State Ex Rel. State Engineer v. Commissioner of Public Lands

Certiorari Denied, No. 31,377, November 20, 2008

IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO

Opinion Number: 2009-NMCA-004

Filing Date: September 24, 2008

District No. 27,654

STATE OF NEW MEXICO ex rel.
STATE ENGINEER,

Plaintiff-Appellee,

and

UNITED STATES OF AMERICA,
JICARILLA APACHE NATION,
NAVAJO NATION, UTE MOUNTAIN
UTE TRIBE, SAN JUAN WATER
COMMISSION, and BHP NAVAJO COAL
COMPANY,

Defendants/Intervenors-Appellees,

v.

COMMISSIONER OF PUBLIC LANDS
FOR THE STATE OF NEW MEXICO,

Defendant-Appellant.

APPEAL FROM THE DISTRICT COURT OF SAN JUAN COUNTY
Rozier E. Sanchez, District Judge Pro Tempore

Gary K. King, Attorney General
DL Sanders, Chief Counsel
Tracy L. Hofmann, Special Assistant Attorney General
Santa Fe, NM

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for Appellee

United States Department of Justice, Environment & Natural Resources Division
Ronald J. Tenpas, Assistant Attorney General
David W. Gehlert
Mark R. Haag
Washington, D.C.

for Appellee United States of America

Holland and Knight
Shenan R. Atcitty
Albuquerque, NM

for Appellee Jicarilla Apache Nation

Navajo Nation Department of Justice
Stanley M. Pollack
Bidtah Becker
Window Rock, AZ

for Appellee Navajo Nation

Daniel H. Israel
Boulder, CO

for Appellee Ute Mountain Ute Tribe

Taylor & McCaleb, P.A.
Jolene L. McCaleb
Elizabeth Newlin Taylor
Corrales, NM

for Appellee San Juan Water Commission

Modrall, Sperling, Roehl, Harris & Sisk, P.A.
Maria O’Brien
Walter E. Stern
Albuquerque, NM

for Appellee BHP Navajo Coal Company

New Mexico State Land Office

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Robert A. Stranahan, IV, General Counsel
Stephen G. Hughes, Associate Counsel
John L. Sullivan, Associate Counsel
Santa Fe, NM

for Appellant

Ryley Carlock & Applewhite
James M. Noble
Denver, CO

for Amicus Curiae Freeport-McMoRan Corporation

Tanya Trujillo
Christopher D. Shaw
Santa Fe, NM

for Amicus Curiae New Mexico Interstate Stream Commission

Gallegos Law Firm, P.C.
J.E. Gallegos
Michael J. Condon
Santa Fe, NM

Terry Goddard, Attorney General
Patrick B. Sigl, Assistant Attorney General
Phoenix, AZ

for Amicus Curiae State of Arizona

OPINION

WECHSLER, Judge.

{1} This appeal arises from a district court subfile proceeding in the course of a general
adjudication of water rights in the San Juan River stream system. At issue is the
applicability of the federal reserved water rights doctrine to state lands that the federal
government granted and conveyed to New Mexico in trust for the purpose of supporting
New Mexican schools. As the manager and acting trustee for New Mexico’s trust lands, the
Commissioner of Public Lands for the State of New Mexico (the Commissioner) asserted
a claim in the underlying adjudication for federal reserved water rights. The Commissioner
argued that by legislatively designating specific sections of land to be used for the support
of New Mexican schools and conveying them in trust to New Mexico, the United States

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Congress also impliedly intended to reserve and convey water rights in those lands. The
State Engineer of the State of New Mexico (the State Engineer) and several other interested
parties opposed the Commissioner’s claim. Ultimately, the district court granted summary
judgment in favor of the parties opposing the Commissioner. For the reasons that follow,
we affirm the district court’s decision and hold that the federal reserved water rights doctrine
does not apply in this case.

HISTORICAL BACKGROUND

{2} Since 1802, the United States Congress has passed enabling acts that have granted
federal lands to each new “public-land” state admitted to the Union for the purpose of
supporting its schools. Andrus v. Utah, 446 U.S. 500, 506 (1980). Unlike the original
thirteen states, many newly created states, including New Mexico, encompassed vast tracts
of federal land that were immune from taxation. Id. at 522 (Powell, J., dissenting). In order
to put those new states on equal footing with the original thirteen states in generating
revenue for the public good, Congress granted them “a fixed proportion of the lands within
[their] borders for the support of public education” in exchange for a “pledge not to tax” the
granted lands. Id. at 523. Following approval of the federal survey, “[t]itle to the sections
vested in the [s]tate.” Id. Thereafter, the state became subject to “a binding and perpetual
obligation to use the granted lands for the support of public education,” and “[a]ll revenue
from the sale or lease of the school grants was impressed with a trust in favor of the public
schools.” Id. at 523-24.

