1 IN TH E COURT OF APPEALS O F THE ST ATE OF NEW MEXICO

2 O pin ionN um

be r: ___ ____ ____ 3 Fi lin g D at e: F eb ru ar

y 24, 201 6 4 N O. 33, 451 5 EAR THWOR KS’ O IL & G AS AC COU NTA BILITY 6 PROJE CT an d NEW ME XICO W IL DERNESS ALL IANCE, 7 Pet it io ne rs , 8 v
. 9 NEW MEX ICO OIL CO NS ERV ATION 10 COMMI SSI ON, 11 Re spon de nt, 12 an d 13 NEW ME XICO O IL & GAS ASSOCI ATI ON, 14 Intervenor. 15 AP PE AL FR OM T HE D ISTRICT C OUR T OF SA NTAFE CO UN TY 16 Sher i A. Raph aelson, D istrict Jud ge 17 Ne w Me xico Environm ental Law C enter 18 E ri c Jantz 19 R. Bruce F rederic k 20 D ougl as Me ikl ej ohn 21 Jonathan Block 22 Santa Fe , N M1 Ne w Me xico W ilderness Alliance

2 Judit h Calm an 3 Alb uq ue rq ue , NM 4 for Pe tition ers 5 E ne rg y , Mi ne ra ls & N at ur al Re sour ce s D ep ar

tm en t 6 W illiam

R. Brancard, Special A ssistant Attorney Ge neral 7 Ke ith W . H errm ann, Spec ial Assistant Attorney Ge neral 8 San ta Fe, NM 9 fo r Re spon de nt 10 Hol la nd & HartLLP 11 Michael H . F eldewe rt 12 San ta Fe, NM 13 fo r In te rv en or1 OPIN ION

2 KEN NED Y, Judge. 3 { 1} Pe tit ion er s a

ppe al the N ew Mex ic o O il Co nse rv at ionCo m m iss ion ’ s ( the 4 Co m m iss ion ) or de r pr om

ulg at ing a201 3 ve rs ionof 19. 15. 17 N M A C ( 6 / 2 8 / 2 0 1 3 ) ( the 5 2013 Rule), which is comm only refe rred to as t he “ Pit Rule. ” Pe tition ers m ake three 6 ar gum en ts. F ir st, the y

c ont en d th at

the Co m m iss ionha d no j ur isd ic tio n to cr eate the 7 2013 Rule because a previous version o f the rule w as the subject of a pending appeal 8 in the c ourts at the ti m e the 2013 Ru le w as ad opt ed

. Se co nd, Pe tit ion er s ar gue that the 9 Co m m iss ion ’ s dec isi on to issue the 201 3 R ule is ar bitrary a nd c ap ri ci ous be ca

use it 10 w as c ontrary

to the e vid en ce rec ei ve d and b ec au se the Co m m iss iondid

not 11 adequately

set forth its reasons for cha n g i n g t he previous version of the Pit Rule. 12 T hi r d, P e t i t i on e r s a ss e rtt hatt he n ot i c e t he C om m i ss i ong a ve o f

i t s pr op osed 13 ru le m ak ing w as ina de qua te . P et iti one rs r eque st tha t w e either va cate the 1 4 Co mm i s s i o n ’ s o r d e r p r o m u l g a t i n g t h e 2 0 1 3 R

u l e o r r e v e r s e a n d r e m a n d t h e 2013 15 Ru le to the Co m

m iss ionf or f urthe r pr oc ee din gs. 16 { 2} W e co nc lud e that the pe ndi ng ap pe al s did not de pr ive the Co m

m iss ionof 17 j ur isd ic tio n to pr om

ulg at e the 201 3 R

ule

. W e furthe r co nc lud e that the Co m m iss ion 18 ad equa te ly

e xpl ai ne d it s r eas on in g for the r ule ’ s a dopt ionin the f

ina l r ule a nd 19 sa ti sf ie d t he st atut ory

req ui rem en ts foris su in g n ot ic e. W e aff irm.2

1 I. BACKGRO UND 2 { 3} In 2008, the Com m issio n approved a version of the Pit Rule (the 2008 Rule). 3 In200 9, the Co m

m iss ionam en de d aportio n of the 200 8 R

ule ( the 200 9 4 A m en dm en t)

. Bo th the 200 8 R ule a nd i ts 2 009 A m en dm en t w er e ap pe al ed to the F ir st 5 Judi ci al D istri ct Co urt by en tit ie s af fi liate d w ith the oil an d ga s ind ustry , and the 6 dis tr ic t c ourt c er

tif ie d th e ap pe al s to thi s Court; w e stay ed our pr oc ee din gs o n th es e 7 cases. In Jan u ar y 2 0 1 2, the Com m issio n, ac ting o n petitio ns from the Ne w Me xico 8 O il an d G as A sso ci at ion an d Inde pe nde nt P etro le um A sso ci at ionof

N ewMe xic o, 9 an noun ce d it s in te nti on t o ho ld hearings o n th e pe tit ion s. P ar tie s w ho o ppos ed

the 10 propos ed rule-making secured a wr it of prohibi tion from the First Judicial District 11 Co urt in Fe br

uary 2012 , or de ri ng the Co m m iss ion to c ea se pr oc ee din gs t o a m en d th e 12 Pi t R ule

. T ha t w rit w as qua she d th e fo llo w ing m onth. T he Co m m iss ioniss ue d it s 13 notice that it would have a publ ic hearing on the application s, an d t o o k evidence, 14 he ar d argum en t, de lib er at ed , a dopt ed the r ule , and f ile d an or de r pr om

ulg at ing the 15 2013 Ru le

. E ar

thw orks’ O il an d G as A cc ount ab ili ty P ro j ec t su bm itt ed ar eque st f

or 16 re he ar ing in a n e ff

or t t o have the Co m

m iss ionr ec onsi de r the 201 3 R ule

. T he 17 Com m issio n did n ot act upon th at request w ithin ten day s; it wa s d eem ed denied 18 pur suant to the N ew Me xic o O il an d G as A ct (O il an d G as A ct), NMSA 1 97 8, 19 Sect io ns 70 -2 -1 to -38 (19 35 , a s a men de d t hr ou gh 20 15 ). See § 70-2-25(A).3

1 Co nc ed ing that the O il an d G as A ct , S ec tio n 70 -2 -2 5 and N MS A 197 8, S ec tio n 39 -3

- 2 1.1 (1 9 9 9 ), do no t provide for an appeal of Com m issio n rulem aking, Petitioners 3 soug ht a

w ri t of c er tio rari und er

Ru le 1- 075 N MR

A in the dis tr ic t c ourt, w hic h th e 4 dis tr ic t co urt gr an te d. T he dis tr ic t c ourt su bse que ntl y

c er tif ie d th e ca se to thi s C ourt. 5 See Ru le 1-0 74 (S) NMRA. 6 II. DISC US SION 7 A . C om m iss ion ’s Ju ri sd ic ti on t o A m en d 2013 P itR ul e 8 { 4} Pe tit ion er s a sse rt that the Co m

m iss ion ha d no au tho ri ty to am en d th e Pi t R ule 9 be ca use the re ha d not y et

be enaf ina l or de r iss ue d inthe appe al s of the 200 8 R

ule or 10 the 200 9 A m en dm en t and tha t p e n d i n g j u d i c ia l a ppe al s m ust stay ong oin g r ule m ak ing 11 on the part ic ular iss ue c onc er ne d. H ow ev er , P et iti one rs dir ect us to no auth or ity 12 co m pe lli ng any

ne wr ule m ak ing on a part ic ular subj ec t t o be he ld i n a be y an ce w hil e 13 the appeal of a pre viou s rule is pendin g. “ W e assum e w here argum ents in briefs are 14 unsu ppor te d by ci te d auth or ity , co unse l af te r dil ige nt searc h, w as una ble to fi nd any 15 supp orting auth ority .” In re A dopt ion of D oe , 198 4- N MS C- 024, ¶ 2, 100 N
. M. 764 , 16 676 P. 2d 1 329. In supp ort of the ir a rg um en t, P et iti one rs ur ge us t o in ste ad appl y the 17 ru le that an a

ppe al div es ts a

low er a dj udi cator

y tr ibunal of

j ur isd ic tio n w he re it

is 18 ac tin g ina n a dj udi cator y ca pa ci ty . Pe tit ion er s als o have not pr ovi de d any auth or ity 19 to re la te a stay on app ea l of age nc y ad j udi catio ns to age nc y ru le m ak ing ac tiv ity

. F or16 Rauscher pr ovi de s, “ T w o pr inc ipa l c ha racte ri sti cs dis tin gui sh r

ule m ak ing f

ro m 1 17 ad j udi catio n. F ir st, a dj udi catio ns r esol ve dis put es a m ong spe ci fi c ind ivi dua ls i n 18 specific cases, wherea s rulem aking affe cts the rights of broad classes of unsp ecified 19 indiv iduals. Second, bec ause adj udication s invo lve concrete disputes, they have an 20 im m ed ia te e ff

ec t on spe ci fi c ind ivi dua ls (those inv olv ed in the dis put e)

