Hi-Line Sportsmen Club v. Milk Rive

No. 88-517
IN THE SUPREME COURT OF THE STATE OF MONTANA
HI-LINE SPORTSMEN CLUB,
Petitioner and Respondent,
-vs-
MILK RIVER IRRIGATION DISTRICTS,
CITY OF GILLETTE, WYOMING, et al.,
Respondents and Appellants.
APPEAL FROM: ~istrictCourt of the ~ i r s t~udicial~istrict,
In and for the Co.unty of ~ e w i s& Clark,
The Honorable Thomas Honzel, Judge presiding.
COUNSEL OF RECORD:
For Appellant:
Matthew W. Knierim; Gallagher, Archambeault & ~nierim,
Glasgow, Montana ilk ~ i v e r )
Douglas E. avids son; Berlack, Israels & ~ieberman,
New York, New York ilk ~ i v e r )
Roger Tippy argued, (city of ~illette),Helena,
Montana
For Respondent:
Donald R. Marble arg-ued,Marble Law Firm, Chester,
Montana
submitted: October 19, 1989
Decided: February 1, 1990
Filed:
J,ustice John C. Sheehy delivered the Opinion of the Court.
The District Court, ~ i r s t~udicial~istrict,~ e w i sand
Clark County, sitting in judicial review of a contested case
under the ~dministrative Procedure Act ( 5 2-4-702, MCA)
reversed the final decision of the State Board of Health and
Environmental sciences (Board) which had granted "401
certifications" to the Milk River Irrigation Districts and to
the City of Gillette, ~yoming. The ~istricts and ~illette
appealed the reversal to this Court. On consideration, we
affirm the action of the ~istrict Court in reversing the
order of the Board.
Section 401 of the Federal Water ~ollution Control Act
Amendments of 1972 (33 U.S.C., Section 1341) provides for a
certification process to be conducted by the affected state
where prospective hydroelectric projects are reviewed for
compliance with the state's water quality statutes and
regulations. Whatever conditions the states may place on the
applicant through the certification procedure become part of
the permit issued by the Federal Energy Regulatory commission
(FERC).
In Montana, the Department of Health and Environmental
sciences has been delegated the responsibility to conduct the
401 certification process. section 75-5-401(2), MCA. Malta
Irrigation Dist. v. Board of Health & Environ. (1986), 224
Mont. 376, 729 P.2d 1323.
On June 14, 1982, Montana Renewable Resources (MRR)
applied to the Department of Health and Environmental
sciences (Department) for 401 certification as part of the
process for obtaining a permit from FERC to construct a
hydroelectric generating facility at the Tiber Dam on the
Marias River near Chester, Montana. The Milk River
~rrigationDistricts (~istricts)filed their application on
January 21, 1983, and the City of Gillette, Wyoming,
(Gillette) submitted its application on February 7, 1983.
On May 14, 1984, the Department issued 401
certifications to MRR, the Districts, and Gillette. In
October, 1984, MRR, by letter requested that the Department
reconsider its decision to certify both the Districts and
Gillette. The Department refused to reconsider. In
February, 1985, MRR petitioned the Board to overturn the
Department's certifications. In April, 1985, ~ i g h - ~ i n e
Sportsmen Club (Sportsmen) moved to intervene in the Board
proceedings. On January 16 and 17, 1986, the Board conducted
a contested case hearing on the 401 certification issued to
the ~istricts and ~illette. MRR and the Sportsmen argued
before the Board that the water temperature conditions
contained in the certifications issued to the Districts and
to Gillette violated the Board's regulations for the Marias
River by allowing an increase in downstream water temperature
which would endanger the existing rainbow trout fishery. The
Board heard additional oral arguments on May 16, June 4,
September 26, and November 14, 1986. On November 26, 1986,
the Board issued findings of fact and conclusions of law and
order. The Board concluded, in part, that the 401
certifications previously issued to Gillette and the
Districts by the Department were to be amended to delete
authorization to use auxiliary outlet level water for
hydropower production at Tiber Dam.
These certifications were amended to include the
following requirement:
All water used for hydropower production is
withdrawn from a point in the reservoir at least 85
feet below the elevation of the bottom of the
present auxiliary outlet of Tiber Dam, or such
lesser depth as is physically required by the
configuration of the reservoir bottom, but in no
event less than 60 feet below the elevation of the
bottom of the auxiliary outlet of the Tiber Dam.
It is this portion of the Board's order which Sportsmen
contested, and succeeded in reversing on judicial review in
the District Court. The ~istrictsand Gillette appealed the
District Court's decision to this Court.
The Marias River was named by Meriwether Lewis of the
Lewis and Clark Expedition in honor of his cousin Maria Wood.
