No. 03-753
IN THE SUPREME COURT OF THE STATE OF MONTANA
2005 MT 60
BITTERROOT RIVER PROTECTIVE ASSOCIATION, INC.,
Petitioner, Respondent and Cross-Appellant,
v.
KENNETH F. and JUDITH A. SIEBEL and
THE MONTANA DEPARTMENT OF NATURAL
RESOURCES AND CONSERVATION,
Respondents and Appellants.
APPEAL FROM: District Court of the First Judicial District,
In and for the County of Lewis and Clark, Cause No. BDV 2002-519,
The Honorable Jeffrey M. Sherlock, Judge presiding.
COUNSEL OF RECORD:
For Appellant Montana Department of Natural Resources & Conservation:
Anne W. Yates (argued), Special Assistant Attorney General, Helena,
Montana
For Appellants Kenneth F. and Judith A. Siebel:
John Bloomquist (argued), Tom E. Davis, Doney, Crowley, Bloomquist &
Uda, P.C., Helena, Montana
For Respondent Bitterroot River Protective Association, Inc.:
Jack R. Tuholske (argued), Sarah K. McMillan, Tuholske Law Office, P.C.,
Missoula, Montana
David J. Ryan, Ryan Law Offices, P.L.L.C., Missoula, Montana
Argued: June 23, 2004
Submitted: June 29, 2004
Decided: March 9, 2005
Filed:
__________________________________________
Clerk
Justice John Warner delivered the Opinion of the Court.
¶1 Kenneth F. and Judith A. Siebel ( “Siebels”) and the Montana Department of Natural
Resources and Conservation (“DNRC”) appeal from an Order on Petition for Judicial
Review entered on August 4, 2003, in the District Court for the First Judicial District, Lewis
and Clark County. Such order denied the Siebels’ applications for beneficial water use
permits and held in favor of the Bitterroot River Protective Association (“BRPA”). The
BRPA cross-appeals from the same judgment and order on separate grounds. We affirm.
¶2 We determine that the first issue presented is dispositive and thus address only the
following issue on appeal:
¶3 Did the District Court err in concluding that the Siebels’ original applications for
beneficial water use were “strawmen” or “sham” applications, and the proposed
amendments to those applications constituted new applications which must be denied as the
Bitterroot River subbasin was closed when they were filed?
I. FACTUAL AND PROCEDURAL BACKGROUND
¶4 The Siebels submitted four applications to appropriate water in the Bitterroot River
Basin in Ravalli County on March 19, 1999. This filing was 10 days before the legislature
closed the Bitterroot River subbasin to new water appropriations on March 29, 1999.
Sections 1, 3, Ch. 205, L. 1999 (codified at § 85-2-344(2), MCA).
¶5 The Siebels own a large ranch known as the Bitterroot Springs Ranch and filed these
applications to appropriate water to develop four ponds–the North Pond, Southeast Pond,
Vetsch Pond and Triple Pond–for the beneficial use of wildlife. At the request of the
Siebels’ consultant, Land and Water, Inc. (“Land and Water”), the DNRC delayed
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processing the applications.
¶6 On March 24, 2000, the Siebels amended the application for the North Pond. The
amendment requested permission to appropriate more than double the volume of water
requested in the original application, documented a change in the place of use, and added
recreation as a beneficial use.
¶7 On June 15, 2000, the DNRC wrote to Siebels’ Land and Water consultant, Karl
Uhlig (“Uhlig”), informing him of deficiencies in the amended North Pond permit
application and requesting additional justification for the volume and flow rate needed to
support the stated beneficial uses. The letter said such information had to be received within
30 days of receipt of the letter or the Siebels could lose their priority date for the North Pond
application.
¶8 The Siebels submitted amendments to the remaining three applications on June 23,
2000. The Siebels’ amended Southeast Pond application requested a volume increase from
28.8 acre-feet to 952.66 acre-feet. The Siebels also changed the point of diversion, the place
of use, the means of diversion, and added fish and recreation as beneficial uses.
¶9 The amended application for the Triple Pond increased the requested volume from
74.8 acre-feet to 1,025.2 acre-feet, increased the proposed depth of the pond from 3 to 25-30
feet and added fish and recreation as beneficial uses.
¶10 The amended application for the Vetsch Pond requested an increase in volume from
45.6 acre-feet to 899.3 acre-feet, changed the means and place of diversion, and added fish
and recreation as beneficial uses.
