COLORADO v. NEW MEXICO

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ORAL ARGUMENT OF RICHARD A. SIMMS, Esq. ON BEHALF OF THE DEFENDANTS

Chief Justice Burger: We will hear arguments first this morning in Number 80 Original, State of Colorado against the State of New Mexico and others.

Mr. Simms, I think you may proceed whenever you're ready.

Mr. Simms: Mr. Chief Justice, may it please the Court:

The Special Master's report in this case was filed in January of this year, and since then it has not gone unnoticed.

I think the Court should know that the Community of Western Water Attorneys, as well as water administrators in the West, are bewildered by the Master's recommendations and are apprehensive about the outcome of this case.

I would like to quote briefly from the--

Unidentified Justice: The important thing, Mr. Simms, of course, is whether we understand it, isn't it?

Mr. Simms: --I agree, that is the important thing.

But I think it's also important that the Court understands what people in the West feel about the case.

I'd like to quote briefly from the Western Natural Resource Litigation Digest, the quarterly publication of the Western Conference of Attorneys General.

In January 1982, the court's special master recommended that Colorado Fuel and Iron Steel Corporation be given first priority on the Vermejo River in an action brought by the State of Colorado for the apportionment of the river between the states of Colorado and New Mexico.

For the past 100 years, the river has been fully appropriated in New Mexico.

The decision ignored both New Mexico's historical dependence on the Vermejo and their traditional guiding principle that prior appropriation governs.

The Special Master's new test balances the economic efficiency of existing uses against the efficiency of proposed uses.

In this case, the test is used in a further departure from previous case law to vary the priorities such that existing economies based upon senior uses are undermined.

Unidentified Justice: Mr. Simms, who wrote that?

Mr. Simms: I don't know who wrote it.

It was written--

Unidentified Justice: Those are some anonymous author's comments?

Mr. Simms: --It was written by the editorial staff of the Digest in San Francisco.

I gave them no suggestions.

I was quite surprised to find it myself.

Unidentified Justice: I find it kind of a surprising authority if you don't even know who wrote it.

Mr. Simms: Well, it was written by the editorial staff of the Western Conference of Attorneys General.

Unidentified Justice: I personally find it kind of amazing that you cite it to us.

You can't even given us any authority for it at all.

Suppose we get on to the central issues of the case.

Mr. Simms: I think the central issues are three, Justice Burger.

I think the Special Master started with a manifest misunderstanding of equitable apportionment.

I think he ignored the relevant facts in this case and attributed legal significance to irrelevant facts.

And with respect to his ultimate finding that CF&I's proposed diversion would have little effect on New Mexico users, I believe that is not a finding at all but is demonstrably an erroneous conclusion of law.

I think the real irony of the Master's report lies in his understanding that... and I'm quoting him from page 21 of the report... the unique circumstances which confronts the Master in this case is Colorado's failure to divert water and put it to beneficial use at any time in the past.

New Mexico has applied the water and has existing economies which are dependent upon that water.

Instead of applying, the rather obvious holdings of this Court in Wyoming versus Colorado and Nebraska versus Wyoming and in Arizona versus California, the Master instead has equated the cause of action in this case with the relief sought.

The way he puts it is this, and I'll quote him again... simply stated, the doctrine says that each state is equal to all of the others, and as quasi-sovereigns, each state is entitled to a share of a river flowing between them.

We think that the Master started with the view that each state is entitled to a portion of the waters of an interstate stream no matter what the circumstances might be.

This is best illustrated I think by the Master's treatment of the first equitable apportionment decision handed down by this Court in 1906, Kansas versus Colorado.

That case, very unlike the case before this Court today, showed... the facts in that case showed a pattern of contemporaneous development in both states.

By 1883 in Kansas, there were some 1,200,000 acres of irrigation on the Arkansas in Kansas.

Between 1884 and 1891, there had developed independently under the law or prior appropriation in Colorado some 300,100 acres of land.

That situation presented the classic equitable apportionment case.

The water supply became insufficient to satisfy the simultaneous growth in both states, and there appeared a conflict in the social and economic institutions which had developed independently.

There, the substantive laws of each state... and as you'll recall, it was said in Kansas versus Colorado that there is no federal law of water in the West; each state has a right to develop its own system under which rights to the use of water might be protected... each state had done so.

The substantive laws in Kansas versus Colorado had been exercised historically.

In that case there was an actual conflict between existing users on either side of the state line.

Because in Kansas they have the doctrine of riparianism, which stands for the proposition that water should be maintained in the river and let down the river undiminished, and on Colorado's side you have priority of appropriation, a doctrine which allows water to be diverted from the river and taken to lands not riparian to the river, you had an actual collision of sovereigns in that case.

Also, the sovereign interest on both sides of the Kansas-Colorado border arose from actual existing uses of water in the respective states.

Notwithstanding those obvious differences from this case, the Master has said, and I'm quoting, The same type of situation exists in this case.

Unidentified Justice: Mr. Simms, may I ask you whether it's your position that as between two states, both of which are states using the appropriated water theory, that the prior appropriator must make reasonable use of the water that's appropriated?

Do we measure the decreed rights or the appropriated rights by some measure of reasonable use, in your view?

Mr. Simms: The court has said that each state is obligated to conserve water to the extent that is economically possible.

There is no evidence in this case and no discussion in the Special Master's report, as opposed to Colorado's reply brief, that there were any uses in New Mexico that were not responsible uses of water.

The measure of water, I think, is one that the Master did not follow, and I think it's one of his fundamental mistakes.

What the Master should have done in assessing the water right entitlements in New Mexico so that he could further assess injury was to look to the actual historic irrigated acreage on the river.

That is not necessarily the decreed right.

It is something that can be discovered through a look at what's been irrigated historically.

Instead of--

Unidentified Justice: If the historic use is somehow wasteful, can the Master take that into consideration or not?

Mr. Simms: --Oh, I think he definitely can.

And I would point out that there is nothing in the record in this case that indicates that there is any waste.

You'll find a lengthy, uninhibited discussion of that in Colorado's brief.

You will find no discussion of it in the Special Master's report.

I think it's important also in that regard to make a distinction early on.

