In the Courts – Water

by Maris Chambers

Coachella Valley Water Dist. v. Agua Caliente Band of Cahuilla Indians, 849 F.3d 1262 (9th Cir. 2017), cert. denied 2017 WL 2909254 (U.S. Nov. 27, 2017) (No. 17-40) and 2017 WL 2909267 (U.S. Nov. 27, 2017) (No. 17-42).

In 2013, the Agua Caliente Band of Cahuilla Indians (the “Band”) filed an action for declaratory and injunctive relief against the Coachella Valley Water District (“CVWD”) and the Desert Water Agency (“DWA”) (collectively the “Water Agencies”), seeking a declaration that it had a federally reserved and aboriginal right to the groundwater underlying its reservation. The United States District Court for the Central District of California held that “the reserved rights doctrine applied to groundwater and that the United States reserved appurtenant groundwater when it established the Tribe’s reservation.” This is because the reserved rights doctrine holds that any rights not specifically addressed in a treaty (here, the treaty establishing the reservation) are reserved to the Band. The Water Agencies then appealed to Ninth Circuit Court of Appeals, which held that: (1) the United States impliedly reserved a water right when establishing the Agua Caliente Reservation; (2) the Band’s implied federal reserved water right extended to groundwater; and (3) the Band’s state water entitlements to groundwater did not disqualify its implied federal reserved water right. On November 27, 2017, the United States Supreme Court denied certiorari to the Water Agencies, announcing that it would not review the Ninth Circuit’s decision. As a result, the decision from the Ninth Circuit, granting reserved rights to groundwater to the Tribe, will remain in effect. However, the parties stipulated to divide the litigation into three phases, agreeing not to quantify any identified groundwater rights until Phase III, which has yet to be decided.

Crystal Clear Spec. Util. Dist. v. Marquez, et al., No. 1:17-CV-254-LY, 2017 WL 5509996 (W.D. Tex. Nov. 17, 2017).

In July of 2016, Las Colinas San Marcos Phase I, LLC (“Las Colinas”) filed a petition for expedited release from the water certificate of convenience and necessity (“CCN”) of Crystal Clear Special Utility District (the “District”), which the Public Utility Commission of Texas (“PUC”) granted on September 28, 2016. The District then filed an appeal of the order in state court, seeking declaratory relief based on claims of preemption and ultra vires acts by the PUC. The District also filed suit in federal court arguing that decertification under Texas Water Code (“TWC”) §§ 13.254(a-5) and (a-6) (the latter of which expressly forbids the PUC from denying a petition for expedited release based on the fact that a CCN holder is a borrower under a federal loan program) is preempted by 7 United States Code (“U.S.C.”) § 1926(b), which protects a utility that is a recipient of federal loans from curtailment of its service area, and are therefore unconstitutional. Both the PUC and Las Colinas filed motions to dismiss, alleging that (1) the Anti-Injunction Act bars the District’s claims, and (2) the court should abstain from deciding this case under various abstention doctrines. However, in a Report and Recommendation to the United States District Judge, United States Magistrate Judge Andrew W. Austin recommended that the federal District Court deny the motions to dismiss, concluding that the District’s § 1926(b) claims were not barred by the Anti-Injunction Act and that the court need not abstain from deciding the case. As a result, the issue of whether or not 7 U.S.C. § 1926(b) preempts TWC §§ 13.254(a-5) and (a-6) survives to be decided by the federal district court.

Aderholt v. Bureau of Land Mgmt., No. 7:15-cv-00162-O (N.D. Tex. Nov. 8, 2017).

A settlement has been reached in the case between the Bureau of Land Management (“BLM”) and Texas landowners (“Plaintiffs”), ending the debate over the southern boundary of the Red River. In 2009, the BLM published surveys in the Federal Register indicating that the southern boundary of the Red River lay about a mile south of its actual banks. The BLM based this position on the 1923 Supreme Court decision in Oklahoma v. Texas, 260 U.S. 606 (1923), claiming that the river’s boundaries were meant to be “relatively permanent.” However, the course of the Red River had shifted significantly northward since the 1923 Oklahoma v. Texas decision, which meant that the BLM was claiming federal ownership of thousands of acres of now-dry land on the Texas side of the river. As a result, Plaintiffs filed suit in 2015, alleging that the BLM had committed an “unconstitutional and arbitrary seizure” of their property. Under the November 8, 2017 Settlement Agreement (“Agreement”), the parties agreed that (1) the northern boundary of private property along the Red River within Wilbarger, Wichita and Clay Counties, Texas is governed by the Oklahoma v. Texas decision and the gradient boundary methodology laid out therein; (2) the geographic location of this boundary may change due to erosion and accretion; (3) where the boundary bank is changed by those processes, the private or public boundary follows the change; and (4) “the south bank of the Red River is the water-washed and relatively permanent elevation or acclivity at the outer line of the river bed.” While the Agreement has closed the case for the parties involved, several questions remain unanswered. It does not, for example, comprise the parties’ resolution of the geographic location of the southern boundary of the Red River. Instead, the BLM is free to initiate new surveys (as long as those surveys follow the procedures and standards set forth by the Agreement in (1) through (4) above), which could give rise to further law suits.

R.E. Janes Gravel Co. v. Tex. Comm’n on Envtl. Quality No. 14–15–00031–CV, 522 S.W.3d 506 (Tex. App.—Houston [14th Dist.] Dec. 15, 2016, pet. pending).

