Dam Fools

By Beacon Staff

In late February, the U.S. Supreme Court ruled unanimously in PPL Montana, LLC v Montana, a case which Montana seems to have lost, badly.

The flap started in 2003 with a federal citizen lawsuit by two “parents of schoolchildren” (actually professional environmentalists), claiming rent was owed to Montana’s school trust on the riverbeds under 17 or so privately owned Montana dams. They (attorney Richard Dolan and Denise Hayman, of Bozeman) were joined in 2004 by Montana’s then-Attorney General Mike McGrath. The federal lawsuit was dismissed in 2005 for “lack of diversity jurisdiction” and was therefore a matter for state courts.

Federal defendants PPL, Avista and Pacificorp then filed in state court to bar the state from seeking rent, while the state (through McGrath’s office) argued it owned the riverbeds.

Dam site rentals previously went to the Feds, some for over a century (1891), with the new question in PPL Montana v State being: Were riverbeds at these locations “navigable” at the time of Montana statehood in 1889 and therefore state land? If so, then the rent (a much higher rent) should instead go to Montana’s school trust.

Well, as any Montana schoolkid can tell you (or dam well should), Fort Benton was Montana’s head of through steamboat navigation from 1860 until the arrival of the Great Northern Railway in 1887. Other rivers saw only sporadic local operations, all sunk either by rocks or the coming of the railroad.

Nonetheless, state district judge Thomas C. Honzel handed Montana a summary judgment, ordering PPL to cough up $41 million in rents for 2000-2007, an average of $5.125 million per year.

Then Pacificorp settled, agreeing to pay $50,000 per year for its dam on the Swan (above the Class 5 Wild Mile, no less), while Avista settled on paying $4 million per year for Noxon Rapids and Cabinet Gorge dams on the Clark Fork.

But PPL, after creating a contingency fund (now $56 million), stood and fought.

The Montana State Supreme Court, in a 5-2 decision written by Justice Patricia Cotter (Chief Justice McGrath had to recuse himself), affirmed Honzel in March 2010. PPL then appealed to the U.S. Supreme Court.

On February 22, the U.S. Supreme Court ruled unanimously U.S. Supreme Court ruled unanimously
(that’s four conservatives, one moderate, and four liberals, folks) to reverse and remand. The opinion, by “swing” Justice Anthony Kennedy, says the Montana court rulings were “based on an infirm legal understanding of this Court’s rules of navigability.”

Under the equal footing doctrine, “upon its date of statehood [November 8, 1889], a State gains title within its borders to the beds of waters then navigable.” Trouble was, in determining what “then navigable” means today, the Montana courts based navigability on “present-day, recreational use.”

Under federal precedent, “watercraft must be meaningfully similar to those in customary use for trade and travel at the time of statehood.” Those Wild Mile racing kayaks, Madison River fish dories, and Clark Fork jet skis weren’t around in 1889. Therefore, the Montana court’s “reliance upon the State’s evidence of present day, recreational use, at least without further inquiry, was wrong as a matter of law.”

How wrong? So much so that the U.S. Supremes declined to decide the other issues, remanding the works back down for a complete do-over, “for further proceedings not inconsistent with this opinion.”

Strangely, spokeswoman Judy Beck of AG Steve Bullock’s office insisted to the Great Falls Tribune that “the rest of the Missouri, Clark Fork and Madison rivers are very much still in play.”

The AG’s office is obviously having difficulty coming to grips with being “wrong as a matter of law,” especially after seven long years. Making things even harder is the fact that our Land Board had already earmarked $41 million of PPL’s money. It was set aside, not for schools, but to bail the Nature Conservancy (DNRC Director Mary Sexton’s former employer) out from under the misbegotten Montana Legacy Project.

Anyone who counts chickens before they hatch is a fool. Those claiming Montana has any dam chickens coming after the U.S. Supreme Court fried their dam golden goose eggs into a dam omelette?

Dam fools.

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