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Environmental Blog

  • 31
  • May
  • 2016

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Texas Supreme Court: Groundwater Owners Must Accommodate Surface Owners’ Rights

The Texas Supreme Court has given those interested in groundwater another reason to hold on to their oil and gas treatises. In 2012, the Court looked to oil and gas law in Edwards Aquifer Authority v. Day to support its decision that landowners own the groundwater beneath their properties in place. On May 27, 2016, the Court borrowed another principle from the state’s oil and gas playbook—this time, the doctrine of accommodation—to address a dispute between the Coyote Lake Ranch, which owns surface rights to its property outside of Lubbock, and the City of Lubbock, which owns the severed groundwater estate beneath the ranch and a right to use any part of the ranch surface to drill, produce, and deliver groundwater.1 Owners of severed groundwater estates must now consider more carefully how their development plans may affect existing surface uses.

The City purchased the groundwater estate in 1953 and drilled seven wells on the ranch. In 2012, the City announced plans to drill up to twenty test wells in the middle of the ranch and to then install another sixty wells across the ranch. Coyote Lake Ranch went to court to enjoin the City, arguing that the City’s plan would cause destructive wind erosion, particularly in the sandier portions of the ranch, and that the City could accommodate ranch operations by adopting an alternative plan that would give access to the groundwater estate without unnecessarily damaging the surface estate. The City argued that the deed gave it the right to develop the groundwater resources as it saw fit, and that the accommodations doctrine did not apply to groundwater owners.

The Court unanimously 2 agreed that, given the similarities between mineral and groundwater estates and the conflicts that arise with the surface owner when development occurs to extract minerals and groundwater, the accommodations doctrine should be extended to groundwater interests. The Court explained that as with other mineral estates, the groundwater estate is “dominant” to the surface estate, not because it is superior to the surface estate, but because it is benefitted by an implied right to the reasonable use of the surface. Similarly, the surface estate is “servient,” not because it is inferior, but because it must allow the exercise of the implied right held by the groundwater estate.

The Court noted that the accommodations doctrine has “proven its worth” in the oil and gas context, and that the Court need not search for a new approach to resolving disputes between owners of surface estates and severed groundwater estates when a proven rule is so readily available. As a result, owners of a groundwater estate must exercise due regard for the surface estate’s rights. Under the accommodations doctrine, the groundwater estate owner may need to yield to the surface owner when (1) the groundwater owner’s use of the surface completely precludes or substantially impairs the existing use, (2) the surface owner has no available, reasonable alternative to continue the existing use, and (3) given the particular circumstances, the groundwater owner has available reasonable, customary, and industry-accepted methods to access and produce the water and allow continuation of the surface owner’s existing use.

Coyote Lake Ranch, LLC, v. City of Lubbock, No. 14-0572, slip op. (Tex. May 27, 2016).

In the main opinion, six justices held that the deed conveying the groundwater estate to the City did not expressly determine the rights of the City and the Coyote Lake Ranch, and they thus looked to the accommodations doctrine to provide the rule of law. In the concurring opinion, the remaining three justices agreed that the accommodations doctrine should extend to groundwater interests, but they thought that the deed expressly addressed the issue.

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Author

Brandon M. Tuck

Brandon M. Tuck Counsel