Supreme Court Ruling Threatens Groundwater Regulation

The Houston Lawyer

In a much anticipated decision further enhancing the property rights of individual landowners at the expense of governmental entities, the Texas Supreme Court in a unanimous decision announced on February 24, 2012, held that “… land ownership includes an interest in groundwater in place that cannot be taken for public use without adequate compensation guaranteed by article I, § 17(a) of the Texas Constitution.” This landmark decision, Edwards Aquifer Authority and State of Texas v. Day & McDaniel, No. 08-0964 (Tex. Feb. 24, 2012), determined that two landowners who had bought a 380-acre tract of land overlying the Edwards Aquifer could not be denied the right to drill a well into and pump water from the aquifer by the Edwards Aquifer Authority (“EAA” or the “Authority”) unless they were compensated for this “governmental taking.”

The EAA has been charged by the Legislature with issuing permits to authorize withdrawals of water from the Edwards Aquifer, an underground aquifer located generally in an arced curve from Brackettville, west of San Antonio, to Austin. The legislation creating the EAA specified that no water could be taken from the aquifer without an EAA-issued permit and that the EAA was to give preference to existing users and their successors and principals over newer users. Indeed, with few exceptions, the EAA Act prohibited withdrawal of water from the aquifer through any well drilled after June 1, 1993 and directed the EAA to issue permits for the withdrawal of water from the aquifer based upon “historical use” prior to that time.

Day and his partner sought a permit to drill 700 acre-feet of water to irrigate a 300-acre tract and stock a 50-acre lake but, after several hearings, the EAA found that Day and his partner were entitled only to a permit to drill 14 acre-feet of water. After a trial court found for Day on his permitting claim but dismissed his constitutional claims, the Court of Appeals affirmed the Authority’s decision to issue the permit for 14 acre-feet but held that “… landowners have some ownership rights in the groundwater beneath their property … entitled to constitutional protection.” Thus, the court held that Day’s constitutional claims should not have been dismissed by the trial court. The Supreme Court affirmed this finding in all respects, specifying
that Day, indeed, “… has a constitutionally protected interest in the groundwater beneath his property …” and directing that the issue of the amount of damages due to Day as a result of this governmental “taking” must be determined by the trial court in further proceedings.

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