“You say you’re gonna leave, you know it’s a lie,
‘Cause that’ll be the day when I die.”
– Lyrics from “That’ll Be the Day,”by Buddy Holly.
Image of Buddy Holly – Courtesy of Oddopolis.com.
In American property law, an ownership distinction can be made between the holders of the surface rights and the mineral rights of a particularly property. In other words, it is possible for the surface of a property and its subsurface, to have separate owners. Predictably, the ability of the law to make this distinction has led to legal conflict. These clashes, over time, have produced what is known as the Accommodation Doctrine, a principle which seeks to govern the relationship between surface interests and mineral interests. It attempts to balance the interests of both parties in a just and proportional manner.
One formulation of the Accommodation Doctrine states that “an oil-and-gas lessee has the implied right to use the land as reasonably necessary to produce and remove the minerals but must exercise that right with due regard for the landowner’s rights.” (Getty Oil Co. v. Jones) Under this principle, the mineral estate is understood in the law to be dominant. Because a mineral estate would be worthless were it inaccessible, and because surface alterations may be required to ensure access, the mineral estate receives the right to use the surface estate. Therefore, the mineral estate is considered dominant. It is for the same reason that the surface estate is considered servient.
The Texas Supreme Court recently considered the accommodation doctrine in Coyote Lake Ranch, LLC v. The City of Lubbock, in the Supreme Court of Texas. The Coyote Lake Ranch, located in Bailey County, sits atop the Ogallala Aquifer, a water table stretching across multiple states. Over 60 years ago, during a severe drought, the City of Lubbock, Texas purchased the Ranch’s groundwater to provide water to its residents. The deed preserved certain amounts of groundwater for the Ranch to use for domestic purposes, ranching operations, oil and gas production, and irrigation. The deed also granted the City of Lubbock tremendous latitudes to extract water and conduct exploratory drilling operations.
In 2012, the City indicated that it was interested in developing new wells, in addition to the eighteen that it had established since purchasing the groundwater rights. Specifically, the City expressed an intent to drill as many as eighty new wells, and argued that its rights, granted by the deed, permitted these activities. Understandably, the Ranch’s management did not respond with enthusiasm, and attempted to work with the City to find an alternative. Unable to reach an agreement, the City began clearing vegetation from the Ranch to create pathways to potential drilling sites. In response, the Ranch sued the City, successfully in the trial court, to enjoin their actions.
Application of the Accommodation Doctrine seemed the surest way to resolve the conflict of interest between the City and the Ranch. However, uncertainty arose from the fact that the Doctrine had never been applied to cases involving groundwater estates. Upon its examination of the issue, the trial court found that groundwater interests were sufficiently similar to mineral interests, and held the Doctrine applicable.
In light of this finding, the Court ruled that the City had a right to the reasonable use of the surface insofar as the use of the surface was necessary to access and recover the groundwater. The Court found that, by barring the City from damaging the surface vegetation, the trial court’s injunction effectively precluded any possibility for recovery of the groundwater. For these reasons, the Supreme Court upheld the Court of Appeals’ judgment reversing the trial court’s injunction and remanding the case for further proceedings.
As the study of cases like Coyote Lake Ranch, LLC v. The City of Lubbock may suggest, applications of the Accommodation Doctrine rarely produce satisfactory results for all parties. Often, the Doctrine is applied to situations where contract language is unclear or absent on such issues. Perhaps there will one day be a more effective method of resolving these disagreements to the satisfaction of all parties involved, but it seems clear that such a remedy has not yet been found. As Buddy Holly used to say, “That’ll Be the Day…”