‘A big, serious problem’: Shields Valley golf course spurs water right fight

by Taylor Haas

Local water commissioner says a ‘shakedown’ is coming for Crazy Mountain Ranch this summer

by Amanda Eggert 06.18.2025

In 2021, a subsidiary of the company that owns the Yellowstone Club purchased Crazy Mountain Ranch, an 18,000-acre guest ranch located in the Shields River Valley of Park County.  Credit: Amanda Eggert / MTFP

CLYDE PARK — Tim Sundling remembers when he first heard developers discuss plans for a golf course in Shields Valley, an agricultural area below the Crazy Mountains that’s resisted the real estate boom consuming glitzy, amenity-rich communities across the county line.

Sundling, who raises cattle on land his great-grandparents ranched, casually followed the rumors that surrounded the future of Crazy Mountain Ranch after a subsidiary of the company that owns the ultra-exclusive Yellowstone Club bought the property in 2021. Like his neighbors, Sundling wondered if elements of the Yellowstone Club, where actors and professional athletes ski and golf alongside some of the world’s wealthiest people, would infiltrate Park County. 

Tim Sundling is a Shields Valley cattle rancher frustrated with Crazy Mountain Ranch’s subversion of laws designed to protect other water users. Credit: Amanda Eggert / MTFP

“The community just swirls with rumors ever since they bought it, about what’s going to happen. And there’s really no way to substantiate it,” Sundling said in a recent interview with Montana Free Press where he recalled a May 2024 meeting Crazy Mountain Ranch hosted on its property. “Some of the farmers and ranchers were very anxious to go because they’re just so curious what’s going to happen.

“They told us, ‘[it’s] going to stay a ranch, it’ll have no community impact, blah, blah, blah. We’ll maybe plan on building a golf course, [but] it’ll never be like the Yellowstone Club. … In retrospect, it was just propaganda to keep us quiet.”

Within five months of that meeting, crews were driving in truckloads of sod for the golf course greens to Crazy Mountain Ranch, an 18,000-acre property known locally as the Marlboro Ranch when it was a guest ranch owned by tobacco giant Philip Morris. Employees of the ranch started using recently installed pipes to water the golf course.

Sundling took notice. He knew Crazy Mountain Ranch hadn’t received approval from the state’s water right regulator to change how and where it uses its water rights to irrigate from Rock Lake and its eponymous creek. Sundling contends that the ranch’s water use is illegal under Montana law, which requires the Department of Natural Resources and Conservation to authorize any changesto a water right’s point of diversion or place of use to ensure other water users aren’t adversely affected.

Phil Gilbert, who also raises livestock in the Shields Valley, took notice too. Like other Rock Creek water users, he objected to the initial change applications Crazy Mountain Ranch submitted to DNRC last year, arguing the company was trying to claim more water than had been historically used. Due in part to issues other irrigators surfaced in their objections, Crazy Mountain Ranch ultimately pulled two of its change requests. 

But to Gilbert’s immense frustration, Crazy Mountain Ranch proceeded with its golf course construction as if the water right issue had been settled. Without DNRC approval, the ranch has been piping Rock Creek water into a different drainage a half to full mile north to water the greens.

“They’re putting this water into a pipe and taking it clear out of the [Rock Creek] system,” Gilbert told MTFP. “Not only are water users impacted, but all aquatic life is impacted. Not only fish, but every little bug and whatever else that lives in that creek. When those little ponds and swamps and everything are without water, this is a big, serious problem.”

Peter Scott, an attorney representing Crazy Mountain Ranch, contended in an email to MTFP on Wednesday that the “water is not diverting water from any other water right holders,” but didn’t directly say whether the ranch is proceeding with golf course irrigation this summer. 

Scott spoke at the meeting Crazy Mountain Ranch hosted last month, in the run-up to the 2025 irrigation season. Gilbert said the goal of that meeting appeared to be to “smooth things over” with other Rock Creek water users, most of whom are downstream. Still frustrated about the prior summer’s golf course irrigation, Gilbert had little patience for the ranch’s fixation on watering 112 acres of “virgin,” or previously unirrigated, ground to create an 18-hole golf course. 

