Tri-State Generation & Transmission Ass’n v. D’Antonio

Tri-State Generation & Transmission Ass’n v. D’Antonio, 289 P.3d 1232 (N.M. 2012) (holding the New Mexico State Engineer’s adoption, by legislative direction, of new Active Water Management regulations for the administration of water rights in priority constitutional against separation of powers, due process, and vagueness claims).

In 2003, the New Mexico Legislature (“Legislature”) enacted N.M. Stat. Ann § 72-2-9.1, directing the New Mexico Office of the State Engineer (“State Engineer”) to adopt rules to administer water allocations efficiently and in priority.  In 2004, the State Engineer responded by developing the Active Water Resource Management regulations (“AWRM”), allowing the State Engineer to identify water districts in need of management and appoint water masters to those districts.  Under AWRM, the masters evaluate their respective district’s supply and manage the allocation of that supply according to users’ priority dates.

AWRM establishes “administrable water rights” to impound, store, or release water according to the elements determined by a court or the State Engineer.  When the task falls to the latter, the Engineer determines the users’ priority date using a hierarchy of (i) final adjudicatory decrees; (ii) adjudicatory subfile orders; (iii) offer of judgments; (iv) hydrographic surveys; (v) issued licenses; (vi) issued permits; and (vii) historic, beneficial uses.  The State Engineer publishes the priority dates; users may appeal the determinations.  Tri-State Generation and Transmission Association (“Tri-State”), an electric power cooperative with water rights, filed suit challenging AWRM on separation of powers, due process, and vagueness grounds.

The District Court of Socorro County (“district court”) found § 72-2-9.1 violated Article III, Section 1 of the New Mexico Constitution because the State Engineer’s authority to determine priority dates originated from the century-old § 72-2-9 granting weight to licenses and adjudications only.  Therefore, the district court reasoned, the State Engineer could only consider evidence of adjudications or licensing ((i), (ii), (iii), and (v) above) when determining administrable rights.  The district court found the remaining provisions of AWRM unconstitutionally beyond the scope of the State Engineer’s statutory authority, in violation of due process, and contrary to constitutional guarantees of inter se adjudication of water rights.

The New Mexico Court of Appeals (“Court of Appeals”) affirmed in part.  The Court of Appeals held that because § 72-2-9.1 granted no new authority to the State Engineer to adopt AWRM, the regulations unconstitutionally exceeded the State Engineer’s authority.  The Court of Appeals, however, reversed the district court’s due process ruling as speculative.  The State Engineer petitioned and Tri-State cross-petitioned to the New Mexico Supreme Court (“Court”).  The Court considered four issues on appeal.

First, the Court considered the State Engineer’s authority to implement AWRM.  Applying two canons of statutory construction, the Court held the Legislature intended to expand the State Engineer’s authority by enacting § 72-2-9.1.  The Court reasoned that enacting legislation entitled, “An Act Relating to Water Providing Authority for State Engineer…” indicates a grant of legislative authority by its plain meaning.  Further, the statute’s placement within the statutory framework did not limit this intent because the Legislature only indicated that a new section be drafted, not that it be placed in a specific sub-section.

Second, the Court looked at Tri-State’s claim that AWRM violated separation of powers because only inter se adjudication could determine water rights in New Mexico.  The Court distinguished adjudication from administration, holding the State Engineer constitutionally permitted to administer the water supply.  The Court noted that while the State Engineer lacks the authority to adjudicate water rights, nothing in the New Mexico Constitution requires adjudication.  Instead, the New Mexico Constitution offers broad terms that the waters of the State “be subject to appropriation for beneficial use, in accordance with the laws of this state.”  The Legislature, the Court held, constitutionally delegated the task of administering water to the State Engineer.

Third, the Court addressed Tri-State’s claim that AWRM violated procedural due process requirements.  The Court held there was no violation for three reasons.  First, to prevail, Tri-State needed to establish deprivation of liberty or property without being afforded adequate procedural protections.  According to the Court, because water rights establish a right to use water, not own water, regulation is an exercise of police power, not deprivation.  Second, regulation by the State Engineer, where permitted, upholds the system of prior appropriation.  Because AWRM establishes a system for the administration of priority dates, the Court held, it upholds prior appropriation; inter se adjudication is not required.  Finally, a claim is ripe for review only when a party presents an actual controversy stemming from non-speculative harm.  Tri-State asserted a claim that a lack of water would destroy their property.  The Court held Tri-State’s claim unripe for review because the State Engineer had yet to make a priority determination as to Tri-State’s rights and Tri-State had yet to appeal any forthcoming determination.

Finally, the Court considered Tri-State’s claim that AWRM was impermissibly vague.  The Court explained that a statute violates due process when it is so vague that people of ordinary intelligence guess at its meaning and differ as to its application.  The Court held § 72-2-9.1 was not impermissibly vague because it provided an express hierarchy with examples and gave sufficient notice to those potentially affected.

Accordingly, the Court reversed the Court of Appeals’ decision regarding the separation of powers claim; affirmed, in part, the Court of Appeal’s speculative due process decision; and held the statute not impermissibly vague.