And the term inefficiency and the term waste are used, Justice O'Connor, throughout the briefs in this case, and they're important to the case.

But the Court should know that efficiency is a term of art in irrigation in the West.

It's not inefficiency in the pejorative sense.

Efficiency in irrigation is a term used to describe the amount of water diverted which is not consumed.

Typically, in a farming operation a farmer might divert 100-acre feet of water.

In the actual growth of plants, in evapo-transpiration, perhaps 50 percent of that would be utilized.

The rest goes back to the regimen of the stream.

That use is called 50 percent efficient.

The inefficiency results from a bunch of physical factors.

Those physical factors are a function of the porosity of soils, they're a function of local temperature, winds, evaporation rates and other physical factors.

Unidentified Justice: Would there be any support in the case law, counsel, for requiring, for example, the appropriation user to line ditches with concrete, or anything of that sort?

Mr. Simms: No, on the contrary, Justice O'Connor, the cases, and specifically, Nebraska versus Wyoming, indicate that farmers are obliged to be only as efficient as they economically can be efficient.

There is not one iota of evidence in this case that indicates that New Mexico's farmers could have been more efficient historically than they have been.

They don't have the money in the Vermejo Conservancy District, as an example, to go buy extremely expensive sprinkler irrigation systems and thus improve the irrigation efficiency by 10 to 20 percent.

Unidentified Justice: Mr. Simms, the Master did find that the operation of that district was inefficient, didn't he?

Mr. Simms: He did find... I don't think he found... yes, he did find that it was inefficient.

Unidentified Justice: And he also found, as I recall, that there was a loss of about 33 percent of the water.

And by loss there, did he mean the water was going back into the river or that it just was not used anywhere?

Mr. Simms: What the Master found was that 33 percent of the water diverted was lost in the application of water in the Vermejo Conservancy District.

As a matter of fact, I think the Master had the numbers backwards.

Actually, 67 percent of the water diverted is lost.

The efficiency of the Vermejo Conservancy District, as an example, is roughly in the middle of the efficiency of Western reclamation projects.

That efficiency is 54 percent.

There is absolutely nothing uncommon about that.

If you add to it the evaporation from the various reservoirs, the efficiency drops down to 33 percent.

He had it backwards.

That is not an uncommon either.

In calculating efficiency, you don't add in the reservoirs.

That's not the way the Bureau of Reclamation would do it in calculating efficiency.

The Master has done it quite differently.

So even though he found inefficiency, first of all, he had the concept of efficiency conceptually backwards; and secondly, it's a non sequitur.

It means nothing.

If the efficiency of the Vermejo Conservancy District--

Unidentified Justice: Which case, if I may interrupt you, among the eight that have addressed generally this area, discusses the efficiency question you are now discussing?

Mr. Simms: --Wyoming versus Colorado, Colorado versus Kansas, Nebraska versus Wyoming.

Unidentified Justice: Which supports you?

Which of those, you think?

Mr. Simms: All three of those cases support us.

In each of those cases,... well, in two of them, particularly, Colorado made the argument that they could take water and use it better elsewhere.

In Wyoming versus Colorado, as an example, Colorado argued that we can take water, use it in the Puter Valley much better than Wyoming can use it in the Laramie Valley.

The court rejected that argument just out of hand.

You'll find that language in the decision.

Yes, Justice Rehnquist?

Unidentified Justice: Am I correct in thinking that, if I read page 21 of the Master's report correctly, that he said there that if you apply the rule of prior appropriation in this case, it would prevent any diversion to Colorado.

So that, in effect, the Master has said as between two states, both of which apply appropriative water law, you do not apply prior appropriation law in the interstate stream adjudication if it results in one state not getting any water.

And the question really is whether the court's prior cases support that departure from appropriation law in the case of two states which follow that principle.

Mr. Simms: I think not at all, in response.

And the answer to that question is somewhat lengthy.

The principles set down by this Court in every equitable apportionment decision that's been handed down before would lead you to precisely the opposite result that the Master has reached.

His treatment of priority of appropriation I think totally misses the thrust of this Court's decisions.

Priority of appropriation has been adopted by each of the 11 contiguous western states, the semi-arid and arid western states that are west of the 100th Meridian.

The jurisprudential underpinning of that doctrine is there simply is not enough water to go around to satisfy the conflicting demands.

That's the basis of the doctrine.

The reason for priority of appropriation lies in the fact that recognition of the benefit or the equitable interest that arises out of the application to beneficial use of water is synonymous with the uses that are actually made.

Priority of appropriation is so fundamental, it's been enshrined in the constitutions of almost all of the western states including Colorado and New Mexico.

Without it in the West there would have been chaos and would today be chaos in water administration.

Unidentified Justice: Mr. Simms, what's your benchmark for appropriation?

Is it the water that's actually been used historically, or is it just decreed rights?

Mr. Simms: It is not necessarily decreed rights.

You have to look at the--

Unidentified Justice: Well, what about this case?

Let's just suppose that the average annual use was X and that there was more water in the river than that.

But the decreed rights were XX, and with XX there wouldn't be any water left.

Now, would... under equitable apportionment, would Colorado in this case, for example, be entitled to some water if there was more water in the river than necessary to satisfy average annual use?

Mr. Simms: --If there were enough water in the river to satisfy the average annual use... if you want to put it that way.

I would call it the average historic use... there would be... Colorado would have a right, in my view, to some water.

I think not in these circumstances for other reasons.

Colorado has sat by for 115 years while this river became fully appropriated.

Colorado has acquiesced in the total use of the river by New Mexico.

Unidentified Justice: Well, in this case suppose our view of the record was that there was water left over in the river after satisfying the average historic use, as you put it, of the New Mexico users.

Mr. Simms: I think it would be extremely difficult to reach that view.

I--

Unidentified Justice: I know, but suppose.

Let's suppose on the facts.

Suppose my facts are right.

Mr. Simms: --If your facts are right, there would be water available for Colorado.

That was the situation in the two cases that Colorado relies on so heavily, the eastern cases.

There was unappropriated water.

The problem here is very different.

You've got a fully appropriated river; the court has already got--

Unidentified Justice: I know, but you mean a fully decreed river.

