Happy New Year! We are back with Part II in our series looking back at the biggest agricultural law issues of 2016. If you missed Part I, which focused on federal issues, click here. Today, we will be focused on Texas-specific issues.
*Jury issues $2.4 million verdict in Bragg v. Edwards Aquifer Authority. The seemingly unending saga of the Bragg case came to an end in 2016. On remand, a Medina County jury issued a judgement in the amount of $2.5 million (exclusive of interest) in favor of the Braggs as compensation for the taking of their groundwater right. The taking occurred when groundwater pumping permits were denied–one on whole and one in part–by the Edwards Aquifer Authority. Although it initially appeared that the Edwards Aquifer Authority was going to appeal the verdict, in July it was announced that they would be paying the judgment, totaling $4.5 million when interest was added, and not pursuing an appeal. This case is extremely important as it is the first case where a Texas appellate court upheld a finding that under these specific facts, the EAA’s denial of Mr. Bragg’s pumping permit constituted a taking of his constitutionally protected property right, requiring just compensation. [To read more about the case, click here.]
*Supreme Court rules in City of Lubbock v. Coyote Lake Ranch. The Texas Supreme Court issued a huge ruling in an important groundwater law case in May. In this case, the City of Lubbock purchased water rights from the Coyote Lake Ranch in 1953. The deed included rights of access and the rights to drill wells. In 2012, the City contacted the ranch with plans to begin drilling a number of additional water wells on the property. The ranch filed suit seeking an injunction against the City, claiming that they could not drill the wells in the locations they wanted based upon protections of the accommodation doctrine. The doctrine, which originated in the oil and gas context and essentially requires an oil and gas operator to accommodate existing surfaces uses in limited circumstances, had never been applied to water law. The Supreme Court, however, changed that. The court ruled that the accommodation doctrine is applicable to groundwater, not just to oil and gas. Further, the court stated that the severed groundwater estate is dominant to the surface estate, a decision with potentially far-reaching implications for Texas landowners. The case is now on remand back to the trial court to determine a number of issues, including whether the accommodation doctrine is applicable under the facts of this case. [Read more about this decision here.]
*Controversy continues over pipeline from Permian Basin to Mexico through Big Bend. The Trans-Pecos Pipeline, a planned pipeline project by Energy Transfer Partners (“ETP”) that will transport natural gas from the Permian Basin to Mexico, has generated a great deal of controversy in the Big Bend area. In 2016, the FERC approved the international portion of the proposed Trans-Pecos pipeline and found that it does not have jurisdiction over the remainder of the line, which is intrastate only and governed by the Texas Railroad Commission. Currently, numerous condemnation actions of have been filed by ETP against landowners along their planned route. ETP relies upon its being a “public utility” as their justification for having eminent domain power. It is likely that this year, we will see appeals from compensation awards issued in these cases, which have historically been very difficult for landowners to prevail.
*Abengoa awarded Burleson County to San Antonio pipeline transfers project to Garney Construction. You may remember back in 2014 that the San Antonio Water Systems signed a contract for a $3.4 billion deal with the Spanish company, Abengoa, to build the Vista Ridge Pipeline. The Pipeline is to transport groundwater leased in Burleson County to the City of San Antonio. In February, Abengoa announced it was in pre-insolvency proceedings and intended to sell 80% of its interest in the Pipeline to an unnamed third party. In April, it was announced that the third party purchaser, who will also have all decision-making authority, would be Garney Construction, a Kansas City-based company. It is expected that construction will begin this year and water will be flowing in 2020. [To read more about the pipeline project, click here.]