STATE ENGINEER OF NEW MEXICO, Plaintiff-Respondent, v. DIAMOND K BAR RANCH, LLC, and RAYMOND L. KYSAR, JR. and PATSY SUE KYSAR, In their capacity as Trustees of THE RAYMOND L. AND PATSY SUE KYSAR, JR. LIVING TRUST, Defendants-Petitioners.
NO. S-1-SC-35446
IN THE SUPREME COURT OF THE STATE OF NEW MEXICO
September 22, 2016
Daylene A. Marsh, District Judge
Victor R. Marshall & Associates, P.C.
Victor Riton Marshall
Albuquerque, NM
for Petitioners
Office of the State Engineer
Gregory C. Ridgley, Special Assistant Attorney General
L. Christopher Lindeen, Special Assistant Attorney General
Santa Fe, NM
Abramowitz, Franks & Olsen
Brett Justin Olsen, Special Assistant Attorney General
Fort Collins, CO
for Respondent
OPINION
DANIELS, Chief Justice.
{1} Water is both a scarce and a vital resource in New Mexico, and its responsible management is crucially important to all New Mexicans. In this appeal, we address the scope of the New Mexico State Engineer‘s regulatory authority over use of surface water in New Mexico when it has been diverted from the Animas River into an acequia in Colorado and accessed from that ditch by Petitioners and others in New Mexico.
{2} We reject Petitioners’ arguments that the State Engineer lacks statutory authority over waters initially diverted outside of New Mexico and has no jurisdiction to enjoin Petitioners from irrigating an area of farmland not subject to an existing adjudicated water right or a permit from the State Engineer. We hold that the State Engineer is authorized by New Mexico law to require a permit for new, expanded, or modified use of this water and to enjoin any unlawful diversion.
I. FACTS AND PROCEDURAL BACKGROUND
{3} The Animas River, running south from Colorado into New Mexico, is a tributary of the San Juan River and part of the larger Colorado River system. In Echo Ditch Co. v. McDermott Ditch Company, No. 01690 (1948), the First Judicial District Court of New Mexico adjudicated water rights for the San Juan River and its tributaries in New
{4} As recognized by the decree, the Ralston Ditch delivers Animas River surface water to irrigate 364.2 acres of land in New Mexico. The decree details the allowable purposes of water use. For each property owner with an adjudicated water right, the decree also specifies the allowable quantity of annual water use and notes that “the right to use of said water shall be confined to use upon the lands described” on the individual ownership forms. The Echo Ditch Decree gives the State Engineer, as statutory water master, exclusive authority to measure waters delivered from a main diversion or distributing system, to monitor waste, and to ensure water is delivered in “the respective quantities which the lands and said water users are entitled to receive.”
{5} Petitioner Diamond K Bar Ranch, LLC (Diamond K), an asset of the Raymond L. and Patsy Sue Kysar, Jr. Living Trust, and trustees Raymond L. Kysar, Jr. and Patsy Sue Kysar (collectively Petitioners), own and operate a farm in San Juan County, New Mexico. The Diamond K farm property includes a large portion of the 364.2 acres of land and its appurtenant water rights for the Ralston Ditch adjudicated in the Echo Ditch Decree.
{6} The State Engineer filed a three-count complaint against Petitioners pertaining to their alleged illegal use of Animas River surface water. In the second count, the only count currently before this Court, the State Engineer sought to enjoin Petitioners’ illegal use of Animas River surface water to irrigate additional acreage that was not part of the adjudicated acreage under the Echo Ditch Decree and for which Petitioners have no permit. See
{7} Petitioners filed a motion to dismiss all three counts against them, primarily relying on Turley v. Furman, 1911-NMSC-030, 16 N.M. 253, 114 P. 278, to support their contention that the State Engineer lacks the authority to regulate the use of surface water from the Animas River for irrigation purposes when that water is diverted in Colorado and transported into New Mexico by the Ralston Ditch.