{3} Congress first promised some of the school trust lands at issue in this case in the
Organic Act of 1850. See ch. 49, § 15, 9 Stat. 446, 452 (1850). Several decades later,
Congress enacted the Ferguson Act of 1898, ch. 489, § 1, 30 Stat. 484, 484 (1898), which
granted to the Territory of New Mexico the lands promised in the Organic Act, along with
some additional lands. Finally, Congress conveyed the school trust lands at issue in this case
to the State of New Mexico in the Enabling Act of 1910, ch. 310, §§ 1, 10, 36 Stat. 557, 557-
58, 563 (1910), which authorized the establishment of the State. The Enabling Act included
additional lands and transferred to the State the lands that Congress had previously granted
to the Territory in the Ferguson Act. See Enabling Act §§ 6-10, 36 Stat. at 561-65. The
Enabling Act also imposed specific trust obligations upon the State with respect to its
management of the lands, including detailed limitations on the State’s use of the proceeds
from the sale, rental, and use of them. See id. § 10, 36 Stat. at 563-64. In this case, the
Commissioner relies on these statutes in support of his claim to federal reserved water rights
in New Mexico’s school trust lands, and we will discuss each statute in greater detail in our
analysis of the merits of the Commissioner’s claim.

PROCEDURAL BACKGROUND

{4} On March 13, 1975, the State Engineer commenced the general stream adjudication
at issue in this case by filing a complaint in district court. Roughly nineteen years later, on
August 13, 2004, the Commissioner became involved in the adjudication by filing a

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“Declaration of State of New Mexico Trust Reserved Water Rights” (Declaration). The
Commissioner’s Declaration described the basis upon which he anticipated claiming federal
reserved water rights as part of the adjudication. In doing so, the Commissioner claimed,
under federal law, the state trust’s entitlement to reserved surface and groundwater rights for
approximately 281,155 acres of school trust land within the San Juan Groundwater Basin.
After the district court set a briefing schedule regarding the Commissioner’s Declaration, the
Commissioner attempted to either withdraw or dismiss his Declaration without prejudice by
invoking Rule 1-041(A)(1)(a) NMRA. The district court refused to allow the Commissioner
to withdraw or dismiss his Declaration, and this Court subsequently denied the
Commissioner’s petition for an interlocutory appeal of that ruling.

{5} On June 15, 2006, the State Engineer petitioned for the commencement of a subfile
proceeding on the Commissioner’s Declaration. In the subfile proceeding, the
Commissioner moved for declaratory relief with respect to his argument that there existed
federal reserved water rights in New Mexico’s school trust lands, and the State Engineer
moved for summary judgment that no such rights existed in those lands. Shortly thereafter,
the United States, along with several other interested parties, intervened in the proceeding.

{6} On February 20, 2007, the district court issued an order denying the Commissioner’s
request for declaratory relief and granting summary judgment in favor of the State Engineer.
In doing so, the district court concluded that the federal reserved water rights doctrine did
not apply to the school trust lands at issue in this case and set forth several reasons why the
Commissioner’s claim failed. First, the district court found that the “specific purpose”
argued by the Commissioner as the basis for Congress’s decision to convey the trust lands
did not, under the applicable federal case law, require a conclusion that it also impliedly
reserved water rights. Specifically, the district court reasoned that the application of water
to the land was not a direct purpose of granting the land. See, e.g., United States v. New
Mexico, 438 U.S. 696, 716-17 (1978) (explaining that when a potential use of water is not
“a direct purpose of reserving the land,” there can be no finding of an implied reservation
of water rights). Second, the district court noted that unlike the federal reservations that
have been held to include federal reserved water rights, the United States did not retain any
ownership interest in the school trust lands. See, e.g., Cappaert v. United States, 426 U.S.
128, 131-32, 138 (1976) (concluding that Congress impliedly reserved water rights in land
owned by the United States that was “set aside as a national monument”). Finally, the
district court concluded that congressional intent to reserve water rights in the school trust
lands could not be inferred because “Congress made no declaration in [the legislation upon
which the Commissioner relies] that the New Mexico Education System, without water,
would be entirely defeated.” See New Mexico, 438 U.S. at 700 (“Each time this Court has
applied the ‘implied-reservation-of-water doctrine,’ it has carefully examined both the
asserted water right and the specific purposes for which the land was reserved, and
concluded that without the water the purposes of the reservation would be entirely
defeated.”). Based on these findings, the district court concluded that the Commissioner
failed to meet his burden of showing that (1) Congress intended to withdraw and reserve
federal lands “for New Mexico Trust Lands as a federal purpose” and (2) “Congress

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intended to reserve, by implication, appurtenant waters to accomplish educational purposes
in New Mexico Trust Lands.” The Commissioner appeals from that ruling.

