Texas' Most Infamous Groundwater Lawsuits

Have you ever wondered why groundwater is legally considered private property in Texas but state property in other states in the United States? Or why the Edwards Aquifer is managed differently than the rest of Texas’ groundwater? And how much legal authority do groundwater districts have? These particulars of Texas groundwater law and management were decided by key lawsuits and court rulings across the past 120 years, resulting in a complicated patchwork of precedents and guidelines.

“To understand how groundwater law works in Texas, you have to start with the unique history here and the timeline of these major decisions that changed how groundwater is used and managed,” said Gabriel Eckstein, J.D., a professor in the Texas A&M University School of Law and director of the Energy, Environmental and Natural Resource Systems Law Program. “The state’s history as both the ‘wild west’ and an agricultural and economic powerhouse in American history really sets the stage for how groundwater law evolved in the state.”

These are some of the most influential groundwater court cases in Texas history, decisions that have shaped the Lone Star State’s legal stances on groundwater rights, management and access.

The first major precedent was set over a century ago in the small town of Denison, where a landowner named W.A. East would soon become forever synonymous with the rule of capture and Texas groundwater.

  

East v. Houston and Texas Central Railroad Company

Who: W. A. East, a landowner, versus the Houston and Texas Central Railroad Company

When: 1904

Where: Denison, Texas

What: The Houston and Texas Central Railroad Company decided to build a maintenance yard for their steam-powered locomotives in Denison and needed to drill a well. East owned property near the railway’s land, and the company asked him about the wells on the property and the underground source. After seeing the wells on East’s property, the company dug its well, with one major difference: it was much larger and deeper.

Why: After the rail company started pumping water, East's and many of his neighbors’ wells started to run dry within months. East decided to sue the Houston and Texas Central Railroad Company for taking water from under his property. He asked the court to apply the reasonable use doctrine, claiming that the company was taking more than its fair share of water and not using it to better the land it was coming from.

Outcome and precedents: East eventually lost his case against the company. While the judge did agree that the railroad company was taking more than its fair share of water and that East and his neighbors were negatively affected by this, it was his ruling that no one party involved had sole rights to the water underground and as such, the railroad owed nothing to East or any other neighbors.

Following two years of appeals and overrulings, in 1904 the Texas Supreme Court weighed in on the issue, agreed with the original decision, and by doing so, officially set the rule of capture as the groundwater law of Texas.

“Essentially, the Texas Supreme Court borrowed language from an 1861 ruling by the Ohio Supreme Court that groundwater was so ‘secret, occult and concealed,’ that applying any set of legal rules to regulate groundwater would be a hopeless endeavor,” said Todd Votteler, Ph.D., principal at Collaborative Water Resolution, LLC and editor-in-chief of the Texas Water Journal.

Estimated reading time: 12 minutes

These court cases set today’s Texas groundwater law precedents

More Information

• The History of W.A. East v. Houston and Texas Central Railway Company, 1904: Establishment of the Rule of Capture in Texas Water Law or "He Who has the Biggest Pump gets the Water", East Texas Historical Journal
• T.C. Ry. Co. v. East, 98 Tex. 146, Casetext
• Sierra Club v. Babbitt, 995 F.2d 571, Casetext
• Texas Supreme Court Rules for Landowners in Water Case, The Texas Tribune
• Edwards Aquifer Auth. v. Day, 369 S.W.3d 814, Casetext
• Texas Supreme Court Will Not Hear Bragg v. Edwards Aquifer Authority, Texas Agriculture Law
• Edwards Aquifer Authority v. Bragg (2013), FindLaw
• Bragg v. Edwards Aquifer Authority (2002), FindLaw
• In Texas, Fight Over Water Spills Underground, The Texas Tribune
• Bragg v. Edwards Aquifer Authority, Civil Action No. SA-06-CV-1129-XR, Casetext
• Guitar Holding Company v. Hudspeth County Underground Water Conservation District No (2006), FindLaw
• Guitar Holding Company, L.P. V. Hudspeth County Underground Water Conservation District No. 1, et al. (Majority), Justia
• Guitar Holding Co. v. Hudspeth County Underground Water Conservation Dist. No. 1, 263 S.W.3d 910 (Tex. 2008), Water Law Review

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“That Ohio Supreme Court ruling was actually based on an 1843 case decided in England, Acton v. Blundell.

“So the rule of capture is really a tort law concept and essentially says, ‘you can't sue your neighbor if your well dries up, or the local spring or something like that.’”

There was little scientific understanding of groundwaters’ origins at this time, and by adhering to the rule of capture, Texas chose to intertwine property rights and groundwater.

