IN THE SUPREME COURT OF THE STATE OF NEW MEXICO
Opinion Number: 2010-NMSC-049
Filing Date: November 10, 2010
Docket No. 32,396
NEW ENERGY ECONOMY, INC.,
Petitioner,
v.
HONORABLE WILLIAM W. SHOOBRIDGE,
Judge for New Mexico’s Fifth Judicial District,
Respondent,
and
SENATOR CARROLL H. LEAVELL, et al.,
Real Parties in Interest,
Consolidated with:
Docket No. 32,409
NEW MEXICO ENVIRONMENTAL
IMPROVEMENT BOARD,
Petitioner,
v.
HONORABLE WILLIAM W. SHOOBRIDGE,
Fifth Judicial District Judge,
Respondent,
and
SENATOR CARROLL H. LEAVELL, et al.,
1
Real Parties in Interest.
ORIGINAL PROCEEDINGS
New Mexico Environmental Law Center
R. Bruce Frederick
Douglas Meiklejohn
Eric Jantz
Santa Fe, NM
for Petitioner New Energy Economy, Inc.
Gary K. King, Attorney General
Eric R. Miller, Assistant Attorney General
Stephen A. Vigil, Assistant Attorney General
Santa Fe, NM
for Petitioner New Mexico Environmental Improvement Board
Gary K. King, Attorney General
Nanette E. Erdman, Assistant Attorney General
Santa Fe, NM
for Respondent Honorable William W. Shoobridge
Montgomery & Andrews, P.A.
Louis W. Rose
Jeffrey J. Wechsler
Lara Katz
Santa Fe, NM
for Real Parties in Interest Senator Carroll H. Leavell, et al.
Miller Stratvert, P.A.
Richard L. Alvidrez
Albuquerque, NM
for Real Parties in Interest Public Service Company of New Mexico and
Southwestern Public Service Company
Vinson & Elkins, L.L.P.
Eric Groten
Bryan Moore
Austin, TX
2
for Real Party in Interest El Paso Electric Company
OPINION
PER CURIAM.
{1} When the Legislature lawfully delegates authority to a state agency to promulgate
rules and regulations, may a court intervene to halt proceedings before the agency adopts
such rules or regulations? This question is one of substantial public interest because court
intervention in administrative proceedings before the adoption of rules or regulations may
thwart the public’s right to participate in such proceedings. We hold that a court may not
intervene in administrative rule-making proceedings before the adoption of a rule or
regulation for three reasons. First, the separation of powers doctrine forbids a court from
prematurely interfering with the administrative processes created by the Legislature.
Second, only upon completion of administrative rule-making proceedings will a party be
certain that it is aggrieved, since it is not known whether a regulation will even be adopted
by the agency. Third, since the administrative proceeding is not complete, there is no actual
controversy to be resolved by a declaratory judgment action.
I. BACKGROUND
{2} The Legislature empowered the Environmental Improvement Board (Board) to
prevent or abate air pollution and to adopt or promulgate regulations consistent with the Air
Quality Control Act. NMSA 1978, § 74-2-5 (1967) (as amended through 2007). This matter
originated in a proposal to regulate greenhouse gas emissions that Petitioner New Energy
Economy (New Energy) filed with the Board. The Board held a public meeting on January
5, 2009 in Santa Fe to determine whether to hold a hearing on New Energy’s proposed
regulation. At the hearing were representatives from the Public Service Company of New
Mexico, the Dairy Producers of New Mexico, the New Mexico Oil and Gas Association, and
the New Mexico Farm and Livestock Bureau, who asked the Board not to conduct a hearing,
contending that the Board lacked the authority under the Air Quality Control Act, NMSA
1978, §§ 74-2-1 to -17 (1967) (as amended through 2007), to regulate greenhouse gas
emissions unless it first established an ambient air quality standard. The Board decided to
allow briefing on the matter and scheduled a hearing on the issue of its jurisdiction and
authority for April 6, 2009.
{3} At the hearing on April 6, 2009 in Santa Fe, New Energy argued that (1) the Board
had the authority to hold hearings on the matter, (2) the final regulation might vary from
their proposed rule, and (3) the Board could adopt an ambient air quality standard in the rule-
making context. The Board determined that it had the required authority to hear the matter
and entered an order establishing a hearing schedule. The groups opposing the petition
moved for a temporary stay of the proceedings and filed objections to the scheduling order.
