Seventh Judicial District Court Div. II Judge Matthew Reynolds affirmed the State Engineer's Order Denying Application by Augustin Plans Ranch LLC, applicant/appellant, for an underground water permit to divert and use waters from the San Augustin Basin in Catron County.

In the amended application of May 5, 2008, the applicant filed with the New Mexico Office of the State Engineer for permit to appropriate underground water. Location of wells lists 37 proposed wells on the applicant's ranch in Catron County, NM.

The top depth of wells are listed as 3,000 feet; the casing diameter, 20 inches; and the expected yield of each well at 2,000 gallons a minute. Quantity requested is 54,000 acre-feet annually for consumptive use and diversion. Purpose of use lists domestic, livestock, irrigation, municipal, industrial, commercial and "other." The other purposes listed include environmental, recreational, subdivision and related, replacement and augmentation. However, specific use was left blank.

Places of use include within the exterior boundaries of Augustin Plains Ranch, as well as other proposed places of use: "Any areas within Catron, Sierra, Socorro, Valencia, Bernalillo, Sandoval and Santa Fe counties that are situated within the geographic boundaries of the Rio Grande Basin in New Mexico."

Additional statements or explanations were filled in by the applicant to cite the "purpose of this amended application is to provide water by pipeline to supplement or offset the effects of existing uses and for new uses in the areas designated in Attachment B (listed above) in order to reduce the current stress on the water supply in New Mexico. Any impairment of existing right, in the Gila-San Francisco Basin, the Rio Grande Basin, or any other basin, that would be caused by the pumping applied for, will be offset or replaced."

A modification to the amended application, emailed on June 26, 2008, said "the purpose and place of use, … will be used for irrigation on Augustin Ranch… limited to 120 acres within a 1,290 foot radius of each of the 37 well locations… (to total) 4,440 acres."

Discussion pointed out that "The right to use water in New Mexico is based upon the New Mexico Constitution, which expresses the water law of prior appropriation existing at the constitution's adoption a century ago: 'Although the water in the public stream belongs to the public,' unappropriated water is 'subject to appropriation for beneficial use.' Once appropriated, 'priority of appropriation shall give the better right.'"

Under New Mexico law, "there is statutory procedure for establishing the right to use underground water pursuant to Chapter 72, Article 12 NMSA 1978. Statute declares that underground waters with reasonably ascertainable boundaries belong to the public and are available for beneficial use."

The State Engineer has two options for applications that are opposed—he may deny the application without a hearing or may order that a hearing be held.

In this case, more than 900 protests were filed. The State Engineer on March 20, 2012, entered an order denying application, saying: "the application is so vague and overbroad that it cannot be reasonably evaluated… and that the application should be dismissed without prejudice to filing of subsequent applications, and that the hearing should be dismissed."

Applicant argued that once the Office of the State Engineer accepted the application and published the notice, the state engineer could not reject the application without a hearing.

In reviewing the state engineer's decision, "this court has determined that the application had to be denied by the state engineer for the following reasons: (1) the application fails to specify the beneficial purpose and the place of use of water; and (2) the application contradicts beneficial use as the basis of a water right and the public ownership of water, as declared in the New Mexico Constitution."

The memorandum of the review by the 7th Judicial District Court states: "New Mexico courts have long considered specificity to be a statutory requirement for an underground water permit." Several cases were cited.

Dismissing the application without prejudice allows the applicant to reapply with specificity.

In conclusion, the District Judge states: "There are no genuine issues of material fact, and Protestants are entitled to judgment as a matter of law. The State Engineer's Order Denying Application is affirmed. Counsel for the state engineer shall prepare the order reflecting this decision."