Texas Supreme Court to decide who determines ownership of water rights

Texas Supreme Court to decide who determines ownership of water rights

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Texas Supreme Court to decide who determines ownership of water rights

By Jim Bradbury and Courtney Cox Smith
James D. Bradbury, PLLC

The Texas Supreme Court recently agreed to hear Pape Partners, Ltd., et al. v. DRR Family Properties, LP. This case concerns the question of who determines private property interests in water rights. Specifically, the parties ask the Court to determine whether the Texas Commission on Environmental Quality (TCEQ) has exclusive jurisdiction to adjudicate private property disputes over ownership of surface water rights or whether those rights can be determined in court.

The Pape Partners bought a 1,086-acre farm. Along with the land, they acquired certain vested water rights. These water rights had previously been recognized through certificates of adjudication under the Texas Water Rights Adjudication Act. As a part of the purchase of the farm, the prior owners executed representations and warranties conveying the entirety of the certificated water rights to the Pape Partners and representing that no other party had any rights or interests in the water rights. When the Pape Partners attempted to update the water rights ownership records with TCEQ, TCEQ staff notified DRR Family Properties, an adjacent property owner, who then asserted partial ownership to the Pape Partners’ water rights. TCEQ then updated the records to reflect a split ownership of the water rights, which interfered with the Pape Partners’ ability to irrigate their land.

The Pape Partners sued DRR Family Properties in district court seeking declaratory relief and asserting trespass to try title, quiet title and title through adverse possession and prescription. DRR Family Properties moved to dismiss the lawsuit on the basis that TCEQ has exclusive original jurisdiction to hear the dispute. The trial court granted the motion to dismiss, and, on appeal, the Waco Court of Appeals affirmed, stating that although the Water Code does not expressly grant exclusive jurisdiction to TCEQ over water rights, the regulatory scheme behind surface water permits indicated that such jurisdiction is with TCEQ alone. The result of that decision is that water rights disputes cannot be determined in court, a very bad precedent.

Pape Partners appealed to the Texas Supreme Court, arguing that TCEQ does not have any jurisdiction to determine disputes over private property rights. The appeal has generated several amicus briefs, including a brief by TCEQ, which expressly disavows such jurisdiction over private property right disputes. The Texas Supreme Court granted the Petition for Review on Jan. 28.

This will be an important case for agriculture to watch. TCEQ has long held the position that it does not have any authority or jurisdiction to determine issues concerning private property rights or disputes. Should the Court side with the lower courts and uphold the rulings giving TCEQ exclusive jurisdiction over all water rights issues, this will be a significant change in how such matters are handled going forward. It potentially places a traditionally judicial property issue in the hands of TCEQ staff who have not traditionally handled such matters or disputes.

Further, the question remains what type of procedure is available when such disputes arise. It is not clear that Texas law provides any such process before TCEQ. Oral argument on this case before the Texas Supreme Court is set for March 24.

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