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Texas Groundwater Summit
              August 29, 2012

Sarah Faust, Kemp Smith LLP
   There was no waiver by Chapter 36 of the City’s
    governmental immunity for claims for past due fees,
    penalties, and costs assessed under a groundwater
    conservation district’s rules governing permits.

   Suits to require prospective compliance with
    statutory or constitutional provisions are not
    prohibited.




                                                          2
   Tex. Water Code § 36.102(e):

          In an enforcement action by a district against any person
    that is a governmental entity for a violation of district rules,
    the limits on the amount of fees, costs, and penalties that a
    district may impose under Section 36.122, 36.205, or this
    section, or under a special law governing a district operating
    under this chapter, constitute a limit of liability of the
    governmental entity for the violation.

         This subsection shall not be construed to prohibit the
    recovery by a district of fees and costs under Subsection (d) in
    an action against any person that is a governmental entity.



                                                                       3
   The common law regarding ownership of groundwater in place
    is that the landowner has absolute title in severalty to the
    groundwater beneath his land, qualified by the law of capture
    and subject to police regulations.

   Landowners have a constitutionally compensable interest in
    groundwater.

   Factual record not developed to determine whether and what
    kind of compensable taking occurred, but likely will depend on
    application of the balancing test of Penn Central Transp. Co. v.
    New York, 438 U.S. 104 (1978).




                                                                       4
Trial Judgment

   Implementation of the EAA Act constituted a regulatory taking
    as set forth in the balancing test of Penn Central Transp. Co. v.
    New York, 438 U.S. 104 (1978).

   Denial of permit for D’Hanis well caused damages of
    $134,918.40, based on the difference between dry land and
    irrigated farm.

   Issuance of permit for Home Place well for less than the
    amount requested caused damages of $597,575, based on the
    market value per acre-foot of water right requested but not
    permitted.


                                                                        5
   Are the claims barred by the statute of limitations?

   What is the date on which economic impact and adequate
    compensation is evaluated?

   If there is a taking, who is liable, the State of Texas or the EAA?

   Is there a physical taking, a denial of all economic value, or a
    Penn Central taking?

   Did the court properly determine adequate compensation?
    How are the economic benefits that the Braggs received
    valued?



                                                                          6
   LULAC alleges EAA Director Districts are disproportionately
    weighted towards rural districts and favor anglo over minority
    voters in violation of the Fourteenth Amendment and the
    Voting Rights Act.

   EAA has filed a motion to dismiss.




                                                                     7
   Suit for judicial review of TWDB finding that GMA 12 DFCs are
    reasonable.



   Environmental Stewardship alleges TWDB failed to adequately
    consider the impact of pumping under the DFCs on spring flow
    and surface water, impairment of surface water rights holders
    ability to utilize water rights, and impacts to wildlife
    dependent on surface water flows.




                                                                    8
   The Red River Compact gives Oklahoma wide berth to protect
    its water resources governed by the Compact against out of
    state transfer and use, and doing so does not violate the
    dormant Commerce Clause.

   The provisions in the Compact that were designed to ensure
    minimum water flow to downstream states did not obligate
    Oklahoma to allow Texas entities to appropriate Texas’ share
    of water from within Oklahoma’s boundaries.

   There is no implied conflict preemption between the Oklahoma
    statutes restricting out of state water use and the Red River
    Compact.



                                                                    9
   TAP sues TCEQ officials for take of whooping cranes in
    violation of the Endangered Species Act, alleging that TCEQ’s
    water diversion permits limited freshwater into the San
    Antonio-Aransas Bay systems.

   Texas Chemical Council, Guadalupe-Blanco River Authority,
    and San Antonio River Authority allowed to intervene as
    Defendants.

   Trial denied Motions to Dismiss, Burford Abstention Motions,
    and Motions for Summary Judgment and case was tried in
    December 2011.




                                                                    10
   Ward Timber and other landowners in Region D challenge
    TWDB’s approval of the 2012 State Water Plan.

   Previous suit by same plaintiffs reversed and remanded TWDB
    approval of Region C water plan because of failure to resolve
    interregional conflict with Region D plan regarding Marvin
    Nichols reservoir.

   Plaintiffs seek injunction to prevent financing or any further
    action on Region C plan that involves Region D water
    resources.




                                                                     11
   Request regarding Travis County’s application of Texas Water
    Code § 35.019

   Q: Are water availability requirements only applicable within
    the boundaries of the PGMA? A: No, water availability
    requirements apply anywhere in the county where platting is
    required.

   Q: Do water availability requirements apply to groundwater
    and surface water? A: No, water availability requirements apply
    only to groundwater.




                                                                      12
   Q: May a county adopt water availability requirements in an
    area where a GCD has been created, is in the process of, or will
    be created in the future? A: Yes.



   Q: Does § 36.002 (as amended in the 82nd R.S. (2011)) limit or
    revoke the county’s regulatory authority under § 35.019? A:
    No.




                                                                       13
   §36.121 excludes certain wells supplying municipalities from
    GCD regulation. Qualifying municipalities bracketed by
    population.



   In 2011 legislative session, HB 3109 and HB 2702 both
    amended 36.121. HB 2702 created a population minimum of
    100,000 for municipalities to qualify.



   Q: If both bills amend §36.121, are municipalities of less than
    100,000 excluded from the exemption? A: No. HB 3109
    prevails over HB 2702 and the minimum population
    requirement is not effective.


