Government regulation of groundwater just became a lot more precarious in Texas. The Texas Supreme Court recently ruled that landowners own the groundwater upon which their land sits, which means that the State of Texas has to be extra careful in how it regulates groundwater use. Specifically, landowners may be entitled to compensation if the state’s groundwater regulations go to far. Which regulations “go to far”? At this point, nobody knows and will most likely be decided in future court cases.
The whole case started back in 1996 when Burrell Day and Joel McDaniel requested a permit from the Edwards Aquifer Authority (EAA) to pump 700 acre feet of water from the Edwards Aquifer which sat directly underneath Day and McDaniel’s 350 acre ranch in Van Ormy, Texas. The EAA ruled that the ranch had not historically used 700 acre feet of water and therefore, granted them a permit for 14 acre feet. Day and McDaniel filed a “takings claim” against the EAA alleging that the EAA had violated their constitutional right to use of the groundwater without compensation.
The Texas Supreme Court ruled that groundwater, like oil and gas, was owned by the landowner under which the groundwater was found. Furthermore, the court found that the EAA’s “historical use” policy violated the Texas Water Code’s permitting factors. Although the court agreed that Day and McDaniel had property rights in their groundwater, the court did not decide whether Day and McDaniel were entitled to compensation for the EAA’s restriction of their groundwater use. That issue was sent back to the trial court to be decided. The court’s entire decision can be found at Edwards Aquifer Authority v. Day.
The case has received national recognition with opinions on both sides.
Environmental groups believe that the decision may create a situation where the Texas water districts have to essentially buy out everyone’s groundwater in order to properly preserve and maintain the state’s aquifers. Landowners, obviously pleased with the ruling claim the decision ensures reasonable regulation in balance with the property rights of landowners.
Jesse Richardson Jr., an attorney and professor in the Department of Urban Affairs and Planning at Virginia Tech University and a board member for the American Agricultural Law Association stated “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.”
Everybody agrees that the ruling will lead to more litigation.