. Ru le m ak ing , 21 in c ontra st, is pr ospe ct ive , an d ha s ade fi nit ive e ff ec t onind ivi dua ls o nly

a ft er the r ule 22 subs eque ntl y

is ap pli ed

. ” 4 1 re as ons that f

oll ow , w e ar e unpe rs ua de d by P et iti one rs ’ a rg um en t. 2 1. D ist in ct ion s B et w ee n R ul em ak in g an d A dj ud ic at ion 3 { 5} T hr ough out

the ir a rg um en t tha t the Co m

m iss ionh a d

n o j ur i s dic tio n to iss ue the 4 2013 Rule, Petitioners repeate dly conflate an adm inistrat i ve agency ’ s adjudicatory 5 au tho ri ty

w itha n a ge nc y ’ s rul em ak ing auth or ity

. T he se tw o ty pe s of a dm ini str at ive 6 autho r i ty

are quite distinct in their application and functio n. While rulem aking creates 7 ge ne ra lly ap pli ed

standard s to w hic h an a ge nc y a nd i ndi vid

ua ls are he ld, a dj udi catio n 8 is the r es olu tio n of

part ic ular dis put es inv olv ing spe ci fi c part ie s and s pe ci fi c 9 p r ob le m s, b y

ap pl y in g s uc h ru le s. Se e U hd e n v . N

. M

. O i l C on se rv at i on Comm ’n , 10 1991 -N MS C- 089, ¶ 7, 112 N
. M. 528, 817 P. 2d 721 (h old ing that a ct ing on p et iti on 11 to create an exception to the Oil Conse rv at i o n Rule with statew ide application th at 12 will app ly

to lim ited situatio n and specific parties is “ adj udicative rather than 13 ru le m ak ing ”) ; see R auscher, Pie rce, Fe fsnes v. T axation and Reve nue Dep’t , 200 2- 14 N MS C- 013, ¶

42, 132 N
. M. 226 , 46 P
. 3d 6 87 ( quot ing Yesl er T errac e Cm ty
. Co unc il 15 v. Ci sne ros , 37 F. 3d 442, 448 (9th Cir. 1994 )); R ay el le n R es . , I nc . v . N. M

. Cu ltu ral 15

1 Pr o p s. R eview Comm ’n , 201 4- N MS C- 006, ¶ 27, 319 P
. 3d 6 39 ( ci tin g I n re 2 A ppl ic ati on o

f T im be ron W

ate r C o. , 1992 -N MS C- 047, ¶

23, 114 N
. M. 154 , 836 P
. 2d 3 73 ( c a t e g o r i z i n g a d m i n i s t r a t i v e a c t i o n a s r e g u l a t o ry w h e n i tf

u rt h e r s t h e pub lic 4 int er es t un de r the state ’ s po lic e powe rs a nd a dj udi cator y w he n it is ba se d on 5 ad jud ic at in g a pri va te rig ht rat he r th an im pl em en ti ng pu bl ic po li cy )). 6 { 6} It

is well es ta

bli she d th at

the L eg isl at

ur e can pr ope rl y

de le ga te r

ule m ak ing 7 po wer to adm in is tra ti ve ag en ci es th ro ug h an en ab li ng st atut e. New Energy Econ., Inc. 8 v. Sho obri dge , 2010 -N MS C- 049, ¶ 14, 149 N
. M. 42, 243 P. 3d 746 ( pe r curi am). O ur 9 L eg isl at

ur e de le ga te d c onc ur

re nt r ule m ak ing auth or ity

und er the O il an d G as A ct

to 10 th e Oil Co ns erv at io n Div is io n and th e Co m m is si on . See S ec tio n 70 -2 -1 1( B) ; S ec tio n 11 70- 2- 12(B ). Given thi s di sti nc tio n, w e hol d th at the Co m

m iss ion ’ s a ct ion s in 1 2 p r o mu l g a t i n g t h e 2 0 1 3 R u l e we r e r e g u l a t o r

y ra t h e r t h a n a d ju d i c a t o ry. 13 2. Judicial Ac tion May N ot P reem ptively Stop Adm inistrative R ulem ak ing 14 Th at is Ot he rwise P er m iss ib le 15 { 7} W e not e that P et iti one rs ’ a ct ionto obt ai n aw ri t of pr oh ib it io n a ga ins t the 1 6 Co m m i s s i o n t o p r e v e n t t h e p r o c e e d i n g s t h a t r e s u l t e d i n t h e 2 0 1 3 R u l e c u rr e n tly

on 17 ap pe al w as ult im at el y qua she d, a nd P et iti one rs did not appe al the f

ina l or de r. O ur 18 Su pr em e Co urt’ s op ini on i n Shoo bri dge , 201 0- NMS C- 049, pr es en ts an in str uc tiv e 19 vie won n earl y

ide nti ca l f

ac ts. I n Shoo bri dge , parties oppo sing a r ulem aking ob tained 20 a pr el im inary

inj unc tio n pr ohi bit ing the E nvi ro nm en ta l Im pr ove m en t B oard

f ro m6

1 co nd uc ti ng th e ad m in is tra ti ve pr oc eed in gs ne ces sa ry to ad op t a r eg ul at io n. Id

. ¶¶ 2- 3. 2 T he E nvi ro nm en ta l I m pr ove m en t B oard

pe tit ion ed our Su

pr em e Co urt f

or aw ri t of 3 su pe rin te nd in g c on tro l o r pr oh ib it io n to va cat e th e in jun ct io n. Id

. ¶ 4
. T h e S up r e me 4 Co urt gr an te d th e w ri t, or de ri ng the dis tr ic t c ourt t o d is solve the inj unc tio n and 5 rem an di ng th e cas e to th e ag en cy to co nd uc t i ts rul em ak in g p ro ceed in gs . Id

. I n do ing 6 so, our S upr em e Co urt r ej ec te d th e ide a that a c ourt c oul d e nj ointhe r ule m ak ing 7 pr oc es s, r ea soni ng tha t the se paratio n of pow er s do ctri ne did not

pe rm it suc h ar es ult : 8 Whe n th e L eg isl at ur e law fu lly

de le ga te s auth or ity

to a state a ge nc y

to 9 pr om

ulg at e ru le s and regulat ion s, m ay ac ourt i nte rv en e to h al t 10 pr oc ee din gs be fo re the ag en cy ad opt s suc h ru le s or re gul at ion s? This 11 que sti on i s one of subs tanti al publ ic int er es t bec au se c ourt i nte rv en tio n 12 in adm ini str at ive pr oc ee din gs b ef or e the a dopt ionof

r ule s or r eg ulatio ns 1 3 m ay t h wa rt t h e p ub l i c’s ri g h tt o p ar t i ci p at e i n s u ch p ro ce ed i n g s . We 14 hol d th at

ac ourt m ay

not int er ve ne in adm ini str at ive r ule -m ak ing 15 pr oceed in gs be fo re the a dopt ionof ar ule or r eg ulatio n[
. ]
. . . [ T ] he 16 se paratio n of pow er s doc tr ine fo rb ids a co urt fr ompre m at ur el y 17 interfer ing with the adm inistrative proce sses c reate d by the Le gislature. 18 Id

. ¶ 1. 19 { 8} Pe titio ne rs ’ co nt en ti on th atth e Co m m is si on lac ke d a ut ho rit y

to pro m ul ga te the 20 2013 Ru le be ca

use of pe ndi ng app ea ls re la te d to the 2008 Ru le an d 20 09 A m en dm en t 21 is s im ilar to the pe tit ion er ’ s ar gum en t i n Shoo bri dge

. T o f or es ta ll ru le m ak ing in thi s 22 w ay w oul d pe rm it the c ourts t o ha lt ag ency ru le m ak ing pr oc ee din gs p ri or to the 23 is su an ce o f a n ew ru le

. Se e id

. (“ [A ] court m ay not intervene in adm inistrative rule24 m ak ing pr oc ee din gs b ef or e the a dopt ion of

ar ule or r eg ulatio n. ”)

. A dm ini str at ive18 Si m il ar p rin ci pl es ex is t i n t he st atut ory aren a. See State v. Valdez , 1955- 2 1 9 N M S C

- 0 1 1 , ¶

1 4 , 5 9 N
. M
. 1 1 2 , 2 7 9 P
. 2 d8 6 8 ( “[ W] h e r e tw o s t a tu t e s h a v e t h e s a me 20 obj ec t and r el at e to the sam e subj ec t, if the la te r ac t i s r ep ug na nt to the f orm er , the 21 form er is re pealed by im plication to the extent of the repugnancy [. ] ”).

