United States District Court, D. Montana, Helena Division
L. Christensen, Chief District Judge.
States Magistrate Judge Jeremiah C. Lynch entered Findings
and Recommendations in this case on January 23, 2017,
recommending denial of Plaintiff the State of Montana's
("the State") Objection and Motion to Dismiss
Defendant Talen Montana, LLC's ("Talen")
Consent to Removal (Doc. 14). Judge Lynch further recommended
granting the State's Motion to Remand (Doc. 12). Both
Talen and Defendant Northwestern Corporation
("Northwestern") timely filed objections and are
therefore entitled to de novo review of the specified
findings and recommendations to which they object. 28 U.S.C.
§ 636(b)(1). The portions of the findings and
recommendations not specifically objected to will be reviewed
for clear error. 28 U.S.C. § 636(b)(1)(A); McDonnell
Douglas Corp. v. Commodore Bus. Mack, Inc., 656 F.2d
1309, 1313 (9th Cir. 1981). Clear error exists if the Court
is left with a "definite and firm conviction that a
mistake has been committed." United States v.
Syrax, 235 F.3d 422, 427 (9th Cir. 2000) (citations
reasons stated below, Judge Lynch's Findings and
Recommendations are adopted as to the State's Motion to
Dismiss Talen's Consent to Removal. However, the Court
rejects the Findings and Recommendations regarding the
State's Motion to Remand.
2003, PPL Montana, LLC ("PPL"), was sued by parents
of Montana schoolchildren in the Missoula division of this
Court based upon diversity jurisdiction. The plaintiffs
alleged that PPL was operating hydroelectric facilities on
state-owned riverbeds and argued that the riverbeds were part
of Montana's school trust lands which entitled plaintiffs
to compensation for PPL's use of the property. The
parents were dismissed for lack of standing after the State
intervened as a party plaintiff. PPL then moved to dismiss
the case for lack of subject matter jurisdiction asserting
that the State is not a citizen for purposes of diversity
jurisdiction. The Court granted PPL's motion and
dismissed the case.
2004, PPL filed suit in state court seeking a declaration
that the State was not entitled to compensation for PPL's
use of the riverbeds. The State counterclaimed seeking a
declaration that it did own the riverbeds and was entitled to
collect rent from PPL for their use. The state court granted
summary judgment to the State. The state court found the
riverbeds of the Clark Fork, Missouri, and Madison rivers
were navigable and accordingly held that the State owned the
riverbeds through navigability for title under the Equal
Footing Doctrine. The Montana Supreme Court affirmed the
state district court in PPL Montana, LLC v. State of
Montana, 229 P.3d 421, 443 (Mont. 2010), concluding the
rivers were navigable as a matter of law at the time of
statehood in 1889, meaning the State acquired title to the
riverbeds at that time under the Equal Footing Doctrine.
petitioned the United States Supreme Court for a writ of
certiorari, which was granted on the sole issue of whether
the Montana Supreme Court erred in its application of the
navigability for title doctrine. PPL Montana, LLC v.
Montana, 132 S.Ct. 1215 (2012). The Supreme Court
reversed and remanded, holding that the Montana Supreme Court
erred in disregarding the segment-by-segment approach to
navigability for title, and by relying on evidence of
present-day recreational use to assess navigability at the
time of statehood. Id. at 1229, 1233-34.
September 2013, Northwestern entered into a purchase and sale
agreement for the acquisition of PPL's hydroelectric
facilities in Montana, including the facilities at issue
here. (Doc. 1-1 at 4.) The acquisition was approved by the
Montana Public Service Commission in September 2014.
Id. In June 2015, PPL Montana, LLC changed its legal
name to Talen Montana, LLC. (Docs. 1-1 at 4; 13-3 at 2-3.)
further pursuing litigation, the State and Talen stipulated
in late March 2016 that the State would be realigned as the
Plaintiff and Talen would be realigned as the Defendant.
(Doc. 13-3 at 3.) The parties also stipulated to bifurcate
issues of liability and damages, with all claims or defenses
relating to navigability at the time of statehood to be
adjudicated first. Id. Six days later, on March 31,
2016, the State filed its complaint on remand naming both
Talen and Northwestern as Defendants. (Doc. 13-4.) The State
asks for a declaration that it owns the land occupied by
Defendants' hydroelectric facilities and seeks to recover
April 20, 2016, Northwestern filed a notice of removal
invoking this Court's federal question jurisdiction.
(Doc. 1.) Talen consented in writing to the removal. (Doc.
1-3.) The State has since filed two motions challenging the
propriety of North Western's removal and the subject
matter jurisdiction of this Court. First, the State filed a
Motion to Remand (Doc. 12) arguing that Northwestern has not
met its burden of establishing federal question subject
matter jurisdiction (Doc. 13). Second, the State filed an
Objection and Motion to Dismiss Talen's Consent to
Northwestern's Notice of Removal (Doc. 14) asserting that
Talen should be judicially estopped from consenting to
removal based on federal question jurisdiction, meaning that
Northwestern cannot satisfy the requirement that all
defendants consent to removal (Doc. 15).
Motion to Dismiss Talen's Consent to Removal
Court agrees with Judge Lynch that the State's Objection
and Motion to Dismiss Talen's Consent to
Northwestern's Notice of Removal (Doc. 14) should be
denied. No party objects to this finding and recommendation.
Thus, reviewing for clear error, the Court finds none and
this motion will be denied. Judge Lynch correctly concluded:
1) that the later-served defendant rule should apply to
Northwestern; 2) applying the waiver doctrine to an
earlier-served defendant would prevent all defendants from
consenting to removal which would deprive the later-served
defendant of its right to remove and defeat the purpose of
the later-served defendant rule; and 3) the litigation
conduct of Talen, as the earlier-served defendant, has no
effect on Northwestern's right of removal under the
later-served defendant rule. (Doc. 144 at 9-13.)