January 15, 2026- State ex rel. Torrez v. American Tobacco Company, No. A-1-CA-41458

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO	1
Opinion Number: __________	2
Filing Date: January 15, 2026	3
No. A-1-CA-41447 and 41458	4
(consolidated for purpose of opinion)	5
STATE OF NEW MEXICO ex rel. RAÚL	6
TORREZ, ATTORNEY GENERAL,	7
Plaintiff-Appellee,	8
v.	9
PHILIP MORRIS USA, INC. and	10
SHERMAN’S 1400 BROADWAY	11
N.Y.C., LLC,	12
Defendants-Appellants,	13
and	14
AMERICAN TOBACCO COMPANY, et al.,	15
Defendants.	16
and	17
STATE OF NEW MEXICO ex rel. RAÚL	18
TORREZ,	19
Plaintiff-Appellee,	20
v.	21
Court of Appeals of New Mexico
Filed 1/15/2026 11:17 AM

R.J. REYNOLDS TOBACCO COMPANY; SANTA FE	1
NATURAL TOBACCO COMPANY, INC.;	2
COMMONWEALTH BRANDS, INC.; COMPANIA	3
INDUSTRIAL DE TOBACOS MONTE PAZ, S.A.;	4
DAUGHTERS & RYAN, INC.; ITG BRANDS, LLC;	5
JAPAN TOBACCO INTERNATIONAL USA, INC.;	6
KING MAKER MARKETING, INC.; KRETEK	7
INTERNATIONAL, INC.; LIGGETT GROUP, LLC;	8
PETER STOKKEBYE TOBAKSFABRIK A/S;	9
PREMIER MANUFACTURING INC.; P.T. DJARUM;	10
SCANDANAVIAN TOBACCO GROUP; LANE LTD.;	11
TOP TOBACCO, LP; VON EICKEN GROUP;	12
FARMERS TOBACCO COMPANY OF CYNTHIANA,	13
INC.; and WIND RIVER TOBACCO COMPANY, LLC,	14
Defendants-Appellants,	15
and	16
AMERICAN TOBACCO COMPANY, et al.,	17
Defendants.	18
APPEALS FROM THE DISTRICT COURT OF SANTA FE COUNTY	19
Kathleen McGarry Ellenwood, District Court Judge	20
Raúl Torrez, Attorney General	21
Santa Fe, NM	22
Aletheia V.P. Allen, Solicitor General	23
Lawrence M. Marcus, Assistant Solicitor General	24
Albuquerque, NM	25
for Appellee	26
Spencer Fane, LLP	27
Sharon T. Shaheen	28
Santa Fe, NM	29

Arnold & Porter Kaye Scholer LLP	1
Alexander Shaknes	2
Manvin S. Mayell	3
New York, NY	4
Kolya D. Glick	5
Washington, D.C.	6
for Appellants Philip Morris USA, Inc. and Sherman’s 1400 Broadway N.Y.C., LLC	7
Rodey, Dickason, Sloan, Akin & Robb, P.A.	8
Melanie B. Stambaugh	9
Albuquerque, NM	10
Greenberg Traurig LLP	11
Elli Leibenstein	12
Gregory E. Ostfeld	13
Chicago, IL	14
for Appellants R.J. Reynolds Tobacco Company and Santa Fe Natural Tobacco	15
Company, Inc.	16
Brownstein Hyatt Farber Schreck, LLP	17
Ross L. Crown	18
Daniel T. Higgins, II	19
Albuquerque, NM	20
Baker & Hostetler LLP	21
Elizabeth B. McCallum	22
Carey S. Busen	23
Evan M. Mannering	24
Washington, D.C.	25
for Appellants Commonwealth Brands, Inc.; Compania Industrial De Tabacos	26
Monte Paz, S.A.; Daughters & Ryan, Inc.; ITG Brands, LLC; Japan Tobacco	27
International USA, Inc., King Maker Marketing, Inc.; Kretek International, Inc.;	28
Liggett Group, LLC; Peter Stokkebye Tobaksfabrik A/S; Premier Manufacturing	29
Inc.; P.T Djarum; Scandinavian Tobacco Group, Lane Ltd.; Top Tobacco, LP; and	30
Von Eicken Group	31

Modrall, Sperling, Roehl, Harris & Sisk, P.A.	1
Jennifer G. Anderson	2
Albuquerque, NM	3
Dentons Bingham Greenebaum LLP	4
Mark A. Loyd	5
Lauren R. Nichols	6
Louisville, KY	7
for Appellants Farmers Tobacco Co. of Cynthiana, Inc. and Wind River Tobacco	8
Company, LLC	9

OPINION	1
BOSSON, Justice, retired, sitting by designation.	2
{1} 	Appellants Philip Morris USA, Inc., et al., and R.J. Reynolds Tobacco	3
Company, et al., (collectively, Participating Manufacturers or PMs) separately	4
appeal the district court’s adjudication of two motions stemming from a long-	5
standing dispute regarding Appellee State of New Mexico’s performance, pursuant	6
to a Master Settlement Agreement (MSA) entered into by the parties in 1998.	7
“Because [these] appeals involve the same underlying proceedings and raise related	8
issues, we exercise our discretion to consolidate [the] appeals for decision.” See State	9
ex rel. Child., Youth & Fams. Dep’t v. Carmella M., 2022-NMCA-052, ¶ 1 n.1, 517	10
P.3d 284; Rule 12-317(B) NMRA. Due to the factual and legal complexity of these	11
issues, we begin with a recitation of the general background underlying both	12
motions. We then provide specific facts and relevant legal analysis within the	13
sections pertaining to each individual motion and the corresponding actions taken	14
by the district court.	15
{2} 	We affirm in part and reverse in part.	16
BACKGROUND	17
{3} 	In 1998, forty-six states and five U.S. territories (Settling State or Settling	18
States), along with the largest tobacco companies in the country, entered into the	19
MSA, effectively concluding a years-long, complex litigation initiated by the	20

2
Settling States against the tobacco companies seeking to recover healthcare costs	1
that stemmed from the treatment of tobacco-related illnesses. Under the terms of the	2
MSA, the Settling States agreed to release and discharge all claims against the	3
tobacco companies in exchange for the tobacco companies making sweeping	4
changes to their business practices and meeting certain obligations to the Settling	5
States. One such obligation required the PMs—i.e., those tobacco companies that	6
are either original or subsequent signatories to the MSA—to make millions of dollars	7
in annual payments to each of the Settling States. The total, annual amount owed to	8
each Settling State, from all of the relevant PMs, is known as the Settling State’s	9
“Allocated Payment.”	10
{4} 	However, not all tobacco companies that operate within the country are	11
subject to the MSA. The companies that are not subject to the MSA are known as	12
“Non-Participating Manufacturers” (NPMs). Because the NPMs operate without the	13
constraints of the MSA inhibiting their businesses, there is the potential for the PMs	14
to suffer a competitive disadvantage and a considerable loss in market share to their	15
competitors on account of the large sums of money the PMs are required to pay to	16
the Settling States. To account for this, the MSA provides for what is known as the	17
“NPM Adjustment”: a reduction in the amount the PMs are required to pay to the	18
Settling States in order to offset the “Market Share Loss” suffered by the PMs on	19
account of their obligations under the MSA.	20

3
{5} 	By default, for any year in which the PMs experience a Market Share Loss	1
that is greater than zero as a result of the provisions of the MSA, the NPM	2
Adjustment requires that the Allocated Payment of each Settling State be reduced	3
“by subtracting from such Allocated Payment the product of such Allocated	4
Payment amount multiplied by the NPM Adjustment Percentage.” 	See 	MSA	5
§ IX(d)(1)(A).1 In other words, the Allocated Payments owed by the PMs to each	6
Settling State will be reduced by a fluctuating percentage for each year in which the	7
PMs experience a Market Share Loss greater than zero due to the provisions of the	8
MSA. The NPM Adjustment differs from year to year.	9
{6} 	A Settling State may avoid having its Allocated Payment reduced by the NPM	10
Adjustment if it has enacted and diligently enforced a “Qualifying Statute” “during	11
the entire calendar year immediately preceding the year in which the payment in	12
question is due.” MSA § IX(d)(2)(B). For the purposes of the MSA, a Qualifying	13
Statute is one that “effectively and fully neutralizes the cost disadvantages that the	14
[PMs] experience vis-à-vis [NPMs] within such Settling State as a result of the	15
provisions of [the MSA].” MSA § IX(d)(2)(E). In essence, although an NPM	16
Adjustment is calculated for each of the Settling States, any Settling State that enacts	17
and diligently enforces a Qualifying Statute does not have its Allocated Payment	18
1 For 	all 	references 	to 	the 	MSA, 	the 	full 	text 	may 	be 	found 	at
https://www.naag.org/wp-content/uploads/2020/09/2019-01-MSA-and-Exhibits-
Final.pdf.

