Coates v. Hall

• Decision Date: 12 March 2007
• Docket Number: Civil Action No. SA-06-CV-773-XR.
• Parties: Hugh COATES, et al., Plaintiffs, v. Charles HALL, et al., Defendants.
• Court: U.S. District Court — Western District of Texas

512 F.Supp.2d 770

Hugh COATES, et al., Plaintiffs, v. Charles HALL, et al., Defendants.

Civil Action No. SA-06-CV-773-XR.

United States District Court, W.D. Texas, San Antonio Division.

March 12, 2007.

COPYRIGHT MATERIAL OMITTED

F. Blake Dietzmann, Law Office of F. Blake Dietzmann, Thomas C. Hall, Hall & Bates, LLP, San Antonio, TX, for Plaintiffs.

R. Gaines Griffin, Davidson & Troilo, P.C., San Antonio, TX, David O. Frederick, Lowerre & Frederick, Max Renea Hicks, Law Office of Max Renea Hicks, Austin, TX, for Defendants.

ORDER

RODRIGUEZ, District Judge.

On this date, the Court considered Defendant Chris Ring's motion to dismiss in his individual capacity (Docket No. 5) and the remaining Defendants' motion to dismiss in their individual and official capacities (Docket No. 6). The motions are GRANTED. For the reasons discussed below, Plaintiffs' federal takings claim, procedural due process claim, substantive due process claim, and equal protection claim are DISMISSED WITHOUT PREJUDICE because they are not ripe for adjudication. Plaintiffs' section 1985 claim is DISMISSED WITH PREJUDICE for failure to state a claim upon which relief may be granted. The Court refuses to exercise supplementary jurisdiction over Plaintiffs' state law tortious interference claims; therefore, those claims are DISMISSED WITHOUT PREJUDICE. The Court expresses no opinion on Defendants' quasi-judicial and quasi-legislative absolute immunity arguments. The Clerk is instructed to close this case.

I. Factual & Procedural Background

Plaintiffs Hugh Coates and Dennette Coates have brought suit against the Kenney County Groundwater Conservation District ("District") and individual directors of the District. This lawsuit is brought pursuant to 42 U.S.C. §§ 1983, 1985, 1988, the 5th and 14th amendments of the United States Constitution, and Texas common law. Plaintiffs claim federal question jurisdiction under 28 U.S.C. § 1331 and supplemental jurisdiction over the state law tortious interference claims.

Plaintiffs allege that Defendants violated their constitutional rights by willfully interfering with their groundwater property rights, and they allege that the District is liable because of its policy of encouraging, tolerating, permitting, and ratifying a pattern of interfering with Plaintiff's groundwater property rights.

The individual Defendants were at all relevant times directors of the District. Plaintiffs allege that the individual Defendants were acting under color of law and were the ultimate policy-making officials of the District. Plaintiffs are suing the individual Defendants in both their official and individual capacities. Plaintiff state that "the actions of the individual Defendants were done in order to deprive the Plaintiffs of their property rights for the purposes of personal gain of said Defendants, intentionally, knowingly, with evil motive, with reckless or callous indifference to the federally protected rights of the Plaintiffs and/or maliciously. Plaintiffs allege that no reasonable individual would have acted in the manner the individual Defendants did in the permitting process."

The District was legislatively created in 2001 by House Bill 3243. In January of 2002, the voters of Kinney County approved the formation of the District at the confirmation election. Plaintiffs allege that unless eclipsed by legislation, landowners in Texas have a freely assignable, vested right to pump water under their land — the common law "rule of capture." Plaintiffs allege that the individual Defendants and the District violated their constitutional rights in handling their applications for Existing and/or Historic Use Permits to withdraw groundwater.

Texas. Water Code § 36.0015 provides that ground water conservation districts may be created for the purpose of preservation, protection, recharging, and prevention of waste of ground water. The rule making power of such ground water districts is determined by Water Code § 36.101, which states that "a district may make and enforce rules, including rules limiting ground water production based on tract size or the spacing of wells, to prove for conserving, preserving, protecting, and recharging of the ground water. ..."

Plaintiffs applied for permits to pump groundwater under the rules of the District. Pursuant to then existing rules, application for Historic Use Permits were due on or before April 1, 2003. This deadline was ultimately extended to October 1, 2003 and again extended to December 1, 2003. According to District Rule 9.09, owners of non-exempt wells completed and operational before December 31, 1991 and that produced ground water between January 1, 1960 and December 31, 1991 were required to make applications for a Historic Use Permit by that date.

