Texas Supreme Court Refrains from Ruling on Subsurface Water Trespass Issue

On February 6, 2015, the Texas Supreme Court issued its ruling in Environmental Processing Systems LC v. FPL Farming Ltd.  Both energy companies and land owners were highly anticipating a ruling as to whether deep subsurface wastewater that migrates under neighboring land is actionable under Texas common law but much to the disappointment of both, the Court declined to rule on this issue.

This case arises of out of a dispute between neighbors FPL Farming, Ltd. and Environmental Processing System. FPL Farming, Ltd owned the groundwater rights to its tract of land but not the mineral rights. Environmental Processing System operated two salt water injection wells, pursuant to permit, on an adjoining tract of land. FPL Farming, Ltd. filed suit against Environmental Processing System alleging trespass. The jury declined to find that Environmental Processing System had trespassed and the trial court rendered a judgment in its favor.

The court of appeals, affirming the trial court’s judgment, held that a trespass did not occur because Environmental Processing System held a state permit that authorized deep subsurface injections. The Supreme Court rejected this reasoning holding that a permit was insufficient and did not shield against claims for trespass. On remand, the court of appeals held that FPL Farming, Ltd. owned a property interest in the water found below the surface of its tracts and had standing to sue Environmental Processing System for trespass to protect its property rights.

The Texas Supreme Court reversed the appellate court’s ruling in favor of FPL Farming Ltd. after finding the landowner did not prove a lack of consent. According to the Court, in order to prevail on a claim for trespass, landowners have the burden to show they did not consent to a subsurface trespass — a higher burden than simply showing a subsurface water migration happened. This decision reversed the court of appeals ruling that put the burden on Environmental Processing Systems Inc. to show it did get consent from FPL Farming Ltd. before water from its underground injection well migrated below FPL Farming Ltd.’s property. Because the jury found that no trespass occurred the Court never had to reach or decide the subsurface issue.