In an opinion by Chief Justice Hecht, the Texas Supreme Court has held that the legislative delegation of authority to TCEQ to “adjudicate water rights” (Chapter 5, Water Code) does not cede jurisdiction to the agency to determine ownership of such rights. Only courts, the Chief wrote, can determine ownership property rights.
The case, Pape Partners, LTD., Glenn R. Pape and Kenneth W. Pape, Petitioners, v. DRR Family Properties LP (No. 21-0049), arose out of Pape’s purchase of a 1,086-acre farm in McLennan County, including the right to use water diverted from the Brazos River for irrigation under a permit issued by the TCEQ. The seller Lola Robinson informed Pape that the TCEQ had recognized her exclusive right to the water covered in the permit. Robinson initially obtained two permits in 1986 for the water rights to her farm. The permits, however, did not cover an adjacent 250-acre tract that Robinson owned, which had no direct river access or any appurtenant water rights. In 1990, Robinson conveyed the 250-acre tract to Swirl Investments, which she owned. In 1997, the TCEQ replaced the two permits issued in 1986 with a single amended permit, which granted Robinson the authority to irrigate both the farm and the adjacent tract from water-diversion points located on the farm. (Pape alleged that Robinson failed to inform the commission that she no longer owned the 250-acre tract.) After issuance of the amended permit, the tract changed hands several times, ending up in the hands of DRR Family Properties, LP. In 2012.
Upon purchasing the property in 2014, Pape submitted ownership documentation to TCEQ. The executive director updated the commission’s records to reflect that Pape owned the water rights appurtenant to the farm. Later, however, the TCEQ identified DRR as the owner of the 250-acre tract and invited DRR to submit its own change of ownership application and documentation. Other landowners who purchased property nearby with chains of title traceable to Robinson also filed ownership documentation after being notified by the commission of potential water rights. In late 2015, acting on DRR’s application, the executive director changed the TCEQ’s records again, this time to reflect that the water rights recorded in the amended permit were owned proportionally by Pape, DRR, and Robinson. In effect, the update reduced the amount of land Pape was authorized to irrigate from the 1,086 acres to 821. Pape filed a motion to overturn the director’s decision in accordance with the commission’s rules. The director’s office then prepared a response for the full commission stressing that the executive director’s review for a change of ownership is ministerial. The commissioners took no action, so Pape’s motion was overruled by the operation of law in 2016.
Pape then sued DRR, Robinson, and several other landowners seeking declarations that it is the sole owner of water rights appurtenant to the 1,086-acre farm and that none of the defendants have water rights recognized by the 1997 amended permit. Pape argued that because Robinson did not own the 250-acre tract when the amended permit was issued, the surface water rights granted her with respect to that tract were personal to her and did not pass with subsequent conveyances of the land. Pape also pleaded alternative claims for adverse possession, to quiet title, and for breach of contract and fraud. DRR moved to dismiss Pape’s claims for lack of subject matter jurisdiction, arguing that the TCEQ has exclusive original jurisdiction to determine water ownership rights and that under the TCEQ’s enabling statute, Pape could have sued for judicial review of the commission’s action on DRR’s application within 30 days, but did not. The trial court granted DRR’s motion to dismiss and then severed all claims against it into a separate suit to permit an immediate appeal. A divided Waco Court of Appeals affirmed, concluding with no supporting analysis that “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.” Under the holding, Pape’s only remedy was a suit for judicial review under Chapter 5, Water Code, which, however, by then, was time-barred.
SCOTX granted review and reversed the court of appeals. Amicus submissions from the TCEQ and three agricultural associations all supported Pape’s position. DRR contended that the reference to water rights adjudication in §5.013(a) grants TCEQ exclusive jurisdiction to decide conflicting claims to water rights. SCOTX disagreed, determining that the Legislature has used “water rights adjudication” as a term of art for the agency’s process of allocating the rights to surface water in a manner that is consistent with the public interest. “Adjudication” is shorthand for the commission’s decision to issue water rights permits for a particular stream or segment. The TCEQ’s amicus brief explained that the agency determines the amount of use, place of use, the purpose of use, point of diversion, rate of diversion, and where appropriate, the acreage to be irrigated and then issues a “certificate of adjudication.” In TCEQ’s own words water rights adjudication is “an administrative record-keeping function.” Only a judicial process can determine property ownership. The Court thus held that the TCEQ lacks jurisdiction to decide conflicting claims of ownership to surface-water rights, which undoubtedly comes as a great relief both to the agency and landowners.
*This article was researched and written by George E. Christian, TCJL’s research intern.