On May 27, 2016, the Texas Top Court issued its opinion in Coyote Lake Ranch, LLC v. Town of Lubbock. Many Texas farming and water law attorneys were in Lubbock attending the Condition Bar of Texas Farming Law Ongoing Legal Education Seminar. When the opinion was launched, you ought to have seen everybody scurrying around!
This situation (on which i’ve formerly blogged here) is very essential for Texas landowners and groundwater proprietors. The very first time, the Texas Top Court announced the accommodation doctrine, formerly applied only in gas and oil severances, will apply in groundwater severances too.
The Coyote Lake Ranch is mainly employed for agriculture, including cattle, irrigated cropland, and recreational hunting. A lot of the ranch includes sand dunes with natural grass cover, although some portion includes irrigated cropland. The ranch overlays the Ogallala Aquifer and sits about 90 miles northwest of Lubbock.
In 1953, the town of Lubbock purchased groundwater legal rights in the Coyote Lake Ranch, a 26,600 acre ranch in Bailey County, Texas. Particularly, the ranch deeded over its groundwater to Lubbock, reserving the authority to use groundwater for domestic wells, ranching operations, gas and oil production, and farming irrigation. The deed contains, as explained the Texas Top Court, “lengthy, detailed provisions concerning the City’s to make use of the land.” These provisions include allowing the town full legal rights of ingress and egress to drill water bores and test wells around the land at any location the authority to use all the ranch necessary or incidental to taking, production, treating, transmission, or delivery of groundwater and the opportunity to construct facilities including water lines, fuel lines, utility lines, communications lines, access roads, necessary or incidental to operations. As a swap, the deed requires Lubbock to pay for rent for surface occupied by its facilities, pay damages to the surface property brought on by operations and activities around the land by Lubbock, and install gates and cattle pads on roads.
Up to now, the town has drilled 7 wells, all across the northern fringe of the ranch. This Year, Lubbock announced its intent to improve groundwater production around the ranch, drilling as much as 20 test wells and 60 additional wells over the property. Lubbock started mowing pathways with the ranch for their prospective drill sites. The ranch, however, wasn’t pleased with this plan of action. Worried about the elevated erosion and surface damage these operations would cause in addition to potential harmful impacts around the then-protected Lesser Prairie Chicken, the ranch searched for legal intervention.
The ranch searched for an injunction within the trial court to prevent Lubbock from proceeding using its work. The ranch based this injunction on the concept that the town “has a contractual and customary law responsibility to make use of that quantity of surface that’s reasonably essential to its operations along with a duty to conduct its operations with due regard for that legal rights from the surface owner.” Basically, the ranch contended the accommodation doctrine should apply within this situation. Lubbock responded the deed language permitted these to make use of the surface and drill the wells and, furthermore, the accommodation doctrine doesn’t affect groundwater proprietors, because it gives mineral proprietors.
The trial court sided using the ranch, reasoning the ranch was prone to prevail around the merits and issuing an injunction against Lubbock. Particularly, a legal court prohibited Lubbock from mowing, blading, or else destroying growing grass from proceeding with drilling any test holes or water bores without talking to the complaintant about potential impacts around the ranch, and from erecting utility lines towards the suggested well fields.
Lubbock appealed and also the Amarillo Court of Appeals reversed. [Read prior blog publish here.] Particularly, a legal court mentioned that because no Texas court had ever extended the accommodation doctrine to groundwater, it “respectfully defers towards the Texas Top Court to acknowledge and pronounce this kind of extension, especially considering the dramatic implications it might have in water law in Texas.” According to this holding, a legal court reversed the trial court’s injunction and remanded the situation.
The ranch attracted the Texas Top Court. A Legal Court recognized the situation and held dental arguments last October.
Texas Top Court Opinion
Within an important decision that may have far-reaching impacts, a legal court sided using the Ranch, holding the accommodation doctrine is relevant to groundwater in Texas. [Read full opinion here.] Let’s walk-through the Court’s holdings and reasoning in the majority opinion, signed by 6 Justices.