¶11 On July 7, 2000, the Siebels responded to the DNRC’s letter of June 15, stating they
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needed more time to gather the requested information and that they would respond by the
end of August. On July 10, 2000, the DNRC sent another letter to Uhlig, at Land and Water,
stating all of the applications were deficient in that the volume and flow rate for the
requested beneficial uses required further justification. The DNRC indicated the applications
would be denied if the requested information was not provided by August 31, 2000.
¶12 On September 28, 2000, Uhlig responded to the DNRC’s letters. On October 13,
2000, the DNRC sent another letter to Uhlig informing him the applications were still
incomplete and were lacking justification for the proposed volume and flow. On October
19, 2000, the DNRC again requested additional information from Uhlig, giving him 30 days
to respond. Again the DNRC stated the applications would be denied if the information was
not timely provided. On October 27, 2000, the Siebels provided the DNRC with the
requested information.
¶13 Thereafter, the DNRC published Notice of Application and accepted objections from
the public on the Siebels’ applications. The BRPA objected to the applications on the
grounds that the Siebels had failed to satisfy the beneficial use requirements. The Montana
Department of Fish, Wildlife and Parks, the U.S. Fish and Wildlife Service, and local
resident, Jim Johnston, also objected. The DNRC scheduled a contested case hearing for
November 27, 2001.
¶14 Prior to the hearing, all of the objectors except the BRPA stipulated that they would
withdraw their objections if the Siebels would agree to reduce the amount of water requested
for each pond. The Siebels reduced the amount of water requested for the Southeast Pond
to 331.20 acre-feet, reduced the amount for the Triple Pond to 812.7 acre-feet, reduced the
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amount for the Vetsch Pond to 342.50 acre-feet, and reduced the amount for the North Pond
to 1364.90 acre-feet.
¶15 Also prior to the hearing, the BRPA filed a Motion to Terminate the Applications,
alleging the amendments were submitted in bad faith, the amended applications were new
applications, and the alleged deficiencies in the applications were not cured within the time
allowed by statute. The Hearing Examiner denied the Motion and denied a subsequent
request to certify the Motion to the DNRC Director.
¶16 The Hearing Examiner concluded the Siebels had not proven that the quantity of
water requested was the minimum amount necessary for the proposed beneficial use; had not
provided evidence to establish a direct correlation between the amount of water requested
and the need for that amount of water to sustain the proposed beneficial uses of fish, wildlife
and recreation; and had not proven the proposed use was a beneficial use for which a water
right could be granted. Accordingly, on March 6, 2002, the Hearing Examiner denied the
Siebels’ applications.
¶17 The Siebels filed exceptions to the Hearing Examiner’s decision. Oral argument was
held on May 8, 2002, and the DNRC issued its Final Order on July 29, 2002, reversing the
decision of the Hearing Examiner and granting all four of the Siebels’ applications. The
DNRC concluded the Siebels had proven that the amount of water requested was
“reasonably necessary” to support the proposed beneficial uses.
¶18 BRPA petitioned the District Court for review. The District Court entered its Order
on August 4, 2003, concluding the Siebels had not submitted the original applications in bad
faith; holding as a matter of law the DNRC erred in relating the amendments back to the
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original applications filed before the Bitterroot River subbasin closure because the
amendments were so substantial they constituted new applications whose filing was
precluded by Bitterroot River subbasin closure; the DNRC erred in applying a “reasonably
necessary” standard in determining the amount of water necessary to support the proposed
beneficial uses and the appropriate standard is the “minimum amount necessary”; and the
DNRC did not err in allowing the amendments to the applications.
¶19 The Siebels filed a Notice of Appeal on October 3, 2003, and the DNRC filed its
appeal on October 7, 2003. On October 17, 2003, the BRPA filed its cross-appeal. The
Siebels and the DNRC appeal the District Court’s conclusions that the DNRC erred in
accepting and processing the amended applications after the Bitterroot River subbasin
closure and that the DNRC incorrectly applied the “reasonably necessary” standard instead
of the “minimum amount necessary” standard in determining the amount of water required
to support the proposed beneficial uses. The BRPA cross-appeals the District Court’s
conclusion that the original applications were not submitted in bad faith and that DNRC did
not err in not terminating the applications pursuant to its authority under § 85-2-302, MCA.
¶20 The decision in this case only requires that we address the issue of whether the
amended applications were so substantial that they constituted new applications whose filing
was subsequent to the time the Bitterroot River subbasin was closed to new appropriations,
and thus the new applications must be denied. The further issues presented by the parties
are questions that may or may not have to be answered another day. However, we do not
issue advisory opinions. Northfield Ins. Co. v. Mont. Ass’n of Counties, 2000 MT 256, ¶ 18,
301 Mont. 472, ¶ 18, 10 P.3d 813, ¶ 18; Bresindine v. Dept. of Commerce (1992), 253 Mont.
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361, 365, 833 P.2d 1019, 1021.
