Supreme Court decision on water rights may divide Montana’s ag community
A pivot irrigation system watering crops (Photo by Getty Images).
In a decision that some in the Treasure State agricultural community warned could have far-reaching impacts on both education and agriculture, the Montana Supreme Court unanimously sided with the state’s Department of Natural Resources and Conservation, saying the state owns a portion of the water rights a Gallatin County family has understood to be theirs for more than 60 years.
The decision could upend the complex balance and relationship of water, all of which is owned by the state, and the state’s agricultural community, while having economic impacts on state-owned school trust land, which generates revenue to support public education in Montana. Ranchers, farmers and other advocates who showed up at an April Montana Land Board meeting have vowed they’ll continue to pressure leaders to make sure their water rights aren’t gobbled up by the state.
The case centers of Debra and Sidney Schutter and their potato farming operations in eastern Gallatin County. For decades, they have used a water right that they were granted in 1960 to water four parcels of land. Three of those parcels they own, and one of those parcels has been state-leased school trust land that they’ve leased continuously.
However, in the 1960 application for water rights, the family said while the well for the water was located on the Schutter’s property, the “point of use” listed four parcels, including the state trust land, which the state has owned since its territorial days.
In its decision, the Supreme Court said that since the original water right was granted based on watering the four parcels of land, including the school trust portion, part of the Schutters’ water right belongs to the state.
Meanwhile, agricultural leaders and private property rights advocates said in the lead-up to the court case that such a decision could obliterate the good relationship the agricultural community has with the state because it means that the state could claim it has an interest in private water rights even if they’re located on private property. Furthermore, they said the case also has the potential for problems because, while the Schutters obtained the water rights in 1960, the state did not claim ownership until 2019.
Most state school-trust land is dry, meaning it has no water rights. For many who lease those state portions of land for grazing or farming, it means that water has to often be piped or brought to the land. Broadly speaking, the more productive the land, the more money the state makes, so it’s a mutually beneficial relationship with the revenue going to support public education.
But farmers and ranchers said in public meetings and in interviews with the Daily Montanan that if private water rights, which are prized and guarded by the agricultural community, are in jeopardy, there won’t be many who risk losing them by renting the land.
“The Montana Supreme Court’s decision yesterday was a blow to private property rights in the state. The court disregarded the intent of the 2019 law, HB 286, sponsored by Rep. Alan Redfield, designed to safeguard private water rights from government claims. This ruling significantly undermines private property rights and will have long-lasting and negative effects. Notably, it leaves senior water rights holders unprotected,” said rancher Carl DeVries, of Edgar. DeVries sits on the board of the Montana Senior Ag Water Rights Alliance.
“As a result of the Supreme Court’s decision, water rights holders are now faced with a tough choice: Protect their valuable water rights or fully use their state-leased land. If they opt for the former, local schools could suffer financially. If they choose the latter, they risk losing a valuable asset. This decision places significant burdens on our ag community,” DeVries told the Daily Montana.
The decision
In a unanimous 5-0 decision written by Justice Beth Baker, Montana’s highest court said that it’s not just about the location of the source of water, in this case, on Schutter’s private land; instead, it’s also about what the purpose of the water rights being granted in the first place.
“Under the prior appropriation doctrine, the existence and contours of a water right primarily are controlled by the intent of the appropriator, determined by the facts and circumstances surrounding an appropriation,” the court said. “Two geographical points are crucial to determine the existence and scope of a claimed water right — the point of diversion and the place of use.”
The court held that because school trust land was part of the basis for the water rights, that the state should have always been named as a water right holder, or, in legal terms, the water right was appurtenant to the land.
“The validity of (Schutter’s water claim), therefore, relies not only on the Schutters’ private land, but on that portion of water used on (school trust land). Accordingly, that portion of (the land) intended for use is appurtenant to school trust land,” the high court opinion’s said. “The (Montana Land) Board’s ‘duty as trustee of the school trust lands prohibits it from alienating this interest in the land absent full compensation.”
The decision also said that while the state will now have a portion of the Schutters’ total water rights, it doesn’t mean the Schutters will be required or must provide water from the well on their private property.
“We reiterate that the Board does not claim, the water court did not grant, and we do not hold that the board has any ownership interest in the well or in the means of transporting water to the (school trust land),” the court said.
The day before
As the court case wound its way through the water court and then was appealed to the state’s Supreme Court, farmers, ranchers and private property rights advocates had been pressuring the Montana Land Board, which is comprised of the state’s top five elected officials, to either vacate the lawsuit, or assert more control of the DNRC, which has been charged with managing the state’s school trust lands and water rights.
At the previous meeting on April 15, ranchers, farmers and organizations representing agricultural interests lobbied the board to take immediate action, but it instead decided to request more information and presentations from the DNRC, leading to criticism of Gov. Greg Gianforte and the slow-moving process.
At the same meeting, Montana Attorney General Austin Knudsen tried unsuccessfully to wrest the decision-making process back to the Land Board, with other members wanting to move more slowly.
The decision from the high court came down on Tuesday afternoon, but just the day before, the Schutters and the state had discussed a settlement agreement that may have averted the conflict. The Schutters, through their counsel, proposed a settlement that would leave each side paying for their own attorneys, and the state agreeing not to pursue the Schutters’ water rights, according to documents obtained by the Daily Montanan.
Gianforte’s office did not respond to requests for comments on the deal. However, leaders of three powerful ag organizations sent a joint letter to the Montana Land Board urging it to accept the deal and hopefully restore the working relationship among the agricultural community, the Montana Land Board and the state’s DNRC.
“Accepting this settlement now would pave the way for a complete, unpressured review of the delegation of power that led to the DNRC pursuing its internal policy of asserting state ownership over private property rights in water developed by private persons on private land, and used, temporarily, on a state lease,” wrote a group of three leaders.
Those leaders include Errol Galt, president of the Senior Ag Water Rights Alliance; Ross Morgan, president of the Rocky Mountain Stockgrowers Association; and Walter Schweitzer, president of the Montana Farmers Union.
“We believe it is the correct policy, legally and morally, for a government to restrain itself from usurping its citizens property rights,” they wrote.
The letter, addressed to the Land Board on April 29, said accepting the Schutters’ proposal would have left the case without a likely resolution at the Supreme Court level, and allowed the DNRC to examine its policies without the public pressure from the agricultural community.
However, with just one day separating the letter and the Supreme Court’s decision, it made the option impossible. The Land Board’s next scheduled meeting is for May 20, and the ag community said it will be there to try and change the way the DNRC makes decisions.
“The Land Board needs to step in and withdraw the delegation of authority from the DNRC. The board has the constitutional duty and power to restore oversight of the agency so it can no longer make these unilateral decisions,” DeVries said. “Attorney General Austin Knudsen has proposed a motion to do just this, which has been supported by Superintendent of Public Instruction Elsie Arntzen. We urge the Land Board members to put the motion on the Land Board’s May agenda and approve it. Farmers and ranchers deserve assurance they can use their water rights without losing them.”
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