Fortner v. Broadwater Conservation Dist.

09/21/2021

DA 20-0391 Case Number: DA 20-0391

IN THE SUPREME COURT OF THE STATE OF MONTANA

2021 MT 240

TRACY FORTNER and MARCY FORTNER,

Petitioners and Appellants,

v.
FILED
BROADWATER CONSERVATION DISTRICT,
SEP 21 2021
Bowen Greenwood
Clerk of Supreme Court
State of Montana
Respondent and Appellee.

APPEAL FROM: District Court of the First Judicial District,
In and For the County of Broadwater, Cause No. BDV-2019-45
Honorable Michael F. McMahon, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

Hertha L. Lund, Christopher T. Scoones, Ben F. Storrnes, Lund Law, PLLC,
Bozeman, Montana

For Appellee:

Cory J. Swanson, Broadwater County Attorney, Townsend, Montana

Submitted on Briefs: July 14, 2021

Decided: September 21, 2021

Filed:

Clerk
Chief Justice Mike McGrath delivered the Opinion of the Court.

Tracy and Marcy Fortner appeal a First Judicial District Court decision upholding a

declaratory ruling by the Broadwater Conservation District determining that Montana

Gulch is a "stream" subject to the regulatory provisions of The Natural Strearnbed and

Land Preservation Act of 1975. We affirm.

¶2 We restate the issues on appeal as follows:

Issue One.. Whether a stream that does not currently have perennial flow—but
would have, absent human alterations—may be classified as a "natural,
perennial-flowing stream" under § 75-7-103, MCA, subject to the jurisdiction of
The Natural Streambed and Land Preservation Act of 1975.

Issue Two: Whether a stream's flow prior to 1975 may be consideredfor purposes
of determining whether it is a "natural, perennial-flowing stream" under
§ 75-7-103, MCA, subject to the jurisdiction of The Natural Streambed and Land
Preservation Act of 1975.

Issue Three.. Whether the Broadwater Conservation District was arbitrary and
capricious in finding that, but for human mining activity, Montana Gulch would
exhibit perennial surface flow throughout its course.

Issue Four: Whether the Broadwater Conservation District and the District Court
incorrectly considered groundwater as part of Montana Gulch.

FACTUAL AND PROCEDURAL BACKGROUND

In February 2017, the Broadwater Conservation District (BCD) began proceedings

against Tracy and Marcy Fortner (the Fortners) for allegedly rnaking unperrnitted

disturbances of the stream channel of Montana Gulch—a tributary of Confederate Gulch,

which flows from the Big Belt mountains into the Missouri River. Pursuant to

§ 75-7-125(2), MCA, the Fortners sought a declaratory ruling that BCD did not have

jurisdiction over Montana Gulch, arguing that the water body did not exhibit perennial flow

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and was therefore not a "stream" as defined by applicable law. BCD appointed a

Departrnent of Natural Resources & Conservation hydrogeologist as a hearing officer

whom they instructed to "determine whether [the specified] human disruptions had the

effect of a diversion, impoundment, appropriation or other human manipulation of a

perennial flow of water." In October 2018, the Hearing Officer presided over a public

hearing at which the BCD Supervisors were also in attendance.

¶4 In February 2019, the Hearing Officer issued a proposed declaratory order

concluding that, while the upper reaches of Montana Gulch were perennial and within

BCD's jurisdiction, the rest of Montana Gulch—including the location of the Fortners'

disturbances—was not perennial and therefore not within BCD's jurisdiction. The

proposed ruling reasoned that "Montana Gulch likely has always had a natural flow

throughout its course" and that mining activity had "drastically altered" these portions of

Montana Gulch. Nevertheless, the Hearing Officer concluded that "nothing in the record

proves Montana Gulch flowed perennially from mouth to source prior to historic or

contemporary mining" and the "lack of pre-mining records" made it "impossible to

deterrnine the flow characteristics" of Montana Gulch prior to rnining activity. In light of

this uncertainty, the Hearing Officer recommended finding no jurisdiction over the project

area.

¶5 In its June 2019 final declaratory ruling, however, BCD declined to adopt the

Hearing Officer's proposed order, instead concluding that "the record is clear that if not

for hurnan activity, water would flow perennially down Montana Gulch" through the

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Fortner project area, rendering it a "natural, perennially-flowing stream under Montana

law."

