*1 LLC, a Delaware MONTANA, Company, Liability Limited Appellant, Plaintiff v. MONTANA, OF
STATE Appellee. Defendant and DA 08-0506. No. Argued September 2009. 27, 2009. Submitted October Decided March 2010. 64. 2010 MT 402. 355 Mont. 229 P.3d *3 Gray, Sterup, Kyle L. Ann Holland & Appellant: For Robert LLP, LLP, (argued), K&L Billings; Hart Paul J. Lawrence Gates Seattle, Washington. General, Bullock, Attorney Steve Montana Appellee:
For Hon. Solicitor, Anthony (argued), Helena. Johnstone Irrigators: David Agricultural For Association of Amici Gallatin Nash, Zimmer, & Weaver, Grigsby, Weaver Bozeman. L. Holly Jo For Amici Montana Water Resources Association: Driscoll, (argued), Franz Franz & Helena. Lund, Hertha L.
For Montana Farm Bureau Federation: Amici P.C., Wittich, Firm, Bozeman. Wittich Law Arthur V.
For Representatives: Buey, Amici School Trust Pamela D. Harley Harris, Murfitt, PLLP, R. & Luxan Helena. Opinion
JUSTICE COTTER delivered the of the Court. 13, 2008, On June the First Judicial District entered findings offact and in a cause of conclusions law action between PPL (State). Montana, (PPL), LLC and the of Montana State The District pay $40,956,180 Court ordered PPL to State use of state- 2007, owned riverbeds at PPL through hydroelectric power Missouri, Madison, sites and Clark Fork rivers. We affirm the damages. District Court’s award
FACTUAL AND PROCEDURAL BACKGROUND PPL is a liability registered Delaware limited company to do in generator1 business Montana. is a electric wholesale and owns operates of federally-licensed hydroelectric facilities, number dams, in A Montana. number of these dams are located on the Missouri, Fork, Clark “Thompson Madison rivers. The Falls Project” located on the Clark Fork River and was built in 1915. This facility was initially government 1949, licensed the federal in Energy was re-licensed in December Federal Regulatory (FERC), Commission pursuant authority to its under the Federal (West 2010). (FPA), Power Act U.S.C.A. 791a-823d Ryan, §§ Cochrane, Morony, Rainbow, Eagle and Black dams are located on the River County, Missouri in Cascade Eagle Montana. The Black facility 1891, in facility 1910, was built Ryan Rainbow in facility 1915, the Morony in and the Cochrane in Holter and Hauser dams are located on the Missouri River in Lewis and Clark County, completed and were in 1918 and respectively. The facility Madison is located on the Madison River in Madison County completed and was Additionally, in 1906. the Hebgen facility, which completed is located on Madison River Gallatin County provides storage capacity power downstream *4 1 State, Montana, Dept. LLC, 310, 124, Revenue v. PPL 2007 MT 340 Mont. 1241, explained “exempt 172 generator.” P.3d we that PPL is an wholesale This means subject regulation by public utility regulatory agencies, that PPL is not may to state electricity price Montana, sell at whatever the wholesale market will bear. LLC, 23. ¶ are and Missouri rivers on the Madison The dams
generation.2 Project” and were “Missouri-Madison to as the collectively referred 27, Thompson Falls September 2000. by FERC on relicensed by Montana owned Projects previously were Missouri-Madison 17,1999. (MPC), to PPL on December Company and sold Power sued 17,2003, Montana school children parents On October seeking Montana, District Court of PPL3 the United States in hydroelectric at its use of state-owned riverbeds compensation for its occupied plaintiffs argued that the riverbeds generation facilities. trust and that PPL was part dams of the school lands PPL’s were for their use. In Montanans obligated to the State compensate 263, State, Mont. Trust v. 1999 MT Responsible Use the School as state- 402, (Montrust), defined “schooltrust lands” P.2d 800 we (Land Board) is the State Land Board public owned lands which public schools obligated as a trustee for the benefit of to administer Montrust, Article X of the Montana in See 13-14. Under Montana. ¶¶ Constitution, obligations obtaining fiduciary Land Board’s include Montrust, the use of school trust lands. full market value for time, paid nor its MPC had ever predecessor Prior neither PPL to to use associated with compensation the State for the riverbeds its dams. Although previously sought compensation never the State had PPL, or decided ofthe state-owned riverbeds MPC State use do so join granted PPL and was leave to against
to federal suit 18, filed complaint requesting on June 2004. The State its own argued by the compensation theory PPL under the school trust Act original plaintiffs, Hydroelectric and also under the Resources (HRA), Originally by the chapter part Title MCA. enacted 1931, 77-4-201, MCA, reads follows: Legislature of HRA as § constituting sell or advertise for sale state lands It is unlawful to developing power part power capable sites sites storage facility Hebgen upstream end of a A such as Dam is built on the ability might hydroelectric project capture to water that and has the and store spilled over and used This stored water can he released time otherwise be downstream. productive output. generate electricity facilities at downstream in order maximize case, judice, sub also named two other The federal as well as the state case hydroelectric PacifiCorp, companies, Both of Avista and defendants. Montana-based these but settled with the State numerous Court, joined challenges complaint companies in PPL’s the State’s District Although companies prior filed trial. both of these they Court, the District because were motions which were ruled them, judgment against prior will refer and did not have a entered we dismissed only trial Opinion. to PPL in this *5 However, hydroelectric energy in quantities. commercial the may any person, [Land Board] a license issue lease or or corporation, municipality development power the sites distribution, use, and the of the disposition energy and electrical generated the specifically provided chapter. sites as in this The term site” is in the HRA as follows: “power specifically defined The site” used in shall “power part only words mean constructed, the is state-owned land on which the dam but also each separate part tract of such land which will become of the and reservoir and which in of itself makes an essential power contribution value of site as a whole not less than of the entire of such site. power 5% value 77-4-202, Section MCA. eventually The federal cause of action was dismissed for lack of
subject jurisdiction. suit, matter Prior to the dismissal the federal declaratory filed a judgment against PPL action in the State First 12, Judicial District Court on November 2004. In its complaint, ability contested the State’s seek its use compensation for at Fork, Missouri, riverbeds its FERC-licensed dams on the Clark and sought Madison Rivers. PPL a that declaration State could not compensation seek for its use of the riverbeds because these claims federally preempted by were the FPA navigational as well “federal servitude.” navigational power “federal servitude” United Congress
States to ensure navigable open rivers remain foreign interstate and commerce. This applies servitude acquired by Union, rivers states their upon entrance into the and all extends to state-owned high-water lands below the See mark. Mont. States,
v. 544, 551, 101 S. 1245, 1251(1981); United 450 U.S. Ct. United Milwaukee, v. Chicago, Co., States 592, St. Paul & Pac. R.R. U.S. (1941). 596-97, 61S. Ct. PPL argued that the existence of this Fork, Missouri, servitude over the Clark and Madison Rivers preempted the operation Additionally, of the HRA dams. its sought regarding defenses, declarations several affirmative arguing (1) it that: had acquired prescriptive easement to use the riverbeds (2) facilities; at equitably its State was estopped asserting (3) right HRA; to compensation ability under the the State’s to seek payments by applicable barred laches and statute (4) limitations; agreements State breached reached with PPL hydroelectric licensing its facilities.4 the course of answered, denying that the the State On November navigational or the federal FPA preempted HRA was seeking a declaration counterclaimed The State also servitude. lands, seeking use for its of state compensate the State PPL must use of those lands past ongoing damages for PPL’s unlawful State asserted compensation to State. without navigable rivers Missouri, Fork, Rivers were Clark and Madison statehood, the beds and banks of acquired that it title to time of the “equal footing under it state these rivers when became ownership rights in these claimed that its doctrine.”5 The State gave right compensation to seek and the HRA riverbeds submerged state lands used occupied PPL’s use *6 it was entitled an Additionally, argued the State that facilities. of uncompensated of use state damages under the theories award of enrichment, negligence. and land, trespass, unjust the moved for complaint, it filed its State day On the same The State asserted that judgment complaint. on PPL’s summary navigational prevented FPA federal servitude neither the nor the use state lands. The State seeking compensation for PPL’s of from licensing procedures FPA the that both the FERC claimed the use contemplated compensated that for of landowners should affirmatively permitted, law and rather than their land under state Additionally, seeking. the the the State was preempted, compensation legal subject equitable not to PPL’s argued State it was defenses. engaged in point proceedings, From this in the PPL and State exceptions,
an motion With some these motions practice. extensive from sought summary judgment rulings the District Court various large in measure appeal the case. Because instant stems aspects of motions, rulings District on these we will describe Court’s chronological them in order. now 2006, 14, Regarding April
Memorandum and Order of
response
“preceding
normally
Affirmative defenses are
asserted
8(c).
case,
pleading.”
In
defenses in its
M. R. Civ. P.
this
asserted affirmative
See
unusual,
likely explained by
Although
fact
complaint.
it is
initial
most
sought
involved
claims which PPL
the federal suit between PPL and
State
the same
Thus,
already
litigate
PPL was
aware of the nature of the
in state court in Montana.
already
and had
formulated its defenses.
State’s claims
acquires
“equal footing
title
doctrine” holds that a state
streambeds
Opinion,
navigable
¶
entrance to the Union. See
of
rivers within its borders
Summary
State’s Motion
Judgment
on PPL’s
Declaratory
Judgment Action
14,
April
Order,
In its
2006 Memorandum
District Court
granted summary judgment
declaratory
favor of
State on PPL’s
First,
action.
judgment
the District Court concluded that the State’s
compensation
claims
were
preempted
not
the federal
above,
7,
navigational
servitude.
noted
see Opinion,
As
the federal
navigational
power
Congress
servitude is
to ensure that
remain
open
foreign
waters
to interstate and
commerce.
Citing
Corp.,
to Fed. Power
v.
Power
Niagara
Commn.
Mohawk
(1954),
74 Ct.
U.S.
S.
the District Court observed that
navigational
exercise of the federal
requires
servitude
clear
Congress.
authorization from
Niagara,
Supreme Court held that
Congress
given
had
clear
not
such
authorization under the FPA. See
249-51,
Niagara,
the State’s compensation seek for PPL’s use of state-owned riverbeds. The District types Court noted three *7 federal preemption express, field, under Montana law: and conflict. See Workers, v. Int. 206, 2003 14, 317 Vitullo Bhd. Elec. 219, Local MT ¶ Of 142, Mont. 75 P.3d Vitullo, 1250. In we described these of forms preemption as follows: ways
This recognizes Court three may which federal law preempt by express state law. The first is preemption, wherein Congress preemption providing includes a clause that state law apply governed by will not in the area the federal statute. Absent express preemption, recognizes types implied Court of two preemption. first is “field preemption,” wherein the scheme regulation pervasive of federal so or comprehensive is that it is Congress reasonable to infer that “occupy intended to field” 410 regulation. The second no for state supplementary
and leave room Conflict preemption.” is “conflict implied preemption type of inability comply of itself an state law manifests preemption law as an obstacle law or where state stands with federal objectives purposes the full and execution of accomplishment Congress. 152, Constr., Inc., 20, MT Vitullo, ¶ v. Sirius 2003 (citing Dukes 14¶ Co., and Constr. 226, 781; Favel v. Am. Renovation 316 Mont. P.3d 412). 266, 40, 285, 59 P.3d MT 312 Mont. did not express preemption that The District Court concluded any language expressly not contain because the FPA did apply neither Court also concluded that state law. The District preempting claims barred the State’s preemption nor conflict preemption field HRA. under the Commn., Coop.v.Fed. Power Hydro-Electric Iowa Relying First (1946), noted that the 66 Ct. 906 the District Court
328 U.S.
S.
and the
“dual
of control between
states
system”
FPA establishes a
Iowa,
167-68, 66 Ct. at 913.
government. First
328 U.S. at
S.
federal
authority
for the
grants FERC the
to issue licenses
The FPA
dams,
construction,
including
power
operation, and maintenance of
economic,
engineering,
financial
regarding the
regulate
Iowa,
U.S.
S. Ct. at
of such facilities. First
soundness
However,
role
state law within
preserves
the FPA also
915-16.
instance,
the FPA
one section of
licensing
the federal
structure. For
for
has
applicant
an
a FERC license to demonstrate
requires
with
the “beds
requirements
respect
of state law
complied with
diversion, and use water for
appropriation,
and banks and to the
power
proposed
in which the
purposes”
projected
state
Iowa,
(quoting
preempted above, the FPA. As noted the HRA contains a section which authorizes the Land Board to enter into a lease with entities “power use sites” within generation Montana for the hydroelectric power. Opinion, However, See 4-5. Section 203 the ¶¶ HRA reads as follows: issuing any lease or license the provisions part, under of this shall power duty board have the and it shall be its
incorporate the lease or such license reasonable restrictions regulations necessary finds in order to protect interest of the state and its people. 77-4-203,
Section MCA. PPL argued that Section 203 impermissible was an attempt regulate facilities, State to its FERC-licensed and that this section rendered the entire HRA preempted. The District Court agreed law, Section 203 preempted that, given federal but concluded recognition FPA’s clear of state property rights, the FPA did not preempt aspects empowered those HRA which the State/Land Board to seek compensation. The Court rejected argument District that the State’s through efforts to receive compensation a lease with represented an impermissible infringement somehow government’s federal licensing regulatory authority under the FPA. Court, As stated the District merely asking them to sit position take Utilities regulation the State constitutes lease with negotiate
down However, Act. Federal Power preempted under the It no sense to reserve position. would make accept cannot *9 hold Act and then that rights under Federal Power the property ability is The rights preempted. those to vindicate any process a incident of conditions of lease an the terms and negotiate cite a The Utilities ownership property possess. owners all preemption offield or conflict under the doctrines number cases However, of the cases are none support position. of their cases, they preempted a state is from nor do hold that property rights. enforcing property its omitted.)
(Citations
sum,
occupy
that the FPA did not
the District Court concluded
¶18
the
to seek
with
State’s efforts
the field or otherwise conflict
However,
to rule
PPL.
the District Court declined
compensation from
challenge
preemption
the HRA on federal
to on PPL’s
“as-applied”
presented factual
question
of this
grounds, concluding
resolution
developed record.
requiring
issues
a more
order,
granted
District Court also
State’s
In this same
See
summary
on PPL’s affirmative defenses.
judgment
motion for
easement,
PPL’s claim for a
Opinion,
respect
prescriptive
7. With
¶
party
a
cannot obtain
Court noted that under Montana law
District
use.
or
See
government property through
possession
title to
adverse
(1973)
142,
Newman,
135,
844,
P.2d
848
e.g.
v.
162 Mont.
509
Roe
(1921)).
Rollwitz,
481,
Regarding
P.
(citing Bode v.
Mont.
199
688
defense, District Court concluded that the
equitable estoppel
PPL’s
or
estopped by
representations
be
the unauthorized acts
State cannot
444,
State,
439,
or
agents.
of its officers
See Norman v.
182 Mont.
(1979).
have
715, 718
no
employee
P.2d
Because
state
would
of trust land in
authority
representations
disposal
to make
about
fiduciary
Land
duties as
contrary
a manner
State and
Board’s
trustees,
3,
against
not
asserted
Opinion,
estoppel
see
could
be
¶
Court further concluded
State in this case.
District
were barred for
defenses of laches and the statute of limitations
its
to seek
reasons. Because the State claimed
efforts
similar
with
trust duties under the
compensation were taken in accordance
its
Constitution,
from
plane
efforts “stand on a different
Montana
those
Norman,
or
a
it.”
ordinary
regain
an
suit to
title
remove
cloud
Thus,
446,
concluded
waiver
breach
defense
the State. The District
law,
public
noted that
under Montana
law established for
reason
private agreement.
cannot
contravened
See Collection
Servs.,
Morrow,
478, 87
84, 9, 320
Bureau
Inc. v.
2004 MT
Mont.
P.3d
1024;
Cape-France
Peed,
see also
Est.
2001 MT
33-
Enters. v.
