Almost 2 years ago, in one of our first blogs, we posted about a groundwater case pending in front of the Texas Supreme Court. At the time, none of us predicted that we would have to wait over 2 years for a decision, but wait we did — until Friday. On February 17th, the Texas Supreme Court issued perhaps the most important decision governing groundwater since the 1904 East case declared that right of capture was Texas' official system of allocation. While we were awaiting a ruling, the Texas legislature tried to answer the same question posed to the court with SB 332. After enacted legislation and a 50-page opinion, the only thing that we can be certain about is more uncertainty.
Although Texas recognizes right of capture, there was a question regarding when the property right is perfected. The fundamental issue in the Edwards Aquifer Authority (EAA) v. Day case is whether an overlying landowner owns the groundwater beneath her property “in place” or whether ownership of the groundwater only vests once the groundwater has been captured through pumping. If the property right is held in place, regulations promulgated by groundwater districts limiting pumping by a landowner may constitute a constitutional taking requiring compensation. Consequently, imposing regulations to ensure groundwater sustainability may be become difficult if not impossible.
The Day case was initiated when the plaintiff landowners requested 700 acre-feet from the EAA and were granted a permit for 14 acre-feet so they brought a claim alleging a taking. The EAA grants permits based on proven historic use of the water between 1972 and 1993. The court explicitly held that landowners have a vested right in water in place; however, the court remanded the case to determine if a takings had occurred in this individual case. In defining the rule of capture, the court defined it as right of capture for oil and gas has been classified in the state.
While the ruling is being hailed as a victory by landowners, its true implications will not be known without further litigation. This means that future court decisions will be responsible for filling in the factual details of what constitutes a taking and what does not. Meanwhile, while that is getting sorted out around the state, groundwater pumping may be left unchecked during a critical time and a continuing drought will only exacerbate this problem. In addition to creating some uncertainty across the state, the ruling may put the legitimacy of multi-year, stakeholder driven Edwards Aquifer Recovery Implementation Program (RIP) into question. This is particularly unfortunate because it was a consensus-based approach to maintaining flow in the springs while still adhering to pumping limits. While only time will tell, it is alarming to think that this ruling may have created more questions than answers thus putting our already fragile groundwater resources at further risk.