Montana Supreme Court’s Unanimous Decision Voids Permit for Creston Water-Bottling Plant

Montana Supreme Court reverses the Montana Department of Natural Resources and Conservation (DNRC) grant of commercial water right to Montana Artesian Water Company in Creston, MT

For seven long years, the attorneys at Ferguson & Coppes have worked diligently to protect water rights and hold the Montana Department of Natural Resources and Conservation accountable for its decision making. This saga – the largest administrative proceeding ever before the Department – now is over as the clients of Ferguson & Coppes recently prevailed in their most recent appeal to the Montana Supreme Court.  

In 2015, the Montana Department of Natural Resources and Conservation (DNRC) issued a water use permit, allowing the Montana Artisan Water Company (MAWC) to produce up to 140,000 water bottles per hour, 24 hours a day, seven days a week – roughly 1.2 billion, 20-ounce water bottles annually – by tapping into a groundwater aquifer along the Flathead River. 

Although MAWC insisted it would only use a fraction of the water-usage capacity assigned under the permitted right, the bottling operation attracted considerable attention, fueling concerns among neighbors and residents living near the Egan Slough property. Nonprofit conservation organizations Water for Flathead’s Future and Flathead Lakers, along with a list of residents, sued the state Department of Environmental Quality and the Department of Natural Resources and Conservation, challenging the two permits granted to MAWC that the state agencies issued — one for wastewater discharge and another for water usage.

All briefs having been submitted on November 30, 2022; our attorneys and clients eagerly awaited a response from the Montana Supreme Court, which came on May 16, 2023 in a 44-page unanimous decision.

The Supreme Court upheld a decision by a district court judge in Helena that said the state erred when it issued a permit to MAWC in 2017, citing that the company did not provide sufficient data, as required by DNRC’s own rules, for the agency to conduct a valid scientific analysis and justify issuing the permit. In its decision, the Supreme Court said DNRC made a mistake in its decision to approve the permit by committing errors of law during the processing of the application, including the failure to submit all the data and failure by the agency to fulfill its duty to analyze all potentially affected water sources. “The errors of law and process undermine confidence in the agency’s determinations … Consequently, this combination of deficiencies leaves us with the definite and firm conviction that, upon review of the whole record … a mistake was made.” Because there is so much water in the aquifer, the agency “assumed the proposed well would have little impact and passed it along without diligent review,” the Court wrote.

“Objectors marshalled extensive expert testimony and addressed a voluminous record to support their claims. Objectors uncovered the errors in DNRC’s review process that led the District Court, and now this Court, to reject the permit, despite usual deference owed to the agency. After extensive effort, Objectors are clearly the prevailing party.”

Flathead Lakers Inc. v. Mont. Dep’t of Natural Resources & Conservation

Counsel for Petitioners Graham Coppes said he was “thrilled” with both the substance and the tone of the Court’s decision. Beyond striking down DNRC’s flawed decision making process and scant hydrology, in a spectacular move out of pure equity for their effort and winning arguments, Montana’s high court awarded our clients their attorney’s fees. Following remand, Ferguson & Coppes, was able to secure hundreds of thousands of dollars for their clients (paid in settlement), both from the bottling company and the DNRC.

In a true “David vs. Goliath” story, Montana’s citizens were the true victors in a decision that will stand testament to the value of cherished and pristine water resources.

Read the Supreme Court Decision here.

See Flathead Beacon and Daily Inter Lake articles.

Ferguson & Coppes attorneys prevail on the merits and attorney’s fees in federal court judgment against the Kootenai National Forest for failing to act as required under the National Scenic Trails Act

On September 28, 2022, the Department of Justice formally withdrew its second 9th Circuit Appeal after losing a judgment on the merits issued by the Honorable Donnald Malloy.  At issue in the case was the agency’s failure to act pursuant to § 706(1) of the Administrative Procedures Act and the National Scenic Trails Act.  Emily Wilmott and Graham Coppes successfully prosecuted the case against the Kootenai National Forest who were more then a decade late in drafting and authorizing a Comprehensive Plan which incorporated protections for the Cabinet-Yaak population of Threatened grizzly bears.

Montana Supreme Court to Determine fate of Montana Artesian Water Company Permit in full seven justice (en banc) panel

Ferguson & Coppes attorney’s Graham Coppes and Emily Wilmott have submitted the final briefs in what has now become a 5 year long battle to protect senior water rights and lawful agency decision making.  After Graham and Emily prevailed for the second time in the First Judicial District, the Company again appealed. See Flathead Beacon article. Now, after all briefs have been submitted, on November 30, 2022, the Montana Supreme Court issued an order declaring that the matter has been submitted for decision to the full court sitting “en banc.” Our attorneys and clients eagerly await that decision. 

John Ferguson presents at the annual Montana Water Law Conference on DNRC’s New Guidance for Combined Appropriations

On October 5, 2022 John Ferguson presented to Montana’s water law practitioners concerning the history of and recent changes to DNRC’s interpretation and enforcement of “combined appropriations” from multiple groundwater wells.  More specifically, DNRC has recently again changed its analysis § 85-2-306, MCA, which authorizes the appropriation of groundwater up to 10 acre-feet per year from a single source aquifer, without a permit.  In implementing this statute, DNRC has struggled over the years to articulate a clear policy for how it will deal with multiple wells developed on an individual property, or developed as a part of a single project.  John’s presentation shed light on the nuances involved in this issue and the very muddy water which still surrounds this issue.

Ferguson & Coppes files suit on behalf of senior water users defending against a newly proposed subdivision authorized with illegal exempt wells

The lawsuit, filed in 1st Judicial District Court in Broadwater County, alleges the defendants failed to do their duty to consider impacts and protect  water and land resources from unreasonable degradation under the Subdivision and Platting Act and the Montana Water Use Act. The lots received Montana Department of Natural Resources and Conservation (DNRC) approval to use aggregated exempt wells. At the center of the issue is Horse Creek Hills, a four-phase, 435-acre subdivision in Broadwater County on the eastern shore and directly upstream from Canyon Ferry Reservoir and Confederate Creek. 

The proposed site is a rural, predominantly agricultural landscape and borders both state and Bureau of Reclamation land. The co-plaintiffs said in a news release announcing the lawsuit the county has ignored overwhelming public opposition to Horse Creek Hills without taking a hard look at the negative impacts this subdivision will have on agricultural operations, water resources, local wildlife, and the livelihoods of Broadwater County residents.“Our senior water rights, cattle operations, neighborhood roads, and quality of life will all bear the brunt of this subdivision if it goes forward,” Carole Plymale, a cattle rancher in Townsend

See KTVH article.

Ferguson & Coppes attorney secures $175,000 dollar settlement for client in multi-venue water use and ditch restoration case

Recently Graham Coppes successfully secured a large settlement on the eve of trial for a client fighting to restore his water delivery systems after a neighbor bulldozed the historic ditches.  After initiating suit, the neighbor claimed that the client’s water rights were invalid.  Graham successfully defended the matter after certification of the proceeding to the Montana Water Court, where the Court awarded Graham’s client the full historical flow rate as claimed. Upon winning at the Water Court, the case returned to district court, where Graham successfully settled the case with a large damage award for his client.