Significant Jury Verdict in Regulatory Takings Case - Edwards Aquifer Authority v. Bragg
In what amounts to a first of its kind, last week a Texas state
court jury awarded pecan farmers Glenn and JoLynn Bragg more than $2.5 million
in a regulatory takings case relating to the denial of a requested groundwater
permit.1 The jury’s verdict builds upon the Texas
Supreme Court’s 2012 ruling that land ownership includes an interest in
groundwater in place that cannot be taken for public use without adequate
At specific issue in this jury trial was the correct model for compensation in a
regulatory takings case.
The Braggs own two commercial pecan orchards that were
irrigated using two wells, one drilled in 1980 without a permit and one in 1995
with permission from the Medina County Groundwater Conservation District. The Braggs’ orchards sit above the Edwards
The Edwards Aquifer Authority (“EAA”) is a political
subdivision of the State of Texas created in 1993 “to manage the aquifer and to
sustain the diverse economic and social interests dependent on the aquifer.”3 Under the Edwards Aquifer Act, the EAA has
authority to grant initial regular permits (“IRPs”) to existing users who can
establish, by “convincing evidence,” beneficial use of underground water
withdrawn between June 1, 1972, and May 31, 1993.4 The EAA began issuing IRPs in 1996.
In 1996, the Braggs applied for IRPs, claiming historic
withdrawals of 228.85 acre-feet of water per year from the 1980 well and 193.12
acre-feet of water per year from the 1995 well. In response, the EAA granted a
permit authorizing 120.2 acre-feet of water per year from the older well and no
permit for the 1995 well, claiming the second well fell outside of the historic
period for existing users. After years
of pursuing administrative remedies against the EAA, the Braggs filed a civil
lawsuit in November 2006.
In a previous bench trial, a judge awarded the Braggs
$630,000 for the value of their water rights that had been unlawfully
“taken.” In August 2013, the Fourth
Court of Appeals upheld the bench trial finding that a taking had occurred but
remanded the case for further proceedings because the three-judge appeals panel
disagreed with the compensation model applied by the district court judge.5
Upon hearing evidence on the two sides’ competing
compensation models, the Medina County District Court jury returned a 10-2
verdict, finding that the Braggs are owed $2.55 million based on the difference
in value of the two commercial pecan orchards before and after the EAA’s denial
of the Braggs’ permit applications to continue using groundwater from the
Edwards Aquifer. With the addition of
pre-judgment interest, the total jury award exceeds $4 million.
This latest development marks another setback in litigation for
the EAA and its permit program, which places an overall cap on withdrawals from
the Edwards Aquifer and has faced increasing scrutiny and litigation. Based on comments made by the EAA following
the announcement of the verdict, we expect the EAA to appeal the jury’s decision.6 We will continue to monitor and report on future
developments in the battle between the EAA and the Braggs and other litigation
relating to ownership of groundwater in Texas.
1 Bragg v. Edwards Aquifer Authority,
Case No. 06-11-18170-CV, in the District Court of Medina County, Texas.
2 Edwards Aquifer Authority v. Day, 369
S.W.3d 814 (Tex. 2012).
3 Edwards Aquifer Act §§
4 Id. at §§ 1.16(a), (b), (d).
5 Edwards Aquifer Authority v. Bragg,
--- S.W.3d ---, 2013 WL 4535935 (Tex. App.--San Antonio Aug. 28, 2013).
6 In a statement made the day after the jury verdict, EAA board chair Luana Buckner
announced, “Regardless of whether we agree or disagree with the jury’s
decision, the EAA board of directors has great respect for this process. Accordingly, we will discuss the outcome and
evaluate all options at our next board meeting.”