On February 24, 2012, the Texas Supreme Court issued its long-awaited decision in Edwards Aquifer Authority v. Day, one of the most significant water law cases in years. In a unanimous decision, the Court ruled that, under both the common law and the recently enacted Senate Bill 332, a landowner owns the groundwater under his land "in place" as a property right that cannot be taken for public use without adequate compensation guaranteed by the Takings Clause of the Texas Constitution. The decision is likely to have wide-ranging effects for landowners' rights, as well as impacts on the regulation of groundwater by the state's 96 established groundwater conservation districts.

The case involved a challenge brought by two farmers, Burrell Day and Joel McDaniel, who applied in 1996 for a permit from the Edwards Aquifer Authority (EAA) to pump 700 acre feet per year of water from 381 acres of land over the Edwards Aquifer for irrigation purposes. The EAA ultimately granted a permit, but for only 14 acre feet of water per year based upon the landowners' documented historic beneficial use of the groundwater. The landowners filed a lawsuit contending that an unconstitutional "taking" of their groundwater rights had occurred. The EAA took the position that a landowner's property interest in groundwater does not vest until after the water is brought to the surface and, thus, the landowners' takings claim must fail because they did not have a constitutionally protected interest in the groundwater in place.

Please see full alert below for more information.