Year: 2022

Water Rights

Mississippi v. Tennessee: A Watershed Decision in State Water Rights

Introduction

            In Mississippi v. Tennessee,[1] the states of Mississippi and Tennessee disagreed about what rights each state had to the groundwater resources of the Middle Claiborne Aquifer. Mississippi filed an action against Tennessee and, in a novel argument, claimed that Tennessee’s pumping of the groundwater in the Aquifer amounted to a tortious taking of groundwater owned by Mississippi.[2] The United States Supreme Court held that Mississippi did not own the groundwater; rather, the Aquifer’s water resources were subject to equitable apportionment between the states.[3] 

Facts

The Middle Claiborne Aquifer is a large freshwater aquifer that underlies eight states, including Mississippi and Tennessee, both of which rely on this water resource daily.[4] Groundwater pumps draw water to the surface, where the water is transported to consumers.[5] The Aquifer is a main source of water for the City of Memphis which, through its utility, draws about 120 million gallons of water per day from Memphis’s more than 160 groundwater wells.[6] All of the wells are drilled straight down and located within Tennessee’s borders, but importantly, some are near the Tennessee-Mississippi border.[7]

Pumping groundwater creates a cone of depression that lowers water levels around the wells. This phenomenon can be controversial when the wells are close to state borders, because the wells—while themselves entirely within state borders—can lower water levels across state lines.[8] Here, Mississippi argued that the City of Memphis’s pumping activities “altered the historic flow of groundwater within the Middle Claiborne Aquifer.”[9] Specifically, Mississippi alleged that Memphis’s groundwater pumping substantially lowered water pressure and decreased groundwater drawdown in the parts of the Aquifer located in Mississippi near the Mississippi-Tennessee border.[10] Mississippi did acknowledge that 30–60 feet of water per year flowed naturally through the Aquifer from Mississippi to Tennessee, but Mississippi contended that Memphis’s pumping “substantially hastened this existing flow.”[11] As a result of the pumping in Tennessee, Mississippi asserted that it was forced to drill deeper wells “and use more electricity to pump water to the surface.”[12]

Rather than filing an original action seeking equitable apportionment—the usual judicial remedy for the apportionment of the shared water resource—Mississippi claimed that the doctrine did not apply because it had a sovereign ownership right to the groundwater beneath its borders.[13] Mississippi therefore sought leave to bring an original action against Tennessee on the basis that Memphis tortiously took “hundreds of billions of gallons of high-quality groundwater owned by Mississippi.”[14] Mississippi sought $615 million in damages.[15] Mississippi also contended that equitable apportionment does not apply to groundwater use.[16] 

Legal Background and Question

            Equitable apportionment is a judicial remedy that seeks to fairly allocate a shared water resource between two or more states, based on the idea that states have an equal right to reasonable use of shared water resources.[17] The United States Supreme Court has applied equitable apportionment to interstate rivers, streams, river basins, and in situations where groundwater pumping has affected the flow of interstate surface waters.[18] Since the Court had never answered the question of whether equitable apportionment applies to interstate aquifers, this case was a matter of first impression.[19] The question in this case, then, was whether equitable apportionment of an interstate aquifer is “‘sufficiently similar’ to past applications of the doctrine to warrant” the application of equitable apportionment.[20]

The Court’s Analysis

            The Court unanimously held that equitable apportionment of the Aquifer was sufficiently similar to past applications such that it warranted application in this case.[21] The Court asserted three primary reasons for its holding.

