BEFORE THE DEPARTMENT OF NATURAL RESOURCES
AND CONSERVATION OF THE STATE OF MONTANA
In the matter of the Petition of the Rippling Woods Homeowners Association, et al., for an administrative declaratory ruling upon the application of section 85-2-302, MCA, as applied to the reclamation plan of Opencut Mining Permit No. 2949, Moudy Pit Site, Ravalli County, Montana
ORDER DENYING PETITION FOR DECLARATORY RULING
1. On June 9, 2020, the above-named Petitioners filed a Petition for Declaratory Ruling with the Department of Natural Resources and Conservation's (Department or DNRC) Water Resources Division Administrator, pursuant to 2-4-501, MCA (Petition).
2. Petitioners are landowners and homeowners who reside near a proposed gravel pit in Ravalli County, Montana. Petitioners seek a declaratory ruling that the statutory provisions of the Montana Water Use Act, Montana Code Annotated (MCA) 85-2-101, et seq., require that certain "reclamation ponds" associated with Opencut Mining Permit No. 2949 issued by the Montana Department of Environmental Quality (DEQ) under the Opencut Mining Act, 82-4-401, et seq., MCA, require a beneficial water use permit from the Department. Petition, pp. 1-2.
3. On October 30, 2019, DEQ issued Opencut Mining Permit No. 2949 to Wayne Moudy (Opencut Permit Applicant) to conduct gravel mining operations at the site. Petitioners have appealed DEQ's decision to issue Opencut Mining Permit No. 2949 to the Board of Environmental Review, which is conducting a contested case proceeding. Petition, p. 2.
4. The Montana Administrative Procedure Act (MAPA) requires each agency to "provide by rule for the filing and prompt disposition of petitions for declaratory rulings as to the applicability of any statutory provision or of any rule or order of the agency. A copy of a declaratory ruling must be filed with the secretary of state for publication in the register. A declaratory ruling or the refusal to issue such a ruling shall be subject to judicial review in the same manner as decisions or orders in contested cases." 2-4-501, MCA.
5. The Montana Attorney General has adopted model rules to implement this statutory directive at ARM 1.3.226 through 1.3.229. The Department has adopted the Attorney General's model rules. ARM 36.2.101. They include:
ARM 1.3.226 DECLARATORY RULINGS, INTRODUCTION.
(1) A party may seek a declaratory ruling from the agency when doubt exists as to how a statute or rule administered by an agency affects the party's legal rights.
ARM 1.3.227 DECLARATORY RULINGS, CONTENT OF PETITION. (1) A petition for declaratory ruling must be typewritten or printed.
(2) The petition must include:
(a) the name and address of petitioner;
(b) a detailed statement of the facts upon which petitioner requests the agency to base its declaratory ruling;
(c) sufficient facts to show that petitioner will be affected by the requested ruling;
(d) the rule or statute for which petitioner seeks a declaratory ruling;
(e) the questions presented;
(f) propositions of law asserted by petitioner;
(g) the specific relief requested; and
(h) the name and address of any person known by petitioner to be interested in the requested declaratory ruling.
. . .
(4) The record in a declaratory ruling proceeding shall include:
(a) the petition;
(b) a statement of matters officially noticed;
(c) if for good cause shown the agency has held hearings on the petition, a stenographic record of the proceedings when demanded by a party; and
(d) the ruling.
ARM 1.3.228 DECLARATORY RULINGS, DENIAL OF PETITION. (1) If the agency denies a petition for declaratory ruling, the agency must mail a copy of the order denying the petition to all persons named in the petition.
(2) An order denying a petition must include a statement of the grounds for denial.
ARM 1.3.229 DECLARATORY RULINGS, EFFECT. (1) A declaratory ruling is binding between the agency and the petitioner concerning the set of facts presented in the petition.
(2) A declaratory ruling or notice of refusal to issue a ruling is a final agency decision subject to judicial review in the same manner as decisions or orders in contested cases.
6. One commentator has observed the following about the purpose of MAPA's declaratory ruling provision:
This provision allows a person to question whether a MAPA agency would potentially challenge an action of the person or entity, or to determine the potential entitlement of any government benefit which the agency may grant or withhold. Consequently, if a client's rights and obligations under agency law are unclear, counsel need only file an action for declaratory judgment with the agency to obtain a ruling. This will answer the question of how an agency would respond before the client acts. An agency's declaratory ruling is binding between the agency and the petitioner. The ruling, or agency's failure to rule, is subject to judicial review in the same manner as a contested case.