4
reduced by the NPM Adjustment. Any Settling State, however, that does not enact a	1
Qualifying Statute, or failed to enforce it in the preceding year, is subject to the NPM	2
Adjustment.	3
{7} 	To add to the complexity, the NPM Adjustments for “diligent” states do not	4
disappear. Instead, the NPM Adjustments of all “diligent” states are aggregated and	5
then reallocated among all “non-diligent” states pro rata in proportion to their	6
respective shares of the market. See MSA § IX(d)(2)(C). The “2004 Common Case	7
Findings” 	for 	the 	“2004 	NPM 	Adjustment 	Proceedings” 	summarize 	the	8
consequences of this reallocation scheme as follows:	9
As a result of this reallocation provision, the greater the number	10
of Settling States that do not establish that they diligently enforced the	11
provisions of their Qualifying Statutes, the more widely the NPM	12
Adjustment is spread thereby reducing the share of the Adjustment that	13
each such [Settling] State bears.	14
Conversely, if only a few Settling States have failed to diligently	15
enforce their Qualifying Statutes for a given year, those Settling States	16
face a more concentrated application of the NPM Adjustment—and	17
hence a greater reduction of their payments for that year, subject only	18
to the limitation that the [NPM] Adjustment applied to a Settling State	19
can be no greater than the total MSA payment it received for that year.	20
In other words, the more Settling States that are found to be “diligent,” the larger the	21
reduction each “non-diligent” Settling State suffers to its “Allocated Payment.”	22
{8} 	An “Independent Auditor”—a nationally recognized public accounting firm	23
jointly selected by the PMs and Settling States—is responsible for calculating all of	24
the relevant amounts owed pursuant to the MSA, incorporating all necessary	25

5
adjustments and reductions, including the application of the NPM Adjustment. See	1
MSA § XI(a), (b). By the language of the Agreement, “[a]ny dispute, controversy or	2
claim arising out of or relating to calculations performed by, or any determinations	3
made by, the Independent Auditor . . . shall be submitted to binding arbitration before	4
a panel of three neutral arbitrators, each of whom shall be a former Article III federal	5
judge. . . . The arbitration shall be governed by the United States Federal Arbitration	6
Act [(FAA)].” MSA § XI(c).	7
{9} 	In 2016, two Arbitration Panels (Birch and Legg Panels) were formed to	8
address challenges to and issues regarding the 2004 NPM Adjustment as calculated	9
and 	applied 	to 	multiple 	Settling 	States, 	including 	New 	Mexico. 	The 	Panel	10
proceedings were split into two parts. The first involved the parties and the Birch	11
and Legg Panels jointly resolving issues that applied broadly to all of the involved	12
Settling States. For the second part of the 2004 NPM Adjustment Proceedings, each	13
Settling State was assigned to one of the two Arbitration Panels, which then	14
“conducted 	individual 	[s]tate-[s]pecific 	hearings 	to 	allow 	them 	to 	separately	15
consider the evidence and issues relevant to the specific [Settling] State[] to which	16
each was assigned.”	17

6
I. 	The 2004 Arbitration Award	1
A. 	Procedural History	2
{10} 	New Mexico’s state-specific hearing was conducted over a seven-day period	3
between February and March 2022. The arbitration panel assigned to conduct New	4
Mexico’s state-specific hearing (Arbitration Panel or Panel) was comprised of three	5
retired Article III judges: the Honorable Stanley F. Birch (11th Cir.); the Honorable	6
Bruce D. Black (D.N.M.); and the Honorable Philip M. Pro (D. Nev.). As was the	7
case with most of the other state-specific hearings, the issue presented to the Panel	8
was whether New Mexico had diligently enforced its Qualifying Statute in 2004.	9
Additionally, the hearings involved extensive commentary on New Mexico’s use of	10
a piece of “Complementary Legislation” that was intended to assist the State in its	11
diligent enforcement of the Qualifying Statute.	12
{11} 	For context, the MSA promulgated a “Model Statute,” which the PMs and	13
Settling States all collectively agreed would constitute a valid Qualifying Statute if	14
enacted by a Settling State. The Model Statute attempts to eliminate the NPMs’	15
unfair competitive advantage by requiring each NPM to make escrow deposits per	16
unit of tobacco sold in the respective Settling State. All of the Settling States enacted	17
the Model Statute, including New Mexico. However, there were a number of	18
considerable 	shortcomings 	and 	loopholes 	in 	the 	Model 	Statute 	that 	made	19
enforcement 	particularly 	difficult. 	To 	counteract 	this, 	most 	Settling 	States—	20

7
including New Mexico—enacted complementary legislation in 2003, which granted	1
the Settling States additional remedial powers to identify and penalize NPMs that	2
were noncompliant under the terms of the Qualifying Statutes. New Mexico’s	3
version of the Complementary Legislation made it easier for the State to track and	4
identify the NPMs operating within the State through the creation of a certification	5
process and an NPM registry. The Complementary Legislation also gave the State	6
additional options by which it could hold noncompliant NPMs accountable, and	7
provided new tools for collecting larger NPM payments and depositing them into	8
escrow more frequently.	9
{12} 	During the Arbitration Panel hearings, the State took the position that it had	10
adequately taken advantage of the tools made available to it via the Complementary	11
Legislation to require escrow payments from the NPMs, and, accordingly, it had	12
diligently enforced its Qualifying Statute. The Arbitration Panel found otherwise.	13
Seemingly using the terms of the Complementary Legislation as the framework for	14
its analysis, the Arbitration Panel found that New Mexico had not properly managed	15
the NPM registry and failed to determine which entities were obligated to make	16
escrow deposits. The Panel also found that the State had failed to secure adequate	17
payments from those entities it had successfully identified. The Arbitration Panel	18
concluded that New Mexico had failed to diligently enforce its Qualifying Statute.	19
It did so not only on the basis that the State had failed to effectively utilize the	20

8
provisions of the Complementary Legislation, but also on the basis that the State	1
failed to take any meaningful action at all. Furthermore, independent of any mention	2
of the Complementary Legislation, it was apparent to the Arbitration Panel that New	3
Mexico had failed to diligently enforce its Qualifying Statute because less than half	4
of the NPMs operating in New Mexico had paid any amounts into escrow between	5
2003 and 2004. The State’s own witnesses corroborated the fact that less than half	6
of the NPMs operating in the State were compliant with the established regulations.	7
{13} 	On this basis, the Arbitration Panel concluded the following:	8
While diligent enforcement is an ongoing process, the fact that	9
limited efforts were made to identify and penalize or disqualify	10
noncompliant distributors until that point makes it difficult to find in	11
favor of the State on this issue. [The State was] cognizant of the	12
necessity of diligent enforcement of the MSA in 2004. [Its] resources	13
were clearly too limited, and [it] lacked the necessary focus and	14
organization to achieve that goal. This Panel must conclude that New	15
Mexico did not diligently enforce the MSA until at least December	16
2004 and as the PMs argued “that was too little too late for 2004.”	17
{14} 	The State appealed the decision of the Arbitration Panel to the First Judicial	18
District 	Court 	of 	the 	State 	of 	New 	Mexico, 	moving 	to 	vacate 	the 	Panel’s	19
determination and award. In its motion to vacate, the State argued that it had	20
presented evidence during the arbitration hearings that showed that “only 1.7	21
[percent] of NPM sales in the State had not been covered by escrow deposits and	22
thus were non-compliant with the Qualifying Statute for 2004 sales.” The State	23
argued that the Arbitration Panel impermissibly required the State to abide strictly	24

