Montana Trout Unlimited v. Montana Department of Natural Resources and Conservation

In 1993, Montana enacted a moratorium on new water-rights applications in certain over-appropriated basins. The legislature issued a basin closure for the upper Missouri River basin, which encompassed the drainage area of the Missouri River and its tributaries above Morony Dam, including the Smith River (basin-closure law). The basin-closure law provided that the Montana Department of Natural Resources and Conservation (DNRC) (defendant) may not process or grant water-appropriation permits within the upper Missouri River basin until the final decrees were issued. There was an exception to the general ban for new groundwater applications. Because some groundwater bears a close relationship with surface water, the basin-closure law forbade the processing of new applications for groundwater that were “immediately or directly connected” to the upper Missouri River basin’s surface water. The legislature did not define “immediately or directly connected.” DNRC, as the agency in charge of implementing the basin-closure law, reviewed groundwater applications. The DNRC interpreted the “immediately or directly connected” language of the basin-closure law to mean that a groundwater application could not be approved for a well-induced infiltration. Infiltration occurred when a well pulled surface water directly from a stream or other source of surface water. The DNRC did not take into account impacts to surface flow caused by the pre-stream capture of tributary groundwater. Montana Trout Unlimited (Trout Unlimited) (plaintiff) brought suit in district court against the DNRC. Trout Unlimited argued that the DNRC had adopted an inappropriately narrow interpretation of the “immediately or directly connected” language of the basin-closure law by considering groundwater to have an immediate or direct connection to surface water only if it induced infiltration. Trout Unlimited argued that DNRC failed to give meaning to each word in the basin-closure law because DNRC’s own hydrogeologist had determined that pre-stream capture of tributary groundwater has a more significant and longer-lasting impact than does induced infiltration. The district court found in favor of DNRC.