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State v. Talen Montana, LLC

United States District Court, D. Montana, Helena Division

February 12, 2019

STATE OF MONTANA, Plaintiff,
v.
TALEN MONTANA, LLC, a Delaware Limited Liability Company, f/k/a PPL CORPORATION, d/b/a Northwestern Energy, a Delaware Corporation, Defendants.

          ORDER

          DANA L. CHRISTENSEN, CHIEF JUDGE UNITED STATES DISTRICT COURT.

         Northwestern Corporation and Talen (together Defendants) move the Court to join the United States as a necessary party under Federal Rule of Civil Procedure 19. (Doc. 192, 197). The State of Montana opposes this motion. (Doc. 198). The Court has read the parties briefs and conducted a lengthy hearing on February 8, 2019.

         In reaching its decision, the Court has an interest not only in arriving at the right conclusion as a matter of law, but also in guiding this litigation efficiently. See Fed. R. Civ. P. 1. To the extent that the United States has an interest in this case, the Court wants that interest developed sooner rather than later. For the reasons explained more fully below, the Court will grant the motion. Because the parties are familiar with the facts of this case, they will only be stated as necessary to understand this Court's Order.

         ANALYSIS

         Under Rule 19(a)(1), a party is necessary, and joinder is required, if: (1) "in that [party's] absence, the court cannot accord complete relief among existing parties"; or (2) a party has an interest in the action and resolving the action in its absence may as a practical matter impair or impede that party's ability to protect that interest; or (3) if a party has an interest in the action and resolving the action in its absence creates a substantial risk that failure to join the party may leave an existing party subject to inconsistent obligations because of that interest. Fed.R.Civ.P. 19(a)(1); Salt River Project Agr. Imp. & Power Dist. v. Lee, 672 F.3d 1176, 1179 (9th Cir. 2012).

         Federal Rule 19 contemplates "entertaining the broadest possible scope of action consistent with fairness to the parties; joinder of claims, parties and remedies is strongly encouraged." United Mine Workers of Am. v. Gibbs, 383 U.S. 715, 724 n.10 (1966). "Further, a court must protect the interests of the parties not before it to avoid possible prejudicial effect; failure of a court to protect those interests by joinder may amount to a violation of due process." R. J. Williams Co. v. Fort Belknap Hous. Auth., 92 F.R.D. 17, 21 (D. Mont. 1981).

         Defendants argue that joinder of the United States is necessary under each of Rule 19's disjunctive requirements. Because this Court agrees that the United States has an interest in the litigation that runs a substantial risk of subjecting Defendants to incurring double or otherwise inconsistent obligations, the Court will not address Defendants' other arguments.

         I. The United States Has a Legally Protected Interest in the Litigation

         Rule 19 requires that a purported necessary party have a legally protected interest in the pending litigation. Cachil Dehe Band of Wintun Indians of the Colusa Indian Cmty. v. California, 547 F.3d 962, 970 (9th Cir. 2008). "This interest must be more than a financial stake, and more than speculation about a future event." Makah Indian Tribe v. Verity, 910 F.2d 555, 558 (9th Cir. 1990) (internal citations omitted). However, the interest itself need "merely be a 'claim'-that is, '[j]ust adjudication of claims requires that courts protect a party's right to be heard and to participate in adjudication of a claimed interest, even if the dispute is ultimately resolved to the detriment of that party.'" White v. Univ. of Calif, 765 F.3d 1010, 1029-30 (9th Cir. 2014) (quoting Shermoen v. United States, 982 F.2d 1312, 1317 (9th Cir. 1992)). A legally sufficient claim is one that is "nonfrivolous." Id. at 1030.

         In Makah Indian Tribe, the Ninth Circuit found that a court's decision that would effectively reallocate a fixed or limited resource required the participation of absent neighboring tribes. 910 F.2d at 558. There, the Makah Tribe challenged "federal regulation allocating] the ocean harvest of migrating Columbia River salmon" where the regulation set lower harvest levels than those protected by treaty. Id. at 556. The Makah Tribe, one of twenty-three tribes covered by the treaty, challenged that the quotas imposed by regulation were unfair and violated their treaty rights. Id. at 557. Because the district court determined that the tribe was primarily seeking to reallocate harvest quotas, the district court sua sponte determined that the absent tribes were "necessary" parties and dismissed the suit. Id. The Tribe appealed, arguing that they only sought to enforce their own treaty rights and to increase the overall harvest quotas, and therefore their claims would not negatively impact any other tribe's interest. Id. However, the Ninth Circuit sided with the lower court. Id. at 559. The court reasoned that because the subject matter of the litigation was the allocation of salmon-which is a limited resource-any decision with regard to the Tribe would necessarily reduce the salmon available to other tribes. Id. Further, the court determined that those interests were not adequately protected by the federal government to the extent "those interests conflict among themselves." Id.

         Here, Defendants argue that the United States has an interest in the outcome of this litigation because it asserts ownership and has charged rent to Northwestern for its use of land that may be determined to be owned by the State in the course of litigation. Defendants argue that the United States has asserted this interest in multiple ways, including participating as an amicus before the United States Supreme Court.

         The State of Montana asserts that the only interest the United States has expressed in this litigation is the interest in advocating for a particular legal test and observes that the United States has not sought to enter this litigation as a party at any time during the now-sixteen years that this case has been pending. Further, the State contends that it does not seek conflicting title to any federal land, and the only question is whether various segments of the river were navigable at statehood. (Doc. 204 at 10 13 n.5 (stating that because the sole issue during this stage of litigation is whether certain segments of land passed to the State of Montana at statehood under the equal footing doctrine "there is no dispute between Montana and the United States[.]").) And, because the State plans to cooperate with the federal government in answering this question, it posits that there is no conflict of interest that would require the United States to join in the fray.[1]

         This final argument is not persuasive. While it is true that there is no dispute over the proper legal standard, nor is there dispute over the outcome for purpose of title in the event certain segments of waters are determined to be navigable, the question of navigability is a question of fact and the consequences of that question will determine which of two sovereigns may charge rent to Northwestern for its use, enjoyment, and occupancy of that land. Here, as in Makah Indian Tribe, the United States has an interest in this litigation because the result will have the practical effect of allocating a fixed resource-title to land- between two sovereigns.

         While the Ninth Circuit cautions that a "mere financial stake" in the outcome of litigation is not a sufficient interest to render a particular party "necessary," the interest here is greater-the United States has an interest in the rent that follows as a right of holding title to land, accompanied by the right to issue permits ...


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