On May 17, 2016, the trial court in Bragg v. Edwards Aquifer Authority entered a judgment in favor of the Braggs awarding them damages in excess of $4.5 million for the taking of their groundwater rights related to their inability to obtain a permit to maintain and grow their pecan orchards purchased prior to the enactment of the Edwards Aquifer Authority Act. The case has more than a 15-year history of litigation and appeals and now represents the first judgment by a landowner under the guidelines outlined by the Fourth Court of Appeals in this litigation.
The appellate court decision outlining the appropriate measure of damages in a takings claim involving groundwater sets a precedent which clearly favors protection of historic use. What is unanswered is how groundwater conservation districts manage the resource in connection with new users while simultaneously protecting historic investment and use.
In an opinion issued May 27, 2016, the Texas Supreme Court in Coyote Lake Ranch, LLC v. The City of Lubbock, ruled that the accommodation doctrine applicable in oil and gas disputes between mineral lessees and surface owners applies to groundwater development in Texas. Specifically, the City of Lubbock is required to address and minimize the impact of their reserved groundwater development on the surface estate owned by Coyote Lake Ranch. The Court also held for the first time that the severed groundwater estate is the dominant estate and has the implied right to use as much of the surface estate as reasonably necessary to produce groundwater. The Court reasoned that without such right, a reservation or grant of such estate would be worthless. However, the Court clarified that if an agreement includes specific provisions that speak to how the groundwater estate owner may explore and produce groundwater from the surface, the accommodation doctrine is not applicable. This represents a victory for landowners whose surface property is burdened by past conveyances of groundwater development rights; but, more importantly, solidifies the Supreme Court’s application of the ownership law applicable to minerals will likewise be applied to groundwater.