Montana v. Talen Mont., LLC

574 F.Supp.3d 795

State of MONTANA, Plaintiff,

v.TALEN MONTANA, LLC, f/k/a PPL Montana, LLC, and NorthWestern Corporation, d/b/a NorthWestern Energy, a Delaware corporation, and United States of America, United States Forest Service, United States Bureau of Reclamation, and United States Bureau of Land Management, Defendants.

CV 16-35-H-DLC

United States District Court, D. Montana, Helena Division.

Signed December 7, 2021

Anthony Johnstone, Johnstone PLLC, Missoula, MT, James P. Molloy, Gallik, Bremer, & Molloy, P.C., Bozeman, MT, John E. Bloomquist, Bloomquist Law Firm, P.C., Dillon, MT, Timothy C. Fox, Patrick M. Risken, Montana Attorney General, Elizabeth R. Story, Richard Charles Tappan, Jr., Bloomquist Law Firm, P.C., Helena, MT, for Plaintiff.

Kyle A. Gray, Brianne C. McClafferty, Holland & Hart, Robert L. Sterup, Brown Law Firm, P.C., Billings, MT Defendant/Talen Montana, LLC.

Stephen D. Bell, Dorsey & Whitney LLP, Missoula, MT, B. Andrew Brown, Pro Hac Vice, Ben D. Kappelman, Brian B. Bell, Pro Hac Vice, Dorsey & Whitney LLP, Minneapolis, MN, for Defendant/NorthWestern Corporation.

Jeffrey Scott Thomas, United States Department of Justict, Washington, DC, David W. Gehlert, James J. DuBois, United States Department of Justice, Denver, CO, John M. Newman, U.S. Attorney's Office, Missoula, MT, Mark Steger Smith, U.S. Attorney's Office, Billings, MT, for Defendant/United States of America, United States Forest Service, United States Bureau of Reclamation, United States Bureau of Land Management.

ORDER

Dana L. Christensen, United States District Judge

Before the Court are two motions for partial summary judgment and several motions in limine. (Docs. 255, 260, 276, 279, 282, 287, 290, 291.) The Court will address each motion in turn.

FACTUAL AND PROCEDURAL BACKGROUND

The long procedural history of this case is summarized in this Court's order granting in part Defendants' motions to dismiss. Montana v. Talen Montana, LLC , No. CV 16-35-H-DLC, 2018 WL 3649606, at *1–3 (D. Mont. Aug. 1, 2018). The operative complaint alleges that Defendants Talen Montana, LLC ("Talen") and NorthWestern Corporation ("NorthWestern") occupy land owned by the State of Montana, and Talen and NorthWestern owe the state compensation for their past and current occupation of that land. (Doc. 221.) The United States was joined as a necessary party because it asserts ownership of the land in question and charges rent to NorthWestern for its use. (Doc. 216.) Montana alleges ownership of submerged lands underlying certain segments of the Madison, Missouri, and Clark Fork Rivers under the Equal-Footing Doctrine. (Doc. 221 at ¶¶ 40–41, 63–81.) Montana seeks declaratory judgment that it owns the land in question, compensation or restitution for Talen and NorthWestern's past and present occupation and use of the land, and an order quieting title to the land. (Id. ¶¶ 94–114.)

LEGAL STANDARD

Under the Equal-Footing Doctrine, "[u]pon statehood, the State gains title within its borders to the beds of waters then navigable[.]" PPL Montana, LLC v. Montana , 565 U.S. 576, 591, 132 S.Ct. 1215, 182 L.Ed.2d 77 (2012). Rivers are navigable if they "are navigable in fact. And they are navigable in fact when they are used, or are susceptible of being used, in their ordinary condition, as highways for commerce, over which trade and travel are or may be conducted in the customary modes of trade and travel on water." Id. at 592, 132 S.Ct. 1215 (quoting The Daniel Ball , 77 U.S. (10 Wall.) 557, 563, 19 L.Ed. 999 (1871) ). The navigability of waters for purposes of state title "is determined at the time of statehood ... and based on the natural and ordinary condition of the water[.]" Id. at 592, 132 S.Ct. 1215 (internal quotation omitted). Navigability for title is distinct from navigability determinations in the context of admiralty jurisdiction (which extends to water routes made navigable even if not formerly so), federal regulatory authority (which extends to newly navigable waters, formerly navigable waters, and waters that may become navigable with reasonable improvements), and the federal commerce power (which focuses on navigation involving interstate commerce). Id. at 592–93, 132 S.Ct. 1215.

