Skyline Sportsmen's Ass'n v. Board of Land Commissioners

96-668




                                                                                            No. 96-668

                                                             IN THE SUPREME COURT OF THE STATE OF MONTANA

                                                                                            1997



                                                  SKYLINE SPORTSMEN'S ASSOCIATION,
                                                     ANACONDA SPORTSMEN'S CLUB,
                                                 MONTANA ACTION FOR ACCESS ASSOCIA-
                                                 TION, and COALITION FOR APPROPRIATE
                                                     MANAGEMENT OF STATE LANDS,

                                                                        Plaintiffs and Appellants,

                                                                                          v.

                                                BOARD OF LAND COMMISSIONERS;
                                              DEPARTMENT OF NATURAL RESOURCES
                                            AND CONSERVATION; and GOVERNOR MARC
                                           RACICOT; JOSEPH P. MAZUREK, ATTORNEY
                                             GENERAL; MIKE COONEY, SECRETARY OF
                                            STATE; NANCY KEENAN, SUPERINTENDENT
                                         OF PUBLIC INSTRUCTION; and MARK O'KEEFE,
                                       STATE AUDITOR; in their capacities as Members
                                                  of the State Land Board,

                                             Defendants and Respondents.
                    * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
                                     MONTANANS FOR THE RESPONSIBLE
                                       USE OF THE SCHOOL TRUST,

                                                                                       Intervenors,

                                                                                          v.

                                            SKYLINE SPORTSMEN'S ASSOCIATION, et al.,
                                            and BOARD OF LAND COMMISSIONERS, et al.,

                                                                       Defendants in Intervention.




                  APPEAL FROM:                           District Court of the First Judicial District,
                                                            In and for the County of Lewis and Clark,
                                                           Honorable John Thomas C. Honzel, Presiding.


                                                                   COUNSEL OF RECORD:

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                                                                                     For Appellant:

                                       Brian M. Morris (argued), Goetz, Madden & Dunn, Bozeman, Montana

                                                                                    For Respondent:

                                          Tommy Butler (argued) and Richard E. Bach, Special Assistant
                                                        Attorneys General, Helena, Montana

                                                 Roy H. Andes (Intervenor) (argued),                               Missoula, Montana




                                                                                Heard and Submitted: October 21, 1997

                                                                               Decided: December 15, 1997
                                                                               Filed:


                                                              __________________________________________
                                                                           Clerk

                    Chief Justice J. A. Turnage delivered the Opinion of the Court.

       The District Court for the First Judicial District, Lewis and Clark County,
                                       granted
    Defendants' motion for summary judgment and denied Plaintiffs' request for a
preliminary injunction, dismissing a challenge to a proposed land exchange between
                                         the
  Board of Land Commissioners and Turner Enterprises, Inc. We vacate and remand.
      The dispositive issue is whether the District Court erred by granting summary
         judgment because Plaintiffs raised genuine issues of material fact.
                                                        Background
           The Board of Land Commissioners (Board) is one of a handful of boards
   established by the Montana Constitution. The Board has direct constitutional
                                      authority
                   to lease, exchange, and sell state trust lands.
              The governor, superintendent of public instruction, auditor, secretary
        of state, and attorney general constitute the board of land commissioners.
     It has the authority to direct, control, lease, exchange, and sell school lands
          and lands which have been or may be granted for the support and benefit
        of the various state educational institutions, under such regulations and
                          restrictions as may be provided by law.

 Article X, Section 4, Mont. Const.                                         In addition, Article X, Section 11(4), Mont.
                                                                             Const.,
                                                                            provides:



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                   All public land shall be classified by the board of land commissioners
               in a manner provided by law. Any public land may be exchanged for other
            land, public or private, which is equal in value and, as closely as possible,
                                           equal in area.

   Section 77-1-202(1), MCA, echoes the constitutional authority of the Board. It
                                         states:
                  The board shall exercise general authority, direction, and control
          over the care, management, and disposition of state lands and, subject to
        the investment authority of the board of investments, the funds arising from
         the leasing, use, sale, and disposition of those lands or otherwise coming
           under its administration. In the exercise of these powers, the guiding
        principle is that these lands and funds are held in trust for the support of
       education and for the attainment of other worthy objects helpful to the well-
            being of the people of this state as provided in The Enabling Act. The
       board shall administer this trust to secure the largest measure of legitimate
                             and reasonable advantage to the state.

