Montana Trout Unlimited v. Montana Dnrc
| Citation | 331 Mont. 483,133 P.3d 224,2006 MT 72 |
| Decision Date | 11 April 2006 |
| Docket Number | No. 05-069.,05-069. |
| Parties | MONTANA TROUT UNLIMITED; McGuire's South Fork, LLC; Fredrick C. Buckingham; Juanita Polston; Boyd Stanley; Hugh Hasting; Will Kurtz; Edwin Morgens; High Lonesome Ranch, LP; Henry C. McMicking; Mike Geary d/b/a Smith River Outfitters, Pro Outfitters; and Montana River Anglers, LLC, Petitioners and Appellants, v. MONTANA DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION; Arthur R. Clinch, as its Director; and Jack Stults, as Administrator of its Water Resources Division, Respondents and Respondents, and Riverside Ranch, Co.; Louise Galt, and William Galt, Intervenors. |
| Court | United States State Supreme Court of Montana |
Peter Michael Meloy, Jennifer S. Hendricks and Robin McGuire, Meloy Trieweiler, Helena, Montana, for Appellants.
Tim D. Hall, Special Assistant Attorney General, Department of Natural Resources and Conservation, Helena, Montana, for Respondents.
David R. Stewart and John E. Bloomquist, Doney Crowley Bloomquist Payne Uda, P.C., Helena, Montana, for Intervenor Riverside Ranch.
Russell McElyea and Jennifer L. Farve, Moore, O'Connell & Refling, P.C., Bozeman, Montana, for Intervenor Galt.
¶ 1 Montana Trout Unlimited and eleven other petitioners (hereafter collectively "Trout Unlimited") appeal from the decision of the District Court for the First Judicial District, Lewis and Clark County, granting summary judgment in favor of the Montana Department of Natural Resources and Conservation (DNRC) and Intervenors Riverside Ranch Co., Louise Galt and William Galt. We reverse and remand.
¶ 2 Trout Unlimited presents the following issues on appeal:
¶ 3 1. Whether Trout Unlimited was required to exhaust its administrative remedies before seeking judicial relief.
¶ 4 2. Whether DNRC's interpretation of "immediately or directly connected to surface water" in the Basin Closure Law is correct as a matter of law.
¶ 5 Montana state law provided two possible ways of perfecting a water right before 1973. A claimant could post a notice at the point of diversion and file a notice with the county clerk pursuant to statute, Mont. Laws 1885, secs. 6 through 10; R.C.M. (1947), 89-810 through -814. The second method required the claimant simply to put the water to use. See Murray v. Tingley (1897), 20 Mont. 260, 50 P. 723. The adjudication of these rights became increasingly cumbersome and complex as the number of appropriators claiming water rights in Montana increased.
¶ 6 The 1972 Montana Constitutional Convention sought to remedy Montana's antiquated appropriation system. The 1972 Constitution contained a directive to the legislature that it "shall provide for the administration, control, and regulation of water rights and shall establish a system of centralized records, in addition to the present system of local record." Art. IX, Sec. 3(4), Mont. Const. The legislature promptly responded by passing the 1973 Montana Water Use Act (Act), 1973 Mont. Laws 452; Sections 85-2-212 to -907, MCA.
¶ 7 The Act mandated that all holders of claims to existing water rights file their claims with the DNRC. The Act charged DNRC with determining the priority dates for each filed claim. The Act further charged DNRC with inspecting conflicts concerning the priority of claims. The legislature established water courts for the adjudication of disputed claims. Once water courts adjudicated existing water rights and DNRC filed water rights according to a priority date, the Act required new claimants to establish their claims through statutory filing procedures. DNRC determined the priority of post-1973 claims based on the date of filing. It became clear as this new system developed that there were significantly more adjudicated and legitimate non-adjudicated claims to water than there was available water.
¶ 8 The legislature responded to this crisis by enacting a moratorium on new applications in the over-appropriated basins. The legislature included a basin closure for the Upper Missouri River basin, encompassing the drainage area of the Missouri River and its tributaries above Morony Dam. Sections 85-2-342 and -343, MCA. The Smith River is a tributary of the Upper Missouri River and subject to the Upper Missouri River basin moratorium (hereafter Basin Closure Law).
