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A $53 million-water battle unfolded in the U.S. Supreme Court on Wednesday in a case whose outcome could ease or increase the revenue flow of budget-strapped states. In PPL Montana v. Montana, the state of Montana and a hydropower company with two projects on three Montana rivers offered the justices competing tests for determining whether Montana holds title to the river beds under those hydropower projects. The Montana Supreme Court ruled for the state and affirmed what has grown to a $53 million-judgment against PPL Montana for rent owed to the state. In arguments on Wednesday, two former Bush Administration solicitors general vigorously faced off over the arcane question of how to determine whether particular waters were navigable at the time of statehood for purposes of transferring title from the United States to a new state. Montana entered the Union in 1889. With few precedents to examine, and some dating back to the 1800s, the justices quizzed the lawyers about portages around waterfalls, the types of boats that traversed the rivers, the kinds of commercial trade carried on the waterways, and geological obstacles. PPL Montana’s counsel, Paul Clement of Washington, D.C.’s Bancroft, called Montana’s claim to the river beds “truly extraordinary” and noted that some of the dams on the rivers had been there for nearly a century without any claim to the underlying land by the state. Those lands, he argued, were understood to be owned either by private parties or by the United States, which, in turn, leased their use to hydropower companies. In determining the navigability of the Missouri and Clark Fork rivers, he said, the Montana Supreme Court made a “critical error” in failing to focus on segments of the rivers where water falls and rapids made them non-navigable and instead focused on the river as a whole. One stretch of the Missouri in particular contains the Great Falls, which has a 17-mile reach. With the Madison River, he added, there is no evidence that any stretch of the river was navigable. Clement said that the 17-mile bypass of the Great Falls “really does matter,” and added, “The way I would think about this is that the very need to bypass, especially a substantial bypass where you leave the river channel, is evidence that that part of the channel, that part of the river is non-navigable.” Those 17 miles, he said, “are impassable, and that alone is sufficient to give us judgment as a matter of law for the five dams on that stretch.” Clement received support from Deputy Solicitor General Edwin Kneedler. Chief Justice John Roberts Jr. voiced concern to Kneedler that there would be “lots of difficulties” if the Court starts drawing lines chopping up the rivers. “They may be navigable in some seasons, but not in others,” said the chief justice. “The line at which you pass from navigability to non-navigability may be difficult to ascertain. It seems to me once you start chopping the highway of commerce up, it does create all those difficulties.” Kneedler said there has to be a “discernible and substantial segment of the river. Often it will be self-evident from the topographical features of the area. Are there major falls and rapids over an extended period of time.” The test, he said, is whether the river is navigable in fact. “If a boat cannot pass in front of the riparian land, then that would be non-navigable.” Montana’s counsel, Gregory Garre of Latham & Watkins, countered that it has been understood for more than a century that the three rivers are navigable. “The test for 100 years has been whether the river served as a continuous highway of commerce,” he told the justices. “Unbroken navigation is not needed to establish navigability.” The court has applied that test, he said, for 140 years, going back to two precedents: The Montello (1874) and The Daniel Ball (1871). Some of the justices, such as Samuel Alito Jr., seemed puzzled by the rationale and logic for the rule that when a territory became a state, the United States gave it title to the beds and banks of its navigable waters. Garre told the justices that the rule stems from the public trust doctrine — that the states hold the waters in trust for the public — and also because navigable rivers were the arteries of commerce. “So what is the justification for the state owning a portion of a river that is non-navigable?” asked Alito. Garre answered, “The Framers were concerned that navigable rivers remain open.” Justice Antonin Scalia quickly interjected, “But they’re closed where you have falls and rapids.” Garre said, “Our position is the test is whether the river served as a continuous highway of commerce. Was that portion part of the continuous highway of commerce? Yes.” Montana has drawn support from environmental groups and 26 states. The states’ amicus brief notes that PPL Montana’s test would upset the rights of a variety of existing uses that depend on the state’s title to navigable rivers, including marinas and boat ramps, utility lines, roads and bridges, water rights diversions, habitat and conservation projects, mineral development projects, and even hydropower facilities. Besides the United States, PPL Montana is supported by amicus briefs from Mountain States Legal Foundation, American Petroleum Institute, Montana Farm Bureau Federation, among others. Marcia Coyle can be contacted at [email protected].

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