The Supreme Court struggled today to come up with a way of resolving whether a power company should pay rent for the use of riverbeds in Montana where its hydroelectric projects are located.
Power company PPL Montana has asked the justices to decide whether the stretches of the rivers in question are navigable, which determines in large part whether the riverbeds are owned by the state.
The case, PPL Montana v. Montana, reached the high court from the Montana Supreme Court, which ruled in March 2010 that three rivers in Montana -- the Clark Fork, the Missouri and the Madison -- are navigable (Greenwire, Oct. 3).
If upheld, the decision has serious implications for PPL Montana, which owns 10 dams on the three rivers and could end up paying millions of dollars in rent for its use of the riverbeds since the company acquired them in 1999.
PPL Montana -- backed by the Obama administration -- says the Montana court failed to tackle the question in the correct way.
Instead of deciding the navigability of each river in its entirety, the court should have adopted a section-by-section analysis, the power company says. In its decision, the Montana court conceded that certain sections of the rivers were not navigable at the time the state was admitted to the union.
The state counters that the question, traditionally, is whether the river was used as a "highway of commerce." That was the case with all three rivers, which were used by loggers, fur traders and miners, the state says.
Explorers Meriwether Lewis and William Clark also traveled along Montana's rivers, although they had to portage around the most difficult sections, such as the Great Falls on the Missouri River.
At today's argument, several justices appeared unsure about whether the section-by-section analysis advocated by PPL Montana's lawyer, Paul Clement of the Bancroft law firm, was the correct way to proceed.
Chief Justice John Roberts, querying the Obama administration's position, noted that "if you start drawing lines ... they become difficult to apply."
Likewise, Justice Sonia Sotomayor pointed to Supreme Court precedent that suggested that "obstructions don't stop the flow of commerce."
But others had more sympathy for the power company, with Justice Antonin Scalia in particular attacking the argument made by the state's lawyer, Gregory Garre of Latham & Watkins, that an adverse ruling for Montana would restrict public access to rivers. Scalia stressed that even if the state did not own the riverbeds, it would still have regulatory authority over the rivers.
"The state can continue to regulate these things whether they own the bed or not," Scalia said.
Scalia also appeared to share PPL Montana's outrage that the state had let the company use the riverbeds for decades before demanding rent.
"It's extraordinary," he said.
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