Courthouse Steps Decision Teleforum: Texas v. New Mexico

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Dean Reuter:  Welcome to Teleforum, a podcast of The Federalist Society's practice groups. I’m Dean Reuter, Vice President, General Counsel, and Director of Practice Groups at The Federalist Society. For exclusive access to live recordings of practice group teleforum calls, become a Federalist Society member today at fedsoc.org.

 

 

Nick Marr:  Welcome everyone to The Federalist Society's Teleforum conference call as this afternoon, December 17th, 2020, we're having a Courthouse Steps Decision Teleforum on Texas v. New Mexico. This ruling was handed down a few days ago. And we're joined today by our expert who covered the oral arguments. I'm Nick Marr, Assistant Director of Practice Groups at The Federalist Society.

 

      As always, please note that expressions of opinion on our call today are those of our expert.

 

      And this afternoon, we're very pleased to be joined by Tony Francois. He's Senior Attorney at the Pacific Legal Foundation. Tony did our oral argument coverage. There's a podcast posted on that link, so go check that out, and he'll be covering the ruling in the case today. So we'll be looking to you, the audience, later in the program for questions. So be thinking of those, have them in mind for when we get to that portion of the call. All right, with that, Tony, thanks for being with us. The floor is yours.

 

Tony Francois:  Thank you Nick. And thank you to The Federalist Society for hosting this discussion about the Texas v. New Mexico decision, and for all of you for joining us today out of your busy schedules. I'm going to talk about three things this afternoon, or this morning depending on the part of the country you're in.

 

      First of all, just an explanation of the background of this dispute and the Supreme Court's decision. It'll probably take the bulk of my comments. But then two related, or perhaps just interesting side points.

 

      The first is, the style of writing in this decision, which I think is, for those who follow the Supreme Court, kind of interesting and indicates a general move in the direction of a certain type of writing style by the justices.

 

      And then finally, I'd like to offer some observations on the role of water disputes in the Supreme Court's docket and what we might glean from this decision, and some other recent decisions, as well as cases that the Supreme Court has declined to hear in the water space, if you will.

 

      So let's start out by talking about Texas v. New Mexico. This is a water dispute between two states and it arises out of the -- I'm blanking on the word. The implementation, I'm sorry, of a compact between Texas and New Mexico and a resulting Supreme Court decree that adjudicates between the two states their relative rights to the waters of the Pecos River, which arises in kind of the Northeast corner of New Mexico, flows through a lot of New Mexico, including past the town of Roswell, and then through West Texas until it meets the Rio Grande River.

 

      And it's not a significant supply for either state, for example, as the Rio Grande is, itself. But still, it provides a significant amount of water for urban uses for farming and other uses on both sides of the Texas / New Mexico border.

     

      As is always the case with multistate rivers, the upstream state, in this case, New Mexico, has something of the pull position if you will in the use of the waters, because they can get them first. And so these compacts and the adjacent decrees typically operate to provide a baseline of flow that the upstream state has to allow past its border to the downstream state. That's how these types of disputes are typically resolved at a practical level.

 

      And then the decree, which is pretty common in these types of conflicts, whether they be between states or just adjoining property owners provides for a court official, in this case the title is River Master, to implement the decree on an ongoing basis. And is as common in water disputes that result in decrees, the Court retains ongoing jurisdiction to enforce the decree so that the decree can be enforced in Court as a motion to enforce the decree, rather than any of the parties having to file a brand new lawsuit and start the whole thing over from scratch.

 

      So that's the structure of the governance of the Pecos River between New Mexico and Texas. You've got a fairly long-standing, well, I'll say it goes back to the 1940s, allocation between the states that establishes an amount of flow that New Mexico is required to release to Texas at the Texas / New Mexico border confirmed by a decree entered by the Supreme Court, which retains jurisdiction over the degree and appoints a River Master as an Officer of the Court to implement the decree on a day-to-day basis.