{8} Petitioners further argued that
{9} Finally, Petitioners argued that the Ralston Ditch, as a community ditch constructed in the 1880s, is exempt from the permit requirements of
{10} The Eleventh Judicial District Court denied the motion to dismiss, concluding that “the State Engineer has legal jurisdiction to enforce the [Petitioners‘] adjudicated water right on the Ralston Ditch notwithstanding the Ditch‘s diversion point within . . . Colorado.” The district court reasoned that Turley was inapplicable to the facts of this case, stating that if there was ever a question whether Turley had any application to preclude the State Engineer‘s authority on the Ralston Ditch, the issue was resolved by the 1948 Upper Colorado River Basin Compact
{11} The Court of Appeals granted Petitioners’ unopposed application for an interlocutory appeal but after full briefing by both parties decided to quash the appeal. See N.M. State Engineer v. Diamond K Bar Ranch, No. 34,103, order quashing interlocutory appeal, ¶¶ 8-10 (N.M. Ct. App. June 25, 2015). We granted Petitioners’ unopposed petition for writ of certiorari to clarify the extent of the State Engineer‘s statutory authority to administer the use of Animas River surface waters when the waters are diverted into an acequia in Colorado and applied to lands in New Mexico in the absence of a vested water right or permit. See Davis v. Devon Energy Corp., 2009-NMSC-048, ¶ 11, 147 N.M. 157, 218 P.3d 75 (granting a petition for writ of certiorari after the Court of Appeals denied interlocutory review).
II. STANDARD OF REVIEW
{12} We review de novo a district court‘s order granting or denying a motion to dismiss under Rule 1-012(B)(6) NMRA. Delfino v. Griffo, 2011-NMSC-015, ¶ 9, 150 N.M. 97, 257 P.3d 917. The district court‘s denial of Petitioners’ motion to dismiss was based on its interpretation of the regulatory authority of the State Engineer. The State Engineer‘s power derives from statute and is “‘limited to the . . . authority expressly granted or necessarily implied by those statutes.‘” Tri-State Generation & Transmission Ass‘n, Inc. v. D‘Antonio, 2012-NMSC-039, ¶ 13, 289 P.3d 1232 (citation omitted). “We review questions of statutory and constitutional interpretation de novo.” Id. ¶ 11.
III. DISCUSSION
A. Relevant Constitutional, Statutory, and Administrative Framework for Surface Water Rights in New Mexico
{13} Water law in New Mexico is governed by the doctrine of prior appropriation. Id. ¶ 40. “Under the doctrine of prior appropriation, water rights are both established and exercised by beneficial use, which forms ‘the basis, the measure and the limit of the right to use of the water.‘” Walker v. United States, 2007-NMSC-038, ¶ 22, 142 N.M. 45, 162 P.3d 882 (quoting
{14} The New Mexico Constitution broadly provides that “[t]he unappropriated water of every natural stream, perennial or torrential, within the state of New Mexico, is hereby declared to belong to the public and to be subject to appropriation for beneficial use, in accordance with the laws of the state.”
{15} The duties of the State Engineer include “general supervision of waters of the state and of the measurement, appropriation, [and] distribution thereof and such other duties as required.”
{16} The diversion or application of water to lands in New Mexico absent a valid water right or permit is unlawful. See
B. The State Engineer Has Statutory Authority to Regulate the Use of Surface Waters in New Mexico Regardless of Their Diversion Location
{17} Relying primarily on dicta in Turley, Petitioners argue that the State Engineer lacks the authority to require a permit or otherwise regulate Petitioners’ use of Animas River surface waters for irrigation purposes when those waters have been diverted in Colorado and transported into New Mexico by the Ralston Ditch. They assert that because the Ralston Ditch is not a natural watercourse, see
{18} In Turley the Territorial Supreme Court held that the territorial engineer of New Mexico lacked the authority to grant a permit for a proposed diversion from the Animas River in Colorado that would have conveyed water into New Mexico via an artificial ditch because the jurisdiction of the territorial engineer did not extend beyond the territorial boundaries of New Mexico. See 1911-NMSC-030, ¶¶ 1, 4-5. As the district court in this case correctly noted, Turley‘s holding limiting the State Engineer‘s extraterritorial authority is still good law but inapplicable here. Unlike in Turley, the State Engineer in this case is not seeking to exercise jurisdiction over appropriation of water in Colorado or construction of a diversion in Colorado but instead seeks to regulate the appropriation of surface waters in New Mexico for use on New Mexico lands.
