Water Laws Committee Meeting and Case Law Update

©Lloyd Gosselink Rochelle & Townsend, P.C.

Presented by: Martin C. Rochelle [email protected]

(512) 322-5810

816 Congress Avenue Suite 1900

Austin, Texas 78701 (512) 322-5800

(512) 472-0532 Fax www.lglawfirm.com

Water Laws Committee Meeting

and Case Law Update

2012 Annual Conference

Texas Water Conservation

Association


HB 2694: Water Curtailment

Rulemaking • Would allow ED to suspend or adjust water rights

during drought or emergency shortage of water

– Proposed rules define key terms:

• Adjustment

• Drought

• Emergency shortage of water

• Suspension

• Suspension or adjustment order

• Water right

– Rules would maintain prior appropriation system

• First in time is still first in right

• Note: for public welfare, ED may decide not to suspend a junior right and

require increased conservation instead



Rulemaking • ED may issue suspension or adjustment order when:

– Drought or emergency shortage of water exists;

– Insufficient water to meet the needs of senior water rights;

– Senior rights holders can put water to beneficial use; and

– By suspending or adjusting junior rights, senior rights could

divert water for beneficial use

• Opportunity for hearing

– Suspension and adjustment orders may be issued by ED without

prior notice or opportunity for hearing

– However, notice and opportunity for hearing must be provided as

soon as practicable after order issued—hearing uncertain



Rulemaking

• Public hearing held on December 1, 2011.

• Public comment period closed on December 5,

2011.

– Many comments sought more clarification and

definition as to hearings process and scope of

drought or emergency shortage of water.

• Considered for adoption at April 11, 2012 TCEQ

Commissioners’ Agenda.


SB 181 / SB 660 – Water Use Reporting

Rulemaking • Implementing revised water use and conservation

reporting metric and guidance.

• Timeline

– Draft TCEQ rules and definitions promulgated in November 2011

– Jan. 18, 2012 WCAC meeting

• TCEQ and TWDB agency reports

• Status of water use and conservation calculator

– Feb. 14, 2012 Committee conference call to discuss concepts for

preparation of draft guidance

– Jan. 1, 2013: Official deadline to implement rules, guidance, and

reporting forms


Watermaster Evaluations

• Evaluations of non-watermaster river and

coastal basins required as part of HB 2694

(TCEQ Sunset Bill). TCEQ to evaluate and issue

a report once every five years.

• During 2012, the TCEQ is evaluating:

– Brazos River Basin

– Brazos-Colorado Coastal Basin

– Colorado River Basin

– Colorado-Lavaca Coastal Basin


Other Topics

• Interim Charges

• Petition for Certiorari to U.S. Supreme Court in

TRWD v. Oklahoma

– Amicus briefing

• The Aransas Project


Case Law Developments


Tex. Rice Land Partners, Ltd. v. Denbury Green Pipeline-Tex., LLC

-- SW3d – (Tex. 2012)

• Challenge to “common carrier” designation by RRC of Denbury CO2

pipeline project

• RRC T-4 (pipeline operation permit) application granted 8 days after

submission without notice, hearing, evidence, or investigation

• Tex. Nat. Res. Code 111.019 gives private company eminent domain power

if pipeline available to the public for hire for transportation of others’ CO2

• Denbury Green just required to “check the box” on T-4 claiming the pipeline

was a common carrier line

• Tex. Rice Partners lessee refused Denbury’s entry to property

• Denbury won on summary judgment, affirmed by court of appeals


Tex. Rice Land Partners, Ltd. v. Denbury Green Pipeline-Tex., LLC

-- SW3d – (Tex. 2012)

• Tex. Sup. Ct.:

– Questions regarding determinations of “public use” under Art. I, Sec. 17

analysis are “inherently judicial” and are reserved for the courts.

– RRC T-4 “application” process more akin to registration, not application

– No effort conducted to confirm the true nature of the proposed pipeline (i.e.,

public use v. private use)

– Consequently, no evidence demonstrating as a matter of law that pipeline

will be available to the public for hire

• Holding:

– To qualify as a common carrier, person must demonstrate “a reasonable

probability” exists that pipeline will at some point after construction serve the

public by transporting gas for one or more customers that will retain

ownership of their gas

– A reasonable probability is one that is more likely than not


Rolling Plains Groundwater Conservation Dist. v.

City of Aspermont

353 SW3d 756 (Tex. 2011)

• City refused to pay GCD-imposed groundwater transport fee

• GCD assessed late payment penalties, civil penalties, attorney fees and

costs

• GCD sued for fees due and owing, and sought declaration in State district

court that City must comply with Ch. 36, Water Code and GCD rules

• City filed PTJ asserting immunity from suit under governmental immunity

• Eastland Court: City was immune from suit for GCD efforts to collect past

due fees, penalties, costs, but City not immune from GCD dec. action


Rolling Plains Groundwater Conservation Dist. v.

