Texas Oil and Gas Attorney Blog
Recently, the Texas Supreme Court issued an important opinion that clarified a Texas landowner’s groundwater rights. In the case of Edwards Aquifer Authority and the State of Texas v. Burrell Day and Joel McDaniel the Court was faced with the issue of whether land ownership includes an interest in groundwater in place, which therefore could not be taken for public use without the adequate compensation mandated by the Texas Constitution. The Court found that it does, and used Texas oil and gas law to assist in its reasoning, comparing the characteristics of mineral rights to groundwater rights.
Burrell Day and Joel McDaniel bought land situated over the Edwards Aquifer in 1994 to grow oats and raise cattle. A well for irrigation had been drilled in 1956 but had collapsed or been removed by the early 1980s. However, water continued to flow due to artesian pressure, contributing much of the water to a lake on the property. To continue to use the well or replace it, Mr. Day and Mr. McDaniel needed a permit from the Edwards Aquifer Authority. The Authority has detailed, strict requirements that are based heavily on historical use for water from this aquifer, which supplies most of the water for south central Texas. Mr. Day and Mr. McDaniel requested a permit from the Authority to allow them to draw 700 acre-feet from the well. The Authority granted them a permit for only 600 acre-feet. They took the matter to an administrative judge, who found that the historical use for this property was only 14 acre-feet.Mr. Day and Mr. McDaniel appealed to the District Court, where they alleged that the Authority’s denial of their requested use was an unconstitutional taking without compensation. The Texas Constitution allegation required the State of Texas as a party. The Texas District Court granted Mr. Day and Mr. McDaniel’s claim on the issue of the amount of water allowed to be used, but it denied relief on the constitutional claim. Both sides appealed that ruling. The Texas Court of Appeals reversed, and held that landowners have a right to the water under their land, but that groundwater flowing into a reservoir for public use was “state water” and therefore subject to regulation.
All three parties-Mr. Day and Mr. McDaniel, the Authority, and the State-petitioned to the Texas Supreme Court to hear this case. In a decision by Justice Hecht, the Court found that groundwater in place beneath property is owned by the landowner and restricting its use can constitute a taking under the Constitution which requires adequate compensation. The Supreme Court found that the Authority’s process of allowing water based on historical use was contrary to the Texas Water Code. The State and the Authority failed to show why the Authority’s permit process should be more restrictive than the Water Code. Finally, the Supreme Court held that a landowner cannot be deprived of groundwater under his property either because he did not use it previously or because the water supply is limited.
The Supreme Court discussed, but discarded, the argument by the Authority and the State of Texas that this ruling would flood the courts with litigation on this issue, and said that the burden on government does not override the takings clause of the Constitution. The Court also briefly compared groundwater rights to the treatment of mineral rights under Texas oil and gas law, and found no common law basis to differentiate between the two subterranean resources.
This decision by the Texas Supreme Court illustrates Texas’ leadership on these sorts of complicated property law questions involving the resources below our feet.
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