In Re the Adjudication of the Existing Rights to the Use of All the Water

No. 00-100

iS THE SIJPXEME COCRT OF TiiE STATE OF ?vI.:OUTAXA

IN THE MATTER OF THE ADJUDICXTLON OF THE EXISTIXG RIGHTS TO
'THE USE OF .ALL TfiE W'ATER, BOTH SURE:ACE AND UNDERGROUND,
WITHIN THE MISSOURI RIVER DRAINiZGE AREA, IUCLUDING ALL
TRIRUTARlES OF TIIE lL1ISSOURl RIVER IK BROADWATER, CASCADE,
JEFFERSON AUD LEWIS AND CLARK COU

APPEAL FROM: The Montana Water Court,
Honorable C. Bruce I,oble, Chief Judge

COUUSEL OF RECORD:

For rippellant:

G. Steven Broun (argued), Attorney at Law, Helena, Montana

Robert I .Lane, Montana Department of Fisli, Wildlife 2nd Parks,
;
I~Ieiena,
Montana

For Respondent:

Honorable C Bruce Loble (argued), ChlefWater Judge; Colleen Coyle. Water
Master, Montana Water Court, Bozcman, Montan-

For Alnici Curiae:

David W. DePuy (argued), DcPuy Law Finn, P.C., Livingston. Montana;
William L. Madden, Jr., Willianl L. Madden, Jr. P.C., Bozeman, hfontana
(Estate of Eva S. DePuy)

Lois J. Schiffer, Assistant Attorney General; Jeffrey Dobbins and Mark
R. Maag (argued), Attorneys, United States Department of Justice;
Alexandra I.. Davis, Office of the Solicitor, United States Dcpartrnent of
Interior (United States of il~nerica)

Laura Zlenier (itrgued), Borcman, Montana (Montana Srate Counc~l
of
Trout Utrln~lited)

John E. Bloo~nquist(argued), Doney, Crowley, Bloomquist & Ccla, Flelena,
Montana (hlontaiia Stockgrowers Association)

Senator Lorents Gros!ield, Big T~rnbcr,
Montdna (Pro Se)

Argued and Subm~tted
Mav 22,2001

Filed:
Justice W. William Leaphart delivered the Opinion ofthe Courr.

"1 The klontana Dcpal~ment Fish liriidiife anti Parks (DFWP) appeals a I-ulingby the
of

Chief Water Judge 011 five pre-1973 water rights claims in the hlissouri River basin. The

t h c claims are based on dners~ons uater for purposes of fish. \\ildltfe or rccrcation 7 he
of

Water Court rullng refers to Iit the ;Ifcztto- i$f)emrbonl ilrairtage ili-eii (1 98X), 234 Mont

331,766 P.2d 228 (Bean Lake) in remarking on the potential inlalidity of the claims. This

C'ourt invited subntission of i~micus
curiae briefs and received briefs from: E.state of Eva S.

Depuy: Montana State Council of Trout Lnlimited; Montana Stoekgrovrcrs Assoelation:

Senator L.orcnts Grosfield; and the United States. Only DFWP can represent citizen intcrcsts

in the adjudication proccss and, in light of our decision in B ~ N Lrrke, DFWP prcsenily
M

asserts only those fish, wildlife and recreation claims that involve diversions. To provide

gu~dance the ii'ater Court. me must reso1t.c the Remrr Lake confus~on address not onlv
to and

the question of whether fish, wildlife and recreation uses are recognized as beneficial uses

for appropriation purposes, but also whether a diversion is required for appropriation

purposes

*a2 We restate the issues as follows:

f Was Beiziz Lake correct in its holding that "under Montana la\'? before 1073,
no appropriation right was recognixed for recreation, fish and wildlife,
except through a Murphy right statute?"

II Does the Water Court's use of the "Beatz Lake remark" violate the Suprerne
Coun's Water Right Claitn Eramination Rules 5.11 and S.IV(l)(a)'?
Jurisdictional Issues

3
,d- The i$7a'aler
Court asscl-rsthat the i>FTt'F's appeal is procedrrraliy dcfcctl\e. The Water-

four%points out that a Master's R c ~ o r was issued with regard to the five DFWP claims
t

involved. The Master's Repon denied the DFWP's requests, and aftcr the ten-day objection

period provided for in Rule 53(e), M.R.Civ.P., and Claim Examination Rule 1.1114) lapsed>

witliout any objection from DFWP, the Chief Water J ~ ~ d adopted the Master's Repot*. The
ge

Chief Water Judge correctly points out that when objections are filed, the Water Court

researches the issues raised and issues an extensive written opinion which, in turn, fdcilitates

review by the appellate court. Accordingly, the Water Court urges this Court to dismiss this

appeal or; in thc alternative, corrvcrt the appeal to a petition for declaratory relief or

supervisory control. DFWP asserts that strict compliance with Rule 1.11(4) of the Claim

Examination Rules is not necessary here since it has consistently and repeatedly objected to

the Water Court's insertion of its Bean Lake remark and that the Water Court has adopted

an unwavering policy of rejecting I>FWP's arguments concerning this policy cven Lvhen

DFWP has filed objections to the master's reports. Nonetheless. DFlVP indicates that it has

no objection to the Court's reclassifying this appeal as a petition for declaratory relief or

supervisory control.

74
1 While we agree bvith the LVater Court that compliance with Rule 1.11(4) of the Clainr

Examination Rules i s critical to effective appellate review, we determine, given that our

decision i n Rcirti Lrrke is the genesis of the alleged confusion which tltc parties seek to

resolve, it is appropriate that we trcat this matter as a continuation of the 1986 Bean Lake

3
controversy wbcrcin we excrciseci supervisory control. Zlccordingiy, as B-cdid in iieclir Liliie,

\rc acccptjurisdictioa and cxercise our power of general supcwisory control over. the Water

Court, pursuant to Artrele 1'11, Sectton 2(2). of the Montana Constttution and Rule 17.

M.R,App.P, Taking jitrisdiction no\&- these purely legal issues will resolve confusion in
on

oui casc lax. pronlote jtrdicial eeonomq, expedite dctcrminat!oil of existing water rrghts and

assist in avoiding protracted litigation. McDonczld v. State (1986), 220 Mont. 5 19,524,722

Facts and Procedure

T5 This case i~~volves pre-.luly 1, 1973, water appropriation claims in the Missouri
five

R~ber DTWP filed the fivc claims based on dkersions for fish, mildlife andrecreatron
bas~n.

purposes for adjudlcatron rn tile Water Court The Water Cour-t ~nscrted the abstracts for
in

the claims a remark (hereafter "Bcntz L I I X ~remark") stat~ng:

There is a question as to the validity of this claimed right. 111the Matter of the
Dearborn Drainage Area, 234 Mont. 343 (19888) (the Bean Lake case) the
Montana Supreme Court stated: "it is clear therefore that under Montana law
before 1973, no appropriation right was recognized for recreation, fish and
wildlife, except through a Murphy right statute."

0 Without ruling on any issue, the Water Court's renlark highlights the conflict in our

casc law regarding whether appropr~at~ons water for fish. a rldlife and reereatton purposes
of

are val~d
under the prior appropriation doctrine before 1973

17
1 DFIVP objected to the ~nsertlon the remark and requested that thc Water Court
of

remove the remark from the abstracts ofrhc five claims. Follo~ving
submission ofbrici's and

21 hearrng, the Water Court denred 11F7U'l''s 0bj~Ctton~ rctdrncd the Rrnn Lrrkr remark
and

1
 iblaster issued a ""Repol-tand .~vlcmorandum Order" finding illat tile five claims
The \%~ter and

fcil within the pararnciers ofthe Beiiil Lrike decision and that therefore thc inscrrion of the

Berrir Lake remark was appropriate. DFCVP did not object to this Report, and the Chiefilrater

Judge subsequently adopted the Master's Report

8 After repeatedly objecttng to the tnsert~onof Bean Lake remarks and rccel-Llng

consistent denials in the \Vater Court, DFCVP appealed to this Court for resolution of the

conflict in our case law as to whether appropriations for fish, wildlife and recreation uses arc

valid water rights under prior approprixtion law. The Water Court objected to appearing as

respondent in this case, and this Cour-t issued an order that the Water Court, as author ofthe

Rciin Lake remark, was a proper respondent in these proceedings. Given thc on-going and

ctiriite
state-wide significance of the issue, we invited all interested parties to submit nrriicrt.~

briefs

DISCUSSION

I Was Kenr~Lalie correct in its holding that "under Montana law before 1973,
no appropriation right was recogniled for recreation, fish and \vildlrfe.
except through a Murphy r~ght statute'?"

