I've posted twice on the Bounds case (18 July 2008; and 18 February 2010). The case involves a claim against the State Engineer for allowing domestic wells without considering the possible impairment of senior water rights in a fully appropriated basin.
Here is what I wrote last February:
In July 2008 I posted about the Bounds decision in which a state judge in New Mexico struck down that state's law allowing the drilling of domestic wells without a permit or water right - so-called 'exempt' wells. The ruling applied only to Luna, Hidalgo, and Grant counties in the southwest portion of the state. Although it applied only to three counties, it was quite a stunning decision, not just in New Mexico, but throughout the West.
The case is finally coming before the New Mexico Court of Appeals, which will hear an oral argument on 22 February 2010.