First, the Court noted that the Aquifer is multistate in character.[22] The Court had only applied equitable apportionment in the past to interstate water resources, and this case unquestionably involved an interstate water resource.[23] Mississippi did not contest the scientific consensus that the “‘Aquifer is a single hydrogeological unit’ spanning multiple states.”[24] 

Second, the Court observed that the groundwater in the aquifer “flows naturally between the states.”[25] This again rendered the aquifer similar to the Court’s past applications of equitable apportionment, which all involved water that flowed naturally across state boundaries.[26] Mississippi argued that the aquifer’s water flow was distinguishable from that of the past applications of equitable apportionment because the aquifer flows “extremely slow[ly].”[27] The Court remained unpersuaded, observing that it had applied equitable apportionment to water resources that sometimes run dry.[28] The Court also stressed that while the speed of the water’s flow may be slow, the volume of the water flowing totaled more than “35 million gallons of water per day, and over ten billion gallons per year.”[29] Thus, the speed at which the aquifer flows failed to distinguish the aquifer from the water resources to which the Court normally applied equitable apportionment.[30]

Lastly, the Court pointed out that the City of Memphis’s pumping activities affected the aquifer underneath Mississippi.[31] Pumping water from the aquifer within Tennessee’s borders reduces groundwater pressure and drawdown miles into Mississippi.[32] “Such interstate effects are a hallmark of [the Court’s] equitable apportionment cases.”[33] For the three reasons stated above, the Court held that the groundwater in the aquifer is subject to equitable apportionment.[34]

Mississippi insisted that it holds “sovereign ownership of all groundwater beneath its surface, so equitable apportionment ought not apply.”[35] The Court disagreed, explaining that while states own the land and waterbeds within their borders, this ownership does not extend to the “flowing interstate waters themselves.”[36] The Court also commented that if states could exercise jurisdiction over all of the groundwater underneath the state, then upstream states could pump aquifers dry and leave downstream states without water.[37]

Mississippi also urged that Tarrant Regional Water District v. Herrmann supported Mississippi’s argument that equitable apportionment should not apply.[38] In Tarrant, the Supreme Court interpreted a compact that two states had negotiated concerning the states’ rights to a water resource.[39] The Tarrant Court did not consider whether equitable apportionment applied in that case, because the dispute was solely governed by the contract.[40] Accordingly, the Court explained that Tarrant was inapposite.[41]

The Court recognized that Tarrant did support the rule that states “may not physically enter another to take water in the absence of an express agreement,” but that was not at issue here—the City of Memphis’s wells were undisputedly within Tennessee’s borders.[42] That some of the aquifer’s water began in Mississippi did not affect the analysis; just as river water may originate in another state, so too may groundwater.[43] While “[t]he origin of an interstate water resource may be relevant to the terms of an equitable apportionment . . . . that feature alone cannot place the resource outside the doctrine itself.”[44] Since Mississippi and Tennessee did not have a contractual agreement about their respective rights to the groundwater, and Tennessee was pumping water in its own state, no rule in Tarrant supported Mississippi’s argument that equitable apportionment should not apply.[45] 

In sum, the Court held that the groundwater in the Middle Claiborne Aquifer was subject to equitable apportionment because it the aquifer was sufficiently similar to the water resources that are customarily subject to equitable apportionment. The Court dismissed Mississippi’s complaint.[46]

Implications for State Water Rights

            As climate change prompts governments to pay closer attention to the use and conservation of water resources, this decision has important ramifications for state water rights. This case appears to stop states from attempting to pump important groundwater resources dry: If Mississippi were able to assert ownership over all of the groundwater within its state borders, then it is in Mississippi’s interest to use as much of that groundwater as possible, lest Tennessee endeavor to do the same. This, of course, would not be a conservation-conscious practice. Equitable apportionment aspires to ensure that states fairly share and preserve water resources. But as the Court noted in this case, states seeking judicial enforcement of equitable apportionment must show real and substantial injury, which is a high bar.[47]

            This ruling also may inspire states to adopt interstate compacts concerning groundwater resources. Because of the cost and difficulties involved in obtaining judicial enforcement of equitable apportionment, a proactive compact is an attractive option for states looking to secure long-term rights to interstate groundwater resources. Predictable judicial enforcement makes compacts reliable and financially prudent. Indeed, the Court in this case explicitly distinguished Tarrant on the grounds that Tarrant was a question of contractual interpretation.[48] The market forces underlying the negotiations of such compacts also give assurance that groundwater resources will be used efficiently by the states that are parties to the compact.

