On September 25, 2013, an administrative law judge (“ALJ”) recently ruled that mere ownership of groundwater, with no evidence of use of or intent to use the groundwater, does not confer standing to challenge a permit application.

In an unprecedented opinion, SOAH’s ALJ, the Honorable Michael J. O’Malley, recently denied party status to landowners seeking standing to participate in a contested case hearing on End Op, L.P.’s applications for operating and transfer permits from the Lost Pines Groundwater Conservation District. End Op, L.P. (“End Op”), an investment group that owns or has the rights to lease approximately 13, 000 acres in Lee and Bastrop County, filed applications for operating and transport permits with the Lost Pines Groundwater Conservation District in 2007 seeking to export up to 56,000 acre-feet. In May 2013, End Op found itself in a contested case hearing after Aqua Water Supply Corporation protested its applications. Several landowners who criticized End Op’s project from the outset sought to participate as parties in the contested case hearing requested by Aqua. The Honorable Judge O’Malley denied the landowners’ request for party status because they lacked standing to challenge the governmental action. In order to have standing to challenge a governmental action, one must have a sufficient personal stake in the controversy by demonstrating a concrete, particularized injury that is distinct from the public. The landowners, who either did not own a well or did not own a well in the formation at issue, argued that by virtue of being landowners whose property sits above the aquifer they possess standing. Judge O’Malley disagreed and held that: (1) groundwater ownership alone is insufficient to establish standing; (2) the landowners’ non-use of groundwater (i.e., no wells and no intent to drill wells) is a relevant factor when analyzing standing, and (3) system-wide effects on an aquifer from production do not constitute a concrete and particularized injury.

After the landowners were denied party status, they asked the ALJ to certify the question about whether groundwater ownership alone was sufficient to confer standing to the Lost Pines Groundwater Conservation District and abate the case or grant an interlocutory appeal. Again, in an unprecedented opinion, the ALJ denied the landowners’ requests on all accounts on the basis that there was no authority to certify a question to the district or grant an interlocutory appeal.

A contested case hearing on End Op’s applications was held on February 11, 2014, and the ALJ has not yet issued his Proposal for Decision.