In the Courts

Water Cases

Aqua Texas, Inc. v. Hays Trinity Groundwater Conservation Dist., No. 1:23-CV-1576-DAE (W.D. Tex. Aug. 24, 2026).

On August 24, 2026, Senior U.S. District Judge David Ezra of the Western District of Texas ruled on cross-motions for summary judgment in the lawsuit filed by Aqua Texas, Inc. (Aqua Texas), a for-profit retail public utility, against the Hays Trinity Groundwater Conservation District (District). Aqua Texas sued the District in December 2023, challenging its overpumping penalties, permitting moratorium, and enforcement of its waste and line loss rules, and the District counterclaimed to enforce its rules against Aqua Texas for overpumping groundwater during times of extreme drought in violation of the District’s Rules, among other violations. The court granted in part and denied in part both the District’s Motion for Summary Judgment and Aqua Texas’s Partial Motion for Summary Judgment, dismissing the majority of Aqua Texas’s claims and leaving pending most of the District’s counterclaims.

The court dismissed Aqua Texas’s claims that the District acted ultra vires, or outside of its legal authority, by imposing overpumping “fines” in excess of a statutory cap and by enforcing its waste and line loss rules. The court also rejected Aqua Texas’s federal Equal Protection claims based on the District’s settlement efforts, its permitting moratorium, and its enforcement of its waste rules, as well as Aqua Texas’s takings claims based on the moratorium and the District’s decision not to grandfather Aqua Texas’s test wells under Chapter 245 of the Texas Local Government Code. The court further dismissed Aqua Texas’s claim that the District violated the Texas Open Meetings Act’s (TOMA) notice requirements. As to the District’s counterclaims, the court held that the Texas Water Code did not require the District to issue a Notice of Alleged Violation before bringing its late reporting counterclaims, and that a genuine issue of material fact remains for trial on whether Aqua Texas violated capping and plugging requirements for abandoned and deteriorated wells.

The court did agree with Aqua Texas on two points, holding that the District acted ultra vires by enforcing its waste rules against Aqua Texas’s wastewater and sewage spills and dismissing the District’s counterclaims for pumping under expired permits, but not its counterclaims for overpumping permitted amounts. The court also allowed Aqua Texas’s claim under TOMA’s open meeting requirements, and the associated claim for attorney’s fees and costs, to proceed to trial, though Aqua Texas has not provided any evidence of a TOMA violation to date. In sum, the District maintains virtually all of its counterclaims, including those related to overpumping, late reporting, and well capping and plugging, while Aqua Texas maintains only its TOMA open meetings claim. While the litigation is ongoing, the ruling represents a significant victory for the District.

Lower Colo. River Auth. v. Lost Pines Groundwater Conservation Dist., No. 24-0958 (Tex. argued Oct. 6, 2026).

On October 6, 2026, the Texas Supreme Court heard oral argument in a dispute between the Lower Colorado River Authority (LCRA) and the Lost Pines Groundwater Conservation District (District) over whether LCRA timely sought judicial review of the District’s decision on its groundwater operating and transport permits. In 2018, LCRA applied for permits to produce up to 25,000 acre-feet of groundwater per year from the Simsboro Formation of the Carrizo-Wilcox Aquifer beneath the Griffith League Ranch in Bastrop County. Following a contested case hearing at the State Office of Administrative Hearings (SOAH), the District granted the permits with modifications, including a reduction in LCRA’s annual production, on November 15, 2021. LCRA moved for rehearing, the District granted rehearing in February 2022 and issued a modified decision in May 2022, and LCRA filed a second motion for rehearing and then sued in July 2022 while that motion was still pending.