7 1 ag en ci es ro ut in el y pr om ul ga te su pe rs ed in g ru le s on va rio us to pi cs . Se e, e . g. , State ex 2 re l. Sta ple ton v . Sk

anda ra , 20 15 -NMCA- 04 4, ¶ 3, 34 6 P.3d11 91 (di sc us si ng 6.6 9.8 3 N MA C ( 0 8 / 3 0 / 2 0 1 2 ) , w h i c h g o v e rn s t e a c h e r e v a l u a t i o n s i n p ub l i c s c h o o l s a nd 4 superseded 6.69.4 NMA C (09/30/2 003, as am ended throug h 06/1 5/20 09)). 2 5 { 9} T h u s , t o t h e e x t e n t t h a t t h e 2 0 1 3 R u l e c h a n g e d t h e 2 0 0 8 R

u l e a nd t he 200 9 6 A m en dm en t, th e pr ev iou s r ule (s ) ar e re pe al ed

by im pli catio n. Be ca

use the 7 pr om ul ga ti on is fin al , Pet it io ne rs are fr ee t o c ha ll en ge th e ru le on it s m eri ts . See Ru le 8 1- 075( A ) (“ T his r

ule gov er

ns wri ts o f ce rt ior ari to a dm ini str at ive of fi ce rs a nd 9 ag en c i e s p u r s u a n t t o t h e N e w M e x i c o C o n s t i tu t i o n w h e n t h e r e i s n o s t a tu t o ryr igh t 10 to an a ppe al or oth er statut or y ri ght of re vie w . ”)

. H ow ev er , the doc tr ine of se paratio n 11 of pow er s pr ec lud es the j udi ci al br an chf rom act in g pr ior

to pr om

ulg at ion

. 12 Shoo bri dge , 201 0- N MS C- 049, ¶ 14 ( “ Be ca

use of the ne ce ssi ty

to re spe ct the se parate 13 br an ch es of gove rn m en t, co urts shou ld n ot i nte rv en e to h al t a dm ini str at ive he ar ing s 14 be fo re r

ule s or r eg ulatio ns are a dopt ed

. ”)

. W e the re fo re de cl ine P et iti one rs ’ inv i t at i on 15 to create a rule allowing an appeal to halt agency rulem aking action and conclude that 16 the pr ec ed ing appe al s of the 200 8 R ule a nd 2 009 A m en dm en t di d no t pr ec lud e the 17 Co m m iss ion fr om ex er ci sin g its au tho ri ty to pr om ulg at e the 2013 Ru le , whi ch w ill8

1 no w be a dd res se d o n i ts m eri ts . 2 B. The C om m issio n’s D ecision to A dopt the 20 13 PitRu le Was Not Ar bitrary 3 or Capr icious 4 { 10} In review ing an adm inistrative order on its m erits, we conduct the sam e re view 5 as th e d is tri ctco ur t s it ti ng i n i t s ap pe ll at e cap aci ty. R io G rand e Ch apt er

of Sie rra 6 Cl ub v . N

. M

. M i ni ng Com m’ n , 2 003-N MS C- 005, ¶ 16, 133 N
. M. 97, 61 P
. 3d 8 06. 7 T hus, w e de te rm ine : “ (1 ) w he the r th e ag en cy a ct ed f ra udul en tly , a rb itr ar ily , or 8 ca pr ic iou sly ; ( 2) w he the r ba se d up on the w hol e re co rd on r ev ie w , the de ci sio n of the 9 agency is not su pported bysubst antial evidence; (3) whether the action of the agency 10 w as outsi de th e sc ope of auth or ity of the a ge nc y ; or

( 4) w he the r the a ct ionof the 11 agency wa s otherwise no t in accordance w ith law. ” Rule 1-075(R). Petitioners assert 12 th atth e Co m

m is si on ’s act io ns in th is in st an ce were arb it rary andcap ric io us . An 13 agency ’ s action is arbitrary and capricious if it is “ unreasonable or witho ut a rational 14 basis, w hen viewed in light of the whole re cord.” Archuleta v. Santa Fe Police De p’t 15 ex r el . Cit

y o f S an ta Fe , 200 5- N MS C- 006, ¶ 17 , 1 37 N
. M. 161 , 108 P
. 3d 1 019 16 (i nte rn al quo ta tio n m ar ks and c itat io n om itt ed ); M cD ani el v . N. M

. B d. of M

ed

. 17 E xa m ’r s , 1 97 4- N M S C

- 06 2, ¶

1 1, 8 6 N
. M
. 4 47 , 5 25 P
. 2d 3 74 ( de sc r i bi ng a ge nc y 18 ac tio n as ar

bitrary an d ca

pr ic iou s w he n it is “ w ill fu l and unr ea sona ble

. . . , w ith out 19 co nsi de ratio n and i n disr eg ar d of f ac ts o r ci rc um stanc es ” (i nte rn al quo ta tio n m ar ks 20 an d c it at io n o m it te d) ).9

1 { 11} T he party

c ha lle ngi ng a

r ule a dopt ed

by a n a dm ini str at ive a ge nc y c ar ri es the 2 bur de n of

sho w ing that the r

ule is ar bitrary or c ap ri ci ous by de m onstratin g that “ ‘ the 3 rule’ s requirem ents are not reasonablyrelate d to the legisl ative purpose[.] ’ ” O ld A be 4 Co. v . N

.M . M ining Comm ’n , 199 5- N MC A -1 34, ¶ 10, 121 N
. M. 83, 908 P
. 2d 7 76 5 (i nte rn al quot at ion m ar ks and c itatio n om itt ed ); se e also N. M

. A tt’ y G en . v . N. M

. P ub. 6 Re gula tion Comm’ n , 201 3- N MS C- 042, ¶ 9, 309 P
. 3d 8 9 ( pla ci ng the bur de n on the 7 part ie s c ha lle ngi ng the a ge nc y or de r)

. Whe n r ev ie w in g ana ge nc y ’ s r ule m ak ing 8 de ci sio n w e use ade fe re nti al standard : 9 A n a genc y ’s rule -m ak ing f unc tio n in vol ve s th e ex er ci se of dis cr et ion , 10 an d ar ev ie w ing co urt w ill not sub sti tut e its j udgm en t f or that of the 11 agency on that issue where there is no showing of an ab u s e o f t h at 12 di sc r e t i on . R

ul e s a nd r e gu l a t i on s e na c t e d by

a n a ge nc y

a r e p r esum ed 13 valid and will be uphel d if re asonablyconsistent with the statutes that 14 th ey

im pl em en t. 15 W ilc oxv . N. M

. B d. of A cu punc tur e & O rie nta l M

ed

. , 2012 -N MC A -1 06, ¶ 7, 288 P
. 3d 16 90 2 (i nt ern al qu ot at io n m ark s an d c it at io n o m it te d)

. 17 { 12} In adopting a newrule, an adm inistr ative agency is required to provide a 18 state m en t of

r ea sons f or doi ng s o. A lth oughf

orm al f ind ing s are not

r equir ed , “ the 19 reco rd m

us t i ndi cate the r ea soni ng o f the Co m m iss iona nd the ba sis on whic h it 20 adopted th e [r

ule] .” City o

f Roswell v. N.M

. W ater Quality Contro l Comm ’n , 197 2- 21 N MC A -1 60, ¶

16, 84 N
. M. 561 , 505 P
. 2d 1 237. T he Co m m iss ionne ed not

state it s 22 re as ons fo r ad opt ing e ac h pr ovi sio n in a rule or r es pond to al l c onc er

ns r ai se d in10

1 te sti m ony ; su char equir em en t w oul d be “ undu ly one ro us . . . a nd unne ce ssary f or the 2 purpos es of appellate re view. ” R eg en ts of U niv

. of Ca l. v. N. M

. W ate r Q ual ityCo ntr ol 3 Comm ’n , 2004-NMC A- 073, ¶ 13, 136 N. M. 45, 94 P. 3 d 7 8 8 . W e re quire onlythat 4 “ the pub lic a nd the r ev ie w ing courts are inf orm ed a s to the r ea soni ng b eh ind the 5 [rule. ] ” Pharm. Mfrs. Ass’n v. N. M. B d. of Pharmacy , 197 4- N MC A -0 38, ¶ 17, 86 6 N.M. 57 1, 5 25 P.2d 93 1. 7 { 13} Petit i on e r s c on t e nd t he C om m i ss i on ’ s de c i si on t o i ss ue t he 20 13 R ule wa s 8 ar bitrary a nd c ap ri ci ous fo r fi ve r ea sons : (1) the 2013 Ru le is r ad ic al ly dif fe re nt f ro m 9 the 200 8 R

ule , de spi te be ing ba se d on larg el y the sa m e evi de nc e; (2 ) the Co m m iss ion 10 did not e nti re ly e xpl ai n it s r ea son fo r de part ing f ro m the 200 8 Ru le ; (3) the 11 Co m m iss iondid

not e xpl ai n w hy the 201 3 R ule is pe rf

orm an ce -b as ed , ins te ad

of 12 prescriptive; (4) the Com m issio n gave n o ex planation of its lowere d ground wa ter 13 contam ination cr iteria, and (5) the Com m issio n gave no explan ation of how it was 14 ab le to ac co m

pli sh m or e co st s av ing m ea sur es than th e 2008 Rule w hil e sti ll 15 pr ote ct ing w at er

sup pli es , pub lic he al th, a nd the en vir onm en t. Pe tit ion er ’ s a sse rt ion s 16 al l f oll owthe sam e lin e of

r ea soni ng. T he Co m

m iss ionhe ar d th e sa m e ev ide nc e in 17 the he ar ing s r el at ed

to the 201 3 R

ule a s it did in rel at ionto the 200 8 R ule , y et the 18 2013 Ru le is so dif

fe re nt fr om the 2008 Ru le that it m ust be ar bitrary an d c ap ri ci ous. 1 9 A s e x p l a i n e di n d e t a i l b e l o w , P e t i t i o n e r s ’ a s s e rt i o n s o f e rr o r a r e n o ts t a t e di n t e rms11