¶6 The Fortners filed a petition for judicial review of BCD's final declaratory ruling.

The District Court upheld the BCD ruling, determining that BCD owed no deference to the

proposed findings of the Hearing Officer, that a stream that would have flowed perennially

but for hurnan activity is a "natural, perennial-flowing strearn" under § 75-7-103, MCA,

and that there was sufficient evidence such that BCD was not arbitrary and capricious in

concluding that Montana Gulch was one such historically perennial stream. The Fortners

now appeal to this Court.

STANDARD OF REVIEW

¶7 Pursuant to statute, a conservation district's declaratory ruling is subject to judicial

review and may be reversed or modified if:

substantial rights of the appellant have been prejudiced because the ruling is:
(a) in violation of constitutional or statutory provisions;
(b) in excess of the statutory authority of the supervisors;
(c) affected by error of law; or
(d) arbitrary or capricious, characterized by abuse of discretion, or a
clearly unwarranted exercise of discretion.

Section 75-7-125(4), MCA.

¶8 To establish that an agency decision was arbitrary and capricious under

§ 75-7-125(4)(d), MCA, the challenging party must bear the burden of proving that the

conservation district's decision was "random, unreasonable, or seemingly unmotivated

based on the existing record." City of Livingston v. Park Conservation Dist., 2013 MT

234, ¶ 16, 371 Mont. 303, 307 P.3d 317 (internal quotation and citation omitted). Legal

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conclusions by the conservation district and the district court are reviewed de novo for

correctness. Stalowy v. Flathead Conservation Dist., 2020 MT 155, ¶ 10, 400 Mont. 266,

465 P.3d 1170; Larson v. State, 2019 MT 28, ¶ 16, 394 Mont. 167, 434 P.3d 241.

¶9 A district court "may not alter a decision merely because the record contains

inconsistent evidence or evidence that rnight support a different result" and "may not

substitute its judgment for that of the agency as to the weight of the evidence on questions

of fact." City of Livingston, ¶ 10, Bitterroot River Protective Ass 'n v. Bitterroot

Conservation Dist., 2008 MT 377, ¶ 18, 346 Mont. 507, 198 P.3d 219) (internal quotation

and citation ornitted). However, courts do not "automatically defer to the agency without

carefully reviewing the record and satisfying themselves that the agency has rnade a

reasoned decision." Clark Fork Coal. v. Mont. Dep't of Envtl. Quality, 2008 MT 407, ¶ 21,

347 Mont. 197, 197 P.3d 482. On appeal, this Court applies the sarne standard of review

when reviewing a district court's decision to affirm the agency decision. Stalowy, ¶ 8.

DISCUSSION

¶10 Issue One.. Whether a stream that does not currently have perennial flow—but
would have, absent human alterations—may be classified as a "natural,
perennial-flowing stream" under § 75-7-103, MCA, subject to the jurisdiction of
The Natural Streambed and Land Preservation Act of 1975.

¶11 The Natural Streainbed and Land Preservation Act of 1975 (Streainbed Act),

codified at § 75-7-101 through 125, MCA, provides that "[i]t is the policy of the state of

Montana that its natural rivers and streams and the lands and property iininediately adjacent

to them within the state are to be protected and preserved in their natural or existing state

and to prohibit unauthorized projects . . ." Section 75-7-102, MCA. The Streainbed Act

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gives conservation districts jurisdiction over applicable projects within the beds or banks

of streams under its jurisdiction. Section 75-7-112, MCA. A conservation district may

enforce the Streambed Act on "projects on any natural perennial-flowing stream or portions

thereof, including its channels." Admin R. M. 36.2.407 (1997).

¶12 A "[s]tream" is defined as "any natural, perennial-flowing stream or river, its bed,

and its immediate banks . . . ." Section 75-7-103(6), MCA. Administrative Rule of

Montana 36.2.402(7) (1997) defines a "[n]atural, perennial flowing stream," in turn, as "a

strearn which in the absence of diversion, impoundrnent, appropriation, or extrerne drought

flows continuously at all seasons of the year and during dry as well as wet years."'

