Did the River Master err in determining that Texas, rather than New Mexico, should bear the cost of evaporative losses caused by Tropical Storm Odile?
The waters of the Pecos River are allocated to Texas and New Mexico in accordance with the terms of the Pecos River Compact. When disputes arose between the states regarding each state’s duties under the Compact, the Supreme Court issued an amended decree to regulate such duties and appointed a River Master to calculate and oversee the parties’ obligations. Texas now challenges the River Master’s determination that Texas, rather than New Mexico, should bear the burden of evaporative losses caused as a result of Tropical Storm Odile. Texas argues that the River Master erred in retroactively awarding evaporative loss credits to New Mexico because the River Master lacks authority to do so, and New Mexico’s motion for such credits was untimely. Texas further contends that Article XII of the Compact is inapplicable because the Bureau impounded flood water for public safety reasons, not for use in Texas. New Mexico counters that the River Master correctly granted a one-time retroactive credit for evaporative losses to New Mexico because New Mexico’s motion was timely, and the River Master was permitted to adopt procedures necessary to address novel accounting issues. New Mexico further asserts that Article XII is applicable because the Bureau impounded flood water primarily for Texas’s later use. The outcome of this case has implications for the role of the River Master and the procedures to be followed in future disputes under the Compact. In addition, the outcome of this case will affect the authority granted to court-appointed officers overseeing other interstate contracts, as well as the tolling procedures that other states should look to in resolving disputes arising from such contracts.
Questions as Framed for the Court by the Parties
Whether the River Master correctly allocated evaporation losses under the Pecos River Compact.
The Pecos River begins in Santa Fe, New Mexico, flows through southeastern New Mexico and west Texas, and empties in Texas into the Rio Grande. New Mexico’s Response to Texas’s Motion for Review, (“New Mexico Response”) at 1. In 1949, the state of Texas and the state of New Mexico formed the Pecos River Compact (“Compact”) to allocate the waters of the Pecos River. Texas Motion for Review of River Master’s Final Determination (“Texas Motion for Review”) at 4. The Compact establishes that “New Mexico will ‘not deplete by man’s activities the flow of the Pecos River at the New Mexico–Texas state line below an amount which will give to Texas a quantity of water equivalent to that available to Texas under the 1947 condition.’” New Mexico Response at 1. The Compact further provides that “unappropriated flood waters”—excess waters that result from flooding— should be split evenly between the states. Texas Motion for Review at 4. In 1988, the Court issued an amended decree (“Amended Decree”) that appointed Dr. Neil Grigg as River Master to calculate and enforce New Mexico’s obligations under the Compact. New Mexico Response at 2-3; Texas Motion for Review at 5.
In September 2014, heavy rains from Tropical Storm Odile caused the Pecos River to flood. New Mexico Response at 5–6; Texas Motion for Review at 7. As a result, Red Bluff, a reservoir for holding water in Texas, filled to capacity and began to spill over. New Mexico Response at 6; Texas Motion for Review at 7. Acting on its flood-control authority, the Bureau of Reclamation (“Bureau”) began impounding floodwater in New Mexico’s Brantley Reservoir (“Brantley”) out of concern for public safety. New Mexico Response at 6; Texas Motion for Review at 7. Texas consequently requested that New Mexico store Texas’s portion of the water in Brantley until Texas was able to use the water in Red Bluff. New Mexico Response at 5–6; Texas Motion for Review at 7. New Mexico agreed not to object to the request, and stored Texas’s water in Brantley through 2014 and most of 2015. New Mexico Response at 6; Texas Motion for Review at 7. Approximately 21,000 acre-feet of water evaporated from the Texas water while it was stored at Brantley. New Mexico Response at 7; Texas Motion for Review at 7.
In early 2015, the Bureau informed Texas that it wanted to release Texas’s water that was being held in Brantley. New Mexico Response at 6–7; Texas Motion for Review at 7–8. Because Red Bluff remained at capacity, Texas requested that the water be held in Brantley as long as possible so that Texas could use the water in Red Bluff and make room to receive the water from Brantley. Id. In March 2015, in response to the Bureau’s indication that it wanted to release the Brantley water, Texas began releasing water from Red Bluff to make room for the water from Brantley. Texas Motion for Review at 8. The Bureau then informed Texas in July 2015 that it could not continue to hold the water in Brantley absent a contract for water storage and began releasing Texas’s water from Brantley in August 2015. New Mexico Response at 7; Texas Motion for Review at 8.