9
by the terms of the Complementary Legislation as a necessary condition for finding	1
that the State had diligently enforced its Qualifying Statute. This additional	2
requirement, the State argued, constituted a functional amendment to the MSA	3
through the insertion of additional enforcement requirements that went beyond the	4
scope of the Arbitration Panel’s authority.	5
{15} 	In their response in opposition to the State’s motion to vacate, the PMs argued	6
that the Arbitration Panel did not exceed the scope of its authority. Instead, the PMs	7
argued, as the MSA does not define “diligent enforcement,” the Panel necessarily	8
based its analysis on multiple state-specific factors, including the availability and	9
features of the Complementary Legislation. The PMs explained that the Arbitration	10
Panel’s decision did not hinge on the State’s failure to adequately utilize the tools	11
given to them via the passage of the Complementary Legislation. Instead, the Panel’s	12
decision was based on the “serious deficiencies across all aspects of the State’s	13
enforcement regime, including resource allocation, collection and verification of	14
data, reporting compliance, audits, inspections, sanctions, lawsuits, enforcement	15
actions, escrow deposit rate, and interagency coordination.”	16
{16} 	The district court agreed with the State. It held that the Arbitration Panel	17
“departed from the [MSA]’s clear and unambiguous language of the limited scope	18
of the State’s diligent enforcement obligations” by “expanding the State’s diligent	19
enforcement obligations beyond the Qualifying Statute required by the plain	20

10
language of the MSA to require Compl[e]mentary Legislation, tax code enforcement	1
and the application and enforcement of other laws.” The district court therefore	2
found that the Arbitration Panel materially amended the MSA by adding in these	3
additional requirements, and that such an amendment was beyond the scope of the	4
Panel’s authority. The court granted the State of New Mexico’s motion to vacate the	5
2004 award.	6
{17} 	The PMs appealed to this Court.	7
B. 	Discussion	8
1. 	The District Court Erred in Vacating the Arbitration Panel’s 2004	9
Award	10
{18} 	The question before the district court, and the question now before us, is not	11
whether the Arbitration Panel made a mistake of fact or law in reaching its	12
conclusion that the State of New Mexico failed to adequately enforce its Qualifying	13
Statute in 2004. See Fernandez v. Farmers Ins. Co. of Ariz., 1993-NMSC-035, ¶ 9,	14
115 N.M. 622, 857 P.2d 22 (holding that “the district court does not have the	15
authority to review arbitration awards for errors as to the law or the facts”). We do	16
not, and indeed cannot, review whether the Arbitration Panel was incorrect in its	17
ultimate conclusion. See id. ¶ 12 (holding that an arbitration panel’s decision cannot	18
be reversed “even if arguably incorrect” as long as its actions were “a permissible	19
exercise of its arbitral power”). The sole question is whether, in reaching that	20
conclusion, the Arbitration Panel exceeded the scope of its authority. See NMSA	21

11
1978, § 44-7A-24(a)(4) (2001) (“Upon motion to the court by a party to an	1
arbitration proceeding, the court shall vacate an award made in the arbitration	2
proceeding if[] an arbitrator exceeded the arbitrator’s powers.”).	3
{19} 	Arbitrators exceed their powers “when the arbitrators rule on a matter that is	4
beyond 	the 	scope 	of 	the 	arbitration 	agreement” 	or 	make 	an 	award 	that 	is	5
“inconsistent with the arbitration agreement.” Fernandez, 1993-NMSC-035, ¶ 17.	6
Although making this determination necessitates a review of the facts and the	7
Arbitration Panel’s conclusions, we do so only to ensure that the Arbitration Panel	8
considered facts upon which it had the authority to rely, and made conclusions that	9
it had the authority to reach. Because this case involves matters of both contract and	10
statutory interpretation, our review is de novo. See Sipp v. Buffalo Thunder, Inc.,	11
2024-NMSC-005, ¶ 15, 546 P.3d 1266 (“Contract interpretation is a matter of law	12
that we review de novo.” (internal quotation marks and citation omitted)); Tucson	13
Elec. Power Co. v. N.M. Tax’n & Revenue Dep’t, 2020-NMCA-011, ¶ 6, 456 P.3d	14
1085 (providing that our interpretation of a statute “is a matter of law that we review	15
de novo” (internal quotation marks and citation omitted)).	16
{20} 	The district court vacated the Arbitration Panel’s 2004 award, reasoning that	17
the 	Panel 	had 	exceeded 	its 	authority 	by 	penalizing 	the 	State 	“for 	deficient	18
enforcement of the Compl[e]mentary Legislation” and “expand[ing] the State[’]s	19
enforcement obligations to include enforcement of the tax code and other laws,”	20

12
thereby inappropriately amending the terms of the MSA to require more than diligent	1
enforcement of a Qualifying Statute.2 On appeal, the PMs argue that the court erred,	2
stating that the Arbitration Panel’s award cannot be interpreted as requiring	3
mandatory compliance with the terms of the Complementary Legislation such as	4
would constitute an amendment to the terms of the MSA. We agree.	5
{21} 	As previously discussed, the Qualifying Statute consisted of a number of	6
defects, which made its enforcement particularly challenging. The Complementary	7
Legislation is a set of enforcement tools passed by the New Mexico Legislature to	8
assist the State in diligently enforcing the more amorphous requirements of the	9
Qualifying Statute. As such, the Complementary Legislation and Qualifying Statute	10
are inextricably linked. To the extent the State argues that it used the Complementary	11
Legislation to meet its requirements under the MSA, as it did in the 2004 NPM	12
Adjustment Proceedings, it is appropriate for the Arbitration Panel to evaluate such	13
a claim and determine whether the Complementary Legislation was adequately used	14
2The State also argues that the Arbitration Panel erred in its definition of what
constitutes “diligent enforcement” under the terms of the MSA. However, this
argument was not raised before the district court, so to the extent the State is making
a right-for-any-reason argument, we decline to consider it. See Meiboom v. Watson,
2000-NMSC-004, ¶ 20, 128 N.M. 536, 994 P.2d 1154 (providing that our appellate
courts “may affirm a district court ruling on a ground not relied upon by the district
court, but will not do so if reliance on the new ground would be unfair to appellant”
(alteration, internal quotation marks, and citation omitted)); Romero v. Bd. of Cnty.
Comm’rs, 2011-NMCA-066, ¶ 7, 150 N.M. 59, 257 P.3d 404 (“[W]e can affirm if
the district court was correct for any reason that was before it on the basis of the
presentations of the parties.” (emphasis added)).