“I think you’re full of it,” Gilbert said he told Crazy Mountain Ranch’s employees and contractors regarding their new plan, which involves offsetting some of the golf course’s water use, estimated at 258 acre-feet annually, by temporarily shutting down some of the pivots it uses to irrigate its hay fields. (Under its new ownership, Crazy Mountain Ranch has retained some of its working cattle ranch operations.)

“We don’t trust them to begin with. They already showed us that we can’t trust them,” Gilbert said of his wariness toward Crazy Mountain Ranch’s pitch to neighboring ranchers. “This is our livelihood, this is why we’re still here. And that doesn’t seem to ring a bell with them. They want to have their, I don’t know what, three months, of fun up there on the golf course.”

Gilbert contends  Crazy Mountain Ranch is already irrigating the golf course this year, so he doesn’t hold out much hope his and others’ opposition, or the threat of a fine — the DNRC is authorized to levy a fine of up to $1,000 per day of illegal water use — will push them to reverse course.

“They didn’t get fined. [But] I guess that really doesn’t matter to them anyways, and I don’t think it’s going to matter to them in round two. When you’ve got all that kind of money, what’s going to stop you from doing whatever you want to do?” he asked. “I don’t know — it’s all coming to a head.”

Scott maintains that the ranch is “diligently managing its water rights through the administative process and is confident this place of use change will not adversely affect the water rights of neighboring landowners.”

But to Sundling and others, there’s a process component that Crazy Mountain Ranch is glossing over in its interactions with local ranchers. 

“There’s a way to do it, but the rules are the same for everyone,” Sundling said.

WHY CHANGE APPLICATIONS MATTER

Change applications are designed to ensure that existing water users aren’t adversely impacted by a change to a water right. To evaluate a change application, the Department of Natural Resources and Conservation examines “return flows” — or the amount of water that re-enters the larger system. These return flows can bolster streamflows, recharge aquifers and replenish springs, all of which can benefit other water users.

‘UPSTREAM WITH A SHOVEL’

The change application process can be a bear. A dozen years of navigating the intricacies of Montana water law have made that abundantly clear to fly-fishing-guide-turned-attorney Graham Coppes. Completing the often “onerous” process requires the right mix of time, expertise and money, he said. 

Coppes, who often represents conservation groups jumping through change application hoops to bolster streamflows in sensitive fisheries, argues that DNRC has taken a lopsided approach to its duty as administrator of water rights. Instead of scrutinizing new water uses and cracking down on illegal withdrawals, Coppes said the agency has created a regulatory logjam in the change process.

Absent better monitoring and stronger enforcement, illegal water use happens “every day, in every corner of Montana,” according to Coppes, who argues that Montana is a regional outlier for its lax approach to unauthorized water use. “We do not have a water police. The entire system of water rights enforcement is regulated by your neighbors — always has been.” 

The result, Coppes said, is a “free-for-all” that can be summed up in a tidy cliche: “It’s better to be upstream with a shovel than downstream with a senior water right.” 

Coppes told MTFP that while the DNRC has a process for frustrated water users to request an investigation into an alleged illegal water use, very little happens after the agency receives the paperwork. Still, at least one of Rock Creek’s irrigators — Scott Knutson, owner of Shields Valley Land and Cattle — has filed what’s called a 609 form with DNRC. 

“CMR should be held to the same rules as every other irrigator in the state. A water right (either a change authorization or a provisional permit) is required BEFORE a water user can start irrigating a new place of use,” Knutson wrote in his petition.

2025-05-28-Form-609-Water-Use-Complaint-SVLC-1

Whether DNRC will do anything with the request for enforcement remains to be seen. In an email to MTFP, DNRC spokesperson Moira Davin confirmed the agency has received official complaints of illegal water use at Crazy Mountain Ranch but declined to comment further on the matter, citing the ongoing investigation. Asked what the DNRC does if its employees find evidence of illegal water use, Davin gave a vague response, writing only that “actions depend on the investigation.” She also noted that petitioners can take up the issue with their county attorney, the Montana attorney general, or Montana courts. 