Mr. Simms: --No, fully appropriated river.

Unidentified Justice: You say there's absolutely no water left over in the river after you satisfy the average historic uses of it.

Mr. Simms: The decreed rights is an example for the Vermejo Conservancy District.

There are some 14,000 acres of decreed right.

We only hope that the Court would recognize their ability to irrigate what the Bureau of Reclamation rehabilitated, minus what might be expected to be fallow, about 10 percent.

The total irrigable acreate is 7380 acres.

What the Master did here was take Colorado's figures, which relate to a period of drought in the late seventies, and reduced the entitlement to what was there in that drought.

Unidentified Justice: Do we have to decide this case properly... do we have to decide whether the Master was incorrect in doing that?

Mr. Simms: I think it's important that you do understand that the Master was incorrect in doing that.

Unidentified Justice: Is that a factfinding?

Mr. Simms: I think it is a factfinding, but it is spoiled by two problems--

Unidentified Justice: So we have to overturn the Master in this respect to come out on your side?

Mr. Simms: --In that respect, but not to come out on our side in general, no.

Because the basic problem that the Master did was to look at what he called the economy of the Vermejo Conservancy District, and he didn't make a finding there with respect to New Mexico's entitlement.

He just looked at that district and concluded that the district was uneconomic and that he could ignore that entire district in assessing injury.

What he put the most weight on when he did that was the fact that in 1980 Congress deferred payment for the construction costs of that district after a congressional finding that the drought in the late seventies had made it impossible for the farmers in the district to pay back construction costs.

There is nothing unusual about that.

I don't think the Master knows that.

Historically, Congress has deferred payment for each and every reclamation project in the United States at one time or another.

Congress continues to do it, for good reason, whenever something like a drought prevents the repayment of construction costs.

Here, the Vermejo Conservancy District farmers have made their construction costs, or did make them, all the way up through 1974.

They made a partial payment in 1975.

They have always made the O&M costs.

The other failure of the Master is he identified profitability of the Vermejo Conservancy District with the economy as that term has been utilized by this Court in previous equitable apportionment actions.

And what he did, for instance, was look to evidence that we presented which indicated in 1979 there was a net operating loss of $39,000 among the district's 63 farms.

He took evidence like that and thought well, this economy is no good; therefore, it can't be injured.

What he fails to do is recognize that despite the fact that there was a $39,000 net operating loss, there were still paid in 1979 one million dollars in local and state taxes by those people; there were also mortgage payments being made, there were also farm implements still being bought, there were payments being made to local banks.

The families that live there have children that go to school that have medical bills, they buy shoes, they have to eat.

The economy is still there, notwithstanding the fact that there was a net operating loss in that year of $39,000.

I think the Master has a totally misconceived... and this is legal; it is not factual, and it so infects his finding, Justice White, that I think that it is rather easy for the Court to conclude that he was wrong with respect to the Vermejo Conservancy District.

He did something differently with respect to all of the other users in New Mexico.

Colorado designed this case, first of all, to try to eliminate and pare down the water rights in New Mexico on the one hand and then inflate the amount of water in the river on the other.

What they did was try to limit the amount of acreage to the acreage irrigated in the late seventies.

Therefore, it would appear that there might be some water made available for CF&I.

Colorado took the figure 250 acres, for example, to the Vermejo Park Corporation, the first diverter in New Mexico.

That's what was irrigated in the late seventies.

Well, in 1978, as an example, in the Vermejo Conservancy District, they had no water to put on their lands because of the drought.

The uncontradicted evidence in the case shows that the actual historic irrigated acreage... this is not the decreed acreage, Justice O'Connor... the historic irrigated acreage of Vermejo Park Corporation was 690 acres.

That is not contradicted.

That acreage was irrigated before 1963.

That's what the master should have looked at.

Under the Constitution and laws of both states, you can't blame the farmer for drought conditions.

His property right doesn't dissipate just because it didn't rain for a few years.

That's what the master has done here.

Because it didn't rain, he has just killed off the users in New Mexico.

Secondly, Colorado tried to throw out the whole bottom half of the river, the Canadian.

And what he has done... Colorado has tried to make it appear as if this were a closed basin somehow, and that water does not get on down to the Canadian River users.

Well, one of the glaring contradictions in Colorado's case here is when they went to Water Division 2, when CF&I went to Water Division 2 in 1975 to get their inchoate water right in Colorado... this is 100 years after the river was fully appropriated downstream... they were thrown out of court initially because the jurisdictional embrace of the court in Colorado goes to the Arkansas River drainage.

The judge sat in Alamosa, he looked to the East and saw the Arkansas, he looked to the South and saw the Vermejo and said, I don't have jurisdiction, that doesn't drain into the Arkansas.

Well, CF&I went back to court and vehemently petitioned the court, oh, yes, you do have jurisdiction because the Vermejo comes down here, it's tributary to the Canadian here, the Canadian turns east and flows on into Oklahoma, and over there it's tributary to the Arkansas.

Well, that's how they got in court to get their water right.

Now they turn around when they get into this Court and say the river stops when you get down to the Vermejo Conservancy District.

I think the evidence that impressed the Master in that regard was not the testimony of the farmers downstream that indicated that they rely on that water.

It's not the legal fact that they have a property right in Vermejo water.

It was the fact that in a certain 20-year period of record, only 6900 acre feet got past the Vermejo Conservancy District's point of diversion.

Well, if you look at the 30-year period of records just prior to that, you'll find out that an average annual of 7,100 acre feet got down.

I don't think it really makes any difference what the amount is.

Unidentified Justice: When you talk about the water getting down past the Vermejo diversion point, that's because of what you referred to as inefficiency?

Mr. Simms: No, it is not inefficiency at all.

Unidentified Justice: What is it?

I mean, if the stream were entirely appropriated, one would expect, I would think, that after the last diversion point you would only get water that was being returned to the stream system.

Mr. Simms: Except in periods of flood, that is the case.

But there are frequent floods on the Vermejo, and that flood flow gets down to the Canadian.

This is another way in which the Master abused the evidence, I think, in his treatment of assessing injury to the upstream diverters.

He took the average annual figures that were provided by Colorado and equated those with divertible flows.

