Clark Fork Coal. v. Mont. Dep't of Natural Res. & Conservation

403 Mont. 225

481 P.3d 198

2021 MT 44

CLARK FORK COALITION, Rock Creek Alliance, Earthworks, and Montana Environmental Information Center, Petitioners and Appellees,

v.MONTANA DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION, and RC Resources, Inc., Respondents and Appellants.

DA 19-0484

Supreme Court of Montana.

Argued and Submitted: July 15, 2020

Decided: February 17, 2021

For Appellants: Brian C. Bramblett (argued), Danna R. Jackson, Department of Natural Resources and Conservation, Helena, Montana Ryan P. McLane (argued), Holly Jo Franz, Franz & Driscoll, PLLP, Helena, Montana (for RC Resources, Inc.)

For Appellees: Katherine K. O'Brien (argued), Timothy J. Preso, Earthjustice, Bozeman, Montana

For Amici Curiae: Oliver J. Urick, Hubble Law Firm, Stanford, Montana (Montana Stockgrowers Association) Jack G. Connors, Doney Crowley P.C., Helena, Montana (for Montana Water Resources Association and Montana Farm Bureau Federation) Meg K. Casey, Laura S. Ziemer, Patrick A. Byorth, Trout Unlimited, Bozeman, Montana

Justice Dirk Sandefur delivered the Opinion of the Court.

¶1 RC Resources, Inc. (RCR) and the Montana Department of Natural Resources and Conservation (DNRC) appeal the judgment of the Montana First Judicial District Court, Lewis and Clark County, reversing a DNRC contested case decision granting RCR a beneficial water use permit pursuant to §§ 85-2-301(1), -302(1), and -311, MCA. The permit would have authorized RCR to annually appropriate up to 857 acre-feet of groundwater that will flow into the underground adits and works of the proposed Rock Creek Mine near Noxon, Montana. We address the following issues on appeal:

1. Whether DNRC correctly concluded that, as used in § 85-2-311(1)(a)(ii), MCA,"legal demands" does not include consideration of whether the subject water use complies with applicable MWQA nondegradation standards?

2. Whether § 85-2-311(2), MCA, violates Article II, Section 3, and Article IX, Section 1, of the Montana Constitution (right to clean and healthful environment) as applied to Objectors’ MWQA nondegradation objections to the proposed MWUA beneficial use permit?

We reverse.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 The narrow issues presented are purely legal issues of statutory and constitutional construction that do not depend upon adjudication of related factual issues. These issues do not arise in a vacuum, however. At the core of the issues presented is the assertion of the petitioner Objectors that DNRC's construction and application of the pertinent provisions of the Montana Water Use Act, Title 85, chapter 2, MCA (MWUA), will deny them an adequate remedy to ensure that RCR's proposed groundwater use will comply with applicable nondegradation standards of the Montana Water Quality Act, Title 75, chapter 5, MCA (MWQA). A general overview of the extensive developmental and regulatory history and status of the Rock Creek Mine Project (RCMP) is thus necessary to contextually frame the issues.

1. RCMP Description.

¶3 The RCMP is a proposed two-phase underground mining operation spread across various sites in and about the Kaniksu National Forest in Sanders County, northeast of Noxon, Montana. The Kootenai National Forest (KNF) of the United States Forest Service (USFS) administers the Kaniksu National Forest under federal law.¹ The ultimate goal of the project is to commercially mine silver and copper from an underground ore body over a 30-plus year period. The current applicant-operator of the project is RCR, a wholly-owned subsidiary of Hecla Mining Company, an Idaho corporation.² The proposed project sites will be primarily located on USFS-KNF land, with secondary support sites on adjoining private land owned by RCR, in and about the Rock Creek drainage in Montana's Cabinet Mountains range. From the conflux of its east and west forks, Rock Creek runs down and ultimately drains into the Clark Fork River below the Noxon Rapids Dam.

¶4 As currently planned, proposed Phase 1 will include construction of a 6,700-foot evaluation adit (i.e. tunnel/shaft), 16-18 feet high by 20 feet wide, with the surface portal located on a 10.4-acre adit site on USFS-KNF land at an approximate elevation of 5,775 feet. The adit site is adjacent to an unnamed tributary of the West Fork Rock Creek which, at that location, is an ephemeral stream fed by seasonal snow melt. It later becomes a perennial stream about 0.8 mile below the evaluation adit site where further fed by two underground springs. From its surface portal, the evaluation adit will traverse under USFS-KNF land on a -10% grade, continue under a small parcel of adjoining RCR-owned land, and on to the target ore body largely located under the Cabinet Mountains Wilderness (CMW) area of the KNF. The proposed Phase 1 adit surface portal site is on USFS-KNF land outside the CMW.