The Third Court of Appeals dismissed LCRA’s suit as untimely.¹ Under the Administrative Procedure Act (APA), a motion for rehearing that is not acted on within 55 days is overruled by operation of law, while the Water Code gives a district’s board until the 91st day to act. Bound by its earlier decision in End Op, L.P. v. Meyer, which applied the APA’s 55-day deadline to a groundwater district’s rehearing decision following a SOAH hearing, the court held that LCRA’s first motion for rehearing was overruled on January 9, 2022, that the District’s later grant of rehearing could not extend that deadline, and that LCRA therefore missed the Water Code’s 60-day deadline to file suit.² Notably, two of the three justices on the panel concurred, writing that End Op was wrongly decided and that the Water Code’s 90-day deadline should govern.

The Texas Supreme Court granted LCRA’s petition for review on September 4, 2026, and will decide (1) whether the Water Code or the APA controls when a groundwater district’s permit decision becomes final after a SOAH hearing; (2) if the Water Code controls, whether LCRA timely filed suit or cured any jurisdictional defect; and (3) whether the court of appeals had jurisdiction over the intervenors’ interlocutory appeal. The Court has not yet issued its decision, but its ruling should provide important guidance to groundwater conservation districts, permit applicants, and protestants on the rehearing and judicial review deadlines that apply to permitting decisions following a SOAH contested case hearing.

¹Lost Pines Groundwater Conservation Dist. v. Lower Colo. River Auth., No. 03-23-00303-CV (Tex. App.—Austin June 28, 2024, pet. granted) (mem. op.).
²End Op, L.P. v. Meyer, No. 03-18-00049-CV, 2018 WL 4102013 (Tex. App.—Austin Aug. 29, 2018, no pet.) (mem. op.).

Litigation Cases

In re Rose et al., No. 26-0916. (Original Mandamus proceeding.).

A county’s attempt to redraw its precinct map before this year’s upcoming general election, but after the primary election, was halted by the Texas Supreme Court’s recent decision in In re Rose et al. The Galveston County Commissioners Court redrew precinct maps after the March 2026 primary election and planned to apply the new maps to the upcoming November 2026 election.

Voters in Galveston County brought a mandamus proceeding to the Supreme Court seeking to prevent the County’s implementation of the newly drawn precinct maps.

The Supreme Court held that the County’s attempt to institute a new precinct map was inconsistent with the Legislature’s instruction that “the conduct of elections be uniform and consistent throughout this state” and that precinct boundaries are fixed at the time of the primary election for the general election. Tex. Elec. Code
§ 1.0015.

The Supreme Court rejected the County’s arguments that the Texas Constitution allows its commissioners court to redraw precinct lines “from time to time for the convenience of the people” and that the Supreme Court’s prior holding in Williams v. Castlemann, 247 S.W.263 (Tex. 1922) allowed redistricting of county precincts “at any time.” See Tex. Const. art. V, §18(a)-(b). Neither the Constitution nor the Williams case explicitly allow redistricting after a primary election but before a general election. The Supreme Court distinguished the Williams case as allowing redistricting “at any time” to allow new precincts to be drawn in response to population growth rather than counties having to wait to do so until each decennial census. This authority does not broadly empower commissioners courts to redraw precincts in the midst of elections.

Instead, the Supreme Court reasoned that a primary election and general election operate together to facilitate one election. The primary election identifies candidates for positions within specific constituencies, who will then be voted on in the general election. The County’s suggested redrawing would create substantial, inconsistent changes in the general election. Candidates would be facing a different race, seeking the votes of different constituents. Voters would be presented with new candidates on their ballots for whom they did not have the opportunity to vote in the March primary.

The Supreme Court explained that its holding in the In re Rose case did not impact a commissioners court’s authority to redraw precinct lines before a primary election or after a general election or prohibit redrawing pursuant to a federal law or court order. But none of those scenarios were present in this case. Therefore, the County was directed to use the prior precinct maps in the upcoming general election. The Supreme Court withheld issuing the writ until and unless the County refuses to comply.

Spectrum Gulf Coast, LLC v. City of San Antonio, No. 24-0794. (Opinion of Court of Appeals 727 S.W.3d 206.).

Public utilities and utility providers should be aware that their long-term contracts are likely subject to statutory requirements that arise after the contract is executed, leading to new and unanticipated regulations.

