Is State Ownership of Public Trust Waters At Risk When SCOTUS Hears PPL Montana v. Montana?

by Robert Adler

When the U.S. Supreme Court hears oral argument in PPL Montana, L.L.C v. State of Montana on December 7, it will consider issues of constitutional history dating to the early days of the American Republic and legal sources that some claim (and others dispute) trace to Magna Charta and the Institutes of Justinian in Roman law. The court will also consider a factual record that includes the journals of the Lewis and Clark expedition. Moreover, the case involves a challenge for the more conservative Justices on the Court, who arguably have to choose between their concerns for private property rights and protection of state sovereignty.

Despite these fascinating underpinnings of the case, some might argue that the core legal issue is interesting only to a water law or property law scholar: What is the proper legal standard to determine “navigability” for purposes of who owns the beds and banks of a particular water body?

The real-world stakes in PPL Montana, however, are potentially extremely important. The dispute involves whether the State of Montana or either private power companies or the federal government own the beds and banks of the Missouri, Clark Fork and Madison Rivers, and therefore whether the State is entitled to compensation for decades of hydroelectric power production by private companies using dams built on state land. More broadly, the Court’s decision could affect ownership and control of hundreds of miles of rivers throughout the country, particularly in the West. And more importantly, with state ownership comes a public trust duty to protect those waters for shared public values in navigation, commerce, fisheries, and environmental protection. (See, e.g., National Audubon Society v. Superior Court (1983).) 

Because of common confusion about the legal import of the word “navigability”, it is also important to clarify what is not at stake in the case. This case will notaffect the longstanding dispute over the federal government’s jurisdiction over some kinds of water bodies under the Clean Water Act (CWA). Thus far, the Supreme Court has decided CWA jurisdiction cases largely on statutory grounds, interpreting the term “waters of the United States” in the statute. (See Rapanos v. United States (2006).) To be sure, the Supreme Court has indicated that the term “navigable” remains relevant to the geographic reach of the CWA, and that this issue may have constitutional dimensions. (See Solid Waste Authority of Northern Cook County v. U.S. Army Corps of Engineers (2001).) However, the Supreme Court has established a different—and for most purposes broader—standard of “navigability” for Commerce Clause authority than for title. Commerce clause authority extends to non-navigable tributaries of navigable waters and to waters that are navigable after artificial improvements. (See Kaiser-Aetna v. United States (1979); United States v. Appalachian Elec. Power Co.,  (1940).) The title test is broader than the Commerce Clause test only where a waterway is navigable solely for intrastate commerce; but one can hardly make that claim for the Missouri River and a major tributary (Clark Fork), which are part of the largest interstate river system in the contiguous states, along with a major tributary of the Columbia River system (the Madison River).

No one in the PPL Montana case disputes the core principle of state ownership of the beds and banks of navigable waters. The Supreme Court confirmed that aspect of state sovereignty in the first half of the nineteenth century (Martin v. Waddell’s Lessee (1842)), and then added that newly admitted states as well as the original 13 share those same rights under the equal footing doctrine of the U.S. Constitution. (Pollard’s Lessee v. Hagan (1845).) Later, the Supreme Court clarified that states held those lands in trust for their people, and therefore could not allow use of those lands for exclusive private benefit without safeguarding their public trust purposes and values. (Illinois Central R. Co. v. Illinois (1892).)

Rather, in PPL Montana, the power company petitioners argue that the Montana trial court and the Montana Supreme Court employed the wrong legal standard in determining whether the particular waters at issue in this case were navigable at the time Montana was admitted to the Union, the timeframe the Supreme Court has held relevant for purposes of ownership.

First, PPL argues that the Montana courts improperly applied the navigability test to the “whole river” rather than a segment-specific inquiry. In United States v. Utah (1931), for example, the Supreme Court found state ownership for large portions of the Colorado and Green Rivers in Utah, but held that title remained in the United States (which owns the surrounding lands) through Cataract Canyon, for which there was insufficient evidence of navigability at statehood. In other cases, however, the Supreme Court has held that temporary interruptions in navigability defeat neither navigability nor title so long as those stretches can be portaged such that the river continues to serve as a continuous highway for commerce. (See The Montello (1874).) Cataract Canyon was never portaged as part of a continuous highway for commerce, and anyone (like me) who has hiked that cliff-bound region knows that such an effort was likely impossible, especially when Utah was admitted into the Union. The State of Montana, however, introduced evidence that the rivers at issue in PPL Montana were portaged historically to transport gold, furs, and other goods in interstate commerce. Interstate commerce stopped at Cataract Canyon, but not at the waterfalls along Montana’s Rivers or many similar waterways throughout the nation.

PPL’s plea for a segmented approach to navigability really amounts to an attack on the factual findings of the state court, an issue the Supreme Court did not accept for review and on which the Court should defer in any event. From a policy perspective, however, PPL’s argument invites a piecemeal pattern of ownership that could impede a state’s efforts, under the public trust doctrine or otherwise, to manage rivers and their component resources as ecosystems. This is a matter of great importance to watershed managers and to businesses and members of the public who use and enjoy rivers for recreational or commercial navigation, for fishing, for water supplies, and for other economic and environmental purposes.  

Second, PPL argues that the Montana courts improperly entertained evidence of current-day recreational use to support a finding of navigability at statehood, as well as evidence of other allegedly irrelevant commercial river uses such as log floating. PPL’s argument about current-day usage is ironic, because in the lower courts it argued that the State should not be allowed to rely on historical records of navigability because they are hearsay (no one remains alive who has personal knowledge of navigability when Montana was admitted to the Union in 1889) and inherently unreliable. If a State cannot use historical evidence of navigability at statehood, and it cannot use post-statehood evidence as probative of the legal test of navigability at statehood, states will have no reasonable way of proving ownership for many rivers. Proof will become increasingly difficult to harness as time passes, inviting private landowners to raise more and more challenges to navigability and thereby to strip the states of legitimate claims to title and, more importantly, to eliminate essential public trust protections.

As to the use of log floating to demonstrate navigability, floating logs to market was a major aspect of commerce in heavily forested parts of the country, and was critical to such major development as construction of the transcontinental railroads. The Supreme Court has approved of such evidence in prior cases (see St. Anthony Falls Water Power Co. v. Board of Water Com’rs of City of St. Paul (1897), but more important, who is better suited than the states (through their courts) to determine what kinds of economic activity are sufficient to show that rivers were highways for commerce for purposes of proving navigability for title?

From a rhetorical perspective, the briefs filed by PPL and various amici on its side appeal to the inclinations of a majority of the Supreme Court to protect private property and the stability of title against governmental takings. The State of Montana and amici on its side, on the other hand, emphasize the importance of preserving state sovereignty and the equal rights of states on admission to the Union. A ruling in PPL’s favor, however, could do serious damage both to property rights and to state sovereignty, because it would effectively constitute a private taking of public property and accompanying public trust protections to subsidize private resource development. The Court can best protect both sets of interests by upholding the Montana Supreme Court’s adherence to U.S. Supreme Court precedent in finding state ownership in the beds and banks of the rivers in question.



© 2014 The Center for Progressive Reform