Trout Unlimited v. DNRC

2025 MT 1

• Court: Montana Supreme Court
• Decided: January 2, 2025
• Docket: DA 23-0268
• Status: Published

Opinion

01/02/2025

DA 23-0268 Case Number: DA 23-0268

IN THE SUPREME COURT OF THE STATE OF MONTANA 2025 MT 1

MONTANA TROUT UNLIMITED, TROUT UNLIMITED, MONTANA ENVIRONMENTAL INFORMATION CENTER, EARTHWORKS, and AMERICAN RIVERS,

Petitioners and Appellants,

v.

MONTANA DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION and TINTINA MONTANA, INC.,

Respondents and Appellees.

APPEAL FROM: District Court of the Fourteenth Judicial District, In and For the County of Meagher, Cause No. DV-2022-09 Honorable Michael B. Hayworth, Presiding Judge

COUNSEL OF RECORD:

For Appellants:

Sean M. Helle (argued), Jenny K. Harbine, Benjamin J. Scrimshaw, Earthjustice, Bozeman, Montana

Patrick A. Byorth, Megan K. Casey, Trout Unlimited, Inc., Project, Bozeman, Montana

For Appellee Montana Department of Natural Resources and Conservation:

Brian C. Bramblett (argued), Molly Kelly, Montana Department of Natural Resources and Conservation, Helena, Montana

For Appellee Tintina Montana, Inc.:

W. John Tietz (argued), Hallee C. Frandsen, Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana For Amici Curiae Association of Gallatin Agricultural Irrigators, Montana Chamber of Commerce, Montana Farm Bureau Federation, Montana League of Cities and Towns, Inc., Montana Stockgrowers Association, and Montana Water Resources Association:

Ryan McLane, Franz & Driscoll, PLLP, Helena, Montana

Argued: March 29, 2024 Submitted on Briefs: April 16, 2024 Decided: January 2, 2025

Filed:

ir,-6t----if __________________________________________ Clerk

2 Justice Jim Rice delivered the Opinion of the Court.

¶1 Montana Trout Unlimited, Trout Unlimited, Montana Environmental Information

Center, Earthworks, and American Rivers (collectively “MTU” or “Appellants”) appeal the

order of the Fourteenth Judicial District Court, Meagher County, denying their petition for

judicial review and affirming the Final Order issued by the Department of Natural Resource

(DNRC) determining the scope of, and granting, a water use permit to Tintina Montana,

Inc. (Tintina), for use in its mining operation. We consider the following issues:

1. Whether MTU has standing to object to DNRC’s determination.

2. Whether DNRC correctly categorized Tintina’s removal of water from its mine and subsequent discharge of the water as neither a beneficial use nor a waste, which therefore fell outside the permitting process of the Montana Water Use Act.

3. Whether DNRC interpreted the Montana Water Use Act in contravention of Article IX of the Montana Constitution.

¶2 We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶3 Tintina, a mining company, seeks to operate a large underground copper mine,

known as the Black Butte Copper Project (the Mine), located north of White Sulphur

Springs in Meagher County. The entirety of the project is located within the watershed of

Sheep Creek, which in turn, is a tributary of the Smith River. The Mine is also located

within a subbasin of the Upper Missouri River, which is open to new surface water

appropriations but provisionally closed to new groundwater appropriations and therefore

necessitates that any new groundwater permit be accompanied by a mitigation plan in

3 accordance with § 85-2-360, MCA. Under this statute, the DNRC may issue a permit for a

new groundwater use in a provisionally closed subbasin if it finds, inter alia, that the

applicant has prepared a hydrogeologic report assessing the effects of the proposed

groundwater appropriation on hydrologically connected surface sources, and, if that report

shows there will be a net depletion of surface water, that the applicant has prepared a

mitigation plan capable of offsetting the effects of net depletion of the new appropriation

on existing surface water users. See §§ 85-2-360, -362, MCA.

¶4 Because the Mine will be underground, substantial quantities of groundwater will

infiltrate the Mine, interfering with mining activity. To address this problem, Tintina

anticipates needing to remove about 807 acre-feet of water from the Mine annually. Of that

water, Tintina intends to utilize approximately 350 acre-feet in its mining operation. The

remaining 457 acre-feet (Remainder Water) will not serve any purpose in Tintina’s mining

operation. Tintina proposed to treat the Remainder Water and return it to the underground

aquifer. The Remainder Water would be treated at an on-premises water facility and then

placed in an underground infiltration gallery constructed by Tintina. The infiltration gallery

would be located to return the Remainder Water to the aquifer underlying the Sheep Creek

alluvium. During the treatment process, to comply with seasonal surface-water standards,

the Remainder Water would be held in treatment ponds from July to September.

¶5 In September 2018, Tintina submitted a package of permit and change applications

to the DNRC pursuant to the Montana Water Use Act (MWUA or the Act). One of the

4 applications sought approval of what became Permit No. 41J-30116562 (Application).1 The

Application proposed, as described above, the use of 350 acre-feet of groundwater for

Tintina’s mining operation, and the removal of the remaining 457 acre-feet of groundwater

from the mine, called “mine dewatering,” and return of that water to the ground aquifer.

The Application included a mitigation plan to offset the impact upon senior water right

holders of Tintina’s proposed use within its mining operation of the 350 acre-feet of

extracted water, as required by MWUA, given the Mine’s location within the closed Upper

Missouri River basin. Under the mitigation plan, Tintina is required to obtain and provide

sufficient water to offset any loss to senior rights holders on Coon and Sheep Creeks

year-round, and Black Butte Creek seasonally. Tintina proposed to obtain that water from

a combination of consumptive use reductions in several irrigation rights and Tintina’s

permitted appropriation of high spring flows, which water would be stored in a 292 acre-foot

reservoir that would allow for timely release to offset any of Tintina’s depletions to surface

water.

¶6 Following its review of the Application, DNRC issued a Preliminary Determination

to Grant Tintina’s application for a beneficial use permit to use 350 acre-feet of the removed

water, including extensive findings of fact and conclusions of law in categories addressing

1 Tintina also applied for a water appropriation that ultimately became Permit No. 41J-30116563, which is related to the Permit in this appeal, but not at issue here. Tintina proposed therein to capture high spring flows from Sheep Creek at a flow rate of 7.5 CFS to store up to 291.9 AFY in an off-stream reservoir, and to use the water for wetland maintenance and mitigation purposes. The conditions for this permit were adjusted pursuant to the parties’ stipulated settlement, discussed herein.

5 Concurrent Proceedings, Proposed Appropriation, Basin Closure, and Beneficial Water Use

Permit Criteria, which encompassed physical availability, legal availability, adverse effect,

adequate diversion, possessory interest, and beneficial use. Upon these findings and

conclusions, the Preliminary Determination concluded that Tintina had satisfied all criteria

under the MWUA for issuance of a permit. MTU filed objections to the Preliminary

Determination, challenging the determinations regarding legal availability and adverse

effect as to the applications for both 41J-30116562 (the permit at issue here) and

41J-30116563, the issue of beneficial use regarding 41J-30116562, and the issues of

physical availability and adequacy of diversion for 41J-30116563. Among other arguments,

MTU contended that Tintina was also required to obtain a beneficial use permit for the

Remainder Water that Tintina proposed to return to the aquifer. In accordance with the

Montana Administrative Procedure Act (MAPA), a contested case proceeding was

conducted before a Hearing Examiner. Both Tintina and MTU moved for partial summary

judgment on the issue of whether the Remainder Water required a beneficial use permit

under the MWUA. The DNRC took the position that the Remainder Water could not be

permitted under the MWUA and fell within the regulatory jurisdiction of the Department of

Environmental Quality (DEQ). Tintina similarly argued that a beneficial use permit was

not required under the plain language of the MWUA, while MTU contended that DNRC’s

categorization of mine dewatering as outside the scope of MWUA conflicted with the

framework of the MWUA when read in conjunction with Article IX of the Montana

Constitution. It argued that the constitutional provisions “dictate an interpretation of the 6 Water Use Act that facilitates comprehensive regulation and reasonable conservation of the

State’s valuable and often scarce water resources.” (Emphasis added.) Therefore, the “use”

of water should fall within one of just two categories, either beneficial use or waste, and

because the MWUA provides that mine dewatering was categorically not waste, such water

should be considered a beneficial use.

¶7 In a February 23, 2022 Order on Cross-Motions for Partial Summary Judgment, the

Hearing Examiner granted summary judgment on this issue to Tintina. The Hearing

Examiner explained that the “distinction drawn by the DNRC in regard to the Application—

that there are certain uses of water that neither rise to the level of beneficial use nor

constitute waste but rather fall into a category that is wholly beyond the scope of the Water

Use Act’s regulatory scheme—is not a new one. Rather, it is one DNRC has drawn

consistently for decades.” The Hearing Examiner cited to several prior DNRC decisions,

noting that, in one such case, In re Application for Beneficial Water Use Permit No.

24591-g41H by Kenyon-Noble Ready Mix Co. (DNRC 1981) (Kenyon-Noble), “the DNRC

specifically considered and rejected an argument similar to one [the Objectors] bring here,

namely that the specific exclusion of mine dewatering operations from the statute

prohibiting the waste of groundwater perforce means that such drainage must be considered

a beneficial use requiring a permit.” The Hearing Examiner noted that the Objectors had

not identified any case in which DNRC had taken a different position, and that the Hearing

Examiner was not aware of any such cases. The Hearing Examiner summarized the issue

as, “[i]f the presence of water is the problem and not the solution, then we are not in the 7 realm of water rights,” and explained that Tintina’s position on the Remainder Water was

supported by the longstanding interpretation of the agency, which had never been altered

by legislative action:

For over 40 years, DNRC has consistently taken the position that mine dewatering standing alone is neither a beneficial use of water nor, pursuant to § 85-2-505(1)(c), MCA, waste. Rather it is a manipulation of water wholly outside the scope of the Water Use Act’s permitting scheme. The Legislature has not seen fit in that time to modify or disavow this interpretation.

¶8 Thereafter, Tintina and MTU entered a stipulation “for the purpose of resolving

objections” to Tintina’s beneficial water use permit applications (the Stipulation). Pursuant

thereto, Tintina agreed to add water flow rate gauges on impacted waterbodies, located as

negotiated with MTU, track daily diverted volumes of groundwater, implement additional

year-round mitigation measures for Black Butte Creek, and modify Tintina’s accompanying

Application for Permit No. 41J-30116563 to reflect flow rates as recommended by MTU.