Rock Creek flows from Rock Lake in Shields Valley. Credit: Amanda Eggert / MTFP

Coppes, who clerked for recently retired Montana Water Court Judge Russ McElyea before going into private practice, can recall just two instances where DNRC has forcefully exercised its enforcement mandate. Both, it so happens, sprouted out of challenges posed by growth in the greater Bozeman area, which is just an hour’s drive from Clyde Park. 

Coppes said those cases have demonstrated that it can be helpful for a county attorney to step in and lean on DNRC for stronger enforcement — something Sundling said he’d like to see. Park County District Attorney Chad Glenn wrote to MTFP in a June 13 email that his office is aware of the golf course irrigation dispute but has not been asked to provide legal advice or representation.

From a policy perspective, Coppes argues that the state government is still behaving as if Montana’s water resources are unlimited, and that’s no longer the case. Asked to respond to requests that the agency use a heavier hand with enforcement, Davin wrote that DNRC “takes its responsibilities with water rights seriously.”

But Coppes said that does not square with what he’s seeing.

“It’s not the old West anymore. There’s too much demand for water and there’s not enough of it. And that’s where DNRC comes in. DNRC is the only branch of the government that presumably has the authority to regulate all of this illegal activity on a large, state-wide scale,” he said. “And they absolutely refuse to do it.”

FEAR FOR THE LAND

On a recent drive through Shields Valley, with bits of cottonwood seeds floating down onto the windshield of her truck, Livingston resident Keegan Nashan described her efforts to learn about Crazy Mountain Ranch’s future. A community organizer and self-described “snoopy bitch,” Nashan has taken it upon herself to research both water- and non-water-related aspects of the ranch’s development plans so she can share it with locals. Her work, she says, is motivated by fear.

“My fear is that the culture of the Shields Valley, which I desperately adore, would be drastically changed,” Nashan said. “If they eat the Shields Valley the way they ate Big Sky, I don’t think I would be able to live with myself unless I did everything I [could] to make sure some of that culture was retained.”

Keegan Nashan of Livingston has been working to educate other Park County residents about the future of Crazy Mountain Ranch. Credit: Amanda Eggert / MTFP

The initial phases of Nashan’s efforts were diligent but affable. She called state and county agencies for information on the ranch’s wastewater permits, researched the lobbyists the company hired to ply lawmakers for changes to water leasing laws, and cold-called some of the property’s development masterminds. At one point, she even phoned CrossHarbor Capital Partner’s headquarters in Boston hoping to speak with company co-founder Sam Byrne, the “deal junkie” with a preference for complicated transactions who’s behind the multi-billion-dollar real estate enterprise that includes the Yellowstone Club, Moonlight Basin, Spanish Peaks — and now Crazy Mountain Ranch.

Nashan is familiar with CrossHarbor’s other exclusive resort properties, having visited them on catering gigs (“I wash other people’s dishes,” she says). She is adamant that the self-contained, privately managed services and infrastructure on display in Big Sky are not what she wants for her community. So she’s started putting her research to work, surfacing her findings and concerns at county commission meetings, planning board discussions and legislative hearings.

Her discovery on a warm June day of new roads carved into Crazy Mountain Ranch and excavators busy at work on new construction projects — likely the nine cabins and clubhouse the company received Department of Environmental Quality’s wastewater permits to build in 2023 — sent her into a ruminative slump. When she encountered a small fire engine emblazoned with “Crazy Mountain Ranch,” Nashan parked her truck, waved and walked over to ask its operators about it. 

Back inside her truck, the Crazies visible in one window and the Bridger range competing for attention outside the other, Nashan explained her disappointment at stumbling upon the fire engine. “It makes me nervous because then there is no inter-reliance on the community,” she said. “The rich people get to divorce themselves from our public services and our public systems.”

