administer domestic well permits. Nothing in the DWS prevented the state engineer from administering domestic well permits in a similar fashion as to all other water rights, as the New Mexico Constitution requires. Mistakenly, Petitioners equated the issuance of a permit under the DWS with an absolute right to acquire and utilize that water pursuant to the issued permits. However, contrary to the Petitioners’ contentions, the DWS created a conditional right and not an absolute right. Therefore, because the DWS dealt with permitting and not administration, it did not facially violate prior appropriation standards as required by the New Mexico Constitution.
Second, the Court considered whether the DWS violated the Petitioners’ procedural and substantive due process rights. Procedural due process requires a governmental agency to give proper notice and to hear a case before the alleged deprivation of property. Substantive due process requires the Court to consider whether the government action interferes with rights implicit to ordered liberty. In order for the Court to rule, the Petitioners must show an actual and personal deprivation or injury. However, as the district court held, Petitioners, specifically Bounds, were unable to show any injury to their water rights. Although Bounds produced an expert witness, that expert failed to show the effect of the domestic wells on Bounds’ water rights. The Court then rejected the due process challenge, finding it to be too speculative.
Lastly, the Court addressed the Court of Appeals’ ruling that the prior appropriation doctrine set forth broad principles and nothing else. The Court specifically rejected this ruling and stated that it would inevitably lead to a large amount of Legislative and administrative discretion in regards to priority water rights.
Accordingly, the Court thereby affirmed the Court of Appeals that the DWS did not violate the United States Constitution and the New Mexico Constitution, and the DWS did not violate Petitioners’ due process rights.
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