On December 31, 2009, public notice was given on New Energy’s proposed rule. On
January 13, 2010, those who had objected to the proposal during the hearings before the
3
Board and others (the plaintiffs) filed a complaint for a declaratory judgment and injunctive
relief in the Fifth Judicial District Court in Lea County. The plaintiffs sought to enjoin the
Board from conducting further administrative proceedings, arguing that the Board lacked
statutory authority to consider or adopt New Energy’s petition. New Energy and the Board
filed motions to dismiss the action. The district court granted the plaintiffs’ request for a
preliminary injunction.
{4} The Board and New Energy petitioned this Court for a writ of superintending control
or prohibition and requested a stay of the district court proceedings. The plaintiffs, as real
parties in interest, opposed Petitioners’ requests. We reviewed the district court’s decision
to issue a preliminary injunction for an abuse of discretion. LaBalbo v. Hymes, 115 N.M.
314, 318, 850 P.2d 1017, 1021 (Ct. App. 1993). See also Allstate Ins. Co. v. Firemen’s Ins.
Co., 76 N.M. 430, 433-34, 415 P.2d 553, 555 (1966); NMSA 1978, § 44-6-7 (1975). A
misapprehension of the law constitutes an abuse of discretion. See State v. Elinski, 1997-
NMCA-117, ¶ 8, 124 N.M. 261, 948 P.2d 1209. For the reasons that follow, we granted the
writ of superintending control and ordered the district court to dissolve the injunction issued
in the case, dismiss the complaint, and remand the case to the administrative agency for
further proceedings.
II. DISCUSSION
{5} The central issue is whether the district court erred in granting a preliminary
injunction enjoining the Board from completing the rule-making process. The plaintiffs
contend that the issue is answered by State ex rel. Hanosh v. Environmental Improvement
Board [hereinafter Hanosh I], 2008-NMCA-156, ¶ 8, 145 N.M. 269, 196 P.3d 970, affirmed
by State ex rel. Hanosh v. King [hereinafter Hanosh II], 2009-NMSC-047, 147 N.M. 87, 217
P.3d 100.
{6} In the two Hanosh cases, the district court was asked to construe a statute to
determine whether the Environmental Improvement Board was acting within its legislative
authority when it adopted regulations addressing automobile emissions. We affirmed the
Court of Appeals, holding that a declaratory judgment action is an appropriate procedure to
challenge the Board’s statutory authority to adopt regulations. Hanosh I, 2008-NMCA-156,
¶ 8; Hanosh II, 2009-NMSC-047, ¶ 4. Under the circumstances of Hanosh II, we agreed that
the plaintiffs could raise a purely legal challenge to the Board’s statutory authority
independent of the administrative appeal process. 2009-NMSC-047, ¶ 4.
{7} The plaintiffs argue that this case is precisely like the Hanosh cases because in
Hanosh I the Board was in the process of considering proposed regulations when the
plaintiffs filed their complaint seeking a declaratory judgment. They contend that because
we upheld the Hanosh I court’s jurisdiction to entertain the action, reasoning that the
question before it was purely legal and did not require “special agency expertise or
additional fact-finding,” the court in this case should have the same authority. 2008-NMCA-
156, ¶ 8.
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{8} We do not find the Hanosh cases controlling. Although the complaint in the Hanosh
cases was filed before the adoption of the regulations, those regulations were adopted on the
same day the plaintiffs delivered their complaint to the Board. Hanosh I, 2008-NMCA-156,
¶ 1. Thus, the Board had actually issued a regulation at the time the district court heard the
challenge to the regulation. This fact distinguishes the Hanosh cases from the one before
us. Our holding in both Hanosh I and II should not be cited for the proposition that a court
may intervene to halt an administrative rule-making proceeding before a rule or regulation
is adopted.
{9} In addition, while we agree that the Board was not engaged in adjudicative fact-
finding, the Board was attempting to hold hearings to develop legislative facts.
Unlike adjudicative facts, legislative facts do not concern individual parties,
such as who did what, when, where, and how. . . . Legislative facts are those
which help the tribunal to determine the content of law and policy and to
exercise its judgment or discretion in determining what course of action to
take.