WITHDRAWAL OR DISMISSAL UNDER RULE 1-041

{7} We first address the Commissioner’s contention that the district court erred in
refusing to allow him to withdraw or dismiss his Declaration. The Commissioner argues that
he had an “unconditional” right to withdraw or dismiss his Declaration without prejudice
under either Rule 1-041(A)(1)(a) or Rule 1-041(C). In response, the parties opposing the
Commissioner argue that (1) Rule 1-041 does not apply to the Commissioner’s Declaration;
(2) even if Rule 1-041 were applicable, the Commissioner would not have an unconditional
right to withdraw or dismiss his Declaration; and (3) the district court properly refused to
allow the Commissioner to withdraw or dismiss his Declaration. We review de novo the
issue of whether the Commissioner had an unconditional right to voluntarily withdraw or
dismiss his Declaration without prejudice under Rule 1-041. See Becenti v. Becenti, 2004-
NMCA-091, ¶ 6, 136 N.M. 124, 94 P.3d 867 (“[W]hen called upon to apply and interpret
rules of civil procedure, we review these questions de novo.”).

{8} We first observe that, by its terms, Rule 1-041(A)(1)(a) does not apply to the
Commissioner’s Declaration. Rule 1-041(A)(1)(a) provides that “an action may be
dismissed by the plaintiff without order of the court . . . by filing a notice of dismissal at any
time before service by the adverse party of an answer or other responsive pleading.”
(Emphasis added.) In this case, the Commissioner is not a “plaintiff” in the underlying
adjudication, which is a special statutory proceeding commenced by the State Engineer. See
NMSA 1978, § 72-4-15 (1907) (stating that it is, in most instances, the responsibility of the
attorney general, at the request of the state engineer, to file suit to determine the respective
rights of individual parties to appropriate water from a stream system). Additionally, the
Commissioner’s Declaration does not constitute an “action” that can be voluntarily
dismissed. We view the Declaration as a single claim within the overarching water
adjudication action brought by the State Engineer in 1975, and as such, Rule 1-041(A) does
not permit a voluntary dismissal of the Declaration. See Gates v. N.M. Taxation & Revenue
Dep’t, 2008-NMCA-023, ¶ 12, 143 N.M. 446, 176 P.3d 1178 (explaining that Rule 1-041(A)
does not permit a plaintiff to dismiss less than all of the claims that make up an action).
Finally, no responsive pleading was required, or even allowed, in this case with respect to
the Commissioner’s Declaration. Compare Rule 1-012(A)-(B) NMRA (explaining the
procedure that a defendant in a civil action is required to follow in filing a responsive
pleading), with NMSA 1978, § 72-4-17 (1965) (explaining the procedure that the district
court must follow in determining the water rights of individual claimants with respect to a
stream system).

{9} Alternatively to his purported right to voluntarily dismiss his Declaration under Rule
1-041(A), the Commissioner argues that Rule 1-041(C) governs. Rule 1-041(C) allows for
the same type of voluntary dismissal described in Rule 1-041(A) for “any counterclaim,
cross-claim or third-party claim.” However, we agree with the State Engineer that the

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Commissioner’s Declaration does not fall under this rule. We simply cannot characterize
his Declaration as either a counterclaim, a cross-claim, or a third-party claim. See Rule 1-
013(A)-(B) NMRA (explaining that a counterclaim is a claim that a defendant in a civil
action has against a plaintiff in the same action); Rule 1-013(G) (explaining that a cross-
claim is a claim that one party in a civil action has against a co-party in the same action);
Rule 1-014(A) NMRA (explaining that a defendant in a civil action may make a third-party
claim against “a person not a party to the action who is or may be liable to him for all or part
of the plaintiff’s claim against him”).

{10} Furthermore, even if we were to conclude, contrary to our legal holding above, that
the Commissioner was a plaintiff and that his Declaration was an action, counterclaim, cross-
claim, or third-party claim subject to Rule 1-041, our result would not change. The purpose
of Rule 1-041(A) “is to preserve a plaintiff’s right to dismiss an action unilaterally, but to
limit that right to an early stage of the litigation.” 8 James W. Moore, Moore’s Federal
Practice § 41.33[1], at 41-45 (3d ed. 2007) (emphasis added). “The rule is thus intended to
fix the point at which the resources of the court and the defendant are so committed that
dismissal without preclusive consequences can no longer be had as of right.” Id. § 41.33[1],
at 41-45 to -46 (internal quotation marks and citation omitted). The stream adjudication at
issue in this case is over thirty years old, the notice of withdrawal of the Declaration was
filed nearly a year after the filing of the Declaration, and a delay in the litigation of the
substance of the Commissioner’s claim would cause even further unnecessary delay, waste
judicial resources, and trigger great uncertainty regarding the individual claimants’
respective water rights.

{11} Accordingly, we agree with the district court that Rule 1-041 was not a procedural
vehicle that was available to the Commissioner in this case. We therefore proceed to address
the merits of the federal reserved water rights claim that the Commissioner made in his
Declaration.