       In 1993, Turner Enterprises, Inc. (Turner), submitted a proposal to the Board
                                             to
 exchange state school trust land located within the boundaries of Turner's Flying D
                                          Ranch
  southwest of Bozeman, Montana, for private land Turner owned elsewhere in Montana.
  The original proposal was to exchange 7,486 acres of state land within the Flying D
   Ranch for 12,689 acres of land Turner owned within the Snowcrest Ranch south of
     Alder, Montana, and the Ulm Pishkun southwest of Great Falls, Montana.    The
 Department of Natural Resources and Conservation (Department) reviewed the proposal
and recommended that it be rejected as not assuring a "good deal" for the State when
                                            all
   attributes of the state lands were evaluated against the land proposed for state
                                      acquisition.
        Turner then modified its proposal by deleting from the proposed exchange two
 sections of state lands within the Flying D Ranch. As modified, the proposal was to
 exchange 6,167 acres of state land for 12,689 acres of private land. On April 15,
                                          1996,
after review by the Department, solicitation of public comment, and preparation of an
environmental assessment (EA) as required under the Montana Environmental Policy Act,
       õõ 75-1-101 through -324, MCA, the Board approved the modified proposal.
          The plaintiff organizations of recreationists and sportsmen brought this
                                       declaratory
 judgment action arguing that the Board had overstepped its lawful discretion under
                                            the
     Montana Constitution because it did not exchange the state land "under such
                                       regulations
   and restrictions as may be provided by law." Article X, Section 4, Mont. Const.
  Specifically, Plaintiffs argued that the Board did not comply with õ 77-2-203(2),
                                           MCA:
                  If the requirements of subsection (1) and 77-2-204 are met, state
           lands bordering on navigable lakes and streams or other bodies of water
         with significant public use value may be exchanged for private land if the
        private land borders on similar navigable lakes, streams, or other bodies of
                                              water.

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    The two most significant bodies of water on the private land owned by Turner are
     Ledford Creek and Robb Creek, both of which are located on the Snowcrest Ranch.
 Cherry Creek and Spanish Creek are the two most significant bodies of water on the
                                             state
  land proposed for exchange. Plaintiffs argued that while Cherry Creek and Spanish
Creek are streams with significant public use value, Ledford Creek and Robb Creek are
                                              not.
           The Plaintiffs pointed out that throughout the process of approving the land
  exchange, the Board told them that õ 77-2-203(2), MCA, did not apply because "there
 are no state lands bordering on a navigable lake or stream included in this proposed
  exchange." Only on June 17, 1996, after Plaintiffs had filed this action, did the
                                             Board
    make supplementary findings on õ 77-2-203(2), MCA, including a finding that Robb
      Creek and Ledford Creek have "the potential to provide significant public use
                                            value."
              MonTRUST, a non-profit citizens' organization promoting the protection,
  advancement and appropriate use of Montana's school trust lands on behalf of public
 education, was granted leave to intervene before the District Court. The Defendants
moved to dismiss the action or, in the alterative, for summary judgment. Intervenors
       moved for summary judgment as well, while Plaintiffs moved for a preliminary
                                          injunction
   to prevent the exchange from proceeding during the pendency of this lawsuit. At a
    hearing on all of the pending motions, the attorneys for the parties and for the
                                         Intervenors
  made oral argument. Additionally, Plaintiffs presented testimony of five witnesses
      concerning the comparability of the bodies of water on the lands proposed for
                                           exchange.
          In a memorandum and order entered after the hearing, the court found that the
     Plaintiffs had standing to bring this action but that the Board had adequately
                                          considered
the requirements set forth at õ 77-2-203(2), MCA. Accordingly, the court granted the
     Defendants' motion for summary judgment and denied the Plaintiffs' motion for a
                                   preliminary injunction.
                                                            Discussion
            Did the District Court err by granting summary judgment because Plaintiffs
                                            raised
                              genuine issues of material fact?
          Summary judgment is proper when there are no genuine issues of material fact
                                               and
 the moving party is entitled to judgment as a matter of law. Rule 56(c), M.R.Civ.P.
  This Court's standard of review of a summary judgment is the same standard as that
  employed by the district court--whether there are genuine issues of material fact
                                            and the
 moving party is entitled to judgment as a matter of law. Missoula Rural Fire Dist.
                                                v.
         City of Missoula (Mont. 1997), 938 P.2d 1328, 1329, 54 St.Rep. 480, 481.
           The standard of review of an informal administrative decision is whether the
 decision was arbitrary, capricious, or unlawful. North Fork Pres. v. Dept. of State
  Lands (1989), 238 Mont. 451, 458-59, 778 P.2d 862, 867. It was appropriate for the
  District Court, in applying that standard, to accept new evidence and not to limit
                                               its