William L. Corbett, Montana Administrative Law Practice: 41 Years After the Enactment of the Montana Administrative Procedure Act, 73 Mont. L. Rev. 339, 369 (2012).
7. Name and address of the Petitioners. The Petitioners are: Jennifer and Randall Lint; Nancy Jacobsen; Rippling Woods Homeowners Association; Sarah Slater; Mark and Lisa van Keulen; Anne Lambert; Gretchen Langton; Kurt Vause; Kathleen Meyer and Patrick McCarron; Annette McDonald; and Brian Langton. Petitioners live in Victor, Ravalli County, Montana, and are represented by counsel with the Bloomquist Law Firm, 3355 Colton Drive, Suite A, Helena, MT 59602. Petition, pp. 1-2.
8. Statement of Facts. Petitioners allege the following facts in support of their Petition:
a. The Petitioners contend that the reclamation plan approved by DEQ as part of Opencut Permit No. 2949 is a beneficial use of water and requires the Opencut Permit Applicant to apply to the Department for a water use permit. The Petition includes a description of the reclamation plan, which Petitioners allege amounts to the creation of three "scenic" ponds adjacent to a chronically dewatered stream in the Bitterroot subbasin closure area (Reclamation Plan). Petition, pp. 2-5.
b. As part of the permitting process, the Opencut Permit Applicant filed a "Water Resources Assessment" with DEQ which provided: "no de-watering will occur or will be necessary to extract the sand and gravel reserves within the permit areas; and the year-round pond will not be used for any beneficial water uses regulated by the DNRC; therefore, no adverse effects on nearby water sources or groundwater well rights are expected." Petition, Ex. 3, Water Resources Assessment, p. 5. Based on this information, DEQ approved the application and the proposed reclamation ponds under the approved reclamation plan. Petition, p. 3, Ex. 1.
c. Petitioners contend that the ponds will consume water in a closed basin, resulting in adverse effect to their water rights. The Petition asserts that DEQ's determination that the post mining reclamation pits do not constitute a beneficial use of water cannot be reconciled with the Water Use Act. Petition, p. 10.
9. Facts to show that Petitioners will be affected by the requested ruling. Petitioners allege the following facts to show they will be affected by the requested ruling:
a. Petitioners have the right to protect their wells or surface water rights which will be adversely affected by the proposed Reclamation Plan. Petition, p. 4.
b. DEQ's approval of the Reclamation Plan without requiring the Opencut Permit Applicant to first secure a beneficial water use permit under the terms of the Montana Water Use Act administered by DNRC does not protect Petitioners interests in the ground and surface water resources, and the Reclamation Plan will not be considered under the applicable laws related to the appropriation of water. Petition, p. 5.
c. A declaratory ruling by DNRC on the questions presented will assure review of the Reclamation Plan will include compliance with the beneficial water use permitting requirements of the Water Use Act, as required by law. Id.
10. The rule or statute for which Petitioners seek a declaratory ruling. Petitioners reference the following provisions of the Montana Water Use Act and the Department's administrative rules implementing the Montana Water Use Act on which they seek a declaratory ruling from the Department:
85-2-102, MCA. Definitions:
(1) "Appropriate" or "appropriation" means: (a) to divert, impound, or withdraw, including by stock for stock water, a quantity of water for a beneficial use; . . .
(5) "Beneficial use", unless otherwise provided, means: (a) a use of water for the benefit of the appropriator, other persons, or the public, including but not limited to agricultural, stock water, domestic, fish and wildlife, industrial, irrigation, mining, municipal, power, and recreational uses; . . . [and]
(27) "Waste" means 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.
85-2-301, MCA. Right to appropriate - recognition and confirmation of permits issued after July 1, 1973. (1) After July l, 1973, a person may not appropriate water except as provided in this chapter. A person may only appropriate water for a beneficial use.
85-2-302, MCA. Application for permit or change in appropriation right. (1) Except as provided in 85-2-306 and 85-2-369, a person may not appropriate water or commence construction of diversion, impoundment, withdrawal, or related distribution works unless the person applies for and receives a permit or an authorization for a change in appropriation right from the department.
