High Court Hears Groundwater Case

After hearing oral arguments Wednesday, the Texas Supreme Court will consider whether a provision in oil-and-gas law that protects landowners who don’t own the minerals beneath their property should also apply to those who don’t own the groundwater.

Texas Supreme Court Justices Paul Green, left, and Chief Justice Nathan Hecht listen to oral arguments Sept. 1 in Texas' appeal of a 2014 ruling that struck down its system of funding public schools as unconstitutional.

After hearing from both sides in a years-long dispute between a South Plains ranch and the city of Lubbock, the Texas Supreme Court will consider whether a well-established provision in oil and gas law that protects landowners who don’t own the minerals beneath their property should also apply to those who don’t own the groundwater — or, perhaps, the wind.

The outcome of the court's decision could have far-reaching implications for savvy water exporters and the state’s fast-growing, thirsty cities.

A lawyer for Coyote Lake Ranch argued Wednesday that the “accommodation doctrine” should apply in cases where an entity — Lubbock, in this case — wants to utilize its rights to groundwater that sits beneath the land that someone else — the ranch — owns and actively uses.

(So-called severed groundwater — and mineral — rights are commonplace in Texas and other states.)

The decades-old doctrine has traditionally required mineral owners — the dominant estate — to accommodate the surface owner’s existing use of the land if at all possible. While it doesn’t always stop drilling or pumping operations, the doctrine gives surface landowners some say regarding the circumstances.

Pressing Their Cases

If the court extended the doctrine to cover groundwater, a lawyer for the city of Lubbock warned the justices, all hell would break loose because it would upend “a centuries-old understanding that the mineral estate is dominant.”

“No court has ever held that a groundwater estate is dominant, and it would create tremendous angst” and “uncertainty,” said Austin lawyer Dale Wainwright — a former state Supreme Court justice — who contended that oil and water are two “very different” things.

A lawyer for the ranch, though, said that extending the accommodation doctrine to cover severed groundwater would in no way undermine the dominance of the mineral estate. The 26,600-acre cattle and gaming operation, she said, is not trying to argue that the city doesn’t have a right to enter the land so it can access the groundwater — only that it deserves the same kind of protection provided to surface landowners with severed mineral rights.

Austin lawyer Rachel Ekery also noted the court had drawn a comparison between groundwater and oil and gas in a consequential 2012 ruling, concluding that "both are fugacious — they travel." 

"The similarities in this context are strong enough that the same ownership principles should govern both and the same reasoning applies to the accommodation doctrine," she said. "With the accommodation doctrine, you’re dealing with one estate that has the right to invade the surface" owned by another estate.

Ekery asked the court to remand the case to a lower court so the ranch may have a chance to prove that at trial. 

The accommodation doctrine issue has not been litigated specifically. A Bailey County district court sided with the ranch in late 2013, invoking the accommodation doctrine in granting a temporary injunction against the city, barring it from moving forward with a planned expansion of a small well field it operates on the northwest corner of the ranch. The Amarillo-based 7th Court of Appeals overturned that decision last summer but said the Legislature or Texas Supreme Court was free to extend the doctrine if it so pleased.

Lubbock acquired water rights on the ranch land more than 60 years ago. Its 1953 deed, as its lawyers have repeatedly pointed out, gives it explicit permission to access the land and drill water wells.

Citing that deed, Wainwright told the all-Republican court Wednesday that the case, more than anything else, is about “contract rights.”

In their numerous questions, the justices appeared more interested in getting each side’s take on whether the deed terms, if specific enough, could override the accommodation doctrine, rather than whether the doctrine should be extended to cover groundwater. 

The nine-member court has no deadline to issue to a decision in the case, one of three it considered Wednesday.

“Do you agree that language of the deed can trump accommodation doctrine?” Chief Justice Nathan Hecht asked Ekery.

Ekery said yes — if the parties agree that's the case.

“But we don’t think they did that here," she said.

"We Really Need a Firm Answer"

Water experts say many deeds do not specify whether the owner of severed groundwater can physically access the land to retrieve it.

“We really need a firm answer from the court as to ... those situations where the deed is silent,” Jim Bradbury, a Fort Worth-based lawyer who focuses on environmental and energy issues, told the Tribune ahead of Wednesday’s oral arguments.

In agreeing to hear the case, Bradbury said, the court spawned speculation that it is looking to offer clarity on the issue and possibly strengthen surface landowner rights.

During the 40-minute session Wednesday, Hecht pressed Lubbock on whether it believes it has the right to do whatever it wants to the land regardless of its impact on the ranch's operations. Wainwright emphasized that the city had tried in good faith to strike an agreement with the ranch, which he said was unresponsive. He added that the city was not willing to forfeit its rights to the water under the terms the ranch had laid out for reasonable use. 

But Justice Phil Johnson noted that — in the long history of the accommodation doctrine — the burden always has been on the landowner to prove that the planned extraction will unreasonably infringe on his or her own use of the surface land and described that as a sound counterpoint.

“It seems like it might neutralize some of your arguments,” he told Wainwright.

Extending the doctrine to cover severed groundwater would give surface landowners "more power than they need," Wainwright said in his response. 

Justice Eva Guzman noted Wednesday that the court also would have to consider whether extending the accommodation doctrine to cover severed groundwater would open the door for even further expansion, asking Ekery whether she thought the same concept should apply to wind farms.

“Those are issues the court is going to have to work out down the road,” Guzman said.