In the Courts

Water Cases

Cactus Water Servs., LLC v. Cog Operating, LLC, No. 23-0676, 2025 Tex. LEXIS 591 (June 27, 2025).

The Supreme Court of Texas (the “Court”) delivered an opinion in Cactus Water Services, LLC v. Cog Operating, LLC. The question before the Court was as follows: who owns produced water under an oil-and-gas conveyance that does not expressly address the matter? The Court held that absent an explicit reservation by the surface owner, the conveyance of oil-and-gas rights conveys with it the right to possession, custody, and control of produced water created as a result of oil-and-gas production.

The Court found that “despite its colloquial appellation, produced water is not water.” Thus, produced water is not subject to the well-established law that water remains part of the surface estate unless expressly severed. Rather, the Court found that produced water “is an inevitable and unavoidable byproduct of oil-and-gas operations” and accordingly, the right to produce hydrocarbons “necessarily contemplates and encompasses the right to produce and manage the resulting waste.” Nevertheless, the Court held that the parties are “free to strike a different deal,” indicating that surface owners who wish to retain ownership of produced water must do so explicitly in the lease agreement.

Baumgardner v. Brazos River Auth., 2025 Tex. LEXIS 590 (June 27, 2025).

The Court also delivered an opinion in Baumgardner v. Brazos River Authority. The question before the Court was whether, for purposes of the statute defining the jurisdiction of the Fifteenth Court of Appeals, a river authority is an “agency in the executive branch of the state government.” The Court held that a river authority does not qualify as an “agency in the executive branch,” and thus, the Fifteenth Court of Appeals does not have exclusive intermediate appellate jurisdiction over civil matters brought by or against a river authority.

Following creation of the Fifteenth Court of Appeals in 2023, the Texas Government Code was amended to grant the Fifteenth Court of Appeals exclusive intermediate appellate jurisdiction over, among other things, “matters brought by or against the state or a board, commission, department, office, or other agency in the executive branch of the state government.” In determining whether such language includes river authorities, the Court looked to the plain text of the statute, the source from which a river authority derives its authority, and the extent of a river authority’s jurisdiction.

The Court determined that a river authority is not considered an “agency in the executive branch” for purposes of the 15th Court of Appeals’ jurisdictional statute. To begin with, a river authority is created under Article XVI, Section 59 of the Texas Constitution and is governed by Title 6 of the Special District Local Laws Code. The Court distinguished this grant of authority from that of “core executive agencies”, which are generally described in Article IV of the Texas Constitution and governed by Title 4 of the Texas Government Code. The Court also cited its previous decisions to conclude that river authorities are generally understood to be political subdivisions, rather than state agencies. Similarly, the Court identified several characteristics of river authorities that are more akin to that of a political subdivision than a state agency, such as limited jurisdiction, taxing powers, and the absence of any state appropriations. Accordingly, the Court reasoned that the Legislature would have made its intentions clear through express language in the statute if river authorities were to be treated as “agencies in the executive branch of state government” for purposes of the 15th Court of Appeals’ jurisdiction.

Litigation Cases

Burns v. City of San Antonio, No. 15-24-00009-CV, 2025 Tex. App. LEXIS 2267, *1 (Tex. App.—15th Dist. Apr. 3, 2025, no pet. h.).

One of the most interesting aspects of this groundbreaking opinion is not what the Court says, but how the Court says it. The relatively new, statewide Fifteenth Court of Appeals has jurisdiction over (i) cases appealed from the newly created business court, (ii) challenges to a state statute or rule, and (iii) challenges from or by the State of Texas, its subdivisions, or employees acting in their official capacities. Since its creation, many jurists have wondered, opined, and even worried about what effect a statewide, intermediate appellate court may have on the state’s jurisprudence and administrative functions. In Burns, the Court indicates that it may prefer to take a measured, methodical approach.

In the Burns case, a group of citizens challenged a declaratory judgment granted by a trial court pursuant to Chapter 1205 of the Government Code (the Expedited Declaratory Judgment Act), validating public securities issued by the City of San Antonio. The challenge to the judgment was based on alleged insufficient notice of the filing of the case. In its filing for declaratory judgment under the Expedited Declaratory Judgment Act, the City provided notice by publication (rather than by personal service) of the suit and upcoming trial, as allowed by the statute. The Fifteenth Court of Appeals did not depart from precedent and upheld the notice by publication as constitutionally sufficient and affirmed the lower court’s judgment in favor of the City.

Villarreal v. City of Laredo, 134 F.4th 273 (5th Cir. 2025).

In a recent en banc decision, the Fifth Circuit reaffirmed the dismissal of journalist Priscilla Villarreal’s First Amendment retaliation claim, holding that the officers and prosecutors involved were entitled to qualified immunity. Id. at 276. Villarreal, a vocal critic of the Laredo Police Department, was arrested in 2017 after publishing nonpublic information obtained through informal channels, allegedly in violation of state law. Id. at 275. She claimed her arrest was in retaliation for her protected speech. Id. However, the Fifth Circuit ruled that at the time of her arrest, it was not clearly established under federal law that an arrest supported by probable cause could still violate the First Amendment. Id. at 276. The court relied on the U.S. Supreme Court’s 2012 decision in Reichle v. Howards, which held there was no recognized right to be free from a retaliatory arrest if probable cause existed. Id. Because the recent exception recognized in the Supreme Court’s Nieves v. Bartlett 2019 decision was not yet law in 2017 (when Villareal was arrested), the defendants’ actions did not violate clearly established rights. Id. This decision underscores that qualified immunity continues to shield government actors from liability for conduct that was legally uncertain at the time it occurred. While the Supreme Court’s evolving precedent may change the landscape going forward, the law as it currently stands protects officials from First Amendment retaliation claims in similar pre-Nieves contexts.

Elliott v. City of Coll. Station, No. 23-0767, 68 Tex. Sup. Ct. J. 830, 2025 Tex. LEXIS 380, at *14 (May 9, 2025).

In a recent decision, the Texas Supreme Court vacated lower court rulings and avoided deciding a constitutional challenge—thereby taking its preferred path of constitutional avoidance—to municipal regulation in extraterritorial jurisdictions (ETJs). Id. at 3. Instead, the Court emphasized and is giving the plaintiffs—property owners in the City of College Station’s ETJ—an opportunity to unilaterally remove their lands from the City’s ETJ pursuant to the “newly” passed SB 2038 statutory scheme. Id. at 9. The Court opined that the plaintiffs exercising this statutory remedy, which would legally require removal of the plaintiff’s lands from the City’s regulation pursuant to the terms of the statute, would moot the plaintiffs’ claims, and, because of that, ruling on the constitutional question (effectively whether a City could regulate residents within an ETJ without electoral input from those residents) would be “imprudent to do so at this time.” Id. at 17. The Court’s decision directs litigants to exhaust the new statutory opt-out process before challenging ETJ regulations in court, highlighting the importance of tracking legislative developments that can significantly alter an entity’s regulatory authority.

“In the Courts” is prepared by Samantha Tweet in the Firm’s Districts Practice Group and Nathan Marroquin in the Firm’s Litigation Practice Group. If you would like additional information or have questions related to these cases or other matters, please contact Samantha at 512.322.5894 or stweet@lglawfirm.com, or Nathan at 512.322.5886 or nmarroquin@lglawfirm.com.