River Segment Must Be Navigable In Fact For Commercial Purposes At Statehood For State To Obtain Title To Riverbed Under The Equal Footing Doctrine

Two weeks ago, the United States Supreme Court issued its decision in PPL Montana v. Montana. The Court held that the Supreme Court of Montana had incorrectly determined that certain segments of the Upper Missouri, Madison, and Clark Fork Rivers were "navigable" at the time of statehood. The Court therefore set aside the Montana court's determination that title to the beds of those rivers passed to the state upon statehood under the equal footing doctrine and remanded the case to the Montana Supreme Court for further proceedings consistent with the Court's opinion.

Background

PPL Montana is a power company that owns and operates hydroelectric dams built on the beds of the Upper Missouri, Madison, and Clark Fork Rivers in Montana. PPL holds federal licenses for its facilities and pays rent to the United States for its use of the riverbeds.

The State of Montana knew of the existence of the facilities for many years, but never claimed title to the riverbeds or asked PPL for compensation. That changed in 2003 when parents of Montana school children sued PPL in federal district court, arguing that PPL had built its facilities on state-owned and school trust lands. The state joined the suit seeking to collect rent from PPL. The case was dismissed on jurisdictional grounds, and ownership of the riverbeds remained an open question.

PPL then brought an action in state court to bar Montana from seeking compensation for its use of the riverbeds. Montana counterclaimed seeking a judgment that it owned the riverbeds and could charge PPL for rent. The trial court ruled in favor of Montana and ordered PPL to pay almost $41,000,000 for its use of the riverbeds between 2000 and 2007. PPL appealed and the Montana Supreme Court affirmed. PPL then appealed to the United States Supreme Court which granted certiorari and reversed.

Equal Footing Doctrine

Under the equal footing doctrine, when a state joins the Union, it obtains title to land underneath waters that are "navigable" at the time of statehood, while the United States retains title to land underneath waters that are non‑navigable at the time of statehood. Thus, the fundamental question in the case was the interpretation of the term "navigable" in the context of title under the equal footing doctrine.

The Montana Supreme Court found that the rivers in question were navigable at the time of statehood and Montana had therefore obtained title to the riverbeds. On appeal, PPL argued that the Montana Supreme Court had erred in finding the rivers navigable.

Navigability Analysis

Navigability is determined by the "navigable in fact" rule. As the Court explained in 1871 in The...