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The U.S. Supreme Court on Friday ruled that Texas, New Mexico, and Colorado improperly excluded the federal government from an agreement that resolved a Rio Grande water sharing dispute, rejecting the states' argument that the conflict was theirs alone to settle.

In a 5-4 decision, the justices sided with the federal government, which argued that the states' 2022 consent decree impacted its interests in providing water to Mexico and two local districts in New Mexico and Texas. Because the government was not a party to the final resolution, its interests were not adequately represented, and the consent decree must be renegotiated, the majority said.

Texas-NM Water Deal : Federal Interests Ignored

Justice Ketanji Brown Jackson, writing for the majority, explained that the proposed consent decree violates the high court's ruling in 1986's Firefighters v. Cleveland, which held that parties resolving litigation through settlement cannot dismiss a third party's claims. This decision impacts the Texas-NM water deal, emphasizing the importance of including the federal government in such agreements.

The dispute originated in 2013 when Texas accused New Mexico of violating the 1938 Rio Grande Compact by illegally diverting water connected to the river downstream from the Elephant Butte Reservoir, where water levels were measured, resulting in Texas losing tens of thousands of gallons from its share. Texas filed its complaint directly with the high court, and in 2018, the justices allowed the federal government to intervene on Texas' side.

Consent Decree Rejected

"The United States still advances the same claims as it did in 2018, backed by the same unique federal interests we identified then," Justice Jackson said. "Through the consent decree, the states would settle all parties' compact claims and, in the process, cut off the United States' requested relief as to New Mexican groundwater pumping. Because our precedent does not permit that result, the states' motion to enter the consent decree is denied."

The three compact states finalized a consent decree in 2022, agreeing to measure the water entering Texas at a new point near the New Mexico-Texas state line. However, the federal government opposed the deal, arguing that while the high court's precedent typically does not allow an intervening party like itself to block a consent decree, the rules change when a proposed decree settles the intervenor's claims without its agreement.

Texas-NM Water Deal : Special Master and Dissent

The special master picked by the high court to oversee the matter, Judge Michael J. Melloy of the Eighth Circuit, recommended that the justices sign off on the states' deal, saying the federal government's concerns were substantially similar to those raised by Texas and that Texas' satisfaction negated the need for the federal government's approval.

Justice Jackson highlighted that the fundamental issue with the compact is that while Colorado is obligated to send a certain amount of water to the New Mexico state line, New Mexico is only obligated to deliver a certain amount of water to the Elephant Butte dam and reservoir, a U.S. Bureau of Reclamation facility roughly 100 miles from the Texas border. Over the years, water users between Elephant Butte and the Texas state line have used increasing amounts of water, requiring the federal government to release more water from the reservoir to fulfill Texas' share under the compact.

Federal Obligations

The federal government is also obligated to deliver water to Mexico. The majority of justices said the United States' claims related to New Mexico's water use between Elephant Butte and Texas are not extinguished just because those two states and Colorado agreed on terms to resolve the dispute.

"The states contend that the United States has no valid compact claims because it does not itself receive an apportionment of water under the compact," Justice Jackson said. "But the United States did not receive an apportionment of Rio Grande water in 2018 any more than it does now."

Texas-NM Water Deal : Dissenting Opinion

In a dissent authored by Justice Neil Gorsuch, the minority argued that the states' agreement should be respected, as it would still preserve the federal government's rights to assert claims in separate litigation in federal district court.

"The court's decision is inconsistent with how original jurisdiction cases normally proceed," Justice Gorsuch said. "It defies 100 years of this court's water law jurisprudence and represents a serious assault on the power of states to govern the water rights of users in their jurisdictions."

Justice Gorsuch stated that the agreement is consistent with the compact's mandate that Texas receives a certain amount of Rio Grande water each year and does not impose any new "improper duty or obligation" on the federal government or deny it the ability to pursue any valid claim.

Legal Representation

The federal government is represented by Elizabeth B. Prelogar, Todd Kim, Edwin S. Kneedler, Frederick Liu, R. Lee Leininger, Judith E. Coleman, and Jennifer A. Najjar of the U.S. Department of Justice. Texas is represented by Ken Paxton, Brent Webster, Grant Dorfman, James Lloyd, Kellie E. Billings-Ray, Aaron L. Nielson, Lanora C. Pettit, and Beth Klusmann of the Texas Attorney General's Office and Stuart L. Somach, Theresa C. Barfield, and Sarah A. Klahn of Somach Simmons & Dunn PC. New Mexico and Colorado were represented at oral arguments by Jeffrey J. Wechsler of Montgomery & Andrews PA. New Mexico is also represented on the briefs by Raul Torrez, James Grayson, and Julie Ann Meade of the New Mexico Attorney General's Office, Shelly Dalrymple and Kaleb W. Brooks of Montgomery & Andrews PA, Bennett W. Raley, Lisa M. Thompson, and Michael A. Kopp of Trout Raley and John B. Draper and Corinne E. Atton of Draper & Draper LLC.