1 o f l e g a l s t a n d a r d s t h a t i n d i c a t e a n e e df o r r e v e r s a l , b u ti n s t e a da r e g r o u n d l e s s c l a i ms 2 of err or based on difference s betwee n the old and new versions o f t h e Pi t Rule. 3 Pe tit ion er s su

ppor te d th e 2008 Ru le a nd the 200 9 A m en dm en t; the f ir st a ppe als of 4 those rules we re filed by the entities whose p etition then resulted in the 2013 Rule, 5 that Petitioners now appeal. Rules change. F or a rule to be invalid , we apply the legal 6 st an da rd s en un ci at edbe lo w. 7 1. D if

fe re nc es Be twee n 200 8 Rule an d 20 13 Rule Do No t A ut om at ic all y 8 Re nder the Latte r R ule A rbitr ary and C apricious 9 { 14} Pe tit ion er s a sse rt that the or de r iss uin g th e 201 3 Ru le is ar bitrary a nd 10 ca pr ic iou s be ca

use it r ep re se nts a“ ra dic al de part ur e” f ro m the 200 8 Rule a nd 2 009 11 A m en dm en t de spi te be ing ba se d on “ ide nti ca l” ev ide nc e. W e de cl ine to fo llo wthi s 12 int er pr et at ion

. P et iti one rs a lso poi nt o ut tha t the Co m m iss ion took a dm ini str at ive 13 notice of the 2008 proceedings when considering th e 2009 Am endm e nt and argue that 14 w e shou ld f

oll owsui t be ca

use the 201 3 R

ule a nd 2008 Rul e ar e so inte rr el at ed a s to 15 re qui re us t o take j udi ci al not ic e of the 200 8 R

ule pr oceed in gs an d the 2009 16 Am endm ent proceedings. How ever, during th e proceed i ng s be l ow , w i th which w e ar e 17 pr es en tly

c onc er ne d, the Co m

m iss ion de nie d Pe tit ion er s’ re que st that it ta ke 18 ad m in is tra ti ve no ti ce o f th e 2 00 8 R ul e an d 2 00 9 Am en dm en t p ro ceed in gs . 19 { 15} Petitioners do no t argue that the Com m issio n erre d when it refused to consid er 20 the re co rd s fr om the 2008 an d 20 09 r ule m ak ing he ar ing s. I nst ea d, P et iti one rs a rg ue12

1 that it is pr oper for this Court to take j udicial notice of those r ecord s . P et ition ers 2 direct u s to not hing that sugg ests we shou ld expand o ur reviewfrom the rec ord 3 below, or w hy

it would be m eet to do so. T o act as if a new rule that differs f rom an 4 old one r equir es r ev ie wof

m or e than th e re co rd

ge ne rate d by t he ne wr

ule m ak ing 5 w oul d be c ontrary

to the w el l- es ta

bli she d r ule s th at “ dis tr ic t co ur ts enga ge d in 6 ad m i n i s t ra t i v e ap p e a l s ar e l i m i t ed t o t h e r ec o rd cr ea t ed at t h e a g en cy l ev el [, ]” 7 M ontano v. N. M

. R ea l E sta te A ppra ise r’ s B d. , 200 9- N MC A -0 09, ¶ 17, 145 N
. M. 494 , 8 200 P.3d 544 , and “ absent a specific statutor y p ro v ision to the contrary , an appeal 9 fro m an ad m in is tra ti ve he ari ng w i l l b e b as edso le ly on t he ad m in is tra ti ve reco rd .” 10 R o w l e yv . M u rra y , 1 98 7- NMC A -1 39, ¶

16, 106 N
. M. 676 , 748 P
. 2d 9 73; se e als o 11 Swisher v. D arden , 1955 -N MS C- 071, ¶ 9, 59 N
. M. 511, 287 P. 2d 73 (s ta tin g th at in 12 de te rm in in g whe the r ana ge nc y ’ s de ci sio n is a rb itr ar y , unl aw fu l, unr ea sona

ble , or 13 ca pr ic iou s, “ the c ourt i n it s r ev ie w , is lim ite d to the re co rd m ad e be fo re the 14 ad m in is tra ti ve tr i b u n a l” ), supe rc ed ed bysta tut e on o the r gr ound s as sta te d in 15 Aguilera v. Bd. of Educ. , 200 6- N MS C- 015, 139 N
. M. 330 , 132 P
. 3d 5 87. T he O il an d 16 G as A ct l im it s appe al s f ro m r ule m ak ing de ci sio ns t o th e re co rd m ad e by

the 17 Co m m iss ion

. S ec tio n 70 -2 -1 2. 2. I t i s no t the func tio n of a co urt a ct ing in anappe llate 18 ca pa ci ty to adm it ne w ev ide nc e or subs tit ute its j udgm en t f

or that of a n a dm ini str at ive 19 ag en cy . See Groendyke Transp ., Inc. v. N.M . Sta te Cor

p. Com m’ n , 198 4- N MS C- 067,13

1 ¶¶ 17- 20, 101 N
. M. 470 , 684 P. 2d 1135 (c onc lud ing that the dis tr ic t c ourt a ct ing in 2 ap pe llate ca

pa ci ty w as lim ite d to re vie w ing e vid en ce pr es en te d to a n a dm ini str at ive 3 ag en cy , a nd a cknow le dgi ng tha t a dm ini str at ive ap peal s are ge ne ra lly li m ite d to 4 ev id en ce p res en te d t o an ag en cy du rin g an ad m in is tra ti ve he ari ng ). Add it io na ll y , we 5 w ill not

be put in the the pos iti on o f re vie w ing the ap pe al s of the 200 8 R

ule a nd 2 009 6 Am endm ent; thos e appeals ar e not before us here. 7 { 16} Inli ght of Pe tit ion er s’ fa ilure to pro vid e author ity to suppo rt the ir sug ge sti on 8 that we ta ke j udi ci al not ic e of the r ec or d inpr ev iou s a dm ini str at ive r ule m ak ing 9 he ari ng s, we d ecl in e to do so . Se e In re A dopt ion of D oe , 1 98 4- N M S C-024, ¶ 2 10 (acknowledging that where a party cites n o authority to supp ort an argum ent, we m ay 11 as sum e no s uc h auth or ity e xi st s) . O ur

r ev ie wis the re fo re li m ite d to w he the r the 12 Co m m iss io n’ s or de r ad opt ing the 201 3 R ule w as a rb itr ar

y or c ap ri ci ous in l igh t of 13 onl y the e vid en ce pr es en te d to it dur ing the 201 3 r

ule m ak ing he ar ing

. 14 2. The R easoning Behind the 2013 Ru le Is Ad equate 15 { 17} A ft er

hol din g se ve ra l he ar ing s, the Co m m iss iona dopt ed

the 201 3 R

ule that i s 16 nowon a

ppe al

. T he Co m

m iss ion enum er at ed its r ea sons f or a dopt ing the 201 3 R

ule 17 in a se ct ionof

it s or de r en tit le d “ ult im at e fa ct s and c onc lus ion s of la w. ” T he 18 Co m m iss ionga ve de ta ile d e xp la na tions f or the standard s and r equir em en ts tha t i t 1 9 c r e a t e di n t h e 2 0 1 3 R u l e , a n dwe a f

f o r da g e n c y ru l e s ap r e s u mp t i o n o f v a l i d i t y.14

1 W ilc ox , 201 2- N MC A -1 06, ¶ 7. G en er al ly , the Co m

m iss ione xpl ai ne d th at

sin ce it s 2 issuance, the 2008 Rule has negativ ely im pacted the growth of the oil and gas 3 indu stry

in NewMexico, has bee n difficult to un ders t an d , has created unnecessary 4 p ap e rw o rk , a n d h a s c r e a t e d a c u m b e r s o m e p r o c e s s t h a t d o e s n o t pr om ote 5 pr ed ic ta

bil ity in the sy ste m . I n a ddi tio n, the Co m m i s s i on l ist ed

e nc our ag ing r eu se a nd 6 re cy cl ing of

oil fi el d f

lui ds and r ed

uc ing sur fa ce im

pa ct s a s a dd itiona l ba se s f or 7 adoptin g the 201 3 Rule. 8 { 18} T he Co m

m iss ionis not

r equir ed to res po nd t o a ll co nc er ns r ai se d duri ng 9 rulem aking hearings. For the purpos es of appellate re view, the rea sons listed above, 10 althoug h general, ar e ad equate to supp ort its decision to issu e the 2013 Rule, 11 particularly in light of the detailed finding s that the Com m issio n provides fo r e ach 12 ge ne ra l r ea son. F or

e xa m ple , the Co m

m iss ion ’ s o r d e r

i s d ivi de d in to e igh t su

bst an tiv e 13 cate gor ie s: p it w as te c onst itu en ts, va dose zo ne m ode lin g, soi l transpo rt , c onstru ct ion 14 an d de sig n, ope ratio n and adm ini str at ion , c los ur e an d r ev eg et at ion , sit ing , a nd m ult i1 5 we ll fl u i dm an ag emen tp i t s . Ea ch s ec t i o n co n t ai n s d et ai l ed s u m m ar i es o f t h e e v i d ence 16 pr es en te d onthe sub

j ec t, inc lud ing de sc ri pti ons of the te sts , stu dies, a nd m ode ls 17 pr es en te d, a s w el l a s th e re sul ts o f tho se te sts , stu die s, an d m ode ls. T he Co m m iss ion 18 the n c om

pil ed that i nf orm at ion in it s c onc lus ion s se ct ionto re ac h r es ult s a s to 19 ac ce pta

ble c onst itu en t l ev el s, ne c e s sary soi l de pth s, r ev eg et at ionr equir em en ts, sit ing15