¶¶
principles,
Mont.
summary judgment, disposing arguments ofPPL’s preemption affirmative defenses. Memorandum August28,2007, Regarding and Order Clark, Missouri,
Navigability Madison, Fork Rivers ability State’s to seek compensation premised
on the notion that it Missouri, owned title to the riverbeds Madison and Clark Fork sought summary rivers. The State judgment *10 ruling that title to these passed riverbeds to Montana when it became pursuant a state in 1889 to the “equal footing” doctrine. In Mont. Access, Curran, Coalition Steam Inc. v. 210 P.2d Mont. 682 163 (1984), we described this doctrine as follows: The landmark dealing case with state and federal ownership underlying navigable beds (1842), waters is Martin v. Waddell (16 Pet.) 367, 41 U.S. 10 In delivering L.Ed. 997. the opinion of Court, the Taney stated, Mr. Chief Justice “For the when Revolution took place, people ofeach state became themselves sovereign; and in that character hold the right absolute to all navigable their waters and the soils under them for their own use, subject only common rights since surrendered Waddell, constitution to the general government.” supra.
States admitted to the
subsequent
original
Union
to thirteen succeeded the
rights
theory
same
on the
that the lands
acquired
the United States from the original thirteen colonies
foreign
governments
held
were
in trust for the new states
in
they
order that
might he admitted on an equal footing with the
(3 How.)
original
Hagan (1845),
states. Pollard’s Lessee v.
44 U.S.
212,
Curran, 210 Mont. at title state holds determining whether a key inquiry The a river was footing doctrine is whether equal riverbeds under In United States entered the Union. at time state “navigable” described (1931),the 64, 51 S. Supreme Ct. 438 Utah, 283 U.S. v. navigability following in the terms: test for applying this court long approved since “The rule is that streams or the United States and laws of Constitution navigable navigable regarded in fact must be as are lakes which used, or they are are are in fact when law; they that used, ordinary being in their natural susceptible condition, commerce, over trade and travel which highways customary modes of trade and may conducted in the are or depend water; does not on and further travel may use is or be had-whether mode in which such particular on an absence of by steamboats, sailing or flatboats-nor vessels fact, fact, a navigation, on the if it be difficulties in but occasional ordinary in its condition affords the stream natural for useful commerce.” channel added)
Utah, (emphasis (quoting at U.S. 51 S. Ct. Bank, 49, 56, 46 S. v. 270 U.S. Ct. United States Holt State Montello, (1870); also, Ball, 77 (1926)); Daniel U.S. 557 see (1874). U.S. 430 standards, granted summary the District Court Applying these State, genuine issues of holding there were no
judgment
Fork, Missouri, and Madison rivers were
material fact that the Clark
statehood,
State
“navigable in
at the time of
fact”
as matter
law.
summary judgment on this issue
entitled to
navigability,
presented
the State
respect
With
to the Missouri’s
Captains Meriwether Lewis and William
journals
evidence from the
they
journey
century wherein
described their
early
Clark in the
19th
Louis, Missouri,
use of
to the Pacific Coast and their
from St.
The State
through present-day
travel
Montana.
Missouri River to
expedition,
long
and Clark
succession
asserted that after
Lewis
during
of the Missouri
trappers plied
upper
of fur
waters
*11
days. Other use of the river was made miners
Montana’s territorial
Helena, Montana,
present-day
the
of Great
settlers from
to
towns
and
State
cited to a 1986 Montana
Falls and Fort Benton. The
also
(River Study)
indicating
Navigable
Study
River
of the Missouri River
system in
use
the river until the advent of the railroad
commercial
study
referred to a 1974
conducted
the
Finally,
the State
1880’s.
determined
Army Corps
Engineers,
which
that historical evidence
supported
navigable
the conclusion that the Missouri
River
Forks, Montana,
Loma,
its headwaters near Three
to
Montana.
Additionally, the State
claimed that
Missouri River had
been
a navigable
previous
judicial
declared
river in
administrative
instance,
proceedings
both the state and federal level. For
in a 1948
(the
MPC,
decision involving
precursor
the Federal Power Commission
FERC),
River,
throughout
concluded that
Missouri
its entire
length,
“navigable
was considered a
water of
United
See
States.”
**
(1948).
re
Co.,
163, 173, 1948
the Mont.
Power
F.P.C.
WL 964
of Appeals
Court
for the District of
subsequently
Columbia
decision, holding
affirmed this
263 mile stretch of the Missouri
from Fort
navigable
Benton
Three Forks was a
water of the United
Commn.,
States. Mont. Power
v.
491,
Co.
Fed. Power
185 F.2d
(D.C.
1950). Likewise,
Cir.
the State claimed that on two
occasions
navigable
considered
Missouri to be a
river. See
v.
Gibson
Kelly,
(1895);
Sutherland,
Mont.
acknowledged early navigation that its extensively had not been as nearby documented as that of rivers. The State attributed this to its reputation forbidding region alleged due hostility Blackfeet Tribe during exploration and trapping decades of the early However, 19th century. the State cited to a study historical Madison River which concluded that experienced Madison had “considerable historically by explorers, miners, use trappers, farmers loggers, is generally high considered have potential navigation.” Furthermore, the State relied the recorded Clark, of Captain navigated nearby observances who Jefferson River and considered the Madison as well based on his observations. The State also cited to documented instances the 20th century log floats down the middle portion River, of the Madison although the State noted that that point history, in the Madison’s both Hebgen prevented Madison dams the free and navigation unobstructed of this river. The State pointed previous out that in a against nuisance suit regarding
MPC
landholdings on the Upper Madison River which had
dam,
been affected by the Madison
MPC
dispute
did not
navigability of the Madison River in
filings.
court
See
v. Mont.
Jeffers
(1923).
Co.,
Power
68 Mont.
416 to the obstructions post-statehood spite that in of
Corps concluded River be River, that the entire Madison recommended Madison to Park its boundary its with Yellowstone navigable from considered Finally, the State noted the Missouri. confluence with fishing and their today by guides commercial heavily used Madison is a conclusion that clients, support use also to that this sufficient and at the navigation susceptible commercial the Madison River was time of statehood. River, claimed the historical Fork the State Turning the Clark Pend Oreille Lake by fur traders from navigation confirmed its
record Idaho, Thompson River above to the mouth of in present-day Falls, Montana, same stretch of river was this Thompson study and until the 1860’s. on a river navigation for steam Based used of examples to historical use Corps, the State cited report with the Blackfoot River Falls area to confluence Thompson industry. timber The mining a robust beyond supported which licensing which it contended proceedings cited to federal State also The Montana navigability ofthe Clark Fork River. See established 751, 1949 (1949); Washington 1102 Water Co., 8 F.P.C. WL Power 2058), 657, 1951 (1951); (Project 10 F.P.C. WL 1856 Power Co. No. 2075), 14 Washington (Project Co. No. F.P.C. 1955 Water Power (1955). WL 3030 motion, claiming genuine there were opposed PPL State’s Missouri, Fork, and Madison of as whether the Clark
issues fact presented at the time of statehood in 1889. navigable Rivers were (Dr. Emmons), Emmons professor an affidavit from Dr. David opined, Montana. Dr. Emmons based on history University at the evidence, of the rivers were of the historical that none his review Missouri, respect With Dr. navigable at time of statehood. Reach,” Falls of river about Emmons that the “Great a stretch opined containing rapids Benton a series of and falls 32 miles above Fort miles, navigated. 17 which 520 feet over had never been descend about Co., (describing Power F.2d at 493 the Great Falls See Mont. Reach). on historical Dr. Emmons claimed to base this conclusion Army Corps Engineers from the from the reports reports as well as journals efforts century, 19th and Clark which described Lewis Dr. that studies the Great Falls Reach. Emmons also noted portage Army Corps determined that this Engineers conducted expense. only great and could be made so at stretch was Madison, Army Regarding pointed Dr. Emmons navigation on this river concluded that commercial Corps study which “entirely question,” out of and that as 1931 there had never any navigation on been the Madison River. Dr. Emmons concluded reports presented these and studies conclusive evidence of non-navigability. Dr. Emmons discounted the observations of Lewis regarding and Clark of the Madison noting they actually attempted never to ascend this river. Furthermore, disputed propriety relying present-
day usage the Madison River in prove navigability order to at the Ahtna, time of statehood. PPL noted that the State relied on Alaska v. (9th Inc., 1989), F.2d presenting argument, Cir. but Ahtna, asserted that inapposite. Ahtna was the Ninth Circuit *13 present-day usage allowed of the Gulkana River in Alaska to be considered order to determine if was susceptible to use at the time Ahtna, of Alaska statehood. at PPL argued F.2d Ahtna was inapposite parties because the stipulated that case had that Here, characteristics of changed the Gulkana had not since statehood. contrast, presented Stanley Schumm, PPL an affidavit from Dr. fluvial geomorphologist, that the characteristics of the Madison had statehood, changed since thus rendering inapplicable. Ahtna In particular, Dr. Hebgen Schumm stated that the Madison and dams had altered the seasonal variations in the Madison River from those present which were at the time during of statehood. The flow June) highest year decreased, periods (May of the had whereas (October ovember) during flow periods year through lowest N had increased. This increase was approximately two-thirds of a foot in October, to nine-tenths a foot in PPL argued November. that this expert analysis established that the Madison was susceptible more navigation now to statehood, than at the time of making present- thus day use, and reliance on the precedent by Ahtna, established Furthermore, untenable. Dr. opined Schumm based on his expertise as a fluvial geomorphologist historic, that because of pre-statehood characteristics, physical the Madison River was not in fact susceptible navigation at the time of statehood. Finally, argued PPL were genuine there issues of material regarding navigability fact Clark Fork River the time of Relying again Emmons, statehood. on the opinion of Dr. PPL pointed Army Corps to 1891 report Congress stating that the reach of the Clark Fork from Lake Pend Oreille to the confluence of the Blackfoot River, roughly Missoula, upstream stream,” miles awas “torrential rocks, falls, full of and rapids, “utterly unnavigable” incapable of being navigable made except at an enormous PPL cost. into at least the view reiterated this Army Corps
claimed that 1910 decision unreported an federal Finally, PPL pointed 1940’s. court decreed wherein the Court of Montana the District Montana, “a to be County, in Sanders Fork River portion of the Clark country carrying products incapable non-navigable stream ....”6 transportation manner of water in the usual summary precluded that material facts arguing In addition use ofhistorical that the State’s evidence PPL also asserted judgment, For used. appropriately nor these rivers was neither credible Study heavily upon relied two instance, that the River PPL claimed from the frontier historical information most unreliable sources of asserted, reminiscences. PPL newspaper personal articles and West: Emmons, full of Dr. that these sources were through the affidavit of documentary proof of embellishments, virtually worthless as “Corps reports” the State’s were PPL also claimed that events. actually by the studies conducted they because were unreliable Engineers, prepared but were instead studies Army Corps of for entity. Army Corps some other federal previous the State’s reliance on Lastly, argued navigability of judicial regarding the proceedings
administrative considered misplaced proceedings because those rivers in Montana was is a standard navigability regulatory purposes, which different purposes. particular, for title noted than if regulatory purposes under the FPA established navigability for past, they navigable in the or if can be made the rivers were title, contrast, does improvements. Navigability with reasonable *14 be to the river can navigability be based whether not allow Assn., Prot. navigability. See Or. v. improved to state of Riverfront (9th 1982) 792, (discussing the distinctions F.2d 794 n.1 Cir. 672 navigability regulatory for federal navigability for title and between deny reasons, urged the District Court to purposes). For all these the State’s motion. the definitions of analysis, the District Court considered navigability in being or used” as used “susceptible
“actual use” of 9, States, 403 Ct. 1175 Citing United U.S. 91 S. for title test. Utah v. (1971), “actual does not have the District Court observed that use” navigability for title test. See commercially profitable under the be 6 case, Steele, captioned in Pacific v. is not available A for this Dolan citation Westlaw, copy is in the Reporter, A of this decision contained or Lexis. Xeroxed appendix PPL’s briefs.
419
Utah,
11,
Similarly,
U.S. at
91 S.
at 1176.
under cases such as
Ct.
Bank,
Supreme
and Holt State
the United States
Court
Montello
specifically
that
navigability
large-scale
noted
is
limited
it
on the mode of
navigation,
depend
commercial
nor indeed does
Montello,
441-42;
on the
See
87 U.S. at
transportation used
river.
Bank,
56,
at
Court
Holt State
United States v.
51 S.
U.S.
Ct.
concluded
key
that the
inquiry
susceptible
being
whether the river was
ordinary condition,
used in its
“rather than the mere manner or extent
Utah,
82,
of
use
443;
actual
....”
283 U.S. at
S.
51 Ct. at
see also The
Montello,
had showing fact, historical evidence it was including documents that the showing log river had been used for drives. Court specifically finding The District cited to the following *15 in 1949: regulatory proceeding by the FPC in a federal
fact issued Lake in Pend Oreille the Clark Fork River between The section of used for the Jocko River in Montana was and the mouth of Idaho areas now property between transportation persons Idaho, from 1810 and Montana Oregon, the states of constituting of furs transportation batteaux being use canoe and such Co., canoe Northwest Fur fur traders of the British Indian tribes in original missionaries transportation of the of short around basin, portages and with the use the Clark Fork steamboats Rapids Rapids, and Rock Island the Cabinet Oregon & subsidiary, Navigation Co. Oregon Steam numbers carriage Co. in the of substantial Navigation Montana miners, supplies, animals and as well as pack their gold vicinity camps in the freight consigned gold commercial Helena, Mont. what now 751, 753, 1869), 1949 WL No. 8 F.P.C. (Project
The Mont. Power Co. The District Court also [**] 2. noted that the Clark Fork had been by the Oreille Lake to the Jocko River declared from Pend rejected The Court PPL’s proceedings FPC as well. District in other not relied findings proceedings that the of these could argument navigability they determinations upon because involved acknowledged differences regulatory purposes. The District test, but navigability regulatory purposes for title and between findings relying generated on the prohibited observed it was not evaluating whether a Montana river by regulatory decisions Court noted that navigability for title test. The District satisfied portages finding navigability requiring obstructions do defeat river a useful channel for commerce. See provides for title where the Montello, 441-42; Utah, 86-87, at Ct. 283 U.S. 51 S. 87 U.S. at Here, presented by findings of the FPC and other evidence Clark Fork used as a channel for the State showed for title test. commerce met River, acknowledged Turning the Madison the District Court use of river. regarding historical documentation” there was “little However, Study prepared River for DNRC did conclude that by explorers, had considerable use experienced the Madison River miners, farmers, Study loggers. River also trappers, “high navigation.” potential that the Madison had a determined Furthermore, Study referred to at least one recorded the River Madison, portion on the middle example log of a float in 1913 present-day Varney, mouth of its fork to Montana. from the west today Additionally, pointed the District Court out that the Madison *16 experiences admittedly the Despite “considerable recreational use.” it, record before the District Court concluded that the Madison “sparse” navigable awas river. Finally, determinations, to respect with each of these District
¶42 Court relied to some extent on the fact that PPL had admitted the navigability of these rivers in its answer to the State’s counterclaims. admissions, The District Court concluded that PPL was bound these upon point and relied this to bolster its help conclusions. Because District Court explicitly coming relied PPL’s admissions in to a decision, we they weight must conclude carried some in its final determination. of aspect We take note this reasoning the District Court’s prior
because to both the issuance of scheduling order and the District grant summary judgment issues, Court’s on navigability PPL filed a to motion amend its to remove pleadings any admissions regarding Fork, Madison, the Clark and Missouri Rivers. In its brief PPL support, claimed that its historical research yielded had questions documents which raised navigable about the light status of the rivers on which are projects located. In responses discovery State’s requests research, sought and its PPL newly to amend its answer to account for this discovered information. However, PPL’s motion properly was never addressed District Court. PPL raises this reversal, issue as an error requiring we will return to this topic analysis our of the District Court’s decision. August Regarding 28, 2007,
Memorandum and Order Missouri, Whether the Streambeds Madison, Clark Fork Rivers are School Trust Lands sought summary State judgment that Montana’s navigable part X, streambeds were of the school trust pursuant lands to Article Section 2 ofthe 1972 provision Montana Constitution. This was carried XI, forth from Article Section of 1889 Montana Constitution and part reads in pertinent as follows:
The public school fund of the state shall consist of:
(1) Proceeds from the school may lands which have been or granted by hereafter be the United States ...
