The Edwards Aquifer Authority and the State of Texas v. Burrell Day and Joel McDaniel, 369 S.W.3d 814

Day bought 381.40 acres over Edwards Aquifer to grow crops and graze cattle; the property contains groundwater beneath the surface that feeds a lake on-site.
The Edwards Aquifer Authority Act (EAAA) requires a permit to withdraw groundwater; it focuses on protecting public welfare and assigns priority to existing users.
Day sought an initial regular permit (IRP) for 700 acre-feet annually, basing it on historic beneficial use including irrigation and recreational lake use.
Evidence showed groundwater from the well flowed into a lake used for recreation; the Authority later denied Day’s request, finding only seven acres of irrigated land during the historical period with groundwater as state water when in the lake.
The trial court and court of appeals disagreed with the Authority on the extent of Day’s historical beneficial use and on whether groundwater ownership in place exists; the Texas Supreme Court granted review to address ownership and takings implications.
The Court held that landowners have ownership interests in groundwater in place and that Day’s takings claim may proceed, remanding for proceedings on the takings aspects while affirming the IRP framework under the EAAA.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is there a constitutionally protectable ownership in groundwater in place?	Day asserts owners have groundwater in place as property rights.	Authority/State argued water can become state water and ownership is not in place.	Yes, Day has ownership in groundwater in place.
Does the EAAA’s historical-use-based permitting framework constitute a taking of Day’s groundwater rights?	Denial of a permit beyond historical use unconstitutionally deprives Day of use.	Regulatory scheme may respond to public needs with compensation required only if a taking occurs.	Summary judgment on takings issues not proper; remand for full takings analysis.
Does the rule of capture apply to groundwater ownership in this context?	Ownership in place should be recognized despite capture principles.	Regulatory framework and common-law rule of capture should limit ownership.	Ownership in place is recognized; capture does not negate ownership.
Are Day’s other constitutional claims meritorious or need no relief beyond takings?	Procedural due process, ex parte communications, and equal protection claims.	No reversible error shown under the record; arguments fail.	No merit to other constitutional claims.

Houst. & T.C. Ry. v. East, 81 S.W.279 (Tex. 1904) (establishes rule of capture for groundwater rights (non-liability for drainage))
Elliff v. Texon Drilling Co., 210 S.W.2d 558 (Tex. 1948) (correlative rights and regulation of groundwater production)
Sipriano v. Great Spring Waters of Am., Inc., 1 S.W.3d 75 (Tex. 1999) (regulatory regime and liability for malice or waste; groundwater regulation retained)
Barshop v. Medina County Underground Water Conservation District, 925 S.W.2d 618 (Tex. 1996) (facial takings challenges to groundwater regulation; regulatory framework validated)
Guitar Holding Co. v. Hudspeth County Underground Water Conservation Dist., 263 S.W.3d 910 (Tex. 2008) (historic/existing use preservation; relevance to permit calculations)
Stephens County v. Mid-Kansas Oil & Gas Co., 254 S.W.2d 290 (Tex. 1923) (ownership of oil and gas in place; analogy to groundwater ownership)
Coastal Oil & Gas Corp. v. Garza Energy Trust, 268 S.W.3d 1 (Tex. 2008) (ownership in place and regulatory regulation context; oil/gas analogy)
City of Corpus Christi v. City of Pleasanton, 276 S.W.2d 798 (Tex. 1955) (percolating waters; surface ownership interactions)