Montana Water Court PO Box 1389 Bozeman, MT 59771-1389 1-800-624-3270 (406) 586-4364 [email protected] IN THE WATER COURT OF THE STATE OF MONTANA UPPER MISSOURI DIVISION CUT BANK CREEK BASIN 41L * * * * * * * * * * * * * * * * * * * * * CLAIMANTS: Columbia Grain Inc.; BNSF Railway Co. 41L-0023-P-2018 41L 124440-00 OBJECTORS: Blackfeet Tribe; United States of America (Bureau of Indian Affairs) CLAIMANT: BNSF Railway Company 41L-0079-P-2017 41L 142616-00 OBJECTOR: Blackfeet Tribe ORDER DENYING OBJECTIONS TO MASTER’S REPORT BNSF Railway Company (“BNSF”) objects to master’s reports in two cases recommending dismissal of two state-based water right claims. The cases and objections involve similar issues so they are considered together in this order. For the reasons set forth, the Court denies BNSF’s objections and adopts the master’s reports’ recommendations to dismiss water right claims 41L 124440-00 and 41L 142616-00. BACKGROUND A. Procedural Background. The Water Court included water right claims 41L 124440-00 and 41L 142616-00 in the Preliminary Decree for the Cut Bank Creek Basin (Basin 41L). The preliminary decree identifies Columbia Grain Inc. (“Columbia Grain”) as the owner of claim 41L 124440-00 and BNSF Railway Co. (“BNSF”) as the owner of claim 41L 142616-00. 1 Claim 41L 142616-00 is included in the preliminary decree as a claimed right to use groundwater for industrial use with a March 20, 1942 priority date. The preliminary decree identifies claim 41L 124440-00 as a claimed right to use groundwater for commercial use for a grain elevator with an August 31, 1959 priority date. The parties later updated ownership records to identify BNSF as co-owner of claim 41L 124440-00. The points of diversion and places of use for the two claims are located within the boundaries of the Blackfeet Indian Reservation. During claim examination, the Department of Natural Resources and Conservation (“DNRC”) added issue remarks to each claim stating it was not clear whether the claim was a state-based water right or part of the tribal water right defied in the Blackfeet Tribe—Montana—United States Compact (“Compact”). The issue remarks were included on the preliminary decree abstracts. The United States of America, on behalf of the Bureau of Indian Affairs (“United States”), and the Blackfeet Tribe objected to claim 41L 12440-00. The Blackfeet Tribe also objected to claim 41L 142616-00. The water master assigned to Basin 41L consolidated claim 41L 124440-00 into case 41L-0023-P-2018 and claim 41L 142616-00 into case 41L-0079-P-2017. Since consolidation, the cases have proceeded on parallel tracks with consolidated orders and briefing. The parties filed cross-motions for summary judgment. The motions addressed whether the claims should be dismissed or recognized as valid state-based water rights. The United States and the Blackfeet Tribe contend the claims should be dismissed because BNSF’s water use is part of the tribal water right defined in the Compact. The Compact defines the “Tribal Water Right” in Basin 41L as including “all Natural Flow and Ground Water within the Cut Bank Creek Drainage, with the exception of those waters subject to the Water Rights Arising Under State Law in that drainage.” Compact, Art. III, § E.1.a.1 BNSF and Columbia Grain argue the two claims fall within the definition of “Water Rights Arising Under State Law,” which the Compact generally 1 The Compact is codified at § 85-20-1501, MCA. 2 defines as a water right arising under Montana law, not federal law, existing as of the date of Compact ratification. Compact, Art. II § (41) & (52). Under the Compact structure, if BNSF’s claims are recognized under state law, they are excluded from the tribal water right. Conversely, if the claims are not recognized under state law, they are part of the tribal water right and should be dismissed. The water master issued parallel master’s reports accepting the United States’ and the Blackfeet Tribe’s arguments, rejecting those of BNSF and Columbia Grant, and recommending dismissal of both claims. BNSF Ry. Co. v. Blackfeet Tribe, 2020 Mont. Water LEXIS 741; Columbia Grain Inc. v. BNSF Ry. Co., 2020 Mont. Water LEXIS 751. BNSF objected to both master’s reports. Columbia Grain did not object. B. Factual Background. The Blackfeet Reservation is a remnant of what once was a much larger area the United States agreed to set aside when it entered into a treaty with the Blackfeet Tribe in 1855. Treaty with Blackfeet Indians, 11 Stat. 657 (Oct. 17, 1855) (“1855 Treaty”). Originally, the reserved area extended across much of what now is northern Montana, east of the Continental Divide. 