Friends of the Wild Swan v. Dnrc

• Decision Date: 29 December 2005
• Docket Number: No. 04-862.,04-862.
• Citation: 2005 MT 351,330 Mont. 186,127 P.3d 394
• Parties: FRIENDS OF THE WILD SWAN, a Montana Nonprofit Corporation, Plaintiff and Appellant, v. DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION, and Montana Board of land Commissioners, Defendants and Respondents.
• Court: Montana Supreme Court

127 P.3d 394

2005 MT 351

330 Mont. 186

FRIENDS OF THE WILD SWAN, a Montana Nonprofit Corporation, Plaintiff and Appellant, v. DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION, and Montana Board of land Commissioners, Defendants and Respondents.

No. 04-862.

Supreme Court of Montana.

Submitted on Briefs July 13, 2005.

Decided December 29, 2005.

Andrew J. Nelson, Smith & Thiel Law Offices, Timothy Bechtold, Rossbach Hart Bechtold P.C., Missoula, Montana, for Appellant.

Tommy Butler and Mark Phares, Special Assistant Attorneys General, Department of Natural Resources and Conservation, Helena, Montana, for Respondents.

Justice JIM RICE delivered the Opinion of the Court.

¶ 1 Appellant Friends of the Wild Swan appeals from the order of the First Judicial District Court granting summary judgment in favor of Respondents Department of Natural Resources and Conservation and the Board of Land Commissioners. We affirm.

¶ 2 We restate the issue on appeal as follows:

¶ 3 Does § 77-1-202, MCA, require the Board of Land Commissioners to conduct a harvest-level financial accounting when considering a proposed timber sale on school trust lands?

BACKGROUND

¶ 4 In 2003, the Montana Department of Natural Resources and Conservation (DNRC) selected one of three alternatives set forth in a Final Environmental Impact Statement on logging in the Swan River State Forest. The selected alternative, "Alternative C," proposed harvesting 10.2 million board feet in three phases from a parcel of school trust lands known today as the Goat Squeezer Project Area. The purpose of the harvest was to generate funds for the Montana public schools as well as to promote timber stand health and vigor. DNRC submitted the proposed timber harvest and sale to the Montana Board of Land Commissioners (Board) as required, and the Board approved the harvest and sale on July 21, 2003. In approving the proposal, the Board did not conduct a harvest-level accounting of the timber sale. Instead, the Board specifically evaluates costs and benefits at the programmatic, or year-end, level only.

¶ 5 Friends of the Wild Swan (FOWS), a nonprofit environmental group, challenged the Board's methodology in evaluating timber sale transactions in the District Court, arguing that § 77-1-202, MCA (2003) (henceforth § 77-1-202, MCA)¹ required harvest-specific accountings. The District Court, however, rejected that challenge and granted summary judgment to the Respondents. FOWS appealed to this Court on November 10, 2004.

STANDARD OF REVIEW

¶ 6 In granting summary judgment, the District Court ruled as a matter of law that § 77-1-202, MCA, did not require the Board to reconcile timber-sale costs and benefits at the harvest-level. No factual disputes are identified, and we review the District Court's conclusions of law de novo, determining their correctness. Steer, Inc. v. Department of Revenue (1990), 245 Mont. 470, 474-75, 803 P.2d 601, 603.

DISCUSSION

¶ 7 The issue of whether § 77-1-202, MCA, requires harvest-level accounting was one of four issues addressed by the District Court and is the only substantive issue raised on appeal. The District Court concluded that no "statute, constitution, rule, regulation, or case law" required the State to perform such specific accountings. The District Court pointed to the year-end accounting requirements as well as to mandated calculations and reporting methodologies as indications that the Legislature never intended to require more specific accountings. It also relied on the Legislature's two-time rejection of bills which would have required harvest-level accounting in reaching its conclusion. See H.B. 605 (Mont.2003), H.B. 576 (Mont.2001). FOWS challenges that conclusion and asserts that the requirement of § 77-1-202, MCA, to "secure the largest measure of legitimate and reasonable advantage to the state" language is rendered meaningless without a harvest-level accounting requirement.

The Trust For Public Schools

¶ 8 Under the Act of February 22, 1889 (the Enabling Act), the federal government granted Montana certain lands "for the support of common schools." Enabling Act, § 10. The grant of those lands created a trust for the people. Montanans for the Responsible Use of the School Trust v. Board of Land Commissioners, 1999 MT 263, ¶ 13, 296 Mont. 402, ¶ 13, 989 P.2d 800, ¶ 13 (Montrust I). Montana's first Constitution accepted the lands which were granted on the terms of the Enabling Act, recognizing that they were held in trust and that the State acted as trustee. Montrust I, ¶ 13. Finally, Montana's 1972 Constitution re-affirmed the land grant, the trust, and the terms of the Enabling Act. Art. X, Sec. 11, Mont. Const. (1972).