(4) All grants money other of land or made from the United general States for purposes educational special or without purpose .... argued The State streambeds were school trust lands Constitution, and the under the Montana fiduciary status
subject obligated asserted that the HRA. The State provisions or license a to lease application Land Board a written present to do so it HRA, it had failed and that because power site under HRA, other and all due under the held liable for all rents should be lands. occupancy state by its unlawful damages caused lands, but not school trust were argued riverbeds generally in trust for the benefit trust lands held public were instead Curran, doctrine. See public under the trust and use of all Montanans 47-48, (discussing public trust P.2d at 168 210 Mont. at states hold title to noting “provides doctrine doctrine and ....”). public benefit and use This waterways trust for the public if the riverbeds were for PPL because significant distinction was paying them without lands, possibly right it could have use trust that its use of water was compensation grounds the State contrast, to be if the were found By use. riverbeds public beneficial constitutionally lands, required would be the Land Board school trust *17 regardless their use of its charge PPL full market value for Montrust, 13-14. character. See ¶¶ order, District Court 28,2007 August In its memorandum
agreed and concluded that state-owned riverbeds with State analysis began its with trust lands. The District Court were school doctrine, noting prior to Montana’s equal footing reference to held the riverbeds in into the Union United States admittance Hagan, 44 Lessee v. U.S. 212 for the future states. See Pollard’s trust (1845). courts have described state The District Court noted that most e.g. Union. See “vesting” as a state entrance lands with 597, 1468, (1963), Cal., 546, S. v. 373 U.S. Ct. 1496 Arizona 645, States, by v. 438 U.S. grounds other Cal. United overruled on Co., 363, 429 U.S. (1978); S. Or. v. Corvallis Sand and Gravel Ct. 2985 (1977). 97 S. Ct. doctrine, equal footing they under the pass Once lands the state Mont., 101 S. Ct. at governed by state law. See 450 U.S. are to determine Thus, important for the District Court how 1251. by footing doctrine would be equal Montana under lands received Constitution. To make this classified under Montana determination, meaning of the analyzed plain the District Court “grant” as follows: term noun, and it has a is a verb and a “grant”
The term both used as depending on how it is used. When meanings, number of DICTIONARY, as “1. To verb, “grant” LAW defines BLACK’S give or confer with 2. (something), compensation. or without To (real by formally property) writing. transfer deed or 3. other To warrant, or 4. permit agree approve, to. To or order.” When used noun, “grant” An agreement right as means “1. that creates a any description by grantor. other than the one held 2. The document formal transfer of real 3. property. by which a transfer property right is effected. 4. The or property so (8th 1999). ed., transferred.” BLACK’SLAW DICTIONARY “grant” The District Court then considered how the term was used First, in each of the relevant provisions Montana Constitution. X, 2(1), the District Court stated that under Article school Section trust lands those by grant are lands transferred to Montana ofland from Congress under the Enabling footing Act. The did equal lands category. fall into this Similarly, the District Court concluded that the 2(4) X, “grants” term Article Section used as a noun and refers to Thus, the transfer of title to lands owned United States. footing
equal technically class, lands did not fall they into this since were not “owned” prior the United States to Montana’s admission state, but as instead held in trust for Montana until such time as it Additionally, became a state. X, the District Court turned to Article 11(1), Section which relates the public trust lands and reads as follows: (1) trust,
Section Public land disposition. All lands of the state that may have been or be granted congress, or by gift acquired grant or devise or any person corporation, shall be public They lands of the state. shall be held in trust for people, disposed provided, as hereafter for the respective purposes for they may which have been or be granted, donated or devised. The District interpreted the term “granted” used in this
section to refer to all the through lands transferred to Montana an Congress. action of recognizing While underlying legal that the basis *18 for Montana’s acquisition of the equal riverbeds the footing was doctrine, the District Court noted that equal footing doctrine itself triggered was not until passage Enabling of the Act. Because this act passed by was the United Congress, States the District Court concluded that the riverbeds at governed X, issue were Article 11(1), Section result, and were trust lands of public the State. As a District reasoned, authority Land Board had the classify lands, as school authority lands trust and had the to lease the riverbeds and use the the support public funds for education. order, District Court noted Finally, at the conclusion
¶51 any on the issue that summary judgment moved for that PPL had ofthe school part were not resulting operations lands flooded argument, the merits of this addressing Without further trust lands. genuine issues of there remained concluded that District Court summary judgment. precluded this issue which material fact on the streambeds sum, concluded that District Court lands, trust Rivers are school Missouri, Madison, and Clark Fork Court further the State. The District summary judgment granting any lands are flooded summary judgment PPL’s motion for denied lands. not school trust Regarding Order 6, 2007 Memorandum
September on the Summary Judgment Partial PPL’s Motionfor the HRA Application summary arguing 6, 2006, judgment, PPL moved On October why reasons it PPL advanced three of the HRA. against application First, argued the HRA does summary judgment. entitled to was streambeds of it explicitly applies state that Second, dams. rivers, applied to PPL’s and it therefore could not that 77-4- already had concluded § that the District Court PPL noted so, being PPL claimed that 203, MCA, federally preempted; this not be severed of the HRA could remaining, non-preempted parts Third, HRA argued that the invalidating the entire act. without were PPL facilities which retroactively those applied not be could in 1931. prior passage to its built Addressing PPL’s PPL’s motion. first District Court denied (2005), 77-1-101, MCA relied § the District Court
argument, part as follows: pertinent which reads otherwise requires the context 77-1-101. Definitions. Unless 77-1-701, title, in this of state land in except definition ... following apply definitions (6)(a) land” or “lands” means: “State (i) any States for granted to the state the United lands lands; exchange for other directly through purpose, either (ii) any person; to the state from lands deeded or devised (iii) through property are the state lands that operation of law. governed by in Title and therefore The HRA is contained previously concluded that the District Court had
this statute. Because States, “granted” to Montana United riverbeds were 77-l-101(6)(a), under state lands § concluded that the riverbeds were *19 (2005), MCA and the HRA The District noted applied. Court also in the HRA “power specific the definition sites” contained contemplated which that the streambeds are See definition state lands. Thus, Opinion, 5. applied District Court concluded that the HRA ¶ at issue in this streambeds case. Turning to PPL’s Court argument, simply second the District April 14,2006, referred back order to its wherein it held that federal preempt law did not seeking compensation State from from PPL any under the HRA. The did District Court not conduct additional in analysis rejecting argument. this Finally, the District Court argument addressed PPL’s
HRA applied passage could not be to dams built in before act’s 1931. PPL claimed the in application of the HRA this manner would impose upon licensing process, it a new for a require bidding proposed lease, impose obligations license or and undefined financial on its hydroelectric projects, impairing thus its rights. vested The District disagreed. Court XVIII, The District Court noted that Article Sections 1 and of the 1889 Montana predated Constitution the construction of any specifically of PPL’s dams and provisions contained the trust carried forward to the 1972 Montrust, Montana Constitution. See obligation existence ofthis constitutional prevented since 1889 state or selling conveying public interests in state lands without full obtaining market value for them. Because 1889 Constitution established the State’s interest in Missouri, the riverbeds of the Clark Fork, Rivers, PPL any Madison in held never fact in interests connection, those streambeds. merely provided the HRA statutory basis for Land Board to exercise those obligations set originally result,” forth the 1889 constitution. “As the District concluded, [HRA] “the is being applied retroactively; rather State, as public lands, trustee of complying its with constitutional mandate.” Accordingly, the District summary Court denied PPL’s motion
judgment seeking preclude application ofthe HRA aas basis for the State to seek compensation this case.
September 2007 Memorandum and Regarding Order PPL’s Motion Partial Summary Judgment That Right Appropriate Water Use for Beneficial Hydropower Right Includes the Incidental to Use State Land 6,2006, On October summary PPL also moved for judgment on its right
claim that appropriate use, water for beneficial and 1972 Montana in both confirmed recognized PPL to use state land. Constitutions, right incidental includes the rent for payment contingent upon right is not claimed that this conjunction its dams. with of state land alleged occupation those of analogous to appropriation were argued rights that its that its dams stockmen, miners, municipalities, irrigators, flumes, ditches, pipes used to ponds, intake than were no different of beneficial use. for other forms appropriate divert and water IX, 1972 Montana 3 of the Article Section argued that under *20 in a Constitution, rights have defined water people of Montana the for the use of beds and banks that includes the incidental manner result, barred and, as a the State was hydropower of use apparatus and banks for those seeking compensation for the use of beds from hydropower projects. summary judgment on denied PPL’smotion for The District Court 3(2) IX, the of Montana Citing to Article Section issue. hydroelectric
Constitution, acknowledged the District provision law. This reads is a use under Montana generation beneficial as follows: appropriated is or hereafter be may use of all water that now distribution, use, way the of sale, rent, right or beneficial
for other drains, flumes, canals, ditches, of for all and over the lands others therewith, the necessarily used in connection and sites aqueducts necessary collecting storing for water shall be reservoirs for to be use. public held water, of District may be a beneficial use the hydropower While nothing the Montana
Court nevertheless concluded expressly party to use state lands Constitution or state law allows paying use without appropriating while water for beneficial occupancy for the and use of those lands. compensation to State Furthermore, already had District Court noted that it concluded riverbeds, in trust title to the and held those lands that the State held result, is under a for of Montana. As a State people lands, obligation protect specifically those constitutional obtaining them alienating disposing or without prohibited reasons, the Court denied PPL’s compensation. For these District summary judgment on this issue. motion for 13,2007Memorandum Regarding Order September Strike Parties’ Motions to the affidavits 6,2006, October PPL moved strike submitted On summary judgment regarding support of its motion State Missouri, Fork, navigability Clark and Madison Rivers. motion,
support judgment its summary the State had submitted (Mason), DNRC, affidavits from Monte Mason an for the employee affidavit, Foley (Foley). State Archivist Jodie In his rendered Mason Fork, Missouri, opinion his the Clark and Madison were Rivers He time of statehood. based these conclusions on a number reports and studies attached as exhibits. claimed that in his had deposition, personal knowledge Mason admitted he no these or preparation. studies their PPL claimed that because Mason knowledge contents, lacked personal accuracy, reliability of the exhibits, they should be stricken from purposes consideration for judgment. summary Additionally, argued the failed State any of show that the documents or exhibits which Mason relied recognized fell hearsay instance, into For exceptions rule. one Study attached exhibit was the River prepared Heritage Research Center of Missoula in December 1986. Because Mason had personal no knowledge prepared, of how it it than and was less years sought May 2006, old at time its admittance was could not be admitted under the Montana Rules of Evidence as an ancient 901(8). Mason. See M. R. Evid. through document or PPL presented argument a similar with respect to another exhibit, attached an report undated Clark Fork prepared Army Corps River of Engineers. Mason could not contents, personally attest to its and could not demonstrate that it was *21 years more than 20 challenged by old. Two other exhibits PPL were navigability reports on the by Madison and Missouri Rivers completed Army Corps of Engineers in 1974. While these two did reports appear prima old, to meet the facie being years test of at least 20 PPL argued their admission was barred because they were based on the accounts of others in old newspapers, old books and similar publications regarding matters that reportedly occurred in the late early 1800’s or any 1900’s. Because the State could not establish first- hand knowledge of these events of these PPL reports, authors argued they were hearsay inadmissible whose defects could not be cured admission under the exception. ancient document asserted that Foley’s 38 documents attached to affidavit were hearsay largely inadmissible for the same reasons. PPL noted that the majority of these documents “excerpts magazine were from books or authors, articles written typically years events, after the recounted do provide any and for personal knowledge basis of the matters argued evidence, discussed.” PPL that all except historical for sources Journals, Clark like the Lewis and direct, first-hand accounts based on consideration. stricken from and should be were inadmissible First, PPL’smotion. considered District Court denied Again, exhibits. The District accompanying Mason and the affidavit of has in his affidavit that DNRC conducted that Mason averred observed ownership of state to determine and document numerous studies Study. commissioned the 1986 River lands, that it had in fact Study historical evidence for compiled River Mason averred that the in order to assist DNRC in Montana over 43 different rivers for of trust land. of streambeds leases determining ownership state by Army reports prepared he on the also relied Mason averred regarding making determinations Corps affidavit, District Court analysis Based an ofthe at issue. on rivers Study Army regularly upon the River concluded that Mason relies duties, his and that these Corps reports carrying out official to the issues at hand. The District Court documents were relevant likely to Mason’s exhibits would be concluded that attachments acknowledged the Although trial. the District Court admissible at the State hearsay, documents it nonetheless concluded were likely lay a foundation for the admission of these would be able to if to do so. required exhibits rationale, District Court held that the Employing a similar
Foley could considered on accompanying affidavit and exhibits Foley’s summary as well. The District Court noted that judgment and attached to authenticates the documents listed simply affidavit her duties as a state archivist. her affidavit in accordance with hearsay, the documents themselves are the District Court Although likely lay a foundation for the Foley determined would be able reasons, admissibility documents at trial. For these of these District Court denied PPL’s motion to strike. resolution these motions and the District Court’s Upon the compensation entitled to seek
determination that the State was “occupied”by and streams PPL for its use of state-owned riverbeds dams, stage trial on State’s was set a bench seven-day A trial was held from compensation. counterclaims for bench 30, 2007, expert the District Court received October 22 to primary issues were testimony argument parties. from both entitled to recover from compensation the amount the State was riverbeds, preempted the HRA is its use ofthe and whether *22 the FPA. The District Court was tasked with applied” an basis “as to calculate considering which should be used methodology interest, damages, prejudgment whether the State was entitled to whether the Land Board or the District Court should determine full market for PPL’s use of land. value state-owned 2008, 13, the District Court entered a Memorandum On June (Memorandum) findings a containing Decision final order of fact (Final Order). In its and conclusions of law Memorandum District challenge applied” preemption “as federal first addressed PPL’s HRA, of the HRA. maintained that operation FPA applied, preempted by impossible because it was for PPL with that comply the mandates both statutes. PPL noted 77-4- § MCA, 209, of HRA a for permits Land Board to enter into lease However, a term no greater years. than under the FPA’s implementing regulations requires “acquire FERC a licensee to title in right lands, fee or perpetuity to use in all other than lands United years States” within 5 of the issuance of a license for a hydroelectric facility under Article 5 of standard FERC license. See Preliminary Standardized Conditions Inclusion Permits and for Act, Licenses Issued Under Parti the Federal Power 54 F.P.C. (1975) added) 1834,1975 (emphasis (discussing WL14631 **36 Article L-5). 5 of 50-year Form PPL claimed that the limitation on state leases objective Furthermore, frustrated the argued FPA.
leasing process HRA, MCA, described in the see 7-4-204 to also §§ contravened the regulatory purpose of the FPA as as its FERC well licenses.
¶69 The District Court determined that the FPA did not
preempt
an
applied”
HRA under
“as
challenge. The District Court observed that
obligation
State’s
to seek compensation
fiduciary
stemmed from its
public
duties to administer
trust
X,
lands under Article
Section
Iowa,
Montana
Referring
Constitution.
to First
the District Court
noted
United
Supreme
previously
States
Court had
concluded
that the FPA
not preempt
rights pursuant
law,
does
property
to state
seek compensation
allows states to
use
of state lands
Secondly,
FERC-licensed facilities.
the District Court determined that
ability
FERC had the
to alter
perpetuity”
the “in
clause in PPL’s
2.9(a)
license, noting
(2010),
that 18 C.F.R.
§
“[t]he
states
approved
Commission has
several sets of standard
conditions
preliminary
hydroelectric
normal inclusion in
permits or licenses for
course,
developments.
special situation,
In a
the Commission in
permit
issuing
modify
or license for a
will
project
or eliminate
(condition).” Indeed,
particular article
the District Court observed that
permitted just
Valley
FERC
such a
Cooper
modification in
Electric
*23
(1978),
a
61336,
and allowed
Assn., Inc.,
determined
the difference between the value
cost
power produced
producing
power.
and the
net benefits
(i.e., the
then
profits),
project
would
be distributed 50-50 between the
Memorandum,
owner and the land owners.
the District
MCA,
77-4-208,
required
HRA
Land
noted
Board to
§
sites,
power
full market
“carefully
obtain
value
PPL’s use of
as
ascertained from all available sources.” The District Court observed
unique
have
riverbeds
characteristics which make them valuable
production
for the
hydropower,
concluded that the “shared net
presented by
methodology
benefits”
the State would best take into
consideration
economic contributions
the state lands make to
hydropower
connection,
projects. In this
District
Court stated that
Supreme
Court of Maine had
methodology
concluded this
appropriate
apply
hydroelectric
to the assessment
of rents for
*24
(Me.
facility
Co.,
in
v.