1 considerations , and t an k integrity . I n all, the Com m issio n’ s order spans fifty pages 2 and is replete w ith the bases for, and reasoning behind, the 2013 Rule. W e theref ore 3 co nc lud e that the Co m m iss ion su ffi ci en tly

state d it s r ea sons f

or a dopt ing the 201 3 4 Ru le

. 5 { 19} Pe tit ion er s m ai nta in tha t “ [t ] he C o m m i s s i o na l s o f

a i le d to gr ap ple w iththe f

ac ts 6 an d c ir cu m stanc es that w er e the f

undam en ta l ba se s of

the 200 8 R

ule , but w hic h it 7 re j ec te d w ith out

e xpl an at ionin 20 13 .” Pe tit ion er s po int to nothin g inthe statut e or 8 re gul at ion s to sup port the ir a sse rt ion that the Co m

m iss ionis re qui re d to a ddr es s th e 9 fa ct s gi vin g r ise to a pr ev iou s r ule w he n pr om

ulg at ing a ne w ru le

. O ur re vie w of the 10 re co rd r ev ea ls tha t the Co m

m iss ionstate d su ff

ic ie nt reasons f

or the c re at ionof

the 11 2013 Rule. Petitioners have not sho wn any deficiency i n t h e ev idence proffer ed 12 during th e 2013 rulem aking to suggest that the Com m is s ion’s c onclusi ons were 13 arb it rary andcap ric io us . See Santa Fe E xpl. Co. v. Oil C

onservati on Comm’n , 199 2- 14 NMS C-044, ¶¶

10-11, 114 N.M
. 103, 835 P. 2d 819 (assertions m ust be accom

panied 15 by citations to th e re cord); Rule 12-213 (A )(4) NMR A ( requiring that a brief in chief 16 co nta in an arg um en t tha t c ont ai ns c itat ions to the “ re co rd pr ope r, tr an sc ri pt o f 17 pr oc eed in gs or e xh ib it s re li edon ”). 18 3. P er fo rm an ce -B ase d R ul e vs. P re sc ri pt ive R ul e 19 { 20} Pe tit ion er s’ br ie f as se rt s th at the Co m m iss ionf ai le d to e xplai n its r ea son fo r16

1 adoptin g a m ore perf

orm ance-based r

u l e, ra ther than the prescriptive rule that they 2 al le ge the 20 08 R

ule e na ct ed

. Mo re spe ci fi ca lly , P et iti one rs c om pla in tha t the 3 Com m issio n provid ed no explanatio n as to why a perf orm ance-based r

ule is required 4 as oppos ed to a prescriptive one. 5 { 21} Pe t i t i o n er s ’ in s i s t en ce o n a p ar t i cu l art ype o f ru l e mis s t at es t h e C o m m i s s i o n ’s 6 obl igatio n. T he Co m

m iss ionis re qui re d on ly to com ply w ithit s st at

uto ry dut ie s and 7 provide an ind ication of the reasoning and basis that it used when adoptin g the rule. 8 O uts ide of

tho se r equir em en ts, the Co m m iss ionha s no obligatio n to pr om ulg at e 9 pr es cr ipt ive ve rs us p er fo rm an ce -b as ed r ule s or giv e a de ta ile d e xpl an at ionof it s 10 reasons for issuing a ce rtain ty pe of rul e. Now here in our reviewof the O il and Gas 11 Ac t, and its accom

pany ing r egulation s, do we find any requirem ent that the rules 12 prom ulgated by the Com

m issio n be perform ance-based or prescriptive; they ne ed 13 on ly sati sf

y th e p ur po se s s etfor th in Sect io n 7 0- 2- 12 (B). 14 { 22} Rathe r than pr ovi de a uth or ity that bi nds the Co m

m iss ionto o ne ty

pe of r ule 15 ove r an y

oth er , P et iti one rs ba se the ir c ha lle nge on a

c om pari son be tw ee n th e 2008 16 Ru le a nd the 201 3 R

ule , giv enthe ir

be lie f that the 201 3 R

ule is in feri or. Be ca

use 17 Pe tit ion ers do n ot d isc harg e the ir bur de n to de m onstrate that the 201 3 R ule is not 18 re as ona

bly r el at ed to th e Co m

m iss ion ’ s le gis la tiv e pur pose , a s is r equir ed

to 19 de m onstrate a rb itr ar

y a nd c ap ri ci ous ac tio n, w e de fe r to the Co m m iss ion ’ s e xe rc ise17

1 of di sc ret io n a nd pre su m e th e 20 13 Ru le is va li d. O ld A be Co

. , 19 95 -NMCA- 13 4, ¶ 2 10 ( statin g r equir em en ts f or pr ovi ng a ct ionis ar

bitrary a nd c ap ri ci ous) ; W

ilc ox , 201 2- 3 N MC A -1 06, ¶

7 ( pr es um ing a ge nc y

r ule is va lid unl es s not in ac co rd w ithstatut or ily 4 pr es cri be d purp ose ). A s di sc uss ed be low , the Co m

m iss ionha s e xpl ai ne d th e 5 reasoning and bases it used, and how it has acc om plis h ed i t s statutorilyproscribed 6 dut ie s, w hil e Pe tit ion er s have m ad e no show ing that the 201 3 R ule is not r ea sona bly 7 re la te d to the Co m

m iss ion ’ s le gis la tiv e pur

pose be y ond the ir

be lie f in i ts b ei ng a

le ss 8 pa la tabl e ru le to th ei r ne ed s t ha n t he on e p rev io us ly ado pt ed

. 9 4. Low ered Ground w ater C ontam ination Stan dards 10 { 23} Pe tit ion er s c ont en d th at the Co m m iss ion fa ile d to j ust if

y its de part

ur e fr om the 11 standard s inthe 200 8 R ule that pr ote ct ed

gr oundw at er . As disc uss ed above , the 12 Co m m iss ion is not

r equir ed to “ j ust if y it s de part ur e” f ro m the 200 8 R

ule ; i t i s on ly 13 re qui re d to e xpl ai n it s r ea soni ng fo r ad opt ing the 2013 Ru le a nd h owthe 201 3 R ule 14 acco m

pl is he s t he Co m

m is si on ’s st atut ory

du ti es . Ci tyof

R osw el l , 197 2- N MC A -1 60, 15 ¶ 1 6. 16 { 24} W ith regard to ground wa ter contam ination , the C omm issio n’ s order identified 17 ev ide nc e de ta ili ng the de ptha nd c onc en tr at ionof c ont am inatio n level s, and how 18 thing s like soil density , w eather, tem perature, and m oistu re a ffec t the speed at which 1 9 co n t amin an t s t ra v el ed ce rt ai n d i s t an ce s . F o r i n s t an ce , t h e C o m m i s s ion acknowledged18

1 that, a ft er

hun dr ed s of y ears , ch lor ide , w hic h is use d as a non- tox ic m ea sur em en t of 2 co ntam inant m ove m en t, w oul d r ea chde pth s a t w hic h gr oundw at er ge ne ra lly e xis ts. 3 T he Co m

m iss ionthe n us ed

that i nf orm at ionto re ac h c onc lus ion s r eg ar din g 4 inf iltratio n of

f lui ds, de sir ab le pit slo pe an gle s, an d m obi lity of vari ous co m poun ds. 5 T he Co m

m iss iona lso c onsi de re d e vid en ce w he re sam ple s take n f

ro m ove r thi rty

pit s 6 ar ound the st at e w er e an al y ze d a cc or din g to E PAm ethodo log y , a nd the r es ult an t 7 co n t a m i n a n t l e v e l s w e r e c o m p a r e d t o “ p ub l i s h e d r e g u l a t o ry c r i t e r i a . ” T he 8 Com m issio n used that in form ation to com pile a list of contam inants th at w arranted 9 m onito ring as well a s their acce ptable levels. The Com m issio n then conclud ed that 10 the levels it specified i n the 2013 Rule “ provide reasonable p rotection of fresh water , 11 publ ic he al th an d the en vir onm en t[ , ] ” an d it ex pla ine d how it re ac he d th at c onc lus ion

