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which are based solely on historic use, may be “too restrictive of [a landowner’s] groundwater

rights and without justification in the overall regulatory scheme.” The Court expressly contrasted

this historic-use-only production limit with the types of production limits that other groundwater

conservation districts are authorized to adopt under Chapter 36 of the Texas Water Code: “Chapter

36 allows districts to consider historical use in permitting groundwater production, but it does not

limit consideration to such use. Neither the Authority nor the State has suggested a reason why

the [Act] must be more restrictive in permitting groundwater use than chapter 36, nor does the Act

suggest any justification.”

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Edwards Aquifer Authority v. Bragg -- takings.

In August 2013, the San Antonio court of appeals issued a decision in which it applies

Day

to a

case in which the trial court found a taking and awarded compensation.

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Background

.

In 1979, the Braggs purchased the sixty-acre Home Place Orchard, which is their

homestead and a commercial pecan orchard. Soon after purchasing the property, the Braggs

cleared the land and planted 1,820 pecan seedlings. In 1980, the Braggs drilled an Edwards

Aquifer well and installed an irrigation system on the Home Place Orchard property. In 1983, the

Braggs purchased the forty-two-acre D’Hanis Orchard, which since 1979 had been planted with

1,500 pecan trees and is a commercial pecan orchard. Initially, the D’Hanis trees were adequately

irrigated from shallow, non-Edwards Aquifer wells on neighboring property. Later the water produced

from these wells became inadequate, and in 1995, the Braggs obtained a permit to drill from the

Medina County Groundwater Conservation District and drilled an Edwards Aquifer well on the

D’Hanis Orchard property.

The Texas Legislature adopted the Edwards Aquifer Act in 1993, but, due to lawsuits challenging

its validity, the Act did not become effective until 1996. After the Act became effective, the Braggs

applied for initial regular permits for the Home Place Orchard well and the D’Hanis Orchard well.

They requested a permit for 222.85 acre-feet of water per year for the Home Place Orchard well and

193.12 acre-feet per year for the D’Hanis Orchard well. The Authority granted a permit to withdraw

120.2 acre-feet per year from the Home Orchard well based on the maximum actual production

from the well during the statutory historical period – 1972 to 1993. The application for the D’Hanis

Orchard well was denied, because no water was produced from that well until 1995. The Braggs

filed suit for an alleged taking of their property.

Following a bench trial, the trial court ruled that the Braggs did not suffer a

per se

taking – there

was no physical invasion and their property still had value – but the granting of the application for the

Home Orchard for an amount less than requested, and the denial of the application for the D’Hanis

Orchard well amounted to a regulatory taking. The trial court awarded the Braggs $597,575.00 in

compensation for the taking of the Home Orchard well and $134,918.40 in compensation for the

taking of the D’Hanis Orchard well.

Regulatory taking.

In its review of the trial court’s takings determination, the San Antonio court of

appeals reviewed the three

Penn Central

factors discussed in

Day.

At to the first

Penn Central

factor, economic impact, the court concluded: “To reduce their water

consumption, the Braggs reduced the number of trees by thirty to fifty percent and reduced the

watering of the remaining trees. This, in turn, resulted in the Braggs’ inability to raise a commercially

viable crop on their properties, unless they purchased or leased water under the permit scheme.

Despite what might amount to only a ten percent increase in their irrigation expense, we do not

consider this merely an incidental diminution in value. The result of the regulation forces the Braggs

to purchase or lease what they had prior to the regulation—an unrestricted right to the use of the

water beneath their land. Thus, we conclude this factor weighs heavily in favor of a finding of a

compensable taking of both orchards.”

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As to the second

Penn Central

factor, reasonable investment-backed expecta-