Update for May 21, 2015

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Texas’ high court allows Bragg water ruling to stand

By William Hoover 
Anvil Herald Correspondent

The Texas Supreme Court on Friday, May 1, refused to review the 4th Court of Appeals decision in the Edwards Aquifer Authority vs. Bragg ruling which found the EAA had “taken” property rights from the Braggs and their pecan farm by limiting their pumping rights.

The refusal allows the 4th Court’s decision to stand for now and is a victory for the Braggs.

The lack of review, however, disappointed water rights experts, who had hoped a Supreme Court ruling would help clarify Texas’ murky groundwater laws.

Texas owns the water in rivers, streams and lakes above ground and governs its allowance. But groundwater is a different story.

More than a century ago, the Texas Supreme Court established the “rule of capture,” meaning that landowners can pump however much water they want from underneath their property regardless of whether it depletes their neighbor’s supply.

Fifty years later, lawmakers put groundwater regulation in the hands of local groundwater conservation districts, drawn across political boundaries rather than aquifer lines. Almost 100 of these districts exist today and all have different rules with little state oversight.

Most people who follow water laws believed the state’s highest court would weigh in on the lower court’s ruling that appears to shift the balance of rights toward landowners when groundwater districts try to limit their water use.

The Bragg decision, rendered in 2013, marked the first time a Texas appeals court found that groundwater regulation resulted in a violation of property rights under the Texas Constitution.

A federal judge ordered the creation of the EAA in 1993 after finding that unlimited pumping was threatening endangered species. One of the largest water districts in the states, the EAA is unique in that it has mandated pumping limits to limit the total amount of annual water withdrawals to 572,000 acre feet.

The Braggs, who have long grown and sold pecans in Medina County, applied for an EAA permit when the water district was first established by the state.

Glenn and JoLynn Bragg invested more than $2 million to grow pecans in Medina County on 100 acres of land sitting over the aquifer many years before the EAA was created in what is known as the historical period. They asked for 228.5 acre-feet for their Home Place Orchard and 193.12 acre-feet for their D’Hanis Orchard.

Based on rules set forth by the Texas Legislature, the EAA granted a permit of only 120.2 acre-feet for the Home Place Orchard, and denied a permit for the other site. As a result of their use of water during the historical period of 1972 through 1993 on the Home Place Orchard, the Braggs were granted a permit for 120.2 acre-feet of Edwards Aquifer water per year.

Because the Braggs had no historical use on the D’Hanis Orchard, that permit application was denied. On Nov. 21, 2006, the Braggs sued the Authority for an alleged taking of their property and for violation of their federal civil rights.

Locally, many water experts are concerned about the implications of the Bragg decision for the EAA, other groundwater districts, suing landowners and ultimately rate payers who would foot the bill for any damages.

“I think everyone’s surprised that the court did not hear this case,” said Steve Kosub, senior water resources counsel with the San Antonio Water Systems. “This would have been an opportunity for the court.”

“What it means for us in the short-term is nothing,” said EAA General Manager Roland Ruiz. “We are still going to operate and regulate the way we have. It is important to note no court has ever said the EAA misapplied or misinterpreted our statutory act.

“The question for the courts was: ‘If a ‘taking’ occurred, what are the damages due to the Braggs?’” he said. “We and the Braggs petitioned the Supreme Court for a review but the court denied the petition for review for both of us. So we are left with the appellate court decision that there was a taking.

“However, we don’t know what those damages are, as of now,” he said. “That will have to play out in trial court.”

The EAA believes there is a statute of limitations that will narrow the field of potential parties who might sue based on the Bragg case.

“We don’t believe that we have an open-ended level of exposure or risk,” said Ruiz. “I feel we are in a good position from that standpoint. We are applying the EAA Act the way we are supposed to and regulating the way the legislature intended us to.

“If there are other taking claims that come forward, they will all have to be based on the facts unique to the particular action taken on their permit,” he said. “Facts are different depending on the applicant, so we can’t make a statement on any particular number of individuals who might qualify. They will all have to be litigated in the courts.”

Although water experts caution it will be difficult to generalize the Bragg decision to other cases, the Supreme Court’s failure to review the case is a concern for other groundwater districts.

“Not many people fall into the category the Braggs fall into,” said Greg Ellis, a lawyer who represents the Hays-Trinity Groundwater Conservation District, previously managed the EAA, and predicted continued litigation of the case and a possible return to the Supreme Court. “I don’t see this either as a final answer on the Bragg situation or a victory or loss for either side. I think the Supreme Court is thinking, if the parties can’t find a way to settle this, the courts will have another shot at it.

“I’m not aware of any other case where the court decided it didn’t have enough evidence, so it gave the plaintiff a second chance to try the case,” he said. “That is exactly what happened. The court said, ‘We don’t have any evidence here about the value of that pecan orchard before regulation and the value after, therefore you have to go back and retry this case’.”

The Supreme Court said in the Day case that part of a water district’s job is to ensure everybody receives their fair share of the aquifer. The court also left it to the individual districts as to how to define what is a ‘fair share’. Based on that opinion, Ellis said he doesn’t think anybody should be allowed to make a takings claim for being limited to their fair share.

“The Supreme Court could have said a fair share of the aquifer for agricultural purposes is two acre-feet of water per acre of land,” said Ellis. “The fact you decided to grow pecan trees instead of corn doesn’t change your fair share. Therefore, there can be no liability on the Home Place Orchard, because you were given your fair share and you have to figure out how to make do with your fair share. But that did not happen.”

While Ellis believes the Supreme Court may have another opportunity to rule on the situation, he said both the Bragg case and the EAA are so unique, it really doesn’t set new law.

“It is unlikely to me that it sets much of a precedent for anybody else in the state,” he said. “Still it is a concern to groundwater districts because it does say that raising somebody’s permit by less than the amount they requested might result in liability.

“My guess is the Supreme Court thinks this case will either settle, or it will be back in front of them in three or four years anyway,” he added.

For the Bragg’s part, Attorney Paul Terrill, released a statement saying the family feels vindicated by the court’s refusal to review the EAA v. Bragg.

“The case is significant because it is the first case in Texas in which a groundwater conservation district has been held liable in court for taking private property,” read the statement. “The Braggs are very gratified that the courts have now confirmed that the EAA’s actions resulted in a taking of their property and the EAA must pay just compensation for that taking. It is a great victory for the Braggs and it is long overdue.”



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