PPL Montana, LLC v. Montana

On February 22, 2012, the United States Supreme Court announced its unanimous opinion in PPL Montana, LLC v. Montana, in which it reversed the Montana Supreme Court’s decision that the State of Montana had acquired ownership and control over certain riverbed land. Petros & White filed an amicus brief on behalf of The Creekside Coalition, Colorado Cattlemen’s Association, Colorado Farm Bureau, and Dude Ranchers’ Association. The following is a brief summary of the opinion.

1. Issue: The central issue in the case was whether the Montana Supreme Court correctly determined that the State of Montana owns and can charge rent for the use of certain sections of the beds of the Missouri, Clark Fork, and Madison Rivers.

2. Legal framework: The holding turns on whether, at the time of statehood, the rivers in question were “navigable in fact,” meaning that they were “used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water.” Two specific aspects of this legal standard were at issue in this case:

(a) Whether navigability in fact is to be determined on a on a segment‐by‐segment basis or, as asserted by the Montana courts, by looking at the “river as a whole” and ignoring “merely short interruptions” that had to be portaged; and

(b) The extent to which evidence of modern‐day recreational boating is relevant to determining whether a river was used, or susceptible of being used, as a highway for commerce at the time of statehood.

3. Holding: The Court reversed the Montana Supreme Court’s ruling that Montana owns and may charge for the occupancy and use of the riverbeds at issue.

(a) The Court specifically held that the Great Falls reach of the Missouri River is not navigable for title purposes and is therefore not owned by the State of Montana.

(b) The Court stated that “there is a significant likelihood that some of the other river stretches in dispute also fail the federal test of navigability for the purpose of determining title,” but remanded the case to the Montana courts to assess the relevant evidence in light of the principles discussed in the opinion.

(c) The Court held that the Montana courts erred as a matter of law in relying on evidence of present‐day, primarily recreational use of the Madison River to determine navigability at statehood because they did not make the required findings that: “(1) the watercraft are meaningfully similar to those in customary use for trade and travel at the time of statehood; and (2) the river’s post‐statehood condition is not materially different from its physical condition at statehood.”

4. Basis for holding: Several aspects of the Court’s holding are particularly relevant to rivers in Colorado and other western states:

(a) The segment‐by‐segment analysis of navigability is appropriate because “physical conditions that affect navigability often vary significantly over the length of a river. This is particularly true with longer rivers, which can traverse vastly different terrain and the flow of which can be affected by varying local climates.” “These shifts in physical conditions provide a means to determine appropriate start points and end points for the segment in question. Topographical and geographical indicators may assist.” The Court cited cases involving gradient changes and the location of a tributary providing additional flow as examples of these physical parameters.

(b) The Court set a high standard for disregarding nonnavigable segments. “Even if the law might find some nonnavigable segments so minimal that they would merit treatment as part of a longer, navigable reach for purposes of title under the equal footing doctrine, it is doubtful that any of the segments in this case would meet that standard, and one—the Great Falls reach—certainly would not.

As an initial matter, the kinds of considerations that would define a de minimis exception to the segment‐by‐segment approach would be those related to principles of ownership and title, such as inadministrability of parcels of exceedingly small size, or worthlessness of the parcels due to overdivision.”

(c) With respect to river segments requiring portage, the Court observed that: “[e]ven if portage were to take travelers only one day, its significance is the same: it demonstrates the need to bypass the river segment, all because that part of the river is nonnavigable.”

(d) The Court made several significant statements concerning evidence of present‐day recreational use:

“Mere use by initial explorers or trappers, who may have dragged their boats in or alongside the river despite its nonnavigability in order to avoid getting lost, or to provide water for their horses and themselves, is not itself enough.”

“At a minimum, therefore, the party seeking to use present‐day evidence for title purposes must show: (1) the watercraft are meaningfully similar to those in customary use for trade and travel at the time of statehood; and (2) the river’s post‐statehood condition is not materially different from its physical condition at statehood.”

“If modern watercraft permit navigability where the historical watercraft would not, or if the river has changed in ways that substantially improve its navigability, then the evidence of present‐day use has little or no bearing on navigability at statehood.”

“Modern recreational fishing boats, including inflatable rafts and lightweight canoes or kayaks, may be able to navigate waters much more shallow or with rockier beds than the boats customarily used for trade and travel at statehood.”

In regard to changes in the condition of the river, the Court specifically observed that the evidence offered by PPL “at least suggests that as a result of PPL’s dams, the river has become ‘less torrential’ in high flow periods and less shallow in low flow periods. Thus, the river may well be easier to navigate now than at statehood.”

With respect to seasonal variations in flow, the Court held that “[w]hile the Montana court was correct that a river need not be susceptible of navigation at every point during the year, neither can that susceptibility be so brief that it is not a commercial reality.”

5. Other aspects: Several other elements of the Court’s holding are significant:

(a) The Court forcefully rejected Montana’s reliance on the standard of navigability that has been applied in cases such as The Montello, which did not seek to determine whether the river in question was navigable for title purposes, but instead whether it was navigable for purposes of determining whether boats upon it could be regulated by the federal government. The primary focus in The Montello was not upon navigability in fact but upon whether the river was a “navigable water of the United States.” “The latter inquiry is doctrinally distinct. It turns upon whether the river ‘forms by itself, or by its connection with other waters, a continued highway over which commerce is, or may be, carried with other States or foreign countries in the customary modes in which such commerce is conducted by water.’”

This aspect of the opinion makes it clear that navigability for title purposes is not to be determined by the same standards that are used in different legal contexts, including the scope of admiralty jurisdiction, the constitutional limits of the federal Commerce Clause power, and the reach of statutes such as the Clean Water Act and Federal Power Act. “Indeed, ‘[e]ach application of [the Daniel Ball] test . . . is apt to uncover variations and refinements which require further elaboration.’”

(b) The Court rejected Montana’s suggestion that denying the State title to the disputed riverbeds will undermine the public trust doctrine.

(c) The Court’s opinion includes a recognition that the failure of a state to claim ownership of riverbeds for many years after statehood, and the reliance by private parties on established land titles, are relevant to the analysis of navigability for title:

As the litigation history of this case shows, Montana filed its claim for riverbed rent over a century after the first of the dams was built upon the riverbeds. Montana had not sought compensation before then, despite its full awareness of PPL’s hydroelectric projects and despite the State’s own participation in the projects’ federal licensing process. While this Court does not reach the question, it may be that by virtue of the State’s sovereignty, neither laches nor estoppel could apply in a strict sense to bar the State’s much belated claim. Still, the reliance by PPL and its predecessors in title upon the State’s long failure to assert title is some evidence to support the conclusion that the river segments were nonnavigable for purposes of the equal footing doctrine.

The Montana Supreme Court’s ruling that Montana owns and may charge for use of riverbeds across the State was based upon an infirm legal understanding of this Court’s rules of navigability for title under the equal footing doctrine. As the Court said in Brewer‐Elliott, “It is not for a State by courts or legislature, in dealing with the general subject of beds or streams, to adopt a retroactive rule for determining navigability which . . . would enlarge what actually passed to the State, at the time of her admission, under the constitutional rule of equality here invoked.” 260 U. S., at 88.