## Facts

- Howard Sleeper, Hayden Gaylor, and Elaine Gaylor (applicants) purchased two long-irrigated farm properties near Ensenada, New Mexico.
- For more than a century before the sale, the lands had been used for agriculture and irrigated under surface-water rights historically associated with the Ensenada Ditch on the Rio Brazos stream system.
- The applicants planned to develop a ski-area resort and to build an artificial lake for recreational and aesthetic use.
- To supply the lake and support the development, the applicants sought administrative approval to change the existing water rights, including changes to the point of diversion and the place and purpose of use from traditional irrigation.
- The applicants submitted a transfer application (and later a modified application) to the New Mexico State Engineer.
- The State Engineer approved the modified application authorizing the requested changes.
- The Ensenada Land & Water Association and other local irrigators (protestants) opposed the approval, asserting the change would injure other water users on the Rio Brazos system and was inconsistent with the public interest.
- The protestants appealed the State Engineer’s approval to the Rio Arriba County district court for a trial de novo.

## Issues

1. Whether the proposed changes in point of diversion and place and purpose of use would impair existing water rights on the Rio Brazos stream system.
2. Whether the proposed transfer was contrary to the public interest under New Mexico law governing changes to existing surface-water rights.
3. In a trial de novo appeal from the State Engineer, whether the district court could make independent findings on impairment and public interest based on the evidence presented.

## Decision

- The district court reversed the State Engineer’s approval of the modified application.
- The district court denied the requested change in point of diversion and in place and purpose of use.
- The court found that allowing the change would impair existing water rights within the Rio Brazos system.
- The court also found the requested change was contrary to the public interest.

## Legal Principles

- A party aggrieved by a State Engineer decision on a change-of-water-right application may appeal to the district court, which may hear the matter by trial de novo and enter its own findings and conclusions.
- A change in a surface-water right (including a change in point of diversion, place of use, or purpose of use) may be denied if it would be to the detriment of existing water rights.
- Beyond injury to existing rights, New Mexico’s water-right change process allows consideration of public-interest limits, and a change may be refused if it conflicts with those limits as applied to the requested transfer.
- When the evidence supports a finding of likely injury to other valid rights, the application may be denied even if the applicant proposes a new, nonagricultural use for the same paper right.

## Conclusion

In *In the Matter of Howard Sleeper, No. RA 84-53(C) (1985)*, the Rio Arriba County district court, sitting in a trial de novo appeal from the State Engineer, rejected a proposed change that would have shifted longstanding irrigation water to supply an artificial lake connected to ski-resort development. The court set aside the State Engineer’s approval and denied the application after finding that the transfer would impair existing Rio Brazos water rights and that the change, as proposed, was contrary to the public interest.