Water Law in the American West: 'i'he Doctrine of Prior Appropriation

'0 Miners in California developed a water use system as an altcmative to the riparian

water system prevalent in England and the eastern United States. While riparian5 allowed

owners of land abutting the water source to control it, the more arid climes of the American

West required a different approach. Priot-appropriation, adapting flexibly to the needs o f a

developing society, allowed diversion to a distant location and simply required use of the

5
water for a beneiiciai purpose. "Kestern states adopted ihc miners. customs through both

court decisions and codification, and the doctrine of prior appropriation became the iaw of

the western states. A. Stone; Selected As~~ecrs
of'Mont(ztrila Mirter Liiw 7 (1978j; Christine A.

Kiein, l%e Cor~.stituriotzal
.Llt%tltoloL~,~
qq/'I.VestertzIYr~ter
L,ai,t-. 14 Va. Envtl. L..J. 343?347-48

(1 995).

710 The common law elements of a valid appropriation are intent, notice, diversion and

application to beneficial use. However, in Montana, as in many western states, the flexibility

of the prior appropriation doctrine has allowed acquisition of the right to use a specific

amount of water tlirough application of the water to a beneficial use. A , Stone, ;\,fontaria

Water La!? (1 994). Judicial opinions and scholarly comnlcntators have repeatedly stated the

rule that application to a beneficial use is the touchstone of the appropriation doctrine. See,

e.g., PI. Stone. Selected Aspects of i\/lorrtczna Water Law 30 (1978): Thonra.r v. Grrir(zzirl

(1883), 6 Colo. 530. 533 ("[t]he true test of appropriation of water is the successful

application thereof to the beneficial use designed, and the method of diverting or carrying

the same, or niaking such application. is immaterial").

Bean Lake

71 1 Bear1 Lrrke involved a claim for inlalte water rights for fish, wildlifc and recreation

purposes in a natural pothole lake. In Ilecin Lmlce this Court stated, "[ijt is clear therefore that

rinder Montana law before 1973, no appropriation right was recognized for recrcatiott, fish
and wiidiife, cxccpt through a Murphy right stature."! ileltrr Luke, 234 hlciiont. at 343,755

P.2d at 236.

312 The Beati Lukc decision appears to be inconsistent \vith earlicr case law i n which the

Court recognircd appropriations for fish. wildlife and recreation. See, e . g , Ostles Livesrock

G. 1:. CVurrerl (1936). 103 Mont. 284, 62 P.2d 205, and Psi-adke Rainbou:~v. Fish iirtd

Ciutne Cotnrrrission (1966), 148 Mont. 412,421 P.Zd 717. In holding that no appropriation

right was recognized for fish, wildlife and recreation, the Bear? Lalw Court ignored Osrzes

and misread Paradise Rainhorvs. The Ost~cs
Court ruled that an earlier diversion of water,

even if used only to maintain a swimming pool or fish pond, had priority over a later

appropriation and stated, "it is not clear that such a use [slrin~rning
pool or fish pond] bvould

not be a beneficial use and hence the basis of a valid appropriation." Oaze.s, 103 Mont. at

302, 62 P.2d at 214. The Bean Lake Court neglected to discuss or ackno\vledge the 0.snes

precedent.

1/13 In Pnt-c~di~se
Kuiriha~t~s, Court again recognized the diversion of water for fish
the

ponds as a valid appropriation of water. The Pcrrrtdise Ritirtboir:~
holding explicitly validated

a diversionaly appropriation for fish. In Rerrri Lake. however, the Court concentrated solely

on the P-'crrcidiseNrrlrzho1v.s Court's un>~illingness,
tinder the peculiar facts of that case; to

z.
I l-rc ! 960 klontana L,egislaturc created a procedure by which the Fish and Game
3

Comit~issioii could appropriate instream flows for fish, wildlife and reereatio~i
purposes
on certain designated streams. Section 89-80!, RCM (1947).
prorecx rrin instrea~nfish and rccrcaiion right and, conscyucntiy, ovcriooked the flv-t that in

Poi-czdise Ruinhoit.~ Court upheld a diversionary appropriarion o f water for fish.
the

714 The majority of briefs sub~iiitted this case concur that the Beat! Lake decision is
in

fraught with internal inconsistencies. In Recin Lake. the Court acknowledged that beneficial

use is the touchstone of a valid appropriation right. Reart Lake, 234 Mont. at 340,766 P.2d

at 234. The Court noted that Article IX, Section 3, of the 1972 Montana Constitution

recognized recreation as a beneficial use and accepted "as given that the activities of the

DFWP in stocking Bean Lake: maintaining the fishery resource. . . coupled with the general

public use of Bean Lake thr the purpose of recreation, wildlife and fishing constituted a

beneficial use of the \vaters within the meaning of the appropriation doctrine." /3ean Lake,

234 blont. at 339, 7hh P.2d at 233.

715 In seeming conflict with these findings that (1) beneficial use is the test of a valid

right, and (2) fish, wildlife and recreation uses are beneficial uses, the Court concluded that

"no Montana legal authority, deriving from common lax?: or statute, acknowledged that

recreattonal, fish or wildlife uses, eten though benefic~al, -
gave rise to any water rights bv

Etpproprtatron under Vontana law" and therefore "under Montana lac\ before 1973. no

appropr~at~on \\as recogni/ed for recreation. fish and rn ~ldlife . . ." Bean Luke, 234
rlght .

.4. Did the Bean Lake Court correctly hold that prior to 1973 Montana did
not recognize water rights for recreation, fish and wildlifc purposes
under the appropriation doctrine?
 1 in Becitz kizke, the Court citcd ai~ii
discussed iJaii:r/idise
il/iirzhoiz.;,in which this Court

specificall> recogr~izcd a vsilid appropriation a diversion of water for fish propagation.
as

There is no hint in the Heiriz Lake decision of an intent tci ovcrrulc Pi;rildi.se Rairrhiiw.9. Beu!:

Lake is no model of clarity, ignores 0stle.i altogether. fails to appreciate the ultimate holding

Rriir~bo~vs
in Pnrilili~se precedent and incorrectly states Montan;i law. Prior to 1973?Montana

explicitly recognized water rights for fish, wildlife and recreation uses. Montana was not

alone in recognizing as bcncficial the use of water for fish, wildlife and recreation purposes.

See, e.g., Fcrden v. fIz~hht.ll(Colo.
1033), 28 P.2d 247,250-5 1 ("lilt is self-evident that water

diverted and cmployed for the propagation of fish is devoted to a useful purpose, and all of

the parties completed their appropriations of water by its application to the bencticial use

designed"); State e s rel. Sttrte C;nnie (ilmnzi.isiorr v. Neil River I.'uilej~C b . ( N . M. !945), 182

P.2d 421, 428 ("we arc unable to find authority, or justification in reason, to support the

claim that the 'beneficial LISC' to which public waters, as defined in this and other

jurisdictions, may be put, does not include uses for recreation and fishing").

117
1 To the extent Reun Lalre suggests that fish. wildlife and recreation are not beneficial

uses, it simply misstates Montana precedent and is hereby overruled. We next address

ileczi? Luke correctly held that non-diversionary water rights for fish, jvildlife and
~vhcther

recreation purposes were not recognizeil in Montana under the doctrine of prior

appropriation.

