Eldorado Co-Op Canal Co. v. Lower Teton Joint Objectors

• Decision Date: 07 October 2014
• Docket Number: No. DA 13–0709.,DA 13–0709.
• Parties: ELDORADO CO–OP CANAL CO., Claimant and Appellee, LOWER TETON JOINT OBJECTORS, Objectors and Appellants, Noia: Teton Coop Reservoir Co., Farmers Cooperative Canal Co., Objector, Appellee and Cross–Appellant, and Patrick Saylor, Intervenor and Cross Appellant.
• Court: Montana Supreme Court

376 Mont. 420

337 P.3d 74

2014 MT 272

ELDORADO CO–OP CANAL CO., Claimant and Appellee LOWER TETON JOINT OBJECTORS, Objectors and Appellants Noia: Teton Coop Reservoir Co., Farmers Cooperative Canal Co., Objector, Appellee and Cross–Appellant and Patrick Saylor, Intervenor and Cross Appellant.

No. DA 13–0709.

Supreme Court of Montana.

Submitted on Briefs July 30, 2014.

Decided Oct. 7, 2014.

Rehearing Denied Nov. 19, 2014.

For Appellants: Stephen R. Brown, Garlington, Lohn & Robinson, PLLP, Missoula, Montana.

For Appellee Eldorado Coop Canal Company: John E. Bloomquist, Bloomquist Law Firm, PC, Helena, Montana.

For Farmers Coop Canal Company and Patrick Saylor: Michael J.L. Cusick, Abigail R. Brown, Moore, O'Connell & Refling, P.C, Bozeman, Montana.

For Amicus: Peter G. Scott, Gough, Shanahan, Johnson & Waterman, PLLP, Bozeman, Montana.

Opinion

Chief Justice MIKE McGRATH delivered the Opinion of the Court.

¶ 1 Monte Giese, Steven Kelly and William Reichelt, often referred to as the Lower Teton Joint Objectors, and Patrick Saylor, intervenor, all appeal from the Water Court's “Order Amending Master's Report and Adopting as Amended,” in Water Court Case 41O–129.

¶ 2 We restate the Issues as follows:

¶ 3 Issue One: Did the Water Court err in amending the Water Master's Report finding that Saylor was a party to an historical water exchange or substitution plan under which he provided the source of carriage water used to deliver water to Choteau Cattle Company through the Bateman Ditch?

¶ 4 Issue Two: Did the Water Court err by including Choteau Cattle on the tabulation of water rights authorized to divert water from the Teton River into the Bateman Ditch under a water rights exchange or substitution plan not claimed by any person?

¶ 5 Issue on Cross–Appeal: Whether water rights in addition to Choteau Cattle can be diverted down the Bateman Ditch.

¶ 6 We affirm in part and reverse in part.

BACKGROUND

¶ 7 Monte Giese, Steven Kelly and William Reichelt are water users who hold appropriation rights from the lower Teton River in Chouteau County, Montana. In 2011 they commenced an action in the Montana Ninth Judicial District Court against the Water Commissioners appointed by the District Court to administer certain water rights diverted from the Teton River pursuant to the 1908 water rights decree in Perry v. Beattie, Cause 371, Ninth Judicial District Court. The water rights claimed by Giese, Kelly and Reichelt were not included in the Perry decree, which involved only rights diverted upstream near Choteau, Montana. Giese, Kelly and Reichelt claimed that the Water Commissioners' practice of diverting water out of the natural channel of the Teton River and into the Bateman Ditch harmed their appropriation rights by depriving the Teton River aquifer of recharge water. They ultimately sought relief under § 85–2–406(2)(b), MCA, which allows a district court to certify a dispute to the Chief Water Judge (the Water Court) for a determination of rights when the dispute involves water rights not all of which have been conclusively determined in prior court decrees.

¶ 8 The District Court dismissed the petition and Giese, Kelly and Reichelt appealed. This Court reversed and remanded to the District Court with instructions to certify all appropriate issues to the Chief Water Judge as provided in § 85–2–406(2)(b), MCA. Giese v. Blixrud, 2012 MT 170, 365 Mont. 548, 285 P.3d 458. In December 2012 the District Court issued a certification notice requesting that the Water Court “make a determination of all existing rights to divert water to the ditch commonly known as the Bateman Ditch.”

¶ 9 The Water Court, with the agreement of the parties, determined to resolve the certified issues in the context of Water Court Case 41O–129, which involved certain Teton River water right claims by the Eldorado Coop Canal Company, along with the objections to those claims. The parties to Case 41O–129 had conducted an evidentiary hearing in June 2012 just prior to this Court's decision in Giese. The parties agreed that the record of that hearing could serve as the evidentiary basis for resolving the certified question from the District Court involving the Bateman Ditch, while reserving resolution of any other issues relating to the Eldorado claims.