. 12 It detailed the level of contam ination perm issib le w hen groun dwater is found at 13 vary ing de pth s, a nd r ea sone d that the ev ide nc e pr es en te d su ppor te d it s c onc lus ion s. 14 In addition , the Com

m issio n’ s order provides citations to portion s of the rec ord that 15 it rel ie d o n i n m ak in g i ts fin di ng s an d c on cl us io ns . 16 { 25} For re asons detailed previousl y , w e do not take up Petitio ners’ argum ent that 17 the Co m

m iss ion ’ s a dopt ionof

the 201 3 R

ule is ar bitra ry a nd cap ric ious be ca

use 18 Pe tit ion er s do not

e xpl ai n w hy th e 20 13 Rul e is d if fe re nt f ro m the 200 8 R

ule w ith 19 respect to groundwater standards. That is not the standard that we a pply ; we instead19

1 lookto whether the Comm issio n’ s actions are consistent with the statute it is charged 2 wit h i m

pl em en ti ng . W

ilc ox , 2012 -N MC A -1 06, ¶ 7. T he Co m m iss ionis as sig ne d th e 3 ta sk o f re gul at ing “ the dis posi tio n of w at er pr oduc ed or use d inc onne ct ionw iththe 4 dr ill ing f

or or pr oduc ing of

oil or ga s . . . in a m an ne r that w ill a ff or d r ea sona

ble 5 protection against contam ination of fresh wa ter su pplies[.] ” Se ction 70 -2-12(B)( 15). 6 N ot o nly is th e Co mm iss ion ’ s or de r co nsi ste nt w iththat m an da te w ithr eg ar d to 7 gr oundw at er , but

the Co m m iss iona lso pr ovi de d an a de qu ate e xpl an at ionba se d on 8 th e ev id en ce as to ho w itarri ve d a t i ts de ci si on to ad op t t he pro vi si on s t ha t i t d id

. 9 5. Ec onom ic Conside rations 10 { 26} Pe tit ion er s a ssert tha t the Co m m iss iona ct ed

im pr ope rl y in pr om ulg at ing the 11 2013 Ru le be ca

use it did so i n o rd er to f

urthe r ec onom ic de ve lop m en t, a nd the 12 furtherance of econom ic developm ent is not part of the Com m issio n’ s duties u nder 13 the Oil and G as Ac t. T he Com m issio n asserts that econom ic considerations exis t as 14 the ve ry

c or e of it s st at uto ry obl igatio ns. P et iti one rs ’ a rg um en t i s m isc onc ei ve d. 15 a. Ec on om ic C on sid er at ion s W er e N ot t he C om m iss ion ’s P ri m ar y P ur po se 16 in P ro m ul gat in g t he 201 3 R ul e 17 { 27} T he Oil an d Gas A ct int en ds tha t a ll oil f

ie lds be a llo w ed

to pr oduc e an d 18 m ar ke t a share of the oil pr oduc ed a nd m ar ke te d inthe state , “ ins of

ar a s [ that] c anbe 19 effe cted econo m ically and without wa ste.” Section 70-2-19(B). The Oil and Ga s Act 20 al so v es ts the O il Co nse rv at ionD ivi sio n w ith the duty to m ak e w ha te ve r ru le s,20

1 regu la ti ons, a nd o rd er s th at a re ne ce ssary

to carr y out the pr ovi sio ns o f the O il an d 2 G as A ct , a nd i n so doi ng, “ the div isi on sha ll give due co nsi de ratio n to the e co nom ic 3 fa ct or s in vol ve d. ” Se ct ion70- 2- 19( C)

. I n a ddi tio n, the O il Co nse rv at ionD ivi sio n 4 m ust a llo cate oil pr oduc tio n e ffi ci en tly a nd e co nom ic al ly

a nd m ust “ co nsi de r the 5 econom ic loss caused by the dril l i n g of unnecessary we lls[.] ” Se ction 70 -2-17(B). 6 Fi na lly , the L eg isl at

ur e em pow er ed the O il Cons erv at ion D ivi sio n “ to m ak e an d 7 en fo rc e ru le s, reg ul at ion s and o rd er s, a nd t o do wh ate ve r m aybe re ason abl y 8 necessary to carry ou t t he pu rp os e o f [t he Oil an d Gas A] ct , whether or not indicated 9 or s pe ci fie d in anyse ct ion [. ] ” Se ct ion70- 2- 11( A ) (e m pha sis a dde d)

. F urther , the 10 Co m m iss ionis re qui re d to m ini m iz e the ec onom ic im pa ct of it s r ule s onsm al l 11 busi ne sse s, an d in doi ng so, co nsi de r the co m ple xity of the r ule , the c om

pla int s and 12 com m ents receive d from

the publi c concerning the rule, and the degree to w hich 13 te ch nol ogy

a nd e co nom ic c ondi tio ns h av e ch an ge d in the ar ea af fe ct ed by the r ule s. 14 N MS A 197 8, § 14 -4 A -6 (A ), ( C) (1 )- (5 ) (2 005) ; N MS A 197 8, § 14 -4 A -3 (A ) (2 005) 15 (a ppl y ing S m al l B usi ne ss R eg ulator y Re lie f A ct

to “ ev e r y de partm en t, a ge nc y , board , 16 com m issio n, com

m ittee or institut ion of the executive branch of state governm ent”). 17 { 28} W e do n ot r eg ar d th e Co m m iss ion ’ s m anda te so b ro ad ly a s to a cc ep t i ts 18 contentio n that econom ic considerations st and as the basis for its other duties un der 19 th e Oil an d Gas Act. See § 70 -2 -1 2( B)

. W e ag re e w ithP et iti oner s th at e co nom ic21

1 co ns id erat io ns can no t s ta nd as th e so le pu rp os e fo r crea ti ng oram en di ng a ru le

. Cf

. 2 P ub. Se rv . Co

. of N. M

. v . N. M

. E nv tl. I m prov em en t B d. , 197 6- N MC A -0 39, ¶ 10, 89 3 N
. M. 223 , 549 P. 2d 638 (st at ing that a ge nc y auth or ity sho uld be c onstru ed

to pe rm it 4 th e fulle st a cc om

pli shm en t of

le gis la tiv e int en t, but

a cknow le dgi ng tha t w he re it is 5 not inc lud ed in the sc ope of

auth or ity de le ga te d to a n a ge nc y , ind ustri al de ve lop m en t 6 shou ld o cc ur

a s a co nse que nc e, not by de sig n)

. H ow ev er , the langua ge of the O il an d 7 G as A ct

a llo w s for th e Co m

m iss ionto inc lud e ec onom ic c onsi de ratio ns i n it s 8 re as oni ng whe n pr om

ulg at ing r

ule s. Whil e ec onom ic c onsi de ratio ns undou bte dly 9 play ed som e ro le in the Co m m iss ion ’ s de ci sio n to iss ue the 201 3 R ule , w e se e no 10 indication that econom ic c o n s iderations were the primary purpos e behind the rule. 11 { 29} In i t s or de r , t he C om m i ss i ons t a t e d m a ny

r e a so ns t hatt he 2 01 3 R ul e wa s 12 ne ce ssary , inc lud ing the Co m m iss ion ’ s de sir e to e nc our ag e re us e and r ec y cl ing of 13 oil fi el d f

lui ds and r ed

uc e sur fa ce im

pa ct s, w hic h w as ins pir ed by c hange s inoil fi el d 14 pr ac tic es . T he se c onsi de ratio ns w er e ena ct ed to pro te ct the en vir onm en t and p ubl ic 15 he al th in acco rd an ce wi th th e O i l an d Gas Act. See § 70-2-12(B)(21), (22). 16 A ddi tio na lly , the Co m m iss ion ’ s or de r poi nts to its de sir e to cl ar if y an d a lle viate the 1 7 cu m b er s o m e p ro ce s s an dco n fu s i o n t h at re s u l t ed fr o m y ea r s o f t h e 2 0 0 8 Ru l e’s 18 ap pli catio n. T o il lus tr at e thi s, the Co m m iss ionpoi nts to int er

pr et at ion s of the 200 8 19 Ru le that r es ult ed

in unne ce ssari ly

r es tr ic tiv e sit ing r equir em en ts and i na ppr opr ia te22

1 ap pli catio n of

the r ule to fr es h w ater pi ts an d surf ac e fe at ur es . S im pli fi catio n of 2 co m pli an ce w ith the Pi t Rul e is a m ea sur e that i s r ea sona

bly ne ce ssary

to ac co m pli sh 3 th e p r ev en ti on of wa st e an d p ro te ct io n o f co rrel at iv e ri gh ts . See § 70 -2 -1 1( A ); see 4 als o 19. 15. 2. 7( C) (1 5) N MA C ( de finin g “ co rr el at ive r igh ts” ). T he se r ea sons a re in 5 ad dit ionto the Co mm is sion’ s f ind ing that the 201 3 R

ule f av or ab ly im pa ct s sm al l 6 b u s i n e s s b y m a k i n g c o mp l i a n c e l e s s c o s t l y. 7 { 30} W e conclude that the Com m i ssion acted w ithin its statuto ry authority when 8 inc lud ing e co nom ic c onsi de ratio ns i n it s st at ed rea sons f or pr om ulg at ing the 201 3 9 Ru le

