In resolving riverbed title disputes, how should courts determine whether a river was navigable?
After a lawsuit against hydroelectric company PPL Montana was dismissed in federal court, PPL Montana sought a declaratory judgment in state court to determine the ownership of riverbeds along three Montana rivers. The State of Montana asserted that it owned the riverbeds under the equal footing doctrine, and sought compensation for PPL Montana’s use of the land. The Montana Supreme Court affirmed the lower court’s grant of summary judgment to Montana, holding that the State of Montana owned the riverbeds and that PPL Montana owed the State of Montana $40,956,180. The issue of title largely turns upon whether the river is “navigable.” PPL Montana argues that navigability for title purposes should be determined by looking at individual segments of rivers and the actual commercial use of rivers at the time statehood was obtained. Montana contends that the proper navigability test is the susceptibility of travel through longer river stretches, which can be informed by current uses. The Supreme Court’s decision may affect rivers’ public benefits and the reliance interests of riverbed owners.
Questions as Framed for the Court by the Parties
1. Does the constitutional test for determining whether a section of a river is navigable for title purposes require a trial court to determine, based on evidence, whether the relevant stretch of the river was navigable at the time the State joined the Union as directed by United States v. Utah, 283 U.S. 64 (1931), or may the court simply deem the river as a whole generally navigable based on evidence of present-day recreational use, with the question "very liberally construed" in the State's favor?
2. When a hydropower project is licensed under the Federal Power Act, a process that includes an economic analysis of the project and solicits state input, and the hydropower producer has obtained easements from private parties and paid substantial rents to the federal government on the understanding that the riverbeds under the hydropower facilities are owned by those private parties or the federal government, is a State's attempt retroactively to claim title and impose tens of millions of back and future rent obligations for use of the riverbeds preempted?
In 2003, parents of children attending school in Montana sued the hydroelectric energy company PPL Montana, LLC in the United States District Court of Montana. See PPL Montana, LLC v. State, 299 P.3d 421, 426 (2010). PPL Montana owns hydroelectric dams on the Missouri, Clark Fork, and Madison Rivers in Montana, and has never paid for its use of the riverbeds. See id. at 426–27. The Montana parents alleged that PPL Montana’s land was owned by the state as school trust land, and that PPL Montana owed the state compensation to benefit its public schools. See id. The State of Montana subsequently joined the suit as a plaintiff, but the suit was later dismissed for lack of subject matter jurisdiction. See id. at 427.
While the federal suit was ongoing, PPL Montana filed a state court lawsuit in Montana's First Judicial District Court, seeking a declaratory judgment that it did not owe Montana any compensation for the operation of its hydroelectric dams on the riverbeds. See PPL Montana, 299 P.3d at 427. PPL Montana argued that it did not owe Montana any compensation because the Federal Power Act (“FPA”) and the “federal navigational servitude” power preempt Montana’s claim to ownership. See id. Montana counterclaimed, arguing that it acquired title to these riverbeds under the equal footing doctrine at the time it became a state, and seeking compensation for PPL Montana’s past and future use of the riverbeds. See id. at 428. Along with its counterclaim, Montana moved for summary judgment to dismiss PPL Montana’s claim. See id.
The court granted summary judgment to Montana, holding that the state's claim was not preempted and that compensation was appropriate based on the court’s definition of navigability. See PPL Montana, 299 P.3d at 428, 431–32. The court ruled that, under the equal footing doctrine, Montana gained title to the riverbeds of its “navigable waters” when it became a state. See id. at 431. To determine navigability, the court relied on the susceptibility of the rivers’ commercial use, holding that the presence of natural obstacles does not imply that a river was non-navigable, as long as the river was used for commerce. See id. at 431–32, 435. While primarily focusing on the rivers’ historical use, the court also looked at current uses to inform navigability at the time of statehood. See id. at 435. Ultimately, the court determined that the rivers were navigable at the time Montana became a state, which means that ownership passed to Montana at that time under the equal footing doctrine and that PPL Montana owes compensation for its use of the riverbeds. See id. at 431–32.
