July 06, 2015 – Village of Logan v. Eastern New Mexico Water Utility Authority, No. 32,648

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:

Filing Date: July 6, 2015

NO. 32,648

VILLAGE OF LOGAN,
Plaintiff-A ppellant,
V.

EASTERN NEW MEXICO WATER
UTILITY AUTHORITY,

Defendant- Appellee.

APPEAL FROM THE DISTRICT COURT OF SANTA FE COUNTY
Sarah M. Singleton, District Judge

Hinkle, Hensley, Shanor
& Martin, L.L.P.
Thomas M. Hnasko
Dulcinea Z. Hanuschak
Dayan M. Hochman
Santa Fe, NM

for Appellant

Montgomery & Andrews, P.A.
Louis W. Rose

Jeffrey J. Wechsler

Carolyn A. Wolf

Galen M. Buller

Santa Fe, NM

Grieg & Richards, P.A.
David F. Richards
Clovis, NM

for Appellee

OPINION
HANISEE, Judge.
{1} 	This single-issue appeal requires clarification of the legal methodology that
applies to resolve a zoning and land use conflict between a municipality and a water
utility authority, both of which are political subdivisions of the state established by
legislative processes. The district court employed the statutory guidance test, which
it found to be most consistent with New Mexico law. We affirm.
BACKGROUND
{2} 	Plaintiff-Appellant, the Village of Logan (the Village), is located within Quay
County, near Tucumcari and on the shores of the Ute Lake Reservoir. As a New
Mexico municipality, the Village has the authority to adopt and enforce laws and
zoning regulations “[f]or the purpose of promoting health, safety, morals or the
general welfare” of its residents. NMSA 1978, § 3-21-1(A) (2007). When the Village
first enacted its zoning ordinances in 1965, it created six zones, one of which was
designated “R-1,” denoting single-family residential use unless otherwise specified.
Under the Village’s current ordinances, any landowner wishing to utilize property in
a manner contrary to its zoning designation must apply to the Village for a special use
permit.
{3} 	Defendant-Appellee, 	Eastern 	New 	Mexico 	Water 	Utility 	Authority

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(ENMWUA), is a state entity created by the Legislature pursuant to NMSA 1978,
Section 73-27-4 (2010). The Eastern New Mexico Water Utility Authority Act (the
Act), see NMSA 1978, §§ 73-27-1 to -19 (2010), was enacted to create a “water utility
authority to develop and construct a water delivery system [to] local governments
within the boundaries of the authority.” Section 73-27-2(B)(1), (2). Within the Act,
the Legislature posited the need for an “organized structure to work with state, local
and federal agencies to complete a water delivery system from the Ute Reservoir to
local governments” in the neighboring eastern New Mexico counties of Curry and
Roosevelt. Section 73-27-2(A)(3); § 73-27-4. To facilitate its mission, ENMWUA was
granted the power of eminent domain to acquire property for “rights of way and
easements and for the use and placement of facilities and infrastructure elements,
including pipelines, structures, pump stations and related appurtenances.” Section 73-
27-7(G).
{4} 	Once established, ENMWUA acquired Lot 11 in the Village’s South Shore
development. It sought and obtained a special use permit for an initially planned water
intake structure that would be contained within the boundaries of Lot 11. ENMWUA
later decided to enlarge the planned structure, and to include an access road and
holding pond. To accommodate the larger facilities, ENMWUA used its power of
eminent domain to acquire Lot 12, adjacent to Lot 11. The Village asserted that

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without a newly specific special use permit, the project would violate the Village’s R-
1 zoning regulations on Lot 12. At that juncture, ENMWUA ceased to acknowledge
the Village’s authority to enforce its zoning regulations against it and refused to again
seek a special use permit.
{5} 	The impasse led the Village to district court, where its complaint sought
injunctive relief and a declaratory determination that its zoning regulations were
indeed applicable to ENMWUA, such that a special use permit would be required in
order for the proposed construction to proceed. ENMWUA filed a motion to dismiss
pursuant to Rule 1-012(B)(6) NMRA, arguing that as a state agency it was immune
from the Village’s zoning laws. In support, ENMWUA cited City of Santa Fe v.
Armijo, 1981-NMSC-102, ¶ 3, 96 N.M. 663, 634 P.2d 685 (“Municipalities have only
those powers expressly delegated by state statute.”). Concluding, however, that the
parties were political subdivisions of equal dignity insofar as each had been “created
by or pursuant to statute,” the district court found that Armijo “does not control the
situation presented in this case,” and sought legal guidance elsewhere.
{6} 	The district court and the parties collectively identified five stand-alone tests
used in varying jurisdictions to resolve disputes of this nature: (1) the statutory
guidance test, (2) the balancing of interests test, (3) the eminent domain test, (4) the
superior sovereign test, and (5) the governmental propriety test. See Macon Ass’n for

