City of Albuquerque v. Reynolds

The City of Albuquerque (plaintiff) applied for permits to drill wells to appropriate groundwater from the Rio Grande Underground Water Basin. After a hearing, the state engineer, Steve Reynolds (defendant), determined that the basin’s groundwater fed the Rio Grande, that the river was already fully appropriated, and that the taking of groundwater would negatively affect the existing river-water-rights holders. Reynolds also determined that approximately 50 percent of the groundwater the city proposed taking would ultimately return to the river. Therefore, half of the city’s proposed appropriation was groundwater, and half was river water. Unlike the river, the basin’s groundwater was not fully appropriated. Reynolds proposed that the city could drill its wells and pump groundwater on the condition that it retired an appropriate amount of its surface-water rights to offset the pumped groundwater that affected river surface-water flow. The city rejected the condition, and Reynolds denied the permits. The city appealed to the New Mexico district court. While agreeing with Reynolds’s fact findings, the district court held that Reynolds did not have the power to consider the surface water and groundwater together—i.e., conjunctive use—and had to treat them separately. Because the basin was not fully appropriated, the district court held that Reynolds must grant the permits. Reynolds appealed to the New Mexico Supreme Court.