354 P.3d 579
Mont.2015Background
- Farmers Cooperative Canal Company (FCCC) holds adjudicated Teton River water rights: 4,000 miner’s inches (priority Aug. 1, 1897) and 300 miner’s inches (priority June 15, 1895). FCCC acquired/confirmed these rights by early 20th-century litigation.
- FCCC built two reservoirs (Harvey Lake, completed 1913; Farmers Reservoir, completed 1942) to stabilize supply and released stored water during low-flow periods.
- Teton Cooperative Reservoir Company (TCRC), a junior appropriator, objected in Water Court that FCCC’s reservoirs are new appropriations and should not inherit the 1895/1897 priority dates.
- The Water Court found FCCC’s combined right is 4,300 miner’s inches with a historical diversion period of March 1–November 30, concluded the reservoirs did not expand volume, diversion period, or flow rate, and therefore could be used under the 1895/1897 rights.
- Both parties appealed; the Montana Supreme Court affirmed the Water Court, rejecting TCRC’s challenge and FCCC’s cross-appeal arguing the court should not have limited the diversion period.
Issues
| Issue | Plaintiff's Argument (TCRC unless noted) | Defendant's Argument (FCCC unless noted) | Held |
|---|---|---|---|
| 1. Whether storage reservoirs can be part of preexisting direct-flow rights | Reservoirs are new appropriations and should have junior priority (date of first use) | Storage may be added to direct-flow rights if it does not expand volume, rate, or diversion period | Held: Storage can be added if it does not expand the right; Water Court applied correct law |
| 2. Whether Water Court’s findings about FCCC’s historical use (4,300 miner’s inches) were clearly erroneous | Insufficient pre-reservoir evidence to support historical use findings | Circumstantial and documentary evidence (1908 decree, 1914 DOI report, witness testimony) support historical use | Held: Findings supported by substantial evidence; not clearly erroneous |
| 3. Whether reservoirs increased FCCC’s diversion volume or period | Reservoirs increased ability to store/use water, so they expanded the right | Post-reservoir records (1963–2004) show FCCC never exceeded 4,300 miner’s inches and diversion period stayed the same | Held: No clear error; reservoirs did not increase amount or period of diversion |
| 4. Whether Water Court erred limiting diversion period to March–November (FCCC cross-appeal) | TCRC should be barred from objecting (laches/waiver/judicial estoppel); limitation was improper | DNRC issue remarks required resolving priority/expansion regardless of TCRC’s objection; limitation reflects historical use | Held: No error; limitation proper and would have been addressed due to DNRC issue remarks |
Key Cases Cited
- Eldorado Co-Op Canal Co. v. Lower Teton Joint Objectors, 376 Mont. 420, 337 P.3d 74 (Mont. 2014) (standard of review and Water Court appellate treatment)
- Skelton Ranch, Inc. v. Pondera Cnty. Canal & Reservoir Co., 375 Mont. 327, 328 P.3d 644 (Mont. 2014) (clear-error/substantial-evidence standard for Water Court findings)
- Whitcomb v. Helena Water Works Co., 151 Mont. 443, 444 P.2d 301 (Mont. 1968) (storage may be added to direct-flow rights if non-expansive)
- Bagnell v. Lemery, 202 Mont. 238, 657 P.2d 608 (Mont. 1983) (storage encouraged; may be added to existing rights so long as it does not expand those rights)
- Fed. Land Bank v. Morris, 112 Mont. 445, 116 P.2d 1007 (Mont. 1941) (historical Montana precedent on storage and water rights)
- Koeppen v. Bolich, 318 Mont. 240, 79 P.3d 1100 (Mont. 2003) (appellate review limits and deference to factfinder on conflicting evidence)