Sunday, April 23, 2017
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Emerging Legal Issues

February  2017

From SledgeLaw Group PLLC

In 2015, the City of Conroe and a group of investor-owned utilities (collectively, “Plaintiffs”) filed suit against the Lone Star Groundwater Conservation District (the “District”) and its directors and general manager in their official capacities.  In their original petition, the Plaintiffs asserted several claims under the Uniform Declaratory Judgment Act (“UJDA”), challenging the validity of the District’s DFCs and rules, as well as multiple claims under the Texas Real Property Rights Preservation Act.  

In response to these claims, the District and its directors filed pleas to the jurisdiction, challenging the court’s subject-matter jurisdiction over all of the Plaintiff’s claims.  However, before the trial court ruled on the pleas, the Plaintiffs amended their petition several times, removing the majority of their original claims from the case. As a result, the only remaining original claims before the court included the Plaintiffs’ UDJA claims against the District and its directors challenging the validity of the District’s rules, for which the Plaintiffs claimed attorneys fees under the UDJA.  Nonetheless, the trial court issued a blanket denial of all the District’s and its directors’ pleas to the jurisdiction, which the District and its directors appealed.

On February 2, 2017, the 9th Court of Appeals in Beaumont issued its opinion on the pleas to the jurisdiction in favor of the the District and its directors. The Court of Appeals ruled that the trial court abused its discretion by failing to grant the directors’ plea to the jurisdiction. The court held that because Section 36.066(a) of the Texas Water Code provides groundwater conservation district directors immunity from suit for official votes and actions, except in certain limited instances of nonconformance with laws relating to conflicts of interest, abuse of office, or constitutional obligations, which were not alleged by the Plaintiffs, the directors are immune from being sued by the Plaintiffs. Thus, the Court of Appeals reversed the trial court’s order denying the directors’ plea and rendered judgment dismissing the Plaintiffs’ claims against the directors, with prejudice. 

The Court of Appeals also ruled that the trial court erred when it failed to grant the District’s plea to the jurisdiction with respect to the Plaintiffs’ claims for attorneys fees. The court held that while Section 36.251 of the Texas Water Code waives the District’s immunity from suit in a challenge to the validity of its rules, which may be asserted in conjunction with a claim under the UDJA in seeking a declaration that the District’s rules are invalid, the Plaintiffs cannot recover attorneys fees in such a claim because it is not authorized under Chapter 36, the more specific of the two statutes on the issue of attorneys fees. Therefore, the court affirmed the trial court’s decision in part by rejecting the District’s plea to dismiss the Plaintiffs claims challenging the validity of the District’s rules, but the court reversed the trial courts decision in part by dismissing the Plaintiffs claims for attorneys fees, with prejudice.

January 2017

From Lloyd Gosselink

The pending lawsuits and contested permit hearing involving Clayton Williams’ and his partners’ permit applications are headed to mediation at the State Office of Administrative Hearings. On January 11, 2017, the El Paso Court of Appeals ordered Williams’ contractual partner Republic Water Co. of Texas, LLC and Middle Pecos GCD to mediate Republic’s pending appeal. In that appeal, the trial court granted the District’s plea to the jurisdiction and awarded court costs and fees for legal counsel and experts.

On January 17, 2017, Republic requested mediation of its contested permit application pending before the District. Republic’s application requests 28,500 acre feet from the Edwards-Trinity aquifer proposed to be withdrawn from wells and related to property and water rights tied to historic use permits issued previously to Williams’ affiliate Fort Stockton Holdings, L.P. (FSH). Republic’s application has been protested by Pecos County, City of Fort Stockton, Pecos County Water Control and Improvement District No. 1, Kennedy Ranch, the Riggs Family, and Cockrell Investment Partners, L.P.

On January 20, 2017, in a separate appeal by FSH, oral arguments set for February 9th were vacated to allow mediation among FSH and appellees Middle Pecos GCD, Pecos County, City of Fort Stockton, Pecos County Water Control and Improvement District No. 1, and Brewster County GCD. FSH is appealing the trial court’s grant of the District’s motion for summary judgment and award of court costs and legal fees. FSH’s application requests 47,418 acre feet from the Edwards-Trinity aquifer tied to the same water rights, property, and wells linked to FSH’s previously issued historic use permits.

November 2016

From Lloyd Gosselink

The federal lawsuit filed by Fort Stockton Holdings, LP and its partner, Republic Water Co. of Texas, LLC, against Middle Pecos GCD, has been dismissed. In response to the District’s motion to dismiss and the “case management conference and docket call” set for November 17th, Plaintiffs filed a motion to dismiss, which was granted on November 10, 2016 (see attached final judgment).

Republic and FSH filed the suit against the District, its Board and senior staff alleging tortious interference with contract and a violation of their civil rights under the U.S. Constitution. Republic and FSH alleged that the District had failed to process Republic’s groundwater production permit application. The first claim involved the contract entered among Republic, FSH, and Clayton Williams Farms. That lease agreement provided for a joint plan to develop and market 9.2 billion gallons of Edwards-Trinity groundwater per year from Williams’ farm. The second claim alleged the District deprived plaintiffs of equal protection and due process during the permitting process. Republic’s permit application claimed (1) an interest in water rights owned by Williams and (2) an entitlement to a permit from the District. FSHLP and Republic sought damages of $400 million plus punitive damages, court costs and legal fees from each defendant jointly and severally.

