The Texas Supreme Court will consider a case of whether the court system or the Texas Commission on Environmental Quality (TCEQ) has jurisdiction over the dispute of water rights.
In the case of Pape Partners Ltd. versus DRR Family Properties LP (DRR), the Texas 10th District Court of Appeals ruled TCEQ has the exclusive jurisdiction to determine surface water rights, reconfirming the longstanding principle that parties must exhaust their administrative remedies before filing suit in district court.
Background
Glenn R. Pape and Kenneth W. Pape purchased a tract of land—which included irrigation water rights recognized by the state of Texas in certificates of adjudication (COA)—in 2014. The COA authorized the use of the permitted water for irrigation, which included an additional 250 acres subsequently purchased by DRR. In 2015, the Papes attempted to record their purchase of the water rights with TCEQ. TCEQ notified all potentially interested landowners, including DRR, they might own an interest in the water rights. After the Papes filed a change of ownership, TCEQ concluded that DRR owned a portion of the water rights.
The Papes sought to reverse the decision by TCEQ through the courts. The Papes did not pursue an administrative appeal, but filed a suit seeking a declaration that it owns all of the water rights in the tract purchased in 2014. The trial court ruled the Papes did not exhaust their administrative remedies and granted DRR’s motion to dismiss the Papes’ claims.
The Papes filed an appeal with the 10th District Court of Appeals, arguing TCEQ’s decision was a determination of legal ownership and the court erred in its decision granting DRR’s motion to dismiss. Lawyers for the Papes argued: “The question of property ownership is within the sole jurisdiction of the courts; the legislature did not vest the TCEQ with exclusive jurisdiction over the Papes’ claims; and the ruling violates the separation of powers clause in the Texas Constitution.”
The Legislature enacted the Texas Water Code, giving TCEQ authority “to establish surface water quality standards, which it implements, in part, in its permitting actions.” The court stated in its opinion, “Although the statute does not expressly grant exclusive jurisdiction over water rights to the TCEQ, the regulatory scheme behind surface water permits is pervasive and indicative of the Legislature’s intent that jurisdiction over the adjudication of surface water permits is ceded to the TCEQ.”
The appeals court concurred with the trial court and ruled the Papes did not exhaust their administrative remedies before filing suit. The court also found the regulatory scheme giving TECQ authority to determine water rights did not violate the separation of powers in the Texas Constitution.
Chief Justice Tom Gray wrote in his dissenting opinion that the TCEQ regulatory system is not structured to determine ownership, stating, “The TCEQ, which is in the administrative branch of government, is not the place to adjudicate that issue.” Gray argued it should be determined by the courts and stated in his conclusion it is a “serious and difficult issue that could adversely impact any person that needs to adjudicate ownership of a water right so that they can present a proper and valid chain of title for that water right to the TCEQ.”
Amici curiae
The Texas and Southwestern Cattle Raisers Association (TSCRA) joined the Texas Water Conservation Association (TWCA) and TCEQ, filing an amici curiae with the Texas Supreme Court and asking to reverse the decision of the Court of Appeals.
TSCRA argued the Texas Water Code gave TCEQ general jurisdiction to issue water rights but did not give TCEQ the authority “with respect to determining disputes over ownership of previously issued surface water rights.”
TCEQ concurred, stating in the amici curiae, their “authority does not extend to adjudicating private disputes simply because they involve water rights. Once a water permit is issued and vested in the holder, it can be bought and sold like any other property. And, like any disagreement about the ownership of property, a dispute about who owns the water rights is properly adjudicated in court.”
TWCA stated that while it takes no stance on the ownership of water rights in the case, the opinion of the Appeals Court is contrary to the state’s system for determining competing claims to the ownership of water rights and prior decisions made by the Texas Supreme Court.
TSCRA said in a statement producers are on the front lines to maintain water ownership rights, making it one of the most important property rights.
“Texas cattle producers need clarity and consistency when disputes arise, which is something only the court system can offer,” said Arthur Uhl, first vice president of TSCRA. “Texas has a long history of protecting private ownership of surface and groundwater. The (TSCRA) will continue to fight in the legislature and in the courts to ensure Texans never lose this precious right and resource.” — Charles Wallace, WLJ editor