The deed of groundwater governs the parties’ legal rights. Initially, a legal court mentioned the deed governed its legal rights regarding while using land to gain access to and take away groundwater. A Legal Court determined the deed was silent around the key issues within this situation.First, even though the deed permitted Lubbock to complete what’s “necessary or incidental” to gain access to the groundwater, it didn’t answer the issue of if the city can perform everything necessary or incidental to drilling anywhere around the ranch or only what’s necessary or incidental to completely connect to the groundwater. The Town argues this term enables these to use any area of the ranch and drill wherever it chooses. The ranch argues this term enables the ranch to dictate where drilling can happen as long as full accessibility water is permitted. A Legal Court held the deed simply doesn’t answer the issue of where drilling and activities can happen.2nd, a legal court held the deed was silent regarding using overhead utility lines. The ranch contended that overhead utility lines would harm the habitat from the Lesser Prairie chicken, as the City was worried about the price and potential shifting of sand dues when they used subterranean utility lines. The lease wasn’t obvious which of those lines could be considered “necessary and incidental” to being able to access water.Since the Court determined the parties’ deed didn’t address the particular issues playing-where can the town drill wells and facilities associated with such wells and what kinds of utility lines might be utilized-a legal court switched, then, towards the accommodation doctrine.
Groundwater and gas and oil are sufficiently factually much like use the same legal concepts. A Legal Court walked via a litany of the way that groundwater and minerals offer a similar experience: both appear in undercover reservoirs both of them are fugacious both might be severed from the top of land a severed groundwater right has got the same to make use of the surface like a severed mineral right both of them are susceptible to the rule of capture and both of them are protected against waste. Further, a legal court reported to its 2012 opinion in Edwards Aquifer Authority v. Day, where it considered the similarities between groundwater and gas and oil to summarize groundwater in position underneath the surface is a member of the landowner. “Common law rules governing mineral and groundwater estates aren’t just similar they’re attracted from one another or in the same source.”
Groundwater estates are dominant to come to light estates when severed. A Legal Court mentioned that even though it had not known the groundwater estate as “dominant” because the mineral estate clearly is, “the estate is dominant for the similar reason a mineral estate could it be is benefited by an implied to the reasonable utilisation of the surface.” Although groundwater is usually of the top owner, where it’s been severed, the Court’s holding implies that the groundwater owner has got the implied right-no matter deed language-for a lot of the top out of the box reasonably essential to make the groundwater. The explanation behind the mineral estate, and today the top estate, being considered dominant may be the idea that an individual is not able to create the mineral or groundwater estate without making some utilization of the top of land to drill the wells to extract the substances. This can be a key holding that could have major impacts on Texas landowners.
The accommodation doctrine pertains to groundwater proprietors. “We have applied the doctrine only if mineral interests are participating. But similarities between mineral and groundwater estates, in addition to their conflicts with surface estates, persuade us to increase the accommodation doctrine to groundwater legal rights.” A Legal Court thought it was essential to use the accommodation doctrine to solve this dispute since the implied reasonable utilisation of the surface provided to the groundwater owner and the authority to make “necessary or incidental” utilisation of the surface granted within the deed simply didn’t resolve the questions at issue within this situation.
In conclusion, the final Court held “that the accommodation doctrine pertains to resolve conflicts from a severed groundwater estate and also the surface estate that aren’t controlled by t he express the parties’ agreement.”
A Legal Court next switched towards the injunction from the trial court, discovering it way too broad because it basically prohibits the town from taking any pursuit to drill wells, so it clearly has the authority to do. For instance, the present injunction denies them from drilling any wells or erecting any utility lines, regardless of the deed language clearly letting them do this stuff. Thus, the injunction was lifted and also the situation delivered back towards the trial court for more proceedings.