In April 2015, Texas and New Mexico initiated discussions with the River Master to resolve the question of the proper allocation of the evaporative losses of the Brantley water. New Mexico Response at 8. After years of negotiations, Texas eventually asserted that the Brantley water should be considered “unappropriated flood water” under the terms of the Compact, and therefore must be accounted for under the Compact. Texas Motion for Review at 10. In 2018, New Mexico requested credit for the evaporative losses to the Brantley water that it had stored for Texas. Texas Motion for Review at 10; New Mexico Response at 12.
The River Master, in allocating the evaporation losses, concluded that the Bureau’s storage of Texas’s water for public safety purposes ended in March 2015, and that the water should thus not be considered “unappropriated flood water” under the Compact. Texas Motion for Review at 11. The River Master further concluded that New Mexico should not be held responsible for Texas’s inability to store the flood waters in Red Bluff. New Mexico Response at 13–14. After finding that New Mexico’s storage of the Brantley water ended in March 2015, the River Master evenly divided the evaporative losses prior to that date, resulting in a credit to New Mexico of 16,600 acre-feet of water. New Mexico Response at 14. Texas filed a motion for review of the River Master’s final determination. Texas Motion for Review at 12. The Supreme Court has original jurisdiction over this case.
THE RIVER MASTER’S DECISION TO RETROACTIVELY AWARD DELIVERY CREDITS
Texas argues that the River Master erred in retroactively granting delivery credits to New Mexico. Texas Motion for Review of River Master’s Final Determination (“Texas Motion for Review”) at 14. Texas first contends that New Mexico’s motion is untimely because it did not follow one of the two limited procedures for challenging the River Master’s decision: (1) submitting written objections within 30 days of the River Master’s preliminary report, or (2) seeking the Supreme Court’s review of the final report within 30 days of its adoption. Id. Since New Mexico pursued neither of these avenues, Texas argues that New Mexico forfeited its right to challenge the absence of evaporation credits in the 2014 and 2015 final determinations. Id. at 14–15. Texas further asserts that the River Master was not authorized under the Amended Decree, the Compact, or the River Master Manual—which outlines the procedures for making the calculations—to retroactively modify past reports. Id. at 15–16. Specifically, Texas argues that the Amended Decree contemplates only one mechanism for retroactive modification: an agreement by the parties. Id. at 16. While New Mexico can modify the River Master Manual through a unilateral motion, Texas argues that the Amended Decree requires that such modification be applied only prospectively. Id. Since the parties did not agree to retroactive modification, and since New Mexico’s unilateral motion can only apply prospectively, Texas claims that the River Master erred in permitting a retroactive modification. Id. at 16–17.
Texas additionally contends that the River Master exceeded his authority in applying equitable tolling to excuse New Mexico’s failure to timely object. Id. at 20. Texas argues that equitable tolling is not available in this case because the deadlines in the Amended Decree are jurisdictional, and equitable tolling cannot be applied to jurisdictional deadlines. Id. at 20–21. Even if equitable tolling were available, Texas argues that New Mexico failed to meet the doctrine’s two elements: (1) the litigant did not pursue his rights diligently, and (2) some extraordinary circumstance did not prevent timely filing. Id. at 22. While New Mexico may have believed it would come to a resolution with Texas, Texas argues that New Mexico should have preserved its right to review if the parties ultimately failed to reach an agreement—which is what happened in this case. Id. at 23–25. Because New Mexico failed to seek review until 2018 and no exceptional obstacle prevented it from doing so, Texas maintains that equitable tolling was impermissibly applied in this case. Id. at 26.