Graham Rex is a rising 3L from Raleigh, North Carolina. He studied Philosophy at the University of North Carolina-Wilmington, and he joined TELJ during his 1L year. Graham wants to practice nonprofit environmental law after law school and he is clerking at Earthjustice in Denver, Colorado this summer. 

Emily Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

Water Rights

Brazos River Auth. v. City of Houston, 628 S.W.3d 920 (Tex. App.—Austin 2021, pet. filed)

 Background 

This case arose over a dispute from the right to construct and operate a reservoir on Allens Creek.[1] The City of Houston sued the State of Texas and the Brazos River Authority (“BRA”), seeking to block the implementation of a new law that would force the City to sell its water rights in the proposed Allens Creek Reservoir to the BRA for up to $23 million by the end of 2021.[2] Specifically, the site of the proposed reservoir is a tract of about 9,5000 acres located in Austin County near the confluence of Allens Creek and the Brazos River.[3] This site was designated “a site of unique value for the construction of a dam and reservoir on Allens Creek” and “that construction and development of the Allens Creek Reservoir project” would be “in the public interest and would constitute a beneficial use of the water.”[4]

For over two decades, the City and the BRA have jointly held a water-appropriation permit authorizing them to construct the reservoir and to use the impounded water.[5] In 2019, however, the Texas State Legislature passed House Bill (H.B.) 2846, which instructed Houston to enter into a contractual agreement with the BRA to transfer its entire interest in the proposed reservoir, including its permit rights, to the Authority.[6] H.B. 2846 was intended to encourage development of the reservoir by transferring the City’s entire interest in the reservoir and all rights to the BRA.[7]

        Houston responded by suing the State of Texas and the BRA, asserting that H.B. 2846 is invalid on multiple grounds.[8] The district court granted declaratory relief, finding that H.B. 2846 is “unconstitutional, void, and unenforceable” because it violates the Texas Constitution’s prohibition of retroactive laws, local or special laws, and the forced sale of government property.[9] In a separate order, the district court sustained Houston’s evidentiary objections in part and overruled them in part.[10] The State and the BRA appealed the decision.[11]

 The Third Court of Appeals’ Decision and Discussion

The Texas Third District Court of Appeals upheld the lower court’s decision to protect the City of Houston’s interest in the unbuilt reservoir by striking down a state law and declaring it unconstitutionally retroactive based on its impairment of Houston’s water rights.[12]  

First, the appellate court discussed why H.B. 2846, as a later-enacted and more specific statute, controls regardless of a conflict with the Local Government Code.[13] Next, the court examined the constitutional challenges to H.B. 2846 and elaborated on its conclusion that there was a failure to demonstrate an overriding public interest in violating the water rights of the City in the unbuilt reservoir.[14] Despite a presumption that the statute was valid, the court construed H.B. 2846 “as a whole” to determine that it had retroactive effect.[15] Thus, the analysis turned to whether the law was unconstitutionally retroactive.[16]

The City argued the law is unconstitutional in part because it violates prohibitions on retroactive laws and on forced sales of municipal property that have a public use.[17] On the other hand, the BRA argued that H.B. 2846 is in the public interest because it is necessary to discharge the legislature’s constitutional duty to conserve the state’s natural resources.[18] In its decision, the appellate court relied on the three-factor test established in a 2010 Texas Supreme Court decision, Robinson v. Crown Cork & Seal Co., to review whether a statute violates the state’s constitutional prohibition on retroactive laws under the following factors: (1) the nature and strength of the public interest served by the statute; (2) the nature of the prior right violated by the statute; and (3) the extent of the impairment.[19]

Although the court agreed that constructing the reservoir is in the public interest, concerns regarding the law remain unaddressed and, according to the majority, “nothing in the record supports a conclusion that H.B. 2846 resolves these concerns.”[20] The conclusion is bolstered by the fact that H.B. 2846 itself does little to advance construction of the reservoir without further action from the Legislature or the Commission.[21] Ultimately, the majority determined the legislature lacked justification to retroactively apply the state statute to Houston’s interest in the unbuilt reservoir because the legislation served a minimal public interest while having a significant impact on Houston’s settled property rights.[22] Therefore, even though H.B. 2846 could serve a compelling interest, the court concluded the statute was unconstitutionally retroactive in balancing the law’s “purpose against the nature of the prior right and the extent to which the statute impairs that right.”[23]