¶ 9 The Basin Closure Law provides that DNRC may not "process or grant an application for a permit to appropriate water ... within the upper Missouri River basin until the final decrees have been issued...." Section 85-2-343, MCA. The legislature provided for several exceptions to the general ban on processing or granting applications. New groundwater applications represent one of the exceptions. Section 85-2-343(2)(a), MCA. The legislature recognized, however, that some groundwater bears a close relationship with surface water and that allowing unrestricted appropriations of groundwater would defeat the purpose of the Basin Closure Law. Thus, the Basin Closure Law also forbids the processing of new applications for groundwater that is "immediately or directly connected" to the Upper Missouri River basin's surface water. Sections 85-2-342 and -343, MCA.
¶ 10 DNRC recognized the particularly intimate relationship between groundwater and surface water along the Smith River. DNRC prepared a Supplemental Environmental Assessment (Supplemental EA) for the Smith River Basin in February of 2003. Therein DNRC noted that the Smith River and its principal tributaries are hydrologically connected to groundwater. The Supplemental EA further noted two ways that groundwater pumping affects surface stream flows. First, pumping may intercept groundwater that otherwise would have entered the stream thereby causing a reduction in surface flows. This phenomenon is called the prestream capture of tributary groundwater. Second, groundwater pumping may pull surface water from the stream toward the well. The DNRC refers to this pulling as induced infiltration. DNRC's hydrogeologist reports that a stream takes longer to recover from prestream capture of its tributary groundwater than from depletion through induced infiltration.
¶ 11 New irrigation developers began turning to groundwater to supplement limited surface water supplies in closed basins. DNRC, as the agency charged with implementation of the Basin Closure law, reviews groundwater applications. Sections 85-2-112 and -113, MCA. DNRC must determine whether an application for groundwater includes groundwater that is "immediately or directly connected to surface water" for the application to qualify under the groundwater exception to the Basin Closure Law. Sections 85-2-342 and -343, MCA. The legislature did not define "immediately or directly connected to surface water" in the Basin Closure Law. Section 85-2-342, MCA. DNRC interpreted the language to mean that a groundwater well could not pull surface water directly from a stream or other source of surface water. This interpretation makes no mention of the potential influence of the prestream capture of tributary groundwater on surface flow. DNRC processed new applications before making a threshold determination that the applications fell within an exception to the Basin Closure Law. It is against this backdrop that Trout Unlimited initiated its suit against DNRC.
¶ 12 Trout Unlimited sought a writ of mandate to require DNRC to refrain from processing groundwater applications on the Upper Missouri River basin until it had made the threshold determination that the groundwater was not "immediately or directly connected to surface water" rather than deferring that determination until it had analyzed other permit criteria. Trout Unlimited further argued that DNRC had adopted an inappropriately narrow interpretation of the "immediately or directly connected to surface water" language in the Basin Closure Law by considering groundwater to have an immediate or direct connection to surface water only if it induced infiltration.
¶ 13 The District Court determined that DNRC had a clear legal duty to abide by the Basin Closure Law by making the threshold determination of whether the application qualified under the groundwater exception, but indicated that it needed additional evidence regarding whether DNRC was complying with that duty. Trout Unlimited and DNRC ultimately entered into a stipulation wherein DNRC agreed that it would make a threshold determination of whether an application for a groundwater permit was immediately or directly connected to surface water. DNRC still adhered, however, to its interpretation of "immediately or directly connected to surface water" by only including induced infiltration of surface water.
¶ 14 The substantive dispute over DNRC's interpretation of "immediately or directly connected to surface water" remained in the form of Count II of Trout Unlimited's Amended Petition. Trout Unlimited sought a declaratory judgment that DNRC's interpretation of the Basin Closure Law conflicted with the clear statutory language of §§ 85-2-342 and -343, MCA. DNRC had embodied its interpretation only in a series of letters written by agency officials at the time that Trout Unlimited filed its Amended Petition. DNRC had not yet established its interpretation of the language in the Basin Closure Law through the Montana Administrative Procedures Act (MAPA).
¶ 15 DNRC finally went through the administrative rulemaking process while this litigation was pending. DNRC defined "immediately or directly connected to surface water" to mean "ground water which, when pumped at the flow rate requested in the application and during the proposed period of diversion, induces surface water infiltration." Rule 36.12.101(33), ARM. DNRC's formal definition again ignored water diverted from streams through prestream capture of tributary groundwater. The substantive issue on appeal remains...
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