85-2-307, MCA. Notice of Application for permit or change in appropriation right.
85-2-308, MCA. Application for permit or change in appropriation right. Objections.
85-2-311, MCA. Criteria for issuance of permit. (1) ...Except as provided in subsections (3) and (4), the department shall issue a permit if the applicant proves by a preponderance of the evidence that the following criteria are met: [(a) through (g) omitted].
85-2-344, MCA. Bitterroot River subbasin temporary closure-definitions - exceptions.
ARM 36.12.101 Definitions:
(14) "Consumptive use" means the annual volume of water used for a beneficial purpose, such as water transpired by growing vegetation, evaporated from soils or water surfaces, or incorporated into products that does not return to ground or surface water.
(51) "Pit, pit-dam, or pond" means a body of water that is created by man-made means, which stores water for beneficial use.
(61) "Reservoir" means a pond, pit, or pit-dam, created by man-made means that impounds and stores water.
ARM 36.12.1701 Filing a Permit Application. (1) An application for beneficial water use permit (Form No. 600) must be filed when an applicant desires to use: (a) groundwater that exceeds 35 gallons per minute or a volume of ten acre-feet . . .
11. Questions Presented. The Petition seeks a declaratory ruling on the following questions:
Whether the year-round reclamation ponds which will impound groundwater as part of the post-mining reclamation plan and use of the property mined under Opencut #2949, requires a beneficial water use permit under the Montana Water Use Act and the administrative rules of DNRC?
Petition, p. 6. In the alternative, the Petition presents the following question:
If the impoundment and use of groundwater in the proposed ponds under the Reclamation Plan for Opencut #2949 is not a beneficial use of water under the Water Use Act requiring a beneficial use permit, do the proposed reclamation ponds authorized by the reclamation plan constitute a "waste" of water prohibited under the Water Use Act?
Petition, p. 7.
12. Propositions of law asserted by Petitioners. Petitioners make the following propositions of law in support of their requested ruling:
a. The reclamation ponds are beneficial uses of water according to the above-referenced provisions of the Water Use Act. Petition, pp. 7-8.
b. Under the Department's internal guidance regarding whether reclamation ponds are beneficial uses of water, the ponds under Opencut Mining Permit No. 2949 require a beneficial water use permit from the Department. Petition, p. 8.
c. The reclamation ponds are appropriations of water for a beneficial use. Petition, pp. 8-9.
d. If the reclamation ponds are not beneficial uses of water, the loss of water caused by the ponds is a "waste" of water prohibited by the Water Use Act. Petition, p. 9.
e. DEQ's interpretation that the reclamation ponds do not require a beneficial water use permit cannot be reconciled with the Water Use Act. The requested declaratory ruling by the Department on the Reclamation Plan for Opencut Mining Permit No. 2949 is necessary to determine whether the Reclamation Plan is viable. Petition, p. 10.
13. Relief requested. Petitioners request the following relief from the Department: "a declaratory ruling that the groundwater to be impounded within the ponds under the Opencut [Mining Permit No.] 2949 reclamation plan is either (1) a beneficial use of water requiring a beneficial use permit from DNRC; or (2) a waste of water which is unlawful under the Water Use Act." Petition, p. 10.
14. The name and address of any person known by Petitioners to be interested in the requested declaratory ruling. Petitioners state that other nearby water users who rely on Big Creek water or water from the ditches near the Opencut Mining Permit No. 2949 area may be interested in the requested declaratory ruling. Petition, p. 11.
15. Petitioners contend that DEQ's approval of the permit and associated reclamation plan cannot be reconciled with the Water Use Act, and the Department's issuance of the requested declaratory ruling will "assure review of the Reclamation Plan will include compliance with the beneficial water use permitting requirements of the Water Use Act, as required by law." Petition, p. 5.
16. The Opencut Act requires an applicant to demonstrate in its plan of operations for a new opencut permit: "that surface water and ground water will be given appropriate protection, consistent with state law, from deterioration of water quality and quantity that may arise as a result of the opencut operation . . . " 82-4-434(2)(l), MCA.
17. DEQ's administrative rules require: "in the event that the proposed opencut operation involves or may result in the diversion, capture, or use of water, acknowledgement that the operator consulted with the regional office of the Department of Natural Resources and Conservation, Water Resources Division, concerning the requirements to obtain water rights and possible adverse impacts to existing water rights . . . " ARM 17.24.218(1)(g)(v).
