"Arizona is trying to fend off a lawsuit in which a company is suing the state over its refusal to allow ground water to be piped to neighboring Nevada to support new development.

The lawsuit pending in federal court in Las Vegas contends, among other things, that the denial interfered with interstate commerce and that Arizona officials violated a federal racketeering law by conspiring with project opponents and by purposely stringing out consideration of the application to "throw up numerous costly bureaucratic hurdles."

The state's alleged intentional mishandling of Wind River Resources LLC's application left then-majority owner Erika Van Alstine financially insolvent, forcing her to sell a majority stake in the Arizona-based company, according to the lawsuit.

Lawyers for the state Department of Water Resources have yet to respond to the lawsuit's charges, instead asking that the lawsuit be thrown out on jurisdiction and other legal grounds, including Wind River's failure to appeal administratively. If the case isn't dismissed, it should at least be transferred to federal court in Arizona, the state's lawyers contend.

Wind River, whose lawsuit seeks unspecified damages, sought to pump water from the Muddy Creek aquifer in the Mormon Wells area north of Beaver Dam and transport it to the Virgin Valley Water District in nearby Mesquite, Nev.

The March 15, 2005, application was the first submitted to the Department of Water Resources for a decision under a 1989 state law that set criteria for transporting water out of Arizona. The law was enacted seven years after the U.S. Supreme Court ruled that groundwater is subject to the U.S. Constitution's protections for interstate commerce."

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