No. 02-341 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

 

2002 MT 352 

POMPEYS PILLAR HISTORICAL ASSOCIATION, 

Petitioner and Appellant, 

v. 

MONTANA DEPARTMENT OF ENVIRONMENTAL 

QUALITY, and UNITED HARVEST, LLC, 

Respondents and Respondents. 

APPEAL FROM: District Court of the First Judicial District, 

In and for the County of Lewis and Clark, 

The Honorable Dorothy McCarter, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Gerald J. Neely, Attorney at Law, Billings, Montana 

For Respondents: 

Norman J. Mullen, Special Assistant Attorney General, Helena, Montana 

(Department of Environmental Quality) 

J. Daniel Hoven, Sara B. Stanton, Browning, Kaleczyc, Berry & Hoven, P.C., 

Helena, Montana (United Harvest, LLC) 

 Submitted on Briefs: September 19, 2002 

Decided: December 30, 2002 

Filed: 

__________________________________________ 

Clerk
2 

Justice Jim Regnier delivered the Opinion of the Court. 

¶1 In the summer of 2000, Respondent United Harvest sought to 

construct a high speed grain loading terminal east of Billings, 

Montana, near Pompeys Pillar National Monument. United Harvest 

obtained an air quality permit from Respondent Department of 

Environmental Quality (“DEQ”) to build the facility. Appellant Pompeys 

Pillar Historical Association (“Association”) commenced administrative review proceedings 

in an effort to overturn the issuance of the permit. Ultimately, the Board of Environmental 

Review (“Board”) affirmed DEQ’s issuance of the permit. 

¶2 The Association subsequently petitioned the First Judicial 

District Court, Lewis and Clark County, to review the Board’s 

decision. The District Court dismissed the Association’s petition 

for lack of subject matter jurisdiction. The Association appeals 

from the District Court’s order of dismissal. We affirm. 

¶3 The sole issue on appeal is whether the District Court erred 

when it dismissed the Association’s petition for review for lack of 

subject matter jurisdiction.

BACKGROUND 

¶4 Pompeys Pillar is a national historic monument located 

approximately twenty-eight miles east of Billings, Montana. The 

Association is a non-profit organization which provides educational 

and administrative services to support the monument’s preservation. 

¶5 Several years ago, United Harvest purchased land adjacent to 

Pompeys Pillar. United Harvest sought to construct a high speed 

grain loading terminal, consisting of silos, grain conveyors, grain 
3 

elevators, truck scales, and a railroad loop track on this land. 

United Harvest intended to build this facility approximately one 

half to three-quarters of a mile from Pompeys Pillar. 

¶6 Toward this end, United Harvest filed an application with DEQ 

for an air quality permit in August of 2000. In evaluating whether 

to issue the permit, DEQ conducted an initial and supplemental 

environmental assessment. The assessment evaluated the proposed 

facility’s impact on the surrounding environment. DEQ concluded: 

(1) that the facility would not detrimentally impact the 

surrounding environment, more specifically the local air quality; 

and (2) that it was not necessary to issue an environmental impact 

statement. Therefore, on September 29, 2000, DEQ issued an air 

quality permit to United Harvest. 

¶7 In mid October 2000, the Association appealed the issuance of 

the permit to an administrative law judge. The appeal sought to 

overturn the issuance of the permit on the grounds that DEQ erred 

in its preparation of the environmental assessment. DEQ and United 

Harvest filed a motion to dismiss the administrative contested case 

hearing. The motion argued that the administrative law judge 

lacked jurisdiction to entertain the challenge and, instead, 

insisted that the Association should file the appeal in the 

appropriate district court. The administrative law judge denied 

the motion. 

¶8 On June 28, 2001, the administrative law judge concluded that 

DEQ “acted arbitrarily and capriciously . . . by issuing a permit 

without conducting an [environmental impact statement].” 
4 

Therefore, the judge recommended that the matter be remanded to DEQ 

for it to conduct the necessary evaluation. Notably, the findings 

did not address issues of air quality, but, instead, addressed the 

adequacy of the environmental assessment. 

¶9 On July 12, 2001, United Harvest and DEQ filed exceptions to 

the administrative law judge’s findings with the Board of 

Environmental Review. On August 9, 2001, the Board declined to 

implement the administrative law judge’s recommendation and, 

instead, ordered DEQ to prepare a supplemental environmental 

assessment “addressing noise impacts . . . and the historic and 

cultural significance of the site.” On October 24, 2001, following 

DEQ’s submission of a supplemental environmental assessment, the 

Board concluded that DEQ did not act arbitrarily, capriciously, or 

unlawfully in conducting the relevant evaluations. Therefore, the 

Board affirmed DEQ’s decision to issue the air quality permit. 

¶10 On November 26, 2001, the Association petitioned the District 

Court to review the Board’s decision. On February 14, 2002, DEQ 

moved the District Court to dismiss the Association’s petition on 

the grounds that the District Court lacked subject matter 

jurisdiction over the case. Paralleling the argument it presented 

to the administrative law judge, DEQ maintained that the challenge 

presented to the administrative arbiters did not contain any air 

quality issues. DEQ contended that the administrative proceedings 

addressed environmental assessment issues only, which fall within 

the province of the Montana Environmental Policy Act (“MEPA”). 

