In the Courts

Water Cases

Texas v. New Mexico (2026).

The United States Supreme Court entered a Compact Decree in late May resolving a long running dispute over the Rio Grande and protecting the State of Texas’ interests in surface water from the Lower Rio Grande. Withdrawals from the Rio Grande river, which are shared between Colorado, New Mexico, and Texas, have been under a 1938 agreement known as the Rio Grande Compact. An interstate compact of this kind functions much like a contract between states, and when one state believes another is taking more than its share, the dispute goes directly to the U.S. Supreme Court, which sits as a trial court in these rare cases. A “Compact Decree” is the Court’s final, binding order spelling out how the states must comply with the Compact going forward. This ruling put an end to over thirteen years of litigation between Texas, New Mexico and Colorado regarding management of the Rio Grande.

The case was filed by Texas in 2013, which alleged that the water intended for the Rio Grande Project (a federal irrigation system that delivers river water to farms in southern New Mexico and West Texas) was being intercepted and used by New Mexico. Specifically, Texas asserted that New Mexico was improperly reducing the quantity of surface water available to Texas from the Lower Rio Grande because New Mexico increased groundwater pumping from aquifers that are hydrologically connected to the stream system. In plain terms, wells drilled near a river draw from the same connected water supply as the river itself, so heavy pumping in southern New Mexico effectively siphoned off water from the river before it could flow downstream to Texas. The litigation was further complicated when the federal government intervened, citing its role operating the Rio Grande Project and its treaty obligation to deliver river water to Mexico. Texas and New Mexico attempted to settle the case once before, but in 2024 the Supreme Court rejected that proposal in a 5-4 decision, holding that the states could not settle around the federal government’s interests.

After the parties returned to negotiations and reached a broader agreement in August 2025, this time with the federal government’s support, the Court accepted the recommendation of a special master (a judge appointed to manage the case and advise the Court) to move forward with agreements proposed by New Mexico, Texas, and Colorado. Under the settlement New Mexico must reduce its annual groundwater depletions by 18,200 acre-feet within the next 10 years, which it plans to accomplish by retiring irrigated farmland and investing in conservation, backed by more than $22 million in state funding and over $40 million in federal support. The decree also divides irrigation water below Elephant Butte Reservoir on a 57-43 split favoring New Mexico users and establishes a new water accounting framework so compliance can be measured and enforced.

City of Dall. v. Steven H., No. 05-24-00463-CV, 2026 LX 177774 (Tex. App.—Dallas Apr. 15, 2026, pet. filed).

In April, the Dallas Court of Appeals ruled that governmental immunity protects the City of Dallas from a lawsuit brought by homeowners whose fence the City tore down. Governmental immunity is the doctrine that shields cities and other governmental entities from being sued unless the Texas Constitution or the Legislature has specifically waived that protection for a particular type of claim. The Blocks bought property in 2010 that sat partly within a City floodway easement, a recorded restriction requiring that nothing built on the land obstruct the natural flow of stormwater. In 2013, the City issued them a floodplain-alteration permit to build a fence, relying on their engineer’s opinion that the fence would not impede drainage. After the fence went up, neighbors complained of flooding, and a City-commissioned drainage study concluded the fence was diverting stormwater. When the Blocks did not remove it, the City did so itself in August 2018. The Blocks sued the City, seeking a declaration that their permit was still valid, roughly $920,000 they claimed to have spent in reliance on it, and compensation for the taking of their right to develop under the permit (a claim known as inverse condemnation, which arises when the government takes or damages private property for public use without paying for it). The City responded with a plea to the jurisdiction, arguing that immunity stripped the court of any power to hear the case and protected the City. The trial court denied the plea, and the City appealed.

The threshold question was whether the City acted in a “governmental” capacity, meaning as an arm of the state for the public benefit, or a “proprietary” one, meaning for the local benefit of its own residents the way a private business might. A city keeps its immunity only for governmental functions. The Blocks argued the removal was proprietary because the City really acted to appease complaining neighbors, not to manage flooding. The court disagreed. Congress created the National Flood Insurance Program, and the Texas Legislature responded with the Texas Flood Control and Insurance Act, which authorizes cities to adopt and enforce floodplain regulations, including removing structures that violate them. Because Dallas was exercising that state-delegated authority, its permitting and enforcement actions were governmental as a matter of law, and claims that a city misused its regulatory power do not convert governmental conduct into proprietary conduct.

That left the Blocks needing a valid waiver of immunity, and the court found none. Their main theory relied on Chapter 245 of the Local Government Code, a “vested rights” statute that freezes the development rules in place when a permit application is filed so a city cannot defeat a project by changing its rules later on. But the Blocks never claimed the City adopted any new regulation after their 2013 application. Their complaint was that the City misapplied rules already on the books, and Chapter 245 does not reach that. It freezes the rules themselves, not the City’s later judgment calls about whether a project complies with them. Because the Chapter 245 claim failed, the inverse condemnation claim built on it failed as well, and Texas courts have repeatedly held that immunity is not waived for promissory estoppel. The court reversed and dismissed those claims with prejudice, although the Blocks’ separate takings claim over the City’s disposal of their fence materials was not part of the appeal and remains pending in the trial court. The Blocks have filed a petition for review with the Texas Supreme Court.

