Opinion ID: 889492
Heading Depth: 1
Heading Rank: 4

Heading: Memorandum and Order of August 28, 2007, Regarding Whether the Streambeds of the Missouri, Madison, and Clark Fork Rivers are School Trust Lands

Text: ถ 44 The State sought summary judgment that Montana's navigable streambeds were part of the school trust lands pursuant to Article X, Section 2 of the 1972 Montana Constitution. This provision was carried forth from Article XI, Section 2, of the 1889 Montana Constitution and reads in pertinent part as follows: The public school fund of the state shall consist of: (1) Proceeds from the school lands which have been or may hereafter be granted by the United States ... (4) All other grants of land or money made from the United States for general educational purposes or without special purpose.... ถ 45 The State argued that the streambeds were school trust lands subject to fiduciary status under the Montana Constitution, and to the provisions of the HRA. The State asserted that PPL was obligated to present to the Land Board a written application to lease or license a power site under the HRA, and that because it had failed to do so it should be held liable for all rents due under the HRA, and all other damages caused by its unlawful occupancy of state lands. ถ 46 PPL argued that the riverbeds were not school trust lands, but instead were public trust lands held generally in trust for the benefit and use of all Montanans under the public trust doctrine. See Curran, 210 Mont. at 47-48, 682 P.2d at 168 (discussing the public trust doctrine and noting this doctrine provides that states hold title to navigable waterways in trust for the public benefit and use....). This distinction was significant for PPL because if the riverbeds were public trust lands, it could possibly have the right to use them without paying the State compensation on the grounds that its use of water was a beneficial public use. By contrast, if the riverbeds were found to be school trust lands, the Land Board would be constitutionally required to charge PPL full market value for their use regardless of its character. See Montrust, ถถ 13-14. ถ 47 In its August 28, 2007 memorandum and order, the District Court agreed with the State and concluded that the state-owned riverbeds were school trust lands. The District Court began its analysis with reference to the equal footing doctrine, noting that prior to Montana's admittance into the Union the United States held the riverbeds in trust for the future states. See Pollard's Lessee v. Hagan, 44 U.S. 212, 3 How. 212, 11 L.Ed. 565 (1845). The District Court noted that most courts have described state lands as vesting with a state upon its entrance to the Union. See e.g. Arizona v. Cal., 373 U.S. 546, 597, 83 S.Ct. 1468, 1496, 10 L.Ed.2d 542 (1963), overruled on other grounds by Cal. v. United States, 438 U.S. 645, 98 S.Ct. 2985, 57 L.Ed.2d 1018 (1978); Or. v. Corvallis Sand and Gravel Co., 429 U.S. 363, 371, 97 S.Ct. 582, 587, 50 L.Ed.2d 550 (1977). ถ 48 Once lands pass to the state under the equal footing doctrine, they are governed by state law. See Mont., 450 U.S. at 551, 101 S.Ct. at 1251. Thus, it was important for the District Court to determine how lands received by Montana under the equal footing doctrine would be classified under the Montana Constitution. To make this determination, the District Court analyzed the plain meaning of the term grant as follows: The term grant is both a verb and a noun, and it has a number of meanings, depending on how it is used. When used as a verb, BLACK'S LAW DICTIONARY, defines grant as 1. To give or confer (something), with or without compensation. 2. To formally transfer (real property) by deed or other writing. 3. To permit or agree to. 4. To approve, warrant, or order. When used as a noun, grant means 1. An agreement that creates a right of any description other than the one held by the grantor. 2. The formal transfer of real property. 3. The document by which a transfer is effected. 4. The property or property right so transferred. BLACK'S LAW DICTIONARY (8th ed., 1999). ถ 49 The District Court then considered how the term grant was used in each of the relevant provisions of the Montana Constitution. First, the District Court stated that under Article X, Section 2(1), school trust lands are those lands transferred to Montana by the grant of land from Congress under the 1889 Enabling Act. The equal footing lands did not fall into this category. Similarly, the District Court concluded that the term grants in Article X, Section 2(4) is used as a noun and refers to the transfer of title to lands owned by the United States. Thus, the equal footing lands did not technically fall into this class, since they were not owned by the United States prior to Montana's admission as a state, but instead held in trust for Montana until such time as it became a state. Additionally, the District Court turned to Article X, Section 11(1), which relates to the public trust lands and reads as follows: Section 11. Public land trust, disposition. (1) All lands of the state that have been or may be granted by congress, or acquired by gift or grant or devise from any person or corporation, shall be public lands of the state. They shall be held in trust for the people, to be disposed of as hereafter provided, for the respective purposes for which they have been or may be granted, donated or devised. ถ 50 The District Court interpreted the term granted as used in this section to refer to all the lands transferred to Montana through an action of Congress. While recognizing that the underlying legal basis for Montana's acquisition of the riverbeds was the equal footing doctrine, the District Court noted that the equal footing doctrine itself was not triggered until passage of the Enabling Act. Because this act was passed by the United States Congress, the District Court concluded that the riverbeds at issue were governed by Article X, Section 11(1), and were public trust lands of the State. As a result, the District Court reasoned, the Land Board had the authority to classify the lands as school trust lands, and had the authority to lease the riverbeds and use the funds for the support of public education. ถ 51 Finally, at the conclusion of this order, the District Court noted that PPL had moved for summary judgment on the issue that any flooded lands resulting from its operations were not a part of the school trust lands. Without further addressing the merits of this argument, the District Court concluded that there remained genuine issues of material fact on this issue which precluded summary judgment. ถ 52 In sum, the District Court concluded that the streambeds of the Missouri, Madison, and Clark Fork Rivers are school trust lands, granting summary judgment to the State. The District Court further denied PPL's motion for summary judgment that any flooded lands are not school trust lands.