This Court has three times said you can't do that.

You can't do it because flood flows are hidden in average annual flows.

When it rains in New Mexico, it rains in a big hurry.

A lot of water drops in a small place.

Arroyos become raging rivers.

Farmers can't go out to the river; they can't even get to their diversion point.

If they could get to their diversion point, they wouldn't want the water in any event because it's so full of silt and direct that it wouldn't be of any use to them.

Unidentified Justice: What happens, Mr. Simms,... let me give you this hypothetical.

A state like Colorado having a modest population back 20 or 30 years ago and doesn't claim any of the water under your priority of appropriation concept.

And then suddenly, as with California and Florida, ten, 15 million people flood into the state and populate it.

And the need... a new need for water arises.

Is this doctrine of priority of appropriation a rigid doctrine?

Mr. Simms: No, it is not a rigid doctrine.

This Court has varied it, however, only for one reason.

It is varied to protect existing economies predicated on junior uses of water.

Unidentified Justice: Existing when?

Then or now?

Mr. Simms: Existing at the time of the lawsuit.

Here, you would apply the doctrine to accomplish what Justice Douglas so painstakingly did in Nebraska versus Wyoming when he listed all of those factors to vary it.

The Special Master in this case turns the law of equitable apportionment on its head.

Unidentified Justice: Well, isn't the supplying of domestic water given priority in most western states as opposed to use for irrigation or manufacturing?

Mr. Simms: It is given priority as a preference for it in the state of Colorado.

I don't think it's true in most western states.

It's not true in New Mexico.

Unidentified Justice: At any rate, Colorado Fuel and Iron wasn't contemplating giving drinking water to a lot of people by its use, I take it.

Mr. Simms: No, they're contemplating taking water out of the Vermejo River and putting it in the Purgatoire system on the theory that there is need in the Purgatoire system.

Unidentified Justice: For what?

What specific use does CF&I contemplate, or do you know?

Mr. Simms: That's a good question.

I don't think CF&I knows.

Unidentified Justice: It isn't in the record, anyway.

Mr. Simms: Water Division 2 thought the uses were so speculative, he also threw it out for that reason, to begin with when he went.

I don't think they know what they want to do.

There is some agricultural uses--

Unidentified Justice: Is there any evidence in this case about it?

In the record in this case?

Mr. Simms: --Yes.

They claim in the future they're going to use it for synfuel development, and they're going to use it for a coal washery at the Allen mine which is now shut down, that they're going to use it for some agriculture.

Those were the uses that they claimed.

Your Honors, I see that my time is up.

I have tried to save eight minutes; I see it was reduced to five, for rebuttal.

I'd like to keep what time I can for rebuttal.

Chief Justice Burger: Very well, Mr. Simms.

Mr. Welborn?

ORAL ARGUMENT OF ROBERT F. WELBORN, Esq. ON BEHALF OF THE PLAINTIFF

Mr. Welborn: Mr. Chief Justice, and may it please the Court, it's the position of the state of Colorado in this case that the report of the Special Master provides for a fair allocation, an equitable apportionment of the water of the Vermejo River.

It is based on 16 days of actual trial extending over four weeks, 50 witnesses, 300 exhibits approximately.

It is prepared by a judge experienced as a trial judge and eminently experienced in water matters.

My presentation today will cover four basic points: Colorado's need for water, Colorado's right to water; thirdly and most importantly, the fact that Colorado can take the amount of water allocated by the Special Master without adverse impact upon legitimate uses in New Mexico if reasonable conservation will be undertaken there to eliminate waste.

And fourth,--

Unidentified Justice: I'll wait until you get to your point.

Go ahead.

Mr. Welborn: --Fourth, I would like to emphasize by reviewing some of the cases, the fourth point would be that the Special Master's report is entirely in accord with prior decisions of this Court.

Justice White, did you want to ask a question?

Unidentified Justice: No, you go ahead.

I'll wait.

Mr. Welborn: Preliminarily, I am a western water attorney.

I don't know of any general feeling such as Mr. Simms suggests.

It might be helpful, although I know you have the briefs and a description of the river system, for me to give you a very brief survey of what the situation is.

The first diversion across the state line from Colorado into New Mexico is the Vermejo Park Corporation which diverts enough water to irrigate 250 acres.

It has a decreed right for 870 acres but hasn't been using that.

The state engineer of New Mexico, Mr. Reynolds, the chief water official of that state, testified that that organization could, in fact, use more water than it had been using.

This relates to the question of the difference between decreed usage and actual usage.

The next user down the stream is the Kaiser Steel Corporation.

The maximum amount they've used is 361 acre feet; that was in 1976.

Since then, they have used less than that.

Going on down, there's the Phelps Dodge Corporation which has decreed rights for 500 acres, or 1000 acre feet.

The allocation is two acre feet per acre.

But Phelps Dodge, through a lessee, is irrigating only 150 acres.

Again, New Mexico officials testified that they could use more water than they have been using.

There's been reference to a drought in the seventies.

The figures really belie that.

The Vermejo Conservancy District in the seventies irrigated 4,100 and some acres; in the sixties irrigated 4,500 and some acres.

The measured flow at the Dawson Gauge, which is the only measuring gauge on the river, was some 8000 in the seventies, some 11,000 in the sixties, some 9000 in the fifties.

Now, this doesn't indicate a severe drought which caused this unreal situation that New Mexico suggests.

Going down then, below the Phelps Dodge usage is the Vermejo Conservancy District diversion point.

At that point, they have a canal that's capable of carrying 600 cubic feet per second.

Between that point and the district reservoirs, there are individual diverters that in recent years have been taking out approximately 500 to 600 acre feet of water.

So that you have no more than 1500 acre feet of actual usage between the state line and the district reservoirs.

Between that diversion point of the district and the district reservoirs, according to the New Mexico chief witness, there's a 10 percent loss of water.

In the reservoirs themselves by evaporation, there's a 2300 acre foot loss of water which amounts to something between 20 and 25 percent.

So you have about a one-third loss of water between the district diversion point, and the point of outflow from the reservoirs.

Then from the reservoirs to the fields, again according to the testimony of New Mexico witnesses, there's another 33 percent loss, and that's what the Special Master was referring to, and he was entirely correct.