 

      So in that framework, one of the things that's provided for in the Pecos River compact is a procedure for Texas to ask New Mexico to hold some of its water in New Mexico, for reasons that are whatever the reasons might be. And the decree provides that if New Mexico stores water, stores Texas' water at Texas' request, then when it releases the water later, when it delivers the water later, it can deduct from the amount it originally stored an amount for evaporation losses. And it's important to understand the hydrology of that.

 

      So if Texas says, "New Mexico, we want you to store 100,000 acre feet of water in one of your reservoirs," that's actually quite a bit of water. Let's call it 10,000 acre feet of water. Well, New Mexico is also storing its own water in that same reservoir. And there's no -- you don't put a dye in the 10,000 acres that's Texas' so you can go gather that up when it's time to deliver it. It's also fungible.

 

      And so when New Mexico is called upon by Texas to deliver some of the water it has stored for Texas, that's coming out of a common fund, if you will, or a common pool of water. And that reservoir is constantly experiencing some evaporation loss. And so the question is really, if New Mexico stores 10,000 acre feet of water for Texas, say for two years, well, during that two years, a certain amount of all of the water in that reservoir will have evaporated. And does any of that evaporation apply to any of Texas' stored water to reduce the amount that New Mexico has to deliver? Or conversely, as Texas argued in this case, are they entitled to the entire 10,000 acre feet that they've had stored there for two years, as though none of it had evaporated?

 

      So the particular dispute that arose -- and so what the decree says, excuse me, is that when New Mexico stores water in New Mexico at Texas' request, then when it delivers the water, it may deduct evaporation losses from the amount of water it releases to Texas. The particular dispute in this case arose in 2014 when there was a fairly severe tropical storm that hit this region of the country. As a result, the Pecos River ran very high. And as it flowed across the New Mexico / Texas border, rapidly filled up a reservoir just inside Texas. And as that filled, actually threatened to overtop that dam and cause significant flood damage, unless Texas were to make very large releases from that dam, which would, in turn, cause flood damage downstream.

 

      So Texas is looking at this management problem. We've got more water than we know what to do with. More water than we have space to put during this winter storm. So they asked New Mexico, would you please hold several thousand acre feet of water in a reservoir in New Mexico so that it doesn't create this condition of flooding and subsequent damage in Texas? And New Mexico immediately responds, yeah, we're happy to do that. But we consider this to be Texas' water and we consider ourselves to be storing it at Texas' request. And specifically referring to, if not explicitly invoking the provision of the decree that says, when we do finally deliver this, it'll be net of evaporation losses.

 

      So later in 2014, after this storm is over, the two states begin negotiations with each other about when and how much at a time to deliver the water that was held in New Mexico. And they don't get very far very fast. It takes them a while to figure out, by mutual agreement, what they're going to do and when.

 

      And one of the things that they argue over is whether or not this particular holding of water in New Mexico is subject to the decree provision, that when it's released, it would be released net of evaporation losses. So they argue back and forth about this.

 

      Meanwhile, the River Master does an annual report that is published, I want to say by March 15 every year covering the prior year's water operations. The parties, in resolving certain disputes, the parties then have a fairly limit period of time, I want to say about 60 days, to file objections to anything in the report. The River Master then has until the middle of the year to publish a final report. And only from those annual final reports may any of the parties seek review in the Supreme Court.

 

      So in the annual report dealing with, among other things, this storage of flood waters in 2014, the River Master's report says, rather than resolving that question -- so this is an open dispute that the parties are negotiating in, we're going to leave this open. The parties both agree with that. They say, yeah, we'll get this figured out. And if we can't figure it out, we'll ask you to figure it out. And so the River Master's final report for that year simply says, the parties are trying to figure out what the answer to the evaporation losses is.

 

      Over the course of a couple of years, Texas and New Mexico continue bickering over this and they can't really come to conclusion. And I forget in the details whether the River Master finally says, enough, I'll tell you what the answer is. Or if New Mexico says, we're done talking about this. River Master, you tell us what the answer is.