"To determine title to a riverbed under the equal-footing doctrine," the Court "considers the river on a segment-by-segment basis to assess whether the segment of the river, under which the riverbed in dispute lies, is navigable or not." Id. at 593, 132 S.Ct. 1215. The Supreme Court has "noted the importance of determining ‘the exact point at which navigability may be deemed to end.’ " Id. at 594, 132 S.Ct. 1215 (quoting United States v. Utah , 283 U.S. 64, 77, 51 S.Ct. 438, 75 L.Ed. 844 (1931) ). A segment should be "discrete, as defined by physical features characteristic of navigability or nonnavigability, and substantial, as a matter of administrability for title purposes." Id. at 597, 132 S.Ct. 1215. "[S]hifts in physical conditions" of a river "provide a means to determine appropriate start points and end points for the segment in question," and "[t]opographical and geographical indicators" such as gradient changes or the location of a tributary providing additional flow "may assist." Id. at 595, 132 S.Ct. 1215. Substantiality requires consideration of factors "related to principles of ownership and title, such as inadministrability of parcels of exceedingly small size, or worthlessness of the parcels due to overdivision." Id. at 596, 132 S.Ct. 1215.

In determining navigability for title, "the evidence must be confined to that which shows the river could sustain the kinds of commercial use that, as a realistic matter, might have occurred at the time of statehood." Id. at 600, 132 S.Ct. 1215. "The evidence of the actual use of streams, and especially of extensive and continued use for commercial purposes may be most persuasive," but actual use is not the only permissible evidence. Utah , 283 U.S. at 82, 51 S.Ct. 438. "[W]here conditions of exploration and settlement explain the infrequency or limited nature" of actual commercial use of a body of water, "the susceptibility to use as a highway of commerce may still be satisfactorily proved." Id. Relevant evidence may include "physical characteristics and experimentation as well as by the uses to which streams have been put." Id. at 83, 51 S.Ct. 438. However, "[m]ere use by initial explorers or trappers, who may have dragged their boats in or alongside the river despite its nonnavigability in order to avoid getting lost, or to provide water for their horses and themselves, is not itself enough" to prove navigability. PPL , 565 U.S. at 600, 132 S.Ct. 1215. Likewise, recreational use of a river and "poststatehood evidence, depending on its nature, may show susceptibility of use at the time of statehood." Id. at 600–01, 132 S.Ct. 1215. But a party "seeking to use present-day evidence for title purposes must show: (1) the watercraft are meaningfully similar to those in customary use for trade and travel at the time of statehood; and (2) the river's poststatehood condition is not materially different from its physical condition at statehood." Id. at 601, 132 S.Ct. 1215. Evidence that a river segment required a portage may be sufficient to defeat a finding of navigability because "[i]t demonstrates the need to bypass the river segment, all because that part of the river is nonnavigable." Id. at 597, 132 S.Ct. 1215.

I. Motions for Summary Judgment

A party is entitled to summary judgment if it can demonstrate that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). In other words, summary judgment is warranted where the documentary evidence produced by the parties permits only one conclusion. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Accordingly, only disputes over facts that might affect the outcome of the lawsuit will preclude entry of summary judgment; factual disputes that are irrelevant or unnecessary to the outcome are not considered. Id. at 247–48, 106 S.Ct. 2505.

Summary judgment is inappropriate where the parties genuinely dispute a material fact: "that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248, 106 S.Ct. 2505. The court must view the evidence "in the light most favorable to the opposing party." Tolan v. Cotton , 572 U.S. 650, 657, 134 S.Ct. 1861, 188 L.Ed.2d 895 (2014) (quoting Adickes v. S.H. Kress & Co. , 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ). However, a party opposing a "properly supported motion for summary judgment may not rest upon the mere allegations or denials of his pleading, but ... must set forth specific facts showing that there is a genuine issue for trial." Anderson , 477 U.S. at 248, 106 S.Ct. 2505.

a. Talen's Motion for Partial Summary Judgment Regarding Bear Trap Canyon

Talen moves for partial summary judgment on Montana's claims concerning the Bear Trap Canyon, which it describes as a "sub-segment" of the Madison River. (Doc. 255; Doc. 256 at 2.)¹ Montana claims that the "segments of the Madison River on which the Madison Hydropower Developments are located ... were navigable for title at the time of statehood." (Doc. 221 at ¶ 78.) Although the parties appear to disagree about the precise river mile boundaries of the land surrounding the Madison Hydropower Developments to which Montana is asserting title, they do not dispute that part of Bear Trap Canyon lies within those boundaries. Talen contends that there is no genuine dispute of material fact concerning the non-navigability of Bear Trap Canyon, which the parties agree runs from River Mile 33 to 42.5. (Doc. 256 at 4–5; Doc. 271 at 3.) Talen argues that none of Montana's expert witnesses opined that Bear Trap Canyon is navigable for title, while Talen's experts have opined that it was non-navigable based on its physical...