Texas Hill Country Landowners Prevail Over Developer in Property Rights Court Case, Face Legislative Battle

The Grahams have fought back by filing a motion to dissolve the Johnson Ranch Municipal Utility District (JRMUD) on the grounds it does not nor has ever had any legally serving directors and that it is not fulfilling the function for which it was created – to protect the natural resources of the State of Texas. The family contends the JRMUD is nothing more than the alter ego of the Johnson Ranch developer, David Hill Johnson Brothers (DHJB), that’s being used to drain the Grahams dry with endless legal fees, using the power of government to do it.


By Terri Hall l April 7, 2015

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Legislative sponsors of SB 709 (Fraser) and HB 1865 (Bonnen, Harless, Smith, Morrison and Deshotel)

Landowners Pat and Terrell Graham won a small victory in the long battle with a neighboring developer of the Johnson Ranch in the Texas Hill Country. Administrative Law Judge Cathleen Parsley has ruled in favor of the Graham and Lux families recommending that the Texas Commission on Environmental Quality (TCEQ) deny the Johnson Ranch developer, David Hill Johnson Brothers (DHJB Development LLC), its permit seeking to take over a dry creek bed on the Lux-Graham family ranch to accommodate discharge of treated sewage and storm water runoff from the Johnson Ranch Subdivision.

DHJB initially sought a land application with TCEQ but then sought to convert it to a discharge permit. Rather than contain the treated effluent on the developer’s own 750-acre property, it decided to amend its permit and dump 350,000 gallons a day of treated sewage onto his neighbors’ property so that DHJB could build even more houses per acre.

Terrell Graham puts this volume in perspective, “Everyone is familiar with the tank trailers that deliver gasoline to their service station. These each contain approximately 9,000 gallons. This would equate to almost 39 of these trailers discharging their contents onto our property each day.

Justifiably, the Grahams worry that their cattle will be drinking effluent and grazing in the creek bed

contaminated by the treated sewage. They’ve incurred over $100,000 in legal fees to defend their property that has been a working farm and cattle ranch in their family for 110 years. Though the judge ruled that TCEQ should deny the amended permit, the decision is not binding. TCEQ could still choose to approve it.

When the Grahams started their legal fight back in 2013, next thing they know, a dormant Municipal Utility District (later dubbed the Johnson Ranch MUD or JRMUD) was requesting to survey their land to determine its value so it could proceed with forcibly taking their property using eminent domain for a storm water easement. Municipal Utility Districts (MUDs) typically deal with utilities and use eminent domain for utility easements. It’s nearly unheard of for a MUD to condemn land for a storm water easement putting the legal footing for such a move in considerable doubt.

If the threat of eminent domain wasn’t bad enough, the JRMUD has harassed and bullied the Grahams through a series of legal maneuvers including filing temporary restraining orders against the family for attempting to mitigate the impacts of drainage coming from the Johnson Ranch Subdivision, notice of intent to sue for violation of the Clean Water Act, and, most recently a petition to condemn portions of the Lux family property for the Johnson Ranch storm water project.

The Grahams have fought back by filing a motion with the TCEQ to dissolve the JRMUD on the grounds that the JRMUD does not, nor has ever had, any legally serving directors and that the JRMUD is not fulfilling the function for which it was created – to protect the natural resources of the State of Texas. The family contends the JRMUD is nothing more than the alter ego of the Johnson Ranch developer, DHJB, that’s being used to drain the Grahams dry with endless legal fees, using the power of government to do it.

“We started to fight back to protect our property,” said Graham, “But, now, we are determined to keep on fighting because what the Johnson Ranch and other MUDs are doing is just not right.”

To date, the TCEQ has issued two notices of violation and two notices of enforcement to the JRMUD for failure to properly implement temporary Best Management Practices (“BMPs”) for protection of the Edwards Aquifer and failure to correct previously noted deficiencies. TCEQ reports indicate that the wastewater treatment plant that is part of the contested permit had been constructed without the required Water Pollution Abatement Plan or TCEQ approval of the wastewater treatment plant construction plans.

“The saga of the Graham family in dealing with DHJB Development, LLC and JRMUD should serve as a cautionary tale to all who dream of buying a ranch and enjoying a quiet life in the Texas Hill Country. It is time for the Texas Legislature to curb abuses of eminent domain that allow developers to profit from taking private land.” says Annalisa Peace, executive director of the Greater Edwards Aquifer Alliance, a protestant in the case.

Eminent domain abuse by Municipal Utility Districts is a concern expressed by some Texas legislators, but it hasn’t yet been fixed. In contrast, there have been several bills filed curtailing Texans property rights that would make it harder for citizens to get due process in contested case hearings. HB 1865 introduced into the House Committee on Environmental Regulation by Republicans Dennis

Bonnen, Patricia Harless, Wayne Smith, Geanie Morrison and Democrat Joe Deshotel and SB 709 filed by Republican Troy Fraser in the Senate Natural Resources & Economic Development Committee relate to environmental permitting procedures for applications filed with the Texas Commission on Environmental Quality.

“The proposed permit would adversely impact protestants’ use and enjoyment of their property. and may adversely affect the cattle that graze there. The discharge route is not properly characterized as a watercourse, and the applicant is not entitled to discharge effluent into it.”

HB 1865/SB 709 would substantially amend the process for contesting permits. If these bills are enacted into law, the length of any hearing would be limited to 180 days, which does not allow time for meaningful discovery, evaluation of discovery, formulation of pre-filed testimony, conduct of live hearing, presentation of arguments, and analysis of complex legal and factual issues by the judge. Further, these bills place the burden of proof on those protesting the permit, rather than on the applicant. If an applicant wants to discharge waste, they should at least have the responsibility to show that it can be done safely, rather than forcing the public to prove otherwise.

These bills would allow the TCEQ to deny a hearing request without allowing the requester an opportunity for discovery, presentation of evidence, cross-examination and argument against the TCEQ decision by an impartial decision-maker that the hearing process was created to provide.

In a state where property rights are supposed to be sacred, the fate of these bills will certainly test the mettle of lawmakers claiming to protect those rights.


Terri Hall is the founder of Texans Uniting for Reform and Freedom (TURF), which defends against eminent domain abuse and promotes non-toll transportation solutions. She’s a home school mother of nine turned citizen activist. Ms. Hall is also a contributor to SFPPR News & Analysis.