© 2015 The Texas Lawbook.
By Kerry Curry
(Oct. 19) – While oil has long been considered king in Texas, water’s importance has grown exponentially in the drought-plagued state. Perhaps it’s inevitable that a battle over the rights of surface owners vs. groundwater owners has landed before the Supreme Court of Texas.
The high court is considering whether the accommodation doctrine — a long-time provision in which a mineral rights owner accommodates or balances a surface owner’s use of the land — should be applied in cases involving severed groundwater rights.
The case before the High Court — Coyote Lake Ranch vs. City of Lubbock — is being watched closely. While severed groundwater estates aren’t as common as severed mineral estates in Texas, they could become more widespread — as could conflicts between surface and groundwater owners — as the need to develop additional water sources in the state becomes more acute.
“Today, the court can take the next logical step and apply settled oil-and-gas principals to require groundwater purchasers like the city of Lubbock to reasonably accommodate surface uses just like every mineral producer in Texas has done for the past half century,” Rachel Ekery of Alexander Dubose Jefferson & Townsend in Austin said during last week’s oral arguments. Ekery represents petitioner Coyote Lake Ranch.
The South Plains, Texas, cattle ranch sued the city of Lubbock over the city’s efforts to drill more water wells on the ranch.
The city acquired groundwater rights to the 26,600-acre ranch in 1953 via a deed with previous owners. It has several water wells on the ranch and in 2012 had begun a process to expand the well field.
The deed provides for “exclusive rights of ingress and egress in, over and on said lands, so that the [City] may at any time and location drill water wells and test wells on said lands for the purpose of investigating, exploring, producing and getting access to percolating and underground water,” according to respondent’s sur-reply. The deed includes the right for the city to lay water lines, build reservoirs and access roads, among other actions.
The ranch, however, claimed the city’s water well expansion was damaging ranch land. Mowing to reach test well sites caused cattle to begin using the mowed areas, which led to “blowouts”— places where all vegetation was lost, sand began to blow and grazing was lost, Ekery told the court.
A Bailey County district court granted the ranch a temporary injunction, but the 7th Court of Appeals overturned it in July 2014, ruling that the accommodation doctrine doesn’t apply to severed groundwater.
The Accomodation Doctrine
The accommodation doctrine requires mineral owners to accommodate the surface owner’s existing use of the land, if feasible. Although the doctrine doesn’t halt oil and gas drilling, it supports the idea of balancing “competing, if unequal, rights to surface use and provides important protection for landowners,” according to the petitioner’s reply brief on the merits.
The doctrine stems from the 1971 decision in Getty Oil Co. v. Jones, which said surface owners should have some protection from mineral operators on their land. For example, if a mineral owner — which has the dominant estate — has a reasonable alternative to extract the minerals via a method that won’t interfere with the surface use, then the mineral owner has an obligation to accommodate the surface owner.
Ekery wants the temporary injunction reinstated and the case sent back to district court for a trial on its merits.
Justices asked the attorneys numerous questions during the arguments. Justice Jeffrey S. Boyd wanted to know what the ranch would have to prove in order to obtain a right to reasonable accommodation.
Ekery said the burden would be the same as in a mineral case. Her client would have to show that it has an existing surface use that is going to be destroyed or impaired by the drilling or related activities, and then the groundwater estate holder would have to explore alternative methods to produce the groundwater.
In the Coyote Lake Ranch case, she said the city mowed tributaries off of the ranch roads, causing more damage than they would have if they’d mowed east to west, she said.
The court also questioned whether the Texas Legislature could more appropriately address the issue, but Ekery argued that the Legislature has ceded the issue to the courts.
Lubbock Weighs In
Austin Bracewell & Giuliani attorney Dale Wainwright, who presented arguments on behalf of the City of Lubbock, said the case is about contract rights.
“In this case, the deed expressly provides extensive rights purchased by the City of Lubbock six decades ago to produce all of the groundwater, with few exceptions not at issue here,” he said.
“No Texas court has ever held that a severed groundwater estate is dominant, and it would create tremendous angst and potentially incredible litigation to figure out what that means if the court were to decide, after centuries, that another estate is dominant,” he said.
In its written sur-reply, the city said, “no gap-filling doctrine is needed here. The deed explicitly lays out the city’s rights, and is far from silent on the manner in which it may execute those rights and includes the authority, as necessary or incidental, to accomplish the former.”
Wainwright wants Texas’s high court to affirm the Court of Appeals’ dissolution of the injunction.
The accommodation doctrine “upsets historic jurisprudence,” he said. “It also gives, frankly, severed groundwater estate owners more power than they need. A dominant mineral estate can halt a surface use if necessary. We are not asking for that. We are not demanding that, and it’s not in our deed.”
The Canadian River Municipal Water Authority and The Texas Farm Bureau filed amicus briefs. The Texas and Southwestern Cattle Raisers Association and the Texas Cattle Feeders Association, together, also filed an amicus brief .
The case is styled Coyote Lake Ranch LLC v. Lubbock. The case number is 14-0572.
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