In 2021, a subsidiary of the company that owns the Yellowstone Club purchased Crazy Mountain Ranch, an 18,000-acre guest ranch located in the Shields River Valley of Park County. Credit: Amanda Eggert / MTFP

Nashan, who grew up in Livingston and studied human migration while earning a political science degree from the University of Montana in Missoula, doesn’t begrudge others for falling in love with the landscape that she also loves. But she does, she said, want them to respect the land and the people who make a home — and a living — on it. Shields Valley landowners don’t view their property as merely a place to park capital and maximize profits, she said. For them, their property isn’t one of many financial investments. For them, “this is their portfolio.”

Plus, it’s generally known that “you don’t f— around with water up the Shields Valley,” Nashan said. “Less than a decade ago, one rancher hit another rancher with a shovel in the middle of a field over water … I think [Crazy Mountain Ranch] is engaging as if it’s Big Sky. And it’s not.”

THE COMING ‘SHAKEDOWN’

Rich Sarrazin remembers that fight, too. A deputized, boots-on-the-ground official sometimes referred to as a ditch rider, for 20 years Serrazin has been charged with ensuring water is properly allocated during lean summer months.

To do that, he references a list of water rights with flow volumes and priority dates, monitors streamflows and ditch levels, documents use, adjusts head gates and consults a judge for input and enforcement direction on stickier matters. This year he’s been assigned a new one, District Court Judge Adam Larsen out of Roundup. Sarrazin has been chatting with Larsen to get him up to speed on the basin generally and the golf course issue in particular.

Barring the occasional local dustup, “we’ve always come out of it pretty clean,” said Sarrazin, who picks up wintertime work appearing as Santa at local Christmas events. “But now you really got to stay on your toes — write everything down, take pictures.”

Rich Sarrazin has been adjudicating water-related disputes in central Montana for 20 years as a water commissioner. He has been communicating with a district court judge based in Roundup for guidance on the complexities the 2025 irrigation season is presenting. Credit: Amanda Eggert / MTFP

Typically, Sarrazin starts making the rounds on rivers and creeks he’s assigned to sometime in July. This year, he anticipates he may be starting a little earlier. Among other things, Sarrazin said he’ll be ensuring that Crazy Mountain Ranch isn’t pulling water out of Rainbow Lake, a fish pond that it has been using as a temporary storage reservoir for the Rock Creek and Rock Lake water it’s been using to irrigate its partially constructed golf course.

“Everything will be shut down going to Rainbow Lake and it’ll all be shut down going to the golf course for the remainder of the summer,” he told MTFP on June 10. “That’s my job. I gotta do the dirty work. … It’s not going to be easy, but they’re going to have to follow it. Otherwise I can get law enforcement involved and we can settle issues that way.”

“It’s going to be a shakedown this year,” he added. “So everybody better get on board that’s gonna get on board.”

See more at Montana Free Press.

Firm Updates

Bitterroot residents file suit over approval of gravel pit expansion

by Taylor Haas

by Jacob Owens | Sat, September 14th 2024 at 4:00 PM

Updated Sat, September 14th 2024 at 11:17 PM

LOLO, Mont. — A group of Missoula County residents are suing county commissioners over approving the expansion of a gravel pit south of Lolo.

The controversy surrounds a 66-acre gravel operation between Lolo and Florence. The area is off Old Highway 93 South and McClain Creek Road, owned by the company Western Materials.

The gravel pit can now expand west following the approval of a use variance. The move is expected to increase the mined area to more than 96 acres in the coming decades.

“It was clear to me for months prior that that was going to be the result, but you have to continue to participate,” Graham Coppes, an attorney at Ferguson & Coppes, said. “The law requires you to exhaust that remedy, that local government remedy before you can seek a court’s involvement.”

Coppes’ natural resources law firm represents the Carlton Protection Trust. The trust is a nonprofit made up of residents who live near the pit.

The variance request underwent five public hearings before approval. Concerns raised by opponents included water contamination, the impact on wildlife and truck traffic on Highway 93.

In the filing, attorneys for the Carlton Protection Trust cite public comment and testimony as evidence that the variance would significantly impact residents of the zoning district, and that the variance is not in the public interest.

“My feel of it was that the county was bending over backwards to make this happen. That they were ignoring relevant evidence that showed that this is a harmful and polluting activity,” Coppes told NBC Montana.

The mine’s alleged illegal expansion over the years is another point raised in the lawsuit.