Three Justices signed an concurring opinion, instead of participate in most opinion detailed above. [Read full opinion here.] These Justices agreed using the results of the situation-namely the accommodation doctrine is relevant to groundwater-but authored individually to create obvious this application takes place when the parties’ agreement doesn’t address the disputed issue. “The accommodation doctrine only pertains to groundwater rights…when the parties’ dispute isn’t controlled by the express the parties’ agreement. Once the parties’ agreement specifically addresses the dispute, it’s unnecessary and improper for courts to suggest legal rights and obligations with the accommodation doctrine.”
By using this baseline, the concurring Justices would hold the deed at issue within this situation specifically solutions in which the City may drill it wells-anywhere around the property. Unlike most opinion, the concurrence finds the deed isn’t silent about this issue. It specifically enables the town the authority to drill water bores “at whenever and location” to gain access to the groundwater. Thus, whether or not the wells are drilled around the north fringe of the ranch, or in the center of the sand dunes and native grass, the deed provides the City the authority to drill. Due to this, the concurring Justices wouldn’t use the accommodation doctrine for this issue and wouldn’t require City to consider alternative plans for various well sites.
However, the concurrence concurs the deed is silent on how and where the town may construct access roads and utility lines. Unlike the word what regarding well locations-which enables wells to become drilled anytime and placement-roads might be built only where “necessary and incidental” towards the operations. Since the phrase “necessary and incidental” is available to disagreement, the accommodation doctrine would affect this area of the dispute.
An individual can never predict exactly what a Court is going to do. Many legal scholars were quite certain that the final Court wouldn’t use the accommodation doctrine to groundwater, or would not achieve the issue of their application whatsoever and choose this situation on other grounds. This situation is a superb indication that you can never bet on which a Court (or jury) is going to do!
Groundwater severances can make multiple complex issues. Anybody coping with groundwater severances-whether trying to retain groundwater legal rights when selling a house or trying to purchase groundwater legal rights from another-should consult a lawyer to make sure that the contracts and deeds drafted sufficiently safeguard the parties’ legal rights. Here, for instance, even 9 Top Court Justices couldn’t decide if the deed language signed through the parties’ specifically addressed a problem. This is just too important of the issue to not seek a lawyer.
Groundwater is really a dominant estate. This area of the opinion continues to be overlooked by a few, but might be very essential for surface proprietors who don’t own the groundwater legal rights. By deeming groundwater a dominant estate, the final Court decision allows groundwater proprietors the implied right to utilize a a lot of the top estate out of the box reasonably essential to produce groundwater, without payment to or permission in the surface owner. We view significant burdens put on Texas surface proprietors for this reason same situation regarding minerals. [For additional info on this, look at this prior blog publish.]
The top owner must still prove the accommodation doctrine prohibits certain conduct. Possibly the important thing practical consideration for Texans is that this: Even though the Court held the accommodation doctrine may affect groundwater cases, that doesn’t imply that a surface owner can stop a groundwater owner from making sure purposes of the land to create the groundwater. Under Texas law, the accommodation doctrine stages in to safeguard the top owner only if three the weather is met. They are: (1) the groundwater owner’s utilisation of the surface substantially impairs a current surface use (2) the top owner doesn’t have available, reasonable option to continue the top use and (3) the groundwater owner includes a reasonable, customary, industry-recognized approach to access and convey water and permit continuation from the surface owner’s use. If these three the weather is not met, the doctrine doesn’t apply and also the groundwater owner isn’t needed to support the top user. In the past, surface proprietors haven’t fared that well under this doctrine in the court. For instance, look at this prior blog publish around the Merriman v. XTO Energy situation.
Stay tuned…. In lots of ways, this situation leaves more questions of computer solutions. How can the accommodation doctrine affect the details of the situation? Because of the Court’s pronouncement concerning the similarities between water and oil, the other cases may aim to impose “oil only” legal concepts to groundwater law? How specific will deed language have to be to ensure that the accommodation doctrine to not apply? You will find likely likely to be a lot more cases in the future. The Texas Tribune authored a fascinating article addressing a few of these issues.