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Retarded Citizens v. Macon-Bibb Cnty. Planning & Zoning Comm’n, 314 S.E.2d 218,
222 (Ga. 1984) (discussing and citing authority for each test); Rutgers v. Piluso, 286
A.2d 697, 702-03 (N.J. 1972) (discussing and applying the balancing of interests test).
ENMWUA sought application of either the statutory guidance or eminent domain
tests, while the Village maintained that the balancing of interests test should be
adopted in circumstances of sovereign equality. Having distinguished Armijo, the
district court nonetheless agreed with ENMWUA that the statutory guidance test was
most consistent with New Mexico law, granted ENMWUA’s motion, and dismissed
the Village’s complaint.
{7} 	The Village appeals, arguing that the district court erred in resolving the case
by application of the statutory guidance test. The Village contends that we should
adopt the balancing of interests test as the more equitable approach to resolving
zoning and land use conflicts between equally situated political subdivisions of the
state. The Village seeks remand in order for an evidentiary hearing to be conducted
so that the interests of the two entities can be balanced in district court, which it
asserts would produce a more informed result. ENMWUA maintains on appeal that
the statutory guidance test is the proper test to be applied, and that its adoption in this
circumstance would be most consistent with our Supreme Court’s rejection of
unexpressed municipal power in Armijo.

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STANDARD OF REVIEW
{8} 	“A district court's decision to dismiss a case for failure to state a claim under
Rule 1-012(B)(6) is reviewed de novo.” Valdez v. State, 2002-NMSC-028, ¶ 4, 132
N.M. 667, 54 P.3d 71. We accept as truthful well-pleaded factual allegations and
resolve all doubts in favor of the complainant. Id. “A Rule [1-0]12(B)(6) motion is
only proper when it appears that [a] plaintiff can neither recover nor obtain relief
under any state of facts provable under the claim.” Valdez, 2002-NMSC-028, ¶ 4
(emphasis, internal quotation marks, and citation omitted). The facts in this case are
not in dispute; thus, we review only the district court’s application of the statutory
guidance test de novo.
DISCUSSION
{9} 	Although this Court squarely addressed zoning and land use conflicts between
the State and a lesser authority in County of Santa Fe v. Milagro Wireless, LLC, 2001-
NMCA-070, 130 N.M. 771, 32 P.3d 214, as had our Supreme Court previously in
Armijo, 1981-NMSC-102, neither has had occasion to speak regarding whether a
wholly separate analysis is needed to resolve zoning and land use disputes between
co-equal political subdivisions of the state concerning activities on non-state-owned
land. Regarding this distinction, the Village contends that Armijo and Milagro, are not
useful to this issue of “first impression,” and that the statutory guidance test amounts

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to little more than an “obsolete approach that should be eschewed in favor of the more
enlightened [b]alancing of [i]nterests [t]est.” ENMWUA agrees on appeal with the
district court’s selection of the statutory guidance test, and the resulting dismissal of
the Village’s complaint.
{10} 	We take a moment to summarize the balancing of interests test advocated by the
Village and first introduced in Rutgers. The test owes its genesis to the New Jersey
Supreme Court’s belief that “[legislative] intent, rarely specifically expressed, is to be
divined from a consideration of many factors[.]” Rutgers, 286 A.2d at 702. The
summarized factors considered essential in Rutgers include statutory language itself,
but also considerations such as the identification of alternative locations for land uses
that divide one political subdivision from another, the scope of each litigant’s political
authority, input from any higher state authority, the degree to which the proposed
facility is essential versus considerations of detriment to surrounding property, and
whether any effort was made to comply with the disputed zoning procedures. Id. at
698. The Village also points out that the balancing of interests test has been embraced
in New Mexico, albeit by the New Mexico Attorney General in an advisory opinion
issued in 2005. See N.M. Att’y Gen. Op. 05-03 (2005) (relying on a Rutgers analysis
to conclude that the Los Alamos Public School District is not automatically immune
from local zoning regulations). The Village contends that this modern, more “holistic

