On June 21, 2024, the United States Supreme Court issued a ruling in Texas v. New Mexico, No. 141, Orig, (2024), a long-running case between the states of Texas and New Mexico over apportionment of water in the Rio Grande River. Both Texas and New Mexico are parties to the 1938 Rio Grande Compact (“the Compact”) which divides the waters of the Rio Grande between Colorado, New Mexico, and Texas. Under the Compact, New Mexico is required to deliver a certain amount of water each year to the Elephant Butte Reservoir which is operated by the federal Bureau of Reclamation (“Reclamation”) which in turn releases specified amounts of water from the Reservoir for delivery to Texas. In 2013, Texas filed suit against New Mexico, claiming that the state engaged in excessive groundwater pumping which depleted supplies of Rio Grande water meant for Texas. Some years later, the Supreme Court allowed the federal government to intervene as a party in the case after concluding that the United States “has an interest” in ensuring that New Mexico makes water deliveries to the Elephant Butte Reservoir that are consistent with the terms of the Compact.

In November 2022, Texas and New Mexico both agreed to a consent decree that would resolve all claims in the dispute while still allowing New Mexico to continue pumping groundwater. Both states asked the Supreme Court to approve the consent decree and resolve the case, despite the federal government’s opposition. However, the Court declined to settle the dispute, finding the that United States still had interests to pursue and that approving the consent decree would dispose of the federal government’s claims without its consent.

Background

The Rio Grande River originates in the San Juan Mountains in southern Colorado, flows through New Mexico and into Texas where it then travels along the border between the United States and Mexico before terminating at the Gulf of Mexico. It’s drainage basin covers more than 180,000 square miles, and in the United Staes alone, water from the Rio Grande is used to provide irrigation supply for about 178,000 acres of land and electric power for local communities.

In 1906, the United States and Mexico settled an early dispute over use of the Rio Grande by entering into a treaty that required the United States to provide Mexico with 60,000 acre-feet of Rio Grande water every year. To honor that commitment, the United States set out to construct a new dam and reservoir at Elephant Butte in New Mexico which is roughly 100 miles north of the New Mexico-Texas border. The Elephant Butte dam and reservoir would become integral to the Rio Grande Project, an irrigation system implemented and operated by Reclamation. Along with the treaty between the United States and Mexico, the federal government is also party to the Downstream Contracts which require the United States to make annual deliveries of water to the Elephant Butte Irrigation District in New Mexico (“EBID”) and to the El Paso County Water Improvement District No. 1 in Texas (“EP1”). Under the Downstream Contracts, Reclamation must provide water to irrigate 88,000 acres in EBID, and 67,000 acres in EP1.

The remaining water rights to the Rio Grande were divided between Colorado, New Mexico, and Texas under the 1938 Rio Grande Compact. Under the Compact, Colorado agreed to deliver a certain amount of water to the New Mexico state line. Then, instead of similarly requiring New Mexico to make a delivery of water to the Texas state line, the Compact requires New Mexico to annually deliver water to the Elephant Butte Reservoir. From there, the Compact relied on Reclamation to apportion and deliver water to EPID and EP1 according to the Downstream Contracts.

Drought conditions set in on the Rio Grande about a decade after the Compact was signed. As a result, entities in New Mexico downstream of the Elephant Butte Reservoir became pumping groundwater at increased levels to support local agricultural operations. In turn, the pumping impacted Reclamation’s water releases from Elephant Butte. When Reclamation releases water from the Reservoir, the water flows into the bed of the Rio Grande, and from there enters a series of canals and ditches where it is used to irrigate farmland. Ultimately, some of the water runs off of fields or percolates into the ground and eventually returns to the Rio Grande riverbed where it continues farther downstream. Groundwater pumping south of the Elephant Butte Reservoir intercepts the return flows that would otherwise reach and replenish the Rio Grande riverbed, and as New Mexico began to increase its groundwater pumping in the mid-twentieth century, Reclamation had to release more water from Elephant Butte to comply with its delivery obligations.

Although Reclamation developed a new method for calculating how much water would be available to EBID and EP1 in light of the increased pumping, that did not resolve the issue. In 2013, Texas filed suited against New Mexico, alleging that the groundwater pumping violated the Compact by exceeding the level of pumping contemplated in 1938 and interfering with water deliveries meant to reach Texas. Eventually, the federal government intervened in the case, arguing that groundwater pumping in New Mexico was interfering with Reclamation’s ability to made contracted deliveries to EPID and EP1, and with its ability to deliver water to Mexico. Like Texas, the federal government sought an injunction that would require New Mexico to stop in-state entities from pumping in such a way that interfered with Reclamation’s water deliveries.