Me.
1994),
State Cent.
Power
¶74 considered whether it or the Land Board should decide the fair market argued value the riverbeds. PPL had HRA, Board, that under the Court, the Land and the not District was proper authority the to decide the fair market value rental or lease for power rate PPL’s use of the rejected sites. The District Court argument, and held it that could the determine fair market value for PPL’s past First, use of the state-owned lands. the District Court noted that PPL Second, had not raised this pretrial issue the order. it distinguished Responsible Montanans the Use the Sch. Trust v. for Darkenwald, MT 190, 328 105, 119 Mont. noting P.3d that the judice case sub did challenge not involve a to actions taken the Darkenwald, Land Board. (noting See the appeal in that case Board). challenge was direct actions the Land Finally, the District Court held it would not on rule the terms of a lease between PPL and Land extending future, the Board into the as that matter would be properly left to the discretion of Land Board. Order, its Final the District applied Court the rationale set argument
forth the Memorandum to presented by and evidence parties at trial. The Court previous rulings District noted its above, discussed and concluded would apply State’s net “shared damages. benefits” method to assess The District Court relied principally upon economist, the State’s expert Duffield, John Ph.D. (Dr. Duffield), in damages order to arrive at for use PPL’s of the state- rejected The to 2007. District power sites from 2000
owned (Saleba), his Gary who based by PPL’s Saleba expert, offered valuation used FERC to determine methodology on the assessment rental Montana federal lands at its pay using PPL should amounts (2010).7 noted The District Court facilities, 18 C.F.R. 11.2 pursuant § employ the “shared net benefits” methodology did not that Saleba’s at a acreage, dam and arrived did include below the methodology, by Dr. Duffield. figure that calculated much lower than calculations, Dr. Duffield utilized documents at his To arrive PPL owed the by PPL to conclude that filed produced publicly either amount rents, excluding interest, from 2000 past State project 2007 rent for this $8,988,436 Thompson Project. Falls The that the State $1,950,592. figure based on the calculation was This was site, entitled to a power the State was owned 54.6 % half, project. For the Madison- share, or ofthe net benefits 27.3% past PPL the State Project, Duffield concluded that owed Missouri Dr. $25,759,825 through interest, for 2000 2006. rent, excluding $4,257,327. Project was rent for the Madison-Missouri due constituting each ownership state of the lands percentage shares of Hebgen, 5.7%; Madison, hydroelectric are separate facility as follows: Rainbow, 96.2%; Hauser, 17.6%; Holter, 26.2%; Eagle, Black 6.8%; 79.3%; 39.7%; 63.6%; Cochrane, Morony, 62.9%. With Ryan, facilities,8 State’s allocated to downstream Hebgen Dam’s benefits net of each of these facilities as follows: share benefits 12.8%; 46.9%; Madison, 3.3%; Hauser, 8.6%; Holter, Eagle, Black 38.8%; 19.4%; Rainbow, 31.0%; Cochrane, Ryan, Morony, 30.8%. $40,956,180 entered Judgment against in the amount of appeals judgment, from this as well as August now rulings discussed above. We state issues as follows: summary in granting Issue One: Did the District Court err Fork, Missouri, the Clark judgment regarding *25 of use, recompensing charges for the annual for the United States “Reasonable (other adjoining enjoyment pertaining occupancy, its than or to of lands lands Government) by the or its or other structures owned United States Government dams FERC], [i.e., fixing charges property, such other will be fixed the Commission value, may the most take into such factors as commercial Commission consideration suited, may property profitable be the beneficial use for which the lands or other may used, purpose property said lands or have been such which other (2010). 11.2(a) may pertinent.” § Commission deem 18 C.F.R. other factors as the storage facility produce Hebgen not Dam a which does itself Because the power, of its which were downstream Dr. Duffield allocated benefits to facilities location. time in Madison Rivers at the Montana became state 1889? err granting summary Issue Two: Did the District Court in
¶79 judgment on the to State issue whether Montana’s of school riverbeds are trust lands? Issue err granting summary Three: Did District Court
¶80 judgment right on whether the appropriate water use for beneficial hydropower to use right includes incidental state land? of Issue Four: err granting Did District Court summary ¶81 judgment regarding availability PPL’s of affirmative defenses against State’s claims? Issue Five: in concluding Did the District Court err ¶82 the HRA applied Thompson Falls and Projects? Missouri-Madison Issue Six: Did District err in its calculation of damages?
STANDARD OF REVIEW
We review de
grant
summary judgment,
novo district court’s
employing the same
standards utilized
the district court pursuant
to M. R.
P.
Burlington
Civ.
56. Smith v.
Ry.
Northern and Santa Fe
Co.,
225,
10,
278,
2008 MT
344 Mont.
moving
P.3d 639. The
¶
party
genuine
must establish the
absence
issues ofmaterial fact and
judgment
Smith,
entitlement
as a matter of law.
10. Once this
¶
satisfied,
burden
been
non-moving
has
party must present
substantial evidence essential
one
or more elements of
case
a genuine
Smith,
raise
issue of material fact.
Reliance
¶
“conclusory
lacking
statements”
specific factual
support
sufficient
genuine
Smith,
to raise a
10;
issue material fact.
seealso
¶
Cup
Tin
Co. Water
Sewer
City Plumbing
Dist. v. Garden
&
and / or
Inc.,
Heating,
54,
2008 MT
347 Mont.
need not defer to judgments decisions the district court. See Co., Lorang 252, 53, v. Fortis Ins. 2008 MT 345 Mont. 192 P.3d 186. This applies rationale evidentiary rulings summary judgment evidentiary context. We review rulings going directly propriety summary towards the judgment novo, de in order to determine evidentiary requirements whether summary judgment been Smith, have satisfied. See 41-42. ¶¶ summary judgment context, Outside we review a district *26 under findings of fact law correctness and its conclusions of
court’s
v. Lincoln Co. Bd.
Family, L.L.C.
clearly
standard. Roe
the
erroneous
70, 12, Mont.
DISCUSSION granting summary err Did District Court in Issue One: ¶87 Fork, Missouri, Clark navigability judgment regarding a state in 1889? at the time Montana became Madison Rivers key consideration of three Analysis of this issue involves the relying upon in the District Court erred questions. The first is whether purposes exhibits for Foley affidavits and attached Mason and correctly summary is whether District Court judgment. second granting for title test in applied navigability interpreted judgment. The third is whether there exist summary State’s motion for summary preclude judgment. fact genuine issues of material which Foley Upon Court’s Reliance the Mason A. The District Accompanying Exhibits Affidavits Foley, Mason and PPL filed a motion to strike the affidavits of Opinion, 62-64. PPL well as the exhibits attached thereto. See ¶¶ hearsay and should argued were based on inadmissible these affidavits summary judgment in the context. District be considered agreed the District Court that the Court denied motion. While hearsay, they exhibits contained it reasoned that would supporting likely 65-66. Opinion, nonetheless be admissible at trial. See ¶¶ in the Mason and argues considering PPL the District Court erred and attached exhibits. PPL claims the District Court Foley affidavits entirely hearsay on in order permitted rely the State to inadmissible summary that carry proof judgment. its on contends burden testimony his entire deposition testimony conceded in Mason regarding navigability reports was based attached his affidavit, yet preparation reports he was not familiar with the testify accuracy, reliability, to their or the personally and could not them. PPL claims the same is true with generate methods used also claims that respect Foley affidavit and exhibits. PPL directly Dr. the State’s evidence on expert opined Emmons credibility summary judgment prove anything lacked about the on use ofthe rivers and was instead based dubious historical historical circumstances, argues the State’s evidence sources. Under these summary judgment. not have been on should considered applying the State first asserts that courts response, Second, rely historical routinely for title test evidence. hearsay historical in this case is because while it admits the record personally is no who today there one alive witnessed condition of argues rivers in the State that such is not Montana’s evidence hearsay excluded rule itself. The State contends that hearsay exceptions evidence this case is admissible under several R. posits contained M. Evid. 802 and 803. The State further subject beyond living because matter this issue is the recall *27 witnesses, properly the District Court allowed the admission of this of type hearsay evidence. 56(e) M. R. P. that supporting opposing Civ. states affidavits summary
in judgment personal context “shall be made on knowledge, forth admissible [and] shall set facts as would be in Smith, In personal evidence....” we stated that affidavits made without knowledge hearsay and based on summary should be considered on Smith, However, judgment. 39. may ¶ we also stated that exhibits support submitted in summary judgment long of a affidavit so as a can proper foundation be laid for such exhibits on any exception based Smith, to the rule excluding hearsay evidence. 39. While ¶ unauthenticated documents summary should not be considered on “ a judgment, document can if it by be considered is ‘authenticated 56(e) to an attached affidavit that meets the requirements [Rule] [is] and the a person through affiant whom the exhibits could be ”Smith, Studios, admitted into (quoting evidence.’ Hal Roach Inc. ¶ (9th Co., Inc., v. Richard Feiner and F.2d 1550-51 Cir. 1990)). Furthermore, self-authenticated documents can be considered summary judgment pursuant R. Smith, to M. Evid. 902. Foley is the State Society. Archivist of the Montana Historical affidavit, Foley her a attached number of historical works and periodicals, and swore oath they under were true copies publications and documents from the collection the Montana Society. Historical M. R. Evid. ten categories 902 contains documents for authenticity “[e]xtrinsic which evidence of as a condition precedent to admissibility is not required 902(4), ....” M. R. Evid. (8) (5),(6), and read as follows:
(4) Certified copies public copy records. A of an official entry therein, record or or report or of a by document authorized law to actually be recorded or filed and recorded or filed in a office, public including any form, data compilations certified as by correct or person custodian other authorized to make the certification, by (1), (2), certificate with complying paragraph (3) or complying any with law ofthe United States or of this state.
(5) publications. Books, Official pamphlets, or other by authority. public to be issued purporting
publications (6) Printed materials purporting periodicals. Newspapers periodicals. newspapers or to be
(8) accompanied Documents Acknowledged documents. provided in manner acknowledgement executed certificate of by law to notary public or officer authorized law a other acknowledgements. take into one Foley affidavit fall All listed in documents as self- admissible categories, and would be
or more of these
Furthermore, many
R. Evid. 902.
authenticating documents under M.
Foley affidavit
with the
would be
of the documents submitted
901(8),
provides
R.
which
admission
admissible under M. Evid.
following requirements:
which meet the
documents
that a
compilation.
data
Evidence
Ancient documents or
(A)
form,
in such
any
compilation,
document or data
(B)
authenticity,
concerning its
suspicion
as to create no
condition
(C)
be,
authentic,
likely
has
it,
if
would
place
where
years
time it is
or more
offered.
been in existence
Archivist,
lay
Foley,
would be able to
Additionally,
State
if
so under M. R. Evid.
required
these exhibits
to do
foundation for
803(8),
hearsay
rule.
reports” exception
records and
“public
*28
Crumleys Inc.,
Compensation
Tank
Bd. v.
SeeMont. Petroleum
Release
33,
(discussing
79-81,
Mont.
historical
when
for
proper
applying
navigability
applying
title test. Courts
required
this test are often
arrive
factual determinations
witnesses,
regarding
any living
matters outside the recall of
thus
requiring
higher degree
reliance
than
of
historical material
Power,
the run of the mill civil
See
dispute. Montana
B. The District Court’s Interpretation Application Navigability for Title Test having evidence before the District Court been properly considered, the question remains as to whether justified this evidence summary grant judgment in key favor the State. The inquiry here is interpretation whether the District Court’s application navigability correct, for title test was since this test sets forth the legal standard the State must meet summary judgment and also indicates the type quantum evidence PPL present must in order genuine to raise a issue of material fact. Broadly speaking, perceived the District Court navigability
title test as somewhat instance, “fluid.” For the District Court concluded that present-day the test usage probative allowed of a river at the time of statehood. District Court also concluded that portages do not navigability, long defeat so as the used, itself susceptible used, river being as a channel of *29 commerce at the time of statehood. These two were crucial points of aspects grant the District summary judgment Court’s of on the navigability question falls, to the presence rapids, due of Rivers, obstructions on the Clark Fork Missouri and because the admittedly well-documented. was not the Madison River early usage of area establishes the caselaw this review of independent Our of the understanding Court’s the District unequivocally for navigability The of concept title was correct. navigability for test Supreme liberally by the United States very construed is purposes title at “actual use” or before experience have A river does not Court. a channel statehood, providing as it long “susceptible” so time of “ does navigability of a stream not ‘[T]hetrue test of for commerce. conducted, is, be, may nor on mode which commerce depend a rule difficulties and ...‘itwould be narrow attending navigation,’ being country, capable a river was that in this unless hold vessels, public it could not be treated as navigated by steam or sail ” (quoting Utah, U.S. 51 S. Ct. at at highway.’ 441). Moreover, “carrying portages, or Montello, places,” 20 U.S. to “artificial means” of require which resort other obstructions As finding navigability. not to defeat a navigation, are sufficient Montello, in The Supreme the United States Court stated did Indeed, few our fresh-water rivers which there are but uninterrupted serious obstructions to an originally present they may they so while navigation. great cases ... be last some carrying prevent as to the use of the best instrumentalities is commerce, point essential whether the natural but the vital and for useful navigation of the river is such it affords a channel fact, although If so river is its commerce. this be may reason of navigation encompassed be with difficulties barriers, rapids such as and sand-bars. natural Montello, 87 U.S. at Additionally, the term “commerce”in the instance, Utah, very broadly is construed. For title context explicitly embraced the notion that Supreme United States newly-discovered retroactively forms ofcommerce can be emerging and navigability. applied considerations urges that consideration of future government [T]he Rather is it true speculative commerce is too to be entertained. issue, that, depends upon the title of state future use not to be growth profitable are possibilities Union, Utah, equality right as a state of the ignored. with its rivers as were not to denied title the beds of such of either navigable in fact at the time of the admission of state of the because the location of the rivers and circumstances country through they which exploration and settlement *30 to navigation flowed had made recourse a late adventure or on large because commercial utilization a scale awaits future The question demands. remains one of fact as to the of capacity ordinary rivers their condition to meet the needs of may growth commerce these arise connection with the ofthe activities, of population, multiplication and the development of may natural And capacity by physical resources. be shown experimentation characteristics and as well as the uses to put. which the have streams been ,
Utah 283
at
S. Ct.
U.S.
at 443-44.
a
navigability
Because
is based
broad definition of commerce
“susceptible
standard,
an
or
present-day
combined with
“actual”
ofuse”
usage
may
navigable
of a river
of its
probative
status as a
river at
See Ahtna,
the time of statehood.
demonstrate in fact under this and entitlement to judgment as a matter of law. Despite presence portages along of Rivers, Clark Fork Missouri the historical evidence establishes they provided a statehood, channel for commerce at the of time susceptible were of such use. usage While historical ofthe Madison well-established, was not as log the evidence of a on float its middle portion century, in the 19th combined with its present-day usage, susceptible demonstrates that this river was of providing channel for commerce at the time of statehood.