The City of Lubbock has been authorized since 1983 to reuse surface water-based effluent imported from the Canadian River Basin. The City applied for authorization in 2004 under § 11.042(c) of the Texas Water Code to convey effluent it began discharging a year prior down a tributary of the Brazos River for diversion and reuse. The Texas Commission on Environmental Quality (“TCEQ”) granted the Application.

Janes Gravel, the holder of a downstream water right issued in 1968, protested the decision. The 419th District Court in Travis County affirmed the Commission’s decision. Janes Gravel appealed the trial court’s ruling to the Texas Court of Appeals. Janes Gravel argued, among other things, that if discharges of effluent had already commenced, then the TCEQ could not grant a bed and banks authorization without either (1) subordinating the authorization to Janes Gravel, or (2) determining that the bed and banks authorization would not adversely affect senior rights downstream. The Court of Appeals also affirmed the TCEQ’s order, basing its decision upon the fact that the City’s effluent had originated as imported water. Janes Gravel appealed to the Texas Supreme Court, which has requested a briefing on the merits without granting the Petition for Review.

Mountain Peak Special Util. Dist. v. Pub. Util. Comm’n of Tex., No.03-16-00796-CV, 2017 WL 5078034 (Tex. App.—Austin [3rd Dist.] Nov. 2, 2017, no pet. h.).

On January 30, 2015, the City of Midlothian (the “City”) filed a petition (the “Petition”) with the PUC for expedited release of a portion of its property from the water CCN service area of Mountain Peak Special Utility District (the “District”). The City filed its Petition pursuant to TWC § 13.254(a-5), which allows “the owner of a tract of land that is at least 25 acres and that is not receiving water or sewer service” to petition the PUC for expedited release of the qualifying land from another’s CCN.

On May 1, 2015, the PUC granted the City’s Petition and amended the District’s CCN to remove the City’s property. The District then filed suit for judicial review of the PUC’s order, arguing that (1) the property the City sought to have decertified was in fact “receiving water service,” (2) the City illegally excluded a 6.7–acre piece of property that it owned within the District’s CCN from its request for expedited release, and (3) as a borrower under a federal loan program, federal law (7 United States Code § 1926(b)) preempted the decertification of any of the District’s certificated service area. Both the trial court and the Court of Appeals in Austin affirmed the PUC’s order approving the City’s request. In affirming the trial court’s decision, the Court of Appeals reiterated that the existence of water lines on or near property to be released from a CCN does not necessarily mean the property is “receiving water service.” Here, the District had not performed any act, furnished any service, or used any facilities or lines for, or committed them to, providing water service to the property at issue. In upholding the PUC’s order, the Court of Appeals also clarified that no “all or nothing” requirement exists under § 13.254(a-5) to prevent a landowner from choosing to seek expedited release of some, but not all, of its property located within a CCN, and that TWC § 13.254(a-6) expressly forbids the PUC from denying a petition for expedited release based on the fact that a CCN holder is a borrower under a federal loan program.

Bexar—Medina—Atascosa Counties Water Control & Improvement Dist. No. 1 v. Bandera Cty. River Auth. & Groundwater Dist., No. 04-16-00536-CV, 2017 WL 4014703 (Tex. App.—San Antonio [4th Dist.] Sept. 13, 2017, pet. filed).

The Bandera County River Authority and Groundwater District (the “Groundwater District”) filed suit against Bexar—Medina—Atascosa Counties Water Control and Improvement District (“WCID”) No. 1 (“BMA”) in January 2016, challenging BMA’s claim of jurisdiction in Bandera County and seeking declaratory judgment that BMA lacks the authority to (1) inspect water wells; (2) enforce jurisdiction or rules over groundwater or surface water; (3) investigate water well violations; (4) promulgate groundwater rules; and/or (5) exercise rights as a WCID in Bandera County. Relying on the fact that BMA’s legislatively-created borders do not extend beyond Bexar, Medina, and Atascosa Counties, the trial court agreed with the Groundwater District and ruled that BMA lacked jurisdiction in Bandera County. The trial court, however, also denied the Groundwater District’s request for attorney’s fees, and both parties appealed. On appeal, BMA raised the issue (for the first time) of whether it is immune from the Groundwater District’s declaratory judgment claims. Specifically, BMA argued that the Uniform Declaratory Judgment Act (“UDJA”) only waives immunity for challenges to the validity of a statute, as opposed to claims seeking an interpretation or declaration of what rights are granted to a party thereby or for actions taken in violation of a statute. The Texas Court of Appeals in San Antonio upheld BMA’s assertion of immunity under the UDJA and remanded the case back to the trial court to allow the Groundwater District to amend its pleading. The appellate court also noted that claims seeking declaration that a governmental entity acted without authority should be brought as an ultra vires action, rather than an action under the UDJA.

Waller v. Sabine River Auth. of Tex., No. B160341-C (163rd Dist. Ct. Orange County, Tex. Oct. 27, 2017).

Following a heavy rainstorm in March 2016, Plaintiffs (individuals owning property on or near the Sabine River, downstream from Toledo Bend Dam) filed suit against the Sabine River Authority of Texas (“SRA”) for alleged property damage caused by flooding. Plaintiffs alleged SRA caused the flooding by improperly and intentionally opening dam spillway gates that released an unreasonably high volume of water into the Sabine River, and asserted state law claims of (1) inverse condemnation, (2) trespass, and (3) nuisance. In response, SRA filed a plea to the jurisdiction, which was granted by an Orange County district court on October 27, 2017. The district court found that Plaintiffs’ claims were not only preempted by federal law, but that Plaintiffs had also failed to meet their burden of proving intent and causation, both necessary elements of an inverse condemnation claim.