## Facts

- R. Burrell Day and Joel McDaniel owned 381.40 acres overlying the Edwards Aquifer; an older irrigation well on the property had collapsed but continued flowing under artesian pressure into a 50-acre lake used for irrigation and recreation.
- The Edwards Aquifer Authority Act required permits for most groundwater withdrawals and generally allocated permitted withdrawal amounts based on quantified “historical use” during a statutory look-back period, with minimum entitlements tied to historically irrigated acreage.
- Day applied for a permit to withdraw 700 acre-feet per year, claiming historical irrigation of about 300 acres plus use associated with the 50-acre lake.
- After a historical-use review, the Authority concluded only a small portion of the property had been irrigated from the well during the relevant period and issued a permit for 14 acre-feet per year.
- Day sued the Authority and the State, asserting (1) entitlement to a larger permit under the statute and (2) that the restriction on pumping was an uncompensated taking under article I, § 17(a) of the Texas Constitution.
- The trial court granted summary judgment for Day on the statutory/permit issue but denied his takings claim.
- The court of appeals disagreed with the trial court’s permit ruling and held the application of the Act could amount to a compensable taking, reviving the takings claim.

## Issues

1. Whether Texas landownership includes a constitutionally protected property interest in groundwater in place beneath the land, analogous to oil and gas in place.
2. Whether a permitting regime that severely restricts a landowner’s ability to withdraw groundwater can constitute a compensable taking under article I, § 17(a) of the Texas Constitution.

## Decision

- The Texas Supreme Court affirmed the court of appeals and remanded for further proceedings.
- The Court held that land ownership includes an interest in groundwater in place and that the interest is protected by the Texas Constitution’s takings clause.
- The Court did not find a taking as a matter of law but held that the Act’s restrictions as applied could be a compensable regulatory taking.
- The Court directed that the takings claim be evaluated under a Penn Central–type regulatory takings analysis.

## Legal Principles

- Texas landowners have a property interest in groundwater in place beneath their land, comparable to ownership in place of oil and gas, and subject to the rule of capture and lawful regulation.
- The rule of capture affects how the groundwater right may be exercised but does not negate the existence of a property interest before water is produced.
- The State may regulate groundwater to protect and conserve the resource, but regulation that “goes too far” may require compensation under article I, § 17(a) of the Texas Constitution.
- Regulatory takings claims involving groundwater restrictions are evaluated using Penn Central–type factors, including economic impact, interference with reasonable investment-backed expectations, and the character of the governmental action.
- Allocation schemes that rely heavily on historical use may, depending on their operation and effect, burden groundwater-in-place interests in a manner that can trigger takings scrutiny.

## Conclusion

The Texas Supreme Court recognized groundwater in place as a constitutionally protected property interest held by the surface owner and held that severe limits on permitted pumping under the Edwards Aquifer Authority Act may constitute a compensable regulatory taking, requiring case-specific analysis on remand.


Edwards Aquifer Auth. v. Day, 369 S.W.3d 814 (Tex. 2012)