By Ben Love
Livestock Weekly, Feb. 3, 2011
(Ben Love is a Brewster County rancher and attorney specializing in real estate and natural resources law.)
Ask any rural Texas landowner, “Who owns the water under your land?” and the answer will be a resounding, “I DO.” Recently however, some groundwater conservation districts and the Edwards Aquifer Authority have taken the position that landowners do not own the groundwater under their land.
Texas groundwater law has a long and seemingly clear judicial history of affirmation of ownership by the surface owner. As early as the 1904 case of Houston & Central Texas Railway Co. v. East the Texas Supreme Court established the Absolute Ownership Rule of groundwater ownership. In East, the Court reasoned that the owner of the land was the “absolute owner of the soil and percolating water (groundwater), which is a part of, and not different from the soil, and that groundwater is the same as the land and cannot be distinguished in law from the soil.” The East case has been long relied upon in Texas and has never been overturned.
Over the past 10 years or so, GCDs have proliferated across the Texas landscape with about a hundred currently in existence. Most are doing exactly what they were created to do, regulate to promote management and conservation of groundwater within their district boundary. Unfortunately, some GCDs are now concerned about the absence of a clear-cut bright line defining how far they can go in the regulation of groundwater before becoming liable to landowners for money damages for going too far. The vested ownership of groundwater in place forms the basis of their concerns, and absent such vested ownership rights, there would be no limit to the extent they could regulate without liability to anyone.
A new, untested theory has been put forth which could clear the way for GCDs and the EAA to be absolved of all liability for over-regulating groundwater. Simply put, they don’t deny that landowners have ownership rights in groundwater, but they creatively contend that ownership only vests when the water is produced on the surface under the Rule of Capture, not when the water is in place under the surface. This novel theory, if adopted either directly or indirectly by the State of Texas, would essentially remove all hurdles for complete control of groundwater by GCDs and the EAA.
Greg Ellis, the former executive director of the Texas Alliance of Groundwater Districts and former general manager of the Edwards Aquifer Authority, has repeatedly stated his belief that “Groundwater is like the clouds; no one can actually own it.”
On January 12, State Senator Troy Fraser, R-Horseshoe Bay, filed Senate Bill 332, which would clarify the ownership of Texas groundwater by the surface owner. SB 332 states that landowners have a vested ownership interest in the groundwater beneath their property while recognizing the role locally elected groundwater conservation districts play in helping manage and conserve it. Senator Fraser noted that “a vested ownership interest is a property right a landowner can legally protect, and the right to produce groundwater is a property right that is exclusively the landowner’s. No one else can come onto private property, drill a well, and start pumping groundwater. If someone were to attempt it, the landowner could legally stop them.” The purpose of SB 332 is simply to clarify this in the Texas Water Code.
The opposition to SB 332 is already fierce in some quarters of the state, with some GCDs claiming its passage would herald a flood of regulatory “takings” lawsuits against groundwater districts. The fear of regulatory takings litigation is the underlying basis of the theory that no one owns groundwater. This theory is based on the premise that if no one owns it, then no one can maintain a cause of action against any water authority for compensatory money damages as a result of over-regulating it. However, nothing contained in SB 332 can be remotely construed to alter existing Texas law with respect to regulatory takings claims and in no way denies ground water districts the right to reasonably regulate groundwater.
Both the federal and Texas Constitutions prohibit the government, or political subdivisions thereof, from taking private property without paying just compensation. What is a “taking”? A taking may occur as a result of government occupation of private property or as a result of over-regulation of private property.
Several factors are considered to determine whether a taking has occurred, including whether the regulation has destroyed all economically viable use of the property, if it unreasonably interferes with the use and enjoyment of the property, the character of the regulatory action, and whether the regulation substantially advances legitimate state interests. Takings are extremely difficult to prove in court. But perhaps the greatest practical factor shielding groundwater districts from unwarranted takings claims is found in Section 36.066(g) of the Texas Water Code. This section provides that if the groundwater district prevails in a suit, the claimant may be liable for all the district’s attorney fees, expert witness fees, costs of court, and other costs.
Before filing a takings lawsuit, any takings claimant must take into consideration the fact that if he prevails at the district court level, he can almost be assured that the agency will take the case up on appeal, and the associated costs will begin to skyrocket. This is not a gamble to be taken lightly by a claimant and is likely the reason Texas courts have tried relatively few water takings claims.
The important issue of ownership of groundwater is often confused with the longstanding Texas Rule of Capture. In a recent appellate court decision, the San Antonio Court of Appeals affirmed that the Rule of Capture is “a doctrine of non-liability for drainage, not a rule of property.” It simply means that a landowner whose property is being drained of groundwater by his neighbor has no judicial remedy, and contrary to popular belief, it does not mean that the landowner does not own the groundwater beneath his land until he produces it at the surface. It is not the Rule of Capture that is under attack in Texas, but the ownership of groundwater in place.
Reversing the historic Absolute Ownership Doctrine of private ownership of groundwater in Texas would result in chaos in state law. Wilson Scaling, formerly the chief of the Natural Resources Conservation Service and rancher from Clay County, questions, “If the landowner doesn’t own the groundwater under his land, then who does? And, what then would happen to the more than one hundred years of water law in Texas based on that premise?”
If landowners expect the answer to “Who owns the water under your land …” to continue to be a resounding “I DO!”, it is extremely important to urge your state senator and representative to support SB 332.