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Argument preview: In the footsteps of Lewis and Clark

On December 7, the Court will hear argument in PPL Montana, LLC v. Montana.  The  case is one for history buffs.  The question is whether the state of Montana holds title to portions of three riverbeds in the state.  The parties agree that the relevant legal test is historical: were the river segments in question part of a waterway that was “navigable in fact” when Montana became a state in 1889?  Prominent among the many bits of historical evidence cited are the journals of Meriwether Lewis and William Clark, who explored the rivers in 1805 on their famous expedition.

The dispute arose this way.  In 1999, petitioner PPL Montana purchased a series of hydroelectric dams on three Montana rivers: the Missouri, the Clark’s Fork, and the Madison.  All but one of the dams were built by predecessors of PPL between 1891 and 1930.  The state of Montana made no effort to charge PPL’s predecessors any rent for their use of the land on which the dams are built.  Then, in 2003, two Montana citizens sued PPL and two other hydroelectric companies, asserting that the riverbeds were state-owned lands and that the power companies owed substantial back rent to the state for the use of these lands.   The state eventually joined the suit, which started out in federal court but was dismissed for lack of jurisdiction and then re-filed by the power companies in state court.

The Montana trial court rejected arguments by the power companies that the demand for rent was preempted by the Federal Power Act.  The court also found that defenses – such as unfair change of position (estoppel) and undue delay (laches) – which would ordinarily bar a private party from seeking to recover unpaid rent did not apply to Montana as a sovereign state.

The state then moved for summary judgment on the question whether the river segments in question were navigable in fact in 1889.  The state submitted a variety of documentary evidence in support of its claim of ownership, including the journals of Lewis and Clark, old newspaper articles about fur traders and miners using the rivers, and various representations made in more recent regulatory proceedings.  PPL submitted affidavits of a local history professor, who stressed that the Missouri and Clark’s Fork Rivers contained significant stretches that were impassable at statehood, and of a fluvial geomorphologist, who testified that the Madison River, a prized trout stream flowing north out of Yellowstone National Park, was too braided and interrupted by sandbars to support navigation at statehood.  Notwithstanding the conflicting evidence, the district court granted the state’s motion for summary judgment.

After further proceedings to determine the fair rental value of the land occupied by the utilities since they purchased the dams, the district court awarded the state forty million dollars in damages (approximately forty-nine million with statutory interest).  PPL’s co-parties then settled with the state.

PPL appealed to the Montana Supreme Court, which affirmed by a vote of five to two.  With respect to the title question, the court stated that “the concept of navigability for title purposes is very liberally construed by the United States Supreme Court.”  A river need not be in actual use for commerce at statehood; instead, all that is required is that it be “susceptible” of providing a channel for commerce.  Nor do obstructions or portages defeat a finding of navigability.  The term “commerce” is also broadly defined, the court said, so that “emerging and newly-discovered forms of commerce can be retroactively applied to considerations of navigability.”

PPL filed a petition for certiorari, and the U.S. Supreme Court invited the Acting Solicitor General to file a brief expressing the view of the United States.  The Acting SG urged the Court to deny review, arguing that the Montana Supreme Court’s decision was “largely fact-specific” and did not conflict with the decision of any other state supreme court or federal appeals court.  The Court nevertheless agreed to hear the case, limiting its review to the question of state title and denying review on the preemption question.

Why did the Court disregard the Acting Solicitor General’s advice?  One can only speculate, but it is possible that some Justices saw a parallel to the recent judicial takings case, Stop the Beach Renourishment v. Florida Department of Environmental Protection (2010).  PPL’s petition accused the Montana courts of perpetrating a “land grab,” and it cited Stop the Beach and other judicial takings cases as presenting analogous “temptations” for state courts eager to transfer property from private parties to the state without paying just compensation.  The fact that Montana had made no effort to charge rent for the land for over a hundred years lent credibility to this claim of opportunism by the state.

The briefs on the merits, which are excellent, narrow the legal dispute significantly.  All agree that under the equal footing doctrine state governments take title to lands beneath navigable waters.  They agree that the relevant question for title purposes is whether a river was navigable in fact at statehood, not whether it is navigable today.  They further agree that the relevant question concerns the condition of a river in its natural state.

The principal disagreement concerns the proper treatment of obstructed segments of a river at statehood – in other words, segments that due to water falls, rapids, or sand bars could not be traversed by a watercraft.  PPL and the United States (which has filed a brief on the merits supporting PPL) rely heavily on United States v. Utah  (1931), involving a title dispute between Utah and the United States over the bed of the Colorado River.  They argue that the Court’s decision in Utah requires a section-by-section analysis of a river.  Sections that were floatable belong to the state; sections that were obstructed do not.  Montana relies extensively on The Montello (1874), a case about whether federal admiralty jurisdiction extends to the Fox River in Wisconsin.  Montello, according to Montana, instructs that the relevant inquiry is whether it was common practice to portage around an obstruction.   If a river was otherwise navigable, an obstruction should not denigrate from the conclusion that the river was navigable if parties would commonly portage around the obstruction and continue on their way.