SUMMARY JUDGMENT

A. Standard of Review

{12} “Summary judgment is appropriate where there are no genuine issues of material fact
and the movant is entitled to judgment as a matter of law.” Self v. United Parcel Serv., Inc.,
1998-NMSC-046, ¶ 6, 126 N.M. 396, 970 P.2d 582. In reviewing whether a genuine issue
of material fact exists, “we view the facts in the light most favorable to the party opposing
summary judgment.” Gormley v. Coca-Cola Enters., 2005-NMSC-003, ¶ 8, 137 N.M. 192,
109 P.3d 280 (internal quotation marks and citation omitted). Ultimately, we review de novo
the legal question of whether a party is entitled to summary judgment as a matter of law. Id.

{13} The Commissioner argues that the question of implied congressional intent to create
federal reserved water rights presents a factual issue to be decided by a factfinder and that
the district court therefore erred in concluding that no such rights exist in the school trust

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lands as a matter of law. However, whether a particular act of Congress establishes a federal
reservation with attendant implied water rights is a question of legislative intent that requires
an interpretation of the relevant acts. See Cappaert, 426 U.S. at 139 (“In determining
whether there is a federally reserved water right implicit in a federal reservation of public
land, the issue is whether the Government intended to reserve unappropriated and thus
available water.”). Such matters are traditionally legal questions that may properly be
resolved on summary judgment. See Union Pac. Land Res. Corp. v. Moench Inv. Co., 696
F.2d 88, 93 n.5 (10th Cir. 1982) (“Questions of statutory construction and legislative history
traditionally present legal questions properly resolved by summary judgment.”). Other
aspects of federal reserved water rights, beyond the mere existence of such rights in a given
piece of land, may involve questions of fact that should not be decided on summary
judgment. For example, a determination of the quantity of water reserved (i.e., the minimum
amount necessary to accomplish the purpose of the reservation) would likely involve factual
issues that would require the factfinder to consider expert testimony. See, e.g., United States
v. Washington, 375 F. Supp. 2d 1050, 1066 (W.D. Wash. 2005) (noting that the quantity of
water impliedly reserved in an Indian reservation under a treaty was “a factual issue to be
determined at trial”). However, the only issue in the present case involves whether certain
acts of Congress can be interpreted to impliedly create any federal reserved water rights in
New Mexico’s school trust lands. Any inquiry relating to the nature and quantity of the
rights that the Commissioner claims is not before this Court. Thus, we are presented with
questions of law that the district court was permitted to decide on summary judgment and
that we must now review de novo.

B. The Federal Reserved Water Rights Doctrine and Its Relationship to State
Water Law

{14} The federal reserved water rights doctrine is a judicially created doctrine that had its
genesis in Winters v. United States, 207 U.S. 564 (1908). In Winters, the United States
Supreme Court recognized and affirmed the power of the federal government, under certain
circumstances, to impliedly reserve water and exempt it from appropriation under state law.
Id. at 577. In doing so, the Court concluded that when Congress established the Fort
Belknap Indian Reservation in Montana, it also impliedly reserved with it the right to the
amount of water necessary to achieve the reservation’s purpose. Id. at 565, 577. Subsequent
United States Supreme Court decisions extended the doctrine to other, non-Indian federal
enclaves. See, e.g., Cappaert, 426 U.S. at 138 (finding that the reservation of a national
monument by executive order also included federal reserved water rights); Arizona v.
California, 373 U.S. 546, 601 (1963) (concluding that “the principle underlying the
reservation of water rights for Indian Reservations” could be extended to national recreation
areas and national forests), disavowed on other grounds by California v. United States, 438
U.S. 645, 674 (1978). As elaborated on and defined in these decisions, the doctrine currently
requires a claimant to establish two elements in order to demonstrate the existence of a
federal reserved water right: (1) that the federal government withdrew the land from the
public domain and reserved it for a federal purpose and (2) that a certain amount of water
is necessary to accomplish the purpose for reserving the land. See Cappaert, 426 U.S. at

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138.