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 review to the administrative record. In a proceeding to determine whether an agency
  decision was arbitrary, capricious, or unlawful, unless the reviewing court looks
                                           beyond
      the record to determine what matters the agency should have considered, it is
                                        impossible
  for the court to determine whether the agency took into consideration all relevant
                                          factors
in reaching its decision. ASARCO, Inc. v. U.S.E.P.A. (9th Cir. 1980), 616 F.2d 1153,
                                            1160.
             Combining the two applicable standards of review, the question before the
  District Court and this Court is whether the Plaintiffs have established a genuine
                                          issue of
     material fact as to whether the Board's decision was arbitrary, capricious, or
                                         unlawful.
           In their brief and at oral argument, the Defendants pointed out that under
  Montana's stream access law at õ 23-2-302(1), MCA, the effect of the proposed land
exchange on the availability of Cherry Creek and Spanish Creek to recreationists will
  merely be fewer points of access; recreationists will retain the right to use the
                                          creeks.
     A condition to the exchange would be that public access to the creeks would be
 maintained at legal access points. The Defendants also point out the "world-class
                                          hunting
  opportunities" on the Snowcrest Ranch, now privately-owned, but which would become
   state land. The Defendants explain that a multitude of factors entered into the
                                        evaluation
  of whether the exchange serves the interests of the school trust beneficiaries and
                                          provides
                        recreational opportunities for the public.
          Similarly, the Intervenors argue that the Board's fiduciary duty to the trust
 beneficiaries mandates approval of this proposed land exchange because the exchange
                                             will
   result in greater income to the beneficiaries, which the Intervenors argue is the
                                             only
    purpose of the trust. As a result of the exchange, the trust corpus would gain
                                          $217,438
   in value plus a projected additional $6,577 in annual income from hunting fees and
                             agricultural and grazing leases.
         However, neither the Board's fiduciary duty to the trust beneficiaries nor the
                                            other
 factors which entered into its decision on this proposed land exchange relieves the
                                            Board
      of its constitutional obligation to follow the "regulations and restrictions"
                                      imposed by the
 Legislature on proposed land exchanges, including those found in õ 77-2-203(2), MCA.
 We must presume that the Montana Legislature understood the effect of its action in
   passing õ 77-2-203(2), MCA, a "regulation and restriction" which may constrict the
    Board's discretion in managing state trust land. See Rider v. Cooney (1933), 94
                                            Mont.
    295, 310, 23 P.2d 261, 264 ("[t]he legislature is presumed to act, so far as mere
   questions of policy are concerned, with full knowledge of the facts upon which its
   legislation is based, and its conclusions on matters of policy are beyond judicial
   consideration"). The Board cannot ignore the requirements set forth at õ 77-2-203

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                                        (2),
  MCA, simply because it believes that it otherwise received a "good deal" from the
                                 proposed exchange.
          The Board based its finding that Robb Creek and Ledford Creek have "the
    potential to provide significant public use value" on the following factors:
          (a) The exchange would result in additional mileage of stream ownership
                            than currently owned by the State;

                      (b) These creeks can provide good sport fisheries to the public; and

            (c)        Robb Creek contains a highly pure strain of native cutthroat trout which
                            is largely absent in either Cherry Creek or Spanish Creek.