Tiber Dam was finished in 1956, named for the small town
nearby on the Great Northern ailw way siding. The Dam backs
up Lake Elwell, named in honor of ~istrictJudge Charles B.
Elwell who retired from the District Court bench in 1967.
The Dam as built had not provided for the generation of
hydroelectric power though the Dam's basic construction
included structures which would allow for installation of
generation equipment. The three entities above named became
interested in hydroelectric development and each sought
mutually exclusive permits from FERC to install hydroelectric
plants in the Dam. Federal law requires before FERC can
grant a permit, an applicant must have a 401 certification
from the state which insures that state water quality
standards are not violated by the proposed project. 33
U.S.C. 5 1341.
It is the public policy of this state, under § 75-5-101,
MCA, to conserve water by protecting, maintaining, and
improving the quality and potability of water for, among
other purposes, "fish and aquatic life, ... recreation and
other beneficial uses." The duty of establishing water
quality standards are imposed upon the Board, under §
75-5-301, MCA. In ARM 16.20.607(4) the Board has classified
the section of the Marias ~ i v e r involved as B-2. ARM
16.20.619(1) provides that waters classified by B-2 are those
suitable for growth and marginal propagation of salmonid
fishes and associated aquatic life.
Since the construction of Tiber Dam, and the release of
waters therefrom the Marias ~ i v e rbelow Tiber Dam provides a
habitat for a sizable population of trout and whitefish.
Testimony before the Department in the administrative hearing
indicated that prior to the construction of Tiber Dam,
fishing on the Marias River and that area was not good and
that fish found were mainly "gold eyes, suckers, carp,
sturgeon and catfish." After the Dam was completed in 1956,
and waters were released from the Dam downstream, aided by
implantation through the Department of Fish, Wildlife and
Parks, the fishery was considerably improved with substantial
numbers of trout, whitefish, and walleyes available for
sportsmen. The reason given for the improvement of the
fishery was the fact that cold waters were released
downstream from the Dam which made the downstream Marias more
conducive and thriving for trout, whitefish, and walleyes.
As the Dam is constructed, there are three means of
water exit from the Dam and Lake Elwell. One is the overflow
spillway, which is rarely used. Another is called the river
outlet,Its intake is situated deep below the surface so it is
reaching colder waters of Lake Elwell. A third is an
auxiliary outlet whose water intake is nearer the surface of
Lake Elwell approximately 85 feet above the intake of the
river outlet.
The difference in elevation between the intakes for the
river outlet and the auxiliary outlet are crucial to the
trout fishery. In the summer season, the waters of Lake
Elwell near the surface are higher in temperature than the
waters well below the surface. In consequence, when waters
are discharged from Lake Elwell through the river outlet,
cooler waters are delivered downstream which aids the
fishery. Waters taken from the auxiliary outlet, on the
other hand, are warmer and are deleterious to the fishery.
Curiously, the demarcation between the warm waters and the
cooler waters is remarkably defined on a profile of Lake
Elwell by a thin zone of separation called a "thermocline."
The application of MRR to FERC for its hydroelectric
development proposed that it would use waters taken
exclusively through the river outlet. Thus it would use the
cooler waters of Lake Elwell at all times and so be amenable
to the downstream fishery. The applications of the Districts
and of Gillette, on the other hand, proposed to use waters
from the auxiliary outlet. When the concerns of the
Department of ~ i s h ,
Wildlife and Parks concerning the release
of warmer waters to the downstream fishery became known,
there were further proposals by the Districts and Gillette
during the contested hearing to mix waters both from the
river outlet and auxiliary outlet so as to keep the
downstream water temperatures cooler.
Nonetheless, the Department originally issued 401
certifications to each of the three applicants. MRR
contested the issuance of the 401 certifications to the
~istrictsand to Gillette before the Board and at this stage
Sportsmen intervened in the proceedings.
The District Court, in reviewing the contested case
proceedings, found that on January 17, 1986, following two
days of hearings, the Board closed the record. On May 16,
1986, the Board proceeded to allow "final oral arguments."
Up to that time, ~illette and the Districts had proposed
alternating flows through the river and auxiliary outlets.
At the May 16, 1986 proceeding, the attorney for Gillette
suggested placing a siphon 30 to 40 feet below the auxiliary
outlet so as to draw up water from the cooler region of the
reservoir for elevated discharge through the auxiliary
outlet. The District Court found that Gillette's application
had not been amended, yet the Board gave serious
consideration to the "siphon scheme." Ultimately, the Board
adopted its conclusion of law no. 4, which provides:
Construction and operation of a hydroelectric
generation facility at Tiber Dam in which all water
used for hydropower production is withdrawn from a
point in the reservoir at least 85 feet below the
elevation of the bottom of the present intake of
the auxiliary outlet of Tiber Dam, or such lesser
depth as is physically required by the
configuration of the reservoir bottom, but in no
event less than 6 0 feet below the elevation of the
bottom of the present intake of the auxiliary
outlet of the Tiber Dam, satisfies applicable water
quality standards, the nondegregation requirements
of the Montana Water Quality Act and Board rules
and the public policy of the State of Montana.