He didn't have his figures mixed.

Unidentified Justice: How do you know what he was referring to?

He didn't make these kind of detailed findings about the water loss.

Mr. Welborn: Justice White, in his report he said that the system of canals used to transport the water to the fields is inefficient.

Unidentified Justice: On what page are you?

Mr. Welborn: I'm at page 8 of his report.

Now, the only reference in the New Mexico testimony to a system of canals... and in fact, the only system of canals... is the system from the reservoirs to the fields.

So that is exactly what the Special Master was referring to.

In order to argue their point, New Mexico changes the subject of that sentence and says in their brief that the Special Master found that the district was so inefficient that it lost 33 percent of the water.

They make the subject of that sentence the district rather than the system of canals.

And it's really a point that shouldn't be involved in this case, because the facts are so clear and New Mexico acknowledges that Colorado's Exhibit 71 is accurate in this regard; that there is a two-thirds loss of water from the district diversion point to the fields.

Unidentified Justice: So what if there is, Mr. Welborn?

Mr. Welborn: Well, this, Justice White, gets to my first and my third point, which is really the basic point here, and that has to do with the elimination of waste by the district that will offset the Colorado allocation.

New Mexico's Exhibit E3, which is perhaps the most important exhibit in the case, is a detailed engineering report as to the manner in which the district supplies stock water, water to the livestock of the district.

And this livestock system is simply an open ditch system whereby the water is released from the reservoirs and taken to the fields.

The livestock consume approximately 35 acre feet of water, but in order to get this 35 acre feet of water to the livestock there must be released from the reservoirs over 2000 acre feet.

So you can see there's about a 98 percent loss there.

Now, the Exhibit E3 demonstrates that by a closed system which can be financed to a large extent by soil conservation assistance, Farm Home Administration assistance, that by a closed system this 2000 acre feet loss can be eliminated.

And not only will it be eliminated, but the district will benefit because they will get a domestic system as well as a stock water system, and the stock water will be available 12 months out of the year instead of 9 1/2 months out of the year, as it is now.

The other two and a half months they have to haul the stock water.

The reason for that is it's in the winter months when the ditches are frozen.

Now, if this--

Unidentified Justice: Mr. Welborn, do our cases require a state to... or a prior appropriator... to make that kind of structural change to utilize the water more efficiently?

Is there authority in the case law for making that kind of determination?

Mr. Welborn: --Yes, there is, Justice O'Connor.

In three cases, this Court talks about wasteful uses, and I am not suggesting that this Court can tell a state or anyone in a state in detail what it has to do.

But the guiding principle here is equity.

What are the equitable considerations.

And Colorado versus Kansas says that all factors bearing on the equities must be considered as of the time of the controversy.

Now, in Nebraska,--

Unidentified Justice: I don't want to interrupt your response to Justice O'Connor, but let me just throw in this question and answer it when you can, if you wish.

I understood the Master to take the rather flat position at page 21 of his report, he says right at the end of the quote, at the top,

"If the rule of priority were to be strictly applied in Colorado versus New Mexico. "

this case,

"a diversion of water by Colorado could not occur. "

"As the court has held before, facts other than priority must be applied to achieve equity in these cases involving an interstate river. "

Now, I regard that last statement of the Master as somewhat dubious in the light of our prior cases.

I think he departed rather substantially here from the prior appropriation law that would have been applied either in Colorado or in New Mexico.

And I would be interested in hearing your explanation of why our prior cases authorize this sort of departure.

Mr. Welborn: --I think that I can answer, then, perhaps both questions at the same time.

Nebraska versus Wyoming, which is essentially the last case, although Arizona versus California is still pending, did say that priority of appropriation may be a main consideration, but it listed a number of other factors.

And one of those other factors is wasteful uses.

Wyoming versus Colorado, which seems to indicate that priority of appropriation would be followed also lists waste as a factor.

Unidentified Justice: But don't most state systems that follow the appropriation system themselves allow for discounting of wasteful uses?

Mr. Welborn: They do not... it's a matter of degree, of course, Justice Rehnquist.

In Colorado, for example, the definition of beneficial use in its statutes is the use of that amount of water to accomplish, without waste, the purpose for which the appropriation is intended.

And Colorado statutes direct the water officials to shut down diversions if waste is occurring.

Now, this brings up a basic consideration here, and that is that although two states may follow the priority of appropriation doctrine, this does not mean by any stretch that they have the same water line.

We found by the testimony in this case, for example, that the New Mexico officials exercise no surveillance over the diversions of water from the Purgatoire.

They don't determine whether the proper amount of water is being diverted in relation to the acreage irrigated, and New Mexico--

Unidentified Justice: From the Purgatoire?

From the Purgatoire?

Mr. Welborn: --Excuse me, on the Vermejo.

They do not, as Colorado does, declare forfeitures or abandonments of water rights when water rights have not been used or portions of water rights have not been used for a number of years.

They allow... the New Mexico laws and procedures allow the proliferation of stock ponds along the tributaries of the Vermejo which are referred to time and again in the Bureau of Reclamation documents, and these are Exhibits 37 to 48 in the record.

These documents say that these proliferations of stock ponds along the Vermejo are the major cause of the water condition.

Colorado does not permit that.

If stock ponds of that nature... these are ponds constructed on tributaries of the river to provide water for livestock... if stock ponds of that nature are constructed and they are causing injury, then something can be done about it.

The New Mexico law does not provide for that.

The point is that priority of appropriation... and this is a perfect example of why it cannot control, because it is only one consideration.

That's what Nebraska versus Wyoming said, that's what Wyoming versus Colorado in effect said, and New Mexico argues that point very strenuously in its brief in the Arizona versus California case, which is in the file, in the record in this case.

Unidentified Justice: May I ask this question.

Are you saying that if there was no evidence of waste, no evidence that New Mexico was not exercising appropriate oversight over the use of water, and assuming that Colorado never used any at all, that the doctrine of equitable apportionment would entitle Colorado to some, anyway?

Mr. Welborn: I'm saying that the decisions have said that, Your Honor.

Unidentified Justice: I think the Master in this case also said it, didn't he?