C. The of Existence Genuine of Issues Material Fact Precluding Summary Judgment on the Navigability Fork, Missouri, Clark and Madison Rivers On appeal, argues has genuine shown that of issues material fact exist regarding each these rivers. Emmons, notes that its Dr. expert, rendered an expert opinion declaring that each of these non-navigable rivers were at the time of statehood, (1) opinions and based following his sources: a 1910 federal declaring court decree portions of the Clark Fork non- (2) a navigable; congressional report Corps based on a 1930’s Engineers survey stating that the Madison river has never been historically navigated navigation and that commercial on this river (3) “entirely question”; was out of the reports historic Corps Engineers that the Great Falls Reach of the Missouri is unnavigable, Ferry and that Stubbs only Reach could be made at great Additionally, cost. PPL notes that its fluvial geomorphologist, Schumm, opined Dr. the presence of PPL’s early century in the 20th on the Madison and Madison Dams
Hebgen Based on of this river. flow characteristics” “materially changed stage-discharge histograms, depth, flow historic evidence river susceptible the Madison was not curves, opined Dr. Schumm See Opinion, statehood. at the time of navigation type upon precisely PPL relies aside the fact that Setting length argued which it has historical information of second-hand context, summary we judgment in the and inadmissible unreliable genuine issue insufficient to raise simply hold that this evidence Fork, Missouri, the Clark regarding navigability on of material fact Missouri, the obstructions respect to and Madison Rivers. With finding insufficient defeat Falls Reach were the Great Clark by the Lewis and they portaged were navigability, because *31 allowing the many others, century, 19th early and expedition, to of respect a channel commerce. With provide to useful Missouri River, evidentiary raising basis for PPL’s sole Fork and Madison Clark conclusory statements consists of a issue of material fact genuine of made a federal navigability portions of these rivers regarding the Such 1910, of in the 1930s. Corps Engineers court in district statements, any are conclusory specific support, without factual genuine law raise issues of material fact. as a matter of to insufficient early in the 1900’sdoes not that these statements were made The fact conclusory specific lack their nature and of somehow cure them of Cup, See Tin 54. ¶ factual basis. regarding changes in the opinion Dr. the flow expert 104 Schumm’s
¶ does not raise a the time of statehood likewise Madison River since susceptibility fact commerce genuine regarding issue ofmaterial The use present-day recreational at the time Montana became state. and Ahtna. The purposes is of “commerce” under Utah sufficient for on the Madison River have been fact that the seasonal variations dams, of fails to presence to of less than 1 foot depths altered susceptible for use as a channel that the Madison was demonstrate Indeed, long so as the Madison of at the time of statehood. commerce year, it is considered susceptible during portions for use of was title navigability time under the test. navigable at the of statehood Utah, (noting at river can be U.S. at 51 S. Ct. 445 See “exceptional, being use is generally navigable unless its considered highwater.”). of practicable only temporary times virtually every stretch of a river must be Finally, argues particular of a river which are in fact” and that stretches “navigable a finding to characteristics can defeat non-navigable physical due their river, of with to whole navigability respect require piecemeal some navigability-with navigable, classification of stretches declared and others non-navigable. argument declared The source for this case, Supreme derives Utah. United States Court navigability considered the of rivers within the state Utah of which government sought sought the United States title. United States portions Green, Utah’s title certain quiet sections of Colorado, Utah, 71, 51 S. and San Juan Rivers in Utah. atU.S. Ct. at A had special appointed findings master been to enter fact rivers, regarding these long some which contained stretches ofnon- Specifically, special roughly waters. master that a found River, 40-mile stretch of the beginning Colorado at the confluence of Utah, Utah, the Green and Grand Rivers in non-navigable. at challenged
U.S.
with to certain sections of opposed as to the rivers However, themselves aas whole. the Utah emphasized Court also applicability approach limited of its in the following terms: present instance,
In the the controversy only relates sections of the rivers which are described in complaint, the master has limited his findings conclusions navigability accordingly. course, propriety view the physical streams, characteristics of the apparent. Even river, where the of a speaking generally, is a matter knowledge, common judicial may hence one ofwhich notice taken, may yet question, be a be determined *32 evidence, how far navigability extends. The question here is not with respect to a interruption navigability short of in a stream navigable, otherwise or of a negligible use, boats part, may which nonnavigable. of stream otherwise We are concerned with long reaches particular with characteristics of navigability nonnavigability, or which the master’s report fully describes. (footnotes omitted)
Utah,
at
U.S.
navigable and reversed
findings
special
point.
master
Utah,
89-90,
portions and the obstructions rapids River and the Missouri Reach of Clark Project Falls on the vicinity Thompson ofPPL’s navigation in the so, find invitation to do River-non-navigable. We decline the Fork Utah, non- the overall misplaced. on Utah PPL’s reliance River was not of the Colorado navigability of the 40-mile stretch upon by Supreme and was never ruled disputed by party, either Instead, merely disputed Utah whether the state of Court itself. Furthermore, as the non-navigable. miles this stretch were first 4.35 does not clear, “section-by-section” approach made Utah Court otherwise navigability in stream interruption[s] “short apply to Utah, at 441. In Utah there was no ....” at 51 S. Ct. non-navigable 36-mile stretch remaining presented evidence merely successfully or that it was portaged, ever of the Colorado was navigability portion of this in the overall interruption” a “short River. Colorado Here, “long put any has forth evidence whatsoever relatively non-navigability” merely points instead
reaches of but Missouri, Fork, and Madison Rivers interruptions the Clark short navigation, do not affect the actual uninterrupted but impede which for commerce in susceptibility of use of these rivers as channels use Reach, though even Falls Montana at the time of statehood. Great River, merely is a short of the Missouri roughly 17-mile stretch channel for useful in the use of the Missouri as a interruption expedition’s commerce, portage the Lewis and Clark evidenced area, actual use of the Missouri of this well-documented Co., e.g. Mont. Power 185 F.2d 493-94. The subsequent thereto. See respect though Clark Fork River-even there same true with is vicinity navigation on this river in the interruptions unimpeded are of the Clark Fork is project, Falls actual use Thompson of PPL’s Pend Oreille Lake at least to this river’s documented from the River with the River. PPL’s dams on the Madison confluence Blackfoot navigation of this river as merely interruptions are also short probative as to its usage of the Madison is present-day well. The statehood, and it is self-evident of use” at time “susceptibility the Madison do not defeat its current use as any obstructions on a channel for commerce within the state of Montana. relatively interruptions short PPL’s evidence of under Utah to insufficient as a matter of law rivers at issue is Furthermore, non-navigable. under any ofthese rivers portions
declare standard, it expansive “susceptible definition of the use” Utah’s
443 Madison, Fork, present-day usage clear that the of the Clark equally susceptible and Missouri Rivers demonstrates that these rivers were providing throughout a useful channel of commerce the state of at Montana the time statehood.
D. Conclusion analysis, foregoing 110 From the we conclude the District Court ¶ err in granting summary judgment did not to the State on the issue of Fork, Missouri, whether Clark and Madison were Rivers in “navigable fact” at time of Montana statehood 1889. Under the test, navigability for title Montana has title to held these riverbeds doctrine, in beginning According footing 1889. equal use, disposition, interests in ownership the beds these rivers has Mont., governed by 551, 101 been state law 450 since time. U.S. at S. Ct. at 1251. One of the issues PPL in appeal raised concerns the amend,
District Court’s failure to rule on its motion to and the extent improperly which District Court relied PPL’s in on admissions rendering its on navigability question. decision See Opinion, 42- ¶¶ 43. The District Court should ruled upon have this motion to amend prior summary its judgment However, decision on this issue. it is true that PPL did equally not raise this until trial omission underway, well after long pretrial the final order had been issued. In event, any we any have not relied upon ostensible admissions made our analysis regarding navigability of these rivers its responsive pleadings.
In summary, review, under de novo we conclude that the District Court’s ultimate ruling Fork, of the Clark Missouri, and Madison Rivers at time of statehood It was correct. s an axiom Montana law we will affirm district court if it result, the right though reasoning eaches even may entirely not be Missoula, orrect. Good v. Schs. Inc. Co. Missoula Pub. Sch. Dist. No. 231, 24, MT 344 Thus, Mont. ¶ P.3d we affirm he District Court on this issue. Issue Did
[113 Two: the District Court err in granting summary udgment the State on the issue whether Montana’s are riverbeds school trust lands? PPL argues that the District Court erred concluding at
riverbeds issue are schooltrust lands. PPL claims that the riverbeds ire lands specifically Enabling Act, indentified in the are they nor X, school trust under lands Article 2 of Section the Montana Rather, asserts, Constitution. the riverbeds are public lands in Curran. See this Court discussed public trust doctrine subject at 167-68. 47-48, 682 P.2d Curran, Mont. argument that the riverbeds rejected The District X, 2 the Act, Section of or Article Enabling
fell under terms *34 determined, on based The District Court then Constitution. Montana X, “grant” as in Article Section meaning of term used plain the the lands of the State. public in fact trust 11(1), that the riverbeds were the went on to conclude the District Court point, From this that the Land Board theory lands the trust on riverbeds were school However, notes, as PPL the classify to them as such. authority had the never taken this action. Land Board has correct in the District Court was We conclude that ¶116 pursuant trust to Article public are lands concluding that the riverbeds 11(1) However, the District X, the Montana Constitution. Section the schooltrust lands concluding in riverbeds were Court erred could, theory, classify as Board them assumption that Land arguably classify the riverbeds as if the Land Board could such. Even lands, fact that it has not done so.9 simple trust remains school District Court’s determination that We reverse the ¶117 lands, they public hold are are school trust instead riverbeds 11(1) Constitution. X, Article Section ofthe Montana trust lands under lands, issue not trust we the riverbeds at are school Although conclude administer required still to these lands the Land Board is X, 11 obligations imposed by Article Section accordance with the trust such, As are held “in trust of the Montana Constitution. riverbeds pursuance disposed except shall not “ever people” for the be or until the full market general disposition, for such providing laws of, ascertained in such disposed or interest to be value of estate safely secured to by law, paid has been may provided manner State, X, 11(2); v. Const. Art. SeeNorman Mont. § state.” Mont. (1979). 715, 439, 444, 597 P.2d summary granting Court err in Issue Three: Did the District use right to water
judgment
appropriate
on whether the
for beneficial
right
use state land?
hydropower includes the incidental
to
erred
it concluded that its
argues
PPL
the District Court
when
hydroelectric power
for
right
appropriate
purposes
water
to use
land. The
generation
right
did not include the incidental
state
PPL
exempt
law did not
District Court determined that Montana
authority
legal
express
opinion
Land
has
no
on whether the
Board
We
take such actions.
paying
appropriating
State
the use
state lands while
water
right
PPL
appropriation
for a beneficial use.
claims that the
includes
case,
right
Thus,
appropriation
the means of
the dams.
—in
lands,
PPL
occupancy
asserts
cannot be assessed rent
of state
right
an
occupancy
as such
is
incident of its lawful
to appropriate
cases,
PPL
position
supported by
water.
claims this
number of
including
20,
(1900),
v.
Denniff,
Smith
Mont.
riverbeds has easement over state lands reason, appropriate argues For this water. State that PPL’s reliance on misplaced the cases cited above is they since involved easements, preexisting or the appropriation of water on federal lands. short, the State claims that permits no state law the free lands, appropriation of water on state or immunizes PPL from the requirement HRA’s to pay compensation. We affirm the District Court. The relied cases do
simply
right
not establish that PPL has a
*35
to make free
appropriation of waters
and
within state-owned lands without
paying any compensation
Mattson,
to the State.
Denniff
instance,
for the
stand
proposition
right
unremarkable
that the
of
appropriation
right
includes the
to an appropriate means of diversion.
Mattson,
See
(discussing necessary
37-40
incidents of
for an
¶¶
use
PPL
by
Lake);
easement held
at a dam on Flathead
Denniff, 24 Mont.
28-30,
at
at
ability
P.
401-02
the
of
(discussing
a valid water
appropriator
acquire
to
an easement over private land in order to
right
Prentice,
exercise his
to appropriation). In
this Court observed
recognizes
that while the State
rights
the
of
to acquire
individuals
the
by
use of water
appropriation, such
is
subject
use
nonetheless
requirements
Prentice,
117,
of state law.
Finally, correctly as the notes, federal, State Conrad Inv. involved not land, bearing state and has no operation on the of in state law this case. Simply put, the cases cited do not stand for the proposition
that PPL’s water, use appropriation of and the incidents necessary to enjoy appropriation, such affect or limit the State’s ownership riverbeds, interests ability State’s such subject use to the requirements law, of Montana or its to seek ability an compensation for appropriation occurring entirely of water upon right of that PPL’s cases demonstrate lands. these public None occupy Montana’s use of dams to of water and its appropriation lands of entirely public within the riverbeds, occurring as it does of Montana exempted operation from the Montana, is somehow reasons, 1972, HRA. these and the For Constitutions of concluding appropriation that PPL’s did not err District Court land, right use state does not include an incidental water free compensation for the use of required pay the State and that PPL is riverbeds. the state-owned summary granting err in Issue Four: Did the District Court availability PPL’s regarding the
judgment affirmative defenses claims? against the State’s granting the District Court erred PPL contends that availability of regarding
summary judgment State compensation. PPL the State’s claims for against affirmative defenses 70-19-302, by claims are 27-2-103 and argues §§ that the State’s barred MCA, 27-2-103, states that the limitations on causes MCA. Section 2, MCA, “apply to actions chapter part set forth in Title actions state or for the benefit of the state in the brought in the name of the by private parties.” claims that same manner as actions (§ 27-2-207(1), MCA), regarding trespass statutes of limitations (§ (§ 27-2-204(1), MCA), liability by statute 27-2- created negligence (§ 211(l)(c), MCA), promise not founded contract or action 27-2-202(3), MCA), variously claims for apply to bar the State’s MCA, Furthermore, 70-19-302, argues sets compensation. § brought by on actions the State 10-year statute limitations by or thereof reason of respecting property profits “real or the issues same,” and also in the applies or title of the state to right instant case. 70-19-302, MCA, inapplicable since State counters § conveyed 1955, by only July to “all lands sold and before applies by consideration was received
the state of Montana for which
valid
state,
any
state; provided
at the time of
such sale or
conveyance,
precluded
constitution Montana
selling
States from
grant
of such lands
the United
terms
*36
Here,
70-19-301,
....”
MCA.
the
disposing
and
same
Section
PPL,
alienated
never
nor could
State have
riverbeds were
sold
Second, the State
these lands in
ofthe Montana Constitution.
violation
yield
this
defenses must
case
argues that the statute of limitations
that the
public
status as
trust lands.
State claims
to the riverbeds’
the Montana
of statutes of limitation would violate
application
and
ex.
Constitution under Norman
State
rel. Boorman v. State Bd. of
(1939).
Commrs.,
reasons,
Land
109 Mont.
HRA to the Thompson Projects Falls and Missouri-Madison ? (1) resolution of issue involves two distinct inquiries: whether the District in granting summary Court erred judgment to the State on the federal of the HRA preemption rejecting and in PPL’s “as- (2) applied” challenged HRA; whether HRA can be lawfully applied to hydroelectric PPL’s facilities.
