Litigation Update: WATER RIGHTS UPDATE: LANDOWNERS SCORE WIN AGAINST WATER AUTHORITIES – BUT QUESTIONS REMAIN

In 2013, in the Edwards Aquifer Authority v. Glenn and JoLynn Bragg decision, the Texas Fourth Court of Appeals, for the first time in Texas history, ruled that the regulation of groundwater violated a property owner's rights under the Texas Constitution.  This decision has potentially far reaching implications and was quickly appealed to the Texas Supreme Court.  Water rights advocates and local water authorities eagerly watched to see if the Supreme Court would uphold the lower court's ruling.  However, to the surprise of many water rights experts, the Supreme Court made news for failing to consider this issue on appeal, thus, leaving the issue of groundwater regulation murky and uncertain.

Background

The State owns the rivers, lakes, and streams located in Texas. This is well-established and unquestioned.  However, as the Texas population continues to increase and water becomes more scarce, groundwater (also referred to as percolating water) has become increasingly important.  Groundwater belongs to the owner of the land located above the water source.  Prior to 1985, Texas followed the "rule of capture," which provided that a landowner could pump as much water from underneath her property, even if this was detrimental to a neighboring property or the State.  However, in 1985, the Texas Legislature attempted to remedy problems associated with this principle and placed groundwater regulation into the hands of local water conservation districts.  Unsurprisingly, this often became a very political process.  Today, nearly 100 separate water conservation districts exist in Texas.  These districts have different rules and regulations, thus, making it difficult for landowners to know their rights and limitations.  Furthermore, these conservation districts are permitted to operate with little oversight despite having the ability to impose significant regulation on a property owner's right to draw groundwater located below their land through strict permitting and other means.

The Underlying Case

In the late 1970's, Glenn and JoLynn Bragg invested in a 100 acre property located in Hondo, Texas, that sat above the Edwards Aquifer with the intention of growing pecans. The couple invested over $2M in their business and it blossomed. The Braggs irrigated the orchard from a well drawing on the Edwards Aquifer.  However, in 1993, the Edwards Aquifer Authority was created and regulations were imposed.  When the Authority restricted the amount of water that could be pumped from underground through a restrictive permitting process, the Braggs sued the Authority and argued that the restrictions on their pumping rights constituted a "taking" under the Texas Constitution, a notion first alluded to in the 2012 Texas Supreme Court ruling of Edwards Aquifer Authority v. Day.

The Court of Appeals agreed with the Braggs and found that the Authority's restrictions unconstitutionally affected their "unrestricted right to the use of the water beneath their land." The Court found that this unrestricted right outweighed the importance of protecting terrestrial and aquatic life.

What Does This Mean?

The Court of Appeals' ruling initially fueled the debate between groundwater protection and private property rights, and the issue appeared ripe for a landmark ruling by the Texas Supreme Court. After receiving full briefing from the parties, the Supreme Court issued a decision denying the petitions and refusing to render an opinion.  As it stands, the unchallenged Appellate Court's ruling seemingly tips the balance towards landowners when faced with limits to their water use imposed by groundwater districts.

The appellate decision, and lack of direction from the Supreme Court, means Texas groundwater authorities should fear that landowners across the state will be encouraged to attack existing regulation on their pumping. Their arguments are only bolstered by the Appellate Court's ruling.  To that end, landowners now have strong footing in the assertion that regulations limiting their ability to pump groundwater represent a "taking" that deprives them of their property right in the water underlying the land.  In application, groundwater authorities could find that current and future regulations restricting a landowner's ability to pump groundwater could require compensation to landowners.

Nonetheless, additional issues remain and uncertainty continues to exist. Specifically, will this ruling apply if property is purchased after the creation of the regulating water authority, and how will future denials of pumping permits be affected?  Until the Texas Supreme Court clarifies these issues, litigation will likely ensue and appellate court opinions could begin to splinter, thereby, further muddying groundwater regulations across Texas.

sriddle