ES, Landowners appeal denial of party status

Environmental Stewardship (ES) and Landowners (Andrew Meyer, Bette Brown, and Darwyn Hanna) have filed an appeal of the decision by the Administrative Law Judge (ALJ) to deny party status in the End Op contested case hearing.  The request was filed with the Lost Pines Groundwater Conservation District Board of Directors on August 1, 2014 and will be heard at a special meeting on August 13, 2014 in Bastrop, TX. The time and location of the meeting has not yet been established. 

ES and Landowners (collectively “Requesters”) have asked that the Board reverse the ALJ’s decision that they are not affected persons, and remand End Op’s application back to the State Office of Administrative Hearings (SOAH) for a contested case hearing including Requesters as parties.

The ALJ denied Requesters’ petition for party status on the basis that a requester must demonstrate an actual or intended use of groundwater owned before the person can assert an interest in the groundwater.  ES and Landowners argue that ownership of land, with the accompanying vested interest in groundwater, constitutes a legally protected interest within the framework of the Texas Water Code (36.002) and the Texas Supreme Court decision in the Edwards Aquifer Authority v. Day case.

The Supreme Court held that a landowner is regarded as having absolute title to the water in place beneath his or her land, and that each owner of land owns separately, distinctly and exclusively all of the water beneath his or her land, subject to the rule of capture and state regulation.  The court went on to conclude that landowners have a constitutionally compensable interest in groundwater, and that “one purpose of groundwater regulation is to afford each owner of water in a common, subsurface reservoir a fair share.”

The Supreme Court further noted, in quoting the United States Supreme Court, “to deny standing to persons who are in fact injured simply because many others are also injured, would mean that the most injurious and widespread Government actions could be questioned by nobody … where a harm is concrete, though widely shared, the Court has found injury in fact.”

IF the ALJ’s reasoning is allowed to stand, then the District will create an incentive for every landowner to drill a well and pump groundwater in order to protect their interest in that groundwater.   Importantly, the ALJ’s decision punishes landowners who may choose to conserve groundwater, since the ALJ has effectively held that a landowner who wishes to use or waste his or her groundwater has a protected interest, while a landowner who opts to limit his or her use of groundwater has no right to protect his or her groundwater interests.  The District should not adopt the ALJ’s approach that rewards needless or wasteful pumping.

Subsequent to the ALJ’s decision on party status, AQUA announced a partial settlement with End Op that would establish a mitigation fund for Aqua of up to $15 million over 20 years. In exchange, AQUA agreed to limited arguments and limited cross-examination, including refraining from arguing on behalf of any landowner other than AQUA at the hearing. The settlement also resulted in a reduction of End Op’s request for a permit to 46,000 AFY instead of 56,000 AFY, and a reduction of pumping in Bastrop County. The AQUA mitigation fund is controlled by AQUA and may be used at AQUA’s sole discretion, with no showing of fault by End Op.  AQUA and End Op also agreed that End Op would set up a mitigation fund of up to $3.75 million to be held by a third-party trustee to pay claims of landowners who are not Aqua customers, as long as they have wells either in the Simsboro Aquifer or within one mile of an End Op well. No details of the landowner fund have been offered by either AQUA or End Op, including whether these landowners will have the burden of proving End Op caused damage to their wells. Click here for a link to AQUA’s frequently asked questions.  The ALJ’s decision recommended the landowner mitigation fund be included in any End Op permit — clearly, End Op, AQUA and the ALJ have attempted to settle issues affecting private landowners and their property rights, while denying the landowners themselves their rights of due process and equal protection.