 

      However it comes about, the River Master decides that the net of evaporation losses provision of the decree applies to the water stored at Texas' request, grants New Mexico an evaporation loss credit of about 21,000 acre feet, and finalizes in kind of an odd procedure not clearly provided for under the decree or the River Master's manual retroactively amends the final report for the year in which the storage occurred.

 

      And so it's from this decision of the River Master that Texas seeks review of the Supreme Court. And Texas made a number of technical arguments. They said that the River Master had no ability to -- basically to resolve the question because it had to -- the River Master had to amend the manual. You know, his manual of operations in order to then amend, or retroactively revise the annual report for 2014. And Texas argued that New Mexico had basically waived any right it may have had to an evaporation credit by not objecting to the original preliminary report for 2014 that the River Master published.

 

      So Texas' argument to the Supreme Court was, when the River Master said, in March or April of 2015, we're leaving this particular 2014 question open, that was the only time that New Mexico could say, no we object to this being held open. You have to decide this question and decide it for us. 

 

      In addition to those procedural arguments, Texas argued to the Supreme Court that under the decree, the water that remained in New Mexico, at Texas' request in order to avoid flood damage, was not in a category of what the decree categorized or defined as stored water at Texas' request. And Texas raised this point that it was just kind of a sidebar, kind of a distraction. As you'll see if you look at the Supreme Court decision, did at least draw the attention of one of the justices, Justice Alito.

 

      Texas argued that because the retained water, call it that, was retained in a reservoir in New Mexico operated by the Bureau of Reclamation, a federal agency, that could only be considered "stored water" if it had been held in that reservoir under a federally described, described in federal statute, contract for storage, which is a term of art in operations of Bureau of Reclamation Facilities. It's defined in the federal statute, and because there was no contract between Texas and the Bureau for the particular water held in that reservoir, that it could not then be considered stored under the decree.

 

      If any of you listened to the Teleforum that we presented following the oral argument, my sense of the oral argument is that it's very difficult to see which way the Court was leaning. There were a lot of good questions to both sides. And it did not appear clear what the outcome would be. I think my take on it, this was argued on October 5th, so this was one of the two cases argued on the first day of this year's term. And that it seemed like Texas may actually have the better reading of the relevant decree and federal law. But that the equities really seem to go more in New Mexico's direction. And so it was hard to see how the case would turn out.

 

      Now, what the Supreme Court's decision this Monday holds is that New Mexico is correct. And it does it in a very simple, straight forward way. It says, the decree says water stored in New Mexico at Texas' request gets an evaporation credit when New Mexico finally does deliver it. And that Texas' various arguments to the contrary don't really work because the decree doesn't add any technical limits on what "stored" means in that provision. And so you give it an ordinary language reading and, by any stretch of the imagination, the water in question was stored in a reservoir in New Mexico at Texas' request.

 

      And that's really the heart of Justice Kavanaugh's opinion for the Court in the case. And it's important, I think -- and this is an aspect of this case that eluded me as I was reading the briefs and observing the oral argument, which is that it's kind of interesting that the water they're arguing over, if New Mexico had not stored it for Texas' benefit, it would have crossed the boarder into Texas and caused rather significant harm somewhere in West Texas. And so it seems a little bit -- well, that might understate it. It seems significantly kind of dog in the manger-ish of Texas to be demanding no evaporation credit for water that New Mexico held for its benefit. When, if New Mexico had not stored the water, it would have caused -- it wouldn't have been to any benefit to simply release it as part of the flood flows to Texas. It would have caused great harm in Texas. So this might go under the "no good deed goes unpunished" rubric.

 

      Justice Kavanaugh's opinion, I think, reflects a couple of important realities about water disputes, and about cases that fall under the Supreme Court's original jurisdiction. A lot of these cases that the Supreme Court does hear -- what is it lately about Texas and original actions in the Supreme Court, but I digress. The Supreme Court doesn't do evidentiary hearings. It is fundamentally a court of last resort, as an appellate court deciding legal questions.