{15} Overall, the doctrine of federal reserved water rights represents a limited exception
to the general rule that individual states govern water rights within their respective borders.
See New Mexico, 438 U.S. at 702 (“Where Congress has expressly addressed the question
of whether federal entities must abide by state water law, it has almost invariably deferred
to the state law.”). Generally, water rights must be obtained by appropriation under state
water law, even if those rights are developed in land owned by the federal government. See
Cal. Or. Power Co. v. Beaver Portland Cement Co., 295 U.S. 142, 163-64 (1935) (stating
that “following the [Desert Land Act] of 1877, if not before, all non-navigable waters then
a part of the public domain became publici juris, subject to the plenary control of the
designated states, including those since created out of the territories named, with the right
in each to determine for itself to what extent the rule of appropriation or the common-law
rule in respect of riparian rights should obtain”). In New Mexico, water law is governed by
the doctrine of prior appropriation. Walker v. United States, 2007-NMSC-038, ¶ 21, 142
N.M. 45, 162 P.3d 882. Under that doctrine, “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.” Id. ¶ 22 (internal quotation marks and citation omitted). The appropriation of water
for beneficial use establishes the priority date of a water right in relation to other water
rights, and the full right of an earlier appropriator will be protected, to the extent of that
appropriator’s use, against a later appropriator. See N.M. Const. art. XVI, § 2 (“Priority of
appropriation shall give the better right.”). However, because the prior appropriation
doctrine rewards the use of water—and use determines both the priority date and quantity
of water to which one holds a right under the doctrine—state water rights can be forfeited
by non-use. State ex rel. Reynolds v. S. Springs Co., 80 N.M. 144, 148, 452 P.2d 478, 482
(1969) (“[U]nder the prior appropriation doctrine of water rights applicable in New Mexico,
nonuse involves forfeiture.” (internal quotation marks and citation omitted)).

{16} Similar to water rights developed under our state law, federal reserved water rights
have the attributes of priority and quantity, allowing such rights to be administered within
the hierarchy of state water rights. See Navajo Dev. Co. v. Sanderson, 655 P.2d 1374, 1379-
80 (Colo. 1982) (en banc). However, the determination of those attributes for a federal
reserved water right follows a far different logic from that of a state water right. See id. at
1379 (“Federal reserved water rights must be understood as a doctrine which places a federal
appropriator within the state appropriation scheme by operation of federal law.”). Unlike
a state water right, the priority of a federal reserved water right is not established by
appropriation for beneficial use; rather, such a right is determined by the withdrawal and
reservation of the applicable land for a federal purpose. See United States v. Jesse, 744 P.2d
491, 493-94 (Colo. 1987) (en banc). A federal reserved water right, therefore, has a priority
date corresponding to the date of the statute, executive order, or treaty creating the
reservation, regardless of whether the water at issue has ever been put to actual use. See id.
at 494. Similarly, the quantity of a federal reserved water right is not determined by the
amount of water put to beneficial use; rather, it is determined by the amount of water
necessary to carry out the primary purpose of the reservation. Id. Further, as is apparent

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from the fact that the priority date of a federal reserved water right is unconnected to the use
of water, such a right cannot be lost by non-use, unlike a water right secured under state law.
Id.

{17} Thus, as the Colorado Supreme Court observed in Jesse:

In contrast to the doctrine of prior appropriation, which . . .
recognizes only the right to divert a quantified amount of water at a specific
location for a specific purpose, the federal doctrine of reserved water rights
vests the United States with a dormant and indefinite right that may not
coincide with water uses sanctioned by state law.

Id. (citations omitted). Such dormant and indefinite rights can be very problematic when it
comes to adjudicating and administering water rights in an arid state, such as New Mexico.
Many stream systems in such states are already fully appropriated, and a determination that
federal reserved water rights exist often requires “a gallon-for-gallon reduction in the amount
of water available for water-needy state and private appropriators.” New Mexico, 438 U.S.
at 705. Further, as demonstrated by this case, claims to federal reserved water rights are
potentially very large with very early priority dates and can therefore be highly disruptive
to rights existing under state law. See Jesse, 744 P.2d at 494 (“Because the priority date of
the [federal] reserved right relates back to the date of the reservation, reserved water rights
threaten existing appropriators with divestment of their rights without compensation.”).
Accordingly, in recognition of the predominance of state law in the area of water rights and
the potentially substantial and detrimental impact on state rights in fully appropriated stream
systems, courts must construe the doctrine of federal reserved water rights narrowly. See id.
Our analysis of the Commissioner’s claim to federal reserved water rights in New Mexico’s
school trust lands therefore follows this principle of narrow construction.

C. Withdrawal and Reservation

{18} “In determining whether there is a federally reserved water right implicit in a federal
reservation of public land, the threshold question necessarily is whether the government has
in fact withdrawn the land from the public domain and reserved it for a public purpose.”
Sierra Club v. Block, 622 F. Supp. 842, 853 (D. Colo. 1985). Despite their facial
similarities, the terms “withdrawal” and “reservation” have distinct meanings when used in
the context of public land law. Id. at 854-55. As the Tenth Circuit Court of Appeals recently
explained,

A withdrawal makes land unavailable for certain kinds of private
appropriation . . . . It temporarily suspends the operation of some or all of the
public land laws, preserving the status quo while Congress or the executive
decides on the ultimate disposition of the subject lands.

A reservation, on the other hand, goes a step further: it not only

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 withdraws the land from the operation of the public land laws, but also
dedicates the land to a particular public use.