Similarly, "[a] district may consider a stream to flow perennially if it dries up periodically

due to man-made causes, or extreme drought." Adrnin. R. M. 36.2.407(1).

¶13 The Fortners challenge the District Court's conclusion that a "natural,

perennial-flowing stream" under § 75-7-103(6), MCA, rnay be one that, though it does not

currently flow continuously in all seasons of the year, would have done so in the absence

of prior human intervention. They argue that this provision should instead be interpreted

to require the waterbody to exhibit existing perennial flow.

The parties do not raise the validity of Admin. R. M. 36.2.402(7)'s interpretation of
§ 75-7-103(6), MCA, as requiring continuous year-round, rather than merely annual, flow.
See Perennial, American Heritage Dictionary of the English Language, (3d ed. 1996) ("[2.]b.
Appearing again and again; recurrent."); Mont. Trout Unlimited v. Dep't Natural Res. &
Conservation, 2006 MT 72, ¶ 36, 331 Mont. 483, 133 P.3d 224 ("We evaluate whether the
agency's interpretation adhered to the statutory language when determining whether the agency
met" the standard for valid agency interpretations of statute under § 2-4-305(6), MCA.). We
confine our analysis to the issues raised by the parties here.
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¶14 The Fortners argue that BCD misapplied this Court's ruling in Bitterroot when BCD

stated that it had "examined 'the nature and extent of man's impact' upon the

stream . . . and determined 'the stream would otherwise flow continuously' but for human

alteration. (Quoting Bitterroot, ¶¶ 39-40.) The Fortners contend that nothing in Bitterroot

allows a conservation district to find jurisdiction over a stream which does not currently

flow perennially.

¶15 Indeed, it was undisputed in Bitterroot that the water body at issue, the Mitchell

Slough, exhibited perennial flow at the time of the case. The key legal issue stemrned from

the fact that most of the Mitchell Slough's water was derived frorn an artificial diversion

of the Bitterroot River. Bitterroot, ¶ 45. The Bitterroot Court rejected the idea that the

Streambed Act's use of the word "natural" necessarily "exclude[s] strearns with any human

influence" frorn its jurisdiction. Stalowy, ¶ 22 (citing Bitterroot, ¶4ll 34, 37) (emphasis in
original). Instead, the Bitterroot Court focused on the "nature and extent of man' s impact"

on the waterway. Bitterroot, ¶ 40. The Bitterroot Court specifically declined to analogize

its holding to one irnplicated by Admin. R. M. 36.2.402(7), which it found "provides

protection for the strearn which runs dry, if the strearn would otherwise flow continuously,"

absent the specified human interventions. Bitterroot, ¶ 39. Thus, Bitterroot is of limited

applicability here, where it is alleged that Montana Gulch ran dry but would otherwise flow

continuously, but for human intervention.

¶16 The Fortners' preferred approach essentially requires a stream to currently be both

"natural" and "perennial-flowing," such that Montana Gulch's current undisputed lack of

perennial flow along the relevant portions of its course would end the jurisdictional inquiry.

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However, the statutory language simply grants jurisdiction over any "natural,

perennial-flowing stream"; it does not require a stream that is "natural and

perennial-flowing." In matters of statutory interpretation, we read statutes in the context

of their entirety and do not insert what the Legislature has ornitted. See §§ 1-2-101, -106,

MCA. Here, the Legislature clearly placed the word "natural" in a position to rnodify the

term "perennial-flowing," requiring the entire phrase to be read in continuity, not as two

independent jurisdictional requirements.

¶17 BCD and the District Court interpreted the term "natural, perennial-flowing strearn"

as a whole, concluding that it could encompass a stream that does not currently exhibit

perennial flow, but would have done so absent hurnan manipulation. The court relied on

Admin. R. M. 36.2.402(7), which defines a "natural, perennial-flowing stream" as "a

stream which in the absence of diversion, impoundment, appropriation, or extreme drought

flows continuously at all seasons of the year and during dry as well as wet years" and on

Admin. R. M. 36.2.407(iv), which provides that a "[conservation] district may consider a

stream to flow perennially if it dries up periodically due to man-made causes, or extreme

drought." Admin. R. M. 36.2.402(7) "provides protection for the stream which runs dry,

if the strearn would otherwise flow continuously," absent the specified hurnan

interventions . Bitterroot, ¶ 39.