II. STANDARD OF REVIEW
¶21 A district court reviews an administrative decision in a contested case to determine
whether the findings of fact are clearly erroneous in view of the reliable, probative and
substantial evidence in the whole record and whether the agency correctly applied the law.
See § 2-4-704, MCA; Baldwin v. Board of Chiropractors, 2003 MT 306, ¶ 10, 318 Mont.
188, ¶ 10, 79 P.3d 810, ¶ 10. We employ the same standards when reviewing a district court
order affirming or reversing an administrative decision. Baldwin, ¶ 10, (citation omitted).
III. DISCUSSION
ISSUE
¶22 Did the District Court err in concluding that the Siebels’ original applications
for beneficial water use were “strawmen” or “sham” applications, and the proposed
amendments to those applications constituted new applications, which must be denied
as the Bitterroot River subbasin was closed when they were filed?
¶23 The Siebels argue the District Court was in error in classifying the amendments to the
Siebels’ original applications as new applications because nothing in the plain language of
the 1973 Montana Water Use Act prohibits amendments to applications timely filed.
According to the Siebels, the only way the District Court could have reached its conclusion
was by reading into the Bitterroot River subbasin closure statute, § 85-2-344, MCA, a
prohibition on amendments or modifications to timely filed applications which pre-dated the
effective date of the statute. In so doing, the Siebels argue that the District Court violated
a fundamental rule of statutory construction that the role of the judge in construing a statute
is not to insert what has been omitted, or to omit what has been inserted. Section 1-2-101,
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MCA; Kadillak v. Anaconda Co. (1979), 184 Mont. 127, 138, 602 P.2d 147, 154. However,
during oral argument, the attorney for the Siebels admitted that nowhere in the District Court
record was there any evidence to support this conclusion, therefore, we decline to address
the argument on appeal.
¶24 The Siebels and the DNRC next argue that the amendments to the original
applications were not so significant as to constitute new applications. According to the
Siebels, the change in flow rate and volume that the District Court focused on in making its
determination were not significant changes; they merely resulted from a reclassification of
the projects from on-stream to off-stream ponds requiring the Siebels to supply additional
design calculations to the DNRC not required when they filed the original applications.
They argue that the changes were insignificant from a water use perspective because the total
volume of water used in an off-stream pond would actually be less than the total volume
required for a constant flow on-stream pond. Additionally, the changes in points of
diversion, means of diversion and place of use were not significant because, like the updated
changes in volume, these changes were necessitated by the reclassification of the projects
from on-stream to off-stream ponds. They insist the changes were mere “refinements” to the
original applications that more accurately reflected the data required by the DNRC once the
design of the projects was complete.
¶25 The Siebels argue that this Court’s holdings in General Agriculture Corp. v. Moore
(1975), 166 Mont. 510, 534 P.2d 859, and Montana Dept. of Natural Resources and
Conservation v. Intake Water Co. (1977), 171 Mont. 416, 558 P.2d 1110, stand for the
proposition that an appropriator of water need not fully develop or completely define the
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exact elements of a proposed appropriation of water at the time the appropriator evidences
their intent to put the water to beneficial use; and so long as the appropriator diligently
pursues their right to appropriate the water, the right relates back to the date of original
filing. The DNRC joins the Siebels in this argument.
¶26 Based on the undisputed facts of this case, it is readily apparent that the amendments
to each of the four applications were much more than mere “refinements” which did not
constitute significant changes to the applications as originally filed. We conclude, as did the
District Court, that the changes were so significant that the amended applications bear little
resemblance, if any, to the original applications. The total volume of water requested for all
four ponds increased from the original 916 acre feet to 4,677 acre feet in the amended
applications. Additionally, each of the amended applications included new beneficial uses
and three of the applications made changes to one or more of the following: the means of
diversion, points of diversion, or points of use. This Court noted, admittedly in dicta, in
Matter of Musselshell River Drainage Area (1992), 255 Mont. 43, 54, 840 P.2d 577, 584,
that changes to the place of diversion and place of use are significant and are indicative of
a new appropriation.
¶27 In spite of this precedent and the statutory requirements for completing an application
to appropriate water provided in § 85-2-302, MCA, the DNRC contends that the
amendments could not constitute new applications because the source of the water for the
project was the same; the points of use and diversion changed but remained on the same
parcel of real property; the change in design from on-stream to off-stream was legitimate;
and no downstream users would be impacted by the changes. We cannot agree.