One document cited in the complaint is from the Missoula County Deputy Attorney in 2008, Michael Sehestedt. The letter states that the-then gravel pit officials applied for a permit to expand in 2001, but officials never issued the permit.

However, for several years, the pit and the Department of Environmental Quality operated as if a permit to expand had been issued.

NBC Montana reached out to Missoula County for comment. As of the morning of Sept. 10 the county had not been served, Allison Franz, the county’s communications manager, said, adding that Missoula County does not typically comment on pending litigation.

DV-32-2024-0000810-OC-Appeal-Complaint-w.-all-Exhibits-9.5.2024

See more at NBC Montana.

Firm Updates

Judge blasts DEQ for lack of public notice in permitting West Yellowstone wastewater system

by Taylor Haas 
Breuner allows limited operation of system for two large commercial campgrounds

BY: DARRELL EHRLICK – JULY 17, 2024 4:54 PM

Gallatin County District Court Judge Andrew Breuner had two unenviable choices: Hurt the water or hurt the economy.

He chose neither in a decision regarding permitting a private wastewater system that sits near one of the greatest tourist destinations on earth, Yellowstone National Park.

At the heart of the court case decided last week and released Monday was whether a new wastewater treatment system for two properties owned by Kampgrounds of America near West Yellowstone, Montana, were properly permitted by the Montana Department of Environmental Quality.

One thing that was not contested in the court case was whether an older antiquated wastewater system needed replacement.

However, neighbors and the Upper Missouri Waterkeeper objected to the new wastewater system that would process thousands of gallons of water a day, using aeration and spraying hay fields to help treat the wastewater. Neighboring property owners, including a guest ranch, worried that the spray of untreated wastewater would cripple its reputation as a tourist destination. Upper Missouri Waterkeeper, a conservation organization concerned with water quality, said it never had a chance to review the system.

Meanwhile, the Kampgrounds of America, which recently bought the commercial campgrounds, said it has spent millions for the property, improvements and planning the wastewater treatment system, and would have never done so if the DEQ had not approved the wastewater processing plan properly, it told the court.

Ultimately, it was Judge Breuner’s dissatisfaction with DEQ for not following state law or the Constitution that is at the heart of the matter, but led to him issuing a narrowly written temporary injunction against the project, at least until it meets the minimum requirements of Montana law.

In a battle that would seem to pit Diamond P Ranch properties against the two KOA campgrounds, it is the state’s own Department of Environmental Quality that received the heaviest criticism from the judge.

“The court is not persuaded by DEQ’s argument that the agency possesses wide discretion under the law to determine when and whether to provide for public participation opportunities or — as is the case here — not to provide any at all,” Breuner wrote.

Rex Portmann, the principal of Diamond P, originally filed the lawsuit challenging the DEQ’s decision, saying that he couldn’t have objected to the wastewater system because there was no public hearing and no public input on the project, a violation of state law and the Montana Constitution’s right to public participation.

Breuner characterized the DEQ’s actions as a “complete absence of any notice.”

In the court order by Breuner, the DEQ seemed to agree with Portmann that it didn’t give any notice of the project. Instead, attorneys argued that since Portmann had inquired about the project, even saying he had wanted to object to it, that he had adequate notice and should have filed a lawsuit within a 60-day window.

However, Breuner rejected that argument and said the DEQ had made no public notice, and the project failed to live up to the required public disclosure of the Montana Constitution, even if the new wastewater treatment system may be demonstrably better than the one it’s replacing. Breuner also said that it was impossible for Portmann to object if he didn’t know where to find the information or if the information had never been made available.

“Even if public notice and participation had been fully afforded, there is no guarantee that rejection of the regional system would have been the conclusion,” Breuner said. “There are indications that the regional system is a marked and environmentally friendly solution to the antiquated system it is replacing.”

While Breuner said that halting the entire project may be appropriate because the DEQ failed to notify the public, doing so may jeopardize hundreds, if not thousands, of people who have made vacation and travel plans, thereby impacting the local economy.