In August 2008, the court entered a $40,956,180 judgment against PPL Montana. See PPL Montana, 299 P.3d at 443. PPL Montana appealed to the Montana Supreme Court, which affirmed the trial court’s ruling. See id. at 461. The Supreme Court of the United States granted certiorari to determine the proper test for navigability in title disputes.
In this case, the Supreme Court will decide who owns title to riverbeds that have been privately used under licenses granted by the federal government. At the core of this dispute is whether the river was navigable when a state entered the Union. Petitioner PPL Montana argues that the equal footing doctrine bars a state from claiming title to the beds of rivers that were non-navigable at statehood. See Brief for Petitioner, PPL Montana, LLC at 28–29. According to PPL Montana, navigability for the purpose of resolving a title dispute requires a historical inquiry, without consideration of modern-era uses for the river and "hyperbolic accounts". See id. at 46–48. Respondent, the State of Montana, contends that dividing a river into segments compromises the navigability test by overlooking the ways in which commerce actually flows along the length of a river. See Brief for Respondent, State of Montana at 33. Montana argues that the Court should focus on the use of the river in commerce, including historical accounts of portage, i.e. carrying a vessel around a natural obstacle that is preventing river travel. See id. at 28–29.
Determining Which Portion of a River Matters for Navigability
PPL Montana argues that the Court should apply a segment-by-segment inquiry for each part of a river in order to determine navigability. See Brief for Petitioner at 34. Advancing a particularized test, PPL Montana argues that lower courts, the federal government, and the State of Montana have all previously employed a segmented approach for determining title to riverbeds. See id. at 34–38. PPL Montana also offers several cases in which the Supreme Court limited its scrutiny to the characteristics of specific segments of a river, rather than reviewing the river in its entirety. See id. at 36–38. According to PPL Montana, the segment-by-segment approach is consistent with the Court’s task of resolving controversies between the adverse parties alone: segmentation does not force the Court to enlarge these property disputes to consider the entire river. See id. at 35. PPL Montana argues that the Montana Supreme Court incorrectly broadened the inquiry to irrelevant sections of the river. See id. at 41.
In response, the State of Montana argues that segmenting the river frustrates the proper inquiry into the river’s continuity. See Brief for Respondent at 32–31. According to Montana, portage should be considered part of traveling along a river because courts have previously reasoned that the practice of portage for certain river segments does not render a river non-navigable. See id. at 29. Montana argues that the Court has previously determined that the Colorado River is navigable, except for one section that was impassable despite attempts to carry the boat around a large canyon. See id. at 34. Montana distinguishes one Supreme Court decision that the Colorado River is non-navigable in a section, due to the presence of a large canyon, because that canyon is twice as big as any obstacles at issue in this case and, unlike the instant situation, there was no evidence that portage was possible. See id. at 34–35. Additionally, Montana contends that, where the Court has segmented a river to determine navigability, the lines were drawn at the state borders. See id. at 35. Further, Montana challenges that PPL Montana’s segmented rule is too vague, as there are no meaningful criteria for determining when a natural obstacle would be considered de minimis, too small to cause a segmentation of the river. See id. at 35.
Evidence of Navigability
PPL Montana argues that evidence of present-day activities distorts the factual inquiry into actual or suspected historical navigability, and that the Court should not consider modern-era uses and historical reports of dubious accuracy in their determination. See Brief for Petitioner at 43–44, 46–47. PPL Montana explains that, under the equal footing doctrine, each state entered the Union with equal claims to sovereignty over their in-state rivers. See id. at 28–29. PPL Montana also maintains that this doctrine protects each state’s sovereignty by barring any state from retroactively claiming more than it was entitled to upon entering the Union. See id. Allowing modern-era uses to inform navigability, PPL Montana argues, would undermine the purpose of the equal footing doctrine. See id. at 48. Further, PPL Montana challenges some of the historical evidence that Montana presented to show navigability, and argues that the Court should avoid speculation about how early settlers actually used a river. See id. at 14, 44–45.