In return, MTU agreed to withdraw all of its objections to Tintina’s Application except for

appeal of the Hearing Examiner’s partial summary judgment order on the Remainder Water

issue. Upon the entry of the Stipulation, the Hearing Examiner issued the Final Order,

explaining that its approval of the conditions within the Stipulation was required under

Admin. R. M. 36.12.207(1), and granting the same, approving the Application for Permit

No. 41J-30116562 subject to the stipulated conditions. The Hearing Examiner noted that

MTU’s objections to the Application had been deemed withdrawn, but that MTU was not

precluded from appealing the February 23, 2022 Order, and also noted that all other

objectors, including senior appropriators, had agreed with entry of the Final Order. 8 ¶9 MTU petitioned the District Court for judicial review of the Final Order on the

Remainder Water issue. Regarding the interpretation of the MWUA, MTU argued that

DNRC was incorrect to classify the Remainder Water as neither beneficial use nor waste.

MTU argued that, because the statutory exemption of mine dewatering from “waste”

includes “the disposal of ground water without further beneficial use,” § 85-2-505(1)(c),

MCA (emphasis added), it was implied that mine dewatering must necessarily be a

beneficial use in the first instance, allowing a mine operator to dispose of such water only

after first obtaining a permit to use it. The District Court rejected this statutory argument,

reasoning that the statutory exemption of mine dewatering from the category of “waste”

does not, by itself, “bootstrap the practice” of mine dewatering “into the permitting

process,” and concluded that “[m]ine dewatering is neither a ‘beneficial use’ of water nor,

pursuant to § 85-2-505(1)(c), MCA, a ‘waste.’” The District Court further reasoned that,

to the extent there is any doubt in the statute’s interpretation, DNRC’s long-standing

interpretation of the Water Use Act reflected the intention of the Legislature and was

entitled to deference.

¶10 Alternatively, MTU contended that if DNRC’s interpretation of MWUA was correct,

then the Act had created an unconstitutional “loophole” that exempted mine dewatering

from the permitting process because the statute would fail to “provide for the administration,

control, and regulation of water rights” and to “provide adequate remedies to prevent

unreasonable depletion and degradation of natural resources.” Mont. Const. art. IX, §§ 1(3),

3(4). Reasoning that MTU was suggesting “that DNRC has a constitutional mandate to 9 comprehensively manage water resources,” which “seems to advocate for DNRC to

exercise regulatory authority beyond the Water Use Act,” the District Court rejected MTU’s

arguments based upon this Court’s decision in Clark Fork Coalition v. Mont. Dep’t of

Natural Res. & Conservation, 2021 MT 44, 403 Mont. 225, 481 P.3d 198 (Clark Fork),

noting that this Court had distinguished the purposes of MWUA from the purposes of the

Montana Environmental Protection Act (MEPA), the Montana Water Quality Act

(MWQA), and, at issue there, the Montana Metal Mine Reclamation Act (MMRA), and

quoted from that decision as follows:

[Unlike with MEPA, the MWQA, and pertinent provisions of the MMRA,] the Legislature did not enact the [MWUA] for the primary purpose of implementing, satisfying, or tailoring it to its environmental protection duty under Montana Constitution Article II, Section 3, and Article IX, Section 1. See § 85-2-101, MCA. Compare §§ 75-1-102, 75-5-102, and § 82-4-301, MCA. The Legislature enacted the [MWUA] for the specific purpose of implementing and fulfilling its separate duty under Article IX, Section 3 (in re state ownership of Montana waters and state “administration, control, and regulation of water rights” under a centralized water rights administration and records system). Section 85-2-101, MCA.

While the [MWUA] also has a secondary stated purpose (i.e. to “provide for the wise utilization, development, and conservation” of state waters “for the maximum benefit” of Montanans “with the least possible degradation of the natural aquatic ecosystems”), the Legislature served that secondary purpose, extraneous and without reference to its Article IX, Section 1 environmental protection duty, by providing for discretionary objection by [MDEQ] or a water quality district. See §§ 85-2-101(3), -311(1)(g), and (2), MCA.

Consequently, the District Court concluded that the MWUA was not rendered

unconstitutional by not permitting mine dewatering because, under Clark Fork, the purpose

10 of MWUA is to regulate water rights based upon beneficial uses, not to regulate the water

resource itself.

¶11 MTU appeals.

STANDARDS OF REVIEW

¶12 In contested cases involving final agency decisions, the Montana Administrative

Procedure Act (MAPA) governs judicial review. Section 2-4-702, MCA. In pertinent part,

MAPA provides:

The court may reverse or modify the [agency’s] decision if substantial rights of the appellant have been prejudiced because:

(a) the administrative findings, inferences, conclusions, or decisions are: (i) in violation of constitutional or statutory provisions; (ii) in excess of the statutory authority of the agency; (iii) made upon unlawful procedure; (iv) affected by other error of law; (v) clearly erroneous in view of the reliable, probative, and substantial evidence on the whole record; (vi) arbitrary or capricious or characterized by abuse of discretion or clearly unwarranted exercise of discretion.

Section 2-4-704(2)(a), MCA.

¶13 Summary judgment is appropriate where there is no genuine dispute of material fact,

and the movant is entitled to judgment as a matter of law. M. R. Civ. P. 56(c)(3). This

Court reviews de novo a district court’s grant of summary judgment, using the same

standards applied by the district court under M. R. Civ. P. 56. Smith v. BNSF Ry., 2008 MT

225, ¶ 10, 344 Mont. 278, 187 P.3d 639. Additionally, we review district court conclusions

and applications of law de novo for correctness. Clark Fork, ¶ 32. As conclusions of law,

11 interpretations and applications of constitutional and statutory law are therefore reviewed

de novo for correctness. Clark Fork, ¶ 32. When reviewing agency decisions for

correctness, we “defer to agency interpretations of its own rules or regulations that fall

within a reasonable range of interpretation.” Mont. Env’t Info. Ctr. v. Westmoreland

Rosebud Mining, LLC, 2023 MT 224, ¶ 10, 414 Mont. 80, 545 P.3d 623. “Where an

agency’s interpretation has stood unchallenged for a considerable length of time, it will be

regarded as a great importance in arriving at the proper construction.” Glendive Med. Ctr.

v. Mont. Dep’t of Pub. HHS, 2002 MT 131, ¶ 14, 310 Mont. 156, 49 P.3d 560 (citing Mont.

Power Co. v. Mont. PSC, 2001 MT 102, ¶ 24, 305 Mont. 260, 26 P.3d 91). “[T]he test of

time and reliance may nevertheless yield to a judicial determination that construction is

nevertheless wrong, based on ‘compelling indications.’” Mont. Power Co., ¶ 25 (citation

omitted).

¶14 “A statute is presumed constitutional unless it conflicts with the Montana

Constitution, in the judgement [sic] of the [C]ourt, beyond a reasonable doubt. Further, the

party challenging the constitutionality of the statute bears the burden of proof, and if any

doubt exists, it must be resolved in favor of the statute.” State v. Akhmedli, 2023 MT 120,

¶ 3, 412 Mont. 538, 531 P.3d 562 (quoting Mont. Indep. Living Project v. State, DOT, 2019

MT 298, ¶ 14, 398 Mont. 204, 454 P.3d 1216) (internal quotations omitted). “In the

construction of a statute, the office of the judge is simply to ascertain and declare what is in

terms or in substance contained therein, not to insert what has been omitted or to omit what

has been inserted.” Section 1-2-101, MCA (emphasis added). 12 DISCUSSION

¶15 1. Whether MTU has standing to object to DNRC’s determination.

¶16 Tintina raises for the first time on appeal the Appellants’ standing to challenge

DNRC’s permitting decision, given that the MWUA specifically regulates water rights, but

none of the Appellants, including MTU, possess a senior water right that could be impacted

by DNRC’s permitting decision. MTU rebuts this argument on two bases: 1) Tintina did

not previously raise the issue of MTU’s standing and therefore failed to preserve the issue

for appeal; and 2) MTU has standing on the basis that its members, predominantly

recreational anglers, uniquely utilize the publicly owned in-stream flow rights in the Smith

River, which sustain the river’s fish population.

¶17 The question of standing is meant to resolve whether the complaining party is the

proper party to seek adjudication of the contested issue. Mont. Trout Unlimited v.

Beaverhead Water Co., 2011 MT 151, ¶ 27, 361 Mont. 77, 255 P.3d 179 (Beaverhead).

“The test of standing is that the complaining party must clearly allege past, present or

threatened injury to a property or civil right, and the alleged injury must be distinguishable

from the injury to the public generally, but it need not be exclusive to the complaining

party.” Beaverhead, ¶ 27.

¶18 In general litigation, a challenge to standing may be raised for the first time on

appeal. Baxter Homeowners Ass’n v. Angel, 2013 MT 83, ¶ 14, 369 Mont 398, 298 P.3d

1145 (“The question of standing is an exception to the general rule that we will not address

issues not properly preserved for appeal.”). However, that rule is altered in the context of 13 MAPA litigation. “Because the Legislature created judicial review of administrative

decisions and at the same time limited the scope of review, the general rule that

justiciability questions can be raised at any time is not applicable” in MAPA cases. Hilands

Golf Club v. Ashmore, 2002 MT 8, ¶ 21, 308 Mont. 111, 39 P.3d 697. Consequently,

“standing and mootness claims cannot be raised for the first time on judicial review of an

administrative agency decision” unless the court determines there was “good cause for the

party’s failure to raise the question before the agency.” Hilands Golf Club, ¶ 21.

¶19 While arguing that Appellants’ claimed injuries are too attenuated to establish

standing under the purposes of the MWUA, that is, the administration of water rights and

protection of senior rights, Tintina does not provide an argument that demonstrates good

cause for its failure to raise the issue before the agency. Therefore, pursuant to this Court’s

interpretation of MAPA, we will give no further consideration to the question. See Hilands

Golf Club, ¶ 28.

¶20 2. Whether the DNRC correctly categorized Tintina’s removal of water from its mine and discharge of the water as neither a beneficial use nor a waste, which therefore fell outside the permitting process of the Montana Water Use Act.