According to DEQ, MEPA does not provide for administrative review 
5 

of challenges to MEPA compliance. DEQ argued that challenges to 

MEPA compliance must be brought in district court. Therefore, as 

the administrative law judge and Board did not have jurisdiction to 

preside over the Association’s appeal, DEQ asserted that the 

District Court lacked jurisdiction to review the administrative 

proceedings. 

¶11 Following a hearing on the matter, the District Court issued 

its Decision and Order on April 18, 2002. Pursuant to the 

rationale offered by DEQ, the District Court dismissed the 

Association’s petition for review for lack of subject matter 

jurisdiction. On May 28, 2002, the Association filed a notice of 

appeal from the District Court’s order of dismissal. 

STANDARD OF REVIEW 

¶12 A district court’s determination that it lacks jurisdiction is 

a conclusion of law. Threlkeld v. Colorado, 2000 MT 369, ¶ 7, 303 

Mont. 432, ¶ 7, 16 P.3d 359, ¶ 7. We review a district court’s 

conclusions of law to determine whether the court’s interpretation 

of the law is correct. Carbon County v. Union Reserve Coal Co., 

Inc. (1995), 271 Mont. 459, 469, 898 P.2d 680, 686. 

DISCUSSION 

¶13 Did the District Court err when it dismissed the Association’s petition for review for 

lack of subject matter jurisdiction? 

¶14 The Association maintains that § 75-2-211, MCA, authorizes an 

adversely affected party to appeal the approval or denial of an air quality 

permit to the Board of Environmental Review. Since the Association contends that it was 
6 

entitled to an administrative contested case proceeding, it argues that it was subsequently 

entitled to judicial review of the administrative decision, pursuant to § 2-4-702, MCA. 

¶15 According to the Montana Administrative Procedure Act 

(“MAPA”), an administrative agency must afford all parties a trialtype hearing in a “contested case.” See §§ 2-4-601, -612, MCA. 

MAPA provides that a “contested case” is “a proceeding before an 

agency in which a determination of legal rights, duties, or 

privileges of a party is required by law to be made after an 

opportunity for hearing.” Section 2-4-102(4), MCA. District 

courts maintain jurisdiction to review such contested case 

proceedings. See §§ 2-4-701-702, MCA. Therefore, for purposes of 

this case, the critical inquiry is whether the Association was 

entitled by law to raise its specific challenge to the issuance of 

the air quality permit in a contested case proceeding. 

¶16 The Clean Air Act of Montana, found at Title 75, Chapter 2, 

Parts 1-4, MCA, governs the issuance of air quality permits. 

Section 75-2-111(2), MCA, provides that “[t]he board [of 

environmental review] shall . . . hold hearings relating to any 

aspect of or matter in the administration of this chapter at a 

place designated by the board.” “This chapter,” referenced in § 

75-2-111(2), MCA, refers to the Clean Air Act of Montana and the 

Asbestos Control Act, not MEPA. Further, § 75-2-211(10), MCA, 

provides: 

When [DEQ] approves or denies the application for a 

permit under this section, a person who is jointly or 

severally adversely affected by [DEQ’s] decision may 

request a hearing before the board [of environmental 

review]. . . . The contested case provisions of the 
7 

Montana Administrative Procedure Act, Title 2, chapter 4, 

part 6, apply to a hearing before the board [of 

environmental review] under this subsection. 

Clearly, had the Association challenged DEQ’s decision in regard to 

issues of air quality, it would have been entitled to pursue 

contested case proceedings. However, it did not do so. 

¶17 The Legislature enacted MEPA to prevent or eliminate 

environmental damage as well as protect the right to use and enjoy 

private property free from undue governmental regulation. See § 

75-1-102, MCA. MEPA requires that state agencies conduct 

environmental reviews when state action will significantly affect 

the quality of the human environment. Rule 17.4.607, ARM. 

“Environmental review” means any environmental assessment, 

environmental impact statement, or other written analysis conducted 

by a state agency to examine the impact of a proposed action on the 

quality of the human and physical environment. Section 75-1-

220(4), MCA. State action encompasses a state agency’s issuance of 

a lease, permit, license, certificate, or other entitlement for use 

or permission to act. Rule 17.4.603(1), ARM. Therefore, United 

Harvest’s application for an air quality permit implicated state 

action and, thus, required DEQ to conduct an environmental review 

prior to its issuance. 

¶18 Notably, the environmental review process is governed by MEPA 

and its corresponding administrative rules, not the Clean Air Act 

of Montana. As stated in the District Court’s order of dismissal, 

“The environmental assessment . . ., although conducted 

contemporaneously with the air quality review for the air quality 
8 

permit, was not part of the air quality permit process itself . . . 

