Lyman Creek, LLC v. City of Bozeman

397 Mont. 365

450 P.3d 872

2019 MT 243

LYMAN CREEK, LLC, a Montana Limited Liability Company, Plaintiff and Appellant,

v.CITY OF BOZEMAN, Defendant and Appellee.

DA 19-0112

Supreme Court of Montana.

Submitted on Briefs: August 21, 2019

Decided: October 15, 2019

For Appellant: Jack G. Connors, Jacqueline R. Papez, Doney Crowley P.C., Helena, Montana

For Appellee: Peter G. Scott, Peter G. Scott Law Offices, PLLC, Bozeman, Montana

For Amicus Curiae: Meg K. Casey, Laura S. Ziemer, Patrick A. Byorth, Trout Unlimited, Bozeman, Montana

Justice Laurie McKinnon delivered the Opinion of the Court.

¶1 Lyman Creek, LLC (Lyman) appeals an order of the Eighteenth Judicial District Court, Gallatin County, granting City of Bozeman’s (City) motion to dismiss.

¶2 We affirm. We restate the dispositive issue as follows: Does § 85-2-114, MCA, of the Montana Water Use Act (Act) preclude an implied private right of action for judicial enforcement of the Act?

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Lyman Creek is a perennial stream in Gallatin County that flows through private property owned by Lyman. Both Lyman and the City own water rights sourced by Lyman Creek.

¶4 In March 2018, Lyman submitted a complaint to the Montana Department of Natural Resources and Conservation (DNRC) containing allegations of unpermitted water use by the City. DNRC has not taken any enforcement action on Lyman’s complaint. On August 6, 2018, Lyman filed a complaint in District Court alleging the City was in violation of the Act and seeking injunctive relief and attorney fees.

¶5 Lyman asserted that § 85-2-125(2), MCA, which allows a party to recover costs when enjoining the use of water by a person that does not have a water right, expressly provides a private right of action to enforce the Act. Lyman reasoned that § 85-2-125(2), MCA, would be meaningless if there is no private right of action to obtain injunctive relief. Lyman’s complaint requested injunctive relief under the Act and § 27-19-102, MCA. Additionally, Lyman argued that even if § 85-2-125(2), MCA, does not expressly provide a private right of action to enforce the Act, that right is implied by the Act in its entirety. The City moved to dismiss Lyman’s complaint for failure to state a claim pursuant to M. R. Civ. P. 12(b)(6), contending that the Act does not create a private right of action for enforcement through injunctive relief, just as it does not create a private right of action, citing Faust v. Utility Solutions, LLC , 2007 MT 326, 340 Mont. 183, 173 P.3d 1183, to enforce civil penalties. Instead, the City claimed, § 85-2-114, MCA, authorizes only DNRC, the attorney general, or the county attorneys to seek judicial enforcement of the Act, including injunctive relief. Importantly, the City acknowledged that Lyman was "not without recourse," as "the mechanism for invoking a district court’s supervisory jurisdiction over water distribution is found in [§] 85-2-406, MCA."

¶6 The District Court granted the City’s motion to dismiss under M. R. Civ. P. 12(b)(6) and dismissed Lyman’s complaint. The District Court held that § 85-2-125(2), MCA, may be invoked by a party with a water right to receive costs and attorney fees in an action to enjoin the use of water by a person that does not have a water right, and that, because Lyman and the City both had water rights originating from Lyman Creek, § 85-2-125(2), MCA, was inapplicable.¹ As the plain language of § 85-2-125(2), MCA, precluded its application, the District Court declined to consider whether § 85-2-125(2), MCA, created an express private right of action.² The District Court next concluded that § 85-2-114, MCA, which allows for judicial enforcement of the Act, does not support an implied private right of action for enforcement. In analyzing the plain language of § 85-2-114, MCA, the District Court held that the legislature did not intend to create a private right of action for enforcement, but instead left enforcement of the Act to DNRC, the attorney general, or the county attorneys. Lyman appeals.

STANDARD OF REVIEW

¶7 "A motion to dismiss pursuant to M. R. Civ. P. 12(b)(6) requires a district court to determine whether a claim has been adequately stated in the pleadings." Woods v. Shannon , 2015 MT 76, ¶ 9, 378 Mont. 365, 344 P.3d 413 (citing Meagher v. Butte-Silver Bow City-County , 2007 MT 129, ¶ 15, 337 Mont. 339, 160 P.3d 552 ). "The pleadings should not be dismissed unless it appears certain that the petitioner will be unable to recover under any set of facts which could be proven in support of his or her claim." Woods , ¶ 9 (citing Kleinhesselink v. Chevron, U.S.A. , 277 Mont. 158, 161, 920 P.2d 108, 110 (1996) ). "The pleadings must be construed in the light most favorable to the petitioner, and all allegations of fact contained in the pleadings are taken as true." Woods , ¶ 9 (citing Plouffe v. State , 2003 MT 62, ¶ 8, 314 Mont. 413, 66 P.3d 316 ).