                                                                      14
Sarah Faust
   Kemp Smith LLP

sfaust@kempsmith.com

   (512) 320-5466

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Case Law Update, Sarah Faust

  • 1. Texas Groundwater Summit August 29, 2012 Sarah Faust, Kemp Smith LLP
  • 2. There was no waiver by Chapter 36 of the City’s governmental immunity for claims for past due fees, penalties, and costs assessed under a groundwater conservation district’s rules governing permits.  Suits to require prospective compliance with statutory or constitutional provisions are not prohibited. 2
  • 3. Tex. Water Code § 36.102(e): In an enforcement action by a district against any person that is a governmental entity for a violation of district rules, the limits on the amount of fees, costs, and penalties that a district may impose under Section 36.122, 36.205, or this section, or under a special law governing a district operating under this chapter, constitute a limit of liability of the governmental entity for the violation. This subsection shall not be construed to prohibit the recovery by a district of fees and costs under Subsection (d) in an action against any person that is a governmental entity. 3
  • 4. The common law regarding ownership of groundwater in place is that the landowner has absolute title in severalty to the groundwater beneath his land, qualified by the law of capture and subject to police regulations.  Landowners have a constitutionally compensable interest in groundwater.  Factual record not developed to determine whether and what kind of compensable taking occurred, but likely will depend on application of the balancing test of Penn Central Transp. Co. v. New York, 438 U.S. 104 (1978). 4
  • 5. Trial Judgment  Implementation of the EAA Act constituted a regulatory taking as set forth in the balancing test of Penn Central Transp. Co. v. New York, 438 U.S. 104 (1978).  Denial of permit for D’Hanis well caused damages of $134,918.40, based on the difference between dry land and irrigated farm.  Issuance of permit for Home Place well for less than the amount requested caused damages of $597,575, based on the market value per acre-foot of water right requested but not permitted. 5
  • 6. Are the claims barred by the statute of limitations?  What is the date on which economic impact and adequate compensation is evaluated?  If there is a taking, who is liable, the State of Texas or the EAA?  Is there a physical taking, a denial of all economic value, or a Penn Central taking?  Did the court properly determine adequate compensation? How are the economic benefits that the Braggs received valued? 6
  • 7. LULAC alleges EAA Director Districts are disproportionately weighted towards rural districts and favor anglo over minority voters in violation of the Fourteenth Amendment and the Voting Rights Act.  EAA has filed a motion to dismiss. 7
  • 8. Suit for judicial review of TWDB finding that GMA 12 DFCs are reasonable.  Environmental Stewardship alleges TWDB failed to adequately consider the impact of pumping under the DFCs on spring flow and surface water, impairment of surface water rights holders ability to utilize water rights, and impacts to wildlife dependent on surface water flows. 8
  • 9. The Red River Compact gives Oklahoma wide berth to protect its water resources governed by the Compact against out of state transfer and use, and doing so does not violate the dormant Commerce Clause.  The provisions in the Compact that were designed to ensure minimum water flow to downstream states did not obligate Oklahoma to allow Texas entities to appropriate Texas’ share of water from within Oklahoma’s boundaries.  There is no implied conflict preemption between the Oklahoma statutes restricting out of state water use and the Red River Compact. 9
  • 10. TAP sues TCEQ officials for take of whooping cranes in violation of the Endangered Species Act, alleging that TCEQ’s water diversion permits limited freshwater into the San Antonio-Aransas Bay systems.  Texas Chemical Council, Guadalupe-Blanco River Authority, and San Antonio River Authority allowed to intervene as Defendants.  Trial denied Motions to Dismiss, Burford Abstention Motions, and Motions for Summary Judgment and case was tried in December 2011. 10
  • 11. Ward Timber and other landowners in Region D challenge TWDB’s approval of the 2012 State Water Plan.  Previous suit by same plaintiffs reversed and remanded TWDB approval of Region C water plan because of failure to resolve interregional conflict with Region D plan regarding Marvin Nichols reservoir.  Plaintiffs seek injunction to prevent financing or any further action on Region C plan that involves Region D water resources. 11
  • 12. Request regarding Travis County’s application of Texas Water Code § 35.019  Q: Are water availability requirements only applicable within the boundaries of the PGMA? A: No, water availability requirements apply anywhere in the county where platting is required.  Q: Do water availability requirements apply to groundwater and surface water? A: No, water availability requirements apply only to groundwater. 12
  • 13. Q: May a county adopt water availability requirements in an area where a GCD has been created, is in the process of, or will be created in the future? A: Yes.  Q: Does § 36.002 (as amended in the 82nd R.S. (2011)) limit or revoke the county’s regulatory authority under § 35.019? A: No. 13
  • 14. §36.121 excludes certain wells supplying municipalities from GCD regulation. Qualifying municipalities bracketed by population.  In 2011 legislative session, HB 3109 and HB 2702 both amended 36.121. HB 2702 created a population minimum of 100,000 for municipalities to qualify.  Q: If both bills amend §36.121, are municipalities of less than 100,000 excluded from the exemption? A: No. HB 3109 prevails over HB 2702 and the minimum population requirement is not effective. 14
  • 15. Sarah Faust Kemp Smith LLP sfaust@kempsmith.com (512) 320-5466