¶18 The Fortners argue that Admin. R. M. 36.2.402(7) does not apply here, contending

that human mining activity allegedly driving surface water underground is not a "diversion,

impoundment, [or] appropriation." It is not apparent to us that mining activity that impacts

a watercourse could never constitute a "diversion, impoundment, [or] appropriation."

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Regardless, Adrnin. R. M. 36.2.407 allows a stream to be considered perennially-flowing

"if it dries up periodically due to man-made causes." A stream that would have flowed

perennially, but for human mining activity, falls squarely within the language of this Rule.

¶19 This interpretation is consistent with relevant caselaw on the rnatter. In Paulson v.

Flathead Conservation Dist., we reviewed an arbitration decision over whether the

Flathead County Lakeshore Protection Program (Lakeshore Program), the Flathead

Conservation District, or both, had jurisdiction over Flathead Lake, which, due to an

artificial impoundment, sits over what was once the Swan River. 2004 MT 136, 321 Mont.

364, 91 P.3d 569. Notwithstanding application of the Lakeshore Prograrn over Flathead

Lake, we affirmed the viability of concurrent Streambed Act jurisdiction. Relevant here,

the Paulson Court noted that the conservation district's jurisdiction could continue to exist

"where a river once flowed before lake waters were expanded as a result of construction of

a dam." Paulson, ¶ 28. This reasoning necessarily accepted the premise that, as a legal

matter, a "natural, perennial-flowing strearn" may be a waterbody that, due to human

activity, is hydrologically no longer a "perennial-flowing stream."

¶20 Our recent decision in Stalowy is even rnore on point. In Stalowy, evidence

supported the deterrnination that North Bear Creek had historically exhibited natural,

continuous surface flow. Stalowy, ¶ 7. However, its surface flow had becorne intermittent

as a result of recent human diversion and appropriation, though subsurface flow continued.

Stalowy, ¶ 7. We upheld the conservation district's finding of jurisdiction in the "lirnited

factual circumstances" where "groundwater flowing through North Bear Creek's historical

channel" supported a finding of jurisdiction based on the conclusion that "human activities

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have caused North Bear Creek to run dry during summer months." Stalowy, ¶ 29. These

factual circurnstances are applicable here, where it is alleged that huinan mining activity

has caused Montana Gulch to lose its perennial surface flow.

¶21 Finally, we note that the Streainbed Act was intended to "protect the use of water

for any useful or beneficial purpose as guaranteed by The Constitution of the State of

Montana" and to fulfill the constitutional directive to "prevent unreasonable depletion and

degradation of natural resources." Section 75-7-102(1-2), MCA; Mont. Const. art. IX,

§ 1(3); Bitterroot, ¶ 45. An interpretation of the Streainbed Act's jurisdictional threshold

that allowed for its evasion by depleting the resource to the point where the stream's surface

flow is no longer perennial would be clearly at odds with this purpose. See § 1-2-102,

MCA (providing that "the intention of the legislature is to be pursued if possible" when

interpreting a statute). Thus, BCD and the District Court did not err in determining that

Montana Gulch could be classified as a "natural, perennial-flowing stream" under the

jurisdiction of the Streambed Act upon a finding that it would have flowed perennially

without hurnan activity.2

2 The Fortners also dispute BCD's contention that the Hearing Officer was required to comply
with BCD's directive to use the legal standard for a "natural, perennial-flowing stream" provided
by BCD. However, they do not challenge the District Court's conclusion that the BCD
Supervisors, who attended the hearing, owed no deference to the proposed findings of its Hearing
Officer. Whether the Hearing Officer was bound to use the legal standard provided to him by
BCD is therefore irrelevant to the present dispute regarding the final declaratory ruling issued by
the BCD Supervisors. The Fortners' only real argurnent on the issue is that the Hearing Officer's
proposed declaratory order should be adopted because it was supported by "unrefuted expert
testimony." The evidence supporting BCD's factual determination is addressed elsewhere in this
Opinion.
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¶22 Issue Two.. Whether a stream's flow prior to 1975 may be considered for purposes
of determining whether it is a "natural, perennial-flowing stream" under
§ 75-7-103, MCA, subject to the jurisdiction of The Natural Streambed and Land
Preservation Act of 1975.