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alternative approach,” best balances the interests of the parties and considers the
overarching public interest in a comprehensive plan. See Rutgers, 286 A.2d at 701,
703; Hayward v. Gaston, 542 A.2d 760, 764 (Del. 1988); Alaska R.R. Corp. v. Native
Vill. of Eklutna, 142 P.3d 1192, 1196 (Alaska 2006) (all adopting the balancing of the
interests test).
{11} 	We begin our analysis, however, by determining the degree to which Armijo
and Milagro, are instructive. In Armijo, our Supreme Court announced specific
limitations on the power of a municipality to enact and enforce local zoning
regulations or restrictions. 1981-NMSC-102, ¶ 3. At issue was whether the City of
Santa Fe could utilize its zoning authority to forbid the Commissioner of Public Lands
from maintaining an oil field pumping rig on the premises of the State Land Office
Building, an activity that would require a permit in order not to violate Santa Fe’s
historical district zoning ordinances. 	Id. 	¶ 1. In reversing the district court’s
determination that Santa Fe’s ordinances apply to state agencies, institutions, and
officials, the Court held that “[a] state governmental body is not subject to local
zoning regulations or restrictions.” Id. ¶ 3. It added that “[s]tatutes granting power to
cities are strictly construed, and any fair or reasonable doubt concerning the existence
of an asserted power is resolved against the city.” Id. The Court went on to state that
“[m]unicipalities have only those powers expressly delegated by state statute” and that

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such authority does not arise by “inference or implication from a statute.” Id. The
Court examined the language of state statutes regarding “Zoning Regulations” under
NMSA 1953, §§ 14-28-9 to -11 (repealed in 1965) (current version at NMSA 1978,
§§ 3-21-1 to -2 (1965, as amended through 2007)), then authorizing Santa Fe to zone
property within its municipal boundaries in the first place. Armijo, ¶ 4. Finding no
direct allowance within the statute permitting municipal zoning requirements to apply
to state land, our Supreme Court reversed the district court’s conclusion that Santa Fe
could prevent placement of an oil pumping rig on state property. Id. ¶¶ 12-13.
{12} 	Milagro assessed the enforceability of county zoning ordinances to the actions
of a private, commercial entity on a state-owned right of way. 2001-NMCA-070, ¶¶ 2,
4-5, 7. Applying Armijo in this slightly different context, this Court upheld the district
court’s dismissal of a challenge to the erection of a cell phone tower—approved of but
not undertaken directly by the New Mexico Highway Department—adjacent to I-25.
Milagro, 2001-NMCA-070, ¶¶ 2, 9. From an analytic perspective, Milagro, as did
Armijo, examined the statutory authority upon which the power to enforce county
zoning ordinances was premised and concluded that the power granted lacked an
“express grant of authority to zone on state land.” Milagro, 2001-NMCA-070, ¶ 7.
{13} 	Although notably distinct from this case insofar as both Armijo and Milagro,
address activities that otherwise violated zoning restrictions on state owned land, both

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utilized principles of statutory construction to determine that municipal ordinances
lack force on state land when contrary authority is not plainly provided by enabling
legislation. Armijo, 1981-NMSC-102, ¶¶ 12-13; Milagro, 2001-NMCA-070, ¶ 7.
Here, the district court correctly identified the statutory guidance test as that most
consistent with our jurisprudence. Pursuant to it, courts review the statutory powers
assigned to each entity to ascertain whether the Legislature intended that one entity’s
local zoning ordinances apply to the other entity’s activities. Macon Ass’n, 314 S.E.2d
at 222; see Village of Swansea v. Cnty. of St. Clair, 359 N.E.2d 866, 867 (Ill. App. Ct.
1977) (utilizing statutory guidance test to conclude that to allow application of
municipal zoning regulations to prevent construction of dog pound would frustrate the
intent of the Illinois legislature and the statutory mandate of the animal control act it
enacted); State ex rel. St. Louis Union Trust Co. v. Ferriss, 304 S.W.2d 896, 901-03
(Mo. 1957) (en banc) (applying statutory guidance test in holding school district’s
legally authorized construction activities to be superior to a municipality’s zoning
ordinance). We note also that the approach taken by Armijo, Milagro, and by
jurisdictions that employ the statutory guidance test in instances such as this where
political subdivisions conflict, is consistent with our historic preference to identify
legislative intent when actions are undertaken pursuant to statutory authority. See
N.M. Indus. Energy Consumers v. N.M. Pub. Regulation Comm’n, 2007-NMSC-053,