The Texas Supreme Court recently reviewed such a long-term contract in Spectrum Gulf Coast, LLC v. City of San Antonio. No. 24-0794. (Opinion of Court of Appeals 727 S.W.3d 206.).

The underlying issue started with a 1984 agreement between Spectrum Gulf Coast, LLC (Spectrum) and CPS Energy, a public utility owed by the City of San Antonio. Under the agreement, CPS Energy permitted Spectrum to attach equipment to CPS Energy’s pre-existing power poles for Spectrum’s provision of telecommunication services. In exchange, Spectrum initially paid $3.75 per pole used for the first year and then, going forward, Spectrum paid a higher rate as set forth in an agreed-upon escalator clause. Notably, the agreement also stated that the parties would “at all times observe and comply with … all laws … which in any manner may affect the rights and obligations of the parties … so long as such laws… remain in effect.”

Three years later, CPS Energy entered into a similar agreement with AT&T, but this agreement did not include an escalator clause. This resulted in AT&T paying a flat $3.75 per pole rate each year while Spectrum paid an increasing pole rate each year.

In 2007, CPS Energy began invoicing both Spectrum and AT&T what it believed to be the maximum allowable rate. Spectrum paid the invoiced amount, but AT&T continued to pay $3.75 per pole.

Spectrum later learned of the rate disparity and, in 2008, filed suit against CPS Energy seeking damages and declaratory relief based on breach of contract and violations of pricing requirements under the Public Utility Regulatory Act (PURA). In 2005, PURA was amended to prohibit municipalities and municipally owned utilities from discriminating for or against telecommunications providers. See Tex. Util. Code § 54.204(b)-(c). Such prohibited discrimination extended to setting pole rates. Id.

After abating the matter for a determination by the Public Utility Commission, and subsequent appeals and a remand, the trial court found that CPS Energy had breached the agreement. CPS Energy then brought a permissive appeal asking whether it breached the agreement by unlawfully imposing discriminatory rates on Spectrum.

The Thirteenth Court of Appeals said no, holding that the new statutes were not incorporated into the agreement each year and thus PURA’s Sections 54.204(b) and (c) were not brought within the parties’ contract rights.

The Texas Supreme Court reversed, finding that the CPS Energy’s rate setting violated PURA, which was incorporated into the agreement and such violation constituted a breach of contract. The Supreme Court first determined that the relevant PURA provisions applied to Spectrum and CPS Energy and then analyzed the agreement’s language.

The Court acknowledged that contracts between a public utility and utility provider are often “premised on an anticipated relationship enduring for decades.” Therefore, such contracts typically incorporate future legal changes to avoid termination or continual renegotiation when those legal changes arise. By specifically referring to “all laws” and “all times,” the agreement acknowledged that future laws would apply to the parties during the agreement’s term. Similarly, the agreement stated that such laws would apply “so long as” they “remain[ed] in effect,” meaning old laws were to be disregarded in favor of any new laws. The 2005 PURA amendments therefore were considered to be incorporated into CPS Energy and Spectrum’s agreement.

The Court emphasized that utilities are heavily regulated to protect consumer welfare and police monopolies, and that it “is doubtful that a monopolistic utility could use contracts to evade utilities laws imposed by the legislature.” Most utility agreements include a provision regarding applicable laws and regulations such that all parties are complying with the relevant laws and regulations during the agreement’s term. However, even if a public utility’s agreement does not include similar provisions acknowledging future legal changes, public utilities should expect that their agreements will be subject to new applicable laws imposed by the Legislature.

“In the Courts” is prepared by Stephen Malish in the Firm’s Districts, Water, and Litigation Practice Groups and Sydney Sadler in the Firm’s Litigation Practice Group. If you would like additional information or have questions related to these cases, please contact Stephen at 512.322.5875 or smalish@lglawfirm.com, or Sydney at 512.322.5856 or ssadler@lglawfirm.com.