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¶28 What the DNRC and Siebels really argue is that original applications to appropriate
water only need to indicate that the applicant wants to acquire the right to use some as yet
undetermined amount of water, in an undetermined manner, with an undetermined means
of diversion, for an undetermined purpose. To so hold would be directly contrary to the
requirement of § 85-2-302, MCA, that “the applicant shall submit a correct and complete
application.” In this case, the nature and extent of the changes to the proposed appropriation
contained in the amended applications can only be consistent with a new appropriation with
a new priority date, which would be prohibited by the Bitterroot River subbasin closure.
¶29 We are not persuaded by the argument that the holdings of General Agriculture and
Intake Water stand for the proposition that an application for permit filed in accordance with
§ 85-2-302, MCA, must relate back to the priority date of the original application when it
is amended by the applicant. Neither General Agriculture or Intake Water are apposite in
this case.
¶30 In General Agriculture, 166 Mont. at 517, 534 P.2d at 863, we held the plaintiff, who
filed a notice of appropriation prior to the effective date of both the 1972 Montana
Constitution and the 1973 Montana Water Use Act, had an “existing right” under the
meaning of Article IX, Section 3(1) of the 1972 Montana Constitution that was not
extinguished by enactment of the 1973 Water Use Act, even though the appropriator had not
yet perfected that right through actual use. Those circumstances are different from this case
where there is no existing right involved.
¶31 In Intake Water, 171 Mont. at 436, 558 P.2d at 1121, we held that under § 89-811,
R.C.M. (1947), the pre-1973 statutory requirements for completing an appropriation of
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water, Intake Water Co. was not required to commence actual on-site excavation of the
diversion works to preserve its priority date; it was enough that the company made an
ongoing effort in good faith to prosecute construction of the appropriation project for the
company’s water right to relate back to the date of posting and filing of notice of
appropriation pursuant to § 89-812, R.C.M. (1947).
¶32 Nothing in those two cases stands for the right of an appropriator under the 1973
Water Use Act, as amended, to claim that a substantially changed application relates back
to the priority date of the original application. To suggest otherwise demonstrates a general
lack of understanding of the differences between pre-1973 and post-1973 statutory law.
¶33 Under the pre-1973 legal framework for acquiring water rights in Montana, a valid
appropriation could be accomplished by posting and filing a notice of appropriation and then
proceeding to divert the water for a beneficial use. Sections 89-810 to 812, R.C.M. (1947);
Intake Water, 171 Mont. at 430, 558 P.2d at 1118. The process left many of the details of
appropriation to be worked out during the excavation and construction phase of the project.
For example, other than an affidavit signed by the appropriator, no other proof was required
to show what quantity of water was actually required to support its intended beneficial use.
See Intake Water, 171 Mont. at 419, 558 P.2d at 1112-13.
¶34 The 1973 Water Use Act fundamentally changed the process for obtaining a new
water right by requiring a permit before appropriating water for beneficial use. Section 85-
2-302, MCA. The permit process is front-end loaded in that a prospective appropriator must
provide detailed information regarding project design in order to meet the rigorous criteria
set forth in § 85-2-311, MCA, before obtaining a permit to begin work. Any appropriation
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undertaken prior to obtaining a permit is illegal under the Act. Section 85-2-302(1), MCA.
¶35 The current permitting system requires a prospective appropriator to gather sufficient
information to correctly and completely describe the proposed appropriation before the
application is filed and before securing a priority date. A priority date cannot be secured by
merely filling out an application, submitting it to the DNRC, and then later designing the
diversion, which is what the Siebels attempted to do here. We conclude that the District
Court did not err in determining that the original applications, filed March 19, 1999, were
so deficient that they were indeed a sham. As such they were insufficient to secure a priority
date as provided by § 85-2-302, MCA, and the amendments finally filed on March 24 and
June 23, 2000, were new applications.
¶36 Accordingly, we hold that the District Court did not err in concluding the amendments
to the original applications were so significant as to constitute new applications the
processing of which was prohibited by the Bitterroot River subbasin closure. To hold
otherwise would establish a precedent whereby prospective appropriators could file a
deficient application, later amend the application without penalty, and thereby gain an
advantage over other appropriators, or circumvent other restrictions such as the closure of
a subbasin to new appropriations.
IV. CONCLUSION
¶37 We affirm the judgment of the District Court denying the Siebels’ applications for
beneficial water use permits.
/S/ JOHN WARNER
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We Concur:
/S/ KARLA M. GRAY
/S/ PATRICIA O. COTTER
/S/ JAMES C. NELSON
/S/ JIM RICE
/S/ HOLLY BROWN
District Court Judge Holly Brown
sitting for Justice Leaphart
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