Opinion ID: 889492
Heading Depth: 1
Heading Rank: 5

Heading: September 6, 2007 Memorandum and Order Regarding PPL's Motion for Partial Summary Judgment on the Application of the HRA

Text: ถ 53 On October 6, 2006, PPL moved for summary judgment, arguing against application of the HRA. PPL advanced three reasons why it was entitled to summary judgment. First, PPL argued the HRA does not explicitly state that it applies to the streambeds of navigable rivers, and it therefore could not be applied to PPL's dams. Second, PPL noted that the District Court had already concluded that ง 77-4-203, MCA, was federally preempted; this being so, PPL claimed that the remaining, non-preempted parts of the HRA could not be severed without invalidating the entire act. Third, PPL argued that the HRA could not be applied retroactively to those PPL facilities which were built prior to its passage in 1931. ถ 54 The District Court denied PPL's motion. Addressing PPL's first argument, the District Court relied upon ง 77-1-101, MCA (2005), which reads in pertinent part as follows: 77-1-101. Definitions. Unless the context requires otherwise and except for the definition of state land in 77-1-701, in this title, the following definitions apply ... (6)(a) State land or lands means: (i) lands granted to the state by the United States for any purpose, either directly or through exchange for other lands; (ii) lands deeded or devised to the state from any person; and (iii) lands that are the property of the state through the operation of law. ถ 55 The HRA is contained in Title 77, and therefore is governed by this statute. Because the District Court had previously concluded that the riverbeds were granted to Montana by the United States, it concluded that the riverbeds were state lands under ง 77-1-101(6)(a), MCA (2005), and that the HRA applied. The District Court also noted that the definition of power sites in the HRA contained a specific definition which contemplated that the streambeds are state lands. See Opinion, ถ 5. Thus, the District Court concluded that the HRA applied to the streambeds at issue in this case. ถ 56 Turning to PPL's second argument, the District Court simply referred back to its order of April 14, 2006, wherein it held that federal law did not preempt the State from seeking compensation from PPL under the HRA. The District Court did not conduct any additional analysis in rejecting this argument. ถ 57 Finally, the District Court addressed PPL's argument that the HRA could not be applied to dams built before the act's passage in 1931. PPL claimed the application of the HRA in this manner would impose upon it a new licensing process, require bidding for a proposed license or lease, and impose undefined financial obligations on its hydroelectric projects, thus impairing its vested rights. The District Court disagreed. The District Court noted that Article XVIII, Sections 1 and 3, of the 1889 Montana Constitution predated the construction of any of PPL's dams and specifically contained the trust provisions carried forward to the 1972 Montana Constitution. See Montrust, ถ 13. The existence of this constitutional obligation since 1889 prevented the state from selling or conveying interests in public state lands without obtaining full market value for them. Because the 1889 Constitution established the State's interest in the riverbeds of the Missouri, Clark Fork, and Madison Rivers, PPL never in fact held any interests in those streambeds. In this connection, the HRA merely provided a statutory basis for the Land Board to exercise those obligations originally set forth in the 1889 constitution. As a result, the District Court concluded, the [HRA] is not being applied retroactively; rather the State, as trustee of public lands, is complying with its constitutional mandate. ถ 58 Accordingly, the District Court denied PPL's motion for summary judgment seeking to preclude application of the HRA as a basis for the State to seek compensation in this case.