Mr. Welborn: The decisions have said that.

The Master in this case, incidentally, was very familiar with Wyoming versus Colorado because he was attorney general to Wyoming during one phase of that.

And he was very impressed with certain similarities there.

Now, as New Mexico argues in its brief in the Arizona versus California case, it might seem at first blush that Wyoming versus Colorado calls for the straight application of priority of appropriation.

But it does not, because in that case, as in this case before the Court, a specific amount of water was allocated to Colorado which it would take regardless of priority.

And starting with the first case, Kansas versus Colorado, this Court said the states come here on the basis of equality of right.

It said this doesn't mean there shall be an equal division.

But it says... and Connecticut versus Massachusetts goes on to say that this is an entirely different situation than that which obtains in private controversies between parties where priority is the straight rule.

And the cases again and again emphasize, as Nebraska versus Wyoming quotes again from Colorado versus Kansas, it says, all factors, all factors, bearing on the equities must be considered.

Unidentified Justice: So that, if I understand your correctly, if a state, with respect to an interstate river, had never used any water before and the other state was making 100 percent use of it, the state that had never used any water still would be entitled to some.

Mr. Welborn: I'm suggesting that that would be a matter for the Court to consider in its balancing of equities; that the door is not closed for the new use.

There are three cases of this Court involving new uses.

Connecticut versus Massachusetts, New Jersey versus New York and Wyoming versus Colorado.

Those are all new uses.

Unidentified Justice: But the first two were riparian states.

Mr. Welborn: The first two, Justice Rehnquist, were riparian states, but there's a great similarity.

In New Jersey versus New York, for example, New Jersey came in and said that they were entitled to have the stream flow in its more or less original condition by reason of their riparian rights.

Now, that's exactly what New Mexico is contending here; that by virtue of these decreed priority rights, it's entitled to have the river flow in its original condition.

And the court in New Jersey versus New York said that the thing to do in these cases is to achieve equitable apportionment... and these are the very words... to achieve equitable apportionment without quibbling over formulas.

And what the court meant there by formulas was the formula of a particular state water line.

And I respectfully suggest that this is an equitable proceeding.

This is an original proceeding in equity, and that it should not be controlled by any rule of law.

Priority is a rule of law; statutory law within the states.

It would be grossly inequitable to apply it here because of the great divergence between the Colorado law and the New Mexico law.

If it were applied, which state's law would govern?

How would it be administered?

Unidentified Justice: Mr. Welborn, do you think the findings of the Special Master are adequate for us to tell what the impact would be on the conservancy district if Colorado is given a priority for 4000 feet of water?

Mr. Welborn: Justice White, I do think that they are adequate.

Unidentified Justice: Well, do we know from the Master's report how much the average historic use is, for example?

Mr. Welborn: The average historic use in the Vermejo Conservancy District?

Unidentified Justice: By these four users.

Mr. Welborn: I don't believe that it gives the detail of that, but I respectfully suggest that if--

Unidentified Justice: You certainly argue a lot about it.

Mr. Welborn: --I beg your pardon?

Unidentified Justice: Your brief certainly argues a lot about it.

Mr. Welborn: We do discuss it in our brief.

Unidentified Justice: But the Master didn't find it, and do you think that the priority given Colorado would mean that some of the historic use, average use, would be interfered with in New Mexico?

Mr. Welborn: No.

And the--

Unidentified Justice: You think there's enough water to satisfy Colorado's priority?

Mr. Welborn: --This is exactly right, and I don't believe for that purpose the Special Master need to have gone into the detail of the uses there.

He gave the--

Unidentified Justice: If that's true, he could have avoided... he might have avoided a lot of argument about... that you've been making.

But let's suppose you're right about average historic use.

But that means average.

How about a dry year?

You know that in the seventies if Colorado took 4000 feet out first, somebody was going to get hurt in New Mexico.

Is that right or not?

Mr. Welborn: --Not necessarily, Justice White, and I will explain why not.

The New Mexico has testified, their chief witness has testified that--

Unidentified Justice: Well, the Special Master certainly didn't get into these facts.

Mr. Welborn: --He didn't get into these facts, but he found that there would be--

Unidentified Justice: But there was evidence in the record from which he could have made these findings, couldn't he?

Mr. Welborn: --He found that--

Unidentified Justice: Wasn't there evidence from which he could have made the kind of findings that you want us to recognize in your brief?

Mr. Welborn: --There certainly evidence, and I would, if I may, like to point that out because I think it's very basic to this case.

And that is that the New Mexico chief witness, Mr. Moots, testified, and this is page 1323 of the transcript, that essentially the entire effect of the Colorado diversion would be felt by the conservancy district.

In other words, these other users who had priority, all of them had priority--

Unidentified Justice: But you say that the conservancy district wouldn't even feel it, in an average year.

Mr. Welborn: --The reason I say--

Unidentified Justice: Well, do you say that or not?

Mr. Welborn: --I do say that.

Unidentified Justice: Now I ask you again, what about a dry year?

What about the driest year there was in the 1970s?

If Colorado takes 4000 feet out first, you know the conservancy district is going to feel it.

Mr. Welborn: The conservancy district... and this is the purpose, Justice White, of the reservoir system... the conservancy district operates on the basis of these reservoirs.

Unidentified Justice: I understand that.

Mr. Welborn: That contain thousands of acre feet of water.

Unidentified Justice: All right, five straight dry years.

You know you're going to have a problem.

0 [Generallaughter.]

Mr. Welborn: In five straight dry years of--

Unidentified Justice: That is not unheard of, is it?

Mr. Welborn, that is not unheard of, either, five--

Mr. Welborn: --Well, I don't believe the records... Colorado's Exhibit 5, Table 2, tabulates the U.S. Geological Survey records for the period of record at the Dawson Gauge, and they don't find a period of five straight years that you have that sort of a situation, but I would--

Unidentified Justice: --I would suggest if you were going to make this kind of submission, that even in a dry year the conservancy district isn't going to get hurt.

This whole case disappears.

It is just a tempest in a teapot.

Certainly the Special Master never made any findings like this.

Mr. Welborn: --I would acknowledge if there were five straight years you would see a--

Unidentified Justice: Or even one dry year.