As the litigation progressed, Texas and New Mexico negotiated a proposed consent decree that would make compliance with the decree sufficient to show compliance with the 1938 Compact. Under that decree, New Mexico would continue pumping groundwater at the increased rate, and would require Reclamation to make deliveries to EPID and EP1 as needed to maintain a specified allotment. While Texas and New Mexico moved to have the consent decree accepted, the federal government objected, claiming that the decree would have disposed of the government’s claims without its consent. The federal government wanted to continue to pursue a court order that would require New Mexico to cease pumping groundwater at the elevated levels. The question of whether to finalize the consent decree was put before the Supreme Court. In a 5-4 decision, the Court declined to approve the consent decree, instead allowing the federal government to continue pursuing its claims.

Decision from the Bench

In deciding whether to approve the proposed consent decree, the Supreme Court focused on answering two relevant questions – whether the federal government had valid claims under the 1938 Compact and whether the proposed consent decree would successfully dispose of those claims. Because the Court answered yes to both questions, it declined to approve the consent decree.

The Court began by considering whether the federal government could bring claims under the 1938 Compact. Interstate compacts, such as the one at issue here, are agreements between states. Texas and New Mexico argued that the federal government could not pursue claims under the 1938 Compact because only Colorado, New Mexico, and Texas were parties to the Compact, not the federal government. The states argued that the Compact did not grant the federal government power to enforce its terms. However, in the past, the Supreme Court has occasionally allowed the federal government to participate in lawsuits concerning interstate compacts to defend “distinctively federal interests” that a normal litigation may not be able to pursue. The Court determined that the present case was such an instance.

According to the Court, the federal government was an “agent” of the 1938 Compact because the Compact is “inextricably intertwined” with both the Downstream Contracts and the Rio Grande Project. Specifically, the Court noted that the purpose of the Compact was to equitably apportion the Rio Grande’s waters which was only possible because the federal government had negotiated and approved the Downstream Contracts which required it to deliver a certain amount of water to Texas. Because of the way the Downstream Contracts and Compact work together, the Court reasoned that the federal government had distinct interests in seeing the Compact upheld. If New Mexico’s groundwater pumping reduced the amount of water in the Rio Grande below the Elephant Butte Reservoir, then Reclamation might be unable to meet its duties under the Downstream Contracts which, according to the Court, are essential to fulfilling the purpose of the Compact. Similarly, the Court determined that the federal government had interests in upholding the Compact due to the 1906 Treaty between the United States and Mexico requiring the United States to deliver 60,000 acre-feet of water from the Elephant Butte Reservoir to the Mexican border, particularly if a breach of the Compact would jeopardize the government’s ability to fulfill its Treaty obligations. For those reasons, the Court concluded that the federal government had “distinctively federal interests” in seeing that the 1938 Compact is upheld and that the government could pursue those interests through litigation.

Next, the Supreme Court considered whether the proposed consent decree would dispose of the federal government’s Compact claims without its consent. Both Texas and New Mexico claim that the consent decree would resolve all claims raised by the parties in the lawsuit. After reviewing the decree, the Supreme Court agreed with the states’ analysis, concluding that the consent decree would incorporate New Mexico’s groundwater pumping into the Compact. Should that happen, the federal government would no longer be able to seek an injunction requiring New Mexico to cease pumping groundwater above 1938 levels because the increased rate of pumping would become a part of the Compact. Therefore, the Court concluded that adopting the consent decree would dispose of the federal government’s Compact claims without the government’s consent.

Because the federal government has distinctly federal interests it may pursue under the 1938 Compact, and because approving the consent decree would dispose of those interests over the government’s objections, the Supreme Court declined to adopt the decree. The litigation over New Mexico’s groundwater pumping and its obligations under the 1938 Compact will continue.

Conclusion

While the Supreme Court’s ruling in Texas v. New Mexico will have an immediate impact on the litigation between Texas and New Mexico over the Rio Grande, it may ultimately affect other disputes between different states going forward. Compacts and other agreements between states to apportion interstate waters are common throughout the United States. In the Western states, the federal government is often involved in delivering such water via projects built and operated by Reclamation. Disagreements between states over water compacts are not uncommon and can arise during periods of drought or change in water usage. In future situations where such disputes make it to court and the federal government intervenes, Texas v. New Mexico may limit the ability of states to resolve those disputes without the input of the federal government.

To read the Supreme Court’s decision in Texas v. New Mexico, click here.

For more water law resources from the National Agricultural Law Center, click here.