¶ 9 Pursuant to the Montana Constitution, the Board of Land Commissioners is directed to administer the trust and act as the accountable trustee. See Art. XI, Sec. 4, Mont. Const. (1889); Art. X, Sec. 4, Mont. Const. (1972). To assist the Board in fulfilling its responsibility as trustee, the Legislature enacted Sec. 3, ch. 60, L.1927, today § 77-1-202, MCA, which outlined the Board's obligations with regard to the language of the Enabling Act and the Montana Constitution. At the time this proceeding was initiated, the language outlining the trust responsibility had not changed in seventy years. It provided:

In the exercise of these powers, the guiding principle is that these lands and funds are held in trust for the support of education and for the attainment of other worthy objects helpful to the well-being of the people of this state as provided in The Enabling Act. The board shall administer this trust to secure the largest measure of legitimate and reasonable advantage to the state.

Section 77-1-202, MCA.

Deference to the Board

¶ 10 Initially, we note that the law affords discretion to the Board in its administration of the school land trust. In State v. Babcock (1966), 147 Mont. 46, 51, 409 P.2d 808, 811, we explained that "[T]he State Board of Land Commissioners has considerable discretionary power.... If the `largest measure of legitimate and reasonable advantage' from the use of state lands is to accrue to the state, then the State Land Board must, necessarily, have a large discretionary power." We further explained that this power was "inherent in the general and discretionary powers conferred by the constitution, and necessary for the proper discharge of its duties...." Babcock, 147 Mont. at 51, 409 P.2d at 811. Finally, we affirmed that discretion in Montanans for the Responsible Use of the School Trust v. Darkenwald, 2005 MT 190, 328 Mont. 105, 119 P.3d 27 (Montrust II), where, when faced with an evaluation of the Board's method of determining "fair market value," we stated, "we will not `control the discretion of the board unless it appears that the action of the board is arbitrarily and, in effect, fraudulent.'" Montrust II, ¶ 52 (citing Toomey v. State Bd. of Land Comm'rs (1938), 106 Mont. 547, 562, 81 P.2d 407, 415). This is not to say the Board has unfettered discretion, or that its discretion is unlimited. Babcock, 147 Mont. at 52, 409 P.2d at 811. However, it is clear that the Board's obligation as trustee is a complex one, that the obligation is governed by constitutional and statutory provisions which grant authority to the Board over the trust, and that these provisions grant "large" or "considerable" discretion to the Board in the performance of its duties.

¶ 11 In addition to the discretion granted to the Board as the administrator of the trust, the law entitles the Board, as a state agency, to "respectful consideration" of its "long and continued course of consistent interpretation" of § 77-1-202, MCA, which it has administered for many years. Montana Power Co. v. Public Service Comm., 2001 MT 102, ¶ 25, 305 Mont. 260, ¶ 25, 26 P.3d 91, ¶ 25. This consideration can be overcome by "compelling indications." Montana Power, ¶ 25; see also Glendive Med. Ctr. v. Mont. Dep't of Public H.H.S., 2002 MT 131, ¶¶ 14-15, 310 Mont. 156, ¶¶ 14-15, 49 P.3d 560, ¶¶ 14-15.

Does § 77-1-202, MCA, require the Board to conduct a harvest-level accounting when considering timber sales on school trust lands?

¶ 12 FOWS argues that in order to fulfill the obligations under § 77-1-202, MCA, the Board must conduct a harvest-level accounting of every proposed trust-land timber sale before approving the project. In response, the Board argues that it fulfills its obligation under § 77-1-202, MCA, by conducting a program-wide accounting on a yearly basis, and notes that there is no proof that it has ever failed to secure "the largest measure of legitimate and reasonable advantage." The question presented, therefore, is whether § 77-1-202, MCA, itself silent on accounting methodologies, requires the Board to conduct a harvest-level financial accounting.

¶ 13 As a matter of statutory interpretation, our goal is to ascertain the intent of the Legislature. McCormick v. Brevig, 2004 MT 179, ¶ 40, 322 Mont. 112, ¶ 40, 96 P.3d 697, ¶ 40; see also § 1-2-101, MCA. Our inquiry begins with the words of the statute itself: "The legislative intent is to be ascertained, in the first instance, from the plain meaning of the words used." Western Energy Co. v. Dept. of Revenue, 1999 MT 289, ¶ 11, 297 Mont. 55, ¶ 11, 990 P.2d 767, ¶ 11; Brevig, ¶ 40.

¶ 14 First, we observe that the plain language of the statute, set forth above, does not require such accountings. In fact, the statute on its face requires no accountings at all. Instead, the statute simply requires the Board to "secure the largest measure of legitimate and reasonable advantage to the state." Section 77-1-202, MCA. Of course, this Court may not "insert what has been omitted" when interpreting a statute. Section 1-2-101, MCA. This principle counsels against reading a specific accounting requirement into § 77-1-202, MCA.

¶ 15 However, FOWS argues that, despite the absence of an explicit requirement in the statute, we should reach a conclusion that...