Groundwater Case Law

Stacey Allison-Steinbach

Texas Alliance of Groundwater Districts

Leadership Training

September 16, 2014

Groundwater Ownership

Other Noteworthy Cases*

GCD Inventory

Emerging Legislative Issues

Houston & TX Central RR v. East• 1904 TXSC decision; landowner’s well went dry when railroad

drilled well next door

• Court held landowners may capture unlimited amount of groundwater beneath their property

• Doctrine of nonliability for drainage, NOT a property rule (“Law of the biggest pump”)

• Provides little certainty and no protection

Limits: Rule of Capture• Trespass

• Malicious or wanton conduct

• Waste (but see Corpus Christi v. Pleasanton)

• Subsidence due to negligent over pumping (Friendswood)

The Evolution Continues• Pecos County WCID No. 1 v. Williams et al. (1954)• City of Corpus Christi

v. City of Pleasanton (1955)

• Friendswood Dev. Co. v. Smith-Southwest Ind. (1978)

The Evolution Continues (pt. 2)• Sipriano v. Great Springs Waters of America

(1999)• City of Del Rio v. Hamilton Trust

(2008)•Guitar Holding v. Hudspeth

County UWCD No. 1 (2008)

Legislature Weighs In (SB 332)• Landowners own groundwater below the surface as real

property

• Landowner entitled to drill for and produce groundwater, but not a specific amount

• GCDs may limit or prohibit drilling based on spacing or tract size and regulate production of groundwater

• EAA/subsidence districts excluded

EAA v. Day & McDaniel

Facts• 1956: irrigation well drilled; used until 1970s• Before 1983: well casing collapsed/pump removed; well

continued to produce water that was stored in holding tank and used for irrigation and recreation

• 1993: EAA created; historic use period ends• 1994: Plaintiffs purchase property• 1996: Plaintiffs timely request 700 acre-feet; EAA denies based

on no historic use

Issues• Did EAA err in limiting permit to 14 af?• Do plaintiffs have a constitutionally protected interest in

the groundwater beneath their property?• Did the EAA’s denial of a permit in the amount requested

constitute a taking?• Are plaintiffs’ other constitutional arguments valid?

Holding• Did EAA err in limiting permit to 14 af? No• Do plaintiffs have a constitutionally protected interest in

the groundwater beneath their property? Yes• Did the EAA’s denial of a permit in the amount requested

constitute a taking? Don’t Know• Are plaintiffs’ other constitutional arguments valid? No

Analysis• Rule of capture and ownership in place NOT mutually exclusive

• Property interest in groundwater in place subject only to rule of capture and GCD regulations

• Penn Central analysis

• EAA acted in accordance with EAA Act; did NOT say whether taking occurred (now settled)

EAA v. Bragg

Facts• Two pecan orchards, one with historic use

• EAA issued one reduced permit and denied other

• Braggs were forced to purchase water for irrigating (10% increase in irrigation costs)

• Trial court found for plaintiffs

• Who is the proper party – the EAA or the State?

• Did the EAA’s actions amount to a taking?

• How should damages be measured?

Issues

• Who is the proper party – the EAA or the State?

• Did the EAA’s actions amount to a taking? Yes

• How should damages be measured? Value of orchards before and after

Holding

Takings Analysis

• Economic impact

• Interference with investment backed expectations

• Character of governmental action

• “Other Relevant Factors”

What We Know• Land ownership includes a constitutionally-protected interest in

groundwater in place that cannot be taken for public use without adequate compensation

• That interest does not preclude regulation by a GCD in accordance with Chapter 36 of the Water Code

• Some limitation of groundwater production does not constitute a compensable taking

What We Don’t Know• How much regulation is too much?

• Is there a distinction between EAA and Chapter 36 GCDs when it comes to a takings claim?

• How will different “uses” be affected?

• Will there be unintended consequences?

• How are damages are calculated? (see Bragg)

Groundwater Ownership

Other Noteworthy Cases*

GCD Inventory

Emerging Legislative Issues

FPL Farming v. EPS• Groundwater trespass case

• Rice farmer claims wastewater from EPS injection well migrated into saltwater aquifer beneath farmer’s land

• Trial court and court of appeals found for EPS, but TXSC held that obtaining a permit does not provide protection against tort liability

• On remand, Beaumont court of appeals held operator liable for trespassing; back on appeal at TXSC

LULAC v. EAA• League of United Latin American Citizens challenged EAA’s

state-mandated precinct voting system

• Argue one-person/one-vote should be used

• Special-purpose districts generally excluded from constitutional provision

Forestar v. Lost Pines GCD (x2)

Directors sued in both official and individual capacities in both cases

• Appeal of Board’s denial of hearing request on Griffin Industries permit application

• Permit for 224 af/year

• Lee Co. takings lawsuit• Uncontested permit

applications for 45K af/year • Board granted 12K af/year

based on proposed use during permit period

Homework (Current Cases)• City of Lubbock v. Coyote Lake Ranch, LLC

• Middle Pecos Groundwater v. Fort Stockton Holdings

• Kinney County GCD lawsuits

• Cities of Richmond and Rosenberg v Fort Bend SD

• Wimberley Valley Watershed Assoc. v Hays-Trinity GCD

Groundwater Ownership

Other Noteworthy Cases*

GCD Inventory

Emerging Legislative Issues

GCD Inventory

http://www.texasgroundwater.org/resources/gcdi.html

Groundwater Ownership

Other Noteworthy Cases*

GCD Inventory

Emerging Legislative Issues

83rd Legislature - Groundwater• HB 1563: fees of office for GCD Board increased

from $150 to $250/day; cap still $9,000• SB 1282: DFC proposal deadline extended to

May 1, 2016• Dozens of major groundwater bills did not pass

Emerging Issues – What’s Next?• Long-term permitting

• Desalination, brackish groundwater, and aquifer storage and recovery

• Groundwater and oil and gas (hydraulic fracturing, injection/disposal wells)

• Well construction standards and enforcement

• DFC Appeals (see prior case law)