Case Law Update: Pape Partners, Ltd. v. DRR Family Properties LP

In 1986, Lola Robinson owned the water rights appurtenant to a 1,086-acre farm pursuant to two separate permits issued by the Texas Commission on Environmental Quality (TCEQ). In 1990, the two permits were replaced with a single permit, which also included an additional 250-acre tract owned by Ms. Robinson. The 1,086-acre tract was subsequently sold to Plaintiff, Pape Partners, Ltd., and the 250-acre tract to the Defendant, DRR Family Properties LP. Pape and DRR subsequently disagreed over ownership of the water rights; Pape sued to establish ownership, but DRR moved to dismiss on the grounds that the TCEQ (and not the courts) had both subject matter and original jurisdiction to determine water ownership rights.

The Texas Supreme Court sided with Pape, concluding that surface water disputes between separate parties are to be decided by the courts and the judicial process. They began by establishing that, constitutionally, District Courts have jurisdiction over all actions, proceedings, and remedies unless otherwise specified by the Constitution or another court, tribunal, or administrative body. To determine the TCEQ’s jurisdiction in this case, the Texas Supreme Court looked to the agency’s enabling statutes, being the Texas Water Code and the Water Rights Adjudication Act, for an express grant of jurisdiction to the agency or a “pervasive regulatory scheme” that indicated the legislature intended for the agency to hear this type of dispute. Pursuant to Chapters 5 and 11 of the Water Code and the WRAA, the court determined that although the TCEQ is granted jurisdiction over water and water rights, and are allowed to “adjudicate” these areas, their power is specifically limited to the process of administering water rights permits. They concluded, and the TCEQ agreed, that the adjudication of water rights is a “term of art” used to describe the process of allocating rights of use.