A. The Preemption Federal “As-Applied” Challenges the HRA In response summary judgment PPL, motions filed 77-4-203, MCA,
District Court ruled that ofthe HRA was preempted § law, Opinion, 16-17, federal see but nonetheless ¶¶ held that the remaining provisions federally of the HRA were preempted and that the State/Land Board permitted compensation to seek trial, PPL. After rejected “as-applied” District Court PPL’s also challenge preemption argues to HRA. PPL the District erred *37 448 conflict is in irreconcilable that the HRA rulings. PPL claims
in these PPL Specifically, licensing requirements. FPA and FERC with the 77-4-201 50-year of lease in §§ HRA’slimitation a that the maintains the lands requirements that -209, MCA, conflicts with the FPA’s “in by held licensee must be by a FERC-licensee affected Opinion, 68. ¶ See perpetuity.” with the Furthermore, FPA invests FERC PPL notes that the hydropower for a site. choosing operator of
sole discretion (West 2010). 800(a) 797(e), implementing The FPA’s §§ U.S.C.A. regarding the the sole discretion regulations invest FERC with also (West 2010); 18 C.F.R. 9.1- §§ of a license. 16 U.S.C.A. § transfer in (2010). provisions, the HRA contains several argues PPL 9.3 Court-that stricken the District to 203-which was addition Section discretion type licensing of precisely Board with invest Land 77-4-204, MCA, allows the instance, For solely to FERC. § reserved as to the value of “preliminary a examination Land Board to conduct development site, plans as submitted power to proposed relating of all other matters applicant, and disposition of the necessary proper for the as it deems development -207, MCA, bidding through 77-4-205 describe business.” Sections lease, granting to a required prior Board is to follow process the Land PPL give municipalities. to including preferences to provision in conflict with the application provisions ofthese is contends that the that the granted under the FPA. PPL also asserts discretion FERC 50-year bidding/examination provisions lease limitation and HRA’s objectives federally the FPA’s and are as an stand obstacle preempted. connection, argues the HRA cannot survive a In this regulatory this is
severability analysis the core of act because State, MT 314 Mont. nature. As we stated in Finke v. law both constitutional “[w]hen a contains P.3d provisions, determine whether unconstitutional unconstitutional severable, we examine the law itself the existence provisions are clause, determine severability clause. If there is no such we must provisions necessary integrity for the the unconstitutional are whether Finke, 25. PPL law or an inducement for its enactment.” were It furthers severability HRA not contain clause. notes that the does that the core of through that Sections 203 207 demonstrate contends such, HRA in As the core of the is regulatory the HRA is nature. authority given to under the regulatory FERC direct conflict with the entirely reason, argues the the HRA is operation FPA. For this preempted. HRA federally preempted State claims the is not connection, requires
FPA. the State notes that FPA compensate property. licensees landowners for use their Regarding severability argument, the PPL’s State contends that the regulatory, compensatory core of HRA is not but rather in a manner with Land obligation consistent Board’s constitutional recompense public seek for the trust use lands. agreeWe with the State. The core ofthe HRA is compensatory, regulatory. purpose fundamental the HRA stated 77-§ MCA,
4-201, is to ensure that the Land obtain Board able to *38 compensation for use of state-owned lands which are used hydroelectric landowners, facilities. The FPApermits private including states, to seek and for compensation receive the use of their land. The the HRA not in core of is conflict with the FPA and survives the federal preemption severability analyses. objects and While PPL that the bidding process -207, MCA, described in through §§ 77-4-204 conflicts jurisdiction licenses, with FERC’s exclusive to issue and/or transfer fact that the process. is State has never resorted to such a If the bidding process -207, MCA, discussed in point 77-4-204 was at some §§ requirements, utilized ran afoul of FERC it arguably then would preempted However, “as applied” an basis. no such conflict exists present. Moreover, at the if such preemption even further of the HRA occur, were to it would not alter the fact that the core of the HRA is compensatory, in regulatory, not nature. Challenge Application
B. PPL’s to the of the HRA PPL also claims that the HRA being “retroactively” applied a contrary it in manner to law. PPL correctly notes that the HRA retroactivity clause, does not contain a argues language that its it designed indicates was apply to the development power future 77-4-204, sites. See (stating § MCA that the Land Board examines “matters proposed ....”); 77-4-206, related to the development MCA § (stating that the Land Board is to determine a applicant whether lease ....”). is “capable carrying out the proposed development Further, argues PPL that the HRA’sapplication in this case violates principles Citing Galarneau, Montana law. to Porter v. 174, 911 P.2d 275 Mont. (1996), argues PPL application ofthe HRA would violate the prohibition against application retroactive of the law because it “takes away impairs rights or acquired existing vested under laws or creates obligation, imposes duty, new a new disability or attaches a new in already respect passed.” Porter, transactions 275 Mont. at omitted). obligations, Among these new (quotations P.2d at 1148-49 State pay approximately PPL requirement is the argues, impairment The claimed compensation. in back million dollars $41 subject to may fact that it now be also includes the rights PPL’s vested granted a lease not be bidding proposals possibly competitive the Land Board. being HRA held that The District Court title acquired Montana
retroactively in this case because applied XVIII, Article Sections in 1889 and when it became a state riverbeds predate the 1889 Montana Constitution-which 1 and prevented state any dams-specifically of PPL’s construction of public state lands without selling conveying interests Thus, neither PPL nor MPC for them. obtaining full market value See the State’s riverbeds free. using interest could claim vested 57. Opinion, ¶ reasoning point. on this agree District Court’s We with the power sites, the statutory leasing state-owned basis
providing provision which was extant aspect HRA an of a constitutional codifies subject dams ownership MPC PPL took Montrust, lands. See trust status of these state constitutional 361, 375, Pettibone, 216 702 P.2d Lands v. Mont. (citing Dept. State (1985)). bidding process PPL claims that the HRA’s 956-57 While dams, ability may operate it to lose its arguably cause present appeal, nor is even is not the Court in the situation before remotely probable.10 only to argues apply that the HRA was intended to also *39 lands, the school trust and not to non-school trust
Section and 36 contention, in for this PPL support at issue this case. As riverbeds it legislative and materials which claims points supporting to various Legislature apply intended the HRA to to dams which show the never already on the riverbeds in 1931. were located the starting point statutory plain for is construction ¶138 statute, if clear and plain language of the is language the is v.Fleetwood unambiguous interpretation required. no further Vader Inc., 6, 30, P.3d 139. As 2009 MT 348 Mont. Enterprises, (see (2005), 77-1-101(6), 54-55), MCA states Opinion, noted ¶¶ § above lands.” The riverbeds at apply in Title 77 to “state provisions the connection, seeking damages past rent is for due In this we note that the State agreement leasing simply requesting with the Land that PPL enter into and is already Pacificorp taken. and Avista have Board-an action which both (2005). 77-1-101(6), are of meaning issue state lands within MCA § Thus, plain language the HRA and Title 77 demonstrates that facilities, applies the statute to PPL’s resort to other methods statutory required. construction is not err accordingly We conclude that the District Court did not
¶139 FPA, federally determining preempted by the HRA was not that it be lawfully applied by compensation could the State to seek hydroelectric for PPL’s use of state-owned riverbeds at its facilities. Did err Six: the District Court in its calculation Issue damages? turning methodology reasoning Before employed District damages, Court its calculation of award take an we legal granted.
note basis which award this was In the (1) Order, District Court’s of law in Final conclusions held that: (2) lands; the riverbeds are state school trust the State has a duty constitutional full obtain market value for their use under (3) Constitution; 77-4-208, HRA, Montana under MCA, of the § (4) power rental for sites ....”; “shall be not less than full market value FPA preclude did not seeking compensation the State from (5) lands; PPL’s use of state-owned the State was entitled to compensation based the “shared methodology nets benefits” and the acreage computation presented experts. this, From the District concluded State entitled to compensation from years for the through PPL argues District Court committed reversible error
failing to specify legal damages basis for the State’s claim.
contends that while the District Court seems to have awarded damages solely HRA, HRA, by itself, based under the not does provide cause of action damages case. The State responds by suggesting nature, that its claim constitutional in but does provide any argument beyond direct that. The District Court concluded that the State/Land Board had authority constitutional to seek compensation for PPL’s use
state-owned X, lands under Article Section 11 the Montana State, counterclaims, Constitution. The in its sought had a declaration Declaratory (UDJA), this effect under the Judgment Uniform Act Title chapter 27-8-201, MCA, MCA. Section of the UDJA reads as follows:
Courts jurisdictions of record within their respective shall have power status, rights, to declare legal and other relations whether or not further relief is or could be claimed. No action or *40 ground that a on the open objection shall be
proceeding may The declaration judgment prayed or decree for. declaratory effect, and form and such negative or affirmative be either judgment effect of a final have the force and declarations shall decree. lands were state school trust By that the riverbeds concluding Board had the constitutional declaring the State/Land
and then that use, the for their District compensation to seek obligation right compensation to seek had a essentially that State declared declaration was sufficient obligated pay it.11This PPL was and and the State in this case PPL legal obligations between establish question compensation. on the reasoning support methodology and We now turn to damages. From October to October District Court’s award Court, primary held the District a bench trial was before PPL owed the State for to determine how much
focus of which was year dating back to use the state-owned riverbeds trial, methodology by be used the District acquired the dams. At vigorously due calculating compensation amount of was Court in damages payable State claimed that measure contested. The the state-owned riverbeds as used the full market value of was statutory that the HRA hydroelectric generation, provided and The State’s valuing then the riverbeds. classifying mechanism for he a valuation which called expert approach Dr. Duffield advocated for analysis, this Dr. Duffield net benefits” method. Under “shared facilities, electricity generation PPL’s amount of considered the power being figure price times the multiplied that that, Dr. Duffield returned, to PPL’s revenues. From gross calculate income, to arrive at a net generating power PPL’s costs in subtracted net figure. apportioned Dr. Duffield then this income or net revenue State, on the State’s share of the land between PPL based facility. associated with each support Dr. several reasons in of this presented Duffield First, opined captured productive he
proposed methodology. crop to the share analogous land in a manner value of state-owned Second, opined Dr. Duffield approach agricultural used in leases. respect lands, and used FERC with to tribal similar method was lands, public Although are trust that the riverbeds in case we conclude statutory lands, Board has constitutional trust Land still instead school duty compensation Opinion, ¶¶ their use. See 116-117. to seek had been applied analogous manner the Maine Supreme Court Third, in Maine Central Power. Dr. Duffield asserted that PPL’s status *41 non-regulated, as a generator electricity wholesale warranted this method in order to prevent obtaining profit” “windfall which would not adequately be captured by other methods.12 Dr. Duffield’s approach was also driven in large measure his understanding that fiduciary the State had a obligation under the Montana Constitution to obtain full market value for the use of state lands. expert PPL’s disputed propriety Saleba of Dr. Duffield’s
methodology and advocated a methodology he termed the “costmethod comparables method in tandem.” Under Saleba’s “cost method” approach, he used several different methodologies to establish a fair market hydroelectric value for PPL’s facilities. Saleba then determined the percentage of the value of the hydroelectric facilities attributable to the land. analysis, Based on his Saleba concluded that 2.23% total value hydroelectric of PPL’s facilities was “land-related.” Saleba then used this percentage, against indexed the cost of the facilities depreciation, minus to arrive at a fair market value of the land occupied by PPL’s facilities. From this fair market figure, value Saleba then calculated the payments. annual lease To arrive at figure, a lease Saleba looked to data from the United States Department of Agriculture for annual lease payments for different types land, as well currently available commercial lease information for Montana school this, trust land. From Saleba concluded an annual lease rate of of fair 7% market value would be appropriate. Saleba then applied figure original cost minus
depreciation of PPL’s facilities and the total acreage facilities, of those to conclude that the fair market value was per $28 dollars acre. Saleba also did an estimate based on the replacement facilities, cost of the produced which a fair market value of per $63 dollars acre. Saleba also ran using calculations state tax PPL, assessment data of to arrive at a fair market value of per $26.08 acre. supplement To this “cost approach, methods” Saleba also did
a “comparables” analysis to determine if there were any comparable non-regulated, Because PPL guaranteed return, it does not receive rate of but instead relies on the free electricity. market to determine what it will receive for its Thus, price which did profits PPL could stand years to make upon going enormous in some based energy deregulated for in the opined markets. Dr. Duffield that a fixed lease rate “profits” generated by not take account of the PPL would not reflect the productive value of the state-owned lands. a lease rate gauge used rates which could be or federal lease
state relied Additionally, Saleba in Montana. PPL’s facilities use offederal hydroelectric FERC for the utilized methodology lease (2010). methodology an This sets 11.2 pursuant to C.F.R. § lands by a on the dam based charge for federal land flooded per-acre annual rights-of-way by the U.S prepared linear use of schedule fees he identified comparables that the Service. Saleba concluded Forest his cost methods with the results arrived correlated well calculations, concluded that total his Saleba Based on approach. $205,230 2006 were to the State for payments annual lease $210,476 for 2007. Memorandum, adopted the District Court State’s In its most method to determine concluding appropriate it was the
approach, District Court noted that of the riverbeds. The the full market value full market value for the duty obtain the State has a constitutional specifically lands, that the Land Board was use of state-owned 77-l-202(l)(a), MCA, largest measure under to “secure directed § *42 to the state ...” in the legitimate advantage and reasonable of 77-4-208, MCA, Furthermore, state lands. § administration of carefully HRA, full market value use is “to be specifically states the sources.” from all available ascertained the “shared net benefits” The District Court observed that
¶151
methodology
been
used
FERC in assessments
primarily
had
lands,
applied
also
in Central Maine
involving
but had
been
tribal
have “unique
Co. The District Court determined
riverbeds
Power
making
production
for the
characteristics”
them valuable
the
net
method
accounted
hydropower, and that
“shared
benefits”
best
make to that
the
contributions
the riverbeds
for
economic
that PPL had not
The District Court also observed
cited
production.
methodology
rejected.
had
any cases where this
been
fact,
findings
In
the District Court defined
“shared
following
terms:
net benefits” method
analysis, the net
are
Under the shared net benefits
benefits
by calculating the difference between the value of
determined
The net
produced
producing
power.
and the cost of
power
project
owner and
land
benefits are then shared between
fifty percent
project
owners. The standard share is
owner
land
fifty percent
owners.
method,
on
this
the District Court relied
data
applying
produced
documents
or
by Dr. Duffield. Dr. Duffield utilized
provided
PPL,
his
benefits calculations on the
filed
and based
net
publicly
both
basis of state-owned riverbeds
above and below dams. For
Project,
Falls
Duffield
at a net
Thompson
Dr.
arrived
benefits
$38,521,558
years
through
for the
Dr.
calculation
2006.
project
Duffield concluded that
State’s share of
was
this
27.3%
ownership
Thus,
based on its
of the riverbeds.
he concluded the total
due,
interest,
for
excluding
period
rents
to the State
this
was
$8,988,436.
analysis,
For
Dr.
applying
same
Duffield
Thompson
$1,950,592.
concluded the rent for
Project
Falls
Project,
For Missouri-Madison
Duffield
at a
Dr.
arrived
benefits
for
figure
total net
the 2000
2007 timeframe of
approximately $122 million dollars. Dr. Duffield then looked at the
of state
percentage
separate facility
land associated with each
in the
Project.
storage
Missouri-Madison
Because the
Dam acts
Hebgen
as a
facility
produce
and does not directly
power, Dr. Duffield allocated its
generation
benefits
plants
which were
downstream it. From
this,
a percentage
Dr. Duffield determined
State’s
ofthe
share for each
the facilities
Project.
Opinion,
Missouri-Madison
See
Dr.
Duffield concluded
Project,
that for the
PPL
Missouri-Madison
owed
$25,759,825
$4,257,327
the State
for the 2000 to
period,
2006 time
2007, excluding
interest.
argues
PPL
relying
the District Court erred in
Dr. Duffield’s
methodology. First, PPL
damages
contends that
for rental value
based on profits, citing
cannot be
Pritchard Petroleum Co. v. Farmers
Co.,
&
Co-Op
Supply
(1948),
Oil
121 Mont.
P.2d
(1992).
v. Lindey’s, Inc.,
Goodover
255 Mont.
“shared net presented benefits” Dr. Duffield. we agree with the State that it is to take proper productive account figure value the land this case in order to arrive at fair for the trial, market At value of PPL’s use of state-owned riverbeds. the State presented already agricultural evidence DNRC the rates for bases and wind on the productive leases value the land. The statutes and regulations concerning agricultural, administrative grazing, geothermal Second, bolster argument. leases this there is no under bar Montana basing damages profits law for an award of on the made PPL. As noted repeatedly Opinion, this the State/Land Board is fiduciary duty under a to obtain full market value for use of state specifically lands. The provides HRA that the determination full hydroelectric market value for use state is to “carefully lands ascertained from all 77-4-208, available sources.” Section MCA. leasing” “Income-based is an appropriate methodology use in to calculating damages Babcock, 52-54, 409 in this case. See 147Mont. at P.2d at 811-12. Pritchard and are inapposite they Goodover because damages wrongful involved for occupation of property, opposed as to damages based on failure to provide compensation the State as required under the Montana Constitution. In determining productive value of the state-owned lands purposes calculating damages case, in this
erroneous for the District Court rely on Dr. Duffield’s method of taking profits into account the hydroelectric projects, ofPPL’s and then sharing profits, benefits, those with the State based on its percentage of ownership project Indeed, though sites. even disagreed Duffield, Saleba with approach Dr. he conceded at trial that this methodology could be used this case for purposes assessing past damages. On direct examination, Saleba testified as regarding follows Dr. Duffield’s method which referred he to as the “profitability method”:
Also, that profitability figure way I method couldn’t out a do prospectively. It seemed things like one of the going challenged to be with PP&L Montana is the with coming up well as going back
amount break-or charge going forward. profitability use the And, know, you arguably could you profitability what go figure out back method use you know how 2006 or 2007.1 don’t was from 2000 to go forward. profitability method added.) (Emphasis methodology Dr. relied Technically speaking, the “shared nets benefits” generally termed
Duffield is not what is *45 Co., Gen. Elec. 20 in Portland analysis. method was described This 61294, (1982), working: WL 40297 1982 ¶ F.E.R.C. project being power at producing the cost of comparing an amount of producing equivalent the cost of
evaluated with project. The alternative at a next-best power hypothetical project the net of the is referred as benefit difference costs then allocated between the being The net benefit is evaluated. project. from the parties intended to benefit ** 61563, 1982 33; 61294, General, WL 40297 20 F.E.R.C. ¶ ¶ Portland Oreille, 135 F.3d at see also Pend he strictly approach, this because Duffield did follow
¶162 Dr.
hydroelectric
“next
alternative”
did not consider the
available
Instead,
approach
characterization of Duffield’s
generation.
