Rule 1-071.2 NMRA. — Statutory stream system adjudication suits; stream system issue and expedited inter se proceedings.

ANNOTATIONS

The 2011 amendment, approved by Supreme Court Order No. 11-8300-027, effective June 8, 2011, in Paragraph C, required that, notwithstanding Rule 1-004 NMRA, notice of a stream issue proceeding or an expedited inter se proceeding be given in accordance with Paragraph C and required that the court approve the notice given to unknown claimants and to claimants whose addresses cannot be reasonably determined.

The district court properly adjudicated senior water rights first. -- Where the Navajo Nation, the United States, and the state of New Mexico reached an agreement settling the Navajo Nation's claims to water in the San Juan river basin, and where federal legislation to approve and implement the settlement agreement was enacted by congress, and where the New Mexico legislature appropriated funds to pay New Mexico's cost of the settlement agreement and authorized the New Mexico state engineer to seek judicial approval regarding the state's share of the water, and where the district court approved the settlement agreement, concluding that the settlement agreement was fair, adequate, reasonable, and consistent with the public interests as well as all applicable laws, the district court did not err in treating appellants' crossclaims as objections to the settlement, because the expedited inter se procedure allows the district court flexibility to adjudicate the senior water rights first, and then address junior claims, which allows the district court to hear all claims against the state engineer so it can be determined how much water the state will have to allocate. State ex rel. State Engineer v. San Juan Agricultural Water Users Ass'n, 2018-NMCA-053, cert. granted.

Notice of inter se proceeding satisfied constitutional due process. -- Where the Navajo Nation, the United States, and the state of New Mexico reached an agreement settling the Navajo Nation's claims to water in the San Juan river basin, and where federal legislation to approve and implement the settlement agreement was enacted by congress, and where the New Mexico legislature appropriated funds to pay New Mexico's cost of the settlement agreement and authorized the New Mexico state engineer to seek judicial approval regarding the state's share of the water, and where the district court approved the settlement agreement, concluding that the settlement agreement was fair, adequate, reasonable, and consistent with the public interests as well as all applicable laws, no due process violation occurred because the threshold question in evaluating a due process challenge is whether there is a deprivation of liberty or property, and in this case, appellants could not have suffered any loss of property rights where there was a reasonable basis to conclude that the settlement agreement provided the Navajo Nation with an amount of water less than the amount that was federally authorized. Moreover, the measures taken by the state satisfied the procedural requirements of due process. State ex rel. State Engineer v. San Juan Agricultural Water Users Ass'n, 2018-NMCA-053, cert. granted.

Proper test for abandonment of water rights. -- Clear and convincing evidence of an unreasonably long period of nonuse constitutes circumstantial evidence of intent to abandon a water right strong enough to warrant a presumption of abandonment. The burden is on the party asserting abandonment to establish the unreasonably long period of nonuse by clear and convincing evidence. When the presumption of intent to abandon a water right has been established by clear and convincing evidence showing an unreasonably long period of nonuse, the burden shifts to the rights-holder to rebut the presumption. The necessity of evidence to rebut the presumption of abandonment is vindication of the constitutional mandate of beneficial use, and thus the evidence must show more than an expression of desire or intent but some actual fact, condition, or act that excuses the nonuse, or reveals actions inconsistent with an intent to abandon the water right. State ex rel. Off. of State Eng'r v. Intrepid Potash, Inc., 2025- NMSC-040, aff'g 2024-NMCA-024, 544 P.3d 276.