Mr. Welborn: --I would like to point out that the Colorado diversion would take place at a point from which approximately only one-half of the Colorado production of water could be taken.

In other words, the Special Master that Colorado contributed about half of the water in the Romeo system, if you allow for depletions and so forth, about 8,400 acre feet, and the Colorado diversion would be taken at a point where... above the state line, where it would take only half.

Unidentified Justice: Well, yes, but it would still reduce the amount of water that reached the state line by 4,000 acre feet.

Mr. Welborn: It would reduce the amount of water that would reach the state line, and if you have the hypothetical situation of five straight years, I won't say there wouldn't be an effect.

Everybody would be affected.

Unidentified Justice: Well, I don't even know from the findings of the Master whether there would be an effect in one dry year.

Mr. Welborn: But in a dry year, of course, the amount of water Colorado could take would be diminished in proportion to the amount of water anyone else could take.

Unidentified Justice: Well, I don't know.

There might... I understand Colorado is entitled to take 4,000 acre feet out first.

Mr. Welborn: That, as I say, geographically, that wouldn't happen because of the diversion points, and I would suggest that in the decree in this case, the diversion points could be specified to be those named in the Colorado decree or points above those that are named.

Unidentified Justice: Well, I would think Colorado, under this allocation, could take up to 4,000 acre feet out of those particular streams.

Mr. Welborn: Well, as I say, if the diversion is limited to those diversion points, there would be a built-in safety factor, but this gets back, Justice White, to the basic point.

Unidentified Justice: Well, I don't understand that.

Mr. Welborn: That the states stand in these proceedings on the basis of equality of right, and as New Mexico has said in each brief, in the Arizona versus California, states have sovereign interests, and that what these cases consider is a division of the benefits.

They are not bound by any hard, fast rule of law.

Unidentified Justice: Mr. Welborn, in order to make your argument that New Mexico wouldn't be hurt, do you have to assume that New Mexico will have made more efficient use of the water?

Mr. Welborn: That is correct.

Unidentified Justice: That is your basic assumption--

Mr. Welborn: That is correct.

Unidentified Justice: --that they have gone out and put underground pipes or something in to take water to water the stock.

Mr. Welborn: No.

That is one method to eliminate a few thousand acre foot loss, and this exhibit, E-3, demonstrates how it can be done, and this is New Mexico's exhibit that went into the record.

Additionally, there is a tremendous amount of waste through these stock farms that I mentioned, that are mentioned again and again in the--

Unidentified Justice: But the point is, for you to say New Mexico wouldn't be hurt, you are assuming New Mexico will apply some conservation measures that have not historically been applied.

Mr. Welborn: --That is quite correct, Justice O'Connor, and I think that bears on the equity.

I don't think that it's... that Colorado has to be asked to forego a proper amount of water from this river to subsidize uses in New Mexico that are not reasonably efficient.

Unidentified Justice: But to what extent do you think courts have a right to get in in these disputes and weigh the extent to which ditches should be lined, or pipelines installed, or new storage facilities built, and so on?

Mr. Welborn: I think, Justice O'Connor, this Court has gotten into those things in some detail.

In Washington versus Oregon, for example, the Court was ready to conclude that Oregon diversions should not be curtailed, and the Court said to itself, as stated in the opinion, well, first we've got to look to see whether these Oregon uses are wasteful or not.

The Court then went on... there was a question in that case about a water right in Washington, and the Court went on to declare that that water right for the purpose of the case was to be considered abandoned, so the Court has gotten into these internal factors.

In Nebraska versus Wyoming, this Court said that for the purpose of that case, the Court could look at the priorities within a particular state.

It is done, I suggest, in reverse.

The Court says that if you want the equity of this Court... it says this to a state... you have got to come in with reasonably efficient uses.

If you want the equity of this Court to say this other state and the needed uses in that state, and here the Colorado uses... this is not just CF&I, the state engineer of Colorado testified as to the... and set forth in his Exhibit 14 the great need of Colorado for this water.

This water will come into Colorado and be used and reused in the Purgatory Valley.

In that valley, there are 300 water rights comprising 788 cubic feet per second.

The state engineer of Colorado testified that over 99 percent of the time there is not enough water in the river to satisfy those needs.

Unidentified Justice: Mr. Welborn, with all of this, it strikes me none of this was in the Master's report.

Mr. Welborn: I suggest--

Unidentified Justice: Well, I would like to ask you a very simple question.

Approximately how many findings, and I mean findings, will we have to make to decide in your favor?

Mr. Welborn: --I think that--

Unidentified Justice: How many findings we will have to make that the Master did not make.

Mr. Welborn: --Did you want me to list those and just how many in terms of number, or do you want me to describe them?

Unidentified Justice: Either way.

Mr. Welborn: Well, I should think that the Court could base its conclusions on the finding of the Special Master that there would be no material injury to--

Unidentified Justice: There's a difference in your thinking between conclusions and findings.

Mr. Welborn: --And I suggest that the Court--

Unidentified Justice: I'm talking about findings.

Mr. Welborn: --Right, could look at the record, as New Mexico has even suggested, and determine these factors.

If it feels that it should go beyond the conclusion of the Special Master and make a finding that was reasonable conservation as was stated in Wyoming versus Colorado, with reasonable conservation, as was suggested in Nebraska versus Wyoming.

Unidentified Justice: Mr. Welborn, doesn't that involve a change in the theory of the Master?

As I read the report, he would have found in your favor even if you assumed some harm to New Mexico, because of the fact that since the river was entirely appropriated, there is nothing at all left for Colorado, and as a sovereign state it is entitled to some of the water.

That is the Master's theory.

Mr. Welborn: And I think, Justice Stevens, that is a proper rule of law.

Unidentified Justice: But if you followed that rule, you don't need any more findings.

It is kind of a legal--

Mr. Welborn: Yes, I think you do.

I respectfully suggest that it is a matter of degree, and this is exactly what this Court was dealing with in Connecticut versus Massachusetts.

In Connecticut versus Massachusetts, it was a matter of degree.