{19} The Territorial Supreme Court in Turley never reached the question Petitioners raise. Id. ¶ 2. Instead, it determined that whether the use of waters diverted in Colorado that entered New Mexico through an artificial ditch would be subject to regulation in New Mexico by the New Mexico territorial engineer was a “moot question” because the proposed ditch in Turley did not yet exist. See id. (“No part of the waters of the Animus [sic] [R]iver has come into New Mexico except by the natural channel. The proposed ditch for bringing it in exists only on paper and may never have any more substantial being . . . .“). In response to this hypothetical question, the Turley Court reiterated New Mexico‘s law of prior appropriation stating, “It is well settled that [natural waters] lose that character at the point of diversion as soon, at least, as they are applied to beneficial use.” Id. Petitioners misapprehend this statement to support their claim that once the waters of the Animas River are diverted into the Ralston Ditch they become “artificial” and “private” and outside the jurisdiction of the State Engineer.
{21} The New Mexico State Engineer is charged with regulation and enforcement of New Mexico water rights.
{22} Petitioners’ contention that diversion and conveyance of waters “by artificial means” such as a ditch renders the use of those waters private and not subject to the State Engineer‘s regulatory authority because they “never flow in a natural stream within the boundaries of New Mexico” is entirely without merit. To support this argument, Petitioners quote language from statutes and a number of cases addressing artificial waters. See, e.g.,
{23} Moreover, water is incapable of full private ownership. See Walker, 2007-NMSC-038, ¶ 27 (“[W]ater rights are not considered ownership in any particular water source, but rather a right to use a certain amount of water to which one has a claim via beneficial use.“). For over a century, New Mexico law has provided that what is owned by the water user is not the water itself but only the right to the use of a certain amount of water for a specified purpose. See Snow, 1914-NMSC-022, ¶ 11 (“The appropriator does not acquire a right to specific water flowing in the stream, but only the right to take therefrom a given quantity of water, for a specified purpose.“). “All water within the state, whether above or beneath the surface of the ground belongs to the state, which authorizes its use, and there is no ownership in the corpus of the water but the use thereof may be acquired and the basis of such acquisition is beneficial use.” State ex rel. Erickson v. McLean, 1957-NMSC-012, ¶ 23, 62 N.M. 264, 308 P.2d 983; see also Jicarilla Apache Tribe v. United States, 657 F.2d 1126, 1133 (10th Cir. 1981)
{24} Accordingly, the Animas River waters diverted into New Mexico by the Ralston Ditch remain natural, unappropriated, public waters of the State. Water is transformed from unappropriated to appropriated by putting the water to beneficial use, which requires an existing water right or a permit from the State Engineer. See
C. Petitioners Are Not Exempt from the Requirement to Obtain a Permit for New, Expanded, or Modified Use of Waters from the Ralston Ditch
{25} Petitioners alternatively claim that the Ralston Ditch as a community ditch constructed in the 1880s does not require a lawful permit to divert water from it and that Petitioners’ pre-1907 water right also exempts them as individual users of that water from a permit requirement. We agree that the Ralston Ditch is an existing community ditch that does not require a permit to divert water under
{26} It is undisputed that the waters of the Ralston Ditch were adjudicated in the Echo Ditch Decree. As set forth in the decree, Petitioners hold a valid water right and are not required to apply for a permit to exercise their pre-1907 water right, whether or not that right had been adjudicated. See
{27} The State Engineer is attempting to enjoin Petitioners’ alleged improper use of a valid water right. Petitioners are alleged to be improperly irrigating land to which their valid water right is not appurtenant because it is not part of the acreage adjudicated by the Echo Ditch Decree. Petitioners are also alleged to be improperly using a quantity of water that exceeds the amount appropriated for use on the acreage adjudicated by the Echo Ditch Decree. It is within the jurisdiction of the State Engineer, and it is the regulatory responsibility of the State Engineer, to prevent any such illegal use. See
IV. CONCLUSION
{28} The use of waters diverted from the Animas River in Colorado that enter New Mexico in the Ralston Ditch is subject to regulation by the State Engineer. The State Engineer has the statutory authority to require a permit for new, expanded, or modified use of this water and, when such changes are made without its approval, to enjoin the illegal use. Accordingly, we affirm the district court‘s denial of Petitioners’ motion to dismiss and remand this case for trial on the pending claims.
{29} IT IS SO ORDERED.
CHARLES W. DANIELS, Chief Justice
WE CONCUR:
PETRA JIMENEZ MAES, Justice
EDWARD L. CHÁVEZ, Justice
BARBARA J. VIGIL, Justice
JUDITH K. NAKAMURA, Justice