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¶ 20, 142 N.M. 533, 168 P.3d 105 (“When construing statutes, our guiding principle
is to determine and give effect to legislative intent . . . aided by classic canons of
statutory construction . . . giving the words their ordinary meaning, [absent indication
that] a different one was intended.”); Griego v. Oliver, 2014-NMSC-003, ¶ 20, 316
P.3d 865 (“Our principal goal in interpreting statutes is to give effect to the
Legislature’s intent.”). We adopt the statutory guidance test as that which applies to
determine whether a land use proposed by one political subdivision of the state may
be prohibited by the zoning regulation of another. While we note the availability of
additional possible tests to guide district courts in such instances, neither party seeks
application of the tests not evaluated in this Opinion.
{14} 	We lastly turn to whether the statutory guidance test supports the district court’s
dismissal of the Village’s complaint, and conclude that it does. We first note that the
Village does not argue on appeal that if the statutory guidance test were correctly
selected by the district court, it was nonetheless incorrectly applied. Accordingly,
ENMWUA did not address application of the test in its answer brief. Yet the district
court as well did not provide insight as to the basis on which it determined ENMWUA
was entitled to dismissal of the Village’s complaint pursuant to the statutory guidance
test. We therefore elect to briefly explain why, as a matter of law and pursuant to the
statutory guidance test, the district court’s dismissal of the Village’s complaint was

1In jurisdictions that employ the eminent domain test, ENMWUA’s power to
take and use land would alone establish its superiority over the Village in the current
dispute. See Macon Ass’n, 314 S.E.2d at 222 (“[T]he [p]ower of [e]minent [d]omain
[t]est take[s] the position that when a political unit is authorized to condemn, it is
automatically immune from local zoning regulation when it acts in furtherance of its
designated public function.”). For the purposes of statutory guidance, it is a factor that
at minimum constitutes a significant expression of legislative intent.
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proper. The Act established, directed, and ultimately empowered ENMWUA in a
manner greater than that allowed to municipalities such as the Village regarding land
use regulation. Specifically, the Act identified the need for and created a water utility
authority spanning multiple counties in eastern New Mexico. See §§ 73-27-1 to -4. It
was designed to benefit local governments in that quadrant of the state by sharing
water from the Canadian River stored in the Ute Reservoir. Section 73-27-2(A)(3).
The power to condemn land by eminent domain is not an insignificant one1 , yet it was
provided to ENMWUA to directly acquire and utilize property in Quay County, where
the Village exists. See § 73-27-7(G). Ultimately, ENMWUA was directed to “provide
an organized structure to work with state, local and federal agencies,” Section 73-27-
2(A)(3), not simply any local entity. See § 73-27-7(G).
{15} 	Comparatively, Section 3-21-1(A) allows local restriction of land use “[f]or the
purpose of promoting health, safety, morals or the general welfare,” among other local
powers vested in municipalities such as the Village by the zoning authority. Yet, no
municipal ordinance can be “inconsistent with the laws of New Mexico.” NMSA

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1978, § 3-17-1 (1993). In this instance, the legislative purpose behind its creation of
ENMWUA would be frustrated by requiring that it adhere to municipal zoning
ordinances. We conclude that the statutory guidance test applies to immunize
ENMWUA from the Village’s zoning ordinances, and thus from its special use permit
process in this instance. See Armijo, 1981-NMSC-102, ¶ 3 (“Statutes granting power
to cities are strictly construed, and any fair or reasonable doubt concerning the
existence of an asserted power is resolved against the city.”).
{16} 	For the foregoing reasons, we affirm the district court’s application of the
statutory guidance test, and its dismissal of the Village’s complaint.
{17} 	IT IS SO ORDERED.
_________________________________
J. MILES HANISEE, Judge
WE CONCUR:
MICHAEL D. BUSTAMANTE, Judge
CYNTHIA A. FRY, Judge