S. Utah Wilderness Alliance v. Bureau of Land Mgmt., 425 F.3d 735, 784 (10th Cir. 2005)
(citations omitted). Ultimately, the act of withdrawing and reserving land ensures that it will
not be transferred out of federal ownership pursuant to homesteading or other land disposal
statutes. See Winters v. United States, 143 F. 740, 748 (9th Cir. 1906) (“[W]hen the lands
of the government have been legally appropriated or reserved for any purpose, they become
severed from the public lands, and . . . no subsequent law or sale should be construed to
embrace or operate upon them.”); see also Sierra Club v. Watt, 659 F.2d 203, 206 (D.C. Cir.
1981) (concluding that a claim for federal reserved rights failed because “Congress did not
withdraw land from the public domain when it passed the [act in question], it merely set
forth purposes, goals and authority for the use of the public domain” (internal quotation
marks and citation omitted) (footnote omitted)).

{19} The Commissioner essentially asks us to consider the requirements of withdrawal and
reservation to be formalistic criteria that are unnecessary for the creation of a federal
reservation of land. According to the Commissioner, the “reserved rights doctrine focuses
on the purpose of the reservation, not the mechanics.” However, this statement presupposes
that a federal withdrawal and reservation of land has actually occurred. As we have
explained, the question of whether a withdrawal and reservation has occurred necessarily
involves mechanics. The Commissioner does not reference any case in which a court has
held that federal reserved water rights existed on land that was not previously withdrawn and
reserved, and we are aware of no such case.

{20} In the seminal cases in which the United States Supreme Court considered the
existence of implied federal reserved water rights—including New Mexico, Cappaert,
Arizona, and Winters—the Court did not focus on the threshold question of whether the
relevant congressional acts, executive orders, or treaties withdrew land from the public
domain and created a reservation for a federal purpose. In each of those cases, it was
undisputed that the federal government had done so. See, e.g., New Mexico, 438 U.S. at 707
(national forests); Cappaert, 426 U.S. at 140-41 (national monuments); Arizona, 373 U.S.
at 601 (national recreation areas, national wildlife refuges, and national forests); Winters,
207 U.S. at 577 (Indian reservations). Therefore, those cases are only helpful to our analysis
as models of what constitutes, as opposed to what does not constitute, a withdrawal and
reservation of land for a federal purpose. Our question is whether the legislation on which
the Commissioner relies actually created a federal reservation of the school trust lands at
issue by withdrawing and reserving them for a particular public use to further a federal
purpose.

{21} First, the Commissioner relies on the Organic Act of 1850, which established the
boundaries of the Territory of New Mexico and provided for the establishment of a territorial
government. Sections 2-5, 9 Stat. at 447-49. In accordance with the federal government’s
policy of granting public domain land to new “public-land” states in furtherance of

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supporting public education, see Andrus, 446 U.S. at 506, the Organic Act provided as
follows:

[W]hen the lands in said Territory shall be surveyed under the direction of
the government of the United States, preparatory to bringing the same into
market, sections numbered sixteen and thirty-six in each township in said
Territory shall be, and the same are hereby, reserved for the purpose of being
applied to schools in said Territory, and in the States and Territories hereafter
to be erected out of the same.

Section 15, 9 Stat. at 452. In making his argument, the Commissioner seizes on the term
“reserved” in this provision to support his position that the Act satisfied the threshold
requirement of creating a reservation. However, the mere use of the term “reserved” in a
congressional act does not necessarily create a federal withdrawal and reservation of land.
See S. Utah Wilderness Alliance, 425 F.3d at 785 (“[J]ust because a withdrawal uses the term
‘reserved’ does not mean that it reserves land ‘for public uses.’”). As the United States
Supreme Court has explained, when Congress granted school trust lands to the Western
states, it neither withdrew nor reserved those lands. In fact, “[p]rior to survey, those sections
[were] a part of the public lands of the United States and [could have been] disposed of by
the Government in any manner and for any purpose consistent with applicable federal
statutes.” United States v. Wyoming, 331 U.S. 440, 443 (1947); see also United States v.
Morrison, 240 U.S. 192, 198-99, 210 (1916) (concluding that language similar to the
Organic Act in the congressional act creating the Territory of Oregon meant that title did not
immediately vest in Oregon and that “Congress was at liberty to dispose of the land” until
“the sections were defined by survey”); Dallas v. Swigart, 24 N.M. 1, 6, 172 P. 416, 417
(1918) (“[T]he reservation from entry under the general land laws shall come into operation
only when the [school trust] lands are surveyed in the field, whereupon they are withdrawn
from entry.”). The Organic Act, like the statute at issue in Wyoming, made conveyance of
the designated lands subject to the completion of the official survey, which, as the
Commissioner acknowledges, did not occur until many years later. Until completion of the
survey, the trust lands remained in the public domain and were subject to disposal by the
federal government. Thus, the Organic Act did not contemplate a withdrawal or reservation
of the lands that it identified for purposes of now asserting a federal reserved water rights
claim. See S. Utah Wilderness Alliance, 425 F.3d at 784 (explaining that withdrawal for the
purpose of asserting a federal implied water right requires a temporary suspension of “the
operation of some or all of the public land laws”).

