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United States (Department of Army Corps of Engineers) v. United States (Army Corp of Engineers)

Supreme Court of Montana

July 30, 2019

United States of America (Department of Army Corps of Engineers); City of Fort Peck, CLAIMANT:
v.
United States of America (Army Corp of Engineers); State of Montana Attorney General, OBJECTORS: United States of America (Department of Army Corps of Engineers). NOTICE OF INTENT TO APPEAR:

          Submitted on Briefs: April 17, 2019

          APPEAL FROM: Montana Water Court, Cause No. 40E-69B Honorable Russ McElyea, Presiding Judge

          For Appellant: Bina R. Peters, Dana Elias Pepper, River and Range Law, PLLC, Bozeman, Montana

          For Appellee: Timothy C. Fox, Montana Attorney General, Jeremiah D. Weiner, Melissa A. Schlichting, Assistant Attorneys General, Helena, Montana, James J. DuBois, U.S. Department of Justice, ENRD Natural Resources Section, Denver, Colorado (Army Corps of Engineers)

          OPINION

          JIM RICE JUSTICE

         ¶1 Claimant City of Fort Peck (Fort Peck) appeals the order entered by the Montana Water Court determining the volume of water to which Fort Peck is entitled pursuant to its Claim 40E 182897-00 in Missouri River Basin (Basin 40E), between the Musselshell River and Fort Peck Dam. We affirm and address the following issue:

Did the Water Court err by entering conclusions in contradiction to the pretrial order and violate Fort Peck's due process rights?

         FACTUAL AND PROCEDURAL BACKGROUND

         ¶2 Water Claim 40E 182897-00[1] is a municipal water right claimed by Fort Peck, which lies on the northeast end of Fort Peck Reservoir, southeast of Glasgow, and has a present population of 251 people. Fort Peck came into existence in 1934, during construction of the Fort Peck Dam, when the town was built to house workers on the dam project. Fort Peck and the surrounding area then reached a population of over 10, 000 people, and local amenities included a hotel, theatre, hospital, school, stores, dormitories, bunkhouses, as well as homes. Fort Peck's population dropped dramatically after the dam was completed, and the town no longer boasts a school, hospital or grocery store. Although evidence varied, it appears Fort Peck's population has also suffered a gradual decline since 1990. The town's hotel and theatre continue to open seasonally.

         ¶3 Fort Peck originally claimed a volume of 1, 500 acre-feet per year (AFY) based upon an assumed continuous, year-round diversion of 930 gallons per minute. During the claim examination process, the Department of Natural Resources and Conservation (DNRC) added an issue remark to the claim questioning the claimed volume. The Water Court ordered Fort Peck to meet with the DNRC to attempt resolution of the issue remark, and ordered the DNRC to file a memorandum with its recommendations for resolution. The parties were unable to resolve the remark, and the DNRC filed a recommendation that the volume on the claim be set at 206 AFY, based upon available evidence. The Water Court joined the State of Montana pursuant to § 85-2-248(7)(a), MCA.[2] In its order joining the State, the Water Court stated that "[t]he prima facie status of Fort Peck's claimed volume has been overcome by evidence showing it has not used that volume for the last twenty-five years and has no plan to do so in the future," but reserved for trial a ruling on the presumption of nonabandonment for municipal water rights claims under § 85-2-227(4), MCA. At the request of the parties, the Water Court stayed the case pending a decision by this Court in City of Helena v. Cmty. of Rimini, 2017 MT 145, 388 Mont. 1, 397 P.3d 1, in which § 85-2-227(4), MCA, was at issue. After issuance of this Court's decision in City of Helena, the case proceeded on hearing track, W. R. Adj. R. 16(c), and the parties engaged in discovery.

         ¶4 The parties submitted a proposed joint pretrial order on June 29, 2018. Pertaining to the arguments here, the parties agreed to the following within the proposed order, including a reduction of Fort Peck's claim to 773 AFY:

AGREED FACTS
4. Fort Peck has historically beneficially used 223 AFY . . . which includes 17 AFY for backwash of its water treatment plant.
5. The capacity of Fort Peck's water treatment and distribution system is 1500 AFY.
CONTENTIONS
1. Fort Peck is entitled to a decreed volume . . . that reflects its actual historical beneficial use of water plus a volume for future use commensurate with its ...

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