Marbob Energy Corporation, a Corporation, Petitioner-Petitioner v. the New Mexico Oil Conservation Commission…

Summary

The New Mexico Supreme Court held that the Oil Conservation Commission and the Oil Conservation Division exceeded their statutory authority under the Oil and Gas Act by adopting Rule 1227, which authorized them to assess civil penalties administratively for violations of the Act or related rules, orders, and regulations. Reading Section 70-2-28's mandate that the Division act through the Attorney General to 'bring suit ... for penalties, if any are applicable' together with the Act's penalty provisions, the Court held that the Attorney General must establish liability and assess civil penalties in a court action, and that this specific provision controls over the agencies' general enforcement grants in Sections 70-2-6 and -11. The Court accorded the Commission little deference because statutory construction is a question of law outside its expertise, and reviewed the district court's contrary judgment de novo. The Court reversed and invalidated Section 19.15.5.10(B)(2) NMAC.