As discussed in our client alert, the Supreme Court of Texas issued an opinion on May 27, 2016, extending the accommodation doctrine to groundwater owners. The City of Lubbock (the City) filed a Motion for Rehearing on August 2, 2016 requesting clarification of certain language in the opinion. Specifically, the City argues that as written, the opinion would allow the limitations of the accommodation doctrine to govern a groundwater lessee’s rights to the surface to extract groundwater, in spite of the express rights granted by the deed between the parties, on the grounds that:
(1) express contractual language authorizing the City to drill at “any” location cannot be interpreted to mean what it says;
(2) the accommodation doctrine’s “due regard” and “reasonably accommodate” standard trump the parties’ express agreement that the City can drill a well at any location;
(3) the accommodation doctrine’s “due regard” and “reasonably accommodate” standard trump the parties’ express agreement that the City an engage in operations to explore and produce groundwater so long as they satisfy the standard of being “necessary or incidental” to the production of groundwater; and
(4) the applicable standard from the deed for constructing and maintaining power lines and access roads is as “necessary or incidental” instead of “necessary and incidental.”
Without such clarification, the City argues that the opinion could be used to require jury findings regarding acceptable locations for wells, power lines, access roads, and other activities, resulting in delay.
Significantly, however, the Motion for Rehearing does not dispute the basic premise that the accommodation doctrine can be extended to the relationship between groundwater and surface estates. Any additional clarify provided by the Court’s opinion will benefit oil and gas lessees and groundwater lessees alike as it will help define the application of the doctrine when the parties have entered a lease. Regardless of the Court’s holding, though, it looks like the doctrine’s application to groundwater is here to stay.