{22} Second, the Commissioner relies on the Ferguson Act of 1898, which was essentially
the realization of Congress’s promise in the Organic Act to grant the Territory of New
Mexico sections sixteen and thirty-six of each township in the Territory. Ferguson Act § 1,
30 Stat. at 484. Of importance in this case, Section 1 of the Ferguson Act, passed roughly
fifty years after the Organic Act, indicates that at least some of the lands promised in the
Organic Act had either been disposed of by the federal government or officially reserved by
the federal government; therefore, the Act promised the Territory of New Mexico indemnity

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lands to compensate for those lands that were no longer available in sections sixteen and
thirty-six. Ferguson Act § 1, 30 Stat. at 484. Section 1 states:

[S]ections numbered sixteen and thirty-six in every township of the Territory
of New Mexico, and where such sections, or any parts thereof, are mineral
or have been sold or otherwise disposed of by or under the authority of any
Act of Congress, other non-mineral lands equivalent thereto . . . in lieu of
which the same is taken, are hereby granted to said Territory for the support
of common schools, such indemnity lands to be selected within said Territory
in such manner as is hereinafter provided: Provided, That the sixteenth, and
thirty-sixth sections embraced in permanent reservations for national
purposes shall not at any time be subject to the grants of this Act, nor shall
any lands embraced in Indian, military, or other reservations of any character
be subject to the grants of this Act[.]

Id. We infer from this promise of different lands to compensate for Congress’s disposal or
reservation of lands within the promised sections that Congress was well aware of its ability
to reserve lands for a federal purpose, as well as the technical requirements for doing so, and
that it chose not to create a federal reservation with respect to New Mexico’s school trust
lands.

{23} Finally, the Commissioner relies on the Enabling Act of 1910, which ushered the
Territory of New Mexico into statehood. Section 1, 36 Stat. at 557-58. Among other things,
the Enabling Act recognized that sections sixteen and thirty-six had already been granted to
the Territory and additionally granted “sections two and thirty-two in every township . . . for
the support of common schools.” Id. § 6, 36 Stat. at 561. As it did in the Ferguson Act,
Congress guaranteed in the Enabling Act indemnity lands to be granted when portions of the
newly designated sections were or became unavailable because they

[were] mineral, or [had] been sold, reserved, or otherwise appropriated or
reserved by or under the authority of any Act of Congress, or [were] wanting
or fractional in quantity, or where settlement thereon with a view to
preemption or homestead, or improvement thereof with a view to desert-land
entry has been made heretofore or hereafter, and before the survey thereof in
the field.

Id. Again, the language of the Enabling Act did not sufficiently withdraw or reserve lands
to create implied federal reserved water rights; rather, it simply conveyed lands out of federal
ownership to the State of New Mexico. Similar to the Ferguson Act, by providing for
indemnity lands that were meant to replace lands in the original grant that were, in fact,
disposed of or reserved for a federal purpose, the Enabling Act displays Congress’s
cognizance of the difference between a reservation and a grant. Thus, like the Ferguson Act,
we cannot read the Enabling Act to have sufficiently withdrawn and reserved the school trust
lands to reach a conclusion that it created a federal reservation in which federal reserved

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water rights can be inferred.

{24} In summary, none of the congressional acts upon which the Commissioner relies
either adequately withdrew the school trust lands from the public domain or reserved them
for a particular public purpose. See S. Utah Wilderness Alliance, 425 F.3d at 784.
Accordingly, the Commissioner has failed to prove the threshold requirements of
demonstrating the existence of implied federal reserved water rights.

D. Federal Purpose

{25} Even if we were to conclude that the congressional acts upon which the
Commissioner relies adequately withdrew and reserved the state trust lands at issue in this
case, our result would be the same. To establish that an implied federal water right exists
in a certain tract of land, one must, in addition to proving that the land was withdrawn and
reserved, show that the reservation was for a federal purpose. See Cappaert, 426 U.S. at
138. Although we do not deny that the support of common schools is a matter of national
interest, we cannot conclude that it is also a federal purpose in the context of the implied
federal water rights doctrine. As the term “federal purpose” has been construed in non-
Indian federal reserved water rights cases, continuing federal ownership of the reserved
lands appears to be a prerequisite to a determination that such rights exist. See, e.g., New
Mexico, 438 U.S. at 707 & n.14; Cappaert, 426 U.S. at 140-42; Arizona, 373 U.S. at 601.