1855 Treaty, art. 4. Over time, the United States passed legislation, ratified agreements, and issued orders progressively reducing the size of the Blackfeet Reservation. See generally, Blackfeet et al. Nations v. United States, 81 Ct. Cl. 101 (1935) (describing various cessions). In addition to actions by the United States that changed the boundaries of the Blackfeet Reservation, the United States also granted rights of way across the reservation. First, in 1887, Congress passed a statute granting BNSF’s predecessor a right of way across portions of reservations that had been set aside for several tribes, including the Blackfeet Tribe, as the reservations existed at that time.2 24 Stat. 402 (Feb. 15, 1887) 2 As to the Blackfeet Tribe, the 1887 Act refers to the “act of Congress approved April fifteenth, eighteen hundred and seventy-four, and commonly known as the Blackfeet Indian Reservation.” 1887 Act, § 1. The 1874 act was one of the statutes passed by Congress that modified and reduced reservation boundaries. 18 Stat. 28; see Blackfeet Nations, 81 Ct. Cl. at 112. 3 (“1887 Act”). The 1887 Act generally described a right of way extending from Minot, North Dakota, to Great Falls, Montana. Next, on May 1, 1888, Congress ratified an agreement with the Blackfeet Tribe and other tribes that established separate reservations, and by which the tribes ceded lands to the United States. Pub. L. No. 50-213, 25 Stat. 113 (“1888 Act”).3 The 1888 Act described the boundaries of the revised reservations, including the Blackfeet Reservation. 1888 Act, 25 Stat. 129. In 1890, the Secretary of Interior issued a report stating that the President had given consent to occupy a strip of land across the Blackfeet Reservation. The report referenced the right of way section of the 1888 Act as authority. In 1893, the Secretary reported that a map of the right of way had been reported and filed.4 BNSF now owns the railroad right of way crossing the Blackfeet Reservation. The parties do not dispute that the points of diversion and places of use for both water right claims are within the right of way. The parties also do not dispute that the United States holds fee ownership of the land described in both claims within the right of way in trust for the use and benefit of the Blackfeet Tribe. See BNSF’s Brief in Support of Mot. for Summary Judgment at 3 (“BNSF does not dispute that the right-of-way at issue runs through lands held in trust for the Blackfeet Tribe”).5 In its response and cross-motion, BNSF argued its rights within the right of way are sufficiently broad to allow it to claim a state-based water right, subject to adjudication by the Water Court. The water master rejected BNSF’s position and issued two reports that largely parallel each other. The master’s reports recommend accepting the position of 3 The agreement ratified in the 1888 Act was signed by the United States on December 28, 1886, and by the Blackfeet Tribe on February 11, 1887. The agreement says it was not binding on either party until ratified by Congress, which occurred on May 1, 1888. 1888 Act, art. IX. 4 The 1887 Act also called for a process of surveying and filing with and approval by the Secretary of Interior. 1887 Act, § 4. Unlike the 1888 Act, the record does not reflect whether BNFS’s predecessors ever did this. 5 BNSF also states in this paragraph of its summary judgment brief that the “effect of the congressionally granted BNSF right-of-way over lands reserved to the tribe is a contested legal issue, not an uncontested fact.” However, BNSF does not take the position that the interest its predecessors obtained from the United States extinguished the trust status of the land burdened by the right-of-way. Thus, there is no disputed fact as to the trust status of the land. 4 the United States and the Blackfeet Tribe. Specifically, the master’s reports conclude the rights the United States granted BNSF’s predecessor as part of the right of way did not extinguish the Blackfeet Tribe’s reserved water rights, so BNSF is precluded from claiming a state-based existing water right. BNSF objects to the recommendations in the master’s reports. ISSUE Did the master’s reports correctly recommend that the Court grant the United States’ and the Blackfeet Tribe’s motions and dismiss claims 41L 124440-00 and 41L 142616-00? DISCUSSION A. Legal Standard. The Water Court reviews a water master’s findings of fact for clear error and the water master's conclusions of law for correctness. Klamert v. Iverson, 2019 MT 110, ¶ 11, 395 Mont. 420, 443 P.3d 379. There are no facts in dispute in this case, so the sole question is whether the master’s reports’ recommendation to dismiss BNSF’s two claims is correct as a matter of law.