WATER: BLM entitled to proceed under Montana law to appropriate water in its reservoirs for use by grazing permittees and others… Ritter affirmed.

BLM filed 6 claims related to 5 reservoirs based on Montana law and a natural pothole (Pothole Lake) based on a federal reservation of lands. The sources are wholly or partly on federal land, and BLM claims the right to use each for stockwatering by its grazing permittees and wildlife. The Water Master recommended summary judgment for BLM on each claim. Stockowners objected, stating the issue as whether BLM “under applicable state and federal laws, actually made appropriations for beneficial use.” They contend that BLM did not perfect any rights and sought an order transferring all the claimed BLM rights to the current grazing permittee and terminating all wildlife claims. Judge Ritter upheld the Master’s recommendation in most respects. Objectors appeal.

Ritter did not err in concluding that BLM holds stockwater rights under Montana law in reservoirs on federal land, for the use of grazing permittees. Under the law established in Bailey (Mont. 1912), relied on by both parties, there is no “public service corporation rule,” but only recognition of a public policy of the State to allow and even encourage individuals and entities to appropriate water and make it available for use by others. We reject Objectors’ argument that BLM cannot appropriate water because it does not separately charge grazers for use of the reservoir water. As long as the water is made available for sale, rental, or distribution or disposal to others, id., it is a valid appropriation under Bailey. Montana law “clearly shows a steadfast commitment to recognizing the ability to appropriate water for its ultimate use by a third party.” Curry (Mont. 2016). Contrary to the Dissent’s argument that BLM has never put water to a beneficial use, Art. IX §3(2) states: “The use of all water that is now or may hereafter be appropriated for sale, rent, distribution, or other beneficial use … and the sites for reservoirs necessary for collecting and storing water shall be held to be a public use.” Nor can Objectors’ argument that BLM’s claims are invalid because it “simply facilitated use of water already appropriated” by their ancestral free grazers be supported under Montana law. It has long been the common law and then statutory law in Montana that multiple appropriators can claim rights from the same source and that the first in time has the best right. It is well known that there have been so many appropriators on some sources that the waters have become “over appropriated.” Trout Unlimited (Mont. 2006) While that creates its own issues, it does not mean that the one that made the first use acquired the right to exclude any others from claiming water from the same source.

Ritter correctly concluded that Pothole Lake was reserved by an act of Congress in 1926 and that nothing raised by Objectors supports any change in that status.

McGrath, Cotter, Wheat, Baker, Shea, Rice.

McKinnon dissented: The Majority’s conclusions that Stockowners’ claims are separate from BLM’s claims ignore that they share the same beneficial use: BLM’s claims are premised on actual beneficial use of water consumed by Stockowners’ cattle. To conclude that BLM has perfected its claim, which may only be characterized as overlapping Stockowners’ claim, the Majority again revisits Bailey and further erodes the long-established principle in western water law that application of water to beneficial use is essential to a completed appropriation. By concluding that BLM has a right in the samewater which has been placed to an actual beneficial use for over a century by Stockowners, the Majority distorts Bailey, fails to address well-reasoned Montana and federal law, and upends the touchstone of the prior appropriation doctrine.

Claimant: BLM; Objectors: Barthelmess Ranch et al, DA 15-533, argued 9/23/16, decided 12/28/16.

John Cruden, Elizabeth Peterson, John Smeltzer, James Dubois, and Anna Stimmel (USDOJ); John Bloomquist & Rachel Meredith (Bloomuist Law Firm), Helena, for Objectors.