Sure, there was going to be some effect on the Connecticut River when the City of Boston took a tremendous quantity of water out of the river, and took it into the Merimac River, but the Court weighed the equities, and that is what this Court has said in prior cases, and I respectfully suggest that that is what the Special Master did.

He said that Colorado is a sovereign state, and it has certain interests that are above and beyond the interests of its citizens, and above and beyond those that would obtain in a controversy between private parties, but he also found that there would be no material injury, and there were material injury, there would be countervailing... there are hard countervailing equities in favor of Colorado, and it is these countervailing equities, the Colorado need for water, that is a basic factor here.

But as to the findings that this Court would have to make to enter its decree, I think that the Special Master's report has the basic considerations that he... that are the result of his evaluation of this very thorough record, and it would seem to me that they would be virtually sufficient, in view of the law that this Court has announced in its prior decision.

And this, of course, brings me to the last point that I wanted to make in this argument, and that is that the Special Master's report is very much in accord with these prior decisions.

He considered all of the factors.

He properly rejected priority as the sole consideration, and here again, I would respectfully refer you to New Mexico's own brief in Arizona versus California, which refers to an equitable division of the benefits, and rejects the idea of priority regardless of state line.

It was there referring, I believe, to the Wyoming versus Colorado case.

What New Mexico and the amici really are seeking here, I suggest, is just that, priority regardless of state line, a rule of law based on these paper decrees, and those were sifted out, I suggest, by the Special Master.

I can't emphasize too strongly the difference between the laws of these two states, even though the follow the priority of appropriation doctrine, difference in administration, difference in... Colorado carries their water rights on the basis of historic use, actual use.

The New Mexico officials testified, Mr. Compton and Mr. Reynolds, that New Mexico carries them on the basis of the decreed right.

And this stock farm situation by impartial observers, so to speak, the Bureau of Reclamation officials, is a most serious matter which, if it existed in Colorado, would be alleviated, because Colorado law provides for that.

The Special Master did indeed consider benefit-detriment.

This was first suggested in the first case, Kansas versus Colorado.

It was reiterated in the most recent case, Nebraska versus Wyoming, and what he did, I suggest, was do just what Nebraska versus Wyoming told him to do.

He reached an informed judgment on the basis of many factors, rejecting the priority of appropriation as the sole consideration.

Mr. Simms alluded to the Canadian River situation, saying that you should look beyond the Romeo conservancy district diversion point.

New Mexico's own exhibit, F-29, shows that in only six years out of 30 did any water pass beyond the district diversion point.

Thank you.

Chief Justice Burger: Very well.

You have two minutes remaining, Mr. Simms.

ORAL ARGUMENT OF RICHARD A. SIMMS, ESQ., ON BEHALF OF THE DEFENDANT -- REBUTTAL

Mr. Simms: First of all, I want to remark that no decision of this Court in any prior equitable apportionment case has sought to sacrifice an existing economy to facilitate a new use.

References to Connecticut, New Jersey, and so on are simply inopposite.

In each of those cases, there was water available to appropriate and findings of no substantial injury.

Unidentified Justice: Mr. Simms, are you saying that the prior appropriation is the controlling factor in all of these cases?

Mr. Simms: It is the controlling factor here, very obviously.

If you were to take the Court's latest statement on the subject, you find it in Arizona versus California.

There, the Master, applying it just to these facts, the Master said it would be unreasonable in the extreme to sacrifice an existing economy for a future use.

The Master apparently didn't even read Arizona versus California.

He just missed it on--

Unidentified Justice: Mr. Simms, may I ask you on that point, does the law of the upstream state have a bearing on your argument?

If it were not, if the law of Colorado were not appropriate, the same general kind of law as it is in New Mexico, would you make the same argument?

Say they had the same law as they have in the eastern states.

Mr. Simms: --I think in either situation there would still be the attempt by the Court to protect existing economies.

That is the underlying theme of every equitable apportionment case, no matter whether it is between prior appropriation jurisdictions or between appropriation and riparian as in Kansas versus Colorado.

Unidentified Justice: In other words, are you willing to say that the law of Colorado is irrelevant to your position, simply because--

Mr. Simms: No, the law of Colorado is not irrelevant to our position.

The law of Colorado has in it, embodied in its constitution, the same equity that is embodied in the New Mexico constitution.

Unidentified Justice: --My question is, what if it were different in Colorado.

Mr. Simms: If it were different--

Unidentified Justice: If your argument depends entirely on future use, then it would be irrelevant.

If it depends on the fact that they are both appropriative states, then it is significant.

Mr. Simms: --No, if it were different, the issues would be slightly different.

The fundamental, the bottom line, however, remains the same, and that is, the Court protects existing water rights.

Here, the Masters recommended exactly the opposite.

He has just flipped equitable apportionment decisions and priority, its meaning and significance, on its head.

Unidentified Justice: Well, is it your position that if two states are in dispute, and if the downstream state succeeds in appropriating all the water that it needs before the upstream state appropriates any water, the upstream state can never get any water?

Mr. Simms: That's correct, and the best way to answer that, I think, Justice Stevens, is, imagine for the moment this were an intrastate stream in Colorado, fully appropriated--

Unidentified Justice: Well, I understand the interests.

Suppose it was an international boundary.

It wouldn't work there, would it?

Mr. Simms: --I can't answer that question.

I don't know.

I don't think there is enough law there to answer it.

Unidentified Justice: And then say Montana appropriate all the water in a stream that originated in Canada.

Could that defeat Canadian subsequent rights?

Mr. Simms: I don't think there is enough international law on that subject to answer that question.

But under Colorado law, if it were an intrastate stream, you can see how outrageous it would be, how absolutely outrageous if CF&I came along in 1975 and somehow could divest all of the Colorado property rights that had been on that river for--

Unidentified Justice: Well, that's right, because they all originate in the same source of law, but what is the source of law on which you rely?

Mr. Simms: --The source--

Unidentified Justice: It is all New Mexico law, is it not?

Mr. Simms: --The source of law on which I rely is the federal common law handed down by this Court in each and every one of the equitable apportionment cases.

Chief Justice Burger: Your time has expired now, Mr. Simms.

Mr. Simms: Thank you.

Chief Justice Burger: Thank you, gentlemen.

The case is submitted.