In a related state-court lawsuit reported in last month’s TAGD newsletter, the court determined that the District was properly processing Republic’s application and that Republic had failed to provide aquifer drawdown maps and related data necessary to set a hearing on the application. The District won that lawsuit and Republic was ordered to reimburse the District’s court costs and fees for experts and attorneys. Republic subsequently provided the maps and data, after which the District set a permit hearing.

October 2016

From Lloyd Gosselink

Middle Pecos GCD Wins Lawsuit Filed by Republic Water Co. of Texas, LLC

On October 27, 2016, final judgment was issued in favor of Middle Pecos Groundwater Conservation District in a lawsuit filed by Republic Water Company of Texas, LLC. On April 5, 2016, Republic filed a permit application requesting 28,500 acre feet of groundwater from the Edwards-Trinity Aquifer. On May 10th, Republic initiated its lawsuit in state court when the District would not declare Republic’s application administratively complete and set a permit hearing. The District took the position that Republic’s application was not administratively complete under Sections 36.113, 36.1131 and 36.114 of the Texas Water Code and its rules because Republic had not provided drawdown maps and other scientific information based on USGS modeling results. Republic argued that this scientific information is not required for an application to be administratively complete and that districts are restricted in requesting only the information listed in Sections 36.113(c) and 36.1131(b). The Court agreed with the District’s interpretation of the statutory administrative completeness requirements. Republic also argued that it was inappropriate for the District to have abated review of its application. The Court concluded that abatement was not yet at issue because the application was not administratively complete. During the pendency of the lawsuit, Republic provided the information requested by the District and the District then declared the application administratively complete and set it for hearing. 

The Court’s final judgment dismisses all of Republic’s claims with prejudice and orders Republic to reimburse the District its expenses of attorneys, experts, and other court costs incurred to defend against Republic’s lawsuit. 

 

September 2016

Coyote Lake Ranch, LLC vs. City of Lubbock Case Update

The Texas Supreme Court denied the Motion for Rehearing on September 23, 2016. It did, however, issue a new opinion that addresses the City of Lubbock’s requested clarification and includes two small non-substantive changes to the original opinion on page 8, paragraph 2. Read the letter sent to parties from the Supreme Court here , the Supreme Court opinion with changes here, and the appellate briefs here. 

 

August 2016

From Lloyd Gosselink

Earlier this week, on August 17th, Republic Water Company of Texas, LLC’s (RWCLLC) Request for Issuance of Mandamus was heard in state district court. At issue was whether RWLLC’s application ought to be declared administratively complete and set for hearing before the Middle Pecos Groundwater Conservation District’s Board. The District urged its plea to the jurisdiction and motion to dismiss, arguing that the application was not administratively complete under Sections 36.113, 36.1131 and 36.114 of the Texas Water Code because RWLLC had not provided drawdown maps based on USGS modeling results. RWLCC argued that this scientific information is not required for an application to be administratively complete and that districts are restricted in requesting only the information listed in Sections 36.113(c) and 36.1131(b). The Court agreed with the District’s interpretation of the statutory administrative completeness requirements. RWLCC also argued that it was inappropriate for the District to have abated review of its application. The Court concluded that abatement was not yet at issue because the application was not administratively complete. The Court granted the District’s plea and motion, set a deadline for the District to file an application for court costs and expert witness and attorney fees pursuant to Section 36.066 of the Texas Water Code, and ordered that a hearing be held within 60 days. 

 

April 2016

From Bickerstaff Heath Delgado Acosta LLP

On April 8, 2016 the Austin Court of Appeals decided an interesting case of first impression involving the Public Information Act (PIA). In Austin Bulldog v. Leffingwell, No. 03-13-00604-CV, 2016 WL 1407818, (Tex. App. – Austin Apr. 8, 2016, no pet. h) (not yet released for publication), the court ruled that government officials are not “members of the public” and when they use private e-mail accounts to conduct public business they will forfeit the right to keep their e-mail addresses concealed from the public.

At issue was Government Code section 552.137 which excepts from disclosure under the Act the email address of a member of the public unless the owner affirmatively consents to its release.  The Austin Bulldog submitted a PIA request for public information contained in emails between the mayor, council members, and the city manager of the City of Austin.  An attorney general decision required production of some of the requested emails, but allowed for the redaction of the personal email addresses of City Officials in accordance with section 552.137.  The City made the redactions, and the Bulldog sued contending that the personal email addresses of City Officials were not excepted from disclosure where the email account was used for official business.  The trial court (Sulak) granted summary judgment to the City and the Bulldog appealed. 

The Third Court reversed and rendered judgment in favor of the Bulldog. Although the Officials argued for a broad interpretation of “member of the public” to mean “members of the community as a whole,” the Court found the phrase “member of the public,” in the context of the PIA, meant anyone who is not a part of the governmental entity.   As such, the Third Court has reversed the prior interpretation of the AG that official’s personal email addresses could be redacted from official communications.  Just another reason why governmental officials and employees should avoid transacting business on personal devices and/or from private email accounts.