Edwards Aquifer Auth. v. Day

• Decision Date: 08 June 2012
• Docket Number: No. 08–0964.,08–0964.
• Parties: The EDWARDS AQUIFER AUTHORITY and The State of Texas, Petitioners, v. Burrell DAY and Joel McDaniel, Respondents.
• Court: Texas Supreme Court

369 S.W.3d 814

55 Tex. Sup. Ct. J. 343

The EDWARDS AQUIFER AUTHORITY and The State of Texas, Petitioners,

v.Burrell DAY and Joel McDaniel, Respondents.

No. 08–0964.

Supreme Court of Texas.

Argued Feb. 17, 2010.

Decided Feb. 24, 2012.

Rehearing Denied June 8, 2012.

Kristofer S. Monson, Assistant Solicitor General, Brian E. Berwick, Samuel Robert Wiseman, David S. Morales, Peter Carl Hansen, Office of the Attorney General of Texas, Greg W. Abbott, Attorney General of Texas, Kent C. Sullivan, Clarence Andrew Weber, Kelly Hart & Hallman LLP, Austin, TX, James C. Ho, Gibson Dunn & Crutcher LLP, Dallas, TX, for The State of Texas.

Darcy Alan Frownfelter, Kemp Smith, P.C., Hunter Wyatt Burkhalter, Andrew S. Miller, Kemp Smith LLP, Austin, TX, Mark N. Osborn, Kemp Smith LLP, El Paso, TX, Pamela Stanton Baron, Attorney at Law, Austin, TX, for Edwards Aquifer Authority.

Thomas E. Joseph, Tom Joseph, PC, San Antonio, TX, for Burrell Day.

Thomas H. Crofts Jr., Crofts & Callaway, P.C., San Antonio, TX, for Amicus Curiae Medina County Irrigators Alliance.

Marisa Perales, Lowerre Frederick Perales, Austin, TX, Enrique Valdivia, Texas Rio Grande Legal Aid, Inc., San Antonio, TX, for Amicus Curiae Angela Garcia.

Michael J. Booth, Booth, Ahrens & Werkenthin, P.C., Austin, TX, for Amicus Curiae City of Victoria.

Douglas G. Caroom, Bickerstaff Heath Delgado Acosta LLP, Austin, TX, for Amicus Curiae Texas Farm Bureau and Texas Cattle Feeders Association.

C. W. “Rocky” Rhodes, South Texas College of Law, Houston, TX, for Amicus Curiae Harris–Galveston Subsidence District.

Lance Hunter Beshara, Pulman Cappuccio Pullen & Benson, LLP, San Antonio, TX, for Amicus Curiae The Alliance of EAA Permit Holders.

Thomas M. Pollan, Bickerstaff Heath & Delgado Acosta LLP, Austin, TX, for Amicus Curiae Canadian River Municipal Water Authority.

Susan Combs, Texas Comptroller of Public Accounts, Austin, TX, pro se.

Russell S. Johnson, McGinnis, Lochridge & Kilgore, LLP, Austin, TX, for Amicus Curiae Texas Wildlife Association.

Dolores Alvarado Hibbs, Texas Department of Agriculture, Austin, TX, for Amicus Curiae Texas Department of Agriculture.

Marvin W. Jones, Spouse Shrader Smith, PC, Amarillo, TX, for Amicus Curiae Texas Landowners Council.

James H. Barrow, Law Offices of James H. Barrow, P.C., San Antonio, TX, J. David Breemer, Pacific Legal Foundation, Sacramento, CA, for Amicus Curiae Pacific Legal Foundation.

Samuel Abel Medina, City Attorney, Lubbock, TX, for Amicus Curiae City of Lubbock.

Lisa Bowlin Hobbs, Vinson & Elkins, LLP, Austin, TX, for Amicus Curiae Mesa Water, L.P.

Robert D. Andron, General Counsel, El Paso Water Utilities Public Svcs. Board, El Paso, TX, for Amicus Curiae City of El Paso.

Marcus W. Norris, Amarillo City Attorney's Office, Amarillo, TX, for Amicus Curiae City of Amarillo.

Gregory S. Coleman, Yetter Coleman LLP, Austin, TX, for Amicus Curiae Glenn Bragg.

William Richard Thompson II, Hankinson LLP, Dallas, TX, for Amicus Curiae Texas Alliance of Groundwater Districts.

Robert L. Duncan, Crenshaw Dupree & Milam, L.L.P., Lubbock, TX, for Amicus Curiae State Senator Robert Duncan.

Dee J. Kelly, Kelly Hart & Hallman LLP, Fort Worth, TX, for Amicus Curiae Anne Windfohr Marion.

J.B. Love Jr., Love Law Office, Marathon, TX, for Amicus Curiae Texas and Southwestern Cattle Raisers Association.

Phil Steven Kosub, San Antonio Water System, San Antonio, TX, for Amicus Curiae City of San Antonio.

Justice HECHT delivered the opinion of the Court.

We decide in this case whether land ownership includes an interest in groundwater in place that cannot be taken for public use without adequate compensation guaranteed by article I, section 17(a) of the Texas Constitution.¹ We hold that it does. We affirm the judgment of the court of appeals ² and remand the case to the district court for further proceedings.

