©2015 Concerned Citizens of Western Montana

The ability of the state to give itself immunity from suit regarding “costs, damages, and attorneys fees” in Article IV.I.8 (page 48) and in Section 2 (1-2-111) (page 79) of the CSKT Compact bill without achieving a 2/3 vote as required by the Montana Constitution is under legal scrutiny thanks to a recent action brought against the state by the Flathead Joint Board of Control (FJBC).

 In considering this issue, it is very important to understand that the CSKT compact, unlike every other tribal compact in Montana, actually does involve the physical and regulatory taking of property rights across western Montana. So, what is being said by this clause in the compact is that the State wants to be able to allow a politically appointed board and its employees to make decisions that take or harm property rights, but does not want to be liable for the costs, damages or attorneys fees of those individuals whose property the board and its employees take or harm. This is why Senate President Debby Barrett said the “passage of the [Compact] bill will be our states first transgression against all of its people.” And by that statement she meant to include both tribal members and non-tribal persons, all of whom are state citizens.  

The State, the Tribes, and the United States intend to take property and not compensate for it. And Article II Section 18 of the Montana Constitution says basically that “if the state wants to grant immunity to itself, then 2/3 of each house of the legislature must agree.”   The CSKT compact bill, SB262, did not receive the needed 2/3 vote in either the Senate or the House.

So what specifically in the Compact, and on what pages, do the so-called takings occur?

  • Article III of the Compact gives the Tribes the bare legal title of and the right to use all of the water in the Flathead Irrigation Project (FIP), and Appendices 5, 11 and 12 divide the FIP agricultural water between instream flow (80%) and agricultural water use (20%). This exactly reverses the pre-compact allocation of water and results in an unconstitutional taking of property rights—the beneficial title to water rights in the federal irrigation project of fee land owners who own 90% of the land within the project is transferred to the CSKT.
    • In order to try to address the transfer of title issue, the Attorney General secured a “water delivery entitlement certificate” for irrigators in a December “deal” with the Governor which the state later admitted under Senate questioning was not a property right[1]
  • Article III of the Compact awards the ownership of off-reservation state water resources to the U.S./CSKT as a water right with a time immemorial priority date for instream flow. The amount of water awarded to the CSKT consists of most, if not all water that is available for future development in these watersheds. Appendices 21-36 describe these water rights. The new water right essentially gives the United States the authority to preclude agricultural water uses across wide portions of Montana and use the State of Montana to enforce this against its citizens.[2]
  • Article IV and Appendix 4 of the Compact creates a new water administration program that consists of a politically appointed water board staffed by Tribal employees. The Board implements a Tribally-created management system applicable to all users that precludes state administration, permits the reduction and reallocation of water resources according to Tribal priorities, and eliminates the usual and customary judicial processes guaranteed by the Montana Constitution, available to Montana citizens for resolving disputes over water rights.
    • The Compact conveys immunity on the State and the politically-