Litigation Cases

Oksuz v. Harmony Pub. Sch., No. 03-25-00325-CV, 2026 LX 129890, at *1 (Tex. App.—Austin Mar. 11, 2026, no pet. h.).

In Oksuz, the Third Court of Appeals reversed the trial court’s granting of a public charter school’s plea to the jurisdiction (“PTJ”). A PTJ is the principle mechanism in which a party seeks to dismiss a claim against it, by arguing that a court has no subject-matter jurisdiction. For governmental entities, like Harmony Public School (“Harmony”), it is a method to assert governmental immunity.

Oksuz was an employee of Harmony, which is a school system affiliated with a movement associated with Sunni Islam. After some time, Oksuz, who is Turkish-American, left the movement, but was still employed at Harmony. Afterwards, Oksuz was terminated from Harmony. He then sued for religious discrimination under the Texas Commission on Human Rights Act (“TCHRA”). If a claimant can establish a prima facia case for a violation, then TCHRA may waive governmental immunity.

Although Harmony presented some evidence that Oksuz stated that the movement was not a religion, the Oksuz Court reversed the dismissal of the religious-discrimination case. The Court found that because it should not test the sincerity of a person’s religious beliefs under federal guidance, it would “credit evidence favorable to Oksuz and draw all reasonable inferences in his favor.” Id. at 11. By presenting evidence that Oksuz did view the movement “in his own scheme of things, religious,” Oksuz did create a genuine issue of material fact and therefore concluded that the plea to the jurisdiction should have been denied.

A court’s reluctance to test a person’s religious beliefs has long been standard practice in federal courts. Here, the Third Court of Appeals applied that deference and will make it more difficult for a governmental entity to dispute jurisdiction by challenging a bona fide religious belief—a requisite for a religious-discrimination violation under the TCHRA.

Boerschig v. Rio Grande Elec. Coop., Inc., No. 24-0213, 2026 LX 262581, at *1 (Tex. May 22, 2026).

The Boerschig case concerns an unrecorded easement and whether Rio Grande’s upgrades to the distribution line exceeds the scope of the easement, if any.
In 1947, Rio Grande acquired a document titled “Right of Way Easement” signed by the executor of the property now at issue. That document was not recorded and did not specify which corporation the executor was granted an easement to. Afterwards, Rio Grande constructed an electric distribution line that crossed about 1.6 miles of the property described in the document—which provided electricity to approximately 1,000 people.

In 2002, Boerschig bought property, which included the property crossed by Rio Grande’s electric line. In 2006, a dispute arose involving Rio Grande removing trees along the line. In 2012, Rio Grande notified Boerschig that it planned to redevelop and upgrade its line situated on a portion of Boeschig’s property. The Supreme Court held that Rio Grande did retain an easement by estoppel, because the writing reflected the parties’ intent and Rio Grande reasonably acted in reliance to the document’s representations. However, the Court held that Rio Grande’s upgrades and development of the line at issue were in excess of the original easement, because an easement-by-estoppel’s scope is strictly limited by law as “to prevent injustice.” Id. at 22. Accordingly, the Court used the original document and Rio Grande’s original development as limits to the scope, which Rio Grande’s redevelopment exceeded.

Because easements by estoppel are, almost be definition, less defined and clear than recorded easements, such holders should be wary from departing from their original exercise of that easement, its reliance, or the grantor’s representations.

Paxton v. City of Austin, No. 24-1078, 2026 LX 221174, at *3 (Tex. May 22, 2026).

The Paxton v. City of Austin case has relatively complex facts: Austin attempted to raise funds for a light-rail plan through the issuance of bonds under Texas Government Code Sections 1205.00–.152. The Attorney General challenged Austin’s ability to do so, and filed a plea to the jurisdiction.

The crux of this opinion is what the trial court decided to do with that plea to the jurisdiction: nothing. Instead of granting or denying the plea—which would have made the ruling appealable—the trial court took the plea under advisement and proceeded with trial. The Attorney General appealed the non-order. The Court of Appeals dismissed the appeal. The Supreme Court agreed that the Attorney General’s appeal was defective, but instead treated the appeal as a writ of mandamus. Under the writ’s standard, the Supreme Court held that by failing to rule
on the plea to the jurisdiction, the trial court abused its discretion, because it did not determine whether it has jurisdiction to hear the case at all.

The Paxton case seems to give parties challenging subject-matter jurisdiction grounds to fully litigate and review a grant or denial of a plea prior to trial.

“In the Courts” is prepared by Stephen Malish in the Firm’s Districts, Water, and Litigation Practice Groups 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 Stephen at 512.322.5875 or smalish@lglawfirm.com, or Nathan at 512.322.5886 or nmarroquin@lglawfirm.com.