New Mexico adopts "anti-speculation" as a feature of water law jurisprudence. -- To avoid a conclusion that one is speculating water, the water rights holder must apply the water to beneficial use. The desire of a water rights holder to use its water later, when it is financially profitable, is the antithesis of beneficial use and is not an excuse for nonuse sufficient to rebut the presumption of abandonment. State ex rel. Off. of State Eng'r v. Intrepid Potash, Inc., 2025-NMSC-040, aff'g 2024-NMCA-024, 544 P.3d 276. Abandonment was supported by substantial evidence. -- Where defendants were granted rights to over 34,000 acre feet/year (afy) of nonconsumptive water and an additional 19,000 afy of consumptive water from the Pecos River for industrial use at a refinery in Loving, New Mexico, and where the water was beneficially used for cooling heated ore and for sluicing undissolved waste salts until 1973, when defendants closed the Loving refinery, there was substantial evidence to support the district court's finding that defendants abandoned all but 150 afy of its water rights in the Pecos River where the evidence showed that no water was put to beneficial use at the Loving Refinery, the licensed place of use, for the licensed purpose of use for over forty years, and that defendants' speculation of its water rights did not excuse its abandonment. State ex rel. Off. of State Eng'r v. Intrepid Potash, Inc., 2025-NMSC-040, aff'g 2024-NMCA-024, 544 P.3d 276.

The district court did not deprive appellants of due process in its forfeiture of water rights adjudication. -- In consolidated appeals that arose from appellants' attempt to modify the point of diversion of water rights that had been dormant for decades, and where, in Case 1, the district court, following an expedited inter se proceeding, concluded that appellants, through their predecessors, forfeited all Pecos River water rights in excess of 5,813.6 acre-feet per year and abandoned all but 150 acre-feet per year of the remaining water rights, and where, in Case 2, the appellants appealed the district court's denial of their joint motion to intervene in writ of mandamus proceedings filed by appellees seeking that the office of the state engineer suspend or cancel preliminary authorizations for appellants to use the water rights pending the final determination of applications to change the point of diversion of their water rights, the district court did not deprive appellants of due process, because the procedure used in the expedited inter se proceeding properly safeguarded appellants' protected property rights by providing notice of the proceeding to all parties and providing appellants with an opportunity to be heard by allowing appellants to proffer evidence regarding its use of the water rights. Appellants also failed to argue that there was a risk of an erroneous deprivation of its water rights after the trial, and thus failed to demonstrate that there was a reasonable likelihood that the outcome might have been different with additional evidence. Carlsbad Irrigation Dist. v. D'Antonio, 2024-NMCA-024, cert. granted.

The district court did not err in its forfeiture adjudication. -- In consolidated appeals that arose from appellants' attempt to modify the point of diversion of water rights that had been dormant for decades, and where, in Case 1, the district court, following an expedited inter se proceeding, concluded that appellants, through their predecessors, forfeited all Pecos River water rights in excess of 5,813.6 acre-feet per year and abandoned all but 150 acre-feet per year of the remaining water rights, and where, in Case 2, the appellants appealed the district court's denial of their joint motion to intervene in writ of mandamus proceedings filed by appellees seeking that the office of the state engineer suspend or cancel preliminary authorizations for appellants to use the water rights pending the final determination of applications to change the point of diversion of their water rights, the district court did err in its forfeiture adjudication, because there was substantial evidence to support the court's decision that appellants stopped beneficially using the nonconsumptive water rights in 1948 after appellants installed cooling towers and no long needed the water to cool potash ore at its refinery, and there was substantial evidence to support the court's conclusion that appellants forfeited the remaining water rights after 1963, based on a water master report provided by appellants that showed there was a nonuse period of at least four years for nonconsumptive and consumptive use water rights. Moreover, the record supports that no circumstances beyond appellants' control excused the nonuse. Carlsbad Irrigation Dist. v. D'Antonio, 2024-NMCA-024, cert. granted.

The district court did not err in the abandonment adjudication. -- In consolidated appeals that arose from appellants' attempt to modify the point of diversion of water rights that had been dormant for decades, and where, in Case 1, the district court, following an expedited inter se proceeding, concluded that appellants, through their predecessors, forfeited all Pecos River water rights in excess of 5,813.6 acre-feet per year and abandoned all but 150 acre-feet per year of the remaining water rights, and where, in Case 2, the appellants appealed the district court's denial of their joint motion to intervene in writ of mandamus proceedings filed by appellees seeking that the office of the state engineer suspend or cancel preliminary authorizations for appellants to use the water rights pending the final determination of applications to change the point of diversion of their water rights, the district court did err in its abandonment adjudication, because there was substantial evidence to support the district court's decision based on appellants' nonuse of their water rights for an unreasonable period of time, creating a presumption of abandonment, and appellants failed to rebut this presumption by offering proof of some fact or condition excusing such nonuse or evidence of an intent not to abandon. Carlsbad Irrigation Dist. v. D'Antonio, 2024-NMCA-024, cert. granted.

