By Annie Kellough
November 20, 2014
Groundwater rights have been hotly debated in Texas for as long as there has been the ability to pump it. Unlike surface water, which is owned by the state and held in trust for the public, Texas courts have ruled that groundwater is the surface owner’s vested private property. This vested right can be regulated by Groundwater Conservation Districts (GCD).
But not all regions have GCDs and their regulatory approaches can vary greatly even if they are present, so the primary legal rule governing groundwater pumping is the Rule of Capture. This rule was adopted by the Texas Supreme Court as the governing principle of groundwater law over a century ago. The Court did so, in large part, because it determined the existence and movements of groundwater were too “secret” and “occult” to be understood. Rule of capture is also the legal doctrine applied in oil and gas law. Recently, water rulings in some Texas courts have increased the parallels to oil and gas law, such as the line of cases of Edwards Aquifer Authority v. Day and Edwards Aquifer Authority v. Bragg, that held groundwater is a vested private property right in place, subject to governmental taking. Because it was a question of first impression, the court looked to oil and gas precedent to make its decision.
Although there have been increased references to oil and gas law in water rulings determining ownership, a recent court decision decided not to apply another principle that exists in oil and gas property rights. This makes it a struggle to know what principles courts will apply to water in the future.
In July, Texas’ Seventh Court of Appeals ruled in The City of Lubbock, Texas v. Coyote Lake Ranch, LLC, that the oil and gas law based principle of the accommodation doctrine does not apply to groundwater. In oil and gas law, the accommodation doctrine states that the mineral estate is the dominant estate; therefore, surface owners must allow access to the mineral estate holder and cannot thwart his or her ability to drill or produce. In return, the mineral rights owner is legally obligated to be considerate and reasonable in his or her use of the surface estate, using whatever means of access to the oil and gas are least damaging to the surface.
In this case, the City of Lubbock was the holder of a 1953 deed conveying groundwater rights under a certain tract of land. These rights were severed from surface property that is currently owned by Coyote Lake Ranch. Beginning in 2012, the City of Lubbock began planning to install water wells to pump the groundwater it purchased. Coyote Lake Ranch asked the court for a temporary injunction and restraining order to stop that from happening, arguing that the water could be accessed without entering its land. The district court granted the request and the City appealed the decision.
The Seventh District ruled that, while some oil and gas principles still apply to water, such as those laid out in the Edwards Aquifer Authority cases mentioned above, the accommodation doctrine does not apply when groundwater rights are severed from the rights of the surface owner. In other words, the groundwater estate holder is not obligated to pump in the least destructive manner. Not applying the accommodation doctrine cuts both ways. In addition to not obligating the groundwater estate holder to pump groundwater in the least destructive manner, the surface owner may not be obligated to allow access to the groundwater through his or her property. The burden for both of these obligations is shifted to the terms of the sales contract.
This failure of the court to follow an oil and gas tenet in groundwater law may foretell of a break from the basic oil and gas law structure. Or it may simply show that courts are becoming more aggressive in the allowances they give to water pumpers.
The fact that Texas courts still apply oil and gas law’s basic Rule of Capture to groundwater seems to support the latter assumption; however, courts should consider a departure from the oil and gas structure, since groundwater is interconnected to surface water through the hydrologic cycle. Courts should stop relying on oil and gas principles and realize that there are now a plethora of water law attorneys who are capable of understanding a new framework.
California used to apply the Rule of Capture, but recently saw the error of its ways and amended its groundwater rules in light of the pervasive and continuing drought. Texas needs to take a lesson from California and continue increasing the regulation of groundwater pumping, in a manner that makes sense for this precious resource and doesn’t simply follow the basic structure of oil and gas law.