¶21 The MWUA provides that “a person may not appropriate water except as provided

in this chapter. A person may appropriate water only for a beneficial use.” Section 85-2-

301(1), MCA. To “appropriate” water is “to divert, impound, or withdraw, including by

stock for stock water, a quantity of water for a beneficial use.” Section 85-2-102(1)(a),

MCA. In turn, “beneficial use” is defined as “a use of water for the benefit of the

appropriator, other persons, or the public, including but not limited to agricultural, stock 14 water, domestic, fish and wildlife, industrial, irrigation, mining, municipal, power, and

recreational uses.” Section 85-2-102(5)(a), MCA. Upon submission of an application for

a water use permit, the DNRC will assess whether the applicant has satisfied each of the

statutory criteria, including that the water will be appropriated for a beneficial use.2 See

§ 85-2-311(1), MCA; Flathead Lakers Inc., v. Mont. Dep’t of Nat. Res. & Conservation,

2023 MT 85, ¶ 38, 412 Mont. 225, 530 P.3d 769.

¶22 In contrast, “waste” of water is defined by the MWUA as “the unreasonable loss of

water through the design or negligent operation of an appropriation or water distribution

facility or the application of water to anything but a beneficial use.” Section 85-2-102(27),

MCA. Waste of groundwater is prohibited by the Act. See § 85-2-505, MCA (“No ground

water may be wasted.”). Without more, the definition of “waste” as “the application of

water to anything but a beneficial use,” § 85-2-102(27), MCA, may well require the DNRC

to administrate within two binary water categories: waste and beneficial use. However, the

MWUA does not stop there, and the recognition of water outside of these binary categories

is reflective of many years of precedent and practice.

¶23 The MWUA describes several circumstances where “the withdrawal or use of ground

water may not be construed as waste.” Section 85-2-505(1), MCA. These include the

circumstance, at issue here, of “the disposal of ground water without further beneficial use

2 These criteria include, among others, the physical and legal availability of the water, its beneficial use, and the lack of adverse effect on senior water right holders. See § 85-2-311(1), MCA.

15 that must be withdrawn for the sole purpose of improving or preserving the utility of land

by draining the same or that must be removed from a mine to permit mining operations or

to preserve the mine in good condition.” Section 85-2-505(1)(c), MCA.

¶24 The Hearing Examiner concluded that Tintina’s removal and disposal of the

Remainder Water did not constitute a “use” because the water was not being applied to any

beneficial purpose, and did not constitute a “waste” because mine dewatering is

categorically exempt from the statutory definition of waste. Section 85-2-505(1)(c), MCA.

On appeal, MTU furthers its interpretational argument that MWUA necessarily categorizes

mine dewatering as a beneficial use because § 85-2-505(1)(c), MCA, which defines mine

dewatering to include “the disposal of ground water without further beneficial use . . . that

must be removed from a mine to permit mining operations” (emphasis added), implies that

the dewatering itself is a beneficial use that must be permitted before Tintina can return the

water to the ground aquifer. The Department and Tintina argue in favor of the Hearing

Examiner’s conclusions. Amici argue that MTU is asking this Court “to fundamentally

reinterpret the foundational basis of every water right in Montana: ‘beneficial use,’” which

would “require thousands of otherwise legal manipulations of water to obtain a water right,

even when there is no use of water.”3

3 The Amici have filed a joint brief, and include the Montana League of Cities and Towns, Association of Gallatin Agricultural Irrigators, Montana Chamber of Commerce, Montana Farm Bureau Federation, Montana Stockgrowers Association, and Montana Water Resources Association.

16 ¶25 MTU’s argument is contradicted by DNRC administrative decisions applying the

Act, and other authority, on which the Hearing Examiner relied. The 1981 Kenyon-Noble

decision involved an applicant, Kenyon-Noble Ready Mix Co. (Kenyon-Noble), which

proposed to dewater its gravel pit and sought a permit to beneficially use a portion of the

extracted groundwater to wash gravel. Like the proposal here, Kenyon-Noble also proposed

to place remaining or excess extracted water into settling ponds “as part of its system for

returning waters to the source of the supply.” Kenyon-Noble, at 1. The Hearing Examiner

held that the remaining extracted water did not constitute “waste,” because it fell within the

exception set out in § 85-2-505(1)(c), MCA, but did not constitute a “beneficial use” either,

because “the mere absence of waste does not inevitably indicate a beneficial use.”

Kenyon-Noble, at 3. The Hearing Examiner reasoned that the phrase “without further

beneficial use” in § 85-2-505(1)(c), MCA, “serves to highlight a legislative intention that

waters withdrawn and subsequently used for beneficial purposes should be treated as

traditional appropriations,” while waters simply removed without such subsequent

beneficial use were not subject to the traditional appropriation process. Kenyon-Noble, at 3.

The Hearing Examiner explained:

[T]he fundamental focus of the appropriative system is upon a bona fide use for the claimed resource. Thus, the exception of drainage practices incident to mining operations from the statutory ban against waste does not by its terms transform such practices into appropriations governed by the permitting process. The permit system merely details a procedural mechanism whereby certain threshold determinations may be made for various appropriations. It is still incumbent upon water users to protect and defend their own property interests. Thus, the mere fact that the legislature has not delegated authority to the Department to assess drainage practices does not work substantial 17 prejudice to any potentially affected persons. Rather, it leaves them where they have historically and traditionally been.

Kenyon-Noble, at 3-4 (internal citations omitted). Accordingly, Kenyon-Noble was granted

a beneficial use permit for the water it removed and beneficially used to wash gravel, but

was not required to permit the extracted water that it removed and placed in settling ponds

for return to the water supply.

¶26 In December of 1981, following the Kenyon-Noble decision, DNRC adopted a

written Dewatering Policy to address when the permit application process is required in

cases of manipulated water. Administrative Policy No. 7, Water Rights Bureau New

Appropriations Program (DNRC 1981) (the Policy). The Policy defined “dewatering” as

“the process whereby water (usually groundwater) from surrounding aquifers must be

removed by pumping or gravity flow so another activity can go on, such as, mining,

agriculture, etc.” Noting that Art. IX, Sec. 3(3), of the Montana Constitution provided that

the State’s waters “are subject to appropriation for beneficial uses as provided by law,” and

the Legislature’s enactment of the MWUA pursuant thereto, including provisions defining

beneficial use, waste, and exemptions from waste, the Policy stated that a permit application

process is not required “where there is no intent to apply any of the water to a beneficial

use,” and that “[t]he mere dewatering of a water source without a beneficial use does not

constitute an appropriation; therefore, no water right can be established solely by

dewatering.” The Policy stated that the MWUA recognized certain circumstances “when

groundwater is not being put to a beneficial use [but] is not a waste,” and provided examples,

18 such as “[w]ater withdrawn from a mine for the purpose of extracting some mineral,”

“[w]ater withdrawn by means of an open drain ditch for the purpose of draining a field to

make it more productive,” and “[w]ater withdrawn from a reservoir, lake or pond for the

purpose of regulating the water level, draining for repairs or construction.”

¶27 In In re Applications for Beneficial Water Use Permits 41T-104524, 41T-104526,

41T-104527 by CR Kendall Co. (DNRC 1999) (CR Kendall), Applicant CR Kendall

Corporation proposed to operate a pump-back water treatment system at its mine to capture

water contaminated from mine tailings and divert it away from an at-risk river. CR Kendall,

at 1. The water would be pumped into the mine’s water containment system where it would

be disposed by evaporation and irrigation. CR Kendall initially applied for a beneficial use

permit for the water, but during the proceeding changed its position with regard to the need

to do so, offering that because it did not intend to gain any benefit from application of the

water, this manipulation did not constitute a beneficial use requiring a permit. The Hearing

Examiner agreed, concluding:

[The] disposal of contaminated water is not a use of water in which a property interest is necessary to achieve a legal objective (hereinafter termed a non-use of water). Consequently, such a non-use of water is not entitled to water rights protection under the prior appropriation doctrine embodied in the Montana Water Use Act of 1973 and does not fall within the jurisdiction of the DNRC permitting process. The DNRC is the regulator of water rights, not the regulator of water disposal.

CR Kendall, at 4-5. The Hearing Examiner relied upon West Side Ditch Co. v. Bennett et

a1., 106 Mont. 422, 78 P.2d 78 (1938), wherein this Court concluded that no property

19 interest existed in water drained from swampy farmland via a constructed ditch because the

mere diversion of the water did not constitute a beneficial use. The Hearing Examiner also

cited In the Matter of the Petition for Declaratory Judgment the City of Deer Lodge, No.

97514-76G (DNRC 1996), wherein the DNRC concluded that the City of Deer Lodge’s

disposal of sewer water through irrigation did not constitute a beneficial use because the

intent of the manipulation was not to produce crops, but merely to discharge the sewage

away from a nearby river. “Trimmed to its essence,” the Hearing Examiner reasoned, “the

Deer Lodge holding is simply that water disposal is not water usage.” Acknowledging the

opponents’ argument that CR Kendall’s proposal for disposing of water was related to and

would benefit its operation of the mine, the Hearing Examiner reasoned:

The essential issue here, however, is not whether Applicant’s diversion is beneficial or related to mining. Obviously, the pump-back system is related to mining activities and must benefit Applicant in some way. Otherwise, Applicant would not operate the system. The issue rather is whether Applicant’s diversion is a use of water in the first place. Disposal of water would not seem to be a use of water.

CR Kendall, at 9. Accordingly, CR Kendall was not required to obtain a beneficial use

permit for the disposal of water from its gravel mine.

¶28 These agency decisions reflect longstanding common law principles governing water

rights. “[B]eneficial use shall be the basis, the measure and the limit of all rights to the use

of water.” McDonald v. State, 220 Mont. 519, 530, 722 P.2d 598, 605 (1986) (emphasis in

original). “[A]pplication to a beneficial use is the touchstone of the appropriation doctrine.”