 As a     preliminary matter, we note that õ 77-2-203(2), MCA, refers to "significant
                                           public
                use value," not potential for significant public use value.
          The statement that Robb Creek and Ledford Creek had the potential to provide
  significant public use value was buttressed first by the Board's finding that the
                                          lands to
  be received in the proposed exchange had more miles of streams. Additional stream
              mileage alone does not equate to significant public use value.
         The Plaintiffs point out that the EA of Robb Creek and Ledford Creek indicated
 high levels of erosion and siltation, low fish numbers, and almost no public use.
                                           The EA
discussed electroshock surveys undertaken by the Department of Fish, Wildlife & Parks
  (DFWP). According to the DFWP's 1991 electroshock survey, Ledford Creek contained
 approximately ten brown trout and five rainbow trout for every 1,000 feet of stream
                                             and
 Robb Creek contained thirty-seven brook trout and five westslope cutthroat trout per
1,000 feet of stream. In contrast, an electroshock survey undertaken on upper Cherry
     Creek showed 237 rainbow trout and twenty-five brown trout; and on lower Cherry
   Creek, 164 brown trout, 128 rainbow trout, and twenty-six mountain whitefish per
                                           1,000
                                      feet of stream.
        Further, while the EA asserted that Robb Creek and Ledford Creek were important
 spawning areas for fish living in the Ruby River, the Plaintiffs presented contrary
   testimony at the District Court hearing. The two DFWP fisheries biologists upon
                                            whose
 study this assertion in the EA was based, Messrs. Brammer and Oswald, testified that
  their studies did not cover Ledford Creek and Robb Creek but had focused instead on
   areas of the Ruby River upstream. Brammer, to whom the EA attributed a statement
                                             that
  these creeks were important spawning areas, stated that he could not agree with the
   statement attributed to him "because I don't have any evidence that would suggest
                                           that's
 the case." Oswald testified that he did not find any evidence of spawning from Ruby
      River into Robb Creek and that any claim that Ledford Creek and Robb Creek are
    important spawning areas "could not be supported by the current evidence that we
                                           have."
             The EA described Ledford Creek as "a good sport fishery with management
   potential." However, both Brammer and Oswald testified before the District Court
                                             that

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   significant problems, including sedimentation, may prevent the development of Robb
 Creek and Ledford Creek as sport fisheries. Furthermore, Oswald testified that DFWP
 had absolutely no evidence from field reports or otherwise of anyone fishing in Robb
                                 Creek or Ledford Creek.
        The Plaintiffs presented several witnesses who testified that Spanish Creek and
 Cherry Creek are excellent sport fisheries but that Robb and Ledford Creeks are not.
    Among others, William Fairhurst, a retired military pilot and avid outdoorsman,
                                          stated
by affidavit that both Spanish Creek and Cherry Creek are "pristine blue ribbon trout
  streams with as good of fishing as can be found in the state." He stated that, in
                                        contrast,
   "Ledford Creek and Robb Creek contain insignificant water flow compared to Spanish
    Creek and Cherry Creek, and, in fact, they are not reliable for fishing and water
                                  throughout the year."
          The Board's supplemental findings further stated that Robb Creek contains a
                                          highly
   pure strain of westslope cutthroat trout largely absent in either Cherry Creek or
                                         Spanish
    Creek. The Plaintiffs presented evidence to the District Court on this point as
                                           well.
Brammer testified that a recovery program for westslope cutthroat trout in Robb Creek
 would be speculative because of habitat degradation and a relatively higher density
                                          of the
  competi- tive brook trout. DFWP had no management plan in place for developing the
westslope cutthroat trout population in Robb Creek, and none was proposed at the time
                                     of the hearing.
            Additionally, at the hearing before the District Court, the Plaintiffs'
                                        witnesses
  raised valid questions about the extent to which access to Cherry Creek and Spanish
Creek would be available to the public under the stream access law. All of the above
factual issues must be viewed against the backdrop of a Board which maintained during
   its decisionmaking process that õ 77-2-203(2), MCA, did not apply to this proposed
      exchange, but when faced with this lawsuit abruptly changed its position and
                                        belatedly
       adopted findings relating to significant public use of the waters involved.
           We conclude that Plaintiffs should be accorded an opportunity through full
   discovery to explore the factual basis, or lack thereof, for the Board's finding
                                        that Robb
     Creek and Ledford Creek constitute bodies of water with significant public use
                                         values.
 The Plaintiffs have raised genuine issues of material fact as to whether Robb Creek
                                            and
    Ledford Creek are streams with significant public use value, including: whether a
     "potential to" provide significant public use value is equivalent to providing
                                       significant
  public use value; the weight, if any, to be accorded an increase in stream mileage
                                           under
 state ownership as a result of the land exchange; the significance of the Robb Creek
 westslope cutthroat trout population in light of the other facts and circumstances;
                                         and the
 truth of the claim in the EA that Ledford Creek can provide a good sport fishery to
                                            the