¶23 The Fortners argue in the alternative that, even if a lack of current perennial flow,

alone, does not preclude Streambed Act jurisdiction, the strearn must have been flowing

perennially as of 1975, the year of the Streambed Act's enactment, for jurisdiction to attach

to a currently non-perennial stream. The Fortners draw this conclusion from the following

discussion in Bitterroot:

When passing the 310 Law [(Streambed Act)], the Legislature recognized
rnan's impact, both past and future, upon the State's waters, requiring that
rivers and strearns "are to be protected and preserved to be available in their
natural, or existing state, and to prohibit unauthorized projects . . . ." Section
2, Chap. 463, L. 1975. The bill's title stated it was for "An Act to provide
for a policy of preserving the natural or existing shape, forrn and course of
strearns to activities of private persons or organizations . . . ." The 310 Law
thus contemplated protection of the "existing shape, form and course" of
waters, even if those waters were no longer purely "natural." The "existing"
state of affairs when the 310 Law was passed in 1975 was that the East Fork
of the Bitterroot had already been heavily manipulated in order to convey
water to Tucker Headgate, which was then diverting water into the quarter-
mile dug channel leading to the Mitchell Slough. Looking ahead to future
impacts, the 310 Law required stream "projects"—physical alterations or
modifications—to be pre-authorized by a conservation district. Section
75-7-103(5) -111, -112, MCA. The Tucker Headgate is precisely the kind of
strearn alteration which would be subject to review and approval under the
310 Law.

Bitterroot, ¶ 37 (emphasis added, omission in original).

¶24 In context, the passage demonstrates only that the legislative purpose to protect

either the natural or existing state of affairs—at a time when the majority of Montana's

waterways had already been subjected to some form of hurnan modification—informed

our central holding in Bitterroot that Streambed Act jurisdiction may, under certain

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circurnstances, extend to waterways that are not, strictly speaking, "natural" in origin. The

effect ofBitterroot was not to replace the Streambed Act's purpose of protecting waterways

in their "natural" state with one for protecting only "existing" states; rather, it was to

recognize both purposes. Nothing in this passage, or the relevant regulatory or statutory

text, suggests that a conservation district rnay not look to the effect of pre-1975 human

activity on a waterway's natural flow characteristics. Therefore, BCD did not err in

examining historical evidence when determining whether Montana Gulch, notwithstanding

its current intermittent surface flow, would have flowed perennially in the absence of

human activity.

¶25 Issue Three: Whether the Broadwater Conservation District was arbitrary and
capricious in finding that, but for human mining activity, Montana Gulch would
exhibit perennial surface flow throughout its course.

¶26 The Fortners argue that, even if BCD's legal standard was correct, BCD's factual

finding that Montana Gulch would have flowed perennially in its unaltered state was

arbitrary and capricious. They detail evidence in the record, particularly the testimony of

their expert, Robin McCulloch (McCulloch), supporting the contention that Montana

Gulch's surface flow had likely always been intermittent and that its surface flow is driven

underground by natural geology, not mining activity.

¶27 However, the mere presence of evidence in the record that could have supported the

Fortners' position is not the relevant inquiry on appeal. See City ofLivingston,¶ 10 (district

court "may not alter a decision merely because the record contains inconsistent evidence

or evidence that might support a different result"). Rather, the Fortners must bear the

burden of proving BCD's decision was "random, unreasonable, or seemingly unmotivated

12
based on the existing record" without asking us to substitute our "judgment for that of the

agency as to the weight of the evidence." City of Livingston, ¶ 10 (quotation omitted);

Bitterroot, ¶ 18 (quotation ornitted).

¶28 The parties do not dispute that Montana Gulch, in its current state, begins as a

perennial stream and gains water throughout its course. They also agree that it loses

year-round surface flow in its middle and lower sections. Additionally, it is undisputed

that Montana Gulch has been altered by mining activity stretching back to the nineteenth

century, though the parties disagree as to the extent and significance of these efforts.