“They blatantly said, ‘Hey, the economy would fall apart if we didn’t allow the water to be used and pumped out,’ and that's the priority; any attempt to regulate it would be impossible,” Eckstein said. “So, Texas went full-blown absolute ownership, rule of capture, and just has been reluctant to move away from it. And it's become like a property right for landowners.”

  

Sierra Club et al. v. Babbitt et al.

Who: Sierra Club, an environmental organization, versus the Secretary of the Interior, Bruce Babbitt (the case was originally filed as Sierra Club versus Lujan, but the name changed when the secretary changed)

When: 1993

Where: Midland, Texas

What: The Edwards Aquifer has provided water for the land above it for centuries, while also being home to many endangered aquatic species that can only be found in the aquifer and its associated habitats, such as Comal and San Marcos springs. As Texas’ population grew, especially in the San Antonio and Austin areas over the aquifer, more and more water was pumped from it. Before this court case, there was no real regulation on aquifer pumping or efforts to conserve the aquifer’s water levels. Lower water levels put the endangered species associated with the aquifer in danger of extinction.

Why: The Sierra Club filed a lawsuit against Babbitt, claiming that the U.S. Fish and Wildlife Service (USFWS) had not done enough to protect the endangered species living in Comal and San Marcos springs in allowing too much groundwater pumping, therefore violating the Endangered Species Act (ESA). The Sierra Club wanted USFWS to regulate pumping from the aquifer to maintain a healthy level of spring flow for wildlife.

Outcome and precedents: The court agreed with the Sierra Club that USFWS had failed to uphold the ESA by not doing more to inform people about preserving spring flows for the endangered species, and by not taking action to reduce aquifer pumping during dry periods to ensure the springs would continue to flow.

In the ruling, the judge gave the Texas Legislature until the end of the 1993 legislative session to pass a bill to regulate aquifer pumping and protect the springs. In response to the legal threat of a federal takeover of the aquifer under the ESA, the Edwards Aquifer Authority (EAA) Act was adopted.

“The case was really critical because that led to the creation of the Edwards Aquifer Authority and created this specialized groundwater district,” said Amy Hardberger, J.D., a professor of water law and director of the Center for Water Law and Policy at Texas Tech University.

EAA is a political subdivision of the State of Texas that was created to manage, enhance and protect the Edwards Aquifer system, according to EAA's website.

This also marked the first time in Texas water law that groundwater was lawfully regulated.

“What's really significant about that, is that many people were convinced at that time that it was unconstitutional, under the state constitution, to regulate groundwater pumping,” Votteler said. “And they would cite the East case, among other things, to support that argument. And so, the legislature created the Edwards Aquifer Authority in response to the judgment from a federal court.”

  

Guitar Holding Company v. Hudspeth County Underground Water Conservation District No. 1

Who: Guitar Holding Company, a local landowner, versus Hudspeth County Underground Water Conservation District No. 1

When: 2008

Where: Hudspeth County, Texas

What: The Bone Spring-Victorio Peak Aquifer provides groundwater in northeast Hudspeth County, which was primarily cattle ranches until 1947, when irrigated agriculture industry developed in the region. This increased water usage at some points in the following decades exceeded recharge rates of the aquifer. In 1990, the Hudspeth County Underground Water Conservation District created a system to help manage water pumping and had strict rules for transporting water out of the district. While they amended the new system in 1998 pursuant to Chapter 36 of the Texas Water Code, an audit of the system in 2000 determined that the district’s system violated the code.

In 2002 the groundwater district created a new system for water permits, and had three permit types: validation, operating and transfer. Validation permits were approved for well owners who had historically pulled groundwater from an aquifer prior to the new system. It guaranteed their right to pump, as long as they proved historic use; and, that historic use amount was considered when determining how much water they were entitled to. Those without historic use applied for operating permits, which only allowed pumping if the aquifer’s water level was high enough. Any permit holder could apply for a transfer permit, which allowed for the capture and transfer of groundwater outside the district. This new system benefited historic users with a validation permit more because they could pump more groundwater and transfer all of their permitted water.

Guitar Holding Company was created in 2002 to manage the Guitar family’s land, they had owned in the district since 1924, which was 38,296 acres in 2002. In the 1940s - 1960s, much of it was used for irrigated farming, but had been used for cattle ranching since. They applied for a validation permit for their 15 wells, permission to drill 52 new wells and the ability to transfer water outside the district, just before the new system went into effect, requesting that their application be processed in the old system. It was processed under the 2002 system, and Guitar received a validation permit, but was unhappy that despite their land area being larger than their neighbors, they had access to less water. This was due to neighbors showing a historic use of more groundwater on irrigated farmland, not ranchland.

Why: Guitar challenged the new system in court, arguing that the district overstepped and by giving more water to those with proven historical use, it created an unbalanced system. Guitar also argued that it was unfair that even those without historical evidence of transferring water were able to do so.

