Should the Supreme Court allow Texas to proceed under the Court’s original jurisdiction in its claim against New Mexico for violating the Rio Grande Compact? Should the Supreme Court allow the United States to intervene in the action and state a claim against New Mexico under both the Rio Grande Compact and federal reclamation law?
Texas filed a complaint against New Mexico and Colorado, pursuant to the Supreme Court’s original jurisdiction under Article III, Section 2, Clause 2 of the United States Constitution and Title 28, Section 1251(a) of the United States Code, alleging that New Mexico violated the terms of the Rio Grande Compact to which all three states are party. The United States subsequently moved to intervene in the proceedings citing both claims under the Rio Grande Compact and federal reclamation law. In the Special Master’s First Interim Report, he suggested that the Court deny New Mexico’s motion to dismiss Texas’s claim, but grant its motion to dismiss the United States’ Complaint in Intervention to the extent that it states a claim under the Rio Grande Compact. The United States argues that the Court must allow it to assert all of its claims against New Mexico because it has a federal interest in the matter. New Mexico and Colorado assert that allowing the United States to proceed with its claims risks re-litigating claims that are already pending at the state level, which they believe is the proper forum for the adjudication of water rights. The Supreme Court’s decision in this case will affect the scope with which the United States can proceed as a party in this action.
Questions as Framed for the Court by the Parties
Whether New Mexico is in violation of the Rio Grande Compact and the Rio Grande Project Act, which apportion water to Rio Grande Project beneficiaries.
On March 18, 1938, Texas, New Mexico, and Colorado signed the Rio Grande Compact (the “Compact”). The Compact resulted from a period of controversy among the states, in the early twentieth century, over the equitable apportionment of water from the Rio Grande river. The Rio Grande river flows down from Colorado through New Mexico and Texas and into the Gulf of Mexico. As the result of an Irrigation Congress held in 1904 in El Paso, Texas, Congress allowed the construction of a federal dam and reservoir. Congress established the Rio Grande Reclamation Project (the “Project”) in 1905, which operated as a federal reclamation project under the Federal Reclamation Act of 1902. The project allowed the construction of a dam to store the water of the Rio Grande, resulting in the Elephant Butte Reservoir (the “Reservoir”).
Under the Compact, New Mexico delivers water to the Reservoir, which is then allocated and released to beneficiaries of the Project located in relevant lands in southern New Mexico and Texas. The states apportion the water under the Compact as recommended by the 1904 Irrigation Congress, depending on the amount of irrigable land in each state. These lands are known as “project lands.”
In 2014, the United States Supreme Court granted leave for Texas to file a complaint, pursuant to the Court’s original jurisdiction under Article III, Section 2, Clause 2 of the United States Constitution and Title 28, Section 1251(a) of the United States Code. In its complaint, Texas alleges that New Mexico has violated the terms of the Compact by “allowing and authorizing” the water it delivers to the Reservoir to then be intercepted and used in New Mexico, preventing it from flowing into Texas and negatively affecting the amount of water Texas has a right to under the Compact. Specifically, Texas alleges that New Mexico has allowed individuals and entities of New Mexico to both divert surface water and extract underground water downstream from the the Reservoir. Texas also included in the action the state of Colorado as a party to the Compact. Later, the United States filed a Complaint in Intervention, claiming that they had a right to intervene in the proceeding to protect federal interests under the Project, which is a federal reclamation project.
On April 30, 2014, New Mexico filed a motion to dismiss both Texas’s Complaint and the United States’ Complaint in Intervention. In its motion to dismiss, New Mexico argued that both motions fail to state a claim upon which relief can be granted, and that under the Compact, New Mexico has only a duty to deliver water to the Reservoir, but not to ensure water deliveries to Texas from the Reservoir. The Court referred the motions to an appointed Special Master, A. Gregory Grimsal, for resolution. The Special Master, in his First Interim Report, recommended that the Supreme Court deny New Mexico’s motion to dismiss Texas’s complaint, but grant New Mexico’s motion to dismiss the United States’ Complaint in Intervention except to the extent that it states a claim under federal reclamation law and not the Compact.
The parties made exceptions to the First Interim Report of the Special Master, and the Supreme Court set oral argument on the exception of the United States and the first exception of Colorado on January 8, 2018.