 

      And so when it is the supervising court of a decree or a judgment over which it retains continuing jurisdiction, the Supreme Court will rely very heavily on, in this case it's a River Master or Water Master in water rights cases, but in other types of cases, the Court will appoint a special master of some kind under the federal rules to administer the decree or the judgment. And because the Court would otherwise have to do its own fact finding, would have to hold a trial in the Supreme Court of facts, the Court I think historically and now, is going to be very loath to overrule its own River Master. Its own appointed official who administers the judgment on a day-to-day basis.

 

      And so the way I would describe the Court's view of a motion like this, please review the determination that your River Master made, is we're not going to unwind what our appointed River Master did here unless you've got something really good. And I think Justice Kavanaugh's opinion here reflects the Court's consensus that what Texas brought here is just not really good. It's not a solid enough argument that the River Master made a mistake to warrant the Supreme Court undermining its own appointed special master. And directing, either another take on it or a different outcome.

 

      So I think that's an important point to take away from this case. And in our prior Teleforum on this, as I said, I wasn't sure whether Texas' better legal argument, or New Mexico's better equities would carry the day. And I think what really does carry the day, although I think Justice Kavanaugh's opinion is sound on the legal points, is how clearly can you demonstrate that the Supreme Court's appointed special master made a big mistake?

 

      And if you can't show a really big mistake really needs correction, then they're just institutionally going to be very likely to uphold the decision of their appointed official. And so I would think that that's probably fairly closely analogous. But maybe even more so to a federal district court reviewing a decision of a magistrate judge. There's just not a lot of incentive to unwind something that the magistrate in a district court case, or the special master in the Supreme Court, has already decided. And if they're going to do that, it's going to have to be for something pretty egregious.

 

      So the decision also has a partial concurrence and partial dissent from Justice Alito, who thinks rather than simply rejecting Texas' motion, that the Court should have remanded it with some instructions to the River Master to take another look at it. And Justice Alito was more persuaded than anyone else on the Court, that this question of whether the water was stored per the decree provision was governed in any way by the need for a contract of storage for any water held in a Bureau of Reclamation reservoir.

 

      He also notes, and I think there's -- this is in the kind of between the lines in the main opinion, but he makes quite clear that in the future, the River Master should probably not be so willing to let the parties spend years bickering over something that the River Master has the authority and the responsibility to resolve. And that probably the better approach would have been for the River Master to say, look, you guys are arguing over this, I get that. I'm going to publish a preliminary report by the date specified, and that will have a recommendation in it.

 

      That puts better leverage on the parties to actually resolve their dispute. Because they have a much clearer idea who would win it if they can't negotiate a resolution to it. And so I think Justice Alito's caution to the River Master is well taken in cases like this.

 

      So that's the decision. New Mexico wins. They get to keep the 21,000 acre feet. It's significant at a practical level because the water, itself, had already been released to Texas in 2015. What they were arguing over was whether New Mexico could hold back the 21,000 acre feet from future deliveries to Texas. And the parties were pretty clear in the briefing and the oral argument that this is enough water to make a pretty significant difference to a lot of, for example, farmers who could use it for irrigation on either side of the New Mexico / Texas border.

 

      I want to talk briefly about the style of the opinion, which I think is -- the writing in it, which I think is interesting. Supreme Court observers have noted an increasingly, I don't think conversational tone is the right descriptor for it. But in Justice Gorsuch's writing, a more directly engaging the reader type of writing that also is characteristic, many times, of Justice Kagan. And Justice Kavanaugh shows that, as well, in this opinion.