Plaintiffs allege that the District was required to issue Existing and Historical Use Permits ("EHUs") to Plaintiffs that authorized them to withdraw an amount of ground `water equal to their "maximum historic use." The District's rules defined "maximum historic use" and an "applicant's actual maximum beneficial use of ground water from an aquifer excluding waste during any one full calendar year of the existing and historic use period." District Rule 1.05.

The District hired Steve Walthour to serve as the District's acting general manager for the purpose of evaluating the applications for administrative and technical completeness and to provide expertise to the District in the permitting process in determining the amount of water an applicant should be permitted. At the time he was hired by the District, Walthour was a full-time employee of the Edwards Aquifer Authority ("EAA") and was in charge of overseeing the EAA's permitting process. In that capacity, Walthour supervised the processing, evaluation, and issuance of approximately one thousand EAA Historic Use Permits.

On June 28, 2004, Walthour declared the Plaintiffs' applications administratively and technically complete under the District's rules and provided each of the Applicants a draft permit. The District set the Plaintiffs application for preliminary hearing on August 12, 2004 ("August 2004 hearing"). Pursuant to District Rule 17.04(A), "interested persons .... may appear at the hearing [and] present evidence, exhibits, or testimony or make an oral presentation as determined by the Board." At the August 2004 hearing, Plaintiffs objected to the granting of party status to protestants who allegedly made no demonstration that they were "interested persons." The District overruled the Plaintiffs' objection and granted party status to any person who desired to protest the Plaintiffs' applications. The August 2004 hearing was a preliminary hearing, which identified interested parties who would participate in the final adjudicatory hearing to be held during October of 2004.

Plaintiffs allege that the District adopted "procedural guidance" rules without complying with the statutory rule-making process and the District's own rules regarding rule-making. These procedural guidance rules incorporated a complete prohibition on discovery, imposed a 45 minute limit on the applicant's presentation of a direct case and a 30 minute limit on the applicant's cross-examination of the District's expert and all of the protestant's witnesses. Furthermore, these rules required applicants to rest their case before obtaining any information on the protestants' claims and did not allow rebuttal evidence. The District allegedly declared for the first time at the hearing that affidavit testimony would be inadmissible if objected to unless the affiant was present to testify.

Plaintiffs and other interested parties participated in the final adjudicatory hearing before the District in October of 2004. Plaintiffs allege that at a hearing before the District in October of 2004, they presented credible scientific and factual evidence in support of their permit application numbers EH20-ET-2004-0023 and EH21-ET-2004-0024, which established a maximum historic use of 12,207 acre feet.

Shortly following the October 2004 hearing on Plaintiffs' applications, Walthour prepared a hearing report pursuant to District Rule 17.08. The board members voted on Plaintiffs' applications on January, 28, 2005. On application EH20-ET-2004-0023, the Plaintiffs argued that they established historical entitlement to 9,608 acre-feet. Walthour recommended that the permit be issued in the amount of 2,070 acre-feet, but the District voted to issue an application in the amount of 2,070 cubicfeet. On application EH21-ET-2004-0024, Plaintiffs argued that they established historical entitlement to 2,689 acrefeet. Walthour recommended issuance of a permit for 1,444.58 acre-feet, but the District voted to issue a permit in the amount of 518 acre-feet.¹ In rejecting Plaintiffs' and Walthour's proposals, the District adopted groundwater withdraw amounts that largely tracked the opinion of Dr. Al Blair, a groundwater consultant who testified at the October 2004 hearing on behalf of the protestants.

Texas Water Code § 36.114 and the District's rules mandate that the District take final action on the application within 35 days of the hearings on each application. District Rule 9.01(D)(3)(c). The District failed to issue any permits to the Plaintiffs, and the District has suspended consideration of all EHUs until such time as the Board knew the total amount of water recommended for approval and permitting by its expert and presiding officer. In state court litigation filed in Kenney County District Court, Judge Pennington ruled that the 35 day deadline is not discretionary. Plaintiffs argue that the permits should have been issued no later than 35 days after the October 2004 hearing.

Plaintiffs allege that the board members who voted to ignore Walthour's permit recommendations were candidates on the "Save Our Water" ticket. Plaintiffs allege that the Board committed "blatant acts of cronyism" by issuing permits to...