WHETHER THE COMPACT AFFECTS FEDERAL INTERESTS
The United States first argues that it has its own federal interests in ensuring that Texas, Colorado, and New Mexico abide by the Compact. The United States argues that it has a federal interest in ensuring water from the Project is satisfactorily delivered to Mexico according to the terms of the 1906 Convention between the United States and Mexico (the “1906 Treaty”), and thus should be allowed to intervene to comply with the 1906 Treaty. The United States asserts that prior precedent has established its authority to prevent an individual state from interfering with the United States’ treaty obligations, and under the 1906 Treaty, the United States must annually send to Mexico at least 60,000 acre-feet of water from the Reservoir, which is part of the Project. The United States contends that by mandating that New Mexico deliver a certain amount of water to the Reservoir, the Compact helps ensure that the United States will be able to fulfill its Treaty obligations to Mexico; thus, if New Mexico takes water back after delivery, this impermissibly removes project water that the United States is required to deliver. In summary, the United States argues that it has a “distinctively federal interest” in ensuring that its Treaty obligations to Mexico are not threatened by a state’s refusal to abide by the Compact.
The United States asserts that it also has a federal interest in protecting both the Project itself and the United States’ own contractual obligations to deliver Project water to two water user associations: Elephant Butte Irrigation District (“EBID”) in New Mexico, and El Paso County Water Improvement District No. 1 (“EPCWID”) in Texas. The United States stresses that it was already delivering water from the Reservoir to EBID and EPCWID decades prior to the Compact. The United States adds that the Compact explicitly acknowledges the United States’ interests in fulfilling its contractual obligations by declaring that all water stored in the Reservoir is “available for release in accordance with irrigation demands, including deliveries to Mexico.” Accordingly, the United States contends that protecting Project operations and the United States’ contractual obligations to deliver Project waters is “a distinctively federal interest” that thus warrants U.S. intervention.
In response, Colorado acknowledges that Congress had to approve the Compact, but Colorado maintains that the Compact did not expressly grant the United States any rights under it. Colorado states that, under the Compact, the states (Texas, New Mexico, and Colorado) are the only parties who represent the interests of the water users affected and that the United States does not have an interest here. Colorado points to the language of the Compact itself, which states that, “Nothing in this compact shall be construed as affecting the obligations of the United States of America to Mexico under existing treaties, or to the Indian tribes, or as impairing the rights of the Indian tribes.” Colorado further argues that the United States’ claims concern the delivery of water downstream from the Reservoir, an issue which the Compact does not address. Instead, Colorado asserts that the Compact’s provisions explicitly separate the United States’ obligations to deliver water from the Reservoir, and the compacting States’ obligations to deliver water to the Reservoir. In summary, Colorado stresses that although the water stored in the Reservoir includes the amount necessary for the United States to deliver to Mexico, the Compact itself does not affect deliveries of Project water downstream from the Reservoir.
Furthermore, Colorado explains that although the Compact considers Project conditions when determining Colorado and New Mexico’s obligations upstream, this does not give rise to new federal rights. As an example, Colorado claims that under the Compact, Texas may request Colorado or New Mexico to release upstream storage waters to increase the volume of water in the Reservoir to 600,000 acre-feet if certain conditions are met. Colorado stresses that the Compact does not assert that the United States also has the right to request Colorado or New Mexico to release water stored upstream. Colorado accordingly contends that the provisions of the Compact that mention the Project serve to protect the compacting states from various environmental conditions, rather than protect the Project itself or the United States’ interests downstream.
Similarly, New Mexico further argues that the Special Master correctly held that the United States does not have a claim under the Compact because any federal interests the United States has in the downstream water of the Rio Grande under the Treaty arose prior to the signing of the Compact in 1938. Thus, New Mexico argues, the Compact was only meant to protect the interests of the three signatory states and not the United States. New Mexico contends that, if the United States can assert claims under state compacts as a non-party, it would risk “upsetting the bargain” between the compacting states and having the United States take positions that are contrary to those of the compacting parties.
UNITED STATES PARTICIPATING IN ORIGINAL ACTIONS AS A PARTY
In the First Interim Report, the Special Master stated that this case is the first time in history that the United States has intervened as a party-plaintiff rather than an amicus curiae in an original action, where the United States is arguing it has its own water rights that are protected by a compact. The United States disputes this assertion, explaining that it has previously intervened as a party-plaintiff in a dispute between Texas and New Mexico over the Pecos River Compact, as well as in Texas v. Colorado, which like the present case, involved a dispute over the Rio Grande Compact. The United States also disputes the Special Master’s interpretation of Nebraska v. Wyoming, which involved a dispute over water rights stemming from the North Platte River and in which the United States intervened as a defendant. In Nebraska v. Wyoming, the Court permitted Wyoming to assert a claim directly against the United States, even though the United States did not receive any apportionment of water under the decree at issue. The United States argues that if Wyoming could assert claims against the United States for undermining an equitable apportionment decree despite the United States not being party to the underlying agreement, the United States can conversely assert a claim against New Mexico, despite not being a party to the Compact.