Quynh Truong v. Allstate Ins. Co., 2010-NMSC-009, ¶ 25, 147 N.M. 583, 227 P.3d 73
(quoting Lee v. Martinez, 2004-NMSC-027, ¶ 13, 136 N.M. 166, 96 P.3d 291 (internal
quotation marks and citations omitted)). The interruption of this process of legislative fact-
finding interfered with the Board’s duty, mandated by the Legislature, to hold public
hearings before regulations are adopted. See NMSA 1978, § 74-1-9 (1985); NMSA 1978,
§ 74-2-6 (1992). This process constitutes an essential part of the legislative branch’s
function to make policy choices. See State ex rel. Haragan v. Harris, 1998-NMSC-043, ¶
23, 126 N.M. 310, 968 P.2d 1173 (Serna, J., dissenting) (“The New Mexico Constitution
establishes the legislative branch as the entity to represent the collective will of the populace
for purposes of creating laws to effectuate the public policy of the State.”).
A. Separation of Powers
{10} Although we have never specifically stated that our cases addressing the relationship
between administrative proceedings and declaratory judgment actions are controlled by the
doctrine of separation of powers, that doctrine has been implicit in our reasoning. When we
wrote in Smith v. City of Santa Fe, 2007-NMSC-055, ¶ 15, 142 N.M. 786, 171 P.3d 300, that
the Declaratory Judgment Act provides an alternative means of challenging an administrative
entity’s authority to adopt a regulation, we cautioned
against using a declaratory judgment action to challenge or review
administrative actions if such an approach would foreclose any necessary
fact-finding by the administrative entity, discourage reliance on any special
expertise that may exist at the administrative level, disregard an exclusive
statutory scheme for the review of administrative decisions, or circumvent
procedural or substantive limitations that would otherwise limit review
5
through means other than a declaratory judgment action.
Id. We repeated this admonition in Stennis v. City of Santa Fe, 2008-NMSC-008, ¶ 3, 143
N.M. 320, 176 P.3d 309 and State ex rel. Regents of Eastern New Mexico University v. Baca,
2008-NMSC-047, ¶ 20, 144 N.M. 530, 189 P.3d 663 (per curiam). The caution we gave
against using judicial action to circumvent the requirements of administrative proceedings
authorized by the Legislature defers to the legislative process that creates an agency and
empowers it to adopt rules or regulations to carry out its powers.
{11} Most of our recent cases addressing the interaction of declaratory judgment actions
and administrative proceedings involved administrative adjudications; that is, the application
of existing law to the facts of a particular matter. See, e.g., Baca, 2008-NMSC-047, ¶ 3
(concerning the construction of a contract in the context of a bid protest by the unsuccessful
party); Stennis, 2008-NMSC-008, ¶ 11 (involving a dispute over whether city ordinance
requiring a permit to drill a domestic well applied to the plaintiff); Smith, 2007-NMSC-055,
¶ 1 (addressing whether the City of Santa Fe could adopt an ordinance requiring a particular
plaintiff to obtain a city permit for a domestic well).
{12} In those cases, we concluded that when the matter at issue (1) is purely legal, (2)
requires no specialized agency fact-finding, and (3) there is no exclusive statutory remedy,
it is a proper matter for a declaratory judgment action and does not require exhaustion of
administrative remedies. Smith, 2007-NMSC-055, ¶¶ 17, 27. Even when the questions to
be addressed were purely legal, however, we have held that a party who initiated the appeals
process in an administrative action could not use a declaratory judgment action to
circumvent the requirements of an administrative appeal. See Baca, 2008-NMSC-047, ¶ 22
(requiring the plaintiff, who had initiated the appeals process to resolve a purely legal issue,
to file the action in the judicial district where appellate review of the administrative action
would have taken place); Smith, 2007-NMSC-055, ¶ 23 (requiring the plaintiff, who had
initiated the appeals process to resolve a purely legal issue, to comply with the time limits
for judicial review, but holding such restrictions did not apply to the plaintiff who had not
initiated the appeals process); Stennis, 2008-NMSC-008, ¶¶ 2-3 (permitting a declaratory
judgment action to resolve a purely legal matter when no appeals process had been initiated).