F3. Does Aemrz Luke correctly hold that claims for the lion-diversionary use
of water for fish. wildlife and recreation are not recognized in :vlonta~la
law under the prior appropriatioli doctrine'!
"8
; in arguing this matter to thc Court; I1f;WP has strenuously contendecl that, since the

fi\-e nater right claiins .*\-hich arc the subject o f the Department's appcal ail involve

diversions of water. the Court should correct the language i n Bctrn Lakc as it applies to

diversionary rights but should leave the llectn Lczlce holding in tact as it applies to non-

diversionary claims. The dissent also argues that the Coui?, in addressing non-diversionary

uses, is going outside the issues and shouid confine itself to diversionary rights. We

would bc inconsistent with the fact that the Necliz
determine illat such a restricted clarificatio~~

Lake remark R hich has given rise to this appeal is bang applied by the LVater Court to both

pre-July 1. 1973, cla~ms. that the lica~i
diversionary and non-di~ers~onarj and Lake decision

itself arosc out o f LIFWP's claim for an instreain, non-dii-ersionary claim to ihc water in a

natural pothole lake. Finally. in the Renr~Lake paragraph which is the primary source of the

present confus~on. Court spec~fieallyescherned an;v reliance on a d~st~nction
the betmfeen

diversionary and non-diversionary claims when it concluded "[w]hatever the merits of the

argument, the DFWP and the public could not habe ~tltended an
lack of d~vers~on

appropriat~on %here none was recogni/ed by lam. and for the same reason, adverse

appropriators could not hale had notice of such a claim."' lien// Lc~ke.
234 \font. at 343,766

T h e Court further exacerbated the confusioi~ when it issued a sccond decision on
the Bean Lake matter, ilirrfter ofDenrborn Dr-rrinage Areu (1 980), 240 Mont. 39, 782
P.2d 8% (Beniz Lake II), in \vhich it rejected the Monlana Stockgro\\.ers Association's
request for attorneys fees for its role in the original Recrn Lrrlze case. In dictum, the Court
purports to sunlrnarize the Neiliz Laice holding, and, in doing so, seems to recognize a
distinction between diverted and non-diverted rights.
The LVater court ruled, and we affirmed, the Department had no appropri-
ation right in Bean Lake predating 1973, because before that time no such
P.2d at 236. Thus. given the facts of Uecrri i,nke9 the language ofthc ijeair Lake decision and

the bi-oad application of tile resulting iiecur Lake remark, it is necessary that we address the

question of l%licthcr thc Kciirz Lirke dec!ston conectls liolds that claims for the non-

diversionary use ofwatcr for fish, wildlife and recreation are not recognized in Montana law

under the prior appropriation doctrine.

I After the Reun Luke Court concluded that prior to 1973, Xlontana dtd not allo\%

appropr~atlonof Liatcr for fish, vvildlrfc and recreatron purposes, the Court essentially

skipped the traditional appropriation analysis. Rathcr than evaluating whether DFWP had

intended to appropriate water and whether IIFWP provided notice of its intent, the Court

simply stated that because Montana did not recognij-c water rights for ikh; \tildlifc and

recreatron purposes, DFWP could not hahe intended to approprrate w ater for those purposes,

and thus adverse nater users could not hate had notice of any such intent. It 1s unclear from

thc opinion itself, whether the Court denled the appropriation for Bean Lake because there

Tvas no drverslon or because it found there was no notice of~ntent apptoprlate. To resolxc
to

the confus~onengendered by Bcnn L,nke, we now determine uhethcr a baltd appropriation

of water may be established without a diversion where no diversion i s physically necessary

for the ~ntcndedusc.

right was recognized for recreation, fish and wildlife. Before 1973, some
form of diversion was necessary for an approprialictn. Because the right
asserted by the Department lacked rhc elements of"divcrsion, intent and
notice," we held that the Department, for itself or for the public, had no
valid water right which predated the 1973 Water Use Act.
Hean Lake 11, 240 Mont. at 41, 782 P.2d at 899.
":O Vv~hilemost traditional uses necessitated a diversion of water for application to

beneficial use. thc appropriation doctrine's histoi-y o f flcvibiiiiy and practicality support a

holding tl~ata diversion is not reauired where thc application to beneficial use does not

physically require a diversion. Common sense rebels against a rigid diversion requirement

that would refuse to recognize a11acknowledged bc~zcficialuse simply because application

to the use does not require removal from and depletion of the water source. 11 accordance
1

with the doctrine's flexibility, we find that a diversion is not a requisite elernent of an

appropriation when it is not a physical necessity for application to a beneficial use.

2 1 More than one commentator has warned against the strict adherence to traditional

elements, such as diversion? when the clement no longer serves its original purpose. These

scholars also note that beneficial use is the only essential element of a valid appropriation.

See, e g.. Tarlock, :3pproprlatio/z For Iil.\trennl Floit. Muintennnce: -4 Progress Report or1

",$'ei.~. P~lhlicC ~ tern Water Riglztr, 1 978 Gtah
" J L. Re\ . 2 11, 22 1 ("Most \\cstern water

experts agree that the actual diversion requirement serves no function that cannot be served

by other water law doctrines and statutory procedures. Thus the real issue is whether these

uses are beneficial"); Christine A. Klein, Tlze Coa~fitz~tio~zal
Mythology of lVesterrl Water

Lrrlt~, Va. Envtl. L.J. 333,35 1 (1995) ("Rigid adherence to the diversion requirement has
13

increasingly restricted the traditional flexibility of the ideas of beneficial use and waste.

Although appropriation to beneficial use is the true measure of a water right, diversion has

frequently bee11substiuuted as the constitutional require1nent"j.
712 traditionally servcd ifrial purposes-providing
i,:ildcr prior appropriation. a divcrsio:~

notice o i a USCT'S intent to approprirrlc tl-alcrl and defining rhc c?ctc:ll of the use. 111 bv\jeui

r Caitleroi? i1922j.04 Mont. d04.2 I 0 P. 761. this Court cxyiaincd that inleiit to ilppropr~ate

is to be determined from the specific facts and circurnstanccs pertaining

It is argued by defendants' learned counsel that no intent to make an
appropriation from Mill Creek on the part of [plaintiffs' predecessors] is
shorn-n, and therefore the adjudication is not warranted. . . . Intent to
appropt-iate will be presumed fiom tiiesefacts, showing, as they do, diversion
and use of Mill Creek waters for irrigating purposes. A cluiiiliitrt S itztent at tlie
time o nppropriatiotz must he deter-mined by his act and by sr*rrourzdi~~g
f
circ~~nrstances, actt~aland contemplated use, and the purpose thercof.
its
(Toofley 1,. C(rrrzpphel1, 24 Mont. 13, 60 Pac. 396.) Actual diversion and
beneficial use existing or in contemplation constitute an appropriation
[citations omitted], and,fronz this evidence it is plain that water from Mill
Crcek was in fact appropriated in the spring of 1867 by [plaintiffs'
predecessors], as found by the court. And the change in the point of diversion
or place of use did not affect the appropriation.

CVileat, 64 Pviont. at 501,210 P. at 763 (emphasis added).

723 In accordance with the historical flexibility of the doctrine ofprior appropriation. the

IVhezeclt Court held that although rntent could bepreslln~ed
from actual d~vcrston,
~ntent
could

be proven through other facts and surrounding circumstances. Sim~larly. Bean Luke, the
In

Court noted that d~versioncould proklde notice or proof of an intent to appropnate. Bea~r

Lake, 234 Mont. at 339. 766 P.2d at 233. 'These decisions do not require a diversion for

proof of intent. To the contrary. the opinions suggest that although a diversion may provide

proof, intent is the essential element and may bc proLen through means other than a

diversion. In other words, a diversion, although sufficient to prove intent, i s not necessary.
qj24 Decisions from this Court have not consisieniiy reqiiircd di~ersionsfor ivatcr

indeedl dcspiie die fact rhai most traditional bcncficinl uses of ~lvat,ir,
appropi-iatior~s, such

as mining and irrigation, could not occur l,',ithout a diversion, Montana has spccificaliy

recognized appropriations of u-ater without diversions where no diversion was required for

(l02Gj, 77 Mont. 220,250 P. 963
the intended hencficial use. See, e.g., Iloniclz v. .Joltt~soi~

(appropriation recognized for instream resewoir); Axfell v. M.S. Cotist~l1irrg,1998 IZIT 64;

288 Mont. 1 50?955 P.2d 1362 (dorncstic i:se recognizcd without a diversion). Those cases

that do suggest that a diversion is an essential element of an appropriation i~rvolvc
uses that,

of practical necessity, require a diversion for the application to beneficial use. See, e.g.,

210, 220,221 P. 71, 75 (diversion by ditch for use in
FV(~t*i-erl Setiecizl(1924), 71 Moi~t.
v.

mining and irrigation); Sherlock v. Cirz.rives (1938), 106 Mont. 206, 216, 76 P.2d 87, 89

(diversion by pipes and flumes from ditch for irrigation and domestic use).

