WHO OWNS WATER?

A recent decision of the Texas Supreme Court is thought provoking. In that state, withdrawal of ground water is subject to permitting regulation by an Aquifer Authority. Certain landowners applied for a permit to withdraw from wells a quantity of ground water to be used for irrigation purposes. The Authority denied a permit based upon historic use, and the landowners went to court.

On appeal from lower courts, the Supreme Court first reviewed the law regarding ownership of oil and gas in place under a landowner's property:

"in our state the landowner is regarded as having absolute title in severalty to the oil and gas 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 oil and gas beneath the soil are considered a part of the realty. Each owner of land owns separately, distinctly and exclusively all the oil and gas under his land and is accorded the usual remedies against trespassers who appropriate the minerals or destroy their market value."

The Court then held that the law regarding ownership of oil and gas "states the common law regarding the ownership of ground water in place."

Having determined that the landowners own the ground water below their land, the Court then addressed the question whether denial of the requested permit to withdraw that water was a violation of the Texas constitution. The Court decided that landowners have a constitutionally compensable interest in groundwater in place. "We decide in this case whether land ownership includes an interest in ground water in place that cannot be taken for public use without compensation guaranteed by article I, section 17 (a) of the Texas Constitution. We hold that it does."

The Authority asserted "that if its ground water regulation can result in a compensable taking, the consequences will be nothing short of disastrous." It expressed concern that the financial burden of taking claims could make regulation impossible. The Court responded: "We cannot know, of course, the extent to which the Authority's fears will yet materialize, but the burden of the Taking Clause on government is no reason to excuse its applicability." (Edwards Aquifer Authority and the State of Texas v. Burrell Day and Joel McDaniel, Texas Supreme Court, No. 08-0964, 2012)

One should bear in mind that some states may not accept the notion that ground water in place is owned by the land owner. Instead, some states may have adopted the concept that a land owner simply has reasonable use of such ground water, again subject to regulation. Also, another court might decide that denial of a permit would be arbitrary or contrary to the manifest weight of the evidence, without reaching a constitutional issue. When a regulation may violate a constitutional right can be a complicated issue and will be discussed more generally in a future post.