13
to achieve diligent enforcement of the Qualifying Statute. However, this cannot be	1
the sole factor for consideration in the Arbitration Panel’s analysis. If the State had	2
otherwise competently and diligently enforced its Qualifying Statute without	3
resorting to the use of the Complementary Legislation, then it would have been an	4
abuse of authority to penalize the State for its failure to utilize the Complementary	5
Legislation, thereby going beyond the scope of the MSA. See MSA § IX(d)(2)(B)	6
(providing that the only requirement for avoidance of the NPM Adjustment is the	7
diligent enforcement of a Qualifying Statute). But that is not what happened here.	8
{22} 	Under the terms of the MSA, a Qualifying Statute is one that “effectively and	9
fully neutralizes the cost disadvantages that the [PMs] experience vis-à-vis [NPMs]	10
within such Settling State as a result of the provisions of [the MSA].” See MSA	11
§ IX(d)(2)(E). By logical extension, not only must a Settling State abide by the terms	12
of its Qualifying Statute, the Settling State must be effective in doing so. If the cost	13
disadvantages have not been fully neutralized, then the Qualifying Statute has not	14
been diligently enforced. In rendering its decision, the Arbitration Panel explicitly	15
provided the framework it used to reach its conclusion, stating that “the Panel has	16
evaluated the evidence presented to determine whether New Mexico has met its	17
burden to show by a preponderance of the evidence that its efforts to monitor NPM	18
compliance, to detect non-compliance, and to compel NPM compliance with its	19
Qualifying Statute were diligent in the context of the facts, law and circumstances	20

14
existing in New Mexico throughout the relevant 2004 time period.” The Panel makes	1
it clear that its ultimate focus is on the diligent enforcement of the Qualifying Statute,	2
not strict adherence to the Complementary Legislation.	3
{23} 	The State is correct that the Panel then devotes a significant portion of its	4
analysis to reviewing whether the State properly utilized the tools given it by the	5
Complementary Legislation to achieve diligent enforcement. But the reason for this	6
singular focus is clear: the State’s argument in support of its diligence was predicated	7
almost entirely on its use of the Complementary Legislation. After the conclusion of	8
New Mexico’s state-specific NPM Adjustment hearing before the Arbitration Panel,	9
the State submitted a post-hearing brief. In its brief to the Panel, the State reiterated	10
the basis for its argument that it had diligently enforced the Qualifying Statute. In	11
support, the State cited to its alterations to the allocable share release provision	12
within 	the 	Qualifying 	Statute 	and 	the 	creation 	of 	an 	NPM 	directory 	as 	an	13
enforcement tool to ensure NPMs remained compliant with the requirements of the	14
Qualifying Statute. Both of these changes were a result of the Complementary	15
Legislation. The State itself further argued that the passage of the Complementary	16
Legislation, including the requirement that the NPMs make quarterly escrow	17
deposits, was perhaps the most important step taken in the State’s efforts at diligent	18
enforcement of its Qualifying Statute. Accordingly, the Arbitration Panel’s analysis	19

15
of the State’s efforts to effectively utilize the Complementary Legislation to	1
diligently enforce the Qualifying Statute was not only understandable, but necessary.	2
{24} 	As an example, the Arbitration Panel’s award states that “[t]he logical first	3
step to enforcing New Mexico’s Qualifying Statute is to determine which PMs . . .	4
and NPMs are obligated to deposit escrow.” From what is available to us in the	5
record, it appears that all of the State’s efforts to identify these entities stemmed from	6
the tools provided via the Complementary Legislation. The Panel determined that	7
the State was deficient in this regard, as “[t]he evidence showed only 6 Registered	8
NPMs” in the State, and that the actions taken “did not constitute diligent	9
enforcement of New Mexico’s Qualifying Statute.” It is incorrect to characterize this	10
conclusion 	as 	the 	Arbitration 	Panel 	mandating 	that 	the 	State 	adhere 	to 	the	11
Complementary Legislation. Instead, it was the Arbitration Panel’s finding that the	12
State had failed to diligently enforce the Qualifying Statute by any means, including	13
the singular means—the Complementary Legislation—through which the State	14
attempted to do so.	15
{25} 	The Arbitration Panel further found that the State failed to ensure escrow	16
compliance, did not identify and sanction those NPMs that violated the escrow	17
requirements, and failed to reduce the NPM share of sales. The Panel concluded that	18
“only 38 [percent] of the 2003 NPM sales resulted in proper escrow payments and	19
2004 was actually worse.” The conclusions of the Panel can be summarized as	20

16
follows: the State failed to identify relevant NPMs, failed to acquire any meaningful	1
amount of escrow payments, and failed to adequately penalize those entities that did	2
not meet the State’s requirements. These conclusions are largely independent of the	3
Complementary Legislation, and instead go to the heart of the matter: whether the	4
actions taken by the State constituted diligent enforcement of the Qualifying Statute	5
and effectively nullified the cost disadvantages suffered by the PMs as a result of the	6
terms of the MSA. The Arbitration Panel found that the State’s actions did not	7
constitute diligent enforcement.	8
{26} 	The State further argues that the Panel’s consideration of “very subjective	9
claims about the State’s enforcement of the Qualifying Statute” along with its	10
consideration of the use of the Complementary Legislation makes it “impossible to	11
separate these factors from each other to determine how the Panel would have	12
decided if it had stuck to the Qualifying Statute.” However, as we have already	13
noted, the Panel’s reliance on deficiencies in the State’s use of the Complementary	14
Legislation was a direct result of the evidence presented to it. Had the State argued	15
a myriad of ways in which it allegedly satisfied the requirements of the MSA, and	16
the Arbitration Panel had found that the State failed in its diligent enforcement	17
exclusively because it failed to utilize the Complementary Legislation, this argument	18
would have merit. However, the Arbitration Panel did not so limit its analysis, and	19

17
its discussion of the Complementary Legislation was predicated on the very	1
evidence supplied to it by the State.	2
{27} 	The State also attempts to defend the district court’s decision by arguing that	3
the Arbitration Panel manifestly disregarded established contract law by ignoring	4
the plain language of the MSA, acting contrarily to the intent of the parties, and	5
inserting additional requirements into the MSA. First, while simultaneously arguing	6
that state law should apply, the State encourages us to adopt the federal definition	7
and test for “manifest disregard” that does not currently exist in our case law.	8
Additionally, the State argues that our standard does not allow for vacating	9
arbitration awards that make simple errors of law, but that “manifest disregard” of	10
the law is more egregious and can be a basis for vacatur. Even if we were to agree	11
with the State on this point, and were to adopt this standard, there is no evidence that	12
the Arbitration Panel’s actions rose to this level. “Manifest disregard” for law	13
requires an element of deliberateness: an arbitration panel must be aware of the law	14
and willfully disregard it. See ARW Expl. Corp. v. Aguirre, 45 F.3d 1455, 1463 (10th	15
Cir. 1995) (characterizing manifest disregard of the law as “willful inattentiveness	16
to the governing law” that goes beyond simple “error or misunderstanding with	17
respect to the law” (internal quotation marks and citations omitted)). This could be	18
satisfied if the State were right that the Arbitration Panel deliberately interpreted the	19
Qualifying Statute and Complementary Legislation to impose new requirements, but	20

18
we have already rejected this argument. Additionally, as to the State’s other claims	1
of willful disregard, the Panel stated in its award that its rejection of other principles	2
and evidence was the result of its good-faith assessments of the credibility of the	3
witnesses and evidence before it. We see nothing in the State’s presentations to the	4
district court or to us that disprove this statement, or otherwise show that the	5
Arbitration Panel willfully disregarded the appropriate law.	6
{28} 	Lastly, the State’s overall argument relies on the assumption that the Panel	7
improperly characterized the Complementary Legislation as an amendment to the	8
MSA and the Qualifying Statute, based in part on the Panel’s usage of that term	9
within the award. However, it is clear that this language stemmed from the State	10
itself, whose attorneys occasionally characterized it as such. Indeed, it is clear from	11
our review of the record that the State was not sure how to characterize the	12
Complementary 	Legislation, 	sometimes 	referring 	to 	it 	as 	“amendments” 	and	13
sometimes referring to it as a set of helpful enforcement tools, supplementing the	14
firm requirements of the Qualifying Statute. What is certain, however, is that it was	15
not the intent of the Arbitration Panel to characterize this as an amendment such as	16
would fundamentally change the Qualifying Statute to require additional, mandatory	17
requirements. To use the State’s own words, the Complementary Legislation is best	18
viewed as a “framework for monitoring compliance with the . . . statutory escrow	19
obligations imposed on NPMs” established by enacting “legislative changes to	20