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   public.  Because of these issues of fact, we hold that a material issue of fact
                                     exists as to
  whether the Board's decision approving the proposed land exchange was arbitrary,
         capricious, and unlawful. Summary judgment was therefore improper.
       Having determined that the District Court erred in granting summary judgment
                                         for
   the Board, we need not reach the other issues raised on appeal. We vacate the
                                       summary
 judgment and remand to District Court for further proceedings consistent with this
                                       Opinion.

                                                                                                            /S/     J. A.   TURNAGE


                                                                            We concur:

                                                            /S/ WILLIAM E. HUNT, SR.
                                                               /S/ JAMES C. NELSON
                                                                 /S/ JIM REGNIER
                                                             /S/ TERRY N. TRIEWEILER


              Honorable Marc G. Buyske, District Judge, specially concurring.
         I concur in the result of the majority opinion, but not in all that is stated
                                          in that
    opinion. I believe the path the majority chose to take to that result runs too
                                          broadly
     through a factual analysis and invites future litigants to view district court
                                        proceedings
    as a means to do what should have been done at the administrative agency level--
                                          develop
the record. I would hold the District Court erred as a matter of law in concluding,
                                              in
 effect, the decision of the Board of Land Commissioners approving the land exchange
                                              at
                               issue here was not arbitrary.
        Although the matter was put before the District Court via a motion for summary
 judgment, the District Court chose to consider and rule on the matter as a judicial
                                           review
    of the administrative decision of the Board. The District Court could not make
                                          factual
findings as those would be beyond the purview of that proceeding, hence its decision
                                              to
     uphold the decision of the Board is one of law. This Courtþs review of legal
                                         decisions
 is plenary as no exercise of discretion is necessary to those decisions--the legal
 conclusion is either correct or not. Hicklin v. CSC Logic, Inc. (Mont. 1997), 940
                                             P.2d
   447, 449, 54 St.Rep. 675, 676; Erickson v. State ex rel. Bd. of Medical Examiners
  (Mont. 1997), 938 P.2d 625, 628, 54 St.Rep. 395, 396. When conducting its plenary
   review of a district courtþs review of an informal administrative decision, this
                                            Court

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follows the same standard as the district court, namely, does the record before the
 administrative body establish it acted arbitrarily, capriciously, or unlawfully.
                                       North Fork
Pres. v. Department of State Lands (1989), 238 Mont. 451, 458-59, 778 P.2d 862, 867.
 The administrative decision is arbitrary and capricious if it was not based upon a
    consideration of all relevant factors and if there has been a clear error of
                                        judgment.
Citizens to Preserve Overton Park, Inc. v. Volpe (1971), 401 U.S. 402, 416, 91 S.Ct.
                           814, 823-24, 28 L.Ed.2d 136, 153.
      The authority of the Board of Land Commissioners is established by the Montana
                                     Constitution:
               The governor, superintendent of public instruction, auditor, secretary
         of state, and attorney general constitute the board of land commissioners.
      It has the authority to direct, control, lease, exchange, and sell school lands
           and lands which have been or may be granted for the support and benefit
         of the various state educational institutions, under such regulations and
                           restrictions as may be provided by law.