Outcome and precedents: The District Court of Hudspeth County and the El Paso Court of Appeals originally sided with the groundwater district, but the Texas Supreme Court did not. It sided with Guitar, ruling that the district needed to consider the water’s purpose, in addition to the amount of water used, when looking at historical use. They also ruled that the transfer permit did not protect district users since it allowed permit holders to change their water use and created unfair benefits for validation permits.

This case created precedents for water transfers and how much historic use could be considered by groundwater districts.

“This was a really important case in discussing how groundwater districts can regulate historic use,” Hardberger said. “Particularly when somebody wanted to apply for transfer permits for exporting for groundwater projects.”

  

McDaniel and Day v. Edwards Aquifer Authority

Who: Joel McDaniel and Burrell Day, landowners, versus
the EAA

When: 2012

Where: Von Ormy, Texas, a part of the San Antonio metropolitan area

What: McDaniel and Day purchased 381 acres of land to grow crops and graze cattle on in 1994 in Von Ormy, Texas. They pumped water from the Edwards Aquifer, and there was a collapsed well on the property that was used for irrigation decades before. The well still had water flowing out of it but it mostly fed a lake on the property used for irrigation and recreation.

To fix the well or drill a replacement, a permit would be required from EAA, which had been created by the Texas Legislature the previous year. In 1994, Day put in an application to pump 700 acre-feet of water annually for farming. Ultimately, the permit application was denied in 2000, with the authority claiming that based on historical information, the water being pumped from the aquifer was not being “placed to a beneficial use.”

Why: Day protested the decision and in a subsequent hearing by the State Office of Administrative Hearings, the judge decided water being used from the lake, although it initially came from well water, it was considered surface water once it left the ground and merged with the lake water and could not be used in Day’s application. This, along with historical information, led to the judge's ruling that Day was allowed 14 acre-feet of water. Day appealed the decision and sued EAA for taking his property without compensation. 

Outcome and precedents: For over a decade, the case went through multiple appeals and courts. Eventually, a district court decided that EAA’s permitting system based on historical use was a “departure” from the Texas Water Code. The Texas Supreme Court later affirmed that ruling and used oil and gas ownership laws in Texas as a basis to decide in favor of Day. They also declared groundwater as a vested property right, meaning too much regulation by an agency like EAA could become a regulatory takings argument.

In light of the East case establishing Texas as a rule of capture state over a century earlier, many experts viewed this ruling as a modern reaffirmation of that doctrine, Votteler said. It set limits on how much control EAA had when it came to water being pumped from the aquifer by private landowners. The ruling moved groundwater law and regulation closer to how oil and gas are regulated in the state, he said.

“The Texas Supreme Court said, ‘Hey, groundwater kind of looks like oil and gas,” Votteler said. “It flows. It’s fluidic. And the rule in oil and gas is absolute ownership, under your property, you own it, like you own the land and the trees on your property.”

  

Bragg v. Edwards Aquifer Authority

Who: Glenn and JoLynn Bragg, orchard owners, versus
EAA

When: 2008

Where: Medina County, Texas

What: Glenn and JoLynn Bragg owned and operated two pecan orchards in Medina County since 1979 and 1983, and both properties were above the Edwards Aquifer. The Braggs submitted applications to the EAA to continue using water from the aquifer at their orchards after the authority was created. One of their applications was for twice the amount of water the orchard historically used, and the second requested using aquifer water at a location that did not use groundwater until 1995.

In 1998, EAA recommended partial denial of the first application, granting a permit for around half of what the Braggs applied for, and complete denial for the second application due to the lack of historic use.

Why: In response, the Braggs sued EAA, claiming that denial of the permits was essentially taking their private property and that EAA had to compensate them for it. The courts found in favor of the Braggs and awarded them over $700,000 in damages. Both parties appealed the decision, the Braggs because they felt that the calculations had been incorrect and that they were owed more, and EAA because they claimed that nothing had been taken from the Braggs and that the amount of money was incorrectly high.

Outcome and precedents: After years of delays, rulings and appeals in 2013 the San Antonio Court of Appeals decided that when the authority awarded the Braggs less water than they had claimed, those actions were an overreach and resulted in a regulatory taking. The court also laid out how to calculate the damages entitled to the Braggs.

This case answered the question as to how much authority groundwater authorities have over the water. The Braggs’ successful argument — that the limited and rejected permits were takings of their private property and deserved compensation — resulted in limiting the regulatory scope of entities such as EAA on private property.

“This ruling has raised questions about groundwater management in Texas," Votteler said, "because it's not always clear with the regulation of groundwater when the regulation results in a taking and when it doesn't."