¶ 10 In February 2013 the Water Master issued the “Master's Report Regarding the Bateman Ditch Case 41O–129,” including findings of fact and conclusions of law regarding use of the Bateman Ditch. Parties filed objections to the Master's Report, and in June 2013 the Water Judge issued the “Order Amending Master's Report and Adopting as Amended.” In summary, the Water Court found that two of the Water Master's findings of fact were not supported by substantial evidence in the record and should be modified. The Water Court also found that Saylor had a protectable right to divert Teton River water through the Bateman Ditch to the downstream diversion point of the Choteau Cattle Company as a water conservation measure, while exercising his own appropriation rights from the Teton. Both Saylor and the Lower Teton Joint Objectors ¹ appeal.

¶ 11 The Teton River rises in the Rocky Mountain Front in west central Montana and flows eastward for almost two hundred miles before joining the Marias River and soon thereafter the Missouri River. Giese, Kelly and Reichelt use water from the lower or downstream portion of the Teton near Fort Benton, Montana. They claim generally that they are damaged by diversion of water into the Bateman Ditch on the upstream portion of the Teton near Choteau, Montana, and that their “calls” on upstream appropriators to release water for their downstream use have been ignored.

¶ 12 The dispute arises at least in part from the 1908 decree in Perry.² That case determined the priority date and flow rate of about 40 water right claims in the upper Teton River west of Choteau and far upstream from Giese, Kelly and Reichelt. The District Court appointed Water Commissioners to administer the water rights decreed in Perry , as provided in § 85–5–101, MCA. The majority of water users on the Teton (and their successors in interest, including downstream users Giese, Kelly and Reichelt) were not parties to the Perry case. Giese, Kelly and Reichelt claim water rights from the Teton with priority dates that are senior to or contemporary with the upstream rights decreed in Perry . Water right claimants on the Teton are participating in the Water Court's ongoing adjudication of water rights under Title 85, chapter 2 of the Montana Code. The Water Court issued its Temporary Preliminary Decree of water rights from the Teton in December 2005 but has not issued a final decree.

¶ 13 About 1950 (the exact date has not been established), the Water Commissioner appointed by the District Court to administer the Perry decree began from time to time diverting most or all of the flow of the Teton River out of its natural channel and into the Bateman Ditch. That ditch runs roughly parallel to the natural channel of the Teton River and bypasses a stretch of the river channel several miles long that is sometimes referred to as the Springhill Reach. The Reach is an area of natural gravel riverbed west of Choteau, and a significant amount of the water flowing through it will seep into the ground. The Bateman Ditch diversion eliminates the seepage of water in the Reach and the water can be used from the ditch or returned to the natural channel. This diversion practice was not established pursuant to any written agreement among appropriators or any express order of the District Court.

¶ 14 Intervenor Saylor has Perry decree rights to use up to 1500 miner's inches³ of water from the Teton River. Saylor uses the Bateman Ditch as the point of diversion for his decreed rights, and the Ditch crosses his land. Eldorado diverts water from the Teton River above the Bateman Ditch pursuant to its Perry decree rights. Eldorado distributes water through canals to its members.

¶ 15 The right to 300 miner's inches of water from the Teton now held by the Choteau Cattle Company is the most senior right in the Perry decree, with a priority date in 1876. Choteau Cattle's point of diversion is the Burd Ditch, the headgate for which is located just downstream from both the Springhill Reach and the point where water diverted into the Bateman Ditch re-enters the Teton River channel. While Choteau Cattle can often divert its water right out of the natural flow of the Teton River via the Burd Ditch, that is not possible during times of low flow because the water seeps into the ground in the Springhill Reach. While Choteau Cattle's Perry right is for 300 miner's inches of water, a significant multiple of that amount has to flow through the Reach for Choteau Cattle to be able to divert its right from the natural river flow.

¶ 16 Diversion of water through the Bateman ditch and returning it to the natural channel just above the Burd Ditch is a way in which Choteau Cattle has exercised its water right. The proponents of diverting Choteau Cattle's right through the Bateman Ditch are holders of junior Perry decree rights. When Choteau Cattle's water is delivered through the Bateman ditch, the effect is to leave water in the natural channel above the Springhill Reach that can be used by Perry right holders junior to Choteau Cattle. If the Bateman Ditch were not used to deliver water to Choteau Cattle during times of low flow, upstream junior right holders (including Saylor and Eldorado) would have to forego or greatly curtail their water use.

¶ 17 There are no apparent records of how often the Bateman Ditch diversion is used each irrigation season to deliver water to Choteau Cattle. The diversion is not required in times of higher water flows in the Teton River, and the frequency of its use has been described as occasional or sporadic.

¶ 18 Earlier in the water rights adjudication process both Eldorado and Choteau Cattle claimed the Bateman Ditch as a point of diversion of their...