Curry v. Pondera Cnty. Canal & Reservoir Co., 2016 MT 77, ¶ 87, 383 Mont. 93, 370 P.3d

20 440 (citing In re Adjudication of Existing Rights to the Use of all Water, 2002 MT 216, ¶ 10,

311 Mont. 327, 55 P.3d 396.). “[A]s every appropriation must be made for a beneficial use

or useful purpose, it becomes the duty of the courts to try the question of the claimant’s

intent by his acts and the circumstances surrounding his possession of the water, its actual

or contemplated use and the purposes thereof.” Toohey v. Campbell, 24 Mont. 13, 17-18,

60 P. 396, 397 (1900). The Department argues that MTU’s “attempt to manufacture

incidental beneficial uses to justify its reading of the law is misplaced,” citing another early

holding that addressed intent regarding diverted water in excess of the amount beneficially

used:

[The appropriator] may divert more water than is necessary for domestic and culinary purposes, and permit the excess to flow on down to his lands; but if he has no intention of using such excess to irrigate the land upon which the excess so runs, and his purpose is not to raise a crop or run machinery, or to mine, or to otherwise apply it to a useful purpose, he acquires no valid right to such excess by the mere fact of a diffusion of waste water upon the grounds, even though they be susceptible of cultivation. The intention of the claimant is therefore a most important factor in determining the validity of an appropriation of water.

Power v. Switzer, 21 Mont. 523, 529-30, 55 P. 32, 35 (1898) (emphasis added).

¶29 As noted above, courts will “defer to agency interpretations of its own rules or

regulations that fall within a reasonable range of interpretation.” Mont. Env’t Info. Ctr.,

¶ 10. We have explained that this rule applies “where a particular meaning has been

ascribed to a statute by an agency through a long and continued course of consistent

interpretation, resulting in an identifiable reliance.” Mont. Power Co. ¶ 25; see also

Glendive Med. Ctr., ¶ 14 (“Where an agency’s interpretation has stood unchallenged for a 21 considerable length of time, it will be regarded as a great importance in arriving at the proper

construction.”). In balance, we also recognize that “the test of time and reliance may

nevertheless yield to a judicial determination that [an agency’s] construction is nevertheless

wrong, based on ‘compelling indications.’” Mont. Power Co., ¶ 25 (citation omitted).

DNRC’s interpretation of its duties under the subject provision of the MWUA has remained

consistent in the 43 years since Kenyon-Noble and at no point has the Montana Legislature

stepped in to modify DNRC’s categorization of mine dewatering as neither “waste” nor

“use,” despite specific opportunities to do so. As explained by the Department, legislative

committees have received testimony regarding the Department’s statutory interpretation

that mere manipulations of water do not require and, indeed, do not qualify for, a beneficial

use permit. See Hearing on H.B. 178, Natural Resources Committee, 59th Montana

Legislature (2005), Testimony of Jack Stults, Administrator, DNRC Water Resources

Division (“a person who digs a drain ditch to remove water and doesn’t use it for any other

purpose does not need a water right.”).

¶30 DNRC’s decision to approve Tintina’s plan for mine dewatering and subsequent

disposal is consistent with its decisions in Kenyon-Noble and CR Kendall. As in

Kenyon-Noble, Tintina intends to use a portion of the water extracted from the mine, while

returning the remainder to the aquifer; as in CR Kendall, the purpose of Tintina’s

22 manipulation of the excess extracted water, or Remainder Water, is merely to remove it

from the mine, not to employ the water for a further beneficial purpose.4

¶31 That Tintina’s mine dewatering is statutorily exempted from “waste” does not

require classification of the dewatering as a “beneficial use.” The phrase “without further

beneficial use” within § 85-2-505(1)(c), MCA, does not “work a transformation,” in the

words of the Kenyon-Noble Hearing Examiner, of dewatering into an appropriation, but

rather distinguishes extracted water that is put to a beneficial use, such as the 350 acre-feet

which is subject to Tintina’s beneficial use application, from water that is extracted “for the

sole purpose of improving or preserving the utility of land by draining the same or that must

be removed from a mine to permit mining operations or to preserve the mine in good

condition.” Section 85-2-505(1)(c), MCA (emphasis added). Under both DNRC’s statutory

4 The Dissent cites to the ruling in Diamond Cross Props. v. Mont., 2008 Mont. Dist. LEXIS 180, 2008 WL 3243320 (July 14, 2008). Dissent, ¶ 60. MTU Objectors likewise cited to Diamond Cross, a state district court decision, in support of its motion for summary judgment before the Hearing Examiner, who discussed the case at length, noting that the District Court there actually agreed with the distinction made by DNRC between the beneficial use of water and other water manipulation, in cases such as Kenyon-Noble and CR Kendall. See Diamond Cross Props., at 6 (“for over 25 years, DNRC has taken the position that the extraction of water that is not needed or desired for a beneficial use, but is merely disposed of as a by-product of other activities, does not constitute a beneficial use of water requiring a beneficial water use permit . . . . [E]xamples include the dewatering of a gravel pit, the removal of contaminated water from a mining operation, and the land application of sewage effluent by a municipality. The Court does not dispute the DNRC’s position in the context of the referenced examples. Indeed, the rulings made by the DNRC in the instances recited are in concert with the exceptions noted by the Legislature that do not constitute waste of water under the [M]WUA. See § 85-2-505(1)(a), (b), (c), and (d)”). The Hearing Examiner explained that Diamond Cross “focused narrowly” on application of the statutory scheme governing the production of coalbed methane, § 82-11-175, MCA, for a project located within a controlled groundwater area, unlike Tintina’s mine here. MTU did not thereafter raise Diamond Cross before the District Court, nor in its briefing to this Court.

23 interpretation and the common law, Tintina would not qualify for a permit of this latter

category of water. See § 85-2-311(1)(d), MCA (requiring a beneficial use to qualify for a

permit); see also Power, 21 Mont. at 529-30, 55 P. at 35 (“[I]f he has no intention of using

such excess . . . or to otherwise apply it to a useful purpose, he acquires no valid right to

such excess.”). The structure of the MWUA and the language of § 85-2-505(1)(c), MCA,

specifically exempting extracted water that is not beneficially used from the definition of

“waste,” plainly posits that mine dewatering would otherwise constitute “waste,” thereby

excluding it from a “use” that requires a right permit. The MWUA’s exclusion of

dewatering from waste thus leaves a third category of water manipulations, a category over

which MWUA provides DNRC no administrative authority.5

¶32 DNRC’s statutory interpretation is also reinforced by the other language of the

exemption, which provides, “in the following cases the withdrawal or use of ground water

may not be construed as waste under this part,” § 85-2-505(1), MCA (emphasis added), thus

implying a distinction between groundwater “withdrawal” and groundwater “use.”

Consistent therewith, § 85-2-505(1)(c), MCA, defines non-waste or waste-exempted water

manipulations as those where water is manipulated “for the sole purpose” of removing it

from land or mine. That is, the water itself will serve no other purpose, and the manipulation

5 The Department notes that the Court has previously recognized other waters for purposes of the Act. See Bostwick Properties, Inc. v. DNRC, 2013 MT 48, ¶¶ 24, 31, 369 Mont. 150, 296 P.3d 1154 (holding that the developer did not qualify for a water right under the Act’s appropriative criteria for stormwater runoff diverted and impounded by the development, and the Department was not required to consider such non-appropriative water sources).

24 is merely to remove the water from that location. MTU’s position that the statute requires

a beneficial use application for both the water Tintina will put to use in the mine, and the

water Tintina will return to the aquifer without use, is inconsistent with this language, and

would merge the distinctions made by the Act.6

¶33 We conclude the District Court correctly affirmed the Department’s application of

the MWUA to Tintina’s application.

¶34 3. Whether DNRC interpreted the Montana Water Use Act in contravention of Article IX of the Montana Constitution.

¶35 Article IX, Section 1, of the Montana Constitution provides: “The state and each

person shall maintain and improve a clean and healthful environment in Montana for present

and future generations. The legislature shall provide for the administration and enforcement

of this duty.” Further, as pertaining to water, the Montana Constitution provides:

(3) All surface, underground, flood, and atmospheric waters within the boundaries of the 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.

6 The Dissent offers that “Tintina’s release of water into Sheep Creek constitutes yet another appropriation” because beneficial use is also defined as “a use of water for aquifer recharge or mitigation.” Dissent, ¶ 67. However, “aquifer recharge” is a process term of art that is defined as the controlled addition of water to either the aquifer or the surface “to offset adverse effects resulting from net depletion of surface water,” § 85-2-102(3), MCA, for purposes of protecting senior water holders in a closed basin from a proposed beneficial use appropriation. See § 85-2- 360, MCA, et seq. This is the process that was followed regarding Tintina’s beneficial use application for the 350 acre-feet of groundwater, and its mitigation plan was found by DNRC to have fully mitigated the net depletion to surface waters resulting from its application, which is not contested by MTU. The discharge of the mine dewatering water, regulated by the Department of Environmental Quality, as explained herein, does not come within the definition of “aquifer recharge.” Neither is this water being “withdrawn in a closed basin without mitigation,” Dissent, ¶ 50, because, unlike the 350 acre-feet subject to net depletion mitigation under Tintina’s beneficial use appropriation, it is being returned to the aquifer.

25 (4) The legislature shall provide for the administration, control, and regulation of water rights and shall establish a system of centralized records, in addition to the present system of local records.

Mont. Const. art. IX, § 3.

¶36 Referring to these provisions, MTU argues that “[r]ead together, the Constitution’s

water-rights provisions compel an interpretation of the Water Use Act that will ensure all

of Montana’s water resources are comprehensively regulated and protected.” Thus,

according to MTU, if MWUA allows DNRC to administer mine dewatering as belonging

to a third category beyond “waste” or “beneficial use,” then MWUA is unconstitutional

because such a dewatering “loophole” circumvents the constitutional requirement that

Montana’s waters be “comprehensively regulated and protected.” DNRC and Tintina

answer that MTU’s constitutional challenge fails because it is unsupported in our

jurisprudence and mistakenly interprets the MWUA to broadly regulate water resources

beyond the administration of water rights.