Colorado asserts that although the cases the United States cites hold that the United States can have federal interests affected by a compact or decree among States, none of them hold that the United States may assert a claim under the compact itself. New Mexico maintains that in the few instances that the United States has intervened as a party in an original action, it has done so to protect independent federal interests, rather than to assert a new cause of action under a compact. For example, in the prior dispute between Texas and New Mexico over the Pecos River Compact, Colorado claims the United States was permitted to intervene as a plaintiff based on its claims relating to its treaty with Mexico, water rights of Indian tribes, and federal lands and facilities, but not claims under the Pecos River Compact. New Mexico additionally argues that in Nebraska v. Wyoming, just because Wyoming was permitted to assert a claim against the United States for improper operations which allegedly violated the decree, it does not logically follow that the United States has a reciprocal right to raise a claim against a state for violating the Compact in this case.
WHETHER THE UNITED STATES IS A THIRD-PARTY BENEFICIARY
In the alternative, the United States maintains that it can bring a claim under the Compact as a third-party beneficiary. The United States argues that because the Compact is a contract, the Compact created a duty in the promisors to any intended beneficiary to abide by the Compact and the intended beneficiary may enforce that duty. The United States asserts that to prove that it is third-party beneficiary of the Compact, it must demonstrate that the parties to the Compact explicitly or implicitly intended to directly benefit the United States. As evidence that the Compact intended to directly benefit the United States, the United States claims that a federal representative advocated for the United States’ interests in Compact negotiations, and that Article XVI of the Compact was included to expressly protect the United States’ treaty obligations to Mexico.
Colorado agrees that the United States must show that the parties to the Compact intended to directly benefit the Unites States for the United States to be a third-party beneficiary of the Compact, but that the United States has failed to do so. Colorado asserts that the parties to the Compact only intended to directly benefit the compacting States by equitably apportioning the waters of the Rio Grande River among them, and notes that the United States was not apportioned any water by the Compact.
New Mexico contends that obtaining third-party beneficiary status is an “exceptional privilege,” which the United States does not justify receiving in this case. New Mexico argues that the Compact does not reflect any implied or express intention to benefit the United States; in fact, the Compact explicitly states that it will not alter or affect the United States’ preexisting obligations. Furthermore, New Mexico claims that the United States has failed to cite a single case where the Court held that the United States was a third-party beneficiary to an interstate compact.
THE RISK OF RE-LITIGATING ISSUES
The City of El Paso, in support of Texas, asserts that the arguments of New Mexico and its amici, that allowing Texas and the United States to litigate their claims would risk re-litigation of issues being tried at the state level, are unfounded. El Paso asserts that New Mexico’s pending adjudication of water rights under New Mexico law is not mutually exclusive from the claims brought by Texas and the United States and, furthermore, that the focuses of the two cases are different. El Paso states that here, unlike the litigation at the New Mexico state level, the issues arise under federal law and concern New Mexico’s obligations under the Compact not to interfere with Texas’s Compact rights. Thus, El Paso argues, there is no risk for re-litigation of issues if the Court allows the claims of Texas and the United States to proceed. Elephant Butte, in support of Texas, adds that there is no risk for re-litigation of issues because the state adjudication declined to hear the issues of whether the project water was being improperly interfered with and, if the Supreme Court also cannot hear the claim, there is a risk that the claim can never be heard.
The City of Las Cruces, in support of New Mexico, argues that, to the extent that the United States has any federal interest in the issues litigated here, they have already been litigated in a New Mexico state case, State of New Mexico ex rel. State Engineer v. Elephant Butte Irrigation District, et al. In this case, the United States was joined as a party under the McCarran Amendment, which waives the United States’ sovereign immunity in cases involving the adjudication of water rights created by state law Las Cruces contends that it is the practice for federal courts to defer to state courts for litigation of proceedings involving water rights and that, if the Court follows the Special Master’s recommendation to let the United States continue as a party, even in a limited context, there would be a risk of re-litigating issues. New Mexico adds that, if the United States disagrees with orders regarding its project water rights in the New Mexico litigation, it must appeal them instead of bringing a claim in this action.
Laura Paskus, State’s Top Water Official Gives Legislators Optimistic Brief on Water Dispute with Texas, Las Cruces Sun-News (October 2, 2017).
Lauren Villagran, Texas Suit Most Imminent Threat to NM’s Water, Albuquerque Journal (June 24, 2017).