Doctrine of relation. -- The doctrine of relation, as it applies to claims to water under the western concept of prior appropriation embodies two features: (1) embarking in good faith on a project to appropriate water; and (2) consummating the project without unnecessary delay by exercising reasonable diligence in constructing facilities, diverting water, and completing the appropriation by applying the water to beneficial use. Meeting these requirements, a would-be appropriator attains a vested right to use the water with a priority date measured as of the time the project commenced. State ex rel. Office of State Eng'r v. Gray, 2021-NMCA-066.

Doctrine of relation applied in inter se proceeding. -- In a case that arose as an inter se proceeding within the Lower Rio Grande general stream adjudication initiated by the State of New Mexico in 1996, and where, in 2014, cross-appellants asked the adjudication court to establish an expedited inter se proceeding to address water rights claimed by appellants at the Copper Flat Mine (the Mine) near Hillsboro, New Mexico, and where appellants, after the expedited inter se proceeding was established, filed their statement of claims asserting that their predecessors in interest had placed 1,019 acre-feet of water to beneficial use before the Mine became operational and an additional 1,267 acre-feet of water during the time the Mine was in operation and requested entry of an order recognizing a vested interest in approximately 2,300 acrefeet with priority dates starting in 1975 and, alleging that certain appellants intended to recommence operations at the Mine as soon as all permit and regulatory requirements were met, asked the adjudication court to declare that they were entitled to a reasonable amount of time to develop an additional 5,200 acre-feet of water rights in accordance with the mining plan created by their predecessors in interest, the adjudication court did not err in refusing to recognize appellants' claimed right under Mendenhall, because the facts and circumstances of the case support the adjudication court's legal conclusion that the predecessors' actions extinguished any inchoate water rights under Mendenhall, and, after buying their predecessors' interest in water rights, appellants did essentially nothing to put any water to beneficial use. Under the doctrine of relation, it was appellants' obligation to put water to beneficial use within a reasonable time, but the decades-long delay in putting the claimed water to beneficial use extinguished any inchoate water rights appellants may have owned. State ex rel. Office of State Eng'r v. Gray, 2021-NMCA-066.

Failure to prove abandonment of vested water rights in inter se proceeding. -- In a case that arose as an inter se proceeding within the Lower Rio Grande general stream adjudication initiated by the State of New Mexico in 1996, and where, in 2014, cross-appellants asked the adjudication court to establish an expedited inter se proceeding to address water rights claimed by appellants at the Copper Flat Mine (the Mine) near Hillsboro, New Mexico, and where appellants, after the expedited inter se proceeding was established, filed their statement of claims asserting that their predecessors in interest had placed 1,019 acre-feet of water to beneficial use before the Mine became operational and an additional 1,267 acre-feet of water during the time the Mine was in operation and requested entry of an order recognizing a vested interest in approximately 2,300 acre-feet with priority dates starting in 1975 and, alleging that certain appellants intended to recommence operations at the Mine as soon as all permit and regulatory requirements were met, asked the adjudication court to declare that they were entitled to a reasonable amount of time to develop an additional 5,200 acre-feet of water rights in accordance with the mining plan created by their predecessors in interest, the adjudication court did not err in concluding that appellants did not abandoned their vested rights in the water attributable to the mining project, because the facts of the case support the adjudication court's finding that appellants sought to revive the mine and protect the vested rights they purchased from their predecessors in interest. State ex rel. Office of State Eng'r v. Gray, 2021-NMCA-066.