. E co nom ic de ve lo pm en t w as not the Co m

m iss ion ’ s pr im ar

y pur pose f or 10 prom ulgatin g the rule, but rather , w as properly one of m any reasons for it. W e further 11 co nc lud e that the Co m m iss ion ’s or de r pr ope rl y take s in to c onsi de ratio n publi c 12 co m m ents co nc ern in g t he rul e, th e ru le ’s com pl ex it y , and tec hnologi ca l a nd e co nomic 13 ch an ge s. See § 14 -4 A -6
. 14 b. The C om m issio n’s R easoning is Adeq uate 15 { 31} Pe tit ion er s a sse rt that the Co m

m iss ion ga ve no ex plana tio n of how it w as able 16 to accom

plish m ore cost saving m easures than the 2008 Rule, y et still protect water 17 s u p p l i es , public health, and the environm ent. T his argum ent is based on th e order 18 ad opt ing the 200 8 R

ule , w hic h stat ed that the Co m m iss ion m ad e al l c hange s it c oul d 19 to lessen po tential effe cts on sm all busin esses while still protecting fresh water,23

1 hum anhe al th, a nd the e nvi ro nm en t. P et iti one rs a rg ue that be ca use the Co m

m iss ion 2 too k a ll poss ibl e m eas ures in 2008 , it is im pli ci t tha t the re w er e no c ost -s av ing 3 m ea sur es r em ai nin g to be m ad e in the 201 3 R ule

. T hus , t he ya rg ue , the de ci sio n to 4 inc lud e an y

c hange s r el at ed

to co st- sa vin g m ea sur es in the 201 3 Rule m ust be 5 arbitrar y and capricious. Petition ers state no factual basis for this, and the record does 6 not su pport their ar g u m ent. A gain, our standard of reviewdoes not con tem plate a 7 co m pari son of

the old a nd n ew ru le s, but rathe r re qui re s that w e co nsi de r w he the r the 8 Co m m is si on ha s pro vi de d an adeq ua te ex pl an at io n of its reas on in g, se e Ci tyof 9 R osw el l , 197 2- N MC A -1 60, ¶ 16, an d w he the r its de ci sio n is unr ea sona ble in lig ht o f 10 th e who le reco rd

. Se e A rc hul eta , 200 5- N MS C- 006, ¶ 17. 11 { 32} Re ly ing on evi de nc e pr es en te d duri ng the 2013 pr oc ee din g, the Co m m iss ion 12 m ad e fi ndi ngs re gard ing m isc onc ep tio ns r eg ar din g tank r equir em en ts tha t un de rl ie 13 the 200 8 R

ule a nd the 2009 A m en dm en t and the unn ec es sary c ost s in curr ed

thr ough 14 co m pli an ce w iththat r

ule

. I n a ddi tio n, the Co m m iss ionm ad e fi ndi ngs as to the 15 ge ne ra l de cl ine of

the oil busi ne ss i n r ec en t y ears , inc lud ing r ed uc ed num be r of w el ls 16 dr ill ed , hig he r co st o f dr ill ing , bus ine sse s le av ing the state due to inc re as ed c ost , a nd 17 ope rator

r el uc tanc e in atte m

pti ng t o ob ta in e xc ep tio ns f ro m th e 20 09 A m en dm en t 18 ow ing to its langua ge an d co m ple xity . Ba se d ontho se f ind ing s, the Co m

m iss ion 19 re ac he d th e co nc lus ionthat the 201 3 R ule w as ne ce ssary

to m ak e co m

pl ianc e w ith24

1 the P it Ru le le ss c um be rsom e an d m or e unde rs tanda ble f or the r eg ulator s and 2 regulated com

m unity

. The C omm issio n’ s order prom ulgatin g the 201 3 Rule lists ten 3 re as ons fo r al te ri ng the P it Ru le , inc lud ing m ak ing co m plian ce w iththe r

ule le ss 4 co stl y , m or e ef

fi ci en t, m or e co ns is te nt, a nd m or e unde rs tanda ble

. F ind ing s a s to 5 correlative rights and ec o n o m i c waste are sufficient to satisfy our requirem ent that 6 ad m in is tra ti ve ag en ci es st at e th ei r reas on in g fo r is su in g a n o rd er. Rutter & W ilban ks 7 Corp. v. Oil C

onservati on Comm’n , 197 5- N MS C- 006, ¶ 18, 87 N
. M. 286 , 532 P
. 2d 8 582 (s ta tin g th at

f ind ing s a s to c or

re la tiv e ri ghts an d e co nom ic w as te a re suf fi ci en t 9 to s at isf

y the r equir em en t tha t the Co mm iss ionm ak e ba sic c onc lus ion s of f ac t or 10 fi ndi ngs) ; se e als o 19. 15. 2. 7( C) (1 5) N MA C (d efi ning “ co rr el at ive r igh ts” a s th e 11 oppo rt

uni ty af fo rd ed to the ow ne r of

e ac h pr ope rty

in a pool to pr oduc e w ith out w as te 12 the owner’ s equitable share of the oil in the po ol, so far as can be prac ticably obtained 13 wit ho ut wast e). 14 { 33} W e c o n c l u d e t h a t t h e e x p l a n a t i o n g i v e n w a s a d e qu a t e t o e x p la in t he 15 Co m m iss ion ’ s r ea soni ng i n pr om ulg at ing the 201 3 R

ule

. I n a dd it ion , w e co nc lud e 16 that P et iti one rs ha ve not de m onstrate d th at

the Co m m iss ionabuse d it s di sc re tio n in 17 co nc lud ing that the 201 3 R ule ’ s pr ovi sio ns are a de qua te to pr ote ct pub lic he al th and 18 the e nvi ro nm en t. W e the re fo re de fe r to the Co m m iss ion ’ s disc re tio n and uphol d th e 19 20 13 Ru le as r eas on ab ly con si st en t wi th th e Oil an d Gas Act. Se e W ilc ox , 201 2-19 The t en -d ay rul e d oe s n ot ap pl y

in cas es of e m erg en cy . Sect io n 7 0- 2- 23
. 3 25 1 NMCA-1 06 , ¶ 7. 2 C. Notice 3 { 34} The Oil a nd

G a s A c tr e qu i r e s t he O i l C on se rvat i on D i vi si ont o c r e a t e r

ul es 4 gove rn ing the pr oc ed

ur e to be fo llo w ed in h eari ngs an d othe r pr oc ee din gs b ef or e it. 5 Se ct ion70- 2- 7. T he Co m m iss ionpr om

ulg at ed se parate pr oc ed

ur al r ule s f or 6 ru le m ak in g h eari ng s an d a dju di cat ory he ari ng s. Co m

pare 19.15.3.9 N MAC wi th 7 19. 15. 4. 9 N MA C. Be fo re an y ru le , re gul at ion , or or de r is a dopt ed , the Co m m iss ion 8 m ust f ir st h old ahe ar ing on the m atte r. S ec tio n 70 -2 -2 3. T he Co m m iss ionm

ust , no 9 le s s t h a n t e n d a y s p r i o r t o t h e h e a r i n g , g i v e “ r e a s o n ab l e n o t i c e ” t h a t a he ar ing is 10 t a ki ng place. Id

. The r ight to rec eive notice and a hearing before the adoptio n of a 3 11 ru le is a st atut ory

rig ht

. Li vi ngston v . E

wi ng , 198 2- N MS C-11 0, ¶ 14, 98 N
. M. 685 , 12 65 2 P .2d23 5. Th e “ ‘reaso nabl e no ti ce’ m an da te sh ou ldcir cu m sc rib e wha te ve r . . . 13 rules are prom

ulgated for the purpos e of notify ing in terested pe rs o ns.” Johnso n v. 14 N.M . O il Conservatio n Comm ’n , 199 9- N MS C- 021, ¶ 23 , 1 27 N. M. 120 , 978 P
. 2d 15 32 7. 16 { 35} Notice of rulem aking hearings m ust be publ ished on behalf of the State of Ne w 17 Me xic o, be sig ne d by the Co m m iss ion ’ s ch ai rm an , an d be ar the Co m m iss ion ’ s se al

. 18 19.15.3.9(A ) NMAC . In additio n, it m ust state t he hearing’ s date, tim e, and place, as26

1 w el l a s th e da te by

w hic h th ose c om

m en tin g m

ust sub m it the ir

w ri tte n c om

m en ts. 2 19. 15. 3. 9( A ) N MA C. T he not ic e m ust be publ ish ed in fo ur dif fe re nt w ay s: “ (1 ) one 3 tim e in a

ne w spa pe r of ge ne ra l c ir cu la tio n inthe state , no le ss than 20 day s pr ior to 4 the sc he dul ed

he ar ing da te ; ( 2) on the appl ic ab le doc ke t f or the c om m iss ion 5 he ar ing

. . . , w hic h th e com m iss ion cl er

k sh al l se nd b y

r eg ular or

e le ctro nic m ai l no t 6 le ss than 20 day s pr ior to the he ar ing to al l w ho h av e re que ste d su chnot ic e; ( 3) one 7 tim e in the N ewMe xic o Reg ist er , w ith the publ ic at ion da te not le ss than 10 bus ine ss 8 day s pr ior to the sc he dul ed he ar ing da te ; and ( 4) by

pos tin g onthe div isi on’ s w eb sit e 9 not les s than 20 day s pr ior to the sc he dul ed

he ar ing da te . ” 19. 15. 3. 9( A )( 1) -( 4) 10 NMAC. 11 { 36} T he Co m

m issio n’s no ti ce w as iss ue d onbe ha lf of the S ta te of

N ewMe xic o, 12 w as giv enund er

the Co m m iss ion ’ s se al , a nd w as sig ne d by the c ha irm anof

the 13 Co m m iss ion

. I t a lso state d th e d at e, ti m e, and pl ac e of the he ar ing , a nd i t gave the 14 date by

which w ritten com

m ents w ere required to be subm itted. Notice wa s publ ished 15 in the Albuquerque Jou rnal, on th e Com m issio n docket, which w as m ailed 16 el ec tr oni ca lly

to tho se w ho r eque ste d it , in the N ew Me xic o Reg ist er , an d on the O il 17 Co ns erv at io n Di vi si on ’s webs it e. All no ti ces were t im el y . Giv en th es e fac ts , we 18 co nc lud e that the Co m m iss ionsa tis fi ed al l not ic e re qui re m en ts p re sc ri be d by statut e 19 an d re gu la ti on .27

1 { 37} Pe tit ion er s’ c ha lle nge to the ad equa cy of the Co m m iss ion ’ s no tic e fo cu se s on 2 one of the f if te enpr opos ed

a m en dm en ts l ist ed

in th e not ic e, na m el y , the one 3 pertaining to “ m

ulti-well fluid m anagem ent pits.” Petitioners assert that the notice 4 wa s inadequate to reasonablyinform the publi c of the sub s t an ce o f the proposed 5 ru le s. P et iti one rs poi nt o ut tha t the not ic e did not de sc ri be the pur

pose of tho se m ult i6 w el l pi ts, the ir

a nti ci pa te d si ze , the ir

a nti ci pa te d op er at ing du rat io n, or the ir 7 an tic ipate d im

pa ct s ona ir , w at er , a nd p ubl ic he al th. P et iti one rs co nte nd tha t, be ca use 8 the notice was inadequate, they we re deprived of an a dequate oppo rtunity to prepare 9 ex pe rt w itn es se s or

pr ep ar e ad equa te c ro ss e xa m inatio ns o f w itn es se s. 10 { 38} Pe tit ion er s c ite to 19. 15. 3. 8 N MA C and th e N ewMe xic o A dm ini str at ive 11 Procedures A ct (N MAP A) to supp ort their assertion tha t t h e Com m issio n’ s notice 12 w as ina de qua te . Ne ith er auth or ity

c ite d su ppor ts P et iti one rs ’ a rg um en t. F ir st, 13 19.15.3.8(A )(1) N MAC go v erns orders initiating rulem aking, and requires that 14 appl ic ati ons to initiate rulem aking in clude “ a bri ef sum m ar y of the pr op osed r

ule 15 ch an ge ’ s in te nde d e ff ec t[
. ] ” (E m

pha sis ad de d. ) N ow he re in the ru le doe s it a ddr es s 16 notice requirem ents, nor does it require a summ ary of the com plexitythat Petitioners 17 de sir e, a nd P et iti oners provi de no r ea son fo r us t o a ppl y suc h a r equir em en t t o th e 18 notice procedure. Second, P etitioners sug gest that we use the NMA PAas a gener al 19 gui de lin e fo r r e s o l v i n g a dm i n i s tr at i v e l aw q u e sti ons. P et iti one rs a cknow le dge that the28

1 NMAPA do es no t ap pl y to all ad m in is tra ti ve ag en ci es . Se e E

. I nde m . Co

. of

M ary lan d 2 v. He ller , 1984-NMC A- 125, ¶ 4, 102 N .M. 144, 692 P. 2d 530 (stating that NMAP A 3 onlyapplies to an agency that is spec ifically placed, by law , r ule, or r egulation , under 4 the A dm ini str at ive P ro ce dur es A ct ). T he y do n ot c ite to an y

auth or ity appl y ing the 5 NMAPA to th e Co m

m is si on . Se e In re A dopt ion of D oe , 1984-NMS C-024, ¶ 2 6 (stat i n g t h at we will not reviewissues raised in appellate briefs w hich are 7 unsu pported bycited authority ). Nothing in th e O il and Ga s Act a pplies th e N MAP A 8 to the Co m

m iss ion ’ s a ct ion s. T hus, w e co nc lud e that the Co m m iss ionc om

pli ed w ith 9 the langua ge of the O il an d Ga s A ct a nd i ts a sso ci at ed

r ule s w he n it

iss ue d no tic e of 10 th e ru le m ak in g h eari ng s. 11 { 39} D es pit e the Co m m iss ion ’ s c om

pli an ce w ithits st at

uto ry obl igatio n to iss ue 12 not ic e, P et iti one rs c ont en d th at the langu ag e in the not ic e re fe rr ing to “ m ult i- w el l” 13 pits was m isleading o r unintellig ible. N otice m ay be inadequate to fulfill its statuto ry 1 4 pur p o s e o f n o t i f y i n g i n t e r e s t e dp e r s o n s i f i ti s i n s u f

f i c i e n t , a m b i g u o u s , m i s l ea din g, 15 orun in te ll ig ib le to th e av erag e ci ti zen . Nesbi t v
. Ci tyof A lbu que rque , 1977-NMS C16 107, ¶ 9, 91 N
. M. 455 , 575 P
. 2d 1 340; se e als o J ohns on , 199 9- N MS C- 021, ¶ 23 17 (a cknow le dgi ng tha t purp ose of “ re as ona ble not ic e” in the O il and G as A ct is to 18 not if y int er es te d pe rs ons)

. A lth oughit is co nc ei vable that the a ve ra ge ci tiz enm igh t 19 not kn ow w hat a re quirem ent pertaining to m ulti-well pits m ight include, the notice29

1 pr ovi des m ore inf

orm at ionthan si m

ply ac ur sor y r ef er en ce to a cr

y pti c te rm . T he 2 not ic e ind ic at es howc opi es o f the pr opos ed a m en dm en ts t o th e Pi t R ule c anbe 3 obt ai ne d: thr oughthe O il Co nse rv at ionD ivi sio n’s A dm ini str at or —w hose pho ne 4 num be r is inc lud ed

—or thr oughthe O il Co nse rv at ionD ivi sio n’ s w eb sit e— w hic h is 5 also in cl ud ed

. T he pr opos ed a m en dm en ts i nc lud e a le ngthy de fi nit ionof

w ha t a 6 “ m ult i- w el l fl uid m an ag em en t pit ” is, an d de ta il w ha t pe rm it ap pli catio ns f or m ult i7 w el l pi ts r equir e, w he re m ult i- w el l pi ts m ay

not be loc ated, a nd wha t c onstru ct ion 8 re qui re m en ts w er e fo r m ult i- w el l f lui d m an ag em en t pit s. If Pe tit ion er s w er e, ind ee d, 9 m isled by , or unawar e of, the Com m issio n ’s n o t ice, they

could have received 10 sig nif ic an tly m or e inf orm at ionabout

m ult i- w el l pi ts and wha t c hange s w ere be ing 11 co nsi de re d by

r ea ch ing out

to the D ivi sio n. W e the re fo re r ej ec t P et iti one rs ’ a rg um en t 12 that the Co m

m iss ion ’ s no tic e w as ina de qua te . I t no t on ly sa tis fi ed the statut or y a nd 13 re gul at or

y r equir em en ts, but

a lso pr ovi de d a ddi tio na l i nf orm at ionby

m ak ing the 14 pr op os edam en dm en ts av ai labl e upo n re qu es t. 15 III. CON CLU SION 16 { 40} Pe tit ion er s’ a sse rt ion s of er ro r m ust fa il. T he y poi nt t o no le ga l ba sis f or the ir 17 as se rt ionthat the Co m m is si on la cked

j ur isd ic tio n to iss ue it s or de r an d c re at e the 18 2013 Rule. In prom

ulgatin g t h e 2 013 Rule, the Com m issio n satisfied its statu tory 19 duties and g ave adequate re asons for its actions. As such, we conclude that there w as30

1 n o e rr o r , a n da f

f i rm. 2 { 41} IT IS S O ORDERE D.
3

____ ____ ____ ____ ____ ____ ____ __ 4 R OD ERIC K T . KE N N ED Y , Ju dg e 5 WE CO NCUR:
6

____ ____ ____ ____ ____ ____ ____ ____ __ 7 M IC HA EL E. V IG IL , C hi ef Ju dg e

8

____ ____ ____ ____ ____ ____ ____ ____ __ 9 JA M ES J. WE C HS LE R , Ju dg e