                                                  Article X, Section 4, Mont. Const.

         Section 77-1-202(1), MCA, echoes the constitutional authority of the Board when
                                        it states:

                 The board shall exercise general authority, direction, and control
         over the care, management, and disposition of state lands and, subject to
          the investment authority of the board of investments, the funds arising
          from the leasing, use, sale, and disposition of those lands or otherwise
           coming under its administration. In the exercise of these powers, the
         guiding principle is that these lands and funds are held in trust for the
        support of education and for the attainment of other worthy objects helpful
         to the well-being of the people of this state as provided in The Enabling
       Act. The board shall administer this trust to secure the largest measure of
                      legitimate and reasonable advantage to the state.
A further þregulationþ or þrestrictionþ provided by law with respect to the actions
                                        of the
                      Board is enumerated in õ 77-2-203(2), MCA:
                 If the requirements of subsection (1) and 77-2-204 are met, state
          lands bordering on navigable lakes and streams or other bodies of water
        with significant public use value may be exchanged for private land if the
       private land borders on similar navigable lakes, streams, or other bodies of
                                           water.

      The record before the District Court and this Court makes clear the Board did
                                         not
  believe the requirements of õ 77-2-203(2), MCA, applied to this proposed land
                                      exchange
   transaction. Obviously, õ 77-2-203(2), MCA, does apply to this land exchange
 transaction, and the conclusion of the Board to the contrary is a clear error of
                                        legal
judgment. This error necessarily affected the development and consideration of the
   record upon which the Board based its April 15, 1996, decision to approve the
                                     exchange.

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    The Board could not have considered the elements of õ 77-2-203(2), MCA, when its
decision was made as the Board did not understand õ 77-2-203(2), MCA, to apply to the
                                   proposed transaction.
         Applying the review standards noted above to this situation, I hope I restate
                                              the
 obvious when clarifying that an administrative board must consider relevant factors
                                            prior
to reaching its decision and not after that decision has been made. In this case it
                                               is
      undisputed that the Board approved the land exchange and then considered the
                                         similarity
of the significant public use values of the waterways in question. The supplementary
 adoption of relevant evidence, when that evidence is statutorily required for lawful
                             decision making, is unacceptable.
           The Board is entrusted by the public with fiduciary control over Montanaþs
                                            public
     trust land. To disregard a statute governing the maintenance of that trust in
                                         reaching a
     decision affecting the trust corpus, and then to provide after-the-fact-of-the-
                                          decision
   findings to justify compliance with the previously disregarded statute, is a not
                                         insignifi-
  cant breach of the Boardþs obligation to the public. Regardless of the manner in
                                             which
 the supplementary findings were adopted or the validity of facts supplemented to the
record, the process is of such unseemly appearance as to be arbitrary as a matter of
                                             law.
The statute ignored by the Board in making the decision to approve this land exchange
       is a direction from the citizens of this State that certain factors need be
                                      considered, and
   certain assurances confirmed, with respect to the exchange of their public trust
                                          lands for
     private lands. The citizens of this State can demand nothing more, and expect
                                           nothing
        less, than to have the governmental entities of the State follow the valid
                                     directions of the
                                          governed.
          The Board has a statutory obligation to make certain, when it trades public
                                             lands
  that contain navigable lakes and streams or other bodies of water with significant
                                            public
   use value, the State of Montana receives lands with similar bodies of water. The
                                           Boardþs
   refusal to consider õ 77-2-203(2), MCA, during its decision making process and its
    attempt to justify its decision to approve the land exchange with supplementary
                                           hearings
    regarding õ 77-2-203(2), MCA, constitutes an arbitrary failure of this statutory
                                        obligation.
          I would remand this matter to the District Court for its return to the Board
                                           of Land
     Commissioners with instructions to reconsider its decision regarding this land
                                           exchange

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 and to properly hear and consider evidence as to the significant public use values
                                       of the
                   bodies of water upon the lands to be exchanged.

                                                                                                     /S/ MARC G. BUYSKE
                                                                                              District Judge, sitting in place
                                                                                               of Justice W. William Leaphart


                                                   Justice Karla M. Gray, dissenting.


