Photo credit: Katie Brady

The U.S. Supreme Court’s unanimous decision in PPL v. Montana, a case dealing with the state’s attempt to charge rent for the use of streambed property it did not own, is now at the core of arguments against Montana’s stream access laws.  Why?

James L. Huffman, Dean Emeritus at the Lewis & Clark Law School and Member of the Hoover Institution Task Force on Property Rights, Freedom, and Prosperity, wrote an excellent piece for the Cato Institute:  “PPL Montana v. Montana: A Unanimous Smackdown of a State Land Grab.”  Read the full article here.  We’ve summarized the high points below.

In PPL, the Montana Supreme Court’s extremely liberal interpretation of two legal concepts, the Equal Footing Doctrine and the Public Trust Doctrine, led it to allow the state to assess rent for the use of streambed by hydroelectric facilities owned by PPL, even though those properties existed for decades without the state asserting ownership and had been taxed regularly by the state.

Prof. Huffman writes:

If state courts are free to modify background principles of property law and reassign title from one party to another, the Takings Clause becomes an empty promise.

Although revenues generated by PPL rental payments on the ten sites—roughly $5 million per year—would do little to alleviate the challenges of funding Montana’s $1.5 billion annual public schools budget, the state was, no doubt, looking ahead to a much larger pay day…Of course, Montana did not pitch its argument to the Supreme Court on the basis of prospective revenues for the struggling public schools—although the need could have been easily demonstrated. Contrary to Karl Marx and those who ‘‘occupied’’ Wall Street and cities across the nation, need (nor want nor envy) does not establish rights.

But Montana did urge other, less evidently self-serving, moral and policy reasons for the Court to recognize title in the state. In its brief to the Supreme Court, Montana described the three rivers as ‘‘home to some of the most prized trout fishing in the world,’’ and wrote that the Great Falls, which appear on the ‘‘official seal of Montana’’ have been ‘‘a symbol of Montana since territorial times…’’All of this and more set forth reasons why the state might be the best owner of the submerged lands in dispute, but they are not legal reasons to conclude that the state actually owns them…

By implication, Montana also argued that the background principle of the public trust doctrine supported a judicial finding of title in the state. But this argument reflects a misunderstanding of the public trust doctrine.

Pursuant to the equal-footing doctrine, Montana gained title at the time of statehood to all lands under waters then navigable in fact. For this purpose, the extent of navigable waters established the geographic boundaries (like metes and bounds) of submerged land ownership in the state. At the same time, navigability defined the waters in which the public held a public trust right of navigation, commerce, and fishing. The background principle of the public trust doctrine provides default definitions of what can and cannot be done with properties so bounded. Though coincident at the time of statehood, state title in submerged lands under navigable waters and public rights of use in navigable waters did not need to remain coincident….

But Montana had a different idea. By linking the two doctrines, Montana sought to expand, at the expense of vested private rights, both state ownership of submerged lands and public rights in use of the state’s waters. By conflating the equal-footing and the public trust doctrines, Montana was inviting the Montana Supreme Court to be as creative in its interpretation of the equal-footing doctrine as it had been two decades earlier in its public trust cases. The Montana court was more than willing, concluding that ‘‘navigability for title purposes is very liberally construed.’’

A unanimous Supreme Court—including even the avid fisherman Justice Scalia—properly ignored Montana’s paean to blue-ribbon trout streams and scenic wonders. With the discipline of well-trained property lawyers, the justices asked only what the law of title to submerged lands dictates with respect to rivers that are clearly not navigable-in-fact at the locations of PPL facilities. Without saying so, the Court dismissed the Montana Supreme Court’s analysis for what it is: a judicial amendment of the law of title to submerged lands resulting in an uncompensated expropriation of lands owned by the United States and private parties. It did not matter if Montana offered persuasive moral and public-interest reasons for a change in the law. By whatever name it is called, Montana was asserting title to that which it did not own. It was looking to the courts to ratify a blatant land grab…Changed public values and increased demands for public uses of Montana’s waters might inform the state’s public policies, but they could not justify divesting the United States or private parties of property rights dating, in many cases, from statehood.