In affirming the trial court’s judgment and granting declaratory relief, the court found H.B. 2846 to be “unconstitutional, void, and unenforceable.”[24] However, dissenting Justice Melissa Goodwin said that the legislature’s action should carry a presumed constitutionality and require Houston to demonstrate the need to strike down the law.[25] Justice Goodwin points to the City of Houston’s failure to do so, and questioned Houston’s proof of its vested water rights in the reservoir because it received permits for the project’s development decades earlier but failed to move forward on construction.[26] Additionally, although Justice Goodwin admits to the questionable policy reasons behind the legislation, her dissent notes that the law’s constitutionality should be evaluated, rather than its policy.[27]

Implications of the Decision

This court’s decision restores the City of Houston’s interest in the Allens Creek reservoir project and affirms the state prohibition against retroactive statutes. This decision appears to be an obstacle to the legislature’s ability to take away rights and property from a city and transfer those interests to another governmental entity. This decision could be used in the future to prevent the legislature from using its powers to require the involuntary transfer of property from a city to another governmental entity. The court’s application also reinforces the Robinson factor test established by the Texas Supreme Court and provides insight into the courts’ decision-making process on issues involving the constitutionality of retroactive statutes.[28]

It remains to be seen how durable this finding, and its implications, will be—the State of Texas and the BRA filed petitions for review with the Texas Supreme Court on October 15, 2021.

Carlo Lipson is a second-year student at the University of Texas School of Law. He joined TELJ in the Spring of his 1L year, and has enjoyed being a part of the journal and learning about the many current environmental law issues and policies. Carlo is from San Francisco, attended undergrad at the Claremont Colleges outside of Los Angeles, and is planning to return to California after law school.

Emily Rogers is the Managing Partner of Bickerstaff Heath Delgado Acosta LLP and represents public and private clients in water rights, water quality, utility, and environmental law matters.           

Kimberly Kelley is an attorney at Bickerstaff Heath Delgado Acosta LLP and practices in the areas of municipal, open government, water, and environmental law. She earned her undergraduate degree from Texas A&M University and graduated Texas Tech University School of Law, where she served on the editorial board of the Law Review.

[1] Brazos River Auth. v. City of Houston, 628 S.W.3d 920 (Tex. App.—Austin 2021, pet. filed).

[2] Id. at 925.

[3] Id. at 923.

[4] Id.; Act of May 22, 1999, 76th Leg., R.S., ch. 1291, § 1.01, 1999 Tex. Gen. Laws 4426, 4426 (S.B. 1593).

[5] Brazos River Auth., 628 S.W.3d at 922.

[6] See id.; See Act of May 16, 2019, 86th Leg., R.S., ch. 380, § 1, 2019 Tex. Gen. Laws 688, 688 (H.B. 2846).

[7] Brazos River Auth., 628 S.W.3d at 924.

[8] Id. at 925.

[9] Id. at 922.

[10] Id. at 925.

[11] Id.

[12] Id. at 936.

[13] Id. at 927; See Tex. Loc. Gov’t Code Ann. §§ 272.001(a), 552.020 (West 2019).

[14] Brazos River Auth., 628 S.W.3d at 936.

[15] Id. at 928.

[16] Id.

[17] See id. at 928.

[18] See Tex. Const. art. XVI, § 59(a); See Brazos River Auth., 628 S.W.3d at 929.

[19] Id. at 929; see Robinson v. Crown Cork & Seal Co., 335 S.W.3d 126, 145 (Tex. 2010).

[20] Brazos River Auth., 628 S.W.3d at 930.

[21] Id. at 931

[22] Id. at 936.

[23] See id. at 931.

[24] Id. at 936.

[25] See id. at 937.

[26] Id. at 930.

[27] See id. at 945.

[28] See id. at 929.