725 .Instice Rice in his dissent states that, in recognizing instream uses prior to 1973, we

are rewriting hlontana history. Justice Rice's protestations to the contrary. Montana has a

legendary history of cattle and sheep ranching. No doubt Montana's stockgrowers would be

surprised to learn, as the dissent suggests, that Montana law would not have rccognizcd a

right to Xvater stock directly from a stream. lake, pond or slough w~thouta man-made

d i ~ e r s ~ o nJust~ceRice's assertion that Montana law 1s "monoltth~c" and absolute tn
.

requiring a diversion as a prerequisite element for all pre-1073 water appropriation claims

is belied by the fact the Montana Legislature recognized that pre- 1973 claims for stock use

and individual use bcrsed l q ~ o r zitistrccinl /low were valid. Such non-diversionar-y, instreanr

14
clainls were exempted from themanciatory filingrcquirement ofTiilc 85, Chapter 2. ('"~vcrq
. .
person . . . asserting a aciini to an existing righr to the lrsc ol'\xiatcr ansing prior t i ~ i i y
o I.

i97;3_is ordered to file a statement of claim to that right with thc departmertl no later than

June 30, 1083. Claims for stock and individual as opposed to municipal doniestic uses b(xscd

1lpo11 irrstt-ecmz,flo,v or ground lvater sources are exempt kom this requirement; however,

claims for such uses niay be voluntarily filed." Section 85-2-21 2, MCA (emphasis added)).

726 Thc fact tlrat there arc no Montana decisions establishing such an instrean1 right

merely reflects the fact that that issue was not litigated, not that such a right was beyond the

pale of Montana prior appropriation doctrine. See T.l'ilhlire v. Billitzgs etc. F'oiver C'o. ( 1 909),

38 blont. 1, 101 P. i68, in \vIrich Wilhite brought a nuisance action against thc rnainteiiancc

of a dam on the Yello~vstoneRiver which caused the river to overflow somc of LVilhite's

land making it '.almost impossible for plaintiff to reach the river and water his livestock or

to obtain water for 11ousehold purposcs . . . ." CViIlrite, 39 Mont. at 4, 101 P. at 168. This

Court affimied the injunctive relief but renianded for a narrowing of the terms of the

injunction. In Bear1 Lake; cve acknowledged, "[ijt cannot be disputed . . . that there were

beneficial uses for which appropriation rights could be obtained which would not require

diversion of the waters." 234 Motit. at 340, 766 P.2d at 233. Given our history, there is

every reason to believe that had tlie issue arisen, Montana would have followed the lcad of

Nevada and ltcld that no ditclt, dam reservoir or other artificial means was necessary for

watering cattle. If there must be a diversion with intent to apply water to a beneficial use:
ihen "'the drinking by cattle consrltutcs a diversion, [and] the ncccssary intent must be that

d27 The non-recognltton of lnsheain rises prror to l 973 nould Iikcwtse have been a stlock

to Montana's early loggers and railroaders mho used Montana stream Ron s to float logs and

CoalitionfbrSfr.eirin Access v. Cur-run(1984), 210 Mont. 38,44,
railroad ties. .See ,\loi~ta~lii

682 P.2d i03; 166, where we recognized that the Dearbom River was used in 1887, two

years before Montana statehood, to float approximately lO0,000 railroad tics. Then in 1888

axid 1889, there \%ereone or two log drives per year donn the Dearbom thus satlsfylng the

federal test for navigability for title purposes. The Court then proceeded to analy/e wltether

public recreational usc and tishing make a stream na\ igable for "use" as opposcd to titli. I '~
hcj

quoted extensively from an 1893 decision ti-om Minnesota which rcasoned that navigability

for use should not be llmited to commerc~alusage. Rather, the concept must lnclude

noncominere~al
uses such as "boating and sailing for pleasure."

Many, if not the most, of the meandered lakes of this state, arc not adapted to,
and probably will never be used to any great extent for, com~nercial
navigation; but they are used--and as population increases, and towns and cities
are built up in their vicinity, will be still more used-by the people for sailing,
rowing, fishing, fowling, bathing, skating, taking water for domestic,
agricultural, and even city purposes, cutting ice, and other public purposes
which cannot now be enumerated or even anticipated. To hand over all these
lakes to pril-ate ownership, under any old or narrow test of navigability, would
be a great wrong upon the public for all time, the extent of which cannot,
perhaps. be now even anticipated. . . .

728 We also quoted from a Wqoming dectston as to the pubhe's use of state waters
 ir~especti\reof the ow~~ership the bed or chanilei of waters. and
of
irrespective of their navigability, the public has the right to use public waters
of this State for floating usable craii and that use ma:; nut be inicrfei-ed wit11
or curtailed by any landowner. it is also the riglrt of the public \vhilc so
lawfully floating in the State's wliters to lawfully hunt or fish or do any and all
other things which are not otherwise made unlawf~~!.

Drq' v. Ariilsft,o-ong(Wyo, 1961j, 362 P.2d 137, 137, quoted in ;Clo/zt[lnizCoillitio/r,2 i O Mont.

at 5 1-52. 682 P.2d at 170.

e29 I-laving noted n ~ t h
approla1 the M~nnesotaand Wyom~ngprecedent, me quotcd

Article IX, Section 3(3), of the Montana Constitutiotl, which statos that all waters within the

boundaries ofthe state are the property of the state for the use of its people and are subject

to appropriation for beneficial uses as provided by law. Relying on this constitutional

provision and on the public trust doctrine dating back to statehood, the Court concluded that

navigability for purposes of detemtining public "use" rights is determined by the capability

of m e of the \% ater for recr2at1onal pulTnses

In sum, we hold that, under the public trust doctrine and the 1972
Montana Constitution, any surface waters that are capable of recreational use
may be so used by the public without regard to streambed ownership or
navigability for nonrecreational purposes.

iblontancl Coalition, 210 Mont. at 53, 682 P.2d at 171.

7'30 Tl?c dissent queries "how this I984 decision, interpreting the 1972 Constitution could

have established in-stream water rights for prior years." She dissent conveniently ignores

the fact that thc Court, in ;Gloittana Coiilltzon, ~nterpreted only the 1972 Const~tutton,
not but

also the publ~ctrust doctr~nen h ~ h
dates back to Montana's statehood Lnder the

Constitution the public trust doctrine, thc public has an instream: non-diversionary right

17
to the recreational use irfthe Stare's navigable siirfacc waters. This holding: ofcciurse, allays

the ciinccnir that ?"nCourt cxprcssed in Pai-iidise i?:riiiiioiis \;-iicrc tiic Fish arid Ciamc

Comtnission contended that the public had a prior right to the use of the strean? since the

publrc had used tlic creek as a fisltlng stream and natural fish hatchcp The Court statcd that

it could not yield to this coi~tentioit a
since "[s/ucl~ public riglit itas never been dcclared in

the case law of this state." Prrrcrdise Kuir~hoirs.148 'Llont. at 419, 421 P.2d at 721. The

Court in itloiitnrrii C:oalition fillcd that void and declared that the public docs l-iave a right to

recreational use of the State's navigable waters.

73 1 The dissent quotes ,'lfontnrlci Coalitiort as recognizing that landowiier C:urran had no

right to control thc use of thc surface ivatcrs of thc Dcslrborn Rivcr to the cxclusiorr of the

public. "except to the extent of his prior appropriation of part of the water for irrigation

purposes. . . ." Montcrrza Chalitiorz, 210 Mont. at 52,682 P.2d at 170. Justice Rice accuses

the Court of ignoring the qualifying clause (quoted above). The referenced clause from

illorztailn C'oc~litiorz
merely recognizes the principle of prior appropriation: that first in time

is first in right. ~Zfiiirte Ferris (19521, 126 Mont. 210,216,237 P.2d 105, 108: 5 85-2-401.
v.

MCA. In adjudicating individual claims forpre- 1973 recreation, fish and \vildlifc, the Water

Court will have to determine the validity of each claini, and as to those claims it finds valid,

it will have to assign a priority datc. Section 85-2-234(O)(c). MC.4.