¶29 However, evidence presented to BCD regarding Montana Gulch's historic flow was

mixed. One sworn statement described regularly finding Montana Gulch with enough flow

to water sheep in June and September, dating back to 1965.3 In contrast, a letter frorn a

former drilling company employee described being unable to find sufficient water to place

a pump while conducting drill work in the area in the 1990s while a letter from a former

project manager stated "no flowing surface water was present in summer or fall seasons"

and that no perennial flow was "observed during the period from 1989 to 1996." The

Fortners pointed out that, as far back as 1886, the United States Geologic Survey had

classified Montana Gulch as a non-perennial stream.

¶30 Similarly, evidence—primarily in the form of McCulloch's report and subsequent

testirnony—was mixed on the disputed question of whether hurnan rnining activity or

3 The Fortners appear to question the credibility of this affiant by noting his connections with
BCD and otherwise challenge the value of his testimony. However, questions of credibility and
weighing of evidence are for the factfinder, rather than this Court on appeal, to consider.
See Bitterroot, ¶ 18.
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natural geology was responsible for the current lack of year-round surface flow in Montana

Gulch. McCulloch's report stated that Montana Gulch is "very likely to have always been

an intermittent stream as determined by the geology" and blamed fractured and porous

bedrock for allowing water to sink into the ground. However, McCulloch's report went on

to state that "surface flows became intermittent largely because offormer mining activity,"

noting that the channel had been diverted rnany years prior. (Emphasis added.)

¶3 1 McCulloch provided testimony during the hearing where he downplayed the relative

significance of rnining activity described in his report. However, as the District Court

noted, this testirnony took place after the legal significance of the irnpacts of mining

activity had been highlighted at the hearing, raising credibility questions.

¶32 McCulloch's report also identified potential mechanisrns by which hurnan mining

activity could have eliminated Montana Gulch's surface flows. First, the report highlighted

the role that Montana Gulch's natural clay layer—which was present in the upper regions

but absent further downstream—played in sealing water on the surface. McCulloch's

report acknowledged that rnining activity had irnpacted this area and he testified that Tracy

Fortner himself "had dug down to bedrock." As the District Court pointed out, it would

not have been unreasonable for BCD to conclude that hurnan mining activity had disturbed

Montana Gulch's natural clay layer, thereby allowing the water to sink to fractured and

porous bedrock below. Similarly, McCulloch's report described how Montana Gulch

showed evidence of a mining sequence in which "the water below the [mine] workings

flowed through the coarse rock filter that was created during the operation" and how the

highly porous "valley fill" used as reclamation material absorbed water: "The existing

14
flows are exposed on bedrock but as soon as the valley fill is encountered the water goes

underground." (Ernphasis added.) Thus, it was reasonable to conclude that the presence

of a coarse rock filter and valley fill due to mining activity in Montana Gulch was

responsible for the watercourse's journey underground.

¶33 In attempting to determine why Montana Gulch loses year-round surface flow after

leaving its headwaters region, despite generally exhibiting increasing flow as it moves

downstream, it was within the purview of BCD to assess the credibility of the witnesses

and affiants and "reasonably reconcil[e]" the conflicting evidence in reaching a decision.

See City of Livingston, ¶ 16. Notwithstanding the presence of evidence that could have

supported a different conclusion, BCD's determination that hurnan mining activity, rather

than natural geology, is responsible for the lack of perennial flow on Montana Gulch is

supported by sufficient evidence and the Fortners have not shown that BCD's finding was

"randoin, unreasonable, or seemingly unmotivated based on the existing record." City of

Livingston, ¶ 16 (quotation oinitted). BCD's deterinination that Montana Gulch would

have flowed perennially in its natural state, and is, therefore, under the Streambed Act's

jurisdiction, is not arbitrary and capricious.

¶34 Issue Four: Whether the Broadwater Conservation District and the District Court
incorrectly considered groundwater as part of Montana Gulch.

¶35 The Fortners contend that the District Court and BCD erred in considering

groundwater when considering whether Montana Gulch was a "stream" under Streainbed

Act jurisdiction. BCD found that Montana Gulch, though intermittent in places, increased

in flow as it inoved downstreain, "indicating possible additional groundwater or tributary

15
sources." Though McCulloch's report dismissed the importance of this increasing flow as

attributable to a concentration of groundwater, BCD concluded that "[a]11 of these waters

must be considered in deterrnining" whether Montana Gulch is a "natural,

perennial-flowing stream."