Resolution of this dispute will have a significant bearing on the title questions involving the Missouri and the Clark’s Fork Rivers.  In 1889, the Missouri was obstructed for seventeen miles at Great Falls, where several of PPL’s dams are now located, and the Clark’s Fork contained an impassible stretch of 2.8 miles at Thompson Falls, where another dam is located.  If PPL is right, then these segments presumably do not belong to the state.  If Montana is right, then it would be necessary to show that these segments were not portaged at statehood in order to deny title to the state.

Another issue concerns the use of post-statehood evidence in order to draw inferences about the status of a river at the time of statehood. There appears to be a broad consensus that post-statehood evidence is relevant.  However, the parties disagree on subsidiary matters.  One concerns the appropriate meaning of dicta in early Supreme Court cases – such as The Daniel Ball (1870) – indicating that the question is whether a stream is used in commerce or is “susceptible” to use in commerce.    PPL argues that “susceptibility” applies only in narrow circumstances where a particular region in a state is not sufficiently developed economically at statehood to support water commerce.  Montana argues this would “scuttle” the susceptibility prong.  Another question concerns whether post-statehood log floating and recreational use can be cited as evidence that commercial use was practical at statehood.  PPL argues that log floating and recreational use are per se irrelevant.  Montana says log floating has been recognized to be a commercial use, and recreational use, especially by boating, can be probative of susceptibility to commercial use.

A final issue that divides the parties concerns who has the burden of proof to establish navigability at statehood.  PPL says, given the state’s temptations to manipulate findings of navigability in order to defeat private rights, the state should have the burden.  Montana does not seek to support the state supreme court’s “liberal construction” standard, but it argues that imposing the burden on the state in every case would disserve federalism and principles of state sovereignty.

How will the Court rule?  One thing seems fairly certain: the case will not be an occasion to revisit the judicial takings issue.  PPL continues to invoke the theme of judicial revision of property rights, but it argues the case solely in terms of precedents dealing with navigability for title purposes.  It seems likely the Court will take the occasion to clarify how navigability for title should be determined, a matter as to which it has not spoken for many years.  Having done so, the Court is likely to reverse and remand the case to the Montana Supreme Court to re-consider the issue under the clarified standard.  An affirmance is unlikely, especially given the questionable grant of summary judgment by the Montana courts in the face of conflicting evidence.

On the question of how to deal with river obstructions, I incline more toward Montana’s “portage” test rather than the section-by-section analysis espoused by PPL and the United States. Rivers in the nineteenth century were major arteries of commerce, and if there is evidence that a river was in fact used for commercial transportation purposes, even with occasional portages, this should not defeat the claim that the river was navigable in fact.  Even if the Court agrees, however, a remand would still be appropriate, since the evidence that the Great Falls stretch was in fact portaged – other than by Meriwether Lewis over an arduous thirty-three days – is not well developed.  The same holds for the 2.8 miles where Thompson Falls interrupts the Clark’s Fork.


On “susceptibility,” I am more taken with PPL’s position.  All agree that the relevant test is whether the river was navigable in its natural condition at statehood.  If this is so, then it is hard to see what “susceptible to navigation” could mean other than that the river would be used for navigation if the economic demand for commerce were sufficiently strong to sustain it.  Any other meaning would seem to draw post-statehood developments into the equation, which the parties appear to agree is irrelevant for purposes of determining title.

I am dubious about using post-statehood recreational use as evidence of navigability at statehood.  Recreational use was not generally considered commerce in the eighteenth and nineteenth centuries, and it would be anomalous to have title shift based on the emergence a century later of kayaking, whitewater rafting, and the use of flat-bottom boats by fly fishers.  Floating logs, however, was a common commercial use of streams in the nineteenth century, so evidence of this practice arguably should be regarded as relevant.

On the question of burden of proof, I suspect the Court will and should avoid both the Montana court’s idea that navigability for title should be “very liberally construed” in favor of the state, and PPL’s idea that the burden of proof should be imposed on the state because of its self-interest.  The conventional answer is that the burden of proof lies with the party seeking relief.  In this case, as it happens, that is PPL, which initiated the state court proceedings.

Recommended Citation: Thomas W. Merrill , Argument preview: In the footsteps of Lewis and Clark, SCOTUSblog (Dec. 1, 2011, 2:32 PM),