Opinion analysis: Montana dunked on riverbeds

The state of Montana has been rebuffed in its efforts to claim title to riverbeds in Montana where privately owned hydro-electric dams are located.  The legal issues were narrow.  All agreed that the state holds title to the beds of rivers that were navigable in fact at statehood.  If the river was not navigable at statehood, title remains in the United States, and the riverbed could be disposed of by sale or grant as part of the federal public domain. The principal question before the Court concerned discrete segments of otherwise-navigable rivers which were sufficiently obstructed that commercial travelers had to portage around them.  Did the need to portage mean the river segment was not navigable?   In a unanimous opinion by Justice Kennedy in PPL Montana, LLC v. Montana, the Court answered in the affirmative: The need to portage defeats navigability for purposes of establishing state title, unless the portage was so short the segment would have no commercial value.

Much of Justice Kennedy’s twenty-six-page opinion reads like a travelogue inspired by Francis Parkman or Bernard DeVoto.  He clearly had fun writing it.  He also kept the librarians at the Court and the Library of Congress busy.  The opinion cites multiple editions of the journals of Lewis and Clark, their letters, other travel diaries, nineteenth-century newspaper articles, encyclopedias, obscure government reports, and secondary sources detailing Montana history.  A great deal of this information was not in the record or the briefs.  This extensive research into background information outside the record reflects an emerging trend among the Justices.  In general, reliance on published material is permitted by the doctrine of judicial notice.  But Justice Kennedy may have taken the practice to new levels by using some of this information effectively to grant partial summary judgment to the party that lost in the court below.

The opinion also includes a lengthy rehearsal of the legal principles that govern title to submerged lands, starting with the common law of England.  The law here is notoriously complicated, and Justice Kennedy’s summary provides a useful and generally accurate guide.  I have two small quibbles.  First, under the “equal footing doctrine” – which gives all states the same rights in submerged lands as were enjoyed by the original thirteen states – states do not necessarily take title to lands beneath waters that are navigable in fact (although Montana did).  They are given equal rights to determine as a matter of state law how title to such lands will be determined.  Many states in fact award title to submerged lands under waters navigable in fact to private riparian owners.  Second, the Court’s assertion that the equal footing doctrine is grounded in the Constitution is open to question.  Although the same claim was made in Oregon ex rel. State Land Bd. v. Corvallis Sand & Gravel Co., the original decisions enunciating the equal footing doctrine located it in the language of the statutes granting states admission to the Union.  Neither Corvallis nor PPL Montana indicates which clause of the Constitution prohibits Congress from admitting states on different terms, and in fact statehood grants frequently contain varying terms (as to schoolhouse land grants for example) without anyone claiming this is unconstitutional.

The key legal conclusions in PPL Montana are that navigability must be determined segment by segment, and that river segments which are sufficiently obstructed that travelers must portage are not navigable.  The justification for these conclusions, Justice Kennedy explains, lies in the historical rationale for giving the state title to submerged lands under tidal waters and waters that are navigable in fact.  “[A] contrary rule,” he said, “would allow private riverbed owners to erect improvements on the riverbeds that could interfere with the public’s right to use the waters as a highway for commerce.”  In contrast, no commerce would occur on segments that were obstructed.  “Thus, there is no reason that these segments also should be deemed owned by the State under the equal-footing doctrine.”

Justice Kennedy is probably correct about the historical rationale for preferring public to private title in lands under navigable waters.  Government ownership of submerged land would more likely preserve public access to the waters.  Of course, there was no guarantee of this – the government might prefer low-lying bridges, or dams, or even land fills.  But as an empirical matter, a state would be more likely to consider the interest of the public in free navigation, and would often lack the resources to undertake projects like building dams that would interfere with navigation.

As Justice Kennedy briefly acknowledges, this historical rationale has been rendered largely obsolete given the expansive powers the federal government now enjoys to protect public navigation.  No matter who owns the riverbed, the feds can come along and remove any artificial obstruction to navigation.  Indeed, under something called the navigation servitude, the feds do not even have to pay compensation for private property destroyed in the process of clearing the channels of navigable waterways.  (See, for example, United States v. Cherokee Nation of Oklahoma).

A better rationale for the segment-by-segment approach might be that this is the traditional rule, and it is a generally a good idea not to upset expectations about ownership and control of land by changing longstanding understandings upon which people have relied.  Justice Kennedy also invokes this principle, although his effort to show that the segment-by-segment approach is the settled rule is not entirely persuasive.  It boils down to the claim that the approach approved but not expressly commanded in one case, United States v. Utah, is “the rule,” whereas the approach approved in other cases like The Montello, are “exceptions to the rule,” since they involved issues other than title at statehood.

Perhaps the best evidence of reliance is the particular history of the dams in question.  As Justice Kennedy points out, Montana made no attempt to charge the utilities any rent for over a century after the first of the dams was erected on the riverbeds.  It made a demand for payment only after an NGO instituted litigation in 2003 claiming that the dams were located on public land and the state was obliged to seek compensation – which amounted to over $40 million for just seven years of use.  As Justice Kennedy notes, “the reliance by PPL and its predecessors in title upon the State’s long failure to assert title is some evidence to support the conclusion that the river segments were nonnavigable for purposes of the equal footing doctrine.”

Another issue addressed by the Court is whether evidence of post-statehood navigation is admissible to help determine whether a river segment was navigable at statehood.  Here, the Court acknowledges that the test is not just whether a river was actually used for commercial navigation at statehood but whether it was “susceptible of being used” for these purposes.  Evidence of use after statehood is therefore admissible because it is relevant to proving or disproving whether the segment could be adapted for commercial navigation.  But Justice Kennedy cautioned the relevant use is commercial use.  The fact that a stream is used today by “inflatable rafts and lightweight canoes or kayaks” does not mean that the water was susceptible of use by “the boats customarily used for trade and travel at statehood.”

The Court declined to address a third issue – which party has the burden of proof in demonstrating navigability at statehood.  The Court said its clarification that a segment-by-segment approach is required, that the touchstone is whether the segment required a portage, and that post-statehood use is relevant only insofar as it involved vessels of the same sort used in commercial navigation at statehood were enough to resolve the case. The burden of proof could wait.

The most notable thing about PPL Montana is the Court’s willingness to review the record evidence – and lots of evidence outside the record besides – to grant what amounts to partial summary judgment for PPL Montana.  The decision is clear in this regard: “[T]his Court now concludes, contrary to the Montana Supreme Court’s decision, that the 17-mile Great Falls reach, at least from the head of the first waterfall to the foot of the last, is not navigable for purposes of riverbed title under the equal-footing doctrine.” Ordinarily, when the Court reviews a decision of a state supreme court, it will correct errors of federal law, and remand for application of the correct legal principles by the state courts.  It is not plausible to interpret PPL’s petition for certiorari as claiming that federal law required entry of judgment in its favor.  Indeed, it does not appear that PPL moved for summary judgment in the state courts on the question of navigability; its position was that contested issues of material fact precluded summary judgment for the state.  Technically the Court only reversed and remanded the judgment below.   But the statement about Great Falls admits of only one action on remand.  The Court in effect treats the case like an appeal from a lower federal court.  Whether this portends a new departure in dealing with state courts, or is simply an idiosyncratic deviation in one case, remains to be seen.