Instead, he ordered the DEQ to restart the process, including following the Montana Environmental Policy Act, which the DEQ had also failed to meet, as well as restart the public participation process, even though DEQ employees told Breuner that they weren’t required to do so — a point which he corrected.

“MEPA required some measure of public notice and participation in its review of the regional system and there was, by DEQ’s own admission, none,” Breuner wrote.

For the remainder of the summer tourist season, the KOA will be allowed to operate the system with some limitations, which the judge said would hopefully minimize the impacts to Diamond P.

The judge also said that Portmann discovered the project because he could see the construction and activity taking place, which tipped him off to the KOA’s actions. But Breuner said that even if the court accepted that Portmann was notified of the change, the rest of the public, which has a right to clean water and a clean environment according to the Montana Constitution, would have no way of knowing about the new wastewater treatment facility.

“The court initially observes that an agency’s admitted failure to provide lawful public notice and participation … are germane to the substance of the underlying assessment and decision making because a process that lacks necessary public input is arguably offensive to due process guarantees against arbitrary and capricious government action,” Breuner said.

DV-16.2023.1014D-Findings-of-Fact-Conclusions-of-Law-and-Order-on-Preliminary-Junction-7.2.2024

See on the Daily Montanan.

Beyond the Big Sky

Idaho farmers say water curtailment order will dry up land, push them out of business

by Taylor Haas 
Idaho Department of Water Resources issued May 27 order that could dry up 500,000 acres of Idaho farmland

BY: CLARK CORBIN – JUNE 4, 2024 5:10 AM

Faced with a water curtailment order issued last week, third generation Idaho farmer Adam Young isn’t just thinking about preparing to cut alfalfa or anxiously waiting for his wheat to flower.

Today, Young is confronting the reality of up to 70% of his family’s 2,700-acre farm in eastern Idaho’s Bingham County drying up this year. 

Unless there is an emergency stay to the curtailment order, Young said the water will be shut off. Meanwhile, the crops are already in the ground. Young has already invested in seed, fertilizer and other inputs he said total $400 per acre.

If the water is shut off, Young said that would mean a total loss for this year’s wheat and barley crop and he would expect to get one cutting of alfalfa in, instead of the three he hoped for.

“Being done for this year means absorbing several million dollars in losses this year and we don’t recover from that,” Young said in a phone interview. “That would spell the end of our business and that’s true for everybody else frankly who is farming.”

Young is among the eastern Idaho and Magic Valley family farmers and other water users who hold the 6,400 groundwater rights that are subject to curtailment. The Idaho Department of Water Resources said those water rights holders are being subject to curtailment because they are not in compliance with a state plan. 

While some groundwater users and districts are subject to curtailment, others users and districts found to be in compliance with a state plan are not subject to having their water shut off.

The Idaho Department of Water Resources said curtailment – or shutting off the water – is necessary because of a predicted water shortfall this year.

When it announced the curtailment order Thursday afternoon, the Idaho Department of Water Resources estimated 500,000 acres of farmland could be affected by shutting off the water.

To put that in perspective, Young said that amount of farmland is about five times the size of the cities of Boise, Meridian and Eagle combined. 

The history of the Young Family Farms dates to 1952 when Young’s grandfather, Darwin Young started the farm.

Adam Young said the farm sustains his parents, his family, his brother’s family, two-full time employees with 30-years of experience, two landlords and additional part time and seasonal employees.

Rep. Stephanie Mickelsen, R-Idaho Falls and the chair of the Idaho Groundwater Appropriators, is also affected by the curtailment order. Mickelsen is CFO of Mickelsen Farms, which grows several varieties of potatoes, as well as winter and spring wheat varieties. With the curtailment order, Mickelsen estimated she would only be able to water and farm about 80 acres out of 7,000 acres.

“You’re talking about wiping out family farms and other businesses across the ag sector,” Mickelsen said in a phone interview on Monday. “It’s basically a draconian way to bring about what they need.”

How are water issues governed in Idaho?

On Thursday, Idaho Department of Water Resources Director Mathew Weaver issued a curtailment order that requires 6,400 junior groundwater rights holders who pump off the Eastern Snake Plain Aquifer to shut off their water, the Idaho Capital Sun previously reported. 