 

      At one point, in the opinion, he explains Texas' argument on one of the points. And then in starting a new paragraph, instead of saying something like, we disagree, or this is incorrect, or something of that nature that you would more likely see from most judicial authors, he simply starts it, "rather, the answer is X." And this is an example of what I mean by the kind of more -- again, I'm not quite sure what the right term is. And conversation tone seems to come into my mind frequently, but you can see a lot of this in Justice Gorsuch's writing, where he will start a paragraph with "start with this," or "consider that," or instead of "for example," or "here's an illustration," or something like that.

 

      So there's more of the style of writing in this opinion that is read as a direct engagement with the reader. And I think that's just an interesting trend in the writing of multiple justices on the Court now.

 

      The other thing that's kind of striking about the opinion, is that the first several pages of it are a recitation of basically the history of the case, and continues for a number of pages before you get to the parts of the opinion that analyze the conflict. But this initial explanation of background has no citations in it, whatsoever, I think for about four pages of text. And that cites a kind of interesting thing.

 

      So for example, the late Chief Justice Rehnquist authored I think more than a handful of water opinions for the Court during his tenure on the Court. And they're very well written and very, very sound opinions I think. But the writing style is totally different. And there's a very typical sort of judicial style of every sentence needs a citation to back it up. And especially in reciting history, or the long history of a particular dispute.

 

      Those portions of opinion that Chief Justice Rehnquist would have written would have been replete with references to history books, to law review articles, to prior judicial decisions that explain this kind of background. And probably footnotes as well. And so you see in this opinion a very different approach. A willingness to simply write in order to provide a very clear readable explanation of the background of the dispute. And much less concern to make sure that, even in the broad strokes, that it's supported by citations.

 

      Now, to be sure, when Justice Kavanaugh engages in the actual dispute in the case, the citations are quite robust and soundly used. And there are citations to other types of authority as well. But the decree is very closely analyzed. The Supreme Court's prior decisions in this case are cited, things like that. So I think it's just kind of striking that on a fairly significant decision like this for the parties, you've got this somewhat different style of judicial writing in the service of clearly and sort of on a single rapid reading, explaining the background of the dispute. So I think, stylistically, this is an interesting opinion for both of those reasons.

 

      The final point that I want to offer, and then I'll turn it back to Nick to see if we have any questions, is the rule of water cases in the Supreme Court's docket and kind of what that may portend for the future in this area. There are a lot of obviously different legal fields, and subject matter, that the Supreme Court deals with. It has to, by nature, be a generalist Court.

 

      And yet, simply by virtue of how human society is organized, there are some that are more fundamental than others. And given the role of water and all human life and its distribution in all human society—I apologize, there’s a little bit of background noise there—water takes on a very important significance. And it's important, I think, for the Supreme Court to set the right tone, is not the word I want, the right standard for how the lower courts will deal with water disputes. Because an awful lot rides on how they're resolved.

 

      Starting from that viewpoint, I think the takeaway from this case, and it's similar to another recent interstate dispute over water the Supreme Court decided, the Tarrant Regional Water District case from, I want to say, 2013. Another unanimous decision authored by Justice Sotomayor, the parties had a lot of equitable arguments in both cases.

 

      And a lot of the arguments in both cases, this one and Tarrant Regional Water District, are this type of argument. We set up in this arrangement that resulted in this decree and this allocation of water that's been affirmed by the Court at a certain point in time. And since then, other things have happened. And we've learned new things. And priorities have changed. And so the decree as written, when it was written, can't be the final word.

 

      And what this decision, at least in Texas v. New Mexico says, is no the decree is the final word. Unless you're going to go through the robust, and time consuming, and difficult process of reopening and relitigating the decree, on a basis that would avoid res judicata and collateral estoppel principles, the decree is the decree is the decree. And what it provides for is how disputes will be resolved.

 

      And so I think what they're saying with these cases is, you have to live with the decree. And you can't approach the decrees, as the Pirate Barbosa would say, mostly guidelines. It's actually the rules. And the River Masters and Water Masters should not be hesitant to enforce the rules. And if the parties can negotiate something different, they need to do that in an orderly and time efficient way.

