Skyline Sportsmen's Ass'n v. Board of Land Com'rs, 96-668

• Decision Date: 15 December 1997
• Docket Number: No. 96-668,96-668
• Citation: 951 P.2d 29,286 Mont. 108
• Parties: , 123 Ed. Law Rep. 941 SKYLINE SPORTSMEN'S ASSOCIATION, Anaconda Sportsmen's Club, Montana Action For Access Association, and Coalition for Appropriate Management of State Lands, Plaintiffs and Appellants, v. BOARD OF LAND COMMISSIONERS; Department of Natural Resources and Conservation; and Governor Marcracicot; Joseph P. Mazurek, Attorney General; Mike Cooney, Secretary of State; Nancy Keenan, Superintendent of Public Instruction; and Mark O'Keefe, State Auditor; in their capacities as Members of the State Land Board, Defendants and Respondents. MONTANANS FOR THE RESPONSIBLE USE OF THE SCHOOL TRUST, Intervenors, v. SKYLINE SPORTSMEN'S ASSOCIATION, et al., and Board of Land Commissioners, et al., Defendants in Intervention. . Heard and
• Court: Montana Supreme Court

Page 29

951 P.2d 29

286 Mont. 108, 123 Ed. Law Rep. 941

SKYLINE SPORTSMEN'S ASSOCIATION, Anaconda Sportsmen's Club,

Montana Action For Access Association, and

Coalition for Appropriate Management of

State Lands, Plaintiffs and Appellants, v. BOARD OF LAND COMMISSIONERS; Department of Natural

Resources and Conservation; and Governor Marcracicot;

Joseph P. Mazurek, Attorney General; Mike Cooney, Secretary

of State; Nancy Keenan, Superintendent of Public

Instruction; and Mark O'Keefe, State Auditor; in their

capacities as Members of the State Land Board, Defendants

and Respondents.

MONTANANS FOR THE RESPONSIBLE USE OF THE SCHOOL TRUST, Intervenors, v. SKYLINE SPORTSMEN'S ASSOCIATION, et al., and Board of Land

Commissioners, et al., Defendants in Intervention.

No. 96-668.

Supreme Court of Montana.

Heard and Submitted Oct. 21, 1997.

Decided Dec. 15, 1997.

Brian M. Morris (argued), Goetz, Madden & Dunn, Bozeman, for Plaintiffs and Appellants.

Tommy Butler (argued) and Richard E. Bach, Special Assistant Attorneys General, Helena, Roy H. Andes (Intervenor) (argued), Missoula, for Defendants and Respondents.

TURNAGE, Chief Justice.

The District Court for the First Judicial District, Lewis and Clark County, granted Defendants' motion for summary judgment and denied Plaintiffs' request for a preliminary injunction, dismissing a challenge to a proposed land exchange between the Board of Land Commissioners and Turner Enterprises, Inc. We vacate and remand.

The dispositive issue is whether the District Court erred by granting summary judgment because Plaintiffs raised genuine issues of material fact.

Background

The Board of Land Commissioners (Board) is one of a handful of boards established by the Montana Constitution. The Board has direct constitutional authority to lease, exchange, and sell state trust lands.

The governor, superintendent of public instruction, auditor, secretary of state, and attorney general constitute the board of land commissioners. It has the authority to direct, control, lease, exchange, and sell school lands and lands which have been or may be granted for the support and benefit of the various state educational institutions, under such regulations and restrictions as may be provided by law.

Article X, Section 4, Mont. Const. In addition, Article X, Section 11(4), Mont. Const., provides:

All public land shall be classified by the board of land commissioners in a manner provided by law. Any public land may be exchanged for other land, public or private, which is equal in value and, as closely as possible, equal in area.

Section 77-1-202(1), MCA, echoes the constitutional authority of the Board. It states:

The board shall exercise general authority, direction, and control over the care, management, and disposition of state lands and, subject to the investment authority of the board of investments, the funds arising from the leasing, use, sale, and disposition of those lands or otherwise coming under its administration. 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.

In 1993, Turner Enterprises, Inc. (Turner), submitted a proposal to the Board to exchange state school trust land located within the boundaries of Turner's Flying D Ranch southwest of Bozeman, Montana, for private land Turner owned elsewhere in Montana. The original proposal was to exchange 7,486 acres of state land within the Flying D Ranch for 12,689 acres of land Turner owned within the Snowcrest Ranch south of Alder, Montana, and the Ulm Pishkun southwest of Great Falls, Montana. The Department of Natural Resources and Conservation (Department) reviewed the proposal and recommended that it be rejected as not assuring a "good deal" for the State when all attributes of the state lands were evaluated against the land proposed for state acquisition.

