High Court Might Clarify Water and Surface Rights

^{*Correction appended} 

Last summer, Brian and Rosie Talbot found their dream ranchette.

The 20-acre property in northeast Lee County, near Caldwell, backed up to a creek and was mostly wooded but featured ample open meadow where they could build a home, grow their own food and create the treasured legacy estate they envision leaving to their children.

The Austin couple was poised to make an offer on the $100,000 plot — a seeming bargain — until their lawyer informed them they wouldn’t own the groundwater beneath it. To their surprise, a developer had already bought those rights — and they weren't selling. The Talbots walked away from the deal.

The situation is commonplace in fast-growing Texas, where developers, water marketers and others gobble up acreage above aquifers, secure the groundwater rights and then sell off the surface — sometimes to unknowing people who don’t understand their new land could be the future home of a massive water pumping operation whether they like it or not.

The same often happens with oil and gas or mineral rights.

Unlike landowners who don’t own the crude oil beneath their property, however, those who don't own their groundwater have no explicit protection from unfettered development under state law.

That could change, with the Texas Supreme Court set to consider an appeal from a South Plains cattle and gaming ranch that sued the city of Lubbock for trying to expand an existing water well field on the 26,600-acre ranch. Throughout the case, lawyers for Coyote Lake Ranch have argued that a well-established provision in oil and gas law known as the "accommodation doctrine" should also apply to “severed” groundwater.

The high court will hear oral arguments Wednesday.

The decades-old doctrine requires mineral owners — the dominant estate — to accommodate the surface owner’s existing use of the land if at all possible. While it doesn’t always stop drilling or pumping operations, the doctrine gives surface landowners some say regarding the circumstances.

Lubbock, which acquired water rights on the ranch land more than 60 years ago, is arguing the accommodation doctrine does not apply to severed groundwater, and that Coyote Lake Ranch is wrongly seeking to expand it, court documents show. The city, which operates a small well field on the northwest corner of the ranch, also has pointed out that its 1953 deed gives it explicit permission to access the land and drill water wells.

A Bailey County district court sided with the ranch in late 2013, invoking the accommodation doctrine in granting a temporary injunction against the city, which had mowed a path to reach the well field without permission from the ranch. The Amarillo-based 7th Court of Appeals overturned that decision last summer but said the Legislature or state Supreme Court was free to extend the doctrine if it so pleased.

Jim Bradbury, the Fort Worth-based lawyer who alerted the Talbots to the severed groundwater estate, said the state’s high court “laid the groundwork” for this type of lawsuit three years ago in a water-related ruling where it “made a number of very direct analogies to oil and gas law."

In that 2012 decision, which lawyers for Coyote Lake have cited in their legal challenge, the court ruled that "land ownership includes an interest in 'groundwater in place' that cannot be taken for public use without adequate compensation."

How the state's highest civil court will rule in the current case is unknown, but Bradbury said its decision to hear the ranch's appeal has spawned speculation that it is looking to offer clarity on the issue and possibly strengthen surface landowner rights — at least in cases where the groundwater owner's deed does not give it explicit permission to access the surface of the property.

“We really need a firm answer from the court as to in those situations where the deed is silent,” Bradbury said, noting that is often the case.

Agriculture groups have urged the nine justices to side with the ranch and extend the accommodation doctrine while a Panhandle-based municipal water authority has argued against it because of what it describes as fundamental differences between oil and gas, and water.

“In a state with a rapidly increasing population and a dwindling surface water supply, the hunt for useable groundwater is taking on an increased role in meeting Texas’s water needs,” the Texas Farm Bureau wrote in an amicus brief. “As this trend grows, the potential for conflict between surface owners and groundwater rights owners will also grow.”

But the Canadian River Municipal Water Authority told the court "it is unnecessary and inappropriate for this court to extend the accommodation doctrine from the context of mineral rights to groundwater estates," contending "there is no legal authority, historical precedent, or need."

In an ideal world for the court, Bradbury said the Legislature would address the issue, but that isn’t likely to happen. The accommodation doctrine is, after all, a court-created policy, he noted.

Meanwhile, the Talbots’ search for the perfect ranchette continues, albeit with a notable addition to their list of must-have features.

Brian Talbot, 51, said he was aware that people transferred mineral rights but didn't realize the same thing could be done with groundwater — and that the protections were non-existent. 

"Honestly, it was a little offensive to learn that you could buy the piece of property, you just couldn’t use the water that it sat on," he said. "It sure has changed my outlook on the way I'm approaching buying property."

Correction: The original version of this story misstated the makeup of the amicus briefs and the position of the Canadian River Municipal Water Authority. 

Disclosure: The Texas Farm Bureau is a corporate sponsor of The Texas Tribune. A complete list of Texas Tribune donors and sponsors can be viewed here.