In Idaho, water issues are governed by what is called the doctrine of prior appropriation, which means the older senior water rights have priority over the newer junior water rights. When there isn’t enough water to go around, the senior water rights get priority while the junior rights get curtailed, or shut off.

Generally, surface water users in Idaho have more senior water rights, while groundwater users have junior water rights.

For example, the Twin Falls Canal Co. holds senior water rights that date back to 1900. On the other hand, the groundwater users affected by Thursday’s Idaho Department of Water Resources curtailment order hold junior water rights dating back to 1954. 

Curtailment is coming into play because in April, Weaver issued a water methodology order that predicted a water shortage of 74,100 acre-feet of water to the Twin Falls Canal Co. Acre-feet is a measurement that represents the volume of water covering an acre of land in water exactly one foot deep. According to the Water Education Foundation’s website, an acre is about the size of a football field. 

The Idaho Department of Water Resources says the groundwater users subject to the curtailment order are being forced to stop pumping water because they are not in compliance with or stopped participating in an approved state plan. The Idaho Department of Water Resources said there are two plans water users can participate in to avoid curtailment when there is a water shortage. One is a 2009 plan submitted by the Idaho Groundwater Appropriators. The other is a settlement agreement from 2016.

Groundwater users who spoke to the Sun don’t agree that they are out of compliance. They said they provided documents to the Idaho Department of Water Resources verifying they have provided enough storage water to cover their proportional share of the predicted water shortage and believe they are holding up their end of mitigating under a 2009 plan. 

But under the 2009 plan, the Idaho Groundwater Appropriators provided enough water to cover the entire shortfall of the surface water users, not just their proportional share, said Brian Patton deputy director of the Idaho Department of Water Resources.

“They offered it conditionally upon the director agreeing with them that that is the extent of their obligation,” Patton said in a phone interview Monday. “The director could not agree to that.”

Now, Patton said the department was obligated to take action to protect senior water rights holders from a water shortfall.

“The law and the court’s direction about that law is very clear,” Patton added. “If there is a finding of injury to the senior water right holders, and the junior water right holders are not operating in compliance with an approved mitigation plan, the director’s obligation is to curtail.

See Idaho Capital Sun.

Firm Updates

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

by Taylor Haas

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.

In The News

Montana Judge Hands Historic Win to Young Plaintiffs in Climate Change Case

by Taylor Haas 
Held v. Montana Decision: Montana is violating the rights of young people with policies that prohibit the state from considering climate change effects when it reviews coal mining, natural gas extraction and other fossil fuel projects

The 103-page decision by Judge Kathy Seeley in the Lewis and Clark County District Court in Helena marked a major victory in the first youth-led climate case to reach trial in the U.S. and could influence similar cases nationwide.

16 plaintiffs filed the lawsuit in 2020, then between the ages of 2 and 18, claiming the state’s permitting of projects like coal and natural gas production contributed to climate impacts to Montana’s environment, harming the young plaintiffs. 

The case was brought against the state, the governor, the Montana Department of Environmental Quality, the state’s public commission office, as well as other state departments. The plaintiffs’ claims have been confirmed, as Seeley states that the plaintiffs, now aged 5 to 22, have a “fundamental constitutional right to a clean and healthful environment.” Seeley also held that policies that prohibit state agencies from considering climate and emissions impacts when approving fossil fuel projects are unconstitutional. 

Montana is one of only three states that have the affirmative right to a healthful environment in their constitutions. That legal language (see below) was a cornerstone of the Held v. Montana case, which had young people testify directly about climate impacts upending their lives, including lead plaintiff Rikki Held, 22, who testified that droughts have left “skinny cows and dead cattle” on her family’s ranch in eastern Montana and wildfires have made ash fall from the sky. Climate scientists, policy researchers, and a delegate to the 1972 Montana Constitutional Convention also testified on behalf of the youths. 

(1) The state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations. (2) The legislature shall provide for the administration and enforcement of this duty. (3) The legislature shall provide adequate remedies for the protection of the environmental life support system from degradation and provide adequate remedies to prevent unreasonable depletion and degradation of natural resources. 