In contrast, Montana maintains that some post-statehood evidence of navigability may inform a historical inquiry. See Brief for Respondent at 45. Montana argues that the Court need not create a special evidentiary rule for determining navigability, but instead should rely upon the standard rule of relevancy when determining what evidence to consider. See id. Montana maintains that the correct test should be whether the rivers at issue were “susceptible of being used” for commerce, not whether each was actually used at the time the statehood. See id. at 44. This susceptibility test, according to Montana, is not only consistent with case precedent about navigability, but will also permit the consideration of a broad range of historical documents. See id. at 44, 51. Montana maintains that the Court has previously considered various historical materials, including those that may contain hyperbolic descriptions, when ruling upon navigability; therefore, contrary to PPL Montana’s challenge, these documents should not be categorically banned from consideration. See id. at 51.
Distinguishing Between Disputes of Title and Regulation
PPL Montana argues that the Montana Supreme Court erred by blurring the distinction between disputes about title to riverbeds and disputes about the validity of state regulations. See Brief for Petitioner at 42. Highlighting the difference between regulation and title, PPL Montana explains that the Supreme Court has previously held that a ship would not escape federal regulation if it was carried around a natural obstacle, i.e. if the ship was used in portage. See id. According to PPL Montana, an area that is considered navigable for regulation may be non-navigable for the purposes of title disputes. See id. PPL Montana argues that the Court must distinguish between the two types of disputes because different portions of the Constitution will apply to each type—the Property Clause is considered in title disputes and focuses upon whether the river was navigable at statehood, whereas the Commerce Clause is utilized in regulation cases and may allow a state to expand its regulatory domain to newly navigable waters. See id. at 31–32.
In contrast, Montana argues that title disputes and regulation disputes share important attributes, which make them comparable. See Brief for Respondent at 31–32. For example, Montana claims that the question under a title dispute, whether a river is navigable for in-state commerce, is closely related to the question under a regulation dispute, whether a river is navigable for interstate commerce. See id. at 31. Sharply distinguishing between these categories of disputes, Montana argues, runs counter to case precedent, which has not honored such a rigid distinction. See id. at 31–32. Montana contends that stare decisis instructs the Court to affirm the method of the Montana Supreme Court, and allows the consideration of regulatory cases that have previously been deemed informative on issues of navigability. See id.
In this case, the Supreme Court will determine the proper test of navigability for riverbed title purposes under the equal footing doctrine. Petitioner PPL Montana, LLC argues for a segmented approach, contending that navigability should be determined by looking at the ability to commercially travel individual sections of a river, based on actual use at the time of statehood. See Brief for Petitioner, PPL Montana, LLC at 27–28, 33–34. Respondent, the State of Montana, counters that navigability should be determined by looking to whether longer stretches of a river were susceptible of being used for commercial travel, which can be informed by later recreational use. See Brief for Respondent, State of Montana at 32–33, 46–47. Respondent Montana also argues that the presence of natural obstacles should not render rivers non-navigable, as long as people could portage around them. See id. at 28–29.
Promoting Public Benefits
Edison Electric Institute (“EEI”) argues that allowing Montana to assert ownership over PPL Montana’s riverbeds will have a chilling effect on the rivers’ public benefits. See Brief of Amici Curiae Edison Electric Institute, et al. in Support of Petitioner at 13–14. Hydroelectric plants, EEI points out, provide 66% of the nation’s renewable energy and help maintain the stability of the energy grid. See id. at 13. EEI asserts that requiring backpay rent on riverbeds will impede hydroelectric power development and could cause plants to shut down. See id. at 18–20. In addition, the Montana Water Resources Association (“MWRA”) argues that local Montanans rely on the private ownership of riverbeds and have planned their businesses around the assumption that they do not owe Montana rent. See Brief of Amici Curiae Montana Water Resources Association (“MWRA”), et al. in Support of Petitioner at 2–4. The Montana Farm Bureau Federation contends that allowing Montana to assert ownership over riverbeds will have negative economic consequences for the small businessmen that would be forced to pay rent. See Brief of Amici Curiae Montana Farm Bureau Federation, et al. in Support of Petitioner at 6–7.