I

In 1994, R. Burrell Day and Joel McDaniel (collectively, “Day”) bought 381.40 acres on which to grow oats and peanuts and graze cattle. The land overlies the Edwards Aquifer, “an underground layer of porous, water-bearing rock, 300–700 feet thick, and five to forty miles wide at the surface, that stretches in an arced curve from Brackettville, 120 miles west of San Antonio, to Austin.” ³ A well drilled in 1956 had been used for irrigation through the early 1970s, but its casing collapsed and its pump was removed sometime prior to 1983. The well had continued to flow under artesian pressure, and while some of the water was still used for irrigation, most of it flowed down a ditch several hundred yards into a 50–acre lake on the property. The lake was also fed by an intermittent creek, but much of the water came from the well. Day's predecessors had pumped water from the lake for irrigation. The lake was also used for recreation.

To continue to use the well, or to drill a replacement as planned, Day needed a permit from the Edwards Aquifer Authority. The Authority had been created by the Edwards Aquifer Authority Act (“the EAAA” or “the Act”) in 1993, the year before Day bought the property.⁴ The Edwards Aquifer is “the primary source of water for south central Texas and therefore vital to the residents, industry, and ecology of the region, the State's economy, and the public welfare.” ⁵ The Legislature determined that the Authority was “required for the effective control of the resource to protect terrestrial and aquatic life, domestic and municipal water supplies, the operation of existing industries, and the economic development of the state.” ⁶

The Act “prohibits withdrawals of water from the aquifer without a permit issued by the Authority”.⁷ The only permanent exception is for wells producing less than 25,000 gallons per day for domestic or livestock use.⁸ The Act gives preference to “existing user[s]”—defined as persons who “withdr[ew] and beneficially used underground water from the aquifer on or before June 1, 1993” ⁹—and their successors and principals. With few exceptions, water may not be withdrawn from the aquifer through wells drilled after June 1, 1993.¹⁰ Each permit must specify the maximum rate and total volume of water that the water user may withdraw in a calendar year,¹¹ and the total of all permitted withdrawals per calendar year cannot exceed the amount specified by the Act.¹²

A user's total annual withdrawal allowed under an “initial regular permit” (“IRP”) is calculated based on the beneficial use of water without waste during the period from June 1, 1972, to May 31, 1993.¹³ The Act, like the Water Code, defines beneficial use as “the use of the amount of water that is economically necessary for a purpose authorized by law, when reasonable intelligence and reasonable diligence are used in applying the water to that purpose.” ¹⁴ Although other provisions of the Water Code governing groundwater management districts define beneficial use more broadly and include recreational purposes,¹⁵ they also state that “any special law governing a specific district shall prevail”.¹⁶ “Waste” is broadly defined.¹⁷

A user's total permitted annual withdrawal cannot exceed his maximum beneficialuse during any single year of the historical period, or for a user with no historical use for an entire year, the normal beneficial use for the intended purpose.¹⁸ But the total withdrawals under all permits must be reduced proportionately as necessary so as to not exceed the statutory maximum annual withdrawal from the aquifer.¹⁹ An “existing user” who operated a well for three or more years during the historical period is entitled to a permit for at least the average amount of water withdrawn annually.²⁰ And every “existing irrigation user shall receive a permit for not less than two acre-feet a year for each acre of land the user actually irrigated in any one calendar year during the historical period.” ²¹

For various reasons, the Authority did not become operational until 1996, and all IRP applications were required to be filed before December 30, 1996. ²² Day timely applied for authorization to pump 700 acre-feet of water annually for irrigation. Attached to the application was a statement by Day's predecessors, Billy and Bret Mitchell, that they had “irrigated approximately 300 acres of Coastal Bermuda grass from this well during the drought years of 1983 and 1984.” The application's request for 700 acre-feet appears to have been based on two acre-feet for the total beneficial use of irrigating the 300 acres plus the recreational use of the 50–acre lake.

In December 1997, the Authority's general manager wrote Day that the Authority staff had “preliminarily found” that his application “provide[d] sufficient convincing evidence to substantiate” the irrigation of 300 acres in 1983–1984 and thus an average annual beneficial use of 600 acre-feet of water during the historical period. The letter invited Day to submit additional information, but he did not respond. In December 1999, the Authority approved Day's request to amend his application to move the point of withdrawal from the existing well to a replacement well to be drilled on the property. Although the Authority cautioned that it still had not acted on the application, Day proceeded to drill the replacement well at a cost of $95,000. In November 2000, the Authority notified Day that, “[b]ased on the information available,” his application would be denied because “withdrawals [from the well during the historical period] were not placed to a beneficial use”.

Day protested the Authority's decision, and the matter was transferred to the State Office of Administrative Hearings for hearing. During discovery, Billy Mitchell testified at his deposition that in 1983 and 1984, an area totaling only about 150 acres had been irrigated, that this had been done using an agricultural sprinkler system that drew water from the lake, and that no more than seven acres had been irrigated with water directly from the well. Day offered no other evidence of beneficial use during the historical period. ²³...