Mont. Const. art. IX., § 1.

In the June 2023 trial, Plaintiffs argued that despite its sparse population, Montana is responsible for a large share of global emissions, through the major production of coal, oil, and gas, as well as pipelines and other infrastructures that are used to ship those fuels elsewhere. 

Expert witnesses presented scientific facts concluding that there is an overwhelming scientific consensus that the Earth is warming as a direct result of greenhouse gas emissions, primarily from burning fossil fuels. Judge Seeley’s decision cited those expert witness testimonies, as well as the evidence that Montana’s temperatures are expected to increase, and with that, increased impacts of climate change, such as heat waves, that have adverse impacts on young people’s mental health and quality of life.  

“Youth plaintiffs have experienced past and ongoing injuries resulting from the state’s failure to consider [greenhouse gas emissions] and climate change, including injuries to their physical and mental health, homes and property; recreational, spiritual and aesthetic interests; tribal and cultural traditions, economic security and happiness”.

The state argued that climate policy should not be set by courts and the plaintiffs had not proved that the global crisis could be attributed to Montana’s relatively small emissions.

A spokesperson for Montana Attorney General Austin Knudsen (R) called the ruling absurd, and said in a statement that the state will appeal the decision.

This “legal theory has been thrown out of federal court and courts in more than a dozen states,” according to spokesperson Emily Flower. “It should have been here as well, but they found an ideological judge who bent over backward to allow the case to move forward and earn herself a spot in their next documentary.”

What This Means 

Judge Seeley issued declaratory relief, which will have an impact on Montana’s policies moving forward by “invalidating statutes prohibiting analysis and remedies based on GHG emissions and climate impacts.” 

“By prohibiting consideration of climate change, GHG emissions, and how additional GHG emissions will contribute to climate change or be consistent with the Montana Constitution, the MEPA Limitation violates Plaintiffs’ right to a clean and healthful environment and is facially unconstitutional,” the ruling said. 

Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia Law School, said Seeley’s findings, including that climate change is a serious health and environmental threat, could “become an inspiration” for lawsuits in states with similar constitutional provisions and make it more difficult for defendants to wave away climate concerns. “I think this is the strongest decision on climate change ever issued by any court.”

Lawsuits that use a safe climate as an affirmative human or constitutional right are abundant in courts worldwide, but success has been mixed for advocates filing these lawsuits in the US. That is slowly changing. In addition to this ruling, the Hawaii Supreme Court recognized a human right to a stable climate in a March ruling against a biomass power plant developer. 

The clear, constitutional language established in this ruling may also boost the push for affirmative climate rights in more than 15 other states considering similar provisions in their own constitutions, according to Maya van Rossum, founder of the Green Amendment for the Generations national movement. “That’s really important, because it’ll help make sure that when these kinds of constitutional provisions are passed in other states, they’re even stronger when it comes to climate,” van Rossum said.

Youth-Led Climate Cases 

The case was just one of several youth-led climate cases, seeing young climate activists suing governments across the US over degradation of the climate through oil and gas development. Another of those cases is Juliana v. US, a landmark lawsuit against the federal government that was greenlighted to proceed to trial by an Oregon district judge in June after being dismissed by the 9th U.S. Circuit Court of Appeals in 2020. Another case filed by young people in Hawaii against the state’s Department of Transportation is scheduled to go to trial next year, making it the second in the country to do so.

Lawyers from legal nonprofit Our Children’s Trust spearhead the cases and lauded the “sweeping” Monday victory in Montana. “Today, for the first time in U.S. history, a court ruled on the merits of a case that the government violated the constitutional rights of children through laws and actions that promote fossil fuels, ignore climate change, and disproportionately imperil young people,” Our Children’s Trust Chief Legal Counsel Julia Olson said in a statement. “In a sweeping win for our clients, the Honorable Judge Kathy Seeley declared Montana’s fossil fuel-promoting laws unconstitutional and enjoined their implementation.”

Firm Updates

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

by John Ferguson

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. 

Firm Updates

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

by John Ferguson

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.