19
strengthen the Qualifying Statute.” There is no evidence that the Arbitration Panel	1
considered it any differently.	2
{29} 	The district court vacated the Arbitration Panel’s award on the ground that it	3
“exceeded [its] powers.” See § 44-7A-24(a)(4). Arbitrators exceed their powers	4
“when the arbitrators rule on a matter that is beyond the scope of the arbitration	5
agreement, 	inconsistent 	with 	the 	arbitration 	agreement, 	removed 	from 	their	6
consideration by statute, or removed from their consideration by case law.”	7
Fernandez, 1993-NMSC-035, ¶ 17 (citations omitted). The Arbitration Panel limited	8
its review to the ultimate question that was concretely within the sphere of its	9
authority: whether New Mexico diligently enforced its Qualifying Statute. In doing	10
so, the Panel appropriately considered relevant state-specific factors, including the	11
Complementary Legislation, but did not exceed the bounds of its authority by	12
making any of these state-specific factors mandatory requirements for diligent	13
enforcement. The district court erred when it held otherwise. Accordingly, we	14
reverse.	15
II. 	The 2022 Reallocation Order	16
A. 	Procedural History	17
{30} 	As alluded to at the outset, when a Settling State is found to be diligent in the	18
enforcement of its Qualifying Statute, the NPM Adjustment value that would have	19
reduced the Settling State’s Allocated Payment does not disappear. Instead, “[t]he	20

20
aggregate amount of the NPM Adjustments that would have applied to the Allocated	1
Payments of those Settling States that are not subject to an NPM Adjustment . . .	2
shall be reallocated among all other Settling States pro rata in proportion to their	3
respective Allocable Shares.” MSA § IX(d)(2)(C). In other words, a Settling State	4
that is found to be non-diligent in the enforcement of its Qualifying Statute shall	5
receive a reallocated portion of the NPM Adjustments of all other Settling States that	6
are found to be diligent. Accordingly, the more Settling States that are found to be	7
diligent, the larger the reduction each non-diligent State suffers to its Allocated	8
Payment.	9
{31} 	Sometime after the creation of the MSA, the Settling States sought an	10
alternative method of dispute resolution to avoid the lengthy and complex arbitration	11
process otherwise required for the Settling States to prove their diligence and avoid	12
the NPM Adjustment. During an earlier set of NPM Adjustment Proceedings, a	13
separate agreement (Term Sheet Settlement Agreement) was reached between the	14
PMs and some of the Settling States, in which the Settling States agreed to settle	15
their claims under the MSA and waive their ability to prove their diligence. These	16
States became known as the “Resolved States.” In exchange, the Resolved States	17
received a significant reduction in the amount by which their Allocated Payment	18
would have been reduced had they been found to be non-diligent. However, it was	19
unclear how the reallocation provision should be applied to the Resolved States.	20

21
Given that the Term Sheet Settlement Agreement eliminated any finding of	1
diligence, (1) should the Resolved States be treated as diligent or non-diligent, and	2
(2) should their NPM Adjustments be reallocated? The attempted solutions provided	3
during the 2003 NPM Adjustment Proceedings were rejected, and these remained	4
open questions.	5
{32} 	In 2017, the Birch and Legg panels responsible for the 2004 NPM Adjustment	6
Proceedings—the 	subject 	of 	this 	present 	action—attempted 	to 	answer 	these	7
outstanding questions. In the Birch and Legg panels’ 2017 reallocation order (the	8
2017 Reallocation Order), they devised the following scheme in an attempt to	9
balance the interests of the PMs, the Resolved States, and those Settling States that	10
declined to sign the Term Sheet Settlement Agreement (Arbitrating States). Any	11
Resolved State that chose to settle and waive its right under the MSA to pursue a	12
finding of diligence via federal arbitration—in exchange for a smaller reduction in	13
its Allocated Payment—would be presumed non-diligent for the purposes of	14
reallocation. In other words, its share of the NPM Adjustment would not be	15
reallocated among the non-diligent Arbitrating States. However, this circumstance	16
created a deficit whereby the PMs’ payments to the States would not be subjected to	17
the full reduction to which they would ordinarily be entitled under the NPM	18
Adjustment. To balance this, the 2017 Reallocation Order created a second step of	19
the process, by which the PMs could rebut the presumption of non-diligence by	20

22
proving that a Resolved State had, in fact, diligently enforced its Qualifying Statute	1
in the relevant year. If the PMs were successful in their challenge, the Resolved	2
State’s 	NPM 	Adjustment 	would 	then 	be 	reallocated 	among 	the 	non-diligent	3
Arbitrating States. Ironically, this results in the PMs and Settling States reversing	4
positions; instead of arguing that a Settling State is non-diligent, the PMs are now	5
arguing for a State’s diligence, and the State is now attempting to defend a	6
presumption of non-diligence.	7
{33} 	In 2022, the 2004 NPM Adjustment Proceedings panels reversed course,	8
issuing a new reallocation order (the 2022 Reallocation Order), which laid out some	9
additional rules governing the reallocation of the NPM Adjustments of the Settling	10
States. The 2022 Reallocation Order determined that under the MSA, the only	11
mechanism by which a Settling State can avoid being subject to the NPM	12
Adjustment is by enforcing a Qualifying Statute in the relevant year, and proving its	13
own diligent enforcement. As such, the plain language of the MSA does not allow	14
for any alternative process that would allow for a PM to step into the shoes of a	15
Settling State and prove that state’s diligence. Under the MSA, the only entity that	16
is allowed to prove a Settling State’s diligence is the Settling State itself. In	17
summary, the Arbitration Panel held: (1) there must be explicit proof of a Settling	18
State’s diligence in order for the State to be considered “diligent,” exempted from	19
the NPM Adjustment, and have its NPM Adjustment reallocated—i.e., there can be	20

23
no presumption of diligence; and (2) the Settling State itself is the only entity	1
permitted to prove its diligence. To the extent the 2017 Reallocation Order allowed	2
otherwise, the Panel held that it constituted an improper amendment to the MSA,	3
which exceeded the bounds of the 2017 Panel’s authority. Accordingly, the 2022	4
Reallocation Order vacated the 2017 Reallocation Order.	5
{34} 	In its place, the 2022 Reallocation Order introduced a new scheme, which it	6
viewed to be in line with the plain language of the MSA. Under the new order, there	7
is a non-rebuttable presumption of non-diligence for any Resolved State. As such,	8
and solely for the purposes of calculating reallocation, “the Resolved States must be	9
deemed to be subject to the 2004 NPM Adjustment.” Accordingly, the NPM	10
Adjustments of the Resolved States are not aggregated and redistributed among the	11
non-diligent Arbitrating States.	12
{35} 	The PMs moved the district court to vacate the 2022 Reallocation Order,	13
arguing 	that 	the 	Order 	“exceeded 	the 	[Arbitration] 	Panel’s 	authority 	by	14
impermissibly amending the parties’ contract and refusing to consider material	15
evidence relevant to an arbitrable dispute.” The district court denied the PMs motion,	16
holding that “[t]he 2004 Panel had the authority to interpret the relevant provisions	17
of the MSA and it did so.” The PMs appealed.	18