Saleba’s
more accurate. See Portland
is indeed
“profitability” approach
as
**
Co.,
profitability
Montana,
of PPL’s facilities in
did
but
not deduct PPL’s
expected rate of return
equity prior
to an accounting of the net
profits.
argues
approved
under
FERC methodology only
profits earned above a company’s expected
rate
return on equity
should be shared with the landowners. PPL urges this Court to
remand this issue to the District Court for a
damages
recalculation of
Co.,
under Portland Gen. Elec.
F.E.R.C.
methodology is unique, it has failed to demonstrate how it was incorrect for the rely District Court to upon this methodology as a trial, matter oflaw. At Dr Duffield acknowledged that his methodology singular and unique, but presented a rationale for his departure approaches from the in Portland Gen. Elec. Co. and Mont. Power Co. The utility companies in both of those regulated cases were entities granted who were monopolies as guaranteed well as a a rate of return by the state’s ratepayers. In exchange, regulated utilities provided energy at guaranteed rate for the consumers. Dr. Duffield referred *46 to this as a “social contract” between the utilities and the rate-paying public. When considering the shared nets benefits or “profitability” analysis in type context, this deducting the ratepayer’s return on equity was an appropriate consideration regulated because the utilities granted are not a level of profitability above and beyond the guaranteed rate of return. Here, by contrast,
¶166 PPL unregulated is an utility and its rate of return is by determined market Although forces. PPL is not guaranteed a rate of by return ratepayers, Montana’s there is no ceiling on the amount profits that PPL can make in unregulated market. If the return on equity of PPL’s private investors is deducted 13Roughly speaking, equity by PPL’s rate of taking return on is calculated given year amount of dividing of net income for and then that number the amount privately-held equity (i.e., non-bank, PPL’s financing amount of and non-bond PPL). by private held investors in investors are allowed private PPL’s assessing “profitability,”
before sharing a fair before any profits “windfall” reap to the benefits though the state-owned land State-even of them with the portion greatly possible and contributes hydroelectric facilities makes the profitability. towards their status Second, that that the riverbeds’ explained Dr. Duffield took into methodology properly which required “trust lands” obligation dispose to administer the State/Land Board’s
account Dr. Duffield people of Montana. those lands for the benefit rate of return allowing to deduct their investors private reasoned that principle. run afoul of this assessing profits, to PPL’s net would prior methodology reasons, unique employed Dr. Duffield his For these by the Court. adopted it was District methodology. Yet clearly with Dr. Duffield’s disagrees Co. and Portland Gen. Elec. referring the Mont. Power
aside methodology Dr. Duffield’s was arguing cases and Co. why, show under circumstances and unprecedented, does not Court, methodology this evidence the District presented unique a matter of law. Given the circumstances before incorrect as Court, unregulated utility as an the District and PPL’s status lands, err the District Court did not as a operating public on trust privately-held deduct rate of return on refusing matter law in we no profitability. Accordingly, PPL’s find equity prior assessing reverse District Court’s decision this legal basis which to regard. any Finally, the Court held that the terms of future District
lease,
rent,
approved by
must be
Land
including
calculation
judice
solely
damages
Board.
case sub
is concerned
with
based on
public
use of
compensate
PPL’s failure to
the State/Land Board for the
lands;
thus,
past damages.
this
damages
case are
future
methodology applied
the Land Board to the terms of a
lease
may
methodology
used
the District Court
may
not be
same
calculating damages
in this case.
amici in
closing,
we take note of the fact
several
this
case,
Association, including the Montana Water Resources
Gallatin
Federation,
Farm
Agricultural Irrigators, and the Montana
Bureau
negative
our
here will have a
expressed
have
concern that
decision
ability
from rivers. While we do
impact
appropriate
their
water
public
riverbeds are
trust lands
conclude that
state-owned
right
free,
not
PPL does
have a
to use those riverbeds
does
*47
usage
will be assessed a fee for
in the
imply that all other water users
11(2)
X,
manner as PPL. As Article
Section
the Montana
same
clear,
any
“[n]o
makes
such land or
estate or interest
Constitution
general
disposed
except
pursuance
therein shall ever
laws
be
disposition,
for such
or until the full market value of the
providing
of,
may
or interest
to
manner
disposed
estate
be ascertained
such
by law,
provided
paid
safely
has been
secured
state.” In
words,
Legislature may pass “general
providing
other
laws”
for the
use of state-owned riverbeds
various users of water. See e.g.
Norman,
case,
CONCLUSION In general, affirm the damages. we District Court’s award We affirm the Court’s District conclusion that title riverbeds of Missouri, Fork, Clark and Madison Rivers passed Montana However, when it became a state 1889. we reverse District lands,” Court’s conclusion that the are riverbeds “school trust instead hold that are they public X, lands trust under Article Section reversal change Our on this issue does not the overall conclusions Court, of the District because under 1889 and Montana fiduciary Constitutions the State and Land obligations Board have administer those lands for the public. benefit Further, the HRA an provides appropriate mechanism with which to damages assess owed PPL to the State. The District Court did err in adopting not methodology assessing damages based on HRA, findings support of fact in damage of its award were clearly erroneous. Finally, the District correctly left to the discretion Land any Board the terms of arriving future lease. In at a lease PPL, with the Land Board is rely not bound to methodology adopted by the calculating damages District Court in past in this case. Affirmed. KRUEGER, for CHIEF JUSTICE sitting JUDGE
DISTRICT *48 LEAPHART, DISTRICT JUDGE NELSON and McGRATH, JUSTICES McLEAN, sitting concur. for JUSTICE WARNER RICE, dissenting.
JUSTICE analysis in its of law the Court has erred I believe apply failed the tenets properly and also to governing title genuine material factual judgment by disregarding summary of conflicts. 56(c) judgment “shall summary that provides R. Civ. M. P. to pleadings, depositions, answers forthwith if
rendered
affidavits,
file, together with the
if
interrogatories, and admissions on
any
as
fact and
genuine
no
issue
to
material
any, show that there is
a
of
judgment
to a
as matter
law.”
moving party
is entitled
that
summary
“has the initial burden of
party moving
judgment
The
fact
of material
genuine
absence of
issues
establishing both the
Missoula,
v.
judgment
City
as a matter of law.” Noe
entitlement
(citations omitted).
14,
1,
“A
417,
Mont.
fact more than mere
first
to outline
govern
dispute
and which establish
legal principles which
Equal Footing
as a matter of law. Under the
judgment
entitlement
Doctrine,
title at
the time of statehood to all
gained
Montana
navigable waters.
Lessee v.
submerged lands under
See Pollard’s
1311(a).
212,
(1845);
229
see
43 U.S.C.
Hagan, 44 U.S.
also
§
law,
determining
Navigability
question
is a
of federal
and in
whether
law,”
must
determine whether
“rivers are
courts
first
Access,
“navigable
fact.”
Stream
Inc.
rivers are
Mont. Coalition for
(1984)
38, 43,
163,
(citing Curran, 210 Mont.
682 P.2d
166
v.
Bank,
Ball,
(1870));
77
also U.S. v. Holt State
270
Daniel
U.S. 557
see
(1926).
197,
necessary
55-56, 46
U.S.
S. Ct.
elements
“(1)
susceptible
[the river]
or was
navigability are:
was used
establish
(2)
(3)
used,
commerce,
being
highway
of useful
in its natural
(4)
ordinary condition,
customary
modes of trade and
travel at the time of statehood.” N.D. ex rel. Bd.
and Sch. Lands
U.
(8th
1992)
U.S.,
Bank,
(citing
F.2d
v.
Cir.
Holt State
199).
56, 46
presented
U.S. at
S. Ct.
If the facts
all of
substantiate
elements,
above
passed
then title
the streambeds
to Montana at
Lessee,
If,
See
statehood.
Pollard’s
navigability as
government’s
determined for exercise of the federal
power,
Commerce Clause
the two tests are nonetheless different-a
distinction
which the District Court failed to make
relying
when
cases,
commerce
discussed below. It has
“for
explained
been
purposes
establishing
pursuant
title to land
rule
state
*49
sovereign
ownership,
navigability
federal
test
both
is
fact
broader and
than
navigability
narrower
test for commerce clause
(Robert
30.01(d)(3)
purposes.”
Rights
II,
Water and Water
vol.
E.
§
2009).
eds.,
ed.,
Beck et al.
3d
Supp.
navigability
LexisNexis
The
for
title test is broader because rivers need not accommodate “interstate
commerce.” Water
Rights
30.01(d)(3);
and Water
at §
see also U.S. v.
(1931).
Utah,
64, 75, 51 S.
438, 441
283 U.S.
Ct.
The
only
rivers instead
because,
need to
susceptible
“[i]ntrastate
to
[c]ommerce”
for
example, “the fact that the
part
Great Salt Lake is not
of a navigable
interstate or international
highway
way
commercial
in no
interferes
[i.e.,
the principle
with
ofpublic
ownership
state]
ofits bed.” Water and
30.01(d)(3)(A)
Rights
Water
at
(quoting
U.S.,
v.
9, 10,
§
Utah
403 U.S.
(1971)).1
1775, 1776
91 S. Ct.
Further, title passes to the states
if
even
commerce,”
there was no
use
“actual
for local
“susceptibility
as
to local
30.01(d)(3)(A)
use” is sufficient.
Rights
Water and Water
(citing
at §
(1874))
Montello,
original).
remaining 30.01(d)(3). entered because Montana Consequently, at Rights Water § navigability apply courts must 8,1889, on November the Union time, about which question a factual at that for title test for its the State’s case and attacked substantial evidence submitted do so. failure to get to off track in begins I the Court believe Importantly-and title applying navigability legal analysis here-in
its substantive merely navigable is test, to an entire river courts are not assume likewise, are navigable, are reaches of river because certain an river non- non-navigable reaches render entire conclude 89-90, 51 S. 80-81, 442-43, 446. Utah, Ct. at U.S. at navigable. See and, Instead, portions of river based courts look relevant are facts, reaches at issue particular determine whether Utah, 73-74, 51 Ct. 440. In Utah, 283 U.S. at S. at non-navigable. See brought portions title to “certain government quiet suit the federal Colorado, Green, San Juan rivers within of the of the beds at Court Utah, at 51 S. Ct. 439. The ....” 283 U.S. state Utah fact, findings to make special to a master referred the case Utah, U.S. at law, for decree. and recommendations conclusions making findings at After extensive fact with 51 S. Ct. 439-40. history, rivers, impediments their “topography of the respect to use, use, navigation, susceptibility rivers commerce,” special portions found that some highways of master others, forty-mile stretch navigable while such as ofthe rivers were Utah, not. Ferry, River located Lees were Colorado above 73-74, Ct. 439-40. U.S. at 51 S. special report, master’s the Utah review stating section-by-section analysis, propriety applying
affirmed the river, speaking generally, of a “[e]ven where the notice knowledge, judicial and hence one of which matter of common *50 taken, may determined may yet question, be be a to be Utah, 77, navigability U.S. at 51 S. Ct. evidence, how extends.” 283 far 690, Irrigation Co., 174 U.S. (citing 441 v. Dam & at U.S. Rio Grande added). (1899)) 770, 698, (emphasis 19 Ct. The Court thus S. 773 miles, roughly should have been analyzed whether a reach four non-navigable, larger reach of water found included within to the four-mile reach. special reversed the master’s conclusion as Utah, 89-90, S. at 446. The Court thus concluded U.S. at 51 Ct. 283 question which portions Utah river State of owned statehood, government owned navigable at and that the federal were
465
Utah,
90-91,
remaining portions.
added.)); Inc. v. Steelheaders Northwest 2005) (“[T]he (Or. Day issue segments of the John River at App. added.)). (Emphasis here ....” “if issue, argues PPL that to this substantive regard With non-navigable other falls and reaches include
individual river title.” navigable for obstructions, are not considered those reaches added.) point, on this argument PPL’s The Court misstates (Emphasis river must be “virtually every stretch argued PPL has stating that are of a river which particular that stretches ‘navigable in fact’ and finding can defeat characteristics physical due to their non-navigable ...” Opinion, to the whole river navigability respect ¶ with added). overreaching However, does make such an (emphasis to be declared non- for certain reaches argues only It argument. approach. navigable under Utah’s declaring, is as a matter Disturbing to me is that the Court non-navigable simply are
law, by PPL to be that the reaches claimed Court refuses to consider factual “short” to matter. The too Fork, Missouri, and of the Clark navigability disputed of the reaches “relatively and it deems them to be short” Madison Rivers because Court, “negligible parts.” Utah mere presumably, the words of the reaches, disputed at the calculates 108. The Court looks Opinion, ¶ order distance, of these distances in significance and decides their navigability on each question factual legally determine the rejecting PPL’s evidence ignoring river-all while individual not, not, the time of did and could have existed at navigability all The Court concludes that Opinion, statehood. 108. ¶ “relatively short” and thus challenged reaches of all the rivers are unable, law, title non-navigable be declared as matter approach This to the taken in Opinion, opposite purposes. and, critically, is done the benefit of extensive Utah without rivers, history, “topography ofthe their factfinding done in Utah on use, use, navigation, susceptibility and impediments and 73, 51 at Utah, U.S. at S. Ct. highways of commerce.” the rivers as 439-40. navigability underscore The nuances of the test for title case, why the ofeach
critical nature ofthe facts and circumstances
a fact-
requiring
as one
Court has described
issue
Supreme
“Each
Utah, 283
at
remedy that should never be a substitute for a trial on the merits if a controversy Air, over a Corp. (citing exists material fact.” Mary J. ¶ Harvest, 159, 17, 338 Baker Revocable Trust v. MT Cenex Mont. ¶ 851). 41, 164 Further, P.3d “it is important to note that at the summary judgment stage, fact, the court findings does make evidence, weigh another, the disputed choose one fact over or assess credibility Schenk, the witnesses.” Andersen v. MT 424, 220 353 Mont. P.3d proper merely 675. The is inquiry not whether presented the State sufficient support evidence to a conclusion of law; navigability rather, as a matter of question the whether is conflicts by created material factual way of evidence which was not speculative, requiring navigability question thus the to be decided I produced after trial. thus turn to the evidence PPL for each river in question at the time statehood.