732 Ample case law depicting the evolution of thc prior appropriation doctrine, and

emerging from throughout the west. supports a concius~on
that the doctrlnc sl~ould rlg~dly
not

demand a diversion where unnecessary to achieve the itltended beneficial use. See, e,g.,

18
f5fipii.e i.'!irter & /"ewer Ch. v. C>r.sccicle Trii,t:n Co.(8th Cir. 1913). 205 F. 123; 12")"[i]f

nature acciirnpiislies a result \vhich is recogniicd and utilized, a changc of proccss by rrian

:vould seem unncccssary"): 1 1re IVcitei. Kigl~is 3il::ier River (Or. 1925). 237 P. 322.336
1 in

"[wjhen no 'ditch, canal, or other structure' is necessary to divert the water from its natural

channel. the law does not vainly require such works: prior to an appropriation"); Town of

iienou v. U.i.stfull(Colo. i%GO), 349 P.2d 370,378 ("It is not necessary in every case for an

appropriator of water to construct ditches or artificial ways through xvl-iich the water might

be taken from the stream in order that a valid appropriation be made. The only indispensable

requirements are that the appropriator intends to use the waters for a beneficial purpose and

actually applies them to that usc"); State, D q t . ofPczrk.s 1.. [(((tho Depi. o Wafer Acli?~ln.
f

(idaho 1974), 530 P.2d 924; 933 (Bakes, J., concurring) ("[wlhere an appropriativc water

right docs not require a diversion to make it effective and beneficial, in the absence of a

statute requiring a diversion there appcars to be no practical reason why a diversion should

be required").

*33 The issue of whether Montana recognizes instream water rights prior to 1973 was

again addressed by this Court in Stutc e.u re/. C;r,ccly v. Cot~edernted
Sulislz arzri Kootenili

( 1 985), 2 19 hlont. 70.7 12 P.2d '754. In Greeb.. the issue was whether Montana's bVatcr Use

Act R~as
adequate to adjudicate federal and Indian reserved water rights which pre-dated

1973. Addressing Indian water rights: we noted that Montana's Water Use Act permits the

Watcr Court to treat Indian reserved rights differently from state appropriatcd rights in terms
of thc filing of c!ai!ns and contents of prciiminary and final dccrces.' We then noted that the

Act recugniic.s and ~ o n f i m 2 ~
"existing rights l the usc of any svatcrs fiir an): iwscfiil or
o

beneficial purpose." Section 85-2- 101(3j, 1IC'A. "Existing right'' means :. right to the use
.

of ~vater
which would be protected under the law as it existed prior to July 1. 1973. Section

85-2-102(8). MC.4. Since the Court in C;~-eely recognized that state appropriative water

rights and Indian reserved water rights differ in origin and definition and that Indian rights

are governed by federal law (Greely, 219 illont. at 89, 712 P.2d at 762; ciccord, /fpplicotiiiiz

f i r Henqficiizi Ilr&terUse Pel-]nit (l996), 278 Mont. 50; 55-57,921 P.2d 1073, 10771, the

Court could have coi~cludedthat the State of Montana u a s bound to reeogni/e Indian

resc~wed
rights as "existing rights" whicl? would be protected under the law (federal law) as

it existed prior to J L I I1. 1973. Section 85-2-102(8), MCA. Ho\vcver, rather than rely on a
~

federal definition of Indian reserl ed rights, the Greebl Court then set out the Water I'se Act

definition of "beneficial use," that is. "t~se water for the benefit of the appropriator, other
of

persons, or the public, including but not limited to agricultural (including stock water),

domestic. fish and wildlife. industrial, irrigation, mining, municipal. polver and recreational

uses." Section 85-2- 102(2), 'CICA. Flav~ng
thus set out the \ arlous state statutory premtses.

'See, e.g., $ 85-2-224, MC.4 (statement of claim for federal reserved water rights);
5 85-2-234(2), MCA (terms of negotiated Indian water rights compact must be included
in final decree without alteration); $ 85-2-234(3), MCA (final decree must establish
existing rights and priorities of Indian tribe possessing water rights arising under federal
law); and $5 85-2-701 through -705, MCA (establishing reserved water rights compact
commission to negotiate with Indian tribes to quantify Indian reserved water rightsj.
the (:our; then concluded: "!'his definition recogniyes nonconsumptivc anti insircam nscs

for fish and wildlife. it is sufficientiy hrc3nci to a!iaw aiij~tdica~ion water rcccrved lo
of

protect tribal hunting and fishing rights, including protcction Goin the depletion of streams

below a protected protection level." C;r-eely, 21 WMont. at 91,712 P.2d at 763. This holding

is significant in that in relies, not on fcderal law, but on the Montana Water I.!se Act's very

broad definition of"beneficia1 usc" as the basis for recogni~ingpre- 1973 tribal rights to non-

cot~sumptive instream uses as "existing rights" which n3~1st corifirmed u~lder Act.
and be the

The Court thus concluded that the \\iater Use Act, on its face, is adequate to adjudicate

Indian resewed water rights, including claims for instream uses prior to 1973. In effect, the

Court, in detcnnining what constitutes an "existing ~isc,"incorporated the Water LTse
Act's

broad definition of "beneficial use," thereby making that definition applicable to both post

and prc-1973 water rights claims. Using the same statutory defi~iition "beneficial use"
for

as cited in Greely (a definition applicable to all water users, not just tribes), thcre is no reason

bvhy the Water Court cannot adjudicate both tribal and non-tribal claims for instream uses

prior to 1973.

'134 Three years after Gt-cell:, we decided Benlz Lclh-e. We note that in Reirn Lake, the

DFWP; although it did not prevail, argued in its brief against making an artificial distinction

between diverted and non-diverted rights for fish, wildlife and recreation purposes.

First, such :a requirement urould be an anachronisn~.While the diversion
requirement is appropriate whcrc dibcrsion is the only means by which water
can he rrsed, it makes no sense to blindly require a diversion whcri: a beneficial
use can and must be made in the stream or lake.
 As an iiiustrarion of the inapplicabiiiry o f a diversion rcquirernent to ihc
rccrcaiional and fish and wildlife use of Bean Lake, imagine a natural or
~nanmadt.depression located close to the lake and of the same size and shape
as Bean I.akc, Further assume that all of the watcr of Bean Lake is dikefled by
pumping into this depression and the new "lake" is stocked and managed as
a fishery and a recreational resource. The artificial lake is unlikely ro be either
as productive or as aesthetically pleasing as the natural lake. Ho\vever, if a
diversion is an absolute requirement for an appropriation, then the less
desirable and much more expensive artificial lake would be given preference
in law over the use of the natural lake. Such a conclusion \vould he, at the very
least, a disservice to logic.

735 Only two slloi? months alier our Bean Lake decision, the Nevada Supreme Court

decided a nearly identical controversy. In Sfcrtc I.
: i\lorro.s. the Nevada Coun considered

whether "Ncvada law absolutely rcquires a physical diversion of water to obtain a ivaier

right" in a controversy involving an inlake appropriation claim for recreation purposes. State

v ~Morrooj(Nev. 1988), 766 P.2d 263,265. After noting that the common law had ecolkcd

to allow appropriations for stock watering without a diversion when there was no practical

need for a physical diversion, the Nevada Court validated a11 inlake appropriation for

recreation purposes ,\firroc 766 P 2d at 267. In protecting the tnlake ~ a t e right, the co~trt
r

held thatjust as the contmoll law "conformed to the practical demands ofstockwatering," so

should it reflect the fact that "[dliversions are not needed for and are incon~patible
with man3

recreational uses." .Worms, 706 P.2d at 267. U e find the P.re\ada Court's reasoning

3 0 Any perception that Montana law required a diversion as a sitze yiiu nevi to an

appropriation arises fi-on1the fact that most traditio~lal
rises, such as agriculture and mining,
had a practical nccd for a physical diversion. That necessity coml9incd lviih thc practice of

using diversions as c i idence of ii uscr7sintcnt t appropriate has iindeniahly led to con fusioin
o

in our precedent, ~vhichlikewise recognizes instrearn uscs of watcr where no diversion is

necessary for the beneficial use. See. e.g.; Axtell 1;. M S . (Joils~~lting; MT 64,288 Wont.
1998

150, 955 P.2d 1352; I>orliciz v. ,Johnsur~(1926). 77 Mont. 229, 250 P. 063: hloritioln

Cbnlition, 2 1 O Mont. at 44,062 P.2d at 160; and Cit.eel7, 219 Mont. at 91, 71 2 P.2d at 763.

