Mike Gershon, Lloyd Gosselink, PC Stacey Reese, Stacey Reese Law, PLLC Celina Romero, Duggins Wren Mann & Romero, LLP

1. Texas Case Law – Decisions Affecting
District Regulation
and Groundwater Rights
presented by
Mike Gershon – Lloyd Gosselink, PC
Stacey Reese - Stacey Reese Law, PLLC
Celina Romero - Duggins Wren Mann & Romero, LLP
Austin, Texas
October 24, 2018

2. Texas Case Law: Types of Issues Litigated
_______________________________________________________
• Property Rights – the nature of the groundwater interest
and who gets to use it
• Authority of Districts to Regulate
• Permitting Decisions
 Who is qualified to protest
 Appeal of Districts’ decisions
• Takings Claims
• Federal Constitutional Claims (due process, equal protection)
• Enforcement

3. Rule of Capture is
“Law of the Biggest
Pump”
No remedy if neighbor
pumps you dry
Houston Texas Central
Railroad Co. v. East
(Tex. S. Ct. 1904)

4. Rule of
Capture
1904 All states follow it except New
Hampshire.

5. Rule of
Capture
1904 All states follow it except New
Hampshire.
1939 11 states follow it.

6. Rule of
Capture
1904 All states follow it except New
Hampshire.
1939 11 states follow it.
1960 3 states follow it.

7. Rule of
Capture
1904 All states follow it except New
Hampshire.
1939 11 states follow it.
1960 3 states follow it.
1999 Only in Texas.

8. Rule of
Capture
1904 All states follow it except New
Hampshire.
1939 11 states follow it.
1960 3 states follow it.
1999 Only in Texas.
2012 Texas qualifies it.

9. Rule of
Capture
Why it made sense…
East (1904):
(1)“Hopeless
uncertainty” and
“practically
impossible” to
regulate a
“secret, occult,
and concealed”
resource
(2)Would impede
economic
development to
award $ damages
Ozarka (1999):
“Neither [reason]
remains valid.”
“[I]t is not
regulation that
threatens progress,
but the lack of it.”
Day (2012):
Under the Rule of
Capture, “legislators
had inadequately
provided for the
protection of
groundwater
supplies.”

10. Day/McDaniel v. Edwards
Aquifer Authority
(Tex. S. Ct. 2012)
“Ownership
in Place”
Doctrine
(2012)Rule of
Capture
Preferred
Method of
Groundwater
Management
by Districts
Ownership-in-place: “In our state the landowner is regarded as having
absolute title in severalty to the [water] in place beneath his land. The
only qualification of that rule of ownership is that it must be considered in
connection with the law of capture and is subject to police regulations.”

11. Day v. EAA
Texas Supreme Court’s
Commentary on Takings
“The requirement of compensation may make the
regulatory scheme more expensive, but it does not affect the
regulations themselves or their goals for groundwater
production.”
“The Legislature can discharge its responsibility under the
Conservation Amendment without triggering the Takings
Clause. But the Takings Clause ensures that the problems
of a limited public resource – the water supply – are
shared by the public, not foisted onto a few.”

12. Bragg v. Edwards Aquifer
Authority
(Tex. S. Ct. Summer 2015;
Verdict in 2016 (on remand))
Held: Yes, EAA is liable.
Remanded to jury to
determine value that the
whole property was
impaired at the time of
taking (when EAA made
its decision). $2.5
million awarded, plus
interest.
Legal Issue: No Challenge to EAA’s decision.
Sole question is takings liability ($$)

13. End Op, L.P. (Recharge) and
Lost Pines GCD v.
Brown, Meyer, Hanna and
Environmental Stewardship
(Austin Ct. of App. Aug. 2018)
Legal Issues: To protest a groundwater permit application,
must a landowner have a well or intend to use groundwater
to satisfy injury elements of standing test?
How to appeal denial of party status?