A. The Madison River Initially, it should be noted here although the Court faults only reaches, PPL for challenging “relatively actuality short” challenged has navigability the of the entire Madison River. PPL submitted conjunction various historical documents in with an Emmons, affidavit Professor including Report Congress a 1931 Army prepared Corps Engineers. Addressing the the same stretches of here, the Madison River which at Army are issue the is there has “[a]s far as known Engineers concluded that
Corps of streams, commercial on these any navigation never been added.) entirely question.” (Emphasis out on them navigation conclusion, regarding him the analysis brought Emmons’ Professor my opinion as statehood, that: “It is of Madison actually report of a evidence in form that credible historian the Madison Engineers demonstrates that Corps of prepared navigation.” use for commercial capable not used River was original.) (Emphasis currently as ofthe Madison River maybe One inclined think Schumm, Stanley A. a fluvial thus PPL asked Dr.
navigable, and physical conditions to evaluate “whether current geomorphologist, River, navigability, the same as or respect with were of the Madison conditions at the time of Montana’s physical different than the analysis summarized his to Union in 1889.”Dr. Schumm admission in an affidavit: conditions of my opinion, physical current expert as River, navigability, are not same respect with
Madison entered the river in 1889 when Montana the conditions hydroelectric First, operation Union. construction materially flow changed the and reservoirs have projects understanding my river. It is characteristics project, including the reservoir known hydroelectric Madison *53 years Lake, a course of in and around Ennis was constructed over Hebgen Hebgen project, the reservoir known 1906 and that Lake, years course in and around 1912 was constructed over a of high and By making during periods flow of flow .... the lower flow, the the of higher during periods operation of low have made the river more hydroelectric projects reservoirs navigation than it have been susceptible now to commercial would of Second, my of the historical descriptions them. review without the that the location and number of the Madison River indicate that changed time of statehood and river channels have since the to have been either appear of the river portions relevant Because reaches anastomosing or braided at the time of statehood. anastomosing have either appear River been Madison braided, at susceptible navigation that was not my opinion is it the time statehood. added.)2
(Emphasis PPL thus contested consideration of current determining navigability state of the Madison River in at statehood. purposes summary judgment, For PPL demonstrated that statehood, is today Madison River not the same as was at the time time, that, navigable. that at it was not above, quit PPL did not there. As noted for each in river sought PPL also offered question expert analysis critiqued which undermine First, PPL evidence offered State. claimed that the State’s use of the Clark Expedition prove Lewis and navigability faulty, of the asserting Madison River at statehood was provide that “Lewis Clark no evidence whatsoever regarding Expedition proved only Madison River” and that the Jefferson, things: “two that Madison and Gallatin are Rivers Expedition similar at their mouths and that try chose not to (Emphasis original.) Second, ascend the Madison.” although the single State cited to a log drive which occurred on a reach of the River, log Madison question countered drive in took place Varney between West Fork and did encompass area which not —an Further, “[t]he reaches at issue in this logs, case. mere fact that poles and rafts occasionally are floated down a high stream and in times of water it a navigable does make river.” ex N.D. rel. Bd. U. and Lands, 972 (quoting Sch. F.2d at 240 Rio Irrigation Grande Dam & 773). Co., 698, 19 at Third, U.S. S. at pointed Ct. out contrary State’s claim in this position. lawsuit was to its past The State failed to claim title to the relevant reaches Madison River early streambed in the Department 1980s. The Lands, State example, published a list of rivers that it navigable, claimed were but only claimed one reach on the Madison River: “Based on historical documentation the Madison River commercially is navigable from the of its Varney, confluence west fork to Montana. Therefore the state ownership claims of Madison points.” River between these two As log evidence, with the State’s float this claimed reach did not cover the explains affidavit, anast[o]mosing As Dr. Schumm later his “An river is exemplified by multiple anastomosing split among distinct channels. An river’s flow and, result, stage anastomosing the various channels as a the river an reach given “[b]raided characterized of single explains flow is lower than in a channel reach.” Dr. Schumm also rivers, anastomosing channels, unlike rivers with their several distinct are *54 by single interlocking tangled a main channel with a series network several, branching reuniting separated smaller shallow channels each other by high depth relatively islands or channel bars. Braided rivers have width to ratios and steep gradients. physical characteristics of braided rivers are not conducive to navigation.” explain witness could at Because the State’s reaches issue.
current
at
Madison
claims
entire
the State “now
why
already, at least
the State had
posit
able to
statehood,” PPL was
claims.
reaches
now
that it did not own the
implicitly, “[a]dmitted”
heavily upon the current use
Fourth,
relied
the State
susceptible
navigation
to
the river was
as evidence that
Madison River
the State’s
analysis criticized
years ago. PPL’s evidence and
over
evidence,
is clear
for which there
position
a
of this modern
emphasis
Lands, 972 F.2d at
Sch.
ex rel. Bd. U. and
support. See N.D.
legal
(“[Mjodern
hoatability’ data are not
day
day
canoe use
modern
statehood.”).
the River’s
indicators of
reliable
because it
River was irrelevant
argued the current use of the Madison
River at the
light
navigability of the Madison
not shed
on the
could
1986 Montana
Finally,
presented
the State
of statehood.
time
Heritage
Research Center
Study prepared
Navigable Water
Emmons
of State Lands. Professor
Department
for the
Missoula
untrustworthy due to its
Study,
opined it was
acknowledged the
but
analysis.
Study
itself
and flawed historical
budgetary constraints
limitations,”
funding
incomplete “[d]ue
that it
to
acknowledged
documenting navigable
to
approach
“[b]ecause
explained
funding,
constrained
lack of
waterways
purposes
for title
has been
the most information for the
upon generating
efforts have been focused
Study’s
in the
pointed
problems
Emmons also
possible
least
cost.”3
of the least
“overly dependent
it was
two
methodology, noting
[wjestern
historians-frontier-era
trustworthy historical sources
found
personal memoirs or reminiscences.” Emmons
newspapers and
“they
because
were
newspapers
suspect
frontier-era
were
western
community
promote
local
often vehicles used
communities
[f|rontier-era
[and]
...
possible occupants and business investors
(HRA)
exactly
Budgetary
why
were
the Historical Research Associates
concerns
State,
Study.
HRA informed the
that it had
refused to
bid for
submit
research,
waterways
experience
type of
for Montana
extensive
in this
both
waterways
experience we are familiar
for
with the amount of
in other western states. Based on this
solidly
provide
required
with a
researched
time
our clients
Unfortunately,
provide
product.
could
we do not think that we
and defensible
ceiling
stipulation
necessary
given
project
and the
no
document
the stated
Therefore, given
Department’s
would be reimbursed.
additional costs incurred
project.
constraints,
proposal
budgetary
offer
on this
HRA is not able to
*55
newspaper editors often acted more as
promoters
unabashed
development
economic
than
news reports.”4
unbiased
“[tjhere
began
recognizing
The District Court
apparently
¶
is
little
regarding
navigability
historical documentation
River.”
quoted
Madison
The court then
and relied
the 1986
Navigable
Study-thereby granting validity
Montana
Water
credibility
very Study
admittedly
which
incomplete
was
explained
about which Emmons
was an unreliable source. The court
Study
log
further reasoned that the 1986
had
referenced
float
from the mouth
Varney
of West Fork of the Madison to
and that
Hebgen
above,
navigated.”
explained
log
Lake “has been
As
float
navigability Hebgen
and the
consequence
Lake were of no legal
log
because the
drive
currently
did
cover the reaches
at issue and
Hebgen Lake did not
at
e.g.
exist
the time of statehood. See
Riverfront
Assn.,
1 (“Navigability
Protec.
the District Court chose to accept concluding State’s evidence in no genuine issue of material fact existed about the Madison River Perhaps at statehood. disconcerting most fact Study upon by that the relied acknowledges the District Court itself its work on the issue was incomplete. The District Court thus violated the principles governing summary judgment. The Court does the It thing. same first Report claims
prepared by Corps Engineers in the merely 1930s was “conclusory” and “insufficient as a genuine matter law raise issues Opinion, material fact.” 103. The Court ¶ likewise disregards Dr. expert opinion Schumm’s that the current condition of the Madison River is completely different than at Instead, the time ofstatehood. Ahtna,
Court relies on
statehood—and were the rivers at issue about whether factual issue presenting no use is recreational present-day “[t]he hold at statehood-to different Opinion, Utah and Ahtna.” under purposes of‘commerce’ sufficient Court, weighing, and Court, has resorted to like the District 104. The (1) analysis clearly evidence and discrediting: ultimately the Madison summary judgment purposes demonstrating (2) statehood, expert an at time of non-navigable River was at the time of statehood Madison River analysis that (3) form, and historical evidence current different than its completely necessarily agency. The Court also governmental U.S. generated evidence. I analytical upon the State’s believe PPL’s attack dismisses trial-including cross- evidentiary should be tested these issues *56 burden of examination, rebuttal, by proper of the application and the factfinder. resolved there proof-and The Clark Fork River B. navigability of the Clark Fork concerning the PPL’s evidence Report submitted to Army Engineers of Corps
River included the 1891 River, including Fork the Congress. evaluating After Clark concluded, here, “[i]t is a mountain Report at issue portions falls, rocks, utterly and stream, rapids and full of torrential at being navigable except an incapable made unnavigable, of added.) Report characterized idea (Emphasis cost.” enormous navigable river as an transforming the Clark Fork River into of years later, Major Army Mark Boatner of the “absurdity.” fifty About Engineers Report by of the 1891 Corps confirmed the observations of River to determine whether the Clark Fork responding request to a navigable: was 14, 1940, acknowledged your letter of November
Receipt is of navigable opinion of this office as to the you request in which Pend Fork of the Columbia River between status of Clark’s River, Lake, Idaho, of the Blackfoot [sic] O’Reille mouth Missoula, above Montana. few miles preservation of the laws for the purpose administering For the States, navigable of waters of the United improvement mouth in Fork considers Clark Department Bridge, Railroad [sic] O’Reille Lake to the Northern Pend Pacific only about miles. distance of four added.) entire Clark Major view was that the (Emphasis Boatner’s reach, was non- Fork, of the referenced four-mile exception with the Thus, dam, explained Emmons navigable. PPL’s which Professor stretch, Corps “far downstream” from the four-mile was in waters the non-navigable. considered judicial offered decrees. In the Federal District also of Court of Montana concluded the Clark’s Fork the Columbia River in Montana, County, Sanders which PPL asserts is the location of its dam, a non-navigable incapable carrying “was and is stream country transportation” of the in the usual manner of water products State, Development and that not the owned Company, Northwestern at portions of the streambeds issue before federal court. Steele (D. 1910). Donlan, Equity v. No. Mont. July evidence, Reviewing the Professor Emmons concluded his analysis by stating, Corps Engineers “[CJredible evidence from the court, and the roughly contemporaneous Montana federal with statehood, me to leads conclude the Clark Fork River Sanders County was a navigable highway not commerce statehood.” Again, PPL also cast doubt on evidence offered State. The relied upon State a document “Clark described as the Fork Corps Report,” despite the fact did any page not contain “title author, other preparation, indication date of or purpose.” Professor Emmons first Report criticized the State’s attribution Corps Engineers: report[] prepared
[The] [was] not United Army States Engineers Corps contends, ... [] State but rather [was] prepared Corps, for the thus carry any imprimatur do[es] credibility that might be with associated an actual Corps Report. There is no indication in the evidence provided by the State Corps adopted ever the conclusions made or concurred in these “Corps so-called Reports.” (Emphasis original.) Emmons then attacked the substance *57 Report, stating “untrustworthy that relied on historical sources ... to reach regarding conclusions historical use of the rivers.” Emmons explained the State’s use of the “Clark Fork Corps Report” was (a) ways: “fallacious in three secondary [the State] taken has sources (b) evidence; based less than credible historical attributed them to (c) more Corps Engineers; the authoritative of proffered them historical of Similarly, evidence the historical use of the rivers.” the State’s on the reliance under-funded 1986 Montana Navigable Water 5 only This evidence further undermines the Court’s assessment that is challenging “relatively claimed here to be exception miles, short” With reaches. the four the reach non-navigable Missoula, Montana, Sandpoint, runs to Idaho. an article Study had mischaracterized the
Study was flawed because claimed February 24,1882. Study in Missoulian on published Weeksville, Montana, the Clark Fork and down logs floated to were article, which However, quoted language Emmons River. body near river in a “situated actually that Weeksville was stated logs the immediate supply in of fine timber and when right locality down out, they can floated neighborhood gives (Misspelling original, d’Oreille rivers.” the Missoula and Pend Emmons.) logic in the In out flawed emphasis pointing added a considerable difference opined “[t]here that Study, Emmons claiming logs that could historically newspaper a frontier-era between actually logs were down a river and credible evidence be floated Thus, original.) (Emphasis in Emmons floated down the river.” credibility prove “the evidence lacks concluded that State’s anything (Emphasis River. use” of the Clark Fork about historical original.) State, summary the District granting judgment government’s regulate addressing power cases the federal relied on Co., e.g. Clause. See Mont. Power commerce under Commerce (F.P.C. (F.P.C. Co., F.P.C. 1949); F.P.C. 751 Wash. Water Power 1955). (F.P.C. Co., 1951); 14F.P.C. 731 While these Wash. Water Power commercial, River admittedly held that the Clark Fork non-title cases rulings navigable purpose, at the time of statehood for that these posture. This is light procedural are this case’s consequence of no summary stage. forth judgment case at the set title construing evidence in its non-navigability, clear evidence of a trial-that favor, assume from that evidence-until we must genuine Fork is a issue ofmaterial fact. navigability ofthe Clark River Court, Instead, Court, has taken itself the District now factfinder, concluding that it weighing PPL’s evidence and role “conclusory credibility, rendering Opinion, lacks it mere statements.” C. The Missouri River anyone passing “[a]s The State claimed that with even a concede, Expedition must
knowledge the Lewis and Clark begged throughout in fact Montana.” PPL Missouri River is had than “acquired Emmons averred he more differ. Professor Expedition during [his] Clark passing knowledge the Lewis and [He knew] in Montana. that the years professional as a historian Reach of the Missouri Expedition navigate did riot the Great Falls *58 impossible (Emphasis original.) because it was for them to do so.” in explained: Emmons historian, my knowledge professional
To as a there has never any navigation been on the Missouri River in the Falls Great physical prevent Reach because the characteristics of the falls it. describing Clark Captain prepared map William a the features of Captain Reach of Missouri River. map, Great Falls On this waterfalls, rapids including Clark listed fifteen different and nine - (1) Eagle the five named in this reach: Black Falls 26 waterfalls - (2) (now descent, in. submerged) ft. 5 Colter Falls 14 ft. in. - (3) (now Falls) descent, Beautiful Cascade named Rainbow - (4) (5) descent, descent, ft. 8 in. Crooked Falls ft. - Falls of in. Great the Missouri 87 ft. descent. 3/4 Further, (Emphasis original.) Emmons cited to an 1896 inquiry Hill, who Department permit Samuel asked War whether a required for maintenance on the dam immediately constructed above Sanford, Eagle Black Falls on the Missouri Captain River. J.C. of the Engineers, Corps Report conducted a which stated: just The dam referred to is Eagle located above the Black Falls of River, the Missouri 1/4 bridge is 3 miles below the railroad at the town Great Falls. bridge begins About 400 feet above this of rapids series and falls in which the river falls 412 feet distance of 11 portion can, miles .... This my the river judgment never be made at a cost that demands of commerce will justify. ever
Relying upon Captain Sanford’s Report, Department War responded to Mr. Hill’s request, informing permit him that no or action Department of the War was required. provided also from Report the War for the Department 30,1898.
Fiscal Year that Report ended June concluded the reach Fort Benton unnavigable to Great Falls was “an occupied section and dangerous cataracts It rapids.” also detailed various navigation improvement projects contemplated for the reach between Great Falls Ferry, upper Missouri, Stubbs within the reach south Great Falls. Report estimated that the cost of mere creating deep channel from Cascade to Great Falls would be three-foot $213,646.50 in 1898 dollars. evidence, Based his review Professor Emmons opined that “credible historical evidence clearly demonstrates that the Great Falls Reach of Missouri River is not and has never been navigable and that the reach of the Missouri River between Great Ferry required post-statehood have would
Falls and Stubbs navigation.” e.g. See commercial improvements support Riverfront for title ... must exist Assn., (“Navigability 794 n. 1 672 F.2d at Protec. exist in the Union. Also must admitted into time the State is a result cannot occur as ordinary [I]t condition .... the river’s *59 improvements.”). reasonable validity ofthe State’s evidence challenged again, Once Report, which Corps had to the Missouri river. The State cited
on this
Upper
Missouri
[
the waters
trappers
plied
]
claimed that “fur
“[ajfter
discovery gold,
miners
days,”
territorial
and
through
Benton from the
to Great Falls and Ft.
and settlers floated the river
mining
Emmons’ assessment:
Helena area
districts.”
offered
Reach of
of the Great Falls
geography
Besides the fact that the
impossible
miners
utterly
that these
the Missouri River makes
Benton,
there are
actually
the entire river
Fort
floated
reports,
with the source of these
problems
historical
considerable
(a nineteenth-century bookseller
Hugh Bancroft. Bancroft
Hubert
anything that
what the
approaches
did not write
antiquarian)
and
generally
to in its Brief
“historical works
refers
as
State
of historical
authentic.” He is not an authentic source
considered
historian,
Starr,
Kevin
referred to Bancroft: “as
information. One
historian,
and
dishonest.” I
[he]
a
was often ludicrous
sometimes
who
use Bancroft as a
professional
know of no
historian
would
source, as the State has done.
credible historical
relying more credible sources
perceived
“[i]nstead
on
Emmons
records,
governmental
or
reports,
such as court
business records
secondary
by
on
sources that
their own
exclusively
State relies
rely
untrustworthy
which
scope
admission are limited
and
Further,
to reach their conclusions.”
PPL rebutted the
primary sources
precedent had
legal argument
previous
that our
established
State’s
Missouri River. The State
navigability
purposes
for title
entire
(1895)
Kelly,
v.
15 Mont.
guarded against depriving right party to trial the improper entry summary judgment. Today, I we believe from the step back protection right. I so, would do would but reverse the District Court’s entry summary judgment and remand for trial.
DISTRICT JUDGE joins SALVAGNI in the dissenting opinion of JUSTICE RICE.