We predicted the Supreme Court wasn’t finished with judicial takings or judicial takings-like issues after its decision (or, more accurately, non-decision) in Stop the Beach Renourishment v. Fla. Dep’t of Envt’l Protection, 130 S. Ct. 2592 (2010). It looks like we might have more grist for the mill, because today, the Court agreed to review the Montana Supreme Court’s ruling in PPL Montana, LLC v. State of Montana, 229 P.3d 421 (Mont. 2010), a case we previewed here.
The issue in the case is who owns the land under certain Montana rivers. For more than 100 years, there wasn’t any doubt: the riverbeds were private property, or were federal property. The Montana Supreme Court concluded otherwise, and held that the state owns that property, and that PPL Montana, a power company, owed $50 million in rent. The (now former) property owner filed a cert petition, asking the Supreme Court to review these Questions Presented:
The Montana Supreme Court held on a summary judgment record that the State of Montana owns the riverbeds under more than 500 miles of river, including the riverbeds under multiple hydropower facilities on the upper Missouri, Madison, and Clark Fork rivers. This came as quite a shock, because for more than a century the riverbeds beneath those facilities have been treated as owned by private parties or the federal government. In reaching this result, the lower court concluded that the rivers were navigable when Montana joined the Union in 1889 and, therefore, that Montana held title to the riverbeds. The court upheld summary judgment for the State, notwithstanding a prior federal court decree, as well as 500 pages of expert testimony and exhibits disputing Montana’s claim to title, establishing that the relevant sections of the rivers were not navigable at statehood. The consequences are draconian: The court below held that the State is entitled to collect tens of millions in retroactive back rent and millions more in future payments from the owners of the hydropower facilities.
The questions presented are:
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?
The Court agreed to review the first question only.
While the Court may not expressly revisit judicial takings, this case raises the question of whether a state court can overturn more than 100 years of its property law and stray from the federal definition of navigability. These type of cases can be fascinating, as they raise issues of historical navigability. For example, we litigated a case in the Court of Federal Claims in which the navigability of a part of San Francisco Bay at statehood was a critical issue, and ended up proving the condition of the land and water in 1850 with historical maps, navigability charts, and contemporaneous court records. Alameda Gateway, Ltd. v. United States, 45 Fed. Cl. 757 (1999).
We’ll be following the Montana case. Stay tuned.