¶8 A district court’s decision to grant a motion to dismiss under M. R. Civ. P. 12(b)(6) operates as a conclusion of law. Faust v. Util. Solutions, LLC , 2007 MT 326, ¶ 11, 340 Mont. 183, 173 P.3d 1183 (citing Bar OK Ranch, Co. v. Ehlert , 2002 MT 12, ¶ 31, 308 Mont. 140, 40 P.3d 378 ). We review a district court’s conclusions of law to determine whether the trial judge’s interpretation of the law is correct. Carbon County v. Union Reserve Coal Co. , 271 Mont. 459, 469, 898 P.2d 680, 686 (1995) (citing Steer, Inc. v. Dep’t of Revenue , 245 Mont. 470, 474-75, 803 P.2d 601, 603 (1990) ).

DISCUSSION

¶9 Lyman does not dispute that it is receiving water in accordance with its water right, nor does Lyman ask the District Court to supervise the distribution of water between it and the City pursuant to § 85-2-406, MCA, which provides for district court supervision of water distribution among appropriators. Instead, Lyman asks the District Court to declare various violations of the Act on the part of the City, and to enjoin the City from any further violations. In particular, Lyman alleges the City is diverting water at higher rates than authorized by its rights; installing and diverting from a spring box without authorization; increasing the period of use of its diversions; and diverting ground water when it is only authorized to divert surface water. Lyman does not allege that any of the City’s conduct has interfered with its water right. Lyman consistently conflates the right to protect a water right and the right to enforce the Act. The distinction between protection of an established water right under § 85-2-406, MCA, and enforcement of the Act under § 85-2-114, MCA, is essential and warrants clarification.

¶10 The Montana Water Use Act was enacted in 1973 in response to a constitutional mandate requiring the legislature to "provide for the administration, control, and regulation of water rights and [to] establish a system of centralized records" of all water rights. Mont. Const. art. IX, § 3 (4). In the general provisions of Title 85, Chapter 2 of the Act, the legislature made clear its "intent that the state, to the fullest extent possible, retain and exercise its authority to regulate water use and provide forums for the protection of water rights, ... and resolve issues concerning its authority over water rights and permits." Section 85-2-101(6), MCA.

¶11 In furtherance of the legislature’s intent that the state retain and exercise its authority to regulate water use, § 85-2-114, MCA, provides for judicial enforcement of the Act. Section 85-2-114(1), MCA, expressly authorizes particular entities or public officials, "by a means reasonably considered sufficient," to seek enforcement of the Act in the district courts. The following specific judicial enforcement remedies are available where DNRC petitions the court:

(a) regulate the controlling works of an appropriation as may be necessary to prevent the wasting or unlawful use of water or to secure water to a person having a prior right to its use;

(b) order the person wasting, unlawfully using, or interfering with another’s rightful use of the water to cease and desist from doing so and to take steps that may be necessary to remedy the waste, unlawful use, or interference; or

(c) issue a temporary, preliminary, or permanent injunction to prevent a violation of this chapter. Notwithstanding the provisions of Title 27, chapter 19, part 3, a temporary restraining order must be granted if it clearly appears from the specific facts shown by affidavit or by the verified complaint that a provision of this chapter is being violated.

Section 85-2-114(1), MCA, (emphasis added). Notably, § 85-2-114(1)(c), MCA, provides that temporary restraining orders "must be granted" where an affidavit or verified complaint filed by DNRC contains specific facts showing violations of the Act. The attorney general or county attorneys may also bring suit to enjoin waste, unlawful use, interference, or other violations of the Act. See § 85-2-114(3), (4), MCA. To be clear, the plain language of § 85-2-114, MCA, entitled "judicial enforcement," refers only to actions initiated by DNRC, the attorney general, or the county attorneys. There is nothing in § 85-2-114, MCA, that expressly provides for a private right to an enforcement action. See Faust , ¶ 25 (" Section 85-2-114, MCA, does not provide expressly for an action brought by a private citizen.").

¶12 Section 85-2-406, MCA, on the other hand, provides a statutory remedy for a water user when a controversy in distribution arises, and sets forth the method for invoking a district court’s supervisory jurisdiction over water distribution among appropriators. See Kelly v. Teton Prairie, LLC , 2016 MT 179, ¶ 22, 384 Mont. 174, 376 P.3d 143. The district court supervises the distribution of water among appropriators: (1) pursuant to a district court decree entered prior to July 1, 1973, § 85-2-406(2)(a), MCA ; (2) pursuant to a petition filed by a party to the controversy for certification to the water court where not all existing...