.” As for the requisite environmental review process, Rule 

17.4.607, ARM, provides: 

In order to determine the level of environmental review 

for each proposed action that is necessary to comply with 

75-1-201, MCA, the agency shall apply the following 

criteria: 

(1) The agency shall prepare an [environmental 

impact statement] as follows: 

(a) whenever an [environmental assessment] indicates 

that an [environmental impact statement] is necessary; or 

(b) whenever, based on the criteria in ARM 17.4.608, 

the proposed action is a major action of state government 

significantly affecting the quality of the human 

environment. 

Therefore, the environmental assessment acts, in part, as an 

initial evaluation to determine whether an agency must prepare an 

environmental impact statement. Rule 17.4.607(2)(c), ARM. 

¶19 Here, DEQ conducted an environmental assessment in 

contemplation of the proposed facility’s impact on the surrounding 

environment. Upon completion of the environmental assessment, DEQ 

deemed it unnecessary to issue an environmental impact statement. 

It is the issues surrounding the environmental assessment that the 

Association sought to challenge through contested case proceedings, 

i.e., the sufficiency of the environmental assessment and the 

decision not to issue an environmental impact statement. In fact, 

the Association requested the following relief from the District 

Court: “The Court is requested to remand the case under 

instructions to order [DEQ] to conduct an Environmental Impact 

Statement concerning the planned project of United Harvest . . . .” 
9 

 Further, on appeal, the Association admits that it sought to 

challenge primarily “the sufficiency of [the] Environmental 

Assessment” throughout the administrative proceedings. Therefore, 

as the environmental review process is governed by MEPA, we must 

look to the appellate procedures contained therein to determine 

whether the Association was entitled to administrative review of 

the issues presented. 

¶20 Section 75-1-201(3), MCA (1999), provides: 

(a) In any action challenging or seeking review of 

an agency’s decision that . . . [an environmental impact 

statement] is not required or that the statement is 

inadequate, the burden of proof is on the person 

challenging the decision. Except as provided in 

subsection (3)(b), in a challenge to the adequacy of a 

statement, a court may not consider any issue or evidence 

that was not first presented to the agency for the 

agency’s consideration prior to the agency’s decision. A 

court may not set aside the agency’s decision unless it 

finds that there is clear and convincing evidence that 

the decision was arbitrary or capricious or not in 

compliance with the law. 

(b) When new, material, and significant evidence is 

presented to the district court that had not previously 

been presented to the agency for its consideration, the 

district court shall remand the new evidence back to the 

agency for the agency’s consideration and an opportunity 

to modify its findings of fact and administrative 

decision before the district court considers the evidence 

within the administrative record under review. . . . The 

district court shall review the agency’s findings and 

decision to determine whether they are supported by 

substantial, credible evidence within the administrative 

record under review. [Emphasis added.] 

Ironically, the Legislature amended this provision in 2001 to add, 

in part, the following language: “A challenge to an agency action 

under this part may only be brought against a final agency action 

and may only be brought in district court or in federal court, 

whichever is appropriate.” Section 75-1-201(6)(a), MCA. One of 
10 

the representatives indicated that this provision was added to 

clarify the review process. Nevertheless, both parties agree that 

the 1999 version of the statute applies to the case at bar. 

¶21 Section 75-1-201(3), MCA (1999), clearly envisions challenges 

to MEPA compliance before a “court” or “district court.” MEPA does 

not contain a corollary to § 75-2-211(10), MCA, the contested case 

provision in the Clean Air Act of Montana. Had the Association 

simply challenged air quality issues, it would have been entitled 

to administrative proceedings. However, the Association admits 

that its challenge contemplated only those issues which pertained 

to the environmental assessment. Since MEPA governs environmental 

review, and since MEPA requires a party to bring a compliance 

challenge before a “court” or “district court,” the administrative 

law judge and Board did not have jurisdiction to hear the 

Association’s challenge. As such, the District Court did not have 

jurisdiction to review the Board’s determination. Consequently, 

the District Court did not err when it dismissed the Association’s 

petition for review for lack of subject matter jurisdiction. 

¶22 Affirmed.

/S/ JIM REGNIER 

We Concur: 

/S/ KARLA M. GRAY 

/S/ PATRICIA COTTER 

/S/ JIM RICE 
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Justice Terry N. Trieweiler concurs. 

¶23 Based on the arguments presented by the parties, I concur 

with the majority Opinion. However, in doing so, I do not express 

any opinion about the adequacy of the procedural due process 

provided for in the Montana Environmental Policy Act for 

challenging decisions made by the Department of Environmental 

Quality. Furthermore, I assume that because there was no time 

limit within which to commence a direct action pursuant to § 75-1-

201(3), MCA (1999), that a direct action in district court can 

still be filed by Pompeys Pillar Historical Association challenging 

the adequacy of the environmental assessment prepared by the DEQ 

and that the merits of the Association's claims, as well as the 

adequacy of the due process afforded, can ultimately be resolved in 

that manner. 

¶24 For these reasons, I concur with the majority Opinion. 

/S/ TERRY N. TRIEWEILER