         I respectfully and reluctantly dissent from the Court's opinion. While it is
                                            clear
that the Board of Land Commissioners and its legal advisers did not cover themselves
 in glory via their conduct in these proceedings, I cannot join the Court's sweeping
                                            effort
  to reconstitute the administrative record on which the Board made its decision in
                                            order
     to provide the plaintiffs a "second bite at the apple" in their late effort to
                                      impact on that
  record and the ultimate decision in this case. I would affirm the District Court's
     conclusion that the Board's decision was not arbitrary, capricious or unlawful.
           The issue of whether the Board's decision was unlawful is not a difficult
                                        one. Late
 or not, the Board ultimately concluded that õ 77-2-203(2), MCA, applies to this land
      exchange. When it did so, it made special findings relating to the statutory
                                       requirements
   on the basis of the record before it, provided opportunities for public input and
                                           comment
    on those findings, and ratified its earlier approval of the land exchange on the
                                          basis of
      those findings. Thus, it cannot fairly be said that the Board's decision was
                                         unlawful.
           Moreover, while I agree with the Court and with Judge Buyske's thoughtful
                                           special
 concurrence that the procedures by which the Board's ratified decision was made were
undoubtedly unseemly from the standpoint of the public's rightful expectations of the
     Board, the question before us is not whether the procedures were arbitrary or
                                       capricious.
   The question is whether the Board's decision was arbitrary or capricious, and I
                                            submit
that it was not. The District Court concluded, and I agree, that sections 3.2.8 and
                                            4.1.8
of the EA provided a sufficient basis--that is, substantial evidence--to support the
                                           Board's
 findings and conclusions that the land exchange meets the requirements of õ 77-2-203
                                             (2),
                  MCA. Beyond that, we cannot properly go in this case.
         The Court, however, approaches this case as if it were a direct challenge to
                                              the
EA, notwithstanding that all parties agree it is not. In its sweeping consideration

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                                             and
evaluation of the evidence the plaintiffs submitted to the District Court after the
                                          EA was
    long completed, this Court essentially upends the EA process and the right of
                                         agencies
    who must use EAs in decision-making to rely on them. It does so by essentially
                                         allowing
 the plaintiffs--who either sat out the EA process or whose views were not accepted
                                          during
that process--to make a "new" record relating to matters addressed in the EA, after
                                             the
     fact and absent a legal challenge to the EA or the process by which the EA was
  developed. If the plaintiffs wanted to impact the EA, they were obliged to do so
                                           during
  that process. Since the evidence presented to the District Court was not offered
                                           during
that process, it cannot properly be considered now in this indirect attack on the EA
                                             via
                          a challenge to the Board's decision.
          Moreover, the plaintiffs could have presented the evidence at issue to the
                                            Board
prior to the Board's conclusion that õ 77-2-203(2), MCA, applied or during the public
  comment and input opportunities provided on the Board's special findings ratifying
                                              and
   approving the land exchange. They did not do that either. Thus, I cannot agree
                                         with the
 Court's determination that this evidence can now be used to create genuine issues of
   material fact regarding whether the Board's decision was arbitrary or capricious.
         Finally, the Court's approach to the use of late-offered evidence to create
                                          genuine
    issues of material fact regarding whether the Board's decision was arbitrary or
                                        capricious
  essentially allows this Court--or any court--to intrude directly into the decision-
                                           making
 responsibilities of the Board. No matter how the Court couches it, its decision in
                                             this
case means that every administrative agency decision can be challenged on "arbitrary
                                               or
  capricious" grounds if a mere evidentiary conflict in the record can be raised--or
                                          created
    after the fact--and every such challenge will allow courts to both intrude into
                                           agency
         decision-making and substitute their judgment for that of the agency.
                                     Notwithstanding
 the rumored discontent in many quarters over the extent to which the legislature has
   delegated authority to administrative agencies, I cannot agree that the Court can
                                         properly
                              vest that authority in itself.
                                             I dissent.

                                                                                                             /S/     KARLA M. GRAY



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