24
B. 	Discussion	1
1. 	The Arbitration Panel Did Not Exceed Its Authority in Entering the 2022	2
Reallocation Order	3
{36} 	Again, in determining whether the Arbitration Panel exceeded its powers, see	4
§ 44-7A-24(a)(4), we must look to whether the arbitrators “rule[d] on a matter that	5
is beyond the scope of the arbitration agreement, inconsistent with the arbitration	6
agreement, removed from their consideration by statute, or removed from their	7
consideration by case law.” 	See Fernandez, 1993-NMSC-035, ¶ 17 (citations	8
omitted). There is no argument that the latter two factors apply, so we look only to	9
the first two. Our review is de novo. See Sipp, 2024-NMSC-005, ¶ 15 (“Contract	10
interpretation is a matter of law that we review de novo.” (internal quotation marks	11
and citation omitted)).	12
{37} 	Our goal in engaging in contract interpretation is to “ascertain the intentions	13
of the contracting parties.” Mendoza v. Isleta Resort & Casino, 2020-NMSC-006,	14
¶ 20, 460 P.3d 467 (internal quotation marks and citation omitted). “If a contract is	15
unambiguous, [an appellate court’s] role is to interpret the contract according to the	16
intent of the contracting parties.” Id. “When a contract is clear as written, a court	17
must give effect to the contract and enforce it as written.” ConocoPhillips Co. v.	18
Lyons, 2013-NMSC-009, ¶ 67, 299 P.3d 844 (internal quotation marks and citation	19
omitted). We therefore look to the plain language of the MSA to discern whether the	20

25
Arbitration Panel’s 2022 Reallocation Order significantly altered the framework	1
provided by the MSA, such that the Panel exceeded the scope of its authority.	2
{38} 	First, it is clear that the Arbitration Panel had the authority to issue the 2022	3
Reallocation Order, and to speak on the application of the reallocation provision.	4
The MSA’s arbitration clause specifies that the arbitration panel is authorized to	5
decide “any dispute concerning the operation or application of any of the . . .	6
allocations described in subsection IX(j).” MSA § XI(c). Subsection IX(j), in	7
relevant part, discusses the reallocation provision. Accordingly, the Panel had the	8
authority to resolve the dispute concerning how the reallocation provision should be	9
applied to the Resolved States. The Panel did not exceed its authority in entering the	10
2022 Reallocation Order.	11
{39} 	Furthermore, it is clear that the 2017 Reallocation Order constituted an	12
improper amendment to the MSA, and the Panel was justified in vacating it. The	13
MSA does not contemplate any condition in which a PM and Settling State can	14
essentially swap places, with the PM now advocating for the State’s diligence and	15
the 	State 	arguing 	for 	its 	non-diligence. 	See 	MSA 	§ 	IX(d)(2)(B). 	The 	2017	16
Reallocation Order’s creation of such a procedure is directly antithetical to the plain	17
language of the MSA. In rectifying this error, the Panel was acting in accordance	18
with the plain language of the MSA. The Panel did not exceed its authority by	19
vacating the 2017 Reallocation Order. We now turn to whether the Arbitration Panel	20

26
had the authority to create the specific reallocation scheme contemplated by the 2022	1
Reallocation Order.	2
{40} 	Looking to the MSA, it is clear that the application of the NPM Adjustment	3
is the default. MSA § IX(d)(2)(A) (“The NPM Adjustment . . . shall apply to the	4
Allocated 	Payments 	of 	all 	Settling 	States, 	except 	as 	set 	forth 	[in 	Section	5
IX(d)(2)(B)].”). There is only one circumstance in which a Settling State may avoid	6
the NPM Adjustment: the diligent enforcement of a Qualifying Statute in the	7
relevant calendar year. MSA § IX(d)(2)(B). In essence, all Settling States are	8
presumed non-diligent and have the NPM Adjustment applied to their Allocated	9
Payments. The reallocation provision therefore lies dormant, and only triggers if a	10
Settling State can successfully refute this presumption by proving its diligence.	11
{41} 	This is all that the 2022 Reallocation Order does. It states that all Resolved	12
States—those which have waived their right to prove their diligence by entering into	13
the Term Sheet Settlement Agreement—are presumed non-diligent and their NPM	14
Adjustments are not reallocated. The PMs argue that the Panel has wrongfully	15
shirked its duties by avoiding determining the diligence or non-diligence of the	16
Resolved States, and calculating the proper reallocation amounts. However, there is	17
nothing 	compelling 	a 	Settling 	State 	to 	pursue 	its 	exclusion 	from 	the 	NPM	18
Adjustment. That is simply the only option if it desires to avoid a finding of non-	19
diligence. By the plain text of the MSA, any Settling State could refuse to enact a	20

27
Qualifying Statute, or decline to prove its diligent enforcement. Entering into the	1
Term Sheet Settlement Agreement appears to be another way of doing so. The 2022	2
Reallocation Order merely reaffirms this default condition.	3
{42} 	The plain text of the MSA does not require any Settling State to affirmatively	4
prove its diligence. As such, the district court did not err in finding that the	5
Arbitration Panel did not exceed its authority or contravene the text of the MSA, see	6
Fernandez, 1993-NMSC-035, ¶ 17, by entering the 2022 Reallocation Order. We	7
affirm the district court’s denial of the PMs’ motion to vacate the 2022 Reallocation	8
Order.	9
III. 	The New Mexico Court of Appeals Has Jurisdiction to Decide This	10
Appeal Under Both the FAA and the New Mexico Uniform Arbitration	11
Act	12
{43} 	Lastly, we turn to the State’s argument that the New Mexico Uniform	13
Arbitration Act (NMUAA), NMSA 1978, §§ 44-7A-1 to -32 (2001), governs this	14
proceeding and bars the Court of Appeals from deciding this appeal. Specifically,	15
the State argues that, in vacating the Arbitration Panel’s 2004 state-specific award,	16
the district court directed the Arbitration Panel to conduct a rehearing, depriving this	17
Court of jurisdiction under the NMUAA to decide this appeal.	18
{44} 	At the outset, we note that we are hesitant even to address the State’s	19
argument. Any ambiguity in the proceedings below that resulted in the present	20
circumstances was created by the State, not by the PMs. The order that the State now	21

28
argues deprives this Court of jurisdiction was promulgated by the State, and contains	1
no language indicating whether or not a rehearing was directed. The State now asks	2
us to construe this ambiguity in its favor, despite the fact that the State created that	3
same ambiguity. The State could have taken any corrective action between the entry	4
of the order some two years ago and now to rectify the confusion or pursue a	5
rehearing. It has not done so. In the interest of fairness, we are not inclined to allow	6
the State to exploit the ambiguous circumstances it helped to cause.	7
{45} 	However, despite our hesitation, there are separate jurisdictional, procedural,	8
and policy questions underlying this issue that will benefit from further exploration.	9
We take up this matter to address and resolve these outstanding concerns.	10
A. 	The FAA Versus the NMUAA	11
{46} 	The language of the MSA clearly specifies that any disputes regarding the	12
diligence of a Settling State, the amount of a Settling State’s Allocated Payment, or	13
the amount of a Settling State’s NPM Adjustment, among others, “shall be submitted	14
to binding arbitration before a panel of three neutral arbitrators, each of whom shall	15
be a former Article III federal judge” and that “[t]he arbitration shall be governed by	16
the United States [FAA].” MSA § XI(c). There is, therefore, no question that the	17
FAA governed the proceedings before the Arbitration Panel.	18
{47} 	However, it remains an open question whether proceedings concerning a	19
motion to vacate the decision of the federal arbitration panel, filed in state court,	20

29
continue to be governed by the FAA, or instead are governed by the state arbitration	1
act of the Settling State in which the action is brought. The State of New Mexico	2
argues that the NMUAA applies, given the MSA’s language selecting state courts as	3
the forum for the resolution of MSA implementation and enforcement actions, see	4
MSA § VII(a), and its selection of state law to govern such proceedings, see MSA	5
§ XVIII(n). The PMs, however, argue that the selection of the FAA to govern the	6
arbitration proceedings carries through to an appeal of the arbitration panel’s	7
decision in state court.	8
{48} 	Most other states faced with a similar challenge have avoided resolving this	9
issue, due to the similarities between their state acts and the FAA. However, there	10
are procedural distinctions between the NMUAA and the FAA that make our	11
analysis more challenging. The FAA places no bars on an appeal from a district	12
court’s grant of a motion to vacate an arbitration panel’s decision. See 9 U.S.C.	13
§ 16(a)(1)(E) (“An appeal may be taken from an order modifying, correcting, or	14
vacating an award.”). The NMUAA, however, does not allow for an appellate court	15
to review the district court’s grant of a motion to vacate if the district court also	16
simultaneously granted a rehearing before an arbitration panel. See § 44-7A-29. The	17
State argues that the district court granted its request for a rehearing, and under the	18
NMUAA, the Court of Appeals is now barred from hearing the appeal.	19

