Court rules groundwater protected property

Mar 2, 2012
by DTN

Texas farmers and other landowners have property rights to groundwater on their lands and are protected from a taking by either regulation or eminent domain, the Texas Supreme Court ruled last week.

The ruling could be critical to Texas farmers who make claims on groundwater usage with local water districts. However, it remains to be seen whether the decision will create a ripple effect across the country.

The state’s highest court found in favor of two Texas farmers who challenged the Edwards Aquifer Authority (EEA), according to the court’s ruling. In 1996, Burrell Day and Joel McDaniel requested a permit to pump water for crops from the Edwards Aquifer on a ranch near San Antonio.

The farmers wanted to use 700 acre feet of groundwater below their land, but EAA permitted just 14 acre feet because the producers were unable to prove historical water use on the property, according to court documents. The farmers alleged the aquifer authority violated their constitutional rights, and they made what is called a takings claim to seek compensation for the limits placed on their groundwater usage.

Jesse Richardson Jr., an attorney, a professor in the department of urban affairs and planning at Virginia Tech University, and a board member for the American Agricultural Law Association, said the ruling could have national significance.

Right now there are 11 other states that have the same rule of capture on the books as Texas, he said. The rule of capture means the first person to drill a well and pump water on the land, owns that water. Those states are Connecticut, Georgia, Indiana, Louisiana, Maine, Minnesota, Massachusetts, Mississippi, Texas, Rhode Island and Vermont.

The Texas Supreme Court recognized that some groundwater owners choose to not produce water immediately and instead hold water for future needs, Richardson said. That means it is a “valid and valuable” use of groundwater that must be recognized by conservation districts in establishing de sired future conditions of an aquifer, he said.

“The court pointed out that to base the decisions solely on historical use provides a ‘perverse incentive’ for everyone to immediately start pumping as much as possible,” Richardson said. “As recently as a few years ago, many legal scholars opined that regulation of water rights could never be a taking.”

The Texas Supreme Court joins a growing number of state supreme courts and federal courts, he said, in recognizing that groundwater rights are real property rights protected by state and federal constitutions.

The Day case has been remanded to a trial court, where it will be determined if the restrictions placed on the water constitutes an illegal taking, according to the Texas Supreme Court ruling.

Takings cases are difficult to prove and often costly to litigate, Richardson said, even if a landowner may have a legitimate taking claim that could result in financial compensation. However, he said the ruling is favorable to farmers in many respects.

They are now able to argue that they plan to use groundwater for future expansions of the farm, Richardson said.

“Farmers clearly have a possible claim for regulation that ‘goes too far’ in restricting their use of groundwater,” he said. “How far is too far is a very difficult question, however. Water authorities will likely be more circumspect in regulating groundwater use now that they know that regulation that is too stringent may amount to a taking and compensation may be owed. I think the decision will result in more litigation over groundwater regulation.

“Overall, I think the decision is positive for farmers.

The ruling that a landowner has a right to the groundwater in place—allowing purchase and sale of those rights, for example—is huge.”

Billy Howe, state legislative director for the Texas Farm Bureau Federation, said the ruling has brought at least some certainty to farmers.

“Now they don’t feel like the government can take ‘their water,’ “ he said.

In Texas, farmers have faced eminent domain issues as well, where land has been condemned to gain access to groundwater, Howe said.

“But the governmental entity tried to argue they only had to pay for the land because the landowner doesn’t own the groundwater,” he said. “So, it belays those fears as well. We will have some irrigators that will be unhappy because they can’t use the districts to restrict their neighbors from getting water.”

Howe said he believes the Texas ruling will have little influence on similar issues in other states.

The Texas Supreme Court put in place the rule of capture for the state in 1904, he said, at the same time the California Supreme Court adopted groundwater rights for their landowners.

“So, if there was going to be a national movement towards the landowner owning the groundwater as part of their land, then it should have happened over 100 years ago after the California ruling,” Howe said.

Texas landowners have had ownership rights to minerals and other materials on their land, he said. So the Texas ruling followed previous legal precedents in the state on oil and gas ownership.

“We have very diverse aquifers in Texas, and the crops grown in each region are diverse as well,” Howe said. “The ultimate result of the ruling for irrigated farmers is that the districts cannot protect their use to the detriment of other landowners.”

He said the government still can regulate groundwater to protect the public health, safety and welfare “as long as the regulation is reasonable and non-discriminatory.”

In recent years, many areas of Texas have suffered severe drought that has caused concerns about how to best conserve aquifers.

Howe said state water districts still will be able to make decisions in response to the drought that encompasses a portion of the Ogallala Aquifer in the Texas Panhandle.

“Those groundwater districts already have wellspacing and allocate groundwater on a per-acre basis, so the impact will be minimal,” he said.

Groundwater conservation districts in Texas, Howe said, must show that their rules for preserving groundwater are necessary. Water district rules cannot create “winners and losers.”

“Therefore, groundwater use can still be restricted as long as it is justified to conserve the groundwater resources, and the restrictions do not create a situation where the land associated with the groundwater is no longer economically viable,” he said.

“Such a situation, as with any other regulatory taking, would require the landowner to be compensated for the loss of land value.” — Todd Neeley, DTN