¶37 The MWUA was implemented for the primary purpose of regulating water rights in

Montana in satisfaction of Article IX, Section 3 of the Montana Constitution. Section

85-2-101(2), MCA (“A purpose of this chapter is to implement Article IX, Section 3(4), of

the Montana constitution, which requires that the legislature provide for the administration,

control, and regulation of water rights and establish a system of centralized records of all

water rights. The legislature declares that this system of centralized records recognizing

and establishing all water rights is essential for the documentation, protection, preservation,

26 and future beneficial use and development of Montana’s water for the state and its citizens

and for the continued development and completion of the comprehensive state water plan.”);

see Clark Fork, ¶ 50. As we have explained, despite having referenced Article IX, Section

3(4) in § 85-2-101(2), MCA, “the Legislature did not enact the MWUA for the primary

purpose of implementing, satisfying, or tailoring it to its environmental protection duty

under Montana Constitution Article II, Section 3, and Article IX, Section 1.” Clark Fork,

¶ 50. Rather, “[t]he Legislature enacted the MWUA for the specific purpose of

implementing and fulfilling its separate duty under Article IX, Section 3 (in re state

ownership of Montana waters and state ‘administration, control, and regulation of water

rights’ under a centralized water rights administration and records system). Section 85-2-

101, MCA.” Clark Fork, ¶ 50. In furtherance of these goals, MWUA authorizes DNRC to

regulate water rights (beneficial uses) and water waste (non-beneficial uses). It does not

grant DNRC the ability to further regulate the water itself.

¶38 Secondarily, MWUA is intended to “encourage the wise use of the state’s water

resources by making them available for appropriation consistent with this chapter and to

provide for the wise utilization, development, and conservation of the waters of the state for

the maximum benefit of its people with the least possible degradation of the natural aquatic

ecosystems.” Section 85-2-101(3), MCA. “[T]he Legislature served that secondary

purpose, extraneous and without reference to its Article IX, Section 1 environmental

protection duty,” Clark Fork, ¶ 51, by providing regulatory authority elsewhere, including

to the Department of Environmental Quality which, under the Montana Water Quality Act 27 (MWQA) and the Metal Mine Reclamation Act (MMRA), is charged with further regulating

the water resource: All discharges of water in Montana are subject to non-degradation

standards and all mining activities must first undergo a permitting process which entails the

review of the project’s hydrological impacts. See § 75-5-303, MCA (“Existing uses of state

waters and the level of water quality necessary to protect those uses must be maintained and

protected.”); §§ 82-4-301, -335, -351, MCA (declaring the intent of MMRA “to prevent

unreasonable depletion and degradation of natural resources” and establishing that “[a]

person may not engage in mining [activities] in the state without first obtaining a final

operating permit from the [DEQ]” and that an application for a MMRA permit may be

denied if “the plan of operation or reclamation conflicts with . . . [MWQA]”); Clark Fork,

¶ 51; Pud No. 1 v. Wash. Dep’t of Ecology, 511 U.S. 700, 719, 114 S. Ct. 1900, 1912 (1994)

(holding that, under the Clean Water Act, water quantity is regulated as a component of

water quality).7

¶39 The District Court reasoned that “[MTU]’s argument that the Constitution requires

that the Water Use Act not only manage water rights but provide comprehensive

management of water resources (including some method to evaluate the impacts of mine

dewatering within the permitting process) is novel but without citation to authority and

7 The Dissent labors under the proposition that the water being removed from the mine and returned to the aquifer is “completely unexamined and unregulated,” creating a “giant loophole,” Dissent, ¶ 50, and will “escape state oversight.” Dissent, ¶ 71. This ignores the system of water regulation outside of the MWUA, and our opinion recognizing this broader regulation in Clark Fork.

28 further analysis, it cannot meet the burden.” (Emphasis in original.) In coming to this

conclusion, the District Court properly applied our decision in Clark Fork.

¶40 In accordance with our ruling in Clark Fork, we conclude the District Court correctly

held that the Department has properly interpreted the MWUA, and that the interpretation

does not render the Act unconstitutional. The exemption of mine dewatering from

MWUA’s permitting requirements does not inhibit the Act’s purpose of regulating water

rights, as required by Article IX, Section 3 of the Montana Constitution. Further, while

beyond the DNRC’s authority, evaluation of mine dewatering impacts is provided by other

statutory frameworks. A statute is presumed to be constitutional, Akhmedli, ¶ 3, and we

conclude MTU has not satisfied its burden to establish that the MWUA is unconstitutional.

¶41 Ultimately, whether this regulatory system is ideal or preferable is a determination

for the Legislature to make. As noted by the Dissent, ¶ 68, mine dewatering has been found

to be a beneficial use “[u]nder the language” of another jurisdiction’s statute, and a couple

other states have enacted statutes requiring a permit for mine dewatering. However, that

does not allow us to import these requirements into Montana statutes. While, as the District

Court observed, “[i]t is presumed that the legislature is acquainted with the law; that it has

knowledge of the state of it upon the subjects on which it legislates; that it is informed of

previous legislation and the construction it has received,” Baitis v. Dep’t of Revenue, 2004

MT 17, ¶ 24, 319 Mont. 292, 83 P.3d 1278, the legislative record here shows the

Department’s longstanding application of the MWUA, including its dewatering policy, has

been specifically brought to the Legislature’s attention. It remains, as far as this case is 29 concerned, the Legislature’s prerogative to review and, if necessary, revise the MWUA or

the larger regulatory structure.

¶42 Affirmed.

/S/ JIM RICE

We Concur:

/S/ MIKE McGRATH /S/ BETH BAKER /S/ JAMES JEREMIAH SHEA /S/ DIRK M. SANDEFUR

Chief Justice Mike McGrath, concurring.

¶43 I concur with the Court’s Opinion and that Tintina may not raise Appellants’ standing

for the first time on appeal. I write separately to address that Appellants do, however, have

standing to challenge DNRC’s permitting decision.

¶44 Tintina rightly concedes that Appellants’ interests would demonstrate standing on

behalf of their members in a case involving environmental harms—there can be no serious

dispute that Appellants’ recreational and aesthetic injuries are sufficient to confer standing

in such cases. See, e.g., Park Cnty. Env’t Council v. Mont. Dep’t of Env’t Quality, 2020 MT

303, ¶¶ 20–24, 402 Mont. 168, 477 P.3d 288. Nevertheless, Tintina argues that here, in the

context of MWUA, only a senior water rights holder would be able to bring an objection to

its permit application. This argument is against the plain language of MWUA, DNRC’s

acceptance of Appellants’ standing and its administrative rules, and public policy.

30 ¶45 Section 85-2-308(4), MCA, says that “[a] person has standing to file an objection

under this section if the property, water rights, or interests of the objector would be

adversely affected by the proposed appropriation.” (Emphasis added.) Clearly, a person

who has interests—apart from their property or water rights—that would be adversely

affected by the proposed appropriation has standing to object. “A” person with an interest

does not limit the class of people to only those with senior water rights; instead, the statute

allows “any” person with an interest to object. Cf. State v. Levine, 2024 MT 169, ¶ 16,

417 Mont. 410, 553 P.3d 416 (defining “a”).

¶46 Tintina’s only analysis in support of its argument analogizes Baxter Homeowners

Association v. Angel, 2013 MT 83, 369 Mont. 398, 298 P.3d 1145, where we held that

Angel was not an “aggrieved party” as defined by § 49-2-101(2), MCA, and as required

under § 49-2-501, MCA, to file a complaint of discrimination under the Montana Human

Rights Act. There, however, Angel had no “specific personal and legal interest” that

“specially and injuriously affected” him as he was not disabled, nor did he have any close

associations to someone such that he could bring the litigation on their behalf. Section

49-2-101(2), MCA; Baxter, ¶ 18.

¶47 Here, MWUA confers standing on any person who has an interest, other than and in

addition to persons with property or water rights, that may be adversely affected by the

proposed appropriation. Section 85-2-308(4), MCA. Appellants demonstrated that they

have aesthetic and recreational interests in the Smith River and the tributaries at issue in this

litigation and that their interests in publicly-owned water rights would be adversely affected 31 by Tintina’s proposed appropriation. The plain language of MWUA confers standing on

Appellants in the same way that they would have standing to defend their interests in “cases

involving environmental harms.” See also Mont. Trout Unlimited v. Beaverhead Water Co.,

2011 MT 151, ¶ 33, 361 Mont. 77, 255 P.3d 179 (common law standing requirements plus

compliance with statutory requirements enough to confer right to participate in a similar

MWUA hearing).

¶48 Finally, DNRC’s own interpretation of § 85-2-308(4), MCA, is consistent with the

plain language meaning, discussed above. DNRC has promulgated rules regarding

requirements to object to an application under § 85-2-302, MCA. See Admin. R. M.

36.12.117 (2024). This rule requires an objector to state facts explaining how the objector

has standing, and to describe how the objector’s interests will be adversely affected. Admin.

R. M. 36.12.117(9)(g) (2024). The rule goes on to describe further requirements “if [the]

objector is claiming adverse effect to instream flow water rights for fish, wildlife, and

recreation.” Admin. R. M. 36.12.117(9)(h) (2024). Clearly, DNRC understands that some

objectors with an “interest” apart from their “property” or “water rights” will be objecting

because of fish, wildlife, recreational, or aesthetic interests.

¶49 In this case, Appellants described their interests in recreating on and protecting

publicly-owned water rights that were threatened by Tintina’s application. DNRC

recognized these interests as “correct and complete” and accepted their objections to the

application. Appellants have standing under common-law principles, which Tintina does

32 not dispute. The plain language and agency interpretation of § 85-2-308(4), MCA, does not

limit Appellants’ standing. I would also reject Tintina’s standing argument on the merits.

/S/ MIKE McGRATH

Justice Laurie McKinnon, dissenting.

¶50 I disagree with the Court’s conclusion that mine dewatering is not a beneficial use

requiring a water use permit. Of the 807 acre-feet of groundwater Tintina plans to withdraw

from the mine each year, the withdrawal of well over half of it—457 of those acre-feet—

will be completely unexamined and unregulated. Tintina acknowledges in its permit

application the withdrawal of 350 acre-feet of water will have impacts to the surface water

in Black Butte Creek, Coon Creek, and Sheep Creek. The Court’s interpretation of the

MWUA undermines the statute’s purpose to protect senior water right holders and prevent

piecemeal litigation by allowing for a giant loophole where large quantities of water can be

withdrawn in a closed basin without mitigation simply because the party claims the water

is not being “used.”

¶51 Under our Constitution, the Montana Legislature must “provide for the

administration, control, and regulation of water rights” and “provide adequate remedies to

prevent unreasonable depletion and degradation of natural resources.” Mont. Const. art. IX,

§ 3(4); Mont. Const. art. IX, § 1. “The Water Use Act was designed to protect senior water

rights holders from encroachment by junior appropriators adversely affecting those senior

rights.” Mont. Power Co. v. Carey, 211 Mont. 91, 98, 685 P.2d 336, 340 (1984). The

33 “protection of senior water rights . . . is the [MWUA’s] core purpose.” Clark Fork Coal. v.