¶36 Similarly, the District Court pointed to the sarne increase in flow when responding

to the contention in McCulloch's report that Montana Gulch lacked sufficient water storage

capacity in its headwaters region to have ever supported perennial flows. The District

Court concluded that the growing strength of Montana Gulch's flow suggested that other

sources, including groundwater and tributaries, could have nourished a perennial flow prior

to mining activity, even absent substantial holding capacity at the headwaters.

¶37 We note that nothing in the statutory definition of "stream" appears to explicitly

exclude an underground waterway, and that the connection between groundwater sources

and associated surface flow can certainly have legal significance. See § 75-7-103(6), MCA

(defining "stream" as "any natural, perennial-flowing stream or river, its bed, and its

immediate banks"); e.g., Trout Unlimited, TT 35-44 (holding that statutory moratorium on

processing of water right claims for groundwater that is "immediately or directly connected

to surface water" included groundwater drilling that intercepted groundwater flowing into

the surface water and that induced surface water infiltration). Moreover, neither BCD nor

the District Court concluded that groundwater, alone, constituted a "strearn" under the

Strearnbed Act. Rather, they both simply acknowledged the uncontroversial fact that the

water of a surface stream often originates as groundwater, as may have been the case in

Montana Gulch. BCD did not exceed statutory bounds in finding this supported the

16
conclusion that Montana Gulch's flow was fed by robust sources and therefore capable of

flowing perennially, in the absence of hurnan activity driving it underground.

¶38 Finally, the references to groundwater by BCD and the District Court here comport

with our holding in Stalowy, where we held that the presence of groundwater flowing under

a historic streambed was a relevant consideration in finding that a waterway's loss of

perennial surface flow was due to hurnan activity and that Streambed Act jurisdiction could

attach. Stalowy, ¶ 23 ("Given the impact of historic human manipulation . . ., the

[conservation] [d]istrict did not err by considering the subsurface flow when rnaking its

jurisdictional deterrnination."). The Fortners seek to distinguish Stalowy by contending

that it is lirnited to cases where it has already been established that human activity has

driven surface flow underground. Even if this seemingly circular argument were true, it is

negated by BCD's reasoned determination here that Montana Gulch was indeed driven

underground by hurnan activity, as discussed above. Neither BCD nor the District Court

erred in considering the relevance of potential groundwater sources along Montana Gulch

when determining whether it was classifiable as a "natural, perennial-flowing strearn"

subject to Streambed Act jurisdiction under § 75-7-103, MCA.

CONCLUSION

¶39 The District Court and BCD did not err in concluding that a stream that does not

currently exhibit perennial flow, but would have in the absence of human manipulation,

may be classified as a "natural, perennial-flowing" stream subject to the Streambed Act.

Neither did BCD exceed its statutory authority in considering natural flows and human

alterations prior to the Streambed Act's enactrnent in 1975. BCD was not arbitrary and

17
capricious in its factual finding that, but for human rnining activity, Montana Gulch would

have flowed perennially to this day. Finally, the District Court and BCD did not err in its

consideration of subsurface flows in Montana Gulch. BCD's finding of jurisdiction was

properly upheld by the District Court.

¶40 Affirmed.

Chief Jus ice

We Concur:

e94

A ore:".~ 341

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Justice Jirn Rice, concurring.

1141 Appellants introduced significant evidence that the middle section of Montana

Gulch was intermittent primarily by reason of geology, and not mining activity. However,

I agree with the Court's holding that, as a matter of law, "[n]otwithstanding the presence

of evidence that could have supported a different conclusion," Opinion, ¶ 33, the applicable

standards of appellate review require that we affirm the agency's contrary factual

conclusion when it is supported by sufficient evidence, as here.

¶42 I would offer a word about the agency's actions in this proceeding. Although the

BCD appointed an examiner to conduct the hearing and rnake proposed factual

determinations, the supervisors personally went on the site visits, sat through the hearing

and listened to all witness testimony, and even filed a post-hearing brief with the hearing

examiner instructing him, in the words of their own counsel, "how he should interpret the

Streambed Act." My advice to the supervisors: stay in your lane. If you determine to

appoint a hearing examiner, then let the examiner do the appointed task without

interference. If you just can't let it go, then conduct the proceeding yourselves.

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