Montana counters that state ownership of these riverbeds will actually enhance the public good by enhancing the public’s access to rivers. See Brief for Respondent at 24–26. The National Wildlife Federation argues that Montana’s rivers, like many Western rivers, are regularly used for recreational pursuits, such as fishing and canoeing, and are home to many species and important natural resources. See Brief for Amici Curiae National Wildlife Federation, et al. in Support of Respondent at 19–21. As public trusts belonging to the states, Montana argues, the states can best serve the public by providing free use for commerce, general travel, and recreation, and by protecting the rivers’ natural ecosystems. See id.; Brief for Respondent at 24–26, 52–53. The California Sportfishing Protection Alliance (“CSPA”) further asserts that private ownership of different segments of a river may impede transportation by preventing the public from traveling the full length of the river. See Brief for Amici Curiae California Sportfishing Protection Alliance ("CSPA"), et al. in Support of Respondent at 18. Finally, the CSPA contends that privatizing the ownership of different portions of riverbeds will invite a “plethora of lawsuits” into the courts as individuals seek title to valuable riverbed land. See id. at 19.
Disrupting Settled Expectations
The Creekside Coalition (“CC”) argues that granting states ownership of the riverbeds would disrupt the expectations of riparian landowners in western states. See Brief of Amici Curiae Creekside Coalition, et al. in Support of Petitioner at 14. Montana has never previously asserted ownership of these riverbeds, CC points out, leading riparian owners to rely on their private ownership. See id. at 11–12. In fact, the MWRA contends that Montana’s favorable laws have even encouraged corporations to build dams on riverbeds, further promoting reliance on water rights. See Brief of MWRA at 37–38. The United States argues that adopting Montana’s longer stretches-of-river approach to navigability would also disrupt the expectations of the federal government, which issues leases and permits for non-navigable riverbeds. See Brief of Amicus Curiae United States in Support of Petitioner at 18–19. Further, the United States contends that the stretches-of-river approach will create uncertainty about riparian owners' title rights because title to one segment of the river may depend on the river’s conditions miles away. See id.
Montana counters that a segmented approach is not appropriate, as states have always understood that they own the riverbeds for larger stretches of a river, despite natural obstacles, as long as they are portageable. See Brief for Respondent at 39. Montana points out that most rivers have areas with natural obstacles that cannot be traveled without portaging; therefore, using a segmented approach (where such obstacles can defeat navigability) would increase litigation, as courts would have to reassess ownership of many U.S. rivers. See id. at 36–39; Brief of Amici Curiae Oregon, et al. (“26 States”) in Support of Respondent at 23–24. Writing as amici curiae, 26 States contend that breaking a river into small sections will only create confusion about title ownership and prevent any uniformity in ownership decisions. See Brief of 26 States at 23–24. Additionally, Montana contends that states consider their ownership of navigable rivers under the equal footing doctrine to be a fundamental aspect of state sovereignty—taking a narrower view of navigability would unduly strip the states of this element of sovereignty. See id. at 24–27.
In this case, the Supreme Court will determine the proper test for navigability for riverbed title purposes under the equal footing doctrine. PPL Montana argues that the proper test should look to the ability to travel on individual segments of rivers at the time statehood was achieved, based on the actual commercial use at that time. Montana contends that the proper test for navigability is whether the river was susceptible of travel on stretches, including the ability to portage, and that this determination can be informed by current recreational use. The decision in this case may affect public access to river-based benefits, and it may also disrupt the expectations of riverbed owners.
- New York Times, Lawrence Hurley: http://www.nytimes.com/gwire/2011/10/03/03greenwire-supreme-court-wades-into-raging-dispute-over-r-74586.html?pagewanted=all (Oct. 3, 2011)
- Land Use Prof Blog, Timothy Mulvaney: http://lawprofessors.typepad.com/land_use/2011/06/mulvaneys-take-on-scotus-cert-grant-for-ppl-montana-v-state-of-montana.html (June 22, 2011)
- Montana Legislature, Water Policy Interim Committee Final Report: www.data.opi.mt.gov/legbills/2011/Minutes/House/Exhibits/nah51a04.pdf (2010)