In contrast, New Mexico asserts that the River Master permissibly granted a one-time credit for evaporative losses to New Mexico. New Mexico’s Response to Texas’s Motion for Review of River Master’s Final Determination (“New Mexico Response”) at 18. New Mexico first argues that New Mexico’s motion is timely because the Compact contemplates accounting modifications based on a three-year period; thus, New Mexico’s 2017 motion was timely because 2017 marked the last year of the three-year period. Id. at 26–27. New Mexico further claims that the River Master did not make retroactive modifications to the River Master Manual, which is prohibited by the Amended Decree, but rather granted a “one-time credit” to New Mexico. Id. at 32. New Mexico contends that the River Master can grant a one-time credit because he is authorized to adjust deadlines and adopt procedures necessary to address “novel accounting issues'' in order to fulfill his duties. Id. at 21–22. New Mexico argues that it was justified in relying on the River Master’s one-time correction because both states jointly sought guidance from him regarding the proper procedure for accounting adjustments and neither challenged the updated procedure at the time. Id. at 25–29. New Mexico additionally asserts that this one-time correction should be applied retroactively because at the time of the correction both states understood it to be applied retroactively—Texas even sought its own retroactive modification in 2018. Id. at 29.
New Mexico further argues that the River Master correctly applied the doctrine of equitable tolling. Id. at 29. New Mexico emphasizes the existence of a presumption in the Supreme Court that equitable tolling be applied in cases between states, which can only be rebutted if Texas can demonstrate that Congress “made the time bar at issue jurisdictional.” Id. at 30–31. Therefore, New Mexico contends that the deadlines in the Amended Decree are not jurisdictional because Congress did not explicitly designate them as so. Id. at 31. New Mexico also argues that this case presents the perfect example of when equitable tolling should be applied—where one party (New Mexico) relied on the conduct of another (Texas) in refraining from filing an action by the deadline. Id. at 31–32. New Mexico claims that it only missed the deadlines in the Amended Decree because Texas reversed its stance: Texas agreed with the River Master’s updated procedure and worked with New Mexico to resolve the accounting issue up until 2018. Id.
THE PURPOSE OF STORING WATER IN TEXAS
Texas argues that Article XII of the Compact, which charges evaporative loss to a state when the United States is storing water “for use” in that state, is inapplicable to the facts of this case. Texas Motion for Review at 27. Texas contends that Article XII does not apply because the Bureau impounded flood water for public safety related to flood control, not for use in Texas. Id. at 28. Texas points to a July 2015 email between the parties where the Bureau warned Texas that it would begin releasing flood water in August 2015—which is when the Bureau’s flood-control authority expired Id. Because the Bureau released the flood water directly after its flood-control authority expired, Texas argues that the timing “confirms that the Bureau was not holding the water for Texas’s use, but instead was storing the water for flood control.” Id. at 29. Texas further claims that Article XII is inapplicable because it only pertains to the consumptive use of water for a federal project in the state. Id. at 30. Since no equivalent federal projects existed at the time of the 2014 flooding, such as a contract related to storage of the water, Texas maintains that Article XII cannot form the basis for awarding evaporative loss credit to New Mexico. Id. at 30–31. Texas additionally contends that Article XII’s application would inappropriately suggest that the Bureau acted illegally—since no storage contract existed, the Bureau was not legally authorized to store water for Texas if it was not doing so pursuant to its flood-control authority. Id.
New Mexico counters that Article XII is applicable because the Bureau impounded water for use in Texas, not for public safety reasons. New Mexico Response at 33–35. While the initial storage of the water may have been rooted in public safety concerns, New Mexico argues that its storage was “primarily a matter of comity.” Id. at 35. Specifically, New Mexico contends that it only continued to store the water past the public safety concern because Texas explicitly requested it to do so. Id. In support of its argument, New Mexico points to the River Master’s finding that public safety concerns had subsided by March 1, 2015, and therefore, the subsequent four-month storage was for Texas’s later use. Id. Regardless, New Mexico asserts that Texas cannot “substitute its interpretation of the evidence for that of the [River Master],” and therefore, the River Master’s finding that Texas understood the stored water to be for its own use should be given controlling weight. Id. New Mexico further contends that the Bureau acted reasonably in cooperating with Texas and offering to store the water until Texas could utilize it or until a contract was negotiated—hardly an indication of illegal behavior. Id. at 36–37.