14. End Op v. Brown, et al.
(Austin Ct. of App. Aug. 2018)
Standing Test:
• Personal legally protected interest w/in GCD’s authority
• Concrete, particularized injury to that interest
• Injury fairly traceable to issuance of permit
• Injury will be redressed by favorable decision on protest
________________________________
Relevant Facts about Protestants:
• Brown has shallow well and doesn’t intend to spend $150K+
on deeper Simsboro well
• Meyer doesn’t have $250K required for deep well
• Hanna receives public water and doesn’t need well
• Envtl. Stewardship’s ¼ acre too small for well under GCD’s rules

15. Cockrell Inv. Partners, Ltd.
(Belding Pecan)
v. Middle Pecos GCD
(pending in Pecos Cty. Dist. Ct.)
challenges settlements of
Fort Stockton Holdings, LP/Clayton Williams Farms v. Middle Pecos GCD
and Republic Water Co. v. Middle Pecos GCD
Technical Issue:
Belding Farms
concerned
about impacts
of Williams’
pumping on
their pecan
farm

16. Cockrell Inv. Partners, Ltd.
v. Middle Pecos GCD
(pending in Pecos Cty. Dist. Ct.)
ROUND 1: Williams’ federal lawsuit; administrative appeal of
permit denial and takings claim (intervenor/protestants City of
Fort Stockton, Pecos Cty., PCWCID1, BCGCD, lessors Ryans
and McKenzies, and Beards)
ROUND 2: Republic Water Co. of Texas, LLC new application;
federal and state lawsuits; SOAH referral
ROUND 3: lobby efforts, legislation, hearings
ROUND 4: settlement among all party litigants
• Permit issued for 28,000 instead of 47,418 ac-ft/yr
• Retired 28,000 ac-ft/yr historic use permit
• Subject to cutback at agreed aquifer-level triggers
ROUND 5: Cockrell Investments sues to block settlement;
Republic sues Williams and McCarthy, which settles
…to be continued

17. Lone Star GCD, et al. v.
City of Conroe, et al.
(recently decided by and appealed from
Montgomery Cty. Dist. Ct.)
Legal/Policy Issue: Large-volume pumpers challenge GCD’s
groundwater-reduction plan intended to convert pumpers to
surface water
Separate DFC appeal (settled)
Held: LSGCD did not have
express or implied statutory
authority

18. Fazzino/Stratta v.
Brazos Valley GCD
(pending in D. Tex. (Waco Div.))
Key Facts: Fazzino alleges drainage from City of Bryan’s existing well
BVGCD calculates worst-case 0.002% drained (de minimus)
Legal Issues: Fazzino requests that MARRS (oil-and-gas case) apply
to invalidate rules protecting Bryan’s well and other
existing-well permits and historic-use permits, and
takings claim ($100K)
Related cases:
• Fazzino v. Brazos Valley GCD
(dismissed from Robertson Cty. Dist. Ct.)
• Fazzino/BVGRA v. City of Bryan
and Brazos Valley GCD
(SOAH dismissed for lack of jurisdiction)

19. Fazzino/Stratta v. Brazos
Valley GCD
(pending in D. Tex. (Waco Div.))

20. Flying “L” Guest Ranch v.
Bandera Cty. River Auth.
and Groundwater Dist.
(pending in Bandera Cty. Dist. Ct.)
Facts: District initiates permit
amendment to reflect actual
beneficial use.
Ranch requests SOAH hearing on
its request for 2,096 ac-ft/yr based
on well capacity
District authorizes 736 ac-ft/yr:
301 ac-ft
+ 27 ac-ft variance
+ 408 ac-ft conditional
Administrative appeal and takings claim

21. OTHER CASES OF INTEREST
• Texas (GLO & School Land Bd.) v. Harrison, Yellow-Top Ranch, Inc.,
H.E. Cattle Co. and BHP Billiton (pending in Travis Cty. Dist. Ct.)
 Dispute over water ownership, revenues from sale for fracking
• Uvalde County UWCD, et al. v. Edwards Aquifer Auth., et al.
(pending in Uvalde Cty. Dist. Ct.)
 Challenge to EAA’s authority to allow severance and export of base
irrigation rights
• Coyote Lake Ranch v. City of Lubbock (decided in 2016)
 Tex. S. Ct. applies oil-and-gas “Accomodation Doctrine”
• Boulware, et al. v. Kinney County GCD (pending in Kinney Cty. Dist. Ct.)
 Admin. appeals of H&E use permit decisions several years ago

22. Texas Case Law – Decisions Affecting
District Regulation
and Groundwater Rights
presented by
Mike Gershon | mgershon@lglawfirm.com; 512.750.9628
Stacey Reese | stacey@staceyreese.law; 512.535.0742
Celina Romero | cromero@dwmrlaw.com; 512.495.8814