Given Montana's long history ofbeneficially usingwater for purposes ofagriculture, inining,

cattle and sheep ranching, logging, rcrilroading, fishing and recreation, we resolve the

confi~sion favor of the Axtell, 1)oney;.\fotzfurln Co~zlitioil Cireely line of authority and
in and

hold that the doctrine of prior appropriation docs not require a physical diversion of water

ulhere no diversion is necessary to put the water to a beneficial use. Thus, instrearniinlake

appropriations of water for beneficial uses may be valid when the purpose (c.g., stock-

watering, fish, wildlife and recreation) does not require a diversion.

737 Because beneficial use rather than diversion is the touchstone of the prior

appropriation doctrine: because Montana has long recognized as beneficial the use of water

for fish, wildlife and recreation; and because Montana has validated non-diversionary

appropriations, we no%. hold that Montana law prior to 1973 did not absolutely require a

diversion for a valid appropriation of lvater.

1138 Finally, we note that the Benil Lake Court's conclusion that the framers of the

Montana Cocistitution did not accept fish, wildlife and recreation uscs as a valid basis for

appropriative miter rights does not accurately reflect the substance of the debates reflected

23
in the transcripts of the i'oi~stitutio~zal
Conucnticin. i h c Court seems to h a w based i t s

conciusion on the fict that, afier debiiic, Subsection 4 to Anicie 1X: Section 3;was dcierccl.

Propcjscd Subsect~on read as fol!oi%s:
4

Subsection 4, Beneficial uses iriclude but are not lilnited to domestic,
municipal, agriculture. stocl<~vatering,industry, recreation, sceslic waterways,
and habitat for wildlife, and all other uses presently recognized by the law
together with future beneficial uses as deteiniincd by the 1,egislature or courts
of Montana. A diversion or development is not required for future acqrlisition
of a water right for the foregoing uses. The L,egislature shall determine a
method of establishiiig those futurc water rights which do not require a
diversion and may designate priorities for those future rights if necessary.

139 A thorough review of the transcripts reveals the rationale for the deletion. After

Delegate Wilson proposed at1 amendment that mould make non-diberssonary rights

permanently junior to diversionary rights regardless of tile date of appropriation, the

delegates voted to delete the entlre section. Sebe~al
delegates urged the deletion of the

section to avoid the eternal subordinatioa of instream rights to diversionary agric~lltural
and

industrial rights. Delegate i\rbanas explained, "I sense that the time may collie in Montana

when recreation may be our big industry. . . . To say foreber that agriculture or industry will

come ahead of-seelns to me somethrng I don't want rn the Constrtutron." Verbatsm

Transcript Vol. I..,at 1332. Delegate Re~chert
sirn~farly
expressed hereoncerns: "Ifwe pass

this . . . is there a danger of h a ~ i n g
these other amendments tacked on to it? Perhaps I'd be

better off, since I'm for recreat~on a beiieficral use-perhaps
as \LC are all bctter offto delcte

the entire section." Verbatim Transcript at 1341. I'hc transcripts inciicatc that it was thc fear

offuture limitations on fish, wildlife and recreation rights that led to the deletion of the entire
 Thus the Beizn
section. rather than a hciiefthai such rights had not already been recogni~ed.

LilRe Court misiakcni): relied an riic dcletinn of Subsection 4 in concluding that the friimcrs

ofthe Constitution did not intend to rccognize appropriations rights existed for fish, 1%iidlifk

and recreation uses

540 For the foregoing reasons, we overrule the Beat? Lake concli~sion Montana: prior
that

to 1973, did not recognize fish, wildlife and recreation appropriations of water, whether

diversionary or non-diversionary. We hold that Montana recognized fish, wildlife and

recreation uses as beneficial and that valid instream and inlake appropriations of water

existed in Montana prior to 1073 where the intended beneficial use did not require diversion.

and witcn the facts and cjrcumstar~~es
indicate that notice of the appropriator's intent had

been given.

741 In its brief to this Court, the Water Court requested that, ifthis Court revisits the Berm

Lalie decision, we give the Water Court "clear instn~ctions"on how to proceed with regard

to recreation, Gsh and vvildlife claims. Accordingly, the Water Court is instructed to identify,

of
review and hold hearings in a manner sin~ilar Adiudicatio~z U'nter.RigJzfr.ofYelloiilvtone
to

River. (1992)>253 Mont. 167, 832 P.2d 1210; on all pre-1973 recreation, fish and wildlife

claims, both diversionary and non-diversionary, and determine the validity of such claims

under the holding ljerein.

142 final note about Justice Rice's dissentient incantations that the Court has, in

addressing non-diversionary rights, gone outside the pleadings anct outside the issues. Far
from being outside the issues: non-diversionary rigilts are at the 11ca1T of tile dispute. They

arc the very source of the confitsioa that \be arc asked to resolve.

v
1
3 The Bear2 Lnkc decision which hits engendered all the coizfusion arose out of claim

for inlake, non-diversionarywater rights for fish, wildlife and recreation purposes i n a natural

pothole. That decision then gave rise to the Water Court's Beilri Lnke remark which, in turn,

has been applied to both diversionary and non-diversionary rights. Since the Bear1 t a k e

decisions in 1988 and 1989, the Water Court has (as of May 9, 2000) issued Bean Lake

remarks in 1666 claims in 38 basins. It makes little sense to prolong the confusion by

stopping the legal analysis midstream? as the dissent would have us do.

7144 If Hecrrr Luke needs clarification: as all agree it does, then we must, of necessity.

address both diversionary and non-diversionary uses. If we were to embrace Justice Rice's

simplified rendition of Montana's \\later usage history (ignoring non-diversionary uses for

logging, stockwatering, railroading and recreation), we would be writing fiction rather than

engaging in legal analysis

I1 Does the Water Court's use of the "Heiltl Lizkc remark" \lolate the Supreme
Court's Water Rlght Claim Examlnatron Rules 5.11 and 5.IV(l)(a)?

lj45 DFWP argues that the remark highlighting the an~bigtlity Montana prceedent is a
ill

"policy' instituted by the Water Court that violates the Claims Examination R~tlcs

promulgated by this Court. We tind that the Montana Water Court has the authority ro

include relevant potential issue remarks in its rulings, and that the Heri/l Lnke remark is such

an issue remark.
!l4G While not challenging the Water Court's authority ro insert issuc remarks, DFWP

suggests ihat the consistent insertion of thc h'ccii? Like remark in ali fish, wiidir'c: ar~c!

recreation claims indicates that tlse Water Court has adopted a position on thc suhstanti7;e

issue. The Water Court on the other hand states that the rcmark mercly identifies potential

issues as autliorized by various Claims Examination Rules. Sec. e.g., Rules 2.1(5)(b),

3.11(5)(b), and 4.III(3)(b).

747 We agree with the Water Court that tile Beuit Luke remark simply notes a potential

legal issue. The remark does not take a position and does not rule on any issue but merely

highlights the conflict engendered by Werol I-nke. Rather than instituting any "policy." the

remark simply points out the possibility that Betm Luke could provide a basis for a challeiige

to any pre-1 a173 iish, wildlife and recreation water claim. The I-eniark was therefore an

appropriate exercise of the Water Court's discretion and did not violate our Claims

Examination Rules.

We concur:
Justice Jim Rice concurring in part aaci dissenting in pal-!.

71
.8 i
.'
rhe public right urged by the Ccmmissin:i would bc based on
the i'dct that the public had used the creek as a f?sl~ing t r e m ~
s
and natural fish hatchery before DuPuy built h i s dam. . . . Such
a public right has never been dcciared it1 the case law of this
state.

t'u~zirlise Rr~ifrhow:r Fish and G n ~ ~Comn~ission
v. te (1966), 148 Mont. 412, 419. 421 P.2d

"'49
11 In this appeal, the DFWP is asserting a prc-1973 water tight claim for fish, ivildlife

and recreation purposes for appropriations inbolvtng a diversion or capture of water.