{26} The Commissioner argues that the oversight powers retained by the federal
government to ensure that the trust is administered properly, along with the federal
government’s authority to enforce the trust’s terms, represent the equivalent of federal
ownership for purposes of establishing implied reserved water rights. Although we agree
with the Commissioner that the Enabling Act imposes strict trust obligations on the State,
see § 10, 36 Stat. at 564-65, we do not agree that such obligations constitute a federal
purpose in conjunction with the school trust lands. We reiterate that the federal reserved
water rights doctrine must be construed narrowly, and we are aware of no authority that
supports the proposition that by retaining oversight or enforcement power over a state’s
disposition of its trust lands, the federal government also retains the title to the land that is
necessary to create a federal reservation and impliedly reserve water rights.

{27} We note that there is one context in which federal reserved water rights are not
dependent on continuing federal ownership, namely, Indian reservation lands allotted and
conveyed in fee to individual tribal members. See, e.g., United States v. Powers, 305 U.S.
527, 532 (1939) (“[W]hen allotments of land were duly made for exclusive use and
thereafter conveyed in fee [from the United States government to tribal members], the right
to use some portion of tribal waters essential for cultivation passed to the owners.”). The
Commissioner relies on Powers in asserting that federal reserved water rights passed along
with the school trust lands when they were conveyed to New Mexico. However, in Powers,
it was clear and uncontested that the federal government, by treaty, withdrew the land at
issue from the public domain and reserved it for a federal purpose before it was allotted and

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conveyed to individual tribal members. See id. at 528, 532-33. Because the federal purpose
under which that land was reserved required water to support the tribe’s “exclusive right of
cultivation,” id. at 533, the Court concluded that the treaty creating the reservation also
impliedly reserved water rights to adequately irrigate the land and refused to rule that those
rights were extinguished simply because the land was conveyed in fee to individual
landowners. See id. On the contrary, as explained above, the lands conveyed to New
Mexico in the Organic Act, the Ferguson Act, and the Enabling Act were never withdrawn
from the public domain and reserved for a federal purpose. As such, it necessarily follows
that any attendant federal reserved water rights that the Commissioner now claims in
connection with those lands were also not impliedly reserved. Accordingly, the result
reached in Powers cannot be reached in this case.

E. Congressional Intent

{28} In addition to arguing that Congress withdrew and reserved the school trust lands for
a federal purpose, the Commissioner also contends that the circumstances surrounding
Congress’s grant of those lands indicates its intent to also grant water rights. Specifically,
the Commissioner argues that because Congress was aware of the arid nature of New
Mexico’s lands when it granted the school trust lands, it must have impliedly intended to
reserve water rights in order to make the lands more valuable. In response, the United States
argues in its answer brief that other express acts of Congress aimed at compensating for the
aridity of New Mexico’s trust lands indicate that no such implied intent existed in the
congressional acts upon which the Commissioner relies.

{29} The United States argues that Congress demonstrated its consciousness of the aridity
of New Mexico’s lands and took action to compensate for it in at least two distinct ways,
neither of which involved granting water rights along with the school trust lands. First, the
United States Supreme Court has recognized that Congress, in granting school trust lands
to New Mexico, made the express decision to grant four sections per township, “instead of
the one section per township ordinarily given in the earlier grants,” in order to compensate
for the fact that the value of the lands that it was granting was comparatively little as a result
of the lack of water. Lassen v. Ariz. ex rel. Ariz. Highway Dep’t, 385 U.S. 458, 463 n.7
(1967). Second, as our Supreme Court recognized in State ex rel. Interstate Stream
Commission v. Reynolds, 71 N.M. 389, 391, 378 P.2d 622, 623 (1963), the Ferguson Act
granted the Territory of New Mexico 500,000 acres of land for the express purpose of
establishing permanent water reservoirs for irrigation. Section 6, 30 Stat. at 485. However,
we note that Congress did not expressly reference the need for irrigation of the school trust
lands in its grant of those lands in the Ferguson Act. See id. § 1, 30 Stat. at 484.

{30} We agree with the United States that both actions of Congress referenced above
demonstrate an acknowledgment of the aridity of the school trust lands and that both can be
considered measures that were implemented to compensate for the relatively low value of
those lands as a result of their aridity. Accordingly, we cannot agree with the Commissioner
that we must infer a congressional intent to grant water rights along with the school trust

15
lands in order to guarantee that the arid lands that were granted remained as “productive”
as possible.

CONCLUSION

{31} The Commissioner has not established that the various congressional acts promising
or conveying trust lands for the support of New Mexican schools withdrew those lands from
the public domain and reserved them for a federal purpose—the necessary prerequisites to
a finding of congressional implied intent to reserve water rights. Therefore, we affirm the
district court’s grant of summary judgment.

{32} IT IS SO ORDERED.

JAMES J. WECHSLER, Judge

WE CONCUR:

LYNN PICKARD, Judge

CELIA FOY CASTILLO, Judge

Topic Index for State of N.M. ex rel State Engineer v. Commissioner of Public Lands, No.
27,654

GV Government
GV-PL Public Lands
GV-SE State Engineer

NR Natural Resources
NR-WL Natural Resources - Water Law

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