Turner then modified its proposal by deleting from the proposed exchange two sections of state lands within the Flying D Ranch. As modified, the proposal was to exchange 6,167 acres of state land for 12,689 acres of private land. On April 15, 1996, after review by the Department, solicitation of public comment, and preparation of an environmental assessment (EA) as required under the Montana Environmental Policy Act, §§ 75-1-101 through -324, MCA, the Board approved the modified proposal.

The plaintiff organizations of recreationists and sportsmen brought this declaratory judgment action arguing that the Board had overstepped its lawful discretion under the Montana Constitution because it did not exchange the state land "under such regulations and restrictions as may be provided by law." Article X, Section 4, Mont. Const. Specifically, Plaintiffs argued that the Board did not comply with § 77-2-203(2), MCA:

If the requirements of subsection (1) and 77-2-204 are met, state lands bordering on navigable lakes and streams or other bodies of water with significant public use value may be exchanged for private land if the private land borders on similar navigable lakes, streams, or other bodies of water.

The two most significant bodies of water on the private land owned by Turner are Ledford Creek and Robb Creek, both of which are located on the Snowcrest Ranch. Cherry Creek and Spanish Creek are the two most significant bodies of water on the state land proposed for exchange. Plaintiffs argued that while Cherry Creek and Spanish Creek are streams with significant public use value, Ledford Creek and Robb Creek are not.

The Plaintiffs pointed out that throughout the process of approving the land exchange, the Board told them that § 77-2-203(2), MCA, did not apply because "there are no state lands bordering on a navigable lake or stream included in this proposed exchange." Only on June 17, 1996, after Plaintiffs had filed this action, did the Board make supplementary findings on § 77-2-203(2), MCA, including a finding that Robb Creek and Ledford Creek have "the potential to provide significant public use value."

MonTRUST, a non-profit citizens' organization promoting the protection, advancement and appropriate use of Montana's school trust lands on behalf of public education, was granted leave to intervene before the District Court. The Defendants moved to dismiss the action or, in the alterative, for summary judgment. Intervenors moved for summary judgment as well, while Plaintiffs moved for a preliminary injunction to prevent the exchange from proceeding during the pendency of this lawsuit. At a hearing on all of the pending motions, the attorneys for the parties and for the Intervenors made oral argument. Additionally, Plaintiffs presented testimony of five witnesses concerning the comparability of the bodies of water on the lands proposed for exchange.

In a memorandum and order entered after the hearing, the court found that the Plaintiffs had standing to bring this action but that the Board had adequately considered the requirements set forth at § 77-2-203(2), MCA. Accordingly, the court granted the Defendants' motion for summary judgment and denied the Plaintiffs' motion for a preliminary injunction.

Discussion

Did the District Court err by granting summary judgment because Plaintiffs raised genuine issues of material fact?

Summary judgment is proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P. This Court's standard of review of a summary judgment is the same standard as that employed by the district court--whether there are genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Missoula Rural Fire Dist. v. City of Missoula (1997), 283 Mont. 113, ----, 938 P.2d 1328, 1329, 54 St.Rep. 480, 481.

The standard of review of an informal administrative decision is whether the decision was arbitrary, capricious, or unlawful. North Fork Pres. v. Dept. of State Lands (1989), 238 Mont. 451, 458-59, 778 P.2d 862, 867. It was appropriate for the District Court, in applying that standard, to accept new evidence and not to limit its review to the administrative record. In a proceeding to determine whether an agency decision was arbitrary, capricious, or unlawful, unless the reviewing court looks beyond the record to determine what matters the agency should have considered, it is impossible for the court to determine whether the agency took into consideration all relevant factors in reaching its decision. Asarco, Inc. v. U.S.E.P.A. (9th Cir.1980), 616 F.2d 1153, 1160.

Combining the two applicable standards of review, the question before the District Court and this Court is whether the Plaintiffs have established a genuine issue of material fact as to whether the Board's decision was arbitrary, capricious, or unlawful.

In their brief and at oral argument, the Defendants pointed out that under Montana's stream access law at § 23-2-302(1), MCA, the effect of the proposed land exchange on the availability of Cherry Creek and Spanish Creek to recreationists will merely be fewer points of access; recreationists will retain the right to use the creeks. A condition to the exchange would be that public access to the creeks would be maintained at legal access points. The Defendants also point out the "world-class hunting opportunities" on the Snowcrest Ranch, now privately-owned, but which would become state land. The Defendants explain that a multitude of factors entered into the evaluation of whether the exchange serves the interests of the school trust beneficiaries and provides recreational opportunities for the public.

Similarly, the Intervenors argue that the Board's fiduciary duty to the trust beneficiaries...