High court rules for power company over Mont. dams

February 22, 2012 - 5:35 PM

WASHINGTON (AP) — The Supreme Court sided with a power company Wednesday in a dispute with Montana over who owns the riverbeds beneath 10 dams sitting on three Montana rivers, although the governor of Montana quickly declared that the state really got most of what it wanted.

In a case that reached back to the travels of Lewis and Clark more than 200 years ago, the court voted unanimously to throw out a state court ruling that could have cost the company, PPL Montana, more than $50 million.

The power company had appealed a Montana Supreme Court ruling that the state owns the submerged land beneath the dams on the Missouri, Clark Fork and Madison rivers, and that PPL owes back rent and interest.

The justices said the Montana court was wrong to conclude that the state owns the riverbeds and ordered the state court to take another look at the case.

"It's as good as we could have hoped for," PPL Montana spokesman David Hoffman said. "It's a really strong indication that the U.S. Supreme Court took this issue very seriously and felt strongly that we were right with a unanimous decision."

But Montana Gov. Brian Schweitzer had a different take. He said Montana will be able to keep as much as 85 percent of the revenue it is demanding from PPL.

Schweitzer argued the ruling only invalidates rent on portions of the waterway. He said rent demands will still be honored on most of it once state courts are done interpreting and applying the high court ruling.

"We are actually popping champagne right now," Schweitzer said. "We will try to get to district court with dispatch, and glee, so we can settle this case and collect a check for the school children of Montana."

Historically, the titles to riverbeds beneath commercially navigable waterways go to state governments upon statehood. Non-navigable riverbed ownership stays with the federal government.

Justice Anthony Kennedy said in his opinion for the court that the state court should have taken a segment-by-segment approach, rather than looking at the rivers in their entirety. And, he said, the state court ignored substantial evidence that the dammed stretches of the three rivers were not navigable when Montana became a state in 1889.

Kennedy noted that Lewis and Clark's expedition spent 11 days travelling 18 miles to go around Great Falls on the Missouri River. "Even if portage were to take travelers only one day, its significance is the same: it demonstrates the need to bypass the river segment, all because that part of the river is non-navigable," Kennedy said.

PPL had argued that eight of the 10 dams in question are built on non-navigable portions of the rivers that require portages around obstacles, such as the Great Falls of the Missouri, so the title to the lands under those dams should not go to the state.

Montana claims that the title to all the land under the rivers within its border transferred when it became a state. When deciding navigability, the entire river should be considered, not just segments, and a portage around a natural obstruction does not interrupt the flow of those rivers as a highway of commerce, the state argued.

Montana Attorney General Steve Bullock said the Supreme Court has left the next steps to the Montana courts, and he plans to continue the fight over "the public's rights to those rivers."

"From the beginning, this case has been about whether PPL pays its fair share for use of our rivers for hydroelectric power — just like Montana farmers using agricultural trust lands, ranchers using grazing trust lands, loggers using timber trust lands and others who benefit from state trust lands already do," Bullock said in the statement.

Both sides cited the accounts of the Lewis and Clark expedition up the Missouri River to argue their case of whether the rivers were navigable or not navigable. Lewis and Clark had been sent by President Thomas Jefferson to explore the newly acquired Louisiana Purchase territory.

The case is PPL Montana v. Montana, 10-218.

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Associated Press writers Matt Volz and Matt Gouras in Helena, Mont., contributed to this report.