Last week, the Amarillo Court of Appeals issued its opinion inn City of Lubbock v. Coyote Lake Ranch, LLC, No. 07-14-00006-CV, holding that the accommodation doctrine did not apply to restrict the City's use of Coyote's land to develop the City's groundwater under the land.
In 1953, the City of Lubbock bought the rights to groundwater under the land now owned by Coyote Lake Ranch. In that deed, the City acquired all groundwater rights, and "the full and exclusive rights of ingress and egress in, over and on said lands so that the Grantee of said water rights may at any time and location drill water wells and test wells on said lands for the purpose of investigating, exploring, producing, and getting access to percolating and underground water." The deed granted the right to lay water lines, build reservoirs, booster stations, houses for employees, and roads, "together with the rights to use all that part of said lands necessary or incidental to the taking of percolating and underground water and the production, treating and transmission of water therefrom and delivery of said water to the water system of the City of Lubbock only."
In 2012, the City proposed a well field plan for the property and began testing and development under that plan. Coyote sued, asking for a temporary injunction to halt the City's activity. Coyote claimed that the City failed to accommodate Coyote's existing uses of the property (the opinion does not say what those uses are), and that the City could use alternatives that would lessen damage to Coyote's use of the land. The trial court granted the temporary injunction, holding that Coyote was likely to be able to show at trial that the City's plan could be "accomplished through reasonable alternative means that do not unreasonably interfere with [Coyote's] current uses." The City appealed from that order.
In the Court of Appeals, the City made two arguments: first, it argued that the accommodation doctrine does not apply to the relationship between the owner of the surface and the owner of groundwater. Second, it argued that the express language in the water rights deed would prevail over general accommodation doctrine principles.
The Court of Appeals reversed, agreeing with the City that the accommodation doctrine does not apply to limit the rights of holders of groundwater rights. The Court said that the Texas Supreme Court has not extended the accommodation doctrine to groundwater, and that "changes in the law should be left to the Texas Supreme Court or the Texas Legislature."
The accommodation doctrine was developed to ameliorate the harsh results of the rule that the mineral estate is the dominant estate and mineral owners have the right to use as much of the surface of the land as is reasonably necessary to explore for and extract minerals, without compensation to the surface owner. The doctrine requires the mineral owner to accommodate existing surface uses where that can be done using established industry practices. The Court's opinion does not provide any logical reason why the accommodation doctrine should not apply also to severed groundwater rights. Indeed, the City's use of Coyote's land to develop its groundwater might be more intrusive than would surface use for development of mineral rights under the land.
The opinion does not address the City's second argument, that the express language in its deed granting the City extensive rights to surface use should make the accommodation doctrine inapplicable. Many deeds granting or reserving mineral interests contain express language granting the mineral owner the right to use the surface estate for oil and gas exploration and development. I have not seen a case involving the accommodation doctrine in which the mineral owner contended that the express language in its deed granting access rights prevailed over the accommodation doctrine.
Severance of groundwater from the surface estate is not as common in Texas as severances of minerals. But with increased demands for and value of groundwater, such severances will become more common, and other conflicts between the surface owner and the owner of groundwater will likely arise. I expect that the Texas Supreme Court will have to address the applicability of the accommodation doctrine to severed groundwater rights in the near future.