Groundwater Planning and Litigation TRWA/TWCA Water Law Seminar Austin, TX January 11-12, 2017 Groundwater Planning and Litigation William D. Dugat III Bickerstaff Heath Delgado Acosta LLP 3711 S. MoPac Expwy. Bldg. 1, Suite 300 Austin, TX 78746 bdugat@bickerstaff.com

Summary EAA v. Bragg Coyote Lake v. City of Lubbock TCEQ v. Guadalupe County GCD Lone Star GCD v. City of Conroe FSH v. MPGCD Republic Water of Texas v. MPGCD Petitions Appealing LSGCD DFC adoption

Edwards Aquifer Authority v. Bragg (Feb. 2016) 2013 San Antonio Court of Appeals determined EAA’s permit denial and permit modification constituted a takings. Case remanded to trial court to determine damages. May 17, 2016 Final Judgment; jury award of $2.5 takings compensation and $1.9 interest.

Facts of Bragg: Home Place – 60 acre homestead and orchard requested 228.85 AF – 120.2 AF. D’Hannis Orchard - 42 acres requested 193.12 acre-feet – no permit (no historical use). Trial Court – takings and damages based on amount of groundwater entitled and value. Valuation – value of entire property before and after EAA action: unlimited water vs. permitted amount.

2016 Trial Court Jury : With Unlimited Water Without Difference Home Place $1.67 million $300K $1.37 million D’Hannis $1.18 million $0 $1.18 million $2.55 million + $1.92 interest $4.47 million

Application of “Accommodation Doctrine” to severed Groundwater Rights Coyote Lake v. City of Lubbock (May 2016) Coyote Lake facts: 26,000 acre land use for cattle ranching, farming, and hunting. 1953 Lubbock bought all the groundwater: Deed reserved some groundwater to ranch Deed had detail provisions on use of surface Sandy soil – “blow outs” when areas cleared and mowed. 2012 7 wells, up to 60 more. City mowed extensive paths – ranch enjoined City.

“Dominant” estate must exercise its rights with “due regard” to the rights of the surface owner. Surface Owner must show: Existing use by surface owner Dominant estate would substantially impair the existing surface use Dominant estate has a reasonable alternative available on the premises There are no reasonable alternatives to surface owner

Take away for Coyote Lake: Groundwater is dominant estate – maximizes production. Going forward, deed or lease of groundwater rights need to be specific. Vague terms could lead to application of accommodation doctrine. Burden of proof on surface owner is high.

TCEQ v. Guadalupe Co. GCD (April 2016) Post Oak Clean Green landfill. Guadalupe County GCD Rule 8.1: Notice of landfill application must be provided to district and “in no event may waste or sludge be permitted to be applied in any manner in any outcrop area of any aquifer within Guadalupe County Groundwater Conservation District” October 2013, Post Oak Clean Green files application for landfill over Carrizo-Wilcox. April 2014, GCD files declaratory judgment action.

Post Oak Clean Green cont’d November 2014, TCEQ intervened and filed plea to jurisdiction: TCEQ has exclusive jurisdiction Improper attempt to stop TCEQ from acting on permit Jurisdictional pleas overruled and GCDs partial MSJ granted: Not preempted in prohibiting waste over aquifer Rule constitutional and not vague Post oak clean green violated rule 8.1

Post Oak Clean Green cont’d Denial of pleas to jurisdiction appealed by TCEQ and applicant. Court of appeals reversed: GCD’s claim not ripe; no injury unless TCEQ permit granted; ripe after TCEQ acts and issues permit. Did not address whether GCD’s claim was barred. By exclusive jurisdiction – solid waste disposal act. No further appeal.

Lone Star GCD and its directors v. City of Conroe et al. (Argued Sept Conroe and investor owned utilities challenged Lone Star GCD’s rule requiring reduction of groundwater use by 30%. GCD filed and district court denied plea to the jurisdiction. Case argued in Beaumont court of appeals in September 2016.

Issues: Whether governmental immunity bars use of the UDJA to challenge a GCD’s rules as invalid because the GCD acted outside its authority? Lone Star GCD argues: UDJA does not apply to rule challenge UDJA cannot be applied to a governmental entity Directors are immune from UDJA under water code § 36.066

Water Code § 36.066(a) “A district board member is immune from suit and immune from liability for official votes and official actions”. Added in 2015. What is the meaning of the director immunity language – personal liability only?

Fort Stockton Holdings LP v. Middle Pecos GCD (pending but not argued) In 2011, FSH requested and was denied a new permit with special condition allowing withdrawal of 47,418 acre feet either under and while maintaining existing irrigation historical use permit or under requested new permit. FSH appealed to district court where MPGCD sought and court granted motion for partial summary judgment.

Fort Stockton Holdings LP v. Middle Pecos GCD (pending but not argued) FSH appealed to El Paso court of appeals. Is MPGCD required to accept special condition requested by FSH? GCD asserts condition violates the decision in Guitar Holding LP v. Hudspeth County UWCD. GHLP – when convert historic use to new use, protected historical use ends.

Republic Water Company of Texas v. Middle Pecos GCD Republic filed mandamus suit requesting district court order MPGCD to declare permit application complete. MPGCD filed plea to jurisdiction and motion to dismiss asserting that Republic had not provided required drawdown maps based upon a USGS study. Republic argued information being required by MPGCD not required under ch. 36 for application to be admin complete. Court agreed with MPGCD, dismissed claims, and ordered republic to pay attorneys’ fees. Republic has filed notice of appeal.

TWCA “Administrative Completeness” Bill Amends Water Code § 36.113(c) to limit what can be in a permit application to listed items under 36.113, and “Other information included in a rule of the district that specifies what information must be included in an application for a determination of administrative completeness, which information must be reasonably related to an issue that a district is authorized to consider under chapter 36.”

Petitions Appealing DFC and GMA-14 adopted by Lone Star GCD § 36.108(d-5) required GMA to propose DFC before May 1, 2016. Once GMA proposes DFCs, each GCD to conduct hearings, provide feedback to GMA and GMA to propose final DFC. After final DFC proposal, each GCD adopts DFC. LSGCD adopted GMA-14 DFCs on August 9, 2016.

“Affected person” may appeal GCD’s adoption within 120 days by filing a petition with GCD. Dec. 2016, Cities of Conroe, Magnolia, and Quadvest (investor-owned water utility) appealed. Allegations: DFCs cannot be based on county boundaries without a scientific relationship between boundaries and aquifers. DFCs fail to protect private property rights. GMA-14 did not consider total estimated receivable storage. GMA-14 did not base adoption on best available science.

GCD forwards petition to TWDB. TWDB to complete a study within 120 days: Do DFCs meet statutory criteria? Scientifically analyze DFCs GCD contracts with SOAH to conduct a hearing on DFC reasonableness: Must consider TWDB study Expert witnesses of TWDB

SOAH’s proposal for decision comes back to board. GCD can vacate or modify, but must justify with a report providing policy, scientific, and technical justification. If GCD finds DFC unreasonable, must reconvene GMA to adopt new DFC for the GCD. GCDs final order may be appealed to district court. First of its kind.

Groundwater Planning and Litigation TRWA/TWCA Water Law Seminar Austin, TX January 11-12, 2017 Groundwater Planning and Litigation William D. Dugat III Bickerstaff Heath Delgado Acosta LLP 3711 S. MoPac Expwy. Bldg. 1, Suite 300 Austin, TX 78746 bdugat@bickerstaff.com