¶5 Phase 1 will include construction of various support facilities and related improvements on the adit site including, inter alia , a temporary steel shop building, a lined ground/storm water retaining pond, and a pumping system which will pump retained stormwater and adit groundwater down mountain through a temporary 6-inch pipeline to a wastewater treatment facility to be constructed on a lower Phase 1 support site on RCR-owned land near the bottom of the Clark Fork River valley. Phase 1 will also include construction of various other support facilities on the secondary support site, as well as various improvements on a 2.5 mile stretch of one of two existing USFS roads that will provide access from the support site to Phase 1 facilities.³ As currently proposed, Phase 1 will disturb a total of 19.6 acres on public and private land and involve excavation of approximately 178,000 tons of waste rock and ore from the evaluation adit. The limited purpose of Phase 1 is to obtain additional metallurgical, geotechnical, and hydrological data necessary for further assessment of the technical, economic, and legal feasibility of commercial mining operations under proposed Phase 2. Initial construction of the Phase 1 adit and related facilities is estimated to take 18-24 months.

¶6 As currently proposed, Phase 2 will include construction of an underground room and pillar mine, largely located under USFS-KNF land within the CMW, with two 15,530-feet production adits (i.e. a conveyor adit and a service adit) down to the ore body from surface portals on the proposed Phase 2 mill site located on USFS-KNF land outside the CMW. The Phase 2 adit portals and mill site will lie at a 3,040-feet elevation, below the conflux of the east and west forks of Rock Creek. The proposed Phase 2 mill site will include a mill facility using a conventional crushing and froth flotation process, adit conveyor facilities, a sewage treatment facility, and various office, shop, and warehouse buildings. RCR plans to ship processed ore concentrates from the mill by rail to a smelting facility in another area. Phase 2 will also include construction of a paste tailings facility (designed to reduce mine tailings to a benign paste-like substance), a paste tailings material storage facility, and related support facilities on RCR-owned land near the bottom of the valley.

¶7 In accordance with state and federal law, the Phase 1 and Phase 2 plans call for bonded reclamation of all disturbed sites. If the project does not proceed to Phase 2, the Phase 1 plan calls for RCR to perform required reclamation on all Phase 1 facilities and sites.⁴ If Phase 2 proceeds, the Phase 2 plan calls for the Phase 1 evaluation adit to serve as an additional ventilation shaft and secondary escapeway for the mine, but for RCR to remove other facilities from the Phase 1 adit site.⁵

2. Affected State Waters and Cabinet Mountains Wilderness.

¶8 In the Cabinet Mountains, groundwater collects and recharges in bedrock faults and fractures from seasonal snow-melt and rain. Where groundwater feeds (i.e. is hydraulically connected⁶ ) to surface waters, changes in groundwater volume can affect the volume and base flows of those surface waters. Significant reduction of surface water volume or base flows can in turn degrade surface water quality. Accordingly, based on area geology, hydrology, and the proposed mine and adit locations, depletion of groundwater volume due to ongoing underground adit inflow will reduce water volume and base flows to various degrees in various area surface water bodies in the various affected drainages of the Clark Fork River including, as pertinent here, the East Fork Bull River, Bull River (including Copper Gulch creek), Rock Creek (including east and west forks), and various source tributaries.

¶9 The CMW is a federally-protected wilderness area in the Kaniksu and Kootenai National Forests as designated under the National Wilderness Preservation Act of 1964.⁷ However, as characterized by the USFS:

The Wilderness Act requires the Forest Service to ensure that valid [mineral] rights exist before approving mineral activities inside a congressionally designated wilderness area. To establish valid existing rights, mining claimants must show they have made a discovery of a valuable mineral deposit on the claim(s) before the withdrawal date and have maintained that discovery. In 1985, the Forest Service determined that RCR's predecessor-in-interest had established valid existing rights to the deposit[s] ... [at issue here].

In accordance with the Wilderness Act, RCR's predecessor-in-interest received a patent only to the minerals within the wilderness, with the federal government retaining the surface estate. For those claims outside the wilderness, RCR received title to both the surface and mineral estate. These patented mining claims contain the ore reserves RCR has proposed to mine. Holders of validly existing mining claims within National Forest Wilderness are accorded the rights provided by U.S. mining laws and must comply with the Forest Service mineral regulations. Mining operations can occur in the wilderness but may be subject

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