The District Court found that "there was not a shred of
evidence in the record" to support that portion of the
Board's conclusion that withdrawing water from 6 0 feet below
the auxiliary outlet of Tiber Dam satisfies applicable water
quality standards, the nondegregation requirements of the
Water Quality Act and the public policy of the state of
Montana.
The District Court noted that in briefs submitted to it
by Gillette, it was conceded that the Board's order
authorizing a siphon tube to the auxiliary outlet may not be
based upon competent substantial evidence of the record and
could be set aside. Gillette further suggested that the
Board's 401 certification order be confirmed to the extent
that it would authorize Gillette to use the river outlet
only. The District Court declined to do this, however,
finding that the Board's conclusion of law no. 4 was clearly
erroneous in view of the reliable, probative and substantial
evidence on the whole record. The District Court further
found that due process would be violated if the certification
could be issued without an amendment to the original
applications and hearings held respecting the possibility of
the use of a siphon or the river outlet.
We affirm the decision of the District Court. This is
not a case where the District Court has improperly
substituted its own judgment for that of the agency. Chagnon
v. Hardy Constr. Co. (1984), 208 Mont. 420, 422-23, 680 P.2d
932, 933. In view of the lack of record supporting the use
of the siphon, and the due process implications where the
public and other parties are not given an opportunity to
explore the proposal of a siphon, we obtain a definite and
firm conviction that a mistake has been made. The appellant
has shown prejudice from a clearly erroneous decision.
Carruthers v. Board of Horse acing (1985), 216 Mont. 184,
188, 700 P.2d 179, 181.
~illette, however, has also contended that the issue
posed in this case has become moot because of actions taken
by the FERC relating to these applications and many others.
On February 11, 1987, while the litigation here was in
progress, the FERC issued its Order No. 464 amending its
regulations to define when the certification requirements of
5 401(a) (1) of the Federal Clean Water Act have been waived
as a result of the failure of the state or other authorized
certifying agency to act on a request for certification filed
by an applicant before the Commission for a hydroelectric
license. The order allowed certifying agencies one year
after the certifying agency receipt of request for water
q-uality certification to grant or deny the license(
applicant's request for certification. The order was made
retroactive. Efforts have been made in the Congress to have
FERC withdraw its retroactive application of Order No. 464,
or to modify the same by granting additional time for
certification. Our record does not show the final
disposition of these efforts. It does appear that the
Department of Environmental Sciences takes the position that
by lapse of time Montana has waived its right to certify
because of Order No. 464.
It is however, not clearly established in the record
that even though FERC may consider that the certifying
agencies in Montana have waived the right to certify, that
the decisions of a certifying agency, as modified by the
courts, would have no effect on the eventual action of the
FERC. In other words, the FERC, as far as the record here
discloses, may yet give effect to the action of this state
regarding the certifications. The eventual handling of the
waiver question by the FERC, and the effect that the FERC
will give to any waiver it finds, is completely within the
discretion of the FERC and not foreseeable by us. For that
reason, we have denied the motion to dismiss these
proceedings as moot.
Sportsmen raise a final argument relating to the water
certification process. Sportsmen contend that if the Board
had adopted rules and regulations pertaining to water quality
certifications such as here pending that the time provisions
of the federal regulations applying to the state's
certification process would have been observed. The ~istrict
Court refused to issue a writ of mandate requiring the
adoption of such rules for the reason that the District Court
had before it a petition for judicial review of an
administrative action, and did not have before it an action
involving the issuance or' writ of mandate. The District
Court was correct in this regard.
The decision of the ~istrict Court is affirmed in all
particulars.
FJe Concur:
~ustice~ i l l i a mE. Hunt, Sr., concurring:
I concur in the foregoing opinion of Justice Sheehy. In
addition, I would award attorney fees to respondent
Sportsmen.
Sportsmen is a non-profit citizens ' group with limited
resources. It has acted to protect Montana's water resources
when our public servant, DHES, has been unwilling to do so.
To this end, it has been forced to engage in protracted
litigation, oftentimes in the face of questionable tactics by
appellants.
Montana is fortunate to have citizens' groups and
attorneys such as these who are willing to take on public
causes. They are entitled to attorn y fees.
7
Justice