The US Supreme Court keeps on giving and giving. Last week, the Court tossed yet another bone to corporations and dealt another blow to environmentalists. The issue in PPL Montana LLC v Montana was who owns the riverbed beneath 10 hydroelectric dams sitting on three Montana rivers. This may seem like a snoozer, but given the latest grabs for the public’s water by private corporations, it has huge implications for the American people, and especially the people of North Carolina.
Historically, the titles to riverbeds beneath commercially navigable waterways go to state governments upon statehood. Non-navigable riverbed ownership stays with the federal government.
So Who Owns the Rivers?
The central question in the Supreme Court case was whether or not a river should be viewed as navigable in its entirety, or whether it should be looked at section by section. The case stems from a 2003 lawsuit filed by parents of Montana schoolchildren, tired of seeing continued budget cuts to education. The parents’ lawsuit claimed that the riverbeds under and around privately owned hydroelectric dams is state land, subject to use fees paid into a state trust that could be used to provide tens of millions of dollars in funding for public schools. The State of Montana ultimately began charging back rent and sent a bill to PPL Montana for $40 million for the use of the three rivers over several decades. PPL Montana argued that sections of the river were not navigable and therefore don’t belong to the State negating any rents due.
Montana argued that since the majority of the river was routinely used for commerce at statehood, then the entire river should be treated as a navigable river. Their argument was supported by previous Supreme Court rulings including The Montello ruling in 1874. In that case, the Court found Wisconsin‘s Fox River had been navigable in fact in its natural state even though several rapids and falls obstructed the natural flow of the river, necessitating portages. The Court rejected a lower court’s decision against navigability, which was based chiefly on the ground that there were, before the river was improved, obstructions to an unbroken navigation. The Court acknowledged that these obstructions made navigation difficult, but noted that even with these difficulties commerce was successfully carried on.
Justice Anthony Kennedy said in his opinion for the Court that the State Court should have taken a segment-by-segment approach, rather than looking at the three Montana rivers in their entireties. He pointed to an 1891 U.S. Army Corps of Engineers report, produced by PPL, that said the Clark Fork near Thompson Falls “is a mountain torrential stream, full of rocks, rapids and falls ... utterly unnavigable and incapable of being made navigable, except at enormous cost.” To understand the complexity of this, we could look at the mighty Mississippi River. Unfortunately, to the Army Corps of Engineers, when you have a hammer everything looks like a nail. For example, few would argue that the Mississippi is not, and has not always been, a navigable river. The Mississippi has served as a major river of commerce since as early as 900 AD when Native Americans settled along the river. Yet, the US Army Corps of Engineers conducted a study of the Upper Mississippi in 1829, and concluded that it would be “useable 8 months a year” only if channels were blasted through the Des Moines and Rock Island Rapids. Does this mean that the entire upper Mississippi River is not to be viewed as a navigable river, and is up for grabs?
The Supremes Throw The Case Back to the States To Decide
The Court threw the case back down to the State and asked Montana to determine section-by-section which parts of the rivers were navigable at statehood and which were not and then charge rents accordingly.
On the one hand, the US Supreme Court’s decision allows PPl Montana to continue to contest the state’s claim of ownership of the riverbed under its dams and requests for back rent. On the other hand, the ruling seems to leave to the individual States the tasks of determining which segments are State-owned and which are not. The Montana Governor believes that the State will still be able to collect 85 percent of the rents previously charged – some $34 million.
More disturbing however is a sentence or two that Justice Kennedy included – almost as an afterthought – surmising that since the State of Montana had not previously charged rent to the power companies for decades, it was tantamount to acknowledging that the State did not really own the riverbed. This implies the possibility that all over the country, states that have not previously realized they could have been charging rent for the use of the public’s natural resources may have already inadvertently handed them over to squatters. Some states are already scrambling to inventory their natural resource assets and make sure they have claim to them lest private interests try to seize them. North Carolina should do the same, especially in regards to Alcoa's attempt to gain control of the Yadkin River for another 50 years.
The States Get the Final Word – For Now
So, as it currently stands, state courts around the nation should have the final word in determining the scope and proper interpretation of the ownership of public trusts -- the rivers -- within their borders. And, given the U.S. Supreme Court general hostility to environmental principles and fondness for corporate "persons" in recent years, that’s probably not a bad thing.
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