Although the Court's rationale in Rt'(21zLuke properly recognized that recreational uses may

coilsiitutc a beneficial use for purposcs of applying the prior appropriation doctrine, thc

op1111on
urtfortunatcly concluded that no approprration r ~ g hfor reereat~onal
t uses of any kind

u as recogni~ed
pnor to 1973, except for those contemplated under the Murphy r~ghts
statute.

That conclusion appeared to i n \ alidate pre- 1973 rcereat~onal
clatms u h ~ c h
satisfied all of the

elements of the appropriation doctrine, including the element of diversion.

'150 1 concur with the Court's holding herein that recreational use is a beneficial use of

water, and that the language in Reczn Lnke which purports to invalidate all pre-1973

recreational claiins is erroneous. 'Po the extent that it i s necessary to clarify that pre-1973

recreational claims which meet all of the elements of the appropriation doctrine, including

diversion, are valid, I concur with the Court's decision herein. I-lowever, I must dissent from

the remaining, substantla1 portlon of the Court's optnion llenrz Luke properly held that pie-
1973 claims involving %on-captive," i.e., lnst~earn iniakc, reercationai uses have never
or

been rccogi~i~ed, also acknuirledgcd by this C:ouri i ~ iscirili!i'se R ~ t i n h o u , ~ ,
as r

751 The Court offers a lengthy discussion in an effort to market its conclusions that t!lc

doctrine ofprior appropriation is aLLhistorieally
flexible" concept. and that the strict necessity

of establishing diversion is mere "perception." 'The Court further holds that the doctrine

recognizes appropriations of water without a diversion whenever a diversion is not necessary

for the use. Finally, the Court holds that pre- 1973 instream appropriations have already been

recognized and approved in our law. Tliese conclusions, which blatantly ignore controlling

statutes and case law, are all erroneous. .A proper review of the applicable law establishes

that diversion, or a fonn thereof, such as impoundnient or capture, is a longstanding,

foundational and requisite element for all pre-1973 water appropriation claims, including

recreational uses. That the law clearly required it is an inescapable conclusion.

'52 A brief look at our early history and precedent is necessary to accurately determine

the applicable law on these issues.

553 This Court provided a detailed recounting of the early law of water appropriation in

li'ntinger (,I!) 12), 45 Mont. 154, 122 P. 575. The Court noted the law had its origins
Bnilej,~.

in the customs of miners and others in California, and that those customs ripened into well-

recognized I-uleslong before the development of local government and legislation. "These

customs formed a part of our unwritten law, or, as it might more aptly be termed: the
common lalv ofthis country as distinguished from the common la\v of Engla~~d.''
Rniiiij:, 45

FMonr, at i 66,122 P.at 579.

;[54 This pre-statutory common law of appropriatioii, often referred to in our case law as

the "settlers' customs," was sumniarired by the Court in ii:f;~rrny Titigley (1 897)> Mout.
v. 20

260, 50 P. 723, as follows: "A person acquired a right to use the water by digging a ditch,

rapping a stream, and turning water into it, and applying the water so diverted to a beneficial

use. This constituted a valid appropriation ofwater." ibf~n'c~r;,illont. at 268,50 P. at 725,
20

Consequently, the Court reaffirmed therein that "[tlhe essence of an appropriation [is] a

completed ditch, actually diverting water, and putting it to a beneficial use . . . ." 12.ltlrrizy~
20

hlont. at 26") 5 0 P. at 725. These common law requircmcnts were repeatedly c~mphasircd
5

in our early case law and throughout our histot-y.

755 Even at this early juncture in the discussion, the flaws in the Court's analysis begin

to appear. The Court holds that "benefic~aluse is the tcst of a t alid right" and "beneficial

use rather than diversion is the touchstone of the prior appropriation doctrine," but fails to

acknowledge that diversion has always been an inherent requircn-ient in our law's assessment

of whether water was beneficially used. As noted in the above quotations from Bailey and

z V ~ ~beneficial use has always been a separate, and additional, consideration which
r q ~

followed capture of the water itself. See irlso IZ'11etll v. Crzmeron (1922), 64 'Llont. 494,501,

21 0 P. 761,763 ("[a]ctual diversion and beneficial use existing or in conternplation constitute
an appropriation"), 'The Uoctrt further explaii~ed the a i f f c 1 . e ~belt!-ecn tl~csctwo
~~

considerations in iboi~cj, Lhirrpheii (i(JOii:, 24 Monr. 13; 60 P.396,
1.. holding:

that right to the use of xvater is a possessory one, that may be obtained by
actual appropriation and diversion, perfected by application of the water so
appropriated to a beneficial use then present and contemplated.

Tool~ey~ 'Llont. at 17, 60 P. at 397. After explaining that the requirement ofbeneficial use
24

"perfected" a dibersion-based appropriation, the Court further explained the process of

determining beneficial usc, which underscores another error in the Court's opinion herein:

But, as every appropriation must be made for a beneficial or useful purpose
. . . it becomes the duty of the courts to try the question ofthe claimant's intent
by his acts and the circumstances surrounding his possession of the water, its
actual or contenlplated use and the purposes thereof.

"
Toohel. 24 Mont. at 18, 60 P. at 397. Contrary to the Court's holding heretn at 23, proof

of intent is not, and has nmcr been, a substitute for diversion. Rather, as the Court has

previously explained, a claimant's intent was analyzed to detemiine whether a beneficial use

mas contemplated, the amount of water appropriated, or I F the right had been lost bq

abandonment of its beneficial use. In erroneously holding othenvise, the Court misappre-

hends bt'71eflf v. Cunieron, and cites it for the wrong proposition at yi 22. The FV/zc?urCoul-i,

In hold~ngthat a cli~tmant'sIntent could be establ~shed"by h ~ act atid by surrounding
s

circumstances. its actual axid contemplated use. and the purpose thereof," ncwr navered

from also requiring "actual diversion," in addition to intent. FVl~ut; %font.at 501: 201 P.
64

at 762. Further, as we have clearly held, "[alctual use was not a prereyr~isitc the creation
to

of the right. . . actual diversion was enough, ifwith f~oncr.fiife
irltenr." Kuiley, 45 Mont. at
173, 122 P. at 582 (emphasis added), qr~oticg
\Vie! on Water Rights. The inicnt. of course,

\>;as not an intent to divert, hut an intent to use the water beneticially.

q5h This Courl has explained that the concept of beneficial use develoijcd in the law aficr

tlrc diversion rcquircment was already established. See 111re ~4(ijz~clicuriot~Water Ie,lc.ior~,
including size of ditch, etc., by which diversion will be
made; the date of appropriation; the name of the appropriator; the name or
description of the stream from which diversion is made; an accurate
description of thepoinr o diversion, with reference to some natural object or
f
permanent monument; and, finally, the notice is to be verified by the affidavit
of the appropriator or someone in his behalf, which affidavit must state that the
matters and facts contained in the notice are true.

Sectlon 89-810, R.C.M. (1947) (emphasis added)

#I60 1nDIVKCv Irzfake U'ater Coiripurrj (19761, 171 Mont. 316,558 P.2d 1 1 10, the Court

analyzed the requirements for establishing a valid appropriation under the statutes. After

setting forth the five statutory rcqulrcments enumerated a b o ~ e the Court eonimented as
,

follows:
 Completion ofail tlicse steps is ncccssary to a c o m p l d ~
appropriation [citation
omitted]. declc~mtion ofnppl-oprintion, unncconrpattied by cortstruction of
a cfive!-.sion%vor/<.s ncrua/ diver.siot~~g"dic
and ,~t'~,!er*it~.~uflicieri~
i.
7 [citation
omittedj. I-hus the posting and filing oC tile notice of appropriation is ti
condition precedent to a valid appropriation. and n vir!id clp~pr-opriictiori &e.r
rzot exi:~r~t'it!~ol(i
cor~zpierio~if the work 11/2diictuai clivcrsioti i,lihe wirrer.
o

iiztcihe, 171 Mont. at 430. 558 P.2d at 1 1 18 (emphasis added). The lrit'zke Court could nor

hake been more clea~,
holding that (I j declaration of one's intent to appropriate, uithout a

diversion, does not establish a valid water right; and (2) a statutory appropriation is not valid

'61 in reaching its conelustons todaj, the Court in large part ignores our century-old

statutory sclicnie requiring diversion', prefemng instead to focus on our common lavr history.