Tubbs, 2016 MT 229, ¶ 24, 384 Mont. 503, 380 P.3d 771. Accordingly, “the [MWUA]

requires that a prospective junior appropriator show that water is legally and physically

available, the proposed use of water is for a beneficial use, and the new appropriation will

not adversely affect existing water rights of senior prior appropriators.” Tubbs, ¶ 6; § 85-2-

311(1)-(2), MCA.

¶52 To protect Montana waters for the use of its people, the MWUA provides that “[a]

person may appropriate water only for a beneficial use” and “the application of water to

anything but a beneficial use” is prohibited as unlawful “waste.” Sections 85-2-301(1),

85-2-102(27), MCA. The structure of the MWUA thus deems applications for water are

either for beneficial use or impermissible waste. The MWUA was designed to provide for

comprehensive management of Montana’s water resources for the benefit of its owners––

Montana citizens. The MWUA implements the constitutional directive that “[a]ll . . . waters

within the boundaries of the 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.” Mont. Const. art. IX,

§ 3(3) (emphasis added). Thus, water applications may be divided into one of two classes:

“beneficial use,” defined in § 85-2-102(27), MCA, which can be authorized only by permit;

and “waste,” which is the unlawful “application of water to anything but a beneficial use,”

§§ 85-2-102(27) and 85-2-301(1), MCA.

¶53 In defining which uses of groundwater fall into the category of impermissible

“waste,” the Legislature specifically excluded mine dewatering: “the disposal of ground 34 water without further beneficial use . . . that must be removed from a mine to permit mining

operations” may “not be construed as waste[.]” Section 85-2-505(1)(c), MCA. “[W]ithout

further beneficial use” highlights the legislative intent that waters withdrawn for the purpose

of mining and not subject to further beneficial use, i.e., not “wanted” by the appropriator,

are nonetheless appropriated for the benefit of the mining operation and thereby subject to

the permitting requirements of the MWUA. Consistently, the MWUA defines “beneficial

use” as a use of water “for the benefit of the appropriator, . . . including but not limited to .

. . mining[.]” Section 85-2-102(5)(a), MCA. Accordingly, Tintina’s use of groundwater to

mine cannot be construed as “waste” under the § 85-2-505(1)(c), MCA, dewatering

exclusion of the MWUA; and must be deemed a “beneficial use” under the

§ 85-2-102(5)(a), MCA, definition of beneficial use of the MWUA. The MWUA also

defines “appropriation” as including “use for an aquifer recharge or mitigation[.]” Section

85-2-102(f), MCA. Hence, the plain language and text of the MWUA compels no other

conclusion but that mine dewatering is a beneficial use that must meet the requirements of

the MWUA. The Court has created a loophole in the legislative design and structure of the

MWUA. However, each provision of the MWUA, together with its purpose to

comprehensively regulate “all” waters in Montana, can be read consistently together so that

senior water right holders and Montana citizens have their rights and water resources

protected.

¶54 Thus, the Legislature has provided that “a person may not appropriate water except

as provided [in Title 85, Chapter 2, MCA].” Section 85-2-301, MCA. Title 85, Chapter 2, 35 MCA, sets forth the permitting requirements and process for appropriating water. There

are very limited exceptions to the requirement that a permit first be obtained before

appropriating water. Section 85-2-306, MCA, provides several de minimis exceptions to

the permit requirement. However, importantly, there is no exception to the permitting

requirements contained within § 85-2-306, MCA, or the entire MWUA, for mine

dewatering. The Court is thus creating an exception for mine dewatering where none exists;

further, the exception the Court creates is certainly not consistent with those exceptions for

de minimis usage the Legislature has created. The Court’s dewatering loophole allows a

large amount of water—nearly 150,000,000 gallons annually—withdrawn by Tintina to

escape State oversight in direct contravention to the MWUA’s stated purpose. Here, Tintina

intends to dig a series of tunnels that extend 460 to 1,640 feet into the ground so that Tintina

may access its copper deposits. Through Tintina’s actions of drilling these tunnels to reach

their copper deposits, they cause to be produced from these wells1 a continuous flow of

large volumes of groundwater from the closed Missouri River basin that Tintina will divert,

pump, and remove to the surface so it can mine its copper deposits.

¶55 Tintina argues that it is exempt from the permitting requirements and any state

oversight because it does not have an actual intent to control and affirmatively use the water.

Tintina’s argument that because it has no desire to “employ” its unpermitted diversion for

1 Section 85-2-102(34), MCA, defines “[w]ell” as “any artificial opening or excavation in the ground, however made, by which ground water . . . flows under natural pressures or is artificially withdrawn.” 36 a “purpose,” there is no basis for the Department to declare a diversion of 457 acre-feet a

“beneficial use,” is unsupportable and disregards the facts. The Court’s reliance on caselaw

that Tintina’s intent as the appropriator is controlling, Opinion ___, first, acknowledges that

Tintina is, in fact, appropriating water for its use. Second, the Court ignores and does not

address that Tintina is beneficially appropriating at numerous points during its “unintended

use” of groundwater when (1) Tintina initially collects the water; (2) Tintina impounds the

water; (3) Tintina allows the impounded water to evaporate for several months because high

nitrogen levels prevent its discharge into Sheep Creek; (4) Tintina conveys the water to the

mine’s treatment plant; and (5) finally, Tintina discharges the groundwater through

Tintina’s “underground filtration galleries” into a different place in Sheep Creek.

Therefore, to say that Tintina does not “employ” the water for its mining operations is

contrary to the meaning of “appropriation” and “beneficial use” as contained in § 85-2-102,

MCA, and defies logic.

¶56 The facts of this case demonstrate the threat a mine dewatering exception presents to

Montana’s waters and senior water rights. Tintina has already acknowledged the adverse

effects on prior appropriators to Black Butte Creek, Coon Creek, and Sheep Creek

downstream of Little Sheep Creek. Of the 807 acre-feet of groundwater Tintina will use for

its mining operation, Tintina will apply 350 acre-feet of groundwater for “industrial

purposes” at the mine and has obtained a groundwater permit with plans to mitigate adverse

effects by offsetting depletions to surface waters in the affected drainages of Coon Creek,

Black Butte Creek, and Sheep Creek. If there are admitted adverse effects from dewatering 37 350 acre-feet of groundwater, then clearly the diversion of 407 acre-feet would adversely

affect the underlying aquifer and surrounding tributaries. Hence, most of the groundwater

which Tintina will disturb and use for its mining operations is already known to produce

adverse effects and yet will escape state oversight. Further, Tintina’s plan to discharge the

water back into Sheep Creek through its infiltration galleries is nothing more than an

unenforceable promise. The water returned to the aquifer would be deposited into Sheep

Creek and the lower portion of Coon Creek and would do nothing to offset the losses in

Black Butte Creek and the upper portion of Coon Creek.

¶57 Tintina, DNRC, and Amicus raise concerns that any draining of wastewater would

now be subject to permitting, such as dam diversions, stormwater drainage, or the draining

of a field. The situations Tintina and DNRC raise are distinguishable from the situation

present here. In the case of Tintina’s planned mine dewatering, diversion and

impoundment, there is extended impoundment, control, and deliberate replacement of the

water that is being drained. Tintina, itself, will cause the movement and displacement of

huge amounts of water to carry out its mining enterprise. This scheme necessitates much

more control over the water than a simple draining of a field or redirecting of stormwater.

Under the permit requirements of § 85-2-302, MCA, only individuals who appropriate water

or “commence construction” to accomplish a “diversion, impoundment, withdrawal, or

related distribution works” are required to get a permit, unless a statutory exemption applies.

In the absence of such activity, the public is not prevented from removing or redirecting

water when, for example, it rains, a storm system is required, or a stream-restoration project 38 is needed. These examples represent a de minimis use of water. The Legislature

acknowledged that not every diversion, impoundment, or withdrawal of water is significant

enough to require a permit. Among other de minimis ground water appropriations, the

MWUA creates an exception to the permit requirement when, “by means of a well[,] . . .

the appropriation is outside a stream depletion zone, is 35 gallons a minute or less, and does

not exceed 10 acre-feet a year.” Section 85-2-306(3)(a)(iii), MCA. Tintina plans to

appropriate 457 acre-feet per year without going through a permitting process. Tintina’s

plans to impound and treat the water before discharging it to Sheep Creek will potentially

and significantly shift the availability of water in the aquifer in terms of location.

¶58 The explicit exceptions give insight into the kind of diversions and withdrawals that

should be exempt from permitting requirements. In addition to the exempt well provision

contained at § 85-2-306(3)(a)(iii), MCA, §§ 85-2-306(3)(a)(i), (ii), (iv), MCA, establish

additional and similarly limited exceptions for small wells and “developed spring[s].” In

Tubbs, we rejected an attempted expansion of the exemptions contained in § 85-2-306,

MCA, finding it inconsistent with the legislative purpose underlying the statute. Tubbs,

¶ 28 (rejecting a rule that “expanded the narrow exemption to the permitting process” under

§ 85-2-306, MCA, and was accordingly “inconsistent with the stated statutory purpose of

the [MWUA]”). Section 85-2-306, MCA, also equips the Department to establish similar

exceptions through rules adopted under § 85-2-113, MCA. Section 85-2-306(8), MCA.

The DNRC has not adopted a rule pertaining to mine dewatering, only a policy. The

Legislature anticipated the potential need for certain exceptions and routine necessities, 39 such as stormwater drainage and dam diversions, which could easily be exempted from

permitting.

¶59 Further, in contrast to the dewatering loophole created by the Court when it

concludes there is no beneficial use, we have previously held activities such as offering

water for sale and preserving in stream flows for ecological and recreational purposes are

beneficial uses under the MWUA. See Curry v. Pondera Cnty. Canal & Reservoir Co.,

2016 MT 77, ¶ 35, 383 Mont 93, 370 P.3d 440 (providing water for sale and issuing shares

is a beneficial use in and of itself regardless of how much water is actually used by the

shareholders); See Hohenlohe v. State, 2010 MT 203, ¶ 49, 357 Mont. 438, 240 P.3d 628

(instream flow is a beneficial use). These examples show there have been instances when

there is a beneficial use even when the water itself is not being directly applied to a particular

physical task such as irrigation, though it is still being “used” in the sense that it is being

employed for the appropriator’s purpose.