THE ROLE AND SCOPE OF AUTHORITY OF THE RIVER MASTER
Texas contends that allowing the River Master to determine whether New Mexico’s objection was timely exceeds the scope of the River Master’s authority. Texas Motion for Review of River Master’s Final Determination (“Texas Motion for Review”) at 17–18. Texas asserts that, in accepting the River Master’s determination that New Mexico should not have been required to adhere to the timeline for filing an objection, New Mexico ignores the Court’s intentions with regard not only to the timeline for filing and quickly resolving disputes, but also to the role of the River Master in the case. Id. at 19. The role that the Court envisioned for the River Master, Texas argues, was limited to calculating New Mexico’s delivery obligations under the Compact and did not include setting forth procedures for resolving disputes. Id. According to Texas, the River Master’s role as envisioned by the Court did not include “receiving what amount[ed] to legal briefs and engaging in . . . application of legal doctrines.” Id. The River Master, Texas points out, is not a lawyer, and he therefore should not have the authority to “second-guess” the process that the Court set forth for resolving disputes related to the Compact. Id. at 18.
New Mexico, however, counters that Texas’s interpretation of the River Master’s authority contradicts the very purpose for which the River Master was appointed. New Mexico’s Response to Texas’s Motion for Review of River Master’s Final Determination (“New Mexico Response”) at 23. According to New Mexico, developing procedures to address accounting issues not previously raised is necessary for the River Master to fulfill his duties and therefore falls under the authority granted him by the Supreme Court. Id. at 21. If the River Master did not have the authority to adopt such procedures, New Mexico argues, the River Master would be unable to serve the purpose for which the Court appointed him: moderating disagreements between the states in order to ensure that the Court is not required to “referee an endless series of disputes.” Id. at 22. New Mexico contends that allowing the River Master to serve this purpose by setting forth procedures for moderating this dispute serves the Compact’s goal of encouraging “interstate comity,” facilitates discussion between the states, and ensures that the problem of the Brantley water is resolved fairly and accurately. Id. at 23. Moreover, the United States, in support of neither party, contends that the River Master must have an opportunity to identify and resolve problems in his yearly reports, and that even if the River Master’s procedure was improper, Texas forfeited its right to object to the River Master’s procedures by failing to object for several years. Brief of Amicus Curiae United States, in Support of Neither Party at 19, 21. The United States further argues that regardless of the River Master’s ability to set procedures, Texas should bear evaporation losses because the water would eventually have been delivered to Texas. Id. at 16–17.
PROPER USE OF THE DOCTRINE OF EQUITABLE TOLLING
Texas argues that even if the Court decided that the River Master had authority to toll deadlines, New Mexico may not avail itself of the doctrine of equitable tolling to escape the filing time constraints. Texas Motion for Review at 20. Texas asserts that equitable tolling is not available because the Court’s time limit is jurisdictional, and such deadlines “are not subject to equitable tolling.” Id. According to Texas, the deadline here protects the interests of the Court as an adjudicatory body in addition to the interests of potential defendants. Id. at 21. The time limits here, Texas contends, serve the interests of the Court in ensuring finality and the “‘smooth functioning of our judicial system.’” Id. Texas asserts that the Court clearly chose not to create exceptions to the timing guidelines set forth in the Compact for a reason, and the River Master may not exercise power that even the Court itself does not exercise. Id. at 22. According to Texas, excusing New Mexico from filing deadlines in this case would open the door to the use of equitable tolling for parties who miss deadlines as a result of “[their] own misunderstanding, simple neglect, or strategy choice.” Id. at 25.
New Mexico counters that the doctrine of equitable tolling should be employed in this case in order to serve the interests of justice. New Mexico Response at 29–30. New Mexico asserts that, even if it did in fact miss a filing deadline, the only reason that New Mexico missed the deadline was that it relied on Texas’s apparent acquiescence to being charged for the evaporative losses. Id. at 31–32. The circumstances in which equitable tolling is justified, New Mexico argues, include circumstances under which the actions of an opposing party caused a party to miss a deadline. Id. at 31. Further, New Mexico maintains that the Court possesses inherent authority to amend the process governing disputes under the Compact, including filing deadlines, for the purpose of serving the interests of justice. Id. at 19. New Mexico contends that the Court has the power to adopt different procedures than the Court initially set forth in order to ensure that both parties have an opportunity to fully present their case and that the result of any accounting is fair and accurate. Id. at 20. Providing further opposition to Texas, the United States argues that the amended decree is a claim-processing rule, rather than a jurisdictional rule; therefore, equitable tolling should apply. Brief of United States at 21.
- Robert Nott, State Looks to Address Texas v. New Mexico Water Case, NM Political Report (Jan. 27, 2020).
- Tim Ryan, Pecos River Fight Faces Supreme Court Test, Courthouse News Service (Jan. 27, 2020).