 

      What I think is interesting about that is, there's a category of water related cases that the Supreme Court has been unwilling to take up despite numerous pretty high-quality cert petitions with some high stakes in them, over the last 10 years, dealing with the subject of federal reserve water rights. I won't get into the details of that type of water right, but suffice it to say, it is a type of claim to the use of water that sits at the very front of the line against all other claimants where they exist. And so where they exist and what the scope of them is a very important question.

 

      And a number of cert petitions over the last, say, five to ten years have asked the Supreme Court to look at and cabin the way the Ninth Circuit, in particular, has adjudicated federal reserve water right claims, because that line of cases in the Ninth Circuit, some in a few other courts, have proven to have the opposite effect that decisions like this one, in Texas v. New Mexico have. Which is, rather than the decree is the decree is the decree, this line of decisions on federal reserve water rights has basically said, the decree is neve really the decree. There's always the federal interest that could creep up and upset the apple cart. Change the distribution of water.

 

      So I think it's interesting to wonder and observe why the Court hasn't been willing to take those kinds of cases about federal reserve water rights, despite its fairly easy resolution of the cases between states, like Texas and New Mexico, in this case, the Tarrant Regional Water District case is between Texas and Oklahoma. And again, well, this is about Texas and the Supreme Court these days. But I think it's just something to, especially if you're interested in water policy and the role of the federal courts in that, to observe.

 

      Where they've taken cases, their approach has been, the decree is the decree is the decree. But the cases they're not taking run in a different direction. And at least my view is that sooner or later the Supreme Court is going to have to weigh in on whether the Federal Reserve Water Rights Doctrine is really kind of a get-out-of-the-decree-free card for federal interests.

 

      With that, I'll conclude and turn it back to Nick, and see if there's any question. And thank you all for joining us today.

 

Nick Marr:  Thanks very much, Tony. So Tony, we'll wait a second here to see if anyone lines up the queue. So Tony we don't have any questions in the queue right now. I'll give the floor back to you in case there's anything that you missed or you want to cover. Or if you want to close it up early a bit this afternoon, I'll leave it up to you.

 

Tony Francois:  You know, I'll just add this one observation I had meant to make about the style of the opinion that's very similar to Justice Sotomayor's writing in the Tarrant Regional Water District case from a few years back. Which is that both of the opinions dwell a little bit on -- this one on high school football and Justice Sotomayor's opinion on college football. There's kind of this interesting way in which water disputes get the Court talking about sort of broader societal realities.

 

      And so in the Tarrant Regional Water case, Justice Sotomayor introduces her opinion with a paragraph discussing the college football rivalries between Oklahoma and Texas. And uses that as a segue to talk about the water dispute, or the water rivalry between the two states. And in this opinion, Justice Kavanaugh talks about the Pecos River -- he describes it as winding its way through 800 miles of West Texas past cities and farms and ubiquitous high school football stadiums that populate West Texas. And it's not a big deal, but it's kind of an interestingly prosaic observation on the way water connects to a lot of the basic realities of our society and culture. And I thought I'd throw that in.

 

      Beyond that, I don't have anything to add on the substance of the case and awfully glad for the opportunity to talk with everybody today and thank you all for joining us.

 

Nick Marr:  All right, thanks very much Tony. So we haven't gotten any questions in the meantime, so we'll wrap it up a bit early. On behalf of The Federalist Society, Tony, I want to thank you very much for the benefit of your valuable time and expertise this afternoon. To our audience for calling in, of course. And please note that we welcome your feedback by email at [email protected]. And keep an eye on our website and your emails for announcements about upcoming Teleforum calls and events. Thank you all for joining us this afternoon. We are adjourned.

 

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Dean Reuter:  Thank you for listening to this episode of Teleforum, a podcast of The Federalist Society’s practice groups. For more information about The Federalist Society, the practice groups, and to become a Federalist Society member, please visit our website at fedsoc.org.