DNRC ordered to issue permit in water case

 By Michael Tucker, staff writer

Bozeman judge cites recent gravel rulings as precedent



Just weeks after a Helena judge ordered the state to issue a permit to a gravel-pit developer because of time delays, a local court used the precedent in a water case.

Gallatin County District Court Judge John Brown on May 12 ordered the state Department of Natural Resources and Conservation to grant a water-use permit to a Big Sky area development due to the agency’s failure to follow statutory time delays.

But DNRC Water Resources Administrator John Tubbs said Monday the agency will appeal the case. The permit has not been issued.

In the case, Bostwick Properties sought a beneficial use permit for a community water supply for the Lazy J South, a subdivision along Highway 191 south of the Big Sky Spur Road, according to court documents.

Originally, objections against the permit were filed by Montana Trout Unlimited and the state Department of Fish, Wildlife and Parks, that agency’s attorney, Bill Schenk, said. The two groups charged that flows in the nearby Gallatin River would be affected by ground water pumping at Lazy J South.

But due to the complexity of the hydrology in the Big Sky area, the objections were withdrawn after developers agreed to supply a metered central well rather than numerous smaller wells or individual water permits, Schenk said.

“We saw ourselves being pulled into an expensive and time-consuming hearing process ... so we looked for an avenue of settlement simply for a matter of practical purposes,” he said.

According to court documents, DNRC deemed Bostwick’s application to be “correct and complete” on Feb. 13, 2007. Under state law, DNRC had 180 days after that date to “grant, deny or condition an application” within 180 days if objections are not filed, according to the 33-page ruling.

The department can seek an extension of 60 days if the agency needs more time to review the application. But DNRC did not do so. Instead, the agency denied the permit after Bostwick pushed the delay issue with a court filing in January of this year.

According to Tubbs, DNRC denied the permit because its experts believed the water use would negatively affect other’s water rights.

“We’re very frustrated that the judged didn’t pay attention to our professionals and their evaluation,” he said.

Brown compared the delay to a similar one discussed in an April court order. That decision, by District Judge Jeffrey Sherlock of Helena, directed the Montana Department of Environmental Quality to issue a permit to a Belgrade-area gravel pit operator because of similar time delays.

“...Where an agency is faced with a legislative mandate that it ‘shall’ take required action on an agency-issued permit, the petitioner is entitled to the performance of a clear legal duty by that agency,” Brown wrote. “As such, the agency is charged with a statutory obligation to issue a permit once the agency has deemed the application to be acceptable.”

Simply put, “‘Shall’ means ‘Shall,’” Brown wrote.

DNRC has requested a stay of the ruling and is attempting to file an appeal with the Montana Supreme Court, Tubbs said Monday. But so far, the stay has not been granted, and Bostwick attorneys have filed an action in the Supreme Court to quash the request.

They argue the stay should be denied because the case is still open because the District Court has not decided on Bostwick’s motion for attorney fees. A final order is expected in the coming weeks.

But at the same time, Bostwick is demanding its permit as required by the court order, Tubbs said.

DNRC has not issued the permit and is using the same argument — that the case is still open, he said.

“On the one hand, they are arguing we should issue their permits now, and on the other hand, when it comes to the Supreme Court appeal, they are saying it’s too soon to appeal because the final order isn’t issued,” he said.

Brown said his ruling will not affect senior water right holders, but parties watching the case from the sidelines disagree.

Gallatin County is part of the Upper Missouri River Basin, and by state law is closed to any new surface water rights requests. While wells utilize ground water, state Supreme Court justices ruled two years ago that ground water and surface water are to be viewed as the same resource.

Ground water, justices determined, provides base flows to surface water; therefore, large wells deplete the availability of water to the rivers and streams that water rights holders rely upon.

The Brown ruling could cut into business concerns down the line, from agricultural users to power companies, Schenk said.

“I think it caused great concern for the downstream water rights holder,” he said. “That processes exists so that DNRC can determine if there is water legally available to appropriate. If they are just ordered to issue a permit, when that process isn’t complete, the ramifications for downstream water rights holders are obvious.”

Dave Weaver, the attorney for the Association of Gallatin Agricultural Irrigators, agreed.

“We are disappointed in Judge Brown’s decision (and) believe the case did not adequately address the constitutionally protected senior water right holders on the Gallatin River.”

AGAI has not sought to intervene in the case, but Weaver said the organization likely will file a “friend of the court” brief when or if the case goes to the Supreme Court.

The DNRC will continue to pursue the appeal, which is necessary because of the precedent Brown’s order sets, Tubbs said.

“There are a lot of pending applications that the case could affect,” he said. “It hasn’t happened quite as fast as the gravel pit (issue) but the potential is sitting there.”

So far, no one else has come forward to capitalize on the ruling, he said, but like the gravel pit issue that set the precedent in Sherlock’s court, that could change. After Sherlock issued his order in April, two other local gravel-mining concerns filed similar suits, with like results.

Bills are being considered to change water-permit laws in the 2009 Legislature, Tubbs said.