{13} In all of these cases, we acknowledged that in creating the declaratory judgment
action, the Legislature provided, in relevant part, that “[a]ny person . . . whose rights . . . are
affected by a statute, municipal ordinance, contract or franchise, may have determined any
question of construction . . . arising under the . . . statute, ordinance, contract or franchise
and obtain a declaration of rights, status or other legal relations thereunder.” NMSA 1978,
§ 44-6-4 (1975). We also implicitly recognized that the Legislature has frequently delegated
to administrative agencies the authority to resolve disputes involving its expertise arising
under specific statutes and regulations.
{14} The limitations we have placed on the use of the declaratory judgment action respect
the role of each branch of government in the constitutional scheme and the administrative
6
processes put in place by the Legislature. Article III, Section 1 of the New Mexico
Constitution divides state government into “three distinct departments, the legislative,
executive and judicial.” Although we have recognized “that the constitutional doctrine of
separation of powers permits some overlap of governmental functions,” State ex rel. Taylor
v. Johnson, 1998-NMSC-015, ¶ 23, 125 N.M. 343, 961 P.2d 768, it remains true that
“[w]ithin our constitutional system, each branch of government maintains its independent
and distinct function.” Id. ¶ 21 (citing State v. Fifth Judicial Dist. Court, 36 N.M. 151, 153,
9 P.2d 691, 692 (1932) for the proposition that “[t]he Legislature makes, the executive
executes, and the judiciary construes the laws.”). Within this constitutional scheme, we have
recognized the Legislature’s power to delegate both adjudicative and rule-making power to
administrative agencies. See Bd. of Educ. of Carlsbad Mun. Sch. v. Harrell, 118 N.M. 470,
483-84, 882 P.2d 511, 524-25 (1994) (citing Wylie Corp. v. Mowrer, 104 N.M. 751, 753, 726
P.2d 1381, 1383 (1986)), for the proposition that the Legislature may delegate adjudicatory
power to agencies); Duke City Lumber Co. v. N.M. Envtl. Improvement Bd., 101 N.M. 291,
292, 681 P.2d 717, 718 (1984) (observing that the Legislature “grants agencies the discretion
of promulgating rules and regulations which have the force of law”). Courts should not
intervene to halt administrative hearings before rules or regulations are adopted. To do so
would thwart the public’s opportunity to participate in rule-making. Because of the
necessity to respect the separate branches of government, courts should not intervene to halt
administrative hearings before rules or regulations are adopted. To do so could deprive the
public of the opportunity to propose rules or regulations and otherwise participate in the rule-
making process. In addition, the administrative agency should be given the opportunity to
correct any errors that have been brought to its attention during the course of such
proceedings.
B. Because the Administrative Proceedings Were Not Complete, the Declaratory
Judgment Action Was Not Ripe, and There Was Not an Actual Controversy
{15} Petitioners argue that because the rule-making process was incomplete, there was no
final agency action, and the declaratory judgment action was premature and not ripe for
review. They note that in the context of judicial review of administrative regulations, the
United States Supreme Court has adopted a two-part test to determine whether a regulation
is ripe for review. See Abbott Labs. v. Gardner, 387 U.S. 136, 149 (1967) (holding that a
court must “evaluate both the fitness of the issues for judicial decision and the hardship to
the parties of withholding court consideration”), abrogated on other grounds by Califano
v. Sanders, 430 U.S. 99, 105 (1977). In applying the first prong, the Court determined that
a rule was ripe for review before it was enforced, but did not go so far as to state such a
matter was ripe before it has been promulgated. See Abbott, 387 U.S. at 151. We have
relied on the first prong of the Abbott test to explain that the doctrine of ripeness “prevent[s]
the courts, through avoidance of premature adjudication, from entangling themselves in
abstract disagreements over administrative policies, and also to protect the agencies from
judicial interference until an administrative decision has been formalized.” See U.S. West
Commc’ns, Inc. v. N.M. State Corp. Comm’n, 1998-NMSC-032, ¶ 8, 125 N.M. 798, 965 P.2d
917 (quoting Abbott, 387 U.S. at 148-49 (internal quotation marks omitted)).
