August 29, 2013

Texas court finds agency can't deny pecan farmers' water rights without compensation

By Texas court finds agency can't deny pecan farmers' water rights without compensation

Last October, we related the story of Glenn and JoLynn Bragg, pecan farmers in Medina County, Texas, who suffered from a state agency’s taking of their water rights.  PLF filed an amicus brief in the case, supporting the Braggs’ argument that the agency, the Edwards Aquifer Authority, could not regulate away the Braggs’ common law water rights, without compensation.  The Texas Fourth Court of Appeals agreed in an opinion issued this week.  It held that the Authority had indeed unconstitutionally taken the Braggs’ water rights.  This is significant not only for the Braggs, but for all Texas water rights holders.  Government does not get a free pass around the Constitution in the water rights context simply by asserting that it has a duty to preserve the water.  If government destroys common law water rights, it must compensate property owners.

PLF’s amicus brief focused specifically on one aspect of “the Penn Central test” for determining when government is liable for taking property by excessive regulation.  As a whole, the Penn Central test requires a court to balance these factors : (1) the economic impact of the regulation on the property owner; (2) the regulations’ interference with the property owners’ “reasonable, investment-backed expectations” and (3) the nature of the regulation.  PLF’s brief focused on the second “expectations” factor, because it is often decisive.

There is no one-size-fits- all standard for gauging whether a property owner has “reasonable, investment-backed expectation” of property use, but courts have often found such expectations reasonable when they merely track the land’s historic use.  In this case, the Braggs had reasonable expectations because they had been growing pecan trees for 30 years, and because they had specifically purchased their orchards in reliance on their ground water rights.  The Braggs knew that they would need to use more and more water from the Aquifer as their pecan trees matured, which was not a problem as their title included common law water rights to use as much water as necessary for irrigating their crop.  But when the Texas Legislature created the Authority, it passed regulations that severely curtailed how much water the Braggs could use.  It wasn’t enough to irrigate all of their trees, so they had to thin their orchards and let many of their trees die.

The Authority tried to argue that the Braggs had no reasonable expectation of irrigating as needed, free of Authority regulation, because the Authority did not exist at the time the Braggs’ purchased their orchards.  Our brief noted that if that were the case—i.e. government could defeat property owners’ expectations simply by enacting regulation—anyone who purchased land prior to the permitting scheme being enacted would never have a reasonable expectation of receiving a use permit, and government could always insulate itself from its constitutional obligation to pay property owners’ for the taking of their rights.

Fortunately, the court implicitly rejected that argument in holding that the Braggs’ had a reasonable expectation to use as much water as necessary to water their orchards.  This supported the court’s conclusion that the Authority had taken their water rights.  The Authority must now pay the Braggs the difference between the value of their land as an orchard with unlimited access to Edwards Aquifer water, and their land with the Authority’s water restrictions in place.  This is an excellent result for the Braggs, who have been fighting this court battle since 2006, and for the continuing protection of common water rights in Texas.

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