18. The Department has discretion when deciding whether to issue a requested declaratory ruling. In exercising its discretion, the Department must take into account the underlying purpose of declaratory rulings within the context of its jurisdiction.
19. MAPA provides discretion to an agency when deciding whether to issue a requested declaratory ruling, and an agency may decline to issue a ruling requested. 2-4-501, MCA; ARM 1.3.228. In the exercise of its discretion, the Department must keep in mind the purpose of declaratory rulings. Fundamentally, declaratory rulings from an agency are available for a party "when doubt exists as to how a statute or rule administered by an agency affects the party's legal rights." ARM 1.3.226.
20. While little guidance exists in statute or Montana case law regarding the proper scope of a declaratory ruling, the Department agrees with the interpretation presented above that 2-4-501, MCA, "allows a person to question whether a MAPA agency would potentially challenge an action of the person or entity, or to determine the potential entitlement of any government benefit which the agency may grant or withhold." Corbett, 73 Mont. L. Rev. at 369.
21. The Petition at issue in this matter is unusual in that it seeks a declaratory ruling that will affect the legal rights of the Opencut Permit Applicant, who is not a petitioner. The Department is unaware of any legal authority that would authorize it to join a non-petitioner to a declaratory ruling proceeding. A declaratory ruling is typically an available avenue for a party who is uncertain about how an agency will react to an action to be undertaken by the petitioning party to get some clarity prior to acting. That is why a "declaratory ruling is binding between the agency and the petitioner concerning the set of facts presented in the petition." ARM 1.3.229.
22. Here, if the Opencut Permit Applicant were the petitioner, it would be appropriate for the Department to issue a declaratory ruling on whether the reclamation plan includes a beneficial use of water requiring a permit. However, here if the Department chooses to issue the requested declaratory ruling, it will only be "binding" between the Petitioners and the DNRC on the particular facts presented in the Petition, which would have no binding effect on the Opencut Permit Applicant at all. Further, a declaratory ruling process does not contemplate an evidentiary hearing or additional fact finding by the agency.
23. The Petition resembles a preemptive water use complaint in which the Department could exercise its authority to pursue an enforcement action or an injunction for illegal water use pursuant to 85-2-114, MCA, rather than a proper petition for a declaratory ruling. Further, pursuant to 85-2-114(9), MCA, Petitioners may also seek relief, including injunctive relief, in district court to prevent the gravel pit with the approved reclamation plan. The declaratory ruling requested would do nothing to define Petitioners' legal rights under those statutory provisions.
24. Ultimately, a declaratory ruling of the Department on the Petition will affect a non-petitioner's legal rights. Any legal rights the Petitioners may have to challenge DEQ's issuance of Opencut Permit No. 2949 are not affected by the Department's refusal to issue the requested declaratory ruling. Finally, any legal rights Petitioners may have to challenge the reclamation ponds associated with the Reclamation Plan for violation of the Water Use Act under an appropriate action are not affected by the Department's refusal to issue the requested declaratory ruling.
For the reasons provided herein, the Department declines to issue a declaratory ruling on the questions presented in the Petition.
Pursuant to 2-4-501, MCA, a copy of this declaratory ruling must be filed with the secretary of state for publication in the register. A declaratory ruling or the refusal to issue such a ruling shall be subject to judicial review in the same manner as decisions or orders in contested cases.
DATED this 15th day of July 2020.
By: /s/ Jan Langel
DNRC Water Resources Division Administrator
CERTIFICATE OF SERVICE
I certify that on July 15, 2020, a true and correct copy of the foregoing Order Denying Petition for Declaratory Ruling was served on the following:
By U.S. mail and by email:
John E. Bloomquist
Betsy R. Story
BLOOMQUIST LAW FIRM, P.C.
3355 Colton Drive, Suite A
Helena, MT 59602
Attorneys for Petitioners
Montana Department of Environmental Quality
Sarah Clerget, Hearing Examiner
Aleisha Solem, Hearing Assistant
Montana Board of Environmental Review
Agency Legal Services Bureau
email@example.com and firstname.lastname@example.org
Montana Department of Environmental Quality
Montana Department of Environmental Quality
email@example.com and firstname.lastname@example.org
By: /s/ Jamie Price