7
{16} The plaintiffs respond that a ripeness analysis is not applicable in this case because
the federal doctrine of ripeness relied on by Petitioners has no basis in the New Mexico
Constitution. We agree that the New Mexico Constitution does not expressly impose a
“cases or controversies” limitation on state courts like that imposed upon the federal
judiciary by Article III, Section 2 of the United States Constitution. However, we have also
held that the judicial power to resolve disputes in a government built upon a foundation
separating the legislative, executive, and judicial functions should be “guided by prudential
considerations.” N.M. Right to Choose/NARAL v. Johnson, 1999-NMSC-005, ¶¶ 12-13, 126
N.M. 788, 975 P.2d 841. Indeed, “prudential rules” of judicial self-governance, like
standing, ripeness, and mootness, are “founded in concern about the proper—and properly
limited—role of courts in a democratic society” and are always relevant concerns. Warth
v. Seldin, 422 U.S. 490, 498 (1975). See also Schlesinger v. Reservists Comm. to Stop the
War, 418 U.S. 208, 221-27 (1974).
{17} The Declaratory Judgment Act itself requires the presence of an “actual controversy”
before a district court can assume jurisdiction in a declaratory judgment action. See NMSA
1978, § 44-6-2 (1975). In the absence of any actual case or controversy, it is improper to
issue a declaratory judgment. Yount v. Millington, 117 N.M. 95, 103, 869 P.2d 283, 291 (Ct.
App. 1993). One of the “prerequisites of ‘actual controversy’ warranting consideration in
a declaratory judgment action [is that] . . . the issue involved must be ripe for judicial
determination.” Sanchez v. City of Santa Fe, 82 N.M. 322, 324, 481 P.2d 401, 403 (1971).
{18} Thus, even if a purely legal question is presented for declaratory judgment, it is not
justiciable unless it is ripe. In Yount, our Court of Appeals wrote that “‘[t]he mere
possibility or even probability that a person may be adversely affected in the future by
official acts’ fails to satisfy the actual controversy requirement.” 117 N.M. at 103, 869 P.2d
at 291 (citing with approval a clarification of the “actual controversy” requirement set out
in Dawson v. Department of Transportation, 480 F. Supp. 351, 352 (W.D. Okla. 1979)). In
the instant case, the proposed regulation was the subject of public hearings, and the final
version, if one emerges from the process, is unknown. It is only upon the adoption of a
regulation that the parties can be certain that they are aggrieved and that there is an actual
controversy.
{19} Under these circumstances, the question of whether the Board’s rule-making actions
exceeded its legislative authority is not ripe for judicial review because no final rule-making
action occurred. Judicial action that disrupts the administrative process before it has run its
course intrudes on the power of another branch of government. Therefore, we use our power
of superintending control to prevent the judicial branch from interfering with the
administrative process. See In re Extradition of Martinez, 2001-NMSC-009, ¶ 17, 130 N.M.
144, 20 P.3d 126 (stating that “the substantial separation of powers concerns . . . provide the
requisite level of injury necessary for the issuance of the writ”).
III. CONCLUSION
8
{20} Because judicial action in this matter interfered with the processes of another branch
of government, we exercise our power of superintending control and order the district court
to dismiss the complaint, dissolve the preliminary injunction, and remand the matter to the
administrative agency.
{21} IT IS SO ORDERED.
_____________________________________
CHARLES W. DANIELS, Chief Justice
_____________________________________
PATRICIO M. SERNA, Justice
_____________________________________
PETRA JIMENEZ MAES, Justice
_____________________________________
RICHARD C. BOSSON, Justice
_____________________________________
EDWARD L. CHÁVEZ, Justice
Topic Index for New Energy Economy, Inc. v. Shoobridge, Docket No. 32,396 and
NMIEB v. Shoobridge, Docket No. 32,409
AL ADMINISTRATIVE LAW AND PROCEDURE
AL-AA Administrative Appeal
AL-AL Administrative Law, General
AL-JR Judicial Review
AL-RU Rules
AE APPEAL AND ERROR
AE-AJ Appellate Jurisdiction
CT CONSTITUTIONAL LAW
CT-CG Constitutional Law, General
CT-RP Ripeness
CT-SP Separation of Powers
CU COURTS
CU–IP Inherent Powers
JG JUDGES
JG-AD Abuse of Discretion
9
JM JUDGMENT
JM-DJ Declaratory Judgment
JD JURISDICTION
JD-AJ Appellate Jurisdiction
JD-DC District Court
JD-SC Supreme Court
JD-SM Subject Matter
10