¶60 Several lower courts in Montana have considered a similar issue of dewatering mines

in coal bed methane (CBM) gas production. Just as here, ground water must be pumped to

the surface as part of the methane gas extraction process, so large quantities of ground water

must be pumped out and disposed of for CBM production. Diamond Cross Props., 2008

Mont. Dist. LEXIS 180, at *6. The DNRC in Diamond Cross Props. argued an extraction

of water not put to further beneficial use was not a beneficial use requiring a permit and

pointed to several agency decisions affirming this. Diamond Cross Props., 2008 Mont.

Dist. LEXIS 180, at *15. The court rejected DNRC’s argument, explaining: 40 This Court does not dispute the DNRC’s position in the context of the referenced examples [of DNRC findings that manipulation or movement of ground water has not required a beneficial use]. Indeed, the rulings made by the DNRC in the instances cited are in concert with the exceptions noted by the Legislature that do not constitute waste of water under the [MWUA]. See § 85-2-505(1)(a), (b), (c), and (d). However, the disposition of CBM produced ground water is distinguishable because the quantity of water that is produced in CBM extraction dwarfs the amounts of water disposed of in the examples cited by the DNRC. Additionally, the examples preferred by DNRC were outside a controlled ground water area. These distinctions and the anticipated impacts, real or imagined, of substantial dewatering of aquifers require appropriate State regulatory review to give effect to the mandates of Article IX, § 3(3) and the Legislative policy reflected in the [MWUA].

Diamond Cross Props., 2008 Mont. Dist. LEXIS 180, at *15-16 (emphasis added). The

court ultimately held that “the Montana Constitution and relevant statutes require

management of CBM ground water for beneficial purposes” and that “[d]isposal of CBM

ground water in a manner without any recognized benefit from the water does not pass

constitutional muster.” Diamond Cross Props., 2008 Mont. Dist. LEXIS 180, at *23-24.

The court noted that “[b]oth the CBM and the water resulting from CBM production

represent value to the people, industry, and wildlife in Montana.” Diamond Cross Props.,

2008 Mont. Dist. LEXIS 180, at *24. Thus, the release of CBM water back to surface

waters was deemed a beneficial use. Diamond Cross Props., 2008 Mont. Dist. LEXIS 180,

at *20. Two years later, relying on Diamond Cross Props., another district court found a

Record of Decision by the Montana Oil and Gas Board authorizing groundwater produced

from CBM production was unconstitutional when it allowed the wastewater from CBM

production be placed into evaporation pits without any beneficial use analysis. Tongue &

41 Yellowstone Irrigation Dist. v. Mont. Bd. of Oil & Gas Conservation, No. BDV-2003-579,

2010 Mont. Dist. LEXIS 116, *17-18 (Mont. First Judicial Dist. March 5, 2010).

¶61 A similar conclusion is required here. Although not operating in a controlled ground

water area, Tintina plans to pump millions of gallons of water from an aquifer in a closed

and highly appropriated basin—without any State regulatory review or any mandatory

mitigation measures of the adverse impacts Tintina has acknowledged exist. The magnitude

of the diversion from the Upper Missouri River Basin, which is closed to new appropriations

due to the “crisis” of “over-appropriat[ion],” is alarming. Montana Trout Unlimited v.

Mont. Dep’t of Nat. Res. & Conservation, 2006 MT 72, ¶ 8, 331 Mont. 483, 133 P.3d 224;

§ 85-2-343 MCA. “The Smith River is . . . subject to the Upper Missouri River basin

moratorium[,]” and the DNRC has “recognized the particularly intimate relationship

between groundwater and surface water along the Smith River.” Montana Trout Unlimited,

¶¶ 7-10. In Diamond Cross Props, the lower court understood what this Court refuses to

face; that is, the ground water produced in mining operations dwarfs the amounts of water

that might constitute de minimis exceptions to State regulatory review. While a substantial

challenge to mining production, this Court cannot ignore existing Montana law embodied

in the MWUA or the mandates of Article IX, Section 3(3), of the Montana Constitution.

¶62 The Court claims DNRC’s longstanding Dewatering-Drainage Policy should be

entitled to deference. DNRC’s policy was adopted in 1981 and provides:

The process of dewatering a water source does not require a Permit Application (Form 600), nor the filing of a Completion (Form 602) with the Department where there is no intent to apply any of the water to a beneficial 42 use. . . The mere dewatering of a water source without a beneficial use does not constitute an appropriation; therefore, no water right can be established solely by dewatering.

DNRC Dewatering-Drainage Policy, AR: 1288-1291. To begin, the policy is blatantly

inconsistent with a specific provision of the MWUA and, for that reason alone, is invalid.

Mont. Power Co. v. Mont. Pub. Serv. Comm’n, 2001 MT 102, ¶¶ 25-27, 305 Mont. 260, 26

P.3d 91. The Legislature has defined an “appropriation” as a “use of water for aquifer

recharge or mitigation.” Section 85-2-102(1)(f), MCA. There is no dispute that Tintina

plans to divert the unpermitted 457 acre-feet it does not want back into Sheep’s Creek

through a series of infiltration galleries to recharge the aquifer. Before doing so, however,

it must impound and store the water during the summer months to avoid violating the stricter

non-degradation standard for nitrogen during the summer months. This clearly is an

“appropriation” under the definition provided by § 85-2-102(1)(f), MCA, yet the DNRC’s

policy provides that it is not an appropriation. “When we assess the validity of an agency

rule, we must begin with an examination of the statute itself.” Tubbs, ¶ 20 (citation omitted).

Our goal in interpreting a statute is to implement the objectives the Legislature sought to

achieve. Montana Wildlife Fed’n v. Sager, 190 Mont. 247, 264, 620 P.2d 1189, 1199

(1980). If legislative intent can be determined from the plain meaning of the words used in

the statute, the plain meaning controls and the Court need go no further nor apply any other

means of interpretation. State v. Trull, 2006 MT 119, ¶ 32, 332 Mont. 233, 136 P.3d 551.

Words and phrases used in a statute are to be construed according to the context in which

they are found, and according to their normal usage, unless they have acquired some 43 peculiar or technical meaning. Section 1-2-106, MCA. Section 2-4-305(6), MCA, provides

that “[w]henever by . . . statute a state agency has authority to adopt rules[,] . . . a rule is not

valid or effective unless it is: (a) consistent and not in conflict with the statute; and (b)

reasonably necessary to effectuate the purpose of the statute.” We have also held that

“‘[r]ules adopted by administrative agencies which conflict with statutory requirements or

exceed authority provided by statute, are invalid.’” Tubbs, ¶ 25 (quoting Haney v.

Mahoney, 2001 MT 201, ¶ 6, 306 Mont. 288, 32 P.3d 1254); see also State ex rel. Swart v.

Casne, 172 Mont. 302, 308, 564 P.2d 983, 986 (1977) (holding agency rules void because

a statute cannot be changed by administrative regulations), overruled on other grounds, Trs.

Of Ind. Univ. v. Buxbaum, 2003 MT 97, ¶ 46, 315 Mont. 210, 69 P.3d 663.

¶63 The DNRC policy upon which the Court relies to create a dewatering loophole is

plainly inconsistent with the statute. The policy, which has not been adopted as a rule, is

invalid because it conflicts with the plain language of § 85-2-102(1)(f), MCA, and because

the Legislature, as is its prerogative, has placed a meaning on “appropriation.” The policy

has also placed a meaning, as discussed previously, on “beneficial use” which is clearly

inconsistent with the statutory definitions. Section 85-2-102(5)(e), MCA (“beneficial use”

is a “use of water for aquifer recharge or mitigation”); and § 85-2-102(5)(a), MCA

(“beneficial use” means “use of water for the benefit of the appropriator, . . . including . . .

mining[.]”). In contradiction to the plain language of the statutes, DNRC has determined

that its policy is not to find a beneficial use for aquifer recharge and mitigation, or use of

44 groundwater for purposes of mining. The policy must be invalidated as inconsistent with

the plain language of the statute.

¶64 DNRC has upheld its policy in two water permitting cases, Kenyon-Noble and CR

Kendall. In the Matter of the Application for Beneficial Water Use Permit No. 24591-g41H

by Kenyon-Noble Ready Mix (1981) (Kenyon-Noble); In re Applications for Beneficial

Water Use Permits 41T-104524, 41T-104526, 41T-104527 by CR Kendall (1999) (CR

Kendall). However, the DNRC’s dewatering loophole has never been formalized by

regulation. Thus, it is important to note that this policy was not subject to

notice-and-comment rulemaking and went into effect without any public input. Here, the

Court’s analysis and decision is based on DNRC policy and on two agency decisions that

issued permits pursuant to that policy. The Court relies on the doctrine of agency deference

when the agency has never adopted a rule. However, because the DNRC has, for nearly a

half century, failed to formalize its interpretation through rule-making, the DNRC’s

interpretation does not constitute the kind of agency action that could merit any deference

by this Court, especially since it is inconsistent with the purpose and text of the Act to

“comprehensively adjudicate existing water rights and regulate water use,” § 85-2-101(6),

MCA, and “to provide for the wise utilization, development, and conservation of the waters

of this state for the maximum benefit of its people with the least possible degradation of the

natural aquatic ecosystems,” § 85-2-101(3), MCA. Long standing interpretations are not

binding on courts, and they must yield if there is a judicial determination that the

construction is inconsistent with the legislative purpose and intent underlying the statute. 45 Mont. Power Co., ¶ 25. In this case, even assuming a policy which, for over forty years was

never formalized into a rule, is entitled to “respectful consideration,” Mont. Power Co.,

¶ 25, this Court should not sanction a DNRC policy that creates a gaping loophole in the

MWUA and undermines the statute’s purpose of providing a comprehensive system to

regulate water use and provide for the wise utilization, development, and conservation of

Montana’s waters. Here, the text of the MWUA defines water appropriated for mining as a

beneficial use, § 85-2-102(5)(a), MCA, and not a “waste” of water, § 85-2-505(1)(c), MCA.