City of Aspermont

353 SW3d 756 (Tex. 2011)

• Tex. Sup. Ct.:

– Only the Legislature can waive governmental immunity through clear and

unambiguous waiver

– Use of term “person” in Section 36.115, Water Code, even when

considering definition of “person” in Section 311.005(2), Gov’t Code, is not

clear and unambiguous waiver

– GCD’s claim for past due penalties, costs, etc. is akin to claim for money

damages

• Holding:

– City is immune from GCD suit for retroactive “money damages”

– City is not immune to suits that require State actors to comply in the future

with a statutory or constitutional obligation, even when such a declaration

compels the payment of money


Hearts Bluff Game Ranch v. United States

-- F3d – (Fed. Cir. 2012)

• Hearts Bluff purchased 4,000 acres in Titus County to use as a mitigation

bank

• USACE told Hearts Bluff before acquisition that the property would be a

good candidate for such purposes

• Property was in area of proposed Marvin Nichols Reservoir

• USACE noticed Hearts Bluff application, TWDB said that approval would

jeopardize viability of Marvin Nichols

• Legislature declared Marvin Nichols location to have “unique value” as a

reservoir site; 2007 SWP recommended project

• USACE denied Hearts Bluff application

• Hearts Bluff sued for takings under 5th Amend., U.S. Const.


Hearts Bluff Game Ranch v. United States

-- F3d – (Fed. Cir. 2012)

• Fed. Cir.:

– Don’t consider whether gov’t action is a “taking” under 5th Amend. unless it

is first shown that action implicates a cognizable property interest

– Voluntary participation in an area that is the subject of pervasive gov’t

control indicates that a protectable property interest is likely lacking

– Hearts Bluff can still fully use its property despite USCOE “action” to deny

application

– At no point did Hearts Bluff ever have a right to earn, sell or transfer

mitigation credits

• Holding:

– USCOE mitigation bank program is a creature of the gov’t; it is inherently

subject to pervasive and discretionary gov’t control

– Hearts Bluff had no cognizable property interest in access to the mitigation

bank program


Ward Timber, Ltd. v. Texas Water Development Board

126th District Court, Travis County, Texas (filed Jan. 12, 2012)

• Plaintiff Ward Timber filed suit in Travis County challenging TWDB approval

of 2007 SWP, alleging unresolved interregional conflicts

• Reg. C proposed Marvin Nichols Reservoir in area included in Reg. D

• Reg. D environmental and agricultural interests adversely impacted by

construction of reservoir, and the Reg. D plan shows a need for water for

instream uses that will be impacted by development of reservoir project

• Dec. 5, 2011, Judge Gisela Triana denied the State’s PTJ, and declared

that TWDB rules regarding interregional conflict resolution apply to the

conflicts identified by Plaintiff

• Remanded matter to TWDB for assessment of conflicts

• 2012 SWP approved by TWDB on Dec. 15, 2011; no changes to issues

raised by Plaintiff

• Jan. 12, 2012, Plaintiff sued TWDB asserting same complaints regarding

2012 SWP


Edwards Aquifer Auth. v. Day

-- SW3d – (Tex. 2012)

• Holdings:

– Affirmed decision to grant 14 acre-feet of historic use; held that the

water in Day’s lake changed from groundwater to surface water

because of the way in which he used his well and the lake; the Court

recognized that other landowners could manage their wells and lakes

differently to preserve the groundwater-nature of the lake water.



-- SW3d – (Tex. 2012)

• Holdings:

– Landowners own groundwater “in place”:

• In our state the landowner is regarded as having absolute title in

severalty to the [water] in place beneath his land. The only

qualification of that rule of ownership is that it must be considered in

connection with the law of capture and is subject to police

regulations. The [water] beneath the soil [is] considered a part of

the realty. Each owner of land owns separately, distinctly and

exclusively all the [water] under his land and is accorded the usual

remedies against trespassers who appropriate the [water] or destroy

[its] market value.’ We now hold that this correctly states the

common law regarding the ownership of groundwater in place



-- SW3d – (Tex. 2012)

• Holdings:

– Whether there is a compensable taking of a groundwater right depends

upon a complex analysis under the takings tests established by the U.S.

Supreme Court and Texas Supreme Court. The Court remanded the

case to the trial court to conduct this analysis

– Court rejected landowner’s other “due process” and “equal protection”

constitutional challenges

– Court declined to rule on the State of Texas’s claim that it is not liable

for any takings damages. It is possible that the State of Texas will be

able to assert its claim during the remand


Essentials of Texas Water Resources

• Second Edition in publication

• Includes topics such as:

– surface and groundwater modeling;

– conjunctive management and use;

– public-private financing; and

– the energy-water nexus.

• $125 purchase price includes hard copy and

digital version


Finally…

• Membership and Services Committee

sponsoring Summer Conference at Horseshoe

Bay.

• Send Jason Hill topics and speaker suggestions.


Martin C. Rochelle

[email protected]

(512) 322-5810

mailto:[email protected]

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Water Laws Committee Meeting and Case Law Update