Bounds v. State ex rel. D'Antonio, 306 P.3d 457

Background

Horace Bounds, a rancher in the fully appropriated/adjudicated Upper Mimbres Basin, challenged New Mexico’s Domestic Well Statute (DWS), §72-12-1.1, after having obtained domestic well permits under that statute.
Petitioners (Bounds and NM Farm & Livestock Bureau) brought a facial constitutional challenge arguing the DWS: (1) violates the state constitutional prior-appropriation doctrine by requiring issuance of domestic well permits without determining unappropriated water availability, and (2) denies due process by providing no notice or hearing before permit issuance.
The district court held the DWS unconstitutional; the Court of Appeals reversed, holding the Constitution’s priority principle does not mandate a particular permitting procedure. The Supreme Court granted certiorari.
The DWS creates an expedited permitting procedure for small domestic uses (automatic issuance upon application) distinct from the statutory notice/protest process that governs most other groundwater appropriations.
State Engineer regulations and later statutes (including domestic well management areas, reduced diversion caps, curtailment-by-priority clauses, and subdivision/platting reforms) provide administrative tools to limit domestic well impacts and to protect senior rights.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the DWS facially violates Article XVI, §2 (priority of appropriation) by requiring issuance of domestic well permits without determining unappropriated water	Bounds: issuance in fully appropriated basins creates an impermissible exception that risks impairing senior rights	State Engineer: the Constitution requires priority administration of rights but does not prescribe permitting procedures; DWS only governs permitting, not administration	Affirmed: DWS is facially constitutional; Article XVI §2 governs administration (curtailment), not identical permitting procedures
Whether the DWS facially violates procedural due process by issuing permits without prior notice/hearing	Bounds: lack of notice and opportunity to be heard before permit issuance deprives senior users of property without due process	State Engineer: absent an actual deprivation or demonstrable impairment there is no cognizable due-process violation; facial challenge requires more than speculative harm	Held: Due-process facial challenge fails—no proven deprivation or imminent impairment; procedural and substantive claims require an as-applied showing
Whether issuance of domestic permits in a closed/adjudicated basin constitutes per se impairment	Bounds: any additional appropriation in a closed basin necessarily impairs seniors	State Engineer: impairment is a fact-specific inquiry; no per se rule	Held: No per se impairment; impairment is determined case-by-case; facial relief not warranted

Key Cases Cited

Tri-State Transmission & Generation Ass’n v. D’Antonio, 289 P.3d 1232 (N.M. 2012) (standard for constitutional review and discussion of conditional nature of water rights)
Montgomery v. Lomos Altos, Inc., 150 P.3d 971 (N.M. 2007) (impairment is fact-specific; rejects per se impairment rules)
Mathers v. Texaco, Inc., 421 P.2d 771 (N.M. 1966) (historical rejection of bright-line impairment rules)
State ex rel. Udall v. Public Employees Retirement Board, 907 P.2d 190 (N.M. 1995) (presumption of legislative validity in constitutional challenges)
State ex rel. Office of State Engineer v. Lewis, 150 P.3d 375 (N.M. Ct. App. 2007) (constructional rules for upholding statutes where possible)
Herrington v. State ex rel. Office of State Engineer, 133 P.3d 258 (N.M. 2006) (practical challenges of curtailing domestic wells discussed)
City of Albuquerque v. Campos, 525 P.2d 848 (N.M. 1974) (exercise of appellate discretion to resolve recurring public questions)
Lummi Indian Nation v. State, 241 P.3d 1220 (Wash. 2010) (facial due-process challenge requires more than speculative potential impairment)