¶65 The clear purpose of the MWUA is to protect senior water rights and ensure new

appropriations do not negatively impact senior rights. Section 85-2-101, MCA. If, because

of agency policy, mine dewatering is not considered a beneficial use, then potentially

unlimited amounts of groundwater can be withdrawn––even from closed basins––and

discharged without any consideration and state oversight of how it will affect senior water

rights holders or Montana’s waters. Tintina’s permit for the 350 acre-feet they do plan to

use in mining operations included buying out senior water rights and providing mitigation

measures to compensate for the withdrawal of water from this area which will affect water

availability for other senior rights. Under DNRC’s current interpretation, Tintina will be

allowed to withdraw an additional 457 acre-feet of water a year without evaluating the

impact of such a withdrawal or engaging in any mitigation efforts. This presents a

significant potential gap in regulating water use and ensuring protection of senior water

rights, all of which is premised upon an agency policy never adopted formally into a rule.

46 “Uncontrolled development of a valuable natural resource contradicts the spirit and purpose

underlying the Water Use Act.” Carey, 211 Mont. at 96, 685 P.2d at 339.

¶66 The underlying premise relied on by this Court that dewatering is not a beneficial

use has huge ripple effects to the structure of the MWUA. For example, as previously

discussed, Tintina is required to hold water for the summer months to avoid violating the

stricter summer non-degradation standard for nitrogen, meaning any groundwater extracted

during that time will be held in storage by Tintina and not released back to Sheep Creek for

a full three months. Substantial amounts of water will evaporate and a substantially large

portion of Tintina’s unpermitted diversion would never be returned to the ground. This

could present significant issues in water availability during a time when water is most

scarce. Here, there is both the beneficial use of impoundment and a consumptive use of

evaporation. See Admin. R. M. 36.12.101(14) (2024) (defining “[c]onsumptive use” to

include evaporation).

¶67 Tintina’s release of water into Sheep Creek constitutes yet another appropriation.

Listed clearly as one of the definitions for beneficial use is “a use of water for aquifer

recharge or mitigation.” Section 85-2-102(5)(e), MCA. Aquifer recharge is defined as

“either the controlled subsurface addition of water directly to the aquifer or controlled

application of water to the ground surface for the purpose of replenishing the aquifer to

offset adverse effects resulting from net depletion of surface water.” Section 85-2-102(3),

MCA. Tintina’s groundwater model predicted a 157 gallons per minute decrease in

groundwater discharge to Sheep Creek in the absence of the mine’s infiltration galleries. 47 As the company’s recharging system would thus partially compensate for the loss of base

flow in Sheep Creek caused by mine dewatering, all the mine’s unpermitted diversion would

serve a beneficial purpose at the mine site. Although all these beneficial uses are

specifically defined and addressed in the MWUA, the Court’s faulty foundational premise

that dewatering is not a beneficial use because Tintina does not want the water, an argument

rooted in “appropriator intent,” together with its misplaced and erroneous reliance on a

DNRC policy, is not only wrong, but will have huge ramifications for the water supply of

Sheep Creek, its surrounding tributaries, the underlying aquifer, and other Montana waters

impacted by mining.

¶68 Although not necessary to look at other jurisdictions given the plain language and

text of the MWUA, prior appropriation jurisdictions that have considered the issue of mine

dewatering have concluded that mine dewatering is a beneficial use or have enacted

statutory mechanisms ensuring state oversight and protection of senior appropriators. The

Supreme Court of Colorado has held that withdrawal of water for the purposes of carrying

out coalbed methane gas extraction was a beneficial use and thus subject to permitting.

Vance v. Wolfe, 205 P.3d 1165, 1173 (Colo. 2009). The court reasoned:

Under the language of the [Water Right and Determination Act of 1969 (1969 Act)], the [extraction of coalbed methane (CBM)] process “uses” water—by extracting it from the ground and storing it in tanks—to “accomplish” a particular “purpose”—the release of methane gas. The extraction of water to facilitate CBM production is therefore a “beneficial use” as defined in the 1969 Act. We reject the [Colorado State Engineers’ and BP America Production Company’s] argument that water used in CBM production is merely a nuisance rather than a “beneficial use.” On the contrary, the use of water in CBM production is an integral part of the CBM process itself. The 48 presence and subsequent controlled extraction of the water makes the capture of methane gas possible. As our precedent in the gravel cases2 makes clear, the fact that the water used during the CBM process may become a nuisance after it has been extracted from the ground and stored in above-ground tanks (that is, after it has been beneficially used) does not prevent a finding that the water is put to a beneficial use.

Vance, 205 P.3d at 1167. Dewatering is also a beneficial use in Nevada. Eureka Cnty v.

Papa, 1999 Nev. Dist. LEXIS 39, *9 (Nev. Dist. Ct. Nov. 16, 1999). New Mexico enacted

the Mine Dewatering Act to deal with this particular issue, which provides “[m]ine

dewatering is neither an appropriation of water nor waste.” N.M. Stat. Ann. § 72-12A-5.

No one in New Mexico can engage in mine dewatering in a declared underground basin

without a mine dewatering permit, and in issuing a permit the state engineer must consider

the potential impacts on the aquifer affected and can require a plan of replacement of the

permit applicant. N.M. Stat. Ann. §§ 72-12A-7, -8, -9. Arizona requires a dewatering

permit administered by the Department of Water Resources and the statute also specifies

how the water is to be used in order of priority after extraction. Ariz. Rev. Stat. § 45-513.

In Alaska, a temporary water use authorization or water right from the Water Resources

Section is required for water uses over 500 gallons per day, even non-consumptive uses.

Permitting Large Mine Projects in Alaska, Department of Natural Resources,

https://dnr.alaska.gov/mlw/mining/large-mines/pdf/Permitting-Large-Projects-in-Alaska-

2 Three Bells Ranch Assocs. v. Cache La Poudre Water Users Ass’n, 758 P.2d 164 (Colo. 1988) (Owner of gravel pit was required to obtain well permits in order to conduct mining activities); Zigan Sand & Gravel, Inc. v. Cache La Poudre Water Users Ass’n, 758 P.2d 175 (Colo. 1988) (Gravel pit owner was required to replace evaporation losses). 49 2024.pdf [https://perma.cc/F6YQ-DYPJ]; Temporary Water Use Authorization, Alaska

Department of Natural Resources, https://dnr.alaska.gov/mlw/water/twua/

[https://perma.cc/KYY6-DBQS]. Thus, states have either found mine dewatering a

beneficial use or enacted legislation that provided a method for state oversight and a

permitting process.

¶69 Unfortunately, the Court inadequately assesses the dewatering loophole, the

MWUA’s goals and objectives, and the MWUA’s purpose in implementing the relevant

provisions of the Montana Constitution. Instead, the Court tethers its analysis to two

unpublished agency decisions interpreting what the agency believes is “beneficial use,”

despite the clear statutory language defining beneficial use to the contrary. Opinion,

¶¶ 25-32. Reliance on two agency decisions and a policy that has never been formally made

into a rule constitutes nearly the Court’s entire opinion. We owe a considered analysis to

the people of this State concerning this important resource.

¶70 More importantly, the DNRC and this Court’s creation of a dewatering exemption is

a fundamental mischaracterization of the MWUA. With the MWUA, the Legislature

charged the Department with implementing a comprehensive system for “the

administration, control, and regulation” of all water belonging to the people of Montana to

ensure the “protection, preservation, and future beneficial use . . . of Montana’s water for

the state and its citizens[.]” Section 85-2-101(2). Section 85-2-101(6), MCA, notes the

Legislature’s “intent . . . that the state, to fulfill its constitutional duties . . . comprehensively

adjudicate existing water rights and regulate water use” in Montana. Rather than 50 recognizing the broad reach of the MWUA’s protections consistent with Tubbs and our

precedent, the Court affirms the Department’s dewatering loophole. All of this done under

the misguided premise that water pumped from the wells Tintina drills to access its copper

deposits—water from the closed Missouri River Basin’s aquifer—is not being “used” by

Tintina in its mining operations and therefore is not a “beneficial use.” Nowhere in the

MWUA does the Legislature bifurcate “use” from “beneficial use.” The clear language of

the MWUA defines a beneficial use as “a use of water for the benefit of the

appropriator . . . in mining.” Section 85-2-102, MCA. Without any oversight whatsoever,

nothing prevents a mine from depleting waterways through inefficient recharge, rerouting

waterways and aquatic life, or simply impounding water and allowing it to evaporate. The

Court’s decision will allow unlimited groundwater pumping at every mine in this state, even

in closed basins: a decision that defies the clear commands of the MWUA and which is

disastrous to the protection of Montana’s waters––all of which is achieved through a twisted

analysis of beneficial use, in contravention to the clear definition provided by the

Legislature.

¶71 It cannot seriously be maintained that Tintina’s “tunnels” or “wells,” which will

extricate 150 million gallons of water per year for the benefit of a copper mine, should

escape state oversight. This is particularly astounding given the disregard of the Court that

the removal of 150 million gallons per year of water is coming from a closed basin just

several miles north of one of this Nation’s most pristine and iconic waterways––the Smith.

Because of the DNRC’s “policy” and this Court’s misguided deference to its policy, the 51 Court has needlessly created a glaring loophole in state oversight of Montana waters, which

will prove hugely impactful to Montana’s future. Montana’s waters belong to its citizens.

The DNRC––and this Court––are obligated to protect this resource. When we defer to

agency decision-making which is inconsistent with the MWUA and fail to correct the

agency’s interpretation, we fail in our obligation to protect Montana citizens and our natural

resources.

¶72 I deeply regret and am saddened by the Court’s decision today. The MWUA

provides clear guidance on how to address mine dewatering issues. The MWUA does not

prevent mining; rather, it instructs on how the interests at stake are to be weighed within the

parameters of existing constitutional enactments, senior water rights, and beneficial use.

The Court refuses to follow the plain language of the MWUA’s provisions and justifies its

deviations by pointing to an agency policy, never formally made a rule, and two decisions

in which the agency applied its policy. In my opinion, our decision will cause a great

injustice and will have huge impacts on Montana’s waters and future generations to come.

/S/ LAURIE McKINNON

Justice Ingrid Gustafson joins in the dissenting Opinion of Justice Laurie McKinnon.

/S/ INGRID GUSTAFSON