Day Ruling Breaks Legal Logjam in Texas Water Law

Note: This article originally appeared in the Lubbock Avalanche-Journal on March 25, 2012.

On Feb. 24, Texas landowners won a historic victory for their ownership of the groundwater “in place” below the surface of the land. In this landmark decision, Edwards Aquifer Authority v. Day, the Texas Supreme Court ruled that landowners have a real property right in groundwater protected from regulatory “takings” without just compensation under Article 1, section 17(a) of the Texas Constitution.

In this case, landowners Burrell Day and Joe McDaniel claimed regulation by the Edwards Aquifer Authority had so denied them of the use of the groundwater below their land that the authority’s restriction amounted to a compensable taking of private property protected by the Texas Constitution.

Rejecting the claims of the EAA – and, in part, of the state – the court agreed with the landowners: “Groundwater rights are property rights subject to constitutional protection whatever difficulties may lie in determining adequate compensation for a taking.”

The court remanded the case to district court to factually determine whether Day and McDaniel were constitutionally entitled to financial compensation.

This decision resolves a question about ownership of groundwater that has remained unsettled throughout more than a century of Texas Supreme Court rulings on groundwater rights. Simply stated, that question asks who owns the water “in place” below the land – the groundwater residing under the surface before it’s pumped to the surface and captured.

In Day, a unanimous court replied under Texas common law, the landowners own the groundwater just as they own the oil and gas below their property.

The court noted under Texas law, “the landowner is regarded as having absolute title in severalty to the oil and gas in place below his land. The only qualification is that it must be considered in connection with the law of capture and is subject to police regulation.”

The court held this rule also “correctly states the common law regarding the ownership of groundwater in place.”

The court rejected a commonly held view that the rule of capture, long recognized in Texas law, precludes ownership of groundwater in place. The court in Day found the rule of capture defines the method of exercising the landowner’s property right and is a protection against liability for drainage, but does not define the scope of the ownership right itself.

Day also neatly resolves what many construe as a vexing question about how to apportion multiple landowners’ interests in shared groundwater resources. Day notes existing regulation of groundwater – just as existing regulation of oil and gas – already has created and now apportions correlative rights to these shared underground resources.

Unusually, Day aligns Texas common law with statute and carefully extends the meaning of legislation enacted through the recent 82nd Texas Legislature which similarly re-affirmed Texas landowners’ legal interest in groundwater as real private property rights.

Questions about groundwater rights have become increasingly contentious in the last 10 years. The rapid growth of regulation through local groundwater districts and new laws to establish long-term aquifer management through regulatory rubrics such as “desired future conditions” and “managed available groundwater” are not readily consonant with a landowner’s rights.

The unprecedented intensity of the droughts of 2009 and 2011, however, heighten the urgency of reconciling the conflicting needs for more conservation and more development of groundwater – both somehow necessary to meet the inexorable demands of the growing Texas population.

Legal uncertainty surrounding groundwater has stalled key legal and financial decisions about the state’s water supply.

While the Supreme Court’s decision does not necessarily provide easy answers to these complex but unavoidable questions, Day clearly answers the fundamental question about groundwater ownership at the center of current policy disputes.

By making groundwater ownership legally equivalent to ownership of oil and gas, the court’s ruling attaches a highly developed body of common law, statute, and regulation to inform landowners and regulators. The court’s comprehensive ruling breaks a major legal logjam in Texas water law.

Most importantly, the Texas Supreme Court in Day reminds the state and local regulators that the financial burden of upholding a landowner’s constitutionally protected ownership of groundwater is no excuse for denial of those rights recognized through more than a century of Texas law.

We are lucky to live in a state where our Supreme court is willing to resist the rising tide of the times toward more government control and less individual liberty.

Thank you to the Texas Supreme Court for reaffirming that our state constitution – just as our national constitution – was written to protect individual rights from the government’s encroachment of those rights.