After ignortng the enduring history of these legislatibe enactments, and the repeated
interpretation and application of the law by generations of Montana judges, the Court seizes
upon the 1979 enactment of 8 85-2-21 2, MCA, as evidence of the Legislature's recognition
of pre-1973 nondiversionary rights. f h e Court apparently concludes therefrom that these
nondiversionary rights were superior to other water claims in that filing a claim was not even
mandatory. At any rate, the Court has sorely misinterpreted this statute.
First, although this claim statute allowed voluntary filing of certain non-recreational
instrcam claims, all claims were tionethelcss required to prove "the place and means of
dikersion" in order to suecessfuiiy establish the water right, 5 85-2-234(6j, MCA, and there
was nothing inconsistent abottt this requirement. The statute, by its definition of "appro-
priation" (quoted herein), limited "instream" claims to those which were based upon
"diversion, impoundment or withdrawal." Section 85-2-102(1), MCA. Instream stock
claims were deemed to be based upon withdrawal. Secorrd, clairns allowed under this staulte
were restricted to those with "existing rights," which were defined by the statute as a water
right "protected under the law as it existed prior to 1973." Section 85-2-1 02(10), ;MCA. As
demonstrated herein, no pre-1973 law protected instreani recreational claims. Third, while
the statute's definition of "beneficial use" included recreational uses, the definition of
"appropriation" nonetheiess required those claims to be based upon diversion: "'Appro-
priate' means . . . (a) to divert, inzj)ozlrrcl,or withn'vc~rv
(including by stock for stock waterj a
quantity of water." Section 85-2-101(1)(a), MCA (en~pliasis added). In the case of the
 Court finds that "the appropriation doctrine's history of flexibility and practicality

support a holding that a diversion is not rcquircd," and that '-beneficial use is lhc oi~ly

esscntiai element of a valid appropriation." Finally. the Court concludes that "'iintcnt is thc

essential element andmay be proven through means other than diversion." In so holding, thc

Cour~
refuses to lionor our common law.

$62 In S\zumniel v. Vogl, sapric, after the Court concluded that the claimant's right could

not bc established under the appropriation statiltes, it analyzed her claim under the common

law:

If the [claimant's] water right exists, it will have to be shown as a water right
acquired prior to the 1885 Act and without benefit of that Act. The essential
features of an appropriation of water made prior to the 1885 Act are a
completed ditch and actual appropriation and application of an amount of
water to a beneficial use.

Slranrtrzel, 144 Vont. at 369, 306 P.2d at 11 1. The Co~trt
then found that the ela~mailt's

failure to provide evidence of diversion was fatal, and affirmed thc district court's refusal to

recognize the claim. This has been the unwavering position of the Court in regard to

common law (non-statutory) water appropriations for a century. See ~Lfidkiff Kitrclzeloe
v.

(1953), 127 Mont. 324. 328, 263 P.2d 976, 978 ("[tlhe rille is that hc %ho first diverts the

Depat-tnient of Fish. Wildlife and Parks, the Petitioner here, appropriation was limited to
leasing water under legislation adopted in 1989. Section 85-2- 101(1)(c)>R.IC.4. Clearly,
this 1979 claim statute did not alter the state of pre- 1973 law, and the Court cannot point to
any autlior~tyfor such a conclusion. The Court also falls to explarn lio\v tlirs statute's
provision for voluntary filing of diversion or withdrawal-based stock and individual claims
recognizes non-diversionary recreational claims.
kvater to a beneficial use has the prior righi thereto where the right is based upon :hi: custom

and practice of the cariy settlers as hcre, and where ihcrc was no cnnpiiani.~
with the

s:atute"j: C'iaziseii v. ilrrni/zgfoii ( I %9), 123 Mont. 1 2 12 P.2d 340 (""a person may niake a

valid appropriation of water by actual diversion and use thcreof without filing a notice of

appropriation as detit~ed sections 7100 to 7102, R. C. M. 1035"): Kikrl v. Ke~lsler
in (19351,

100 Mont. 592, 51 P.2d 235 ("a valid appropriation of water mey he acquired even where

there has heen no co~npliance
with the statute regulating appropriations by record, where the

water is actually diverted from the stl-cam and applicd to a beneficial use: compliance is

important only with regard to the doctrine of 'relation hack'"): !Vlrzytznrd v. I?.irlkins ( I ? 18),

55 Mont. 54, 173 P. 551 ("[tjhe essential elements of an appropriation were a completed

ditch and the application of water through it to a beneficial use").

7'63 Despite the heavy weight of o~rr
precedent, the rnajority finds that diversion was not

a part of this Court's "traditional appropriation analysis," and that "[djecisions from this

Court have not consistently required diversions for water appropriations." The cases cited

(1926), 77 Mont. 229>250 P. 963,
for this supposed "inconsistency" are llonich 11. .Jolrr~so~?

and A.uteli v. hl.3. Coi~sulting,1998 MT 64, 288 Mont. 150; 955 P.2d 1362. tiowever,

neither stand for the proposition for which they are offercd.

7164 The issue in Donich was whether junior appropriators were infringing upon the m:ater

rights of senior appropriators, who claimed that the damming and storing of water by the

junior rightholders was infringing upon their senior rights established under a previous
adjudication. i)onich dciilt with thc priorit;; of rights between appropriators, not~.vbether
the

The
app~npriationrequireinenis. cxisrenci: ofdiversion
junior appropriators' actions f~ifiiled

was nor an Issue in the case. becausc di\ersioii \\as zccknotbfcdged thcreln. The lI

approprrations, we now liold that Montana law, prior to 1973 did not absolutely require a

diwrsion for a valid appropriation of water." The absoluteness of the Court's error on the

substance of the law cannot be overstated. There 1s as much "confuslo~t"In our pre- 1073 la\\

on diversion as there i s in a brick. Our law is simply monolithic.

8 This is acknowledged and explained in the brief of the I)I-'L\'P, who is the Petitioner

here:

[Tlhe general appropriation requirements of pre-July I , 1973 Montana
law. . .[required] an actual diversion (capture) and beneficial use of water to
establish intent and to give other water users notice of the specifics of the
appropriation. Diverting or capturing water for fish, wildlife or recreation is
a beneficial use of water and establishes a valid right under pre-July 1, 1973
Montana law. Instream or inlake fish. wildlife and recreation claims that do

'This "line of authority" is most interesting. The four refercnccd cases address very
different issues, and none of them cite to any of tlte others. If the focus is diversion, then
Dorlich and ,?.u/ell spoke approvingly of capture as a form of diversion, ~Wo~ztcrnirCbalitiotz
acknowledged the superiority of diversion-based irrigation rights over the public's right to
use water pursuant to the Public Trust Doctrine, and Greeiy spoke of diversion approvingly
in distinguishing state water rights from reserved rights. To the extent these cases provide
any authority on the question here, it xveighs against the Court's position.
 not involve a diversion (capture) of water, exccpi iiir Murphy Rights; as
invalid under pre-July 1, 1973 Vtontana law.

779 The i'our~has now re-created pre-1973 Lvatcr law in Mclonraiia, its opinion is a

smootb!y written; seamless essay which attracts an unsuspecting reader to ilreconclusion that

the holding is completely correct and justified under the law. Indeed, 1 cannot disagree with

the proposition that "[c]ommon sense rebels against a rigid diversion requirement which

would refuse to recognize an acknowledged beneficial use simply because application to tlte

use does not require removal from the ~vater
source." If this issue had becn presented to the

Court as a prospectne re\ iston to the cornmon lam properly arising out of litiration. I lbould

most seriously consider it. However, thc issue of instream rights is nor even before the

Court; only diversion-based claims are before us. The Court chooses to go outside the issues

actually raised here, outside the arguments presented, outside the rclicfrequested, and outside

100 p!us years of precedent to retroactively redefine pre-I073 law, I submit that the Court

is also going outside its judicial obligation to apply the law that is, electing instead to remake

pre-1973 law in accordance with what it wished the law had been.

Chief Justice Karla M. Gray:

I concur in the foregoing concurring and dissenting opinion of j ~ ~ s t i Rice.
c
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