30
{49} 	However, despite the procedural distinctions between the FAA and the	1
NMUAA with regard to the appealability of a district court’s grant of a motion to	2
vacate, we decline to address the question of which arbitration act applies. We	3
conclude that this Court possesses jurisdiction over this appeal under either act, and	4
that in all other relevant respects, the FAA and NMUAA are substantively identical,	5
eliminating the need for further parsing.	6
{50} 	Under the FAA, our jurisdiction is clear: “An appeal may be taken from an	7
order modifying, correcting, or vacating an award.” 9 U.S.C. § 16(a)(1)(E). This	8
grant of jurisdiction is not qualified or limited in any way. If the FAA applies, this	9
Court clearly has the authority to hear the present appeal. If the NMUAA applies,	10
however, “[a]n appeal may be taken from an order vacating an award without	11
directing a rehearing.” Section 44-7A-29(a)(5) (emphasis added). Despite this	12
limiting language, we find that we possess jurisdiction over this appeal because the	13
district court did not explicitly direct a rehearing. Furthermore, even if a rehearing	14
had been ordered, practical finality applies in this limited circumstance to prevent	15
these 	errors 	from 	becoming 	permanent 	and 	unassailable, 	with 	financial	16
consequences extending far beyond New Mexico’s borders.	17
B. 	The District Court Did Not Direct a Rehearing	18
{51} 	In its “Motion to Vacate 2004 Final Arbitration Award,” the State asked the	19
district court for two forms of relief: (1) to vacate the Arbitration Panel’s award in	20

31
favor of the PMs, and (2) to order that a new hearing be held before a newly-	1
convened arbitration panel. The district court granted the State’s motion, but did not	2
specify the scope of relief, simply ordering that the “State of New Mexico’s Motion	3
to Vacate the 2004 Final Arbitration Award is GRANTED.” While we reverse the	4
district court’s order in this regard as explained above, the order itself makes no	5
mention of the State’s request for a rehearing, and the order’s reasoning is limited to	6
its analysis and conclusion that the Arbitration Panel exceeded the scope of its	7
authority. “Where the language of a judgment or decree is clear and unambiguous,	8
it must stand and be enforced as it speaks.” Allred v. N.M. Dep’t of Transp., 2017-	9
NMCA-019, ¶ 41, 388 P.3d 998 (text only) (citation omitted). However, given the	10
lack of an explicit grant of the State’s request for a rehearing, we are unable to	11
discern from the plain text of the order whether the district court intended to order a	12
rehearing. To resolve the ambiguity, we look elsewhere.	13
{52} 	When the plain language of a district court order is ambiguous, we look to	14
other indicia of the district court’s intent, construing the judgment “in the light of	15
the pleadings, other portions of the judgment, findings, and conclusions of law.”	16
Fed. 	Nat’l 	Mortg. 	Ass’n 	v. 	Chiulli, 	2018-NMCA-054, 	¶ 	14, 	425 	P.3d 	739.	17
Ultimately, “[o]ur goal in construing an ambiguous judgment is to determine the	18
intention and meaning of the author.” See Allred, 2017-NMCA-019, ¶ 23 (alteration,	19
internal quotation marks, and citation omitted). In the record, the State’s request for	20

32
a new hearing is referenced only twice: once, as previously mentioned, in its motion	1
to vacate, and again at the hearing held on the State’s motion. During the hearing,	2
the State requested the district court to vacate the 2004 Arbitration Award and	3
remand for a rehearing. The district court then clarified that the State was not seeking	4
a strict rehearing, but was seeking a new hearing before a new arbitration panel,	5
which the State confirmed. The court then inquired further as to what directive the	6
district court should provide to the new panel, if the court were to grant the State’s	7
request. The hearing concluded with the district court requesting that both parties	8
submit proposed orders, without giving any indication as to whether it intended to	9
grant the State’s request for a new hearing.	10
{53} 	It is clear that the district court was aware of the State’s request for a new	11
hearing, as well as the scope of its request. However, the district court’s order	12
granting the State’s motion to vacate makes no mention of the State’s request, and	13
fails to explicitly grant it. The order lacks any language remanding the matter to	14
either the previously established arbitration panel or a new panel. Furthermore, it is	15
common for a district court ordering a rehearing to issue instructions to the	16
arbitration panel on remand regarding the scope of their review. In re State of Haw.	17
Org. of Police Officers (SHOPO) v. Cnty. of Kauai, 230 P.3d 428, 429 (Haw. Ct.	18
App. 2010) (explaining that the lower court vacated an arbitration award and	19
“remanded [the] matter to the arbitrator with instructions to rehear the issue of what	20

33
remedy [was] appropriate” (emphasis added)); Neb. Dep’t of Health & Hum. Servs.	1
v. Struss, 623 N.W.2d 308, 312 (Neb. 2001) (stating that the district court explicitly	2
directed “that the matter be remanded for a rehearing before a new arbitrator” and	3
instructed that the scope of the rehearing was to allow the appellant to present	4
additional evidence); E. Tex. Salt Water Disposal Co. v. Werline, 307 S.W.3d 267,	5
269 (Tex. 2010) (stating that the district court’s judgment “ordered that the matter	6
be re-submitted to arbitration by a new arbitrator with the sole issue before that	7
[a]rbitrator being whether or not there was a material breach of [an employment	8
agreement]” (internal quotation marks omitted)).3 In contrast, although the district	9
court here directly inquired as to which instructions it should provide to the new	10
arbitration panel if it were to order a new hearing, the order does not contain any	11
such instructions.	12
{54} 	Finally, the NMUAA specifies that when a district court vacates an award and	13
orders a rehearing, “[t]he arbitrator must render the decision in the rehearing within	14
the same time as that provided in Section [44-7A-20(b)].” See § 44-7A-24(c).	15
Section 44-7A-20(b) states that “[a]n award must be made within the time specified	16
by the agreement to arbitrate or, if not specified therein, within the time ordered by	17
the court.” Here, the arbitration clause within the MSA provides no timeframe by	18
3We cite these out-of-state authorities only to illustrate that when courts vacate
an arbitration award and order a rehearing, courts consistently provide detailed
instructions to govern and inform the scope of the panel’s review on remand.

34
which the award must be rendered. Accordingly, even if a rehearing were ordered,	1
it was for the district court to set the timeframe for the rehearing. The district court	2
did not do so, and no hearing has been pursued in the two years since the district	3
court entered its order vacating the Arbitration Panel’s 2004 award.	4
{55} 	There are only two possible conclusions: either the district court directed a	5
rehearing, or it did not. The court did not explicitly direct a rehearing in its order	6
vacating the Arbitration Panel’s award, nor did the court verbally express an intent	7
to do so. The order contains no remand instructions, nor any directive to the	8
Arbitration Panel regarding the scope of its subsequent proceedings. The district	9
court did not provide any timeline by which a new panel would be required to render	10
a new decision. Accordingly, there are no indications that the district court intended	11
to order a rehearing, and therefore we hold that no rehearing was directed. See Allred,	12
2017-NMCA-019, ¶ 23 (“Our goal in construing an ambiguous judgment is to	13
determine the intention and meaning of the author.” (alteration, internal quotation	14
marks, and citation omitted)). As such, under both the FAA and the NMUAA, this	15
Court has jurisdiction over these appeals. See 9 U.S.C. § 16(a)(1)(E) (“An appeal	16
may be taken from an order modifying, correcting, or vacating an award.”); § 44-	17
7A-29(a)(5) (“An appeal may be taken from an order vacating an award without	18
directing a rehearing.”).	19

35
C. 	The District Court’s Order Is Practically Final and Appealable	1
{56} 	We also find merit in noting that, even if the district court had ordered a	2
rehearing, due to the extraordinary and unique circumstances posed by this litigation	3
and appeal, the Court of Appeals would still possess jurisdiction under the NMUAA.	4
Section 44-7A-29(a)(5) provides that an order vacating an award is appealable if it	5
does not direct a rehearing. Our courts have never had an opportunity to interpret or	6
construe the language of Section 44-7A-29(a)(5), but courts in other states have	7
construed statutes with similar language. Although the language of the subsection	8
does not use the word “finality,” other states have held that the rationale behind	9
barring an appeal when a rehearing has been ordered is that the arbitration	10
proceedings have not yet been completed, and there is no final order in the action.	11
See Struss, 623 N.W.2d at 314 (“[A] lower court’s order [that] . . . vacates an	12
arbitration award without directing a rehearing finally terminates the arbitration	13
process and thus renders such order suitable for review, whereas an order [that]	14
directs a rehearing is premature for appellate review because the arbitration process	15
has not been completed.”); In re SHOPO, 230 P.3d at 432 (holding that an order	16
vacating an arbitration award and remanding for further proceedings “extended,	17
rather than concluded, the arbitration process” and is not “sufficiently final to be	18
suitable for appellate review”).	19

36
{57} 	However, not all forms of rehearing are the same in scope. If a court orders a	1
rehearing for the limited purpose of requiring the same arbitration panel to take a	2
simple, corrective action, there is a reasonable argument to be made that such an	3
action is not a final order. But that is not what happened here. In this instance, the	4
State requested a new hearing, before a new arbitration panel. The Supreme Court	5
of Texas has held that in just such a circumstance—where an arbitration panel’s	6
award is vacated and the court orders a new hearing before a new panel—such an	7
order “is as final a decision as an appellate court’s remand of a case to a trial court	8
for a new trial, and therefore appealable.” Werline, 307 S.W.3d at 272.4
9
{58} 	We are not without precedent to follow Texas’s example. In New Mexico,	10
appellate courts are allowed in extremely limited circumstances to exercise our	11
jurisdiction and review a non-final order if it is deemed to be practically final. See	12
State v. Ahasteen, 1998-NMCA-158, ¶¶ 12-13, 126 N.M. 238, 968 P.2d 328,	13
abrogated on other grounds by State v. Savedra, 2010-NMSC-025, ¶ 9, 148 N.M.	14
301, 236 P.3d 20. “Under the doctrine of practical finality an appellate court will	15
review a remand order if the issue raised on appeal would, as a practical matter, not	16
4In Werline, the Supreme Court of Texas was interpreting a provision of the
Texas General Arbitration Act (TAA) that is virtually identical to Section 44-7A-
29(a)(5) of the NMUAA. See Werline, 307 S.W.3d at 270 (“Section 171.098(a) [of
the TAA] states: ‘A party may appeal a judgment or decree entered under this
chapter or an order: . . . (5) vacating an award without directing a rehearing.’”
(quoting Tex. Civ. Prac. & Rem. Code Ann. § 171.098 (West 1997, amended
2025))).

37
be available for review after a decision on remand.” Id. ¶ 12 (internal quotation	1
marks and citation omitted); see State v. Heinsen, 2005-NMSC-035, ¶ 14, 138 N.M.	2
441, 121 P.3d 1040 (explaining that “[t]he practical finality exception recognizes	3
that the rule of finality is not an absolute, inflexible rule, but a term that is to be given	4
a practical, rather than a technical, construction” (internal quotation marks and	5
citation omitted)). We are cognizant of the fact that “practical finality is the	6
exception, rather than the rule” and that our courts “appl[y] it cautiously, in limited	7
circumstances.” Heinsen, 2005-NMSC-035, ¶ 15. This is such a circumstance, where	8
“the issue raised on appeal will not be available for review if the [PMs are] deprived	9
of an immediate appeal.” Id.	10
{59} 	If we do not decide this issue now, there is a strong possibility that it will	11
never be available for appellate review, meaning that the error—reversing the	12
arbitration decision—would become entrenched and unassailable, causing a grave	13
injustice. Here, the district court erroneously vacated the Arbitration Panel’s award	14
on the basis that the Panel improperly considered elements of the Complementary	15
Legislation in finding that New Mexico was not diligent in enforcing its Qualifying	16
Statute. If we were to determine that we do not have jurisdiction to decide this appeal	17
because a rehearing was ordered, the issue will be remanded for a new hearing before	18
a new arbitration panel. Indeed, the new arbitration panel might reach a new	19
decision, relying on the erroneous reasoning of the district court. Given that an error	20

38
of law or fact is not a basis for overturning an arbitration panel’s award, the very	1
error that we are now called upon to review would become shielded by the extremely	2
narrow grounds upon which an arbitration panel’s award can be vacated. See	3
Fernandez, 1993-NMSC-035, ¶ 9 (holding that “the district court does not have the	4
authority to review arbitration awards for errors as to the law or the facts”). In other	5
words, the moment a new arbitration panel applies the faulty reasoning relied upon	6
by the district court, that same reasoning would become shielded from review and	7
vacatur.	8
{60} 	In addition, the consequences of failing to correct this error now may be	9
extensive and widespread. Pursuant to the terms of the MSA, if the new arbitration	10
panel, relying on faulty reasoning, reaches a new conclusion finding that the State	11
diligently enforced its Qualifying Statute, then New Mexico’s NPM Adjustment will	12
be reallocated pro rata among all the other non-diligent Settling States. This could	13
result in significant reductions to other Settling States’ Allocated Payments. If we	14
do not rectify this mistake now, the error can never be remedied. This is exactly the	15
limited, but critical, circumstance in which the doctrine of practical finality applies.	16
Ahasteen, 1998-NMCA-158, ¶¶ 12-13.	17
{61} 	Although an order vacating an arbitration award and directing a rehearing is	18
not one of the specific appealable orders enumerated in Section 44-7A-29(a), that	19
list of appealable orders is not exclusive. See N.M. Dep’t of Health v. Maestas, 2023-	20

39
NMCA-075, ¶ 14, 536 P.3d 506 (“[W]e do not treat [Section 44-7A-29] as an	1
exclusive list of orders that may be appealed.” (internal quotation marks and citation	2
omitted)). “When an order concerning arbitration is not one of the orders listed in	3
Section 44-7A-29(a), the question of whether the order is appealable as of right	4
depends on whether the order is final, and finality must be determined by applying	5
the general law concerning finality of judgments in civil cases.” Id. ¶ 15 (alteration,	6
internal quotation marks, and citation omitted). Here, the district court’s order “is as	7
final a decision as an appellate court’s remand of a case to a trial court for a new	8
trial, and therefore appealable.” See Werline, 307 S.W.3d at 272. Even if a rehearing	9
had been directed, this is the exact unique circumstance that authorizes our use of	10
the doctrine of practical finality, and we will exercise our jurisdiction accordingly to	11
ensure the merits of this action are heard. See Ahasteen, 1998-NMCA-158, ¶¶ 12-	12
13; Heinsen, 2005-NMSC-035, ¶ 14. The proper administration of justice so requires	13
it.	14
CONCLUSION	15
{62} 	For the foregoing reasons, we reverse the district court’s vacatur of the final	16
award for the State of New Mexico 2004 NPM Adjustment proceeding, and remand	17
for the reinstatement of the award. Otherwise, we affirm.	18

40
{63} 	IT IS SO ORDERED.	1
_____________________________	2
RICHARD C. BOSSON, Justice,	3
Retired, Sitting by Designation	4
WE CONCUR:	5
_________________________________	6
J. MILES HANISEE, Judge	7
_________________________________	8
MEGAN P. DUFFY, Judge	9