Opinion ID: 2586233
Heading Depth: 3
Heading Rank: 2

Heading: New Mexico State Law

Text: {20} As previously noted, the Walkers' state law argument is premised on three overlapping legal areas: the beneficial use requirement, the language of Section 19-3-13 and its interplay with the beneficial use requirement, and certain language drawn from our precedent. We begin with a brief discussion of New Mexico water law as it has developed over time.
{21} The prior appropriation doctrine governs water law in New Mexico. See N.M. Const. art. XVI, § 2 (Priority of appropriation shall give the better right.); Montgomery v. Lomos Altos, Inc., 2007-NMSC-002, ¶ 5 n. 3, 141 N.M. 21, 150 P.3d 971 (citing NMSA 1978, § 72-1-2 (1907)). Under prior appropriation, the right to use water is considered a property right which is separate and distinct from ownership of the land. KRM, Inc. v. Caviness, 1996-NMCA-103, ¶ 6, 122 N.M. 389, 925 P.2d 9; see Charles T. DuMars & A. Dan Tarlock, Symposium Introduction: New Challenges to State Water Allocation Sovereignty, 29 Nat. Resources J. 331, 332 (1989) (noting that under prior appropriation a water right [is] a quasi-exclusive property right ( not tied to the locus of use ) (emphasis added)). Thus, a water right is not an automatic stick in the bundle of rights a landowner receives upon purchasing even a fee interest in land. {22} 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. N.M. Const. art. XVI, § 3. A water right is separate and distinct from a right to adjacent land because it is derived not from the rights in the land, but from appropriation for beneficial use. Olson v. H & B Props., Inc., 118 N.M. 495, 498, 882 P.2d 536, 539 (1994). As a result of the separate and distinct nature of a water right, that right must be exercised or lost; one cannot sit on water rights to the exclusion of any other claimant without putting them to beneficial use. See Ira G. Clark, Water in New Mexico: A History of Its Management and Use 39 (1987) (Since the criterion was application of water to beneficial use, this was not a property right which could be acquired in perpetuity; it had to be exercised to be kept alive.). {23} The sole exception to the general rule that water rights are separate and distinct from the land is water used for irrigation. See KRM, 1996-NMCA-103, ¶ 8, 122 N.M. 389, 925 P.2d 9 (holding that Section 72-1-2 and NMSA 1978, § 72-5-22 (1953) evince an intent to create a limited statutory exception to the general rule that water rights and land ownership are distinct property rights). Irrigation water rights are appurtenant to the land, meaning that any conveyance of the land will carry the water right with it unless the water right is expressly reserved by the grantor. See NMSA 1978, § 72-1-2 (1953) (providing that all waters appropriated for irrigation purposes . . . shall be appurtenant to specified lands owned by the person, firm or corporation having the right to use the water); § 72-5-22 (providing that the transfer of title of land in any manner whatsoever shall carry with it all rights to the use of water appurtenant thereto for irrigation purposes, unless previously alienated in the manner provided by law (emphasis added)); Turner v. Bassett, 2005-NMSC-009, ¶ 10, 137 N.M. 381, 111 P.3d 701 (noting that under Sections 72-1-2 and 72-5-22, water that is applied to irrigation becomes appurtenant to the land on which it is used). {24} The prior appropriation tradition, as it exists in New Mexico today, can be traced to the convergence of practices followed in northern Mexico prior to the cession in 1848 with practices developed in connection with Anglo western settlement. See United States v. Rio Grande Dam & Irrigation Co., 9 N.M. 292, 306, 51 P. 674, 678 (1898) (stating that [t]he law of prior appropriation existed under the Mexican republic at the time of the acquisition of New Mexico), rev'd on other grounds by 174 U.S. 690, 19 S.Ct. 770, 43 L.Ed. 1136 (1899); Clark, supra, at 41-42 (noting that the water institutions of New Mexico represent a fusion of early Spanish law and custom with the pure form of the doctrine of prior appropriation [which] stems from the California gold rush). The prior appropriation doctrine's independence of water from the land, and the requirement that a water right be exercised continuously, distinguish water rights under the prior appropriation doctrine from water rights under the riparian doctrine. See Clark, supra, at 39. The riparian doctrine governs water rights in most eastern states, and grants landowners the right to make reasonable use of water that flows through or otherwise abuts their land. Ownership of a water right under the riparian doctrine is in no way affected by failure to exercise the right. Id. at 37. {25} Early Western settlers, such as those in the gold mining camps of California and the early irrigation settlements in Colorado, found the riparian doctrine unworkable in the arid West because they often had to divert water from its source in order to use it beneficially because the land associated with the use of the water did not itself contain a water source. See A. Dan Tarlock, The Future of Prior Appropriation in the New West, 41 Nat. Resources J. 769, 770 (2001); Clark, supra, at 37-40. Under the traditional riparian doctrine, the new Western settlers would have had to show that their reasonable use did not interfere with those downstream. See Clark, supra, at 37 (noting that under the riparian doctrine, the reasonable use of a water right must not significantly interfere with downstream riparian appropriators). This riparian doctrine made sense in the eastern states where larger sources of water exist, and, therefore, not as many people had to tap into a single source resulting in less effect on downstream users. See Norman K. Johnson & Charles T. Dumars, A Survey of the Evolution of Western Water Law in Response to Changing Economic and Public Interest Demands, 29 Nat. Resources J. 347, 348-49 (1989). In the western states where populations were limited to fewer and smaller water sources, most uses somehow affected downstream users. See id. {26} As indicated by its historical evolution in the West, a primary feature of the prior appropriation doctrine and its concomitant beneficial use requirement was the need for water to be mobile or divertible to other areas of use and not tied to the surrounding land. See 2 Joseph W. Dellapenna, Waters and Water Rights 11.02(a), (d) (Robert E. Beck, ed., 1991 ed., 2001 Repl.Vol.) (noting the key attributes of prior appropriation address the need in arid regions to divert and transport water in order to place it to beneficial use). Because water is a scarce commodity in the West, mobility and transferability are necessary to meet changing social goals. This often means moving water from one location to another and also from one use to another. See Kaiser Steel Corp. v. W.S. Ranch Co., 81 N.M. 414, 419, 467 P.2d 986, 991 (1970) (discussing how even private parties may exercise powers of condemnation to construct facilities to transport water and put it to beneficial use such as mining); Clark, supra, at 39 (stating that prior appropriation had released the arid western region from restricting its scant water resources to the limits of riparian lands, making possible the diversion of those waters to areas where they could be applied more effectively). {27} Water rights are therefore not tied to a particular location or even a particular source. See NMSA 1978 § 72-5-23 (1985) (change of place of use); NMSA 1978 § 72-5-24 (1985) (change of purpose); NMSA 1978 § 72-12-7 (1985) (change of location of well for groundwater). As such, water 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. See Joseph L. Sax, Rights that Inhere in the Title Itself: The Impact of the Lucas Case on Western Water Law, 26 Loy. L.A. L.Rev. 943, 944 (Water has been described as merely usufructuary; as belonging to the public; as subject to public servitudes; as incapable of full ownership; as subject to constraints that it be used nonwastefully, reasonably, beneficially, etc. (citation omitted)). Thus, under prior appropriation, as a separate protected property right, a vested water right can be sold, leased, or transferred. KRM, 1996-NMCA-103, ¶ 5, 122 N.M. 389, 925 P.2d 9. {28} This mobility of water rights, generally not appurtenant to any specific land, informs our analysis of the Walkers' argument in this case. As we shall see, the Walkers would have this Court undermine years of established law by declaring such a link, or an appurtenance, between land and water in the non-irrigation context.
{29} The Walkers draw on New Mexico statutory law in support of their assertion that the law of New Mexico tied the appropriation of water to the appropriation of range for the beneficial use of raising livestock and `possession' of the range was directly tied to a vested water right. As noted previously, this argument is based on Section 19-3-13, which states: Any person, company or corporation that may appropriate and stock a range upon the public domain of the United States, or otherwise, with cattle shall be deemed to be in possession thereof: provided, that such person, company or corporation shall lawfully possess or occupy, or be the lawful owner or possessor of sufficient living, permanent water upon such range for the proper maintenance of such cattle. (Emphasis added.) The Walkers further argue that Section 19-3-13 conferred a possessory interest in an easement to stock the public range in conjunction with water ownership. In other words, the statutory use of the word possession in connection with discussion of a valid water right to support cattle demonstrates a legislative intent to give those with a water right for stock watering on the public domain a possessory interest in that range attendant to the water right. {30} As correctly observed by the Tenth Circuit in Diamond Bar, this Court has already confronted the nature of the possessory interest discussed in Section 19-3-13 and held that it is not as broad as the Walkers interpret it to be. As early as 1915, this Court stated that the precursor to Section 19-3-13 did not grant any exclusive right in the use of the public domain. Hill, 21 N.M. at 11, 151 P. at 1015. Hill addressed whether the predecessor to Section 19-3-13 conflicted with federal laws specifying that public lands should be left open for all to enjoy. Id. at 10-12, 151 P. at 1015-16. In holding that Section 19-3-13's predecessor was a proper use of the police power, and not in conflict with federal law, this Court noted that granting any party an exclusive right to the public domain would violate federal law, and must therefore be held invalid. Id. at 11, 151 P. at 1015. Construing the predecessor to Section 19-3-13 narrowly, this Court observed that the New Mexico statute simply required that all those who seek to stock a range upon the public domain must, before doing so, lawfully possess, or be the lawful owner of, sufficient permanent water on such range for the proper maintenance of such cattle. Id. at 11, 151 P. at 1016. Hill thus states that to use the land of the public domain for stock watering, one must have a water right to support those cattle. However, Hill never implies the converse: that a water right on the public domain used to water cattle creates a land right in that range. {31} In Yates, this Court expanded on Hill, holding that under the predecessor to Section 19-3-13, when a person has obtained sufficient water on the public range to raise cattle, that person has the right to the exclusive enjoyment of that range, but only as against others who did not develop other waters upon the same [lands]. Yates, 30 N.M. at 422, 235 P. at 437. While noting that the predecessor to Section 19-3-13 provides access to those with water rights, in Yates we emphasized that such access to the public domain is not a right but a privilege, governed by license from the federal government. 30 N.M. at 422, 235 P. at 437; see also William D. Rowley, U.S. Forest Service Grazing and Rangelands: A History 54 (1985) (noting that since the formation of the forest reserves, the use of terms such as privilege and allotment indicate the government's contention that stockmen did not possess unlimited rights to graze on the reserves). Accordingly, and contrary to the Walkers' assertion that they have a possessory interest to forage the public domain independent of their grazing permit, this Court has consistently held that Section 19-3-13 and its predecessor recognize merely a right in the use of the license to graze on public lands, allowing those with sufficient water rights to support cattle on such lands to exclude others without a water right. Yates, 30 N.M. at 422, 235 P. at 437; Hill, 21 N.M. at 11, 151 P. at 1015-16. This Court has never indicated that a person raising cattle pursuant to a license has any separate interest in the public domain, aside from water rights protected by the Mining Act, that can be asserted against the United States government if that license is lost. {32} In connection with Section 19-3-13, the Walkers also argue that the beneficial use requirement itself gives rise to a right to continue a particular beneficial use on the particular land upon which a water right is initially established. Thus, by limiting their ability to graze cattle on the allotment, the United States has put a barrier between the Walkers and their water right that will have the effect of terminating that right based on non-use. This argument is flawed for two reasons. {33} First, the Walkers have not been forced into non-use, because as discussed previously, all water rights, even if appurtenant to a certain piece of land, can be severed from that land and applied to another use at a different location. See § 72-5-23 (laying out the process for changing place of use of an appurtenant water right); § 72-5-24 (laying out the process for changing the purpose of use and place of diversion for a vested water right); § 72-12-7 (laying out the process for changing well location and use); see also Mathers v. Texaco, Inc., 77 N.M. 239, 248, 421 P.2d 771, 778 (1966) (noting that New Mexico statutes expressly recognize that the right to use water upon certain lands may be severed from such lands and become appurtenant to other lands, or may be transferred for other purposes and other uses); Tarlock, supra, at 777 (Water rights, despite their usufructuary character, have always been treated as transferable property rights.). Thus, the value of the Walkers' water right does not depend entirely on stock watering at the same location; the right can be severed from the allotments, moved to other lands, used for other purposes, or even sold. See, e.g., Colvin I, 67 Fed.Cl. at 570 (noting that although a rancher was no longer permitted to graze cattle on certain Bureau of Land Management (BLM) lands, he continued to have a vested water right appurtenant to said lands, and thus the newly authorized rancher on the BLM lands had to haul in his own water). {34} Second, the requirement that water must be put to beneficial use does not give rise to an interminable right to continue that same beneficial use. See McNew, 33 N.M. at 436, 269 P. at 65 (It . . . does not follow that, because water has been appropriated for a particular use, it forever thereafter must be applied to that use. (quoted authority omitted)). For example, if one acquires a water right by beneficially using water in a milling operation, which operation is subsequently shut down due to environmental violations, the mill operator cannot claim a right to continue milling just to protect the water rights. In this case, the Walkers' ability to acquire and use their water right on the allotments was conditioned on the permission of the federal government to go on the land. The Walkers were thus responsible for maintaining their license to graze on the public land, and since they lost that license, they cannot now rely on a right to continue a particular beneficial use to maintain the water right that they were able to acquire by way of government permission in the first place. Because the Walkers chose not to comply with the government's permitting process, they took the risk of either forfeiting their water right through non-use or being forced to transfer, lease, or sell that right.
{35} Along with Section 19-3-13, the Walkers rely on this Court's 1928 opinion in First State Bank of Alamogordo v. McNew, 33 N.M. 414, 269 P. 56 (1928), to support their argument that they have an implicit right to land incident to their water right. Quoting selectively from particular passages in McNew, the Walkers and their Amici assert that a possessory right to forage on public lands is implicit within a New Mexico water right. They accurately quote from McNew that, although the title to the public range rested with the United States, holder of the water right had appropriated and stocked said range with cattle, and being the owner of permanent water for use upon said range for the maintenance of cattle thereon, had possessory rights in said public lands, which he could protect as against one forcibly entering thereon without right. 33 N.M. at 422, 269 P. at 59 (emphasis added). The Walkers argue that this language, which relies on the predecessor to Section 19-3-13 as well as on Hill and Yates, indicates that a vested water right based on grazing cattle necessarily includes a possessory interest in the very forage which is the object of that grazing. {36} The Walkers also claim that McNew analogizes a stockwater [sic] right to an irrigation right, and thus supports a finding that an interest in land is incident to a water right. In other words, since irrigation water rights become appurtenant to the land on which they are used, stock watering rights, which are also tied to the land through grazing, imply a grazing right on the land surrounding the source of that water. The Walkers point to the following statement from McNew: Since water for stock-raising, as well as for irrigation, may become incident to the beneficial use of land, the cases cited are not distinguishable in that respect. The water right is considered incident or appurtenant to the land irrigated, because that is the use which it is applied and for which appropriated. For the same reason, it should be deemed incident to the land on which W.H. McNew's cattle grazed. 33 N.M. at 423, 269 P. at 60 (citation omitted). The Walkers assert that if stock watering rights can be incident to land, then conversely, a land right utilized to gain that water right, such as forage, can be incident to a water right. {37} Upon careful analysis of the McNew opinion, we conclude that the Walkers have misread its holding as well as its place in New Mexico jurisprudence. McNew addressed whether a water right is appurtenant to a possessory interest in land. 33 N.M. at 422-423, 269 P. at 59-60. Regardless of the holding of McNew on that issue, neither McNew nor any other New Mexico case supports the converse proposition: that a land interest is incident to a water right. In contrast to the facts of McNew, the Walkers do not seek to make a water right appurtenant to land; rather, they seek to make an interest in land appurtenant to a water right. The McNew opinion never addressed such a claim. There is no support for applying McNew in this fashion. See also Hunter v. United States, 388 F.2d 148, 153-54 (9th Cir.1967) (The argument that appurtenance runs both ways claims too much. The appurtenance must be limited to that which is essential to the use of the right granted; it does not include the thing with which the right granted is used.); Cleary v. Skiffich, 28 Colo. 362, 65 P. 59, 63 (1901) (holding that a water right does not include the right to use land on which to beneficially apply the water). {38} While our discussion of McNew could end here, we think this distant opinion deserves further explanation, especially in light of the specific passages the Walkers selectively draw upon to support their argument. The facts of McNew provide important context and are historically interesting, being specific to the time of the open range when the public domain was utilized by settlers seeking to make a living in the arid conditions of the West. The McNews raised cattle on the public range, but held no title to the land. McNew, 33 N.M. at 422, 269 P. at 59. As part of their stock raising operation, the McNews purchased rights to a large amount of water and built the instrumentalities necessary to pipe that water to the range to water their cattle. Id. The McNews later orally conveyed their entire interest to their son, which conveyance was challenged by a creditor bank. Id. at 421, 269 P. at 59. The part of the opinion relevant to our discussion here involved whether those water rights could be conveyed orally, or whether a conveyance of such rights would have to comply with the statute of frauds. McNew, 33 N.M. at 421-22, 269 P. at 59-60. Classifying the McNews' rights as possessory rights, which equity would protect against someone attempting to enter forcibly without better right, and the water rights as appurtenant or incident thereto, this Court agreed with the McNews that a written conveyance was not necessary. Id. at 423, 269 P. at 60 (relying on precedent from Oregon and Montana). {39} Whatever the merits of an oral conveyance may have been in 1928, however, New Mexico water law has since evolved and made this inquiry moot. Since McNew was decided, our courts have recognized water rights as real property interests to which all the rules of real property apply, including the requirement of the statute of frauds that all such conveyances be in writing. See Posey v. Dove, 57 N.M. 200, 210, 257 P.2d 541, 547 (1953) (It is generally conceded by all of the authorities that a water right, or an interest in water, is real property, and it is so treated under all the rules of law appertaining to such property. (quoted authority omitted)); see also McNew, 33 N.M. at 422, 269 P. at 59 (stating that the Court declined to confront the issue of whether water rights were real property). It is now clear under New Mexico law that a transfer of a water right must be in writing. {40} Therefore, all of McNew's language about water being appurtenant to possessory estates in land, utilized to avoid the statute of frauds, seems out of time, would not be viewed the same today, and serves no continuing purpose for the law. As previously discussed, the law of New Mexico is clear that a water right is separate from any land right and not appurtenant, except in the irrigation context. To find any sort of interest in land, one must look to the land, not to a water right upon that land. To the extent McNew appears inconsistent with these principles, it has no contemporary legal effect and should no longer be cited for that purpose. {41} Drawing on this same language from McNew, a later Court of Appeals opinion cited McNew, indicating in dicta that water used for certain domestic purposes, including watering livestock, can be incident to land where the right to continue to use the water on the land is indispensable to the enjoyment of the land. KRM, 1996-NMCA-103, ¶ 7, 122 N.M. 389, 925 P.2d 9 (citing McNew, 33 N.M. at 430, 269 P. at 62-63) (emphasis added). The Walkers seize upon this language in KRM to support their argument that forage rights are implicit in a water right because without the right to forage their water right is valueless. {42} To the extent that KRM, and specifically the final sentence in paragraph seven of that opinion, suggests that uses of water other than for irrigation purposes are appurtenant to land, we hereby correct that language. It relies on the very language in McNew that we have just held to be of no further legal effect. Though only dicta in KRM, that language is potentially confusing to the law; and therefore, in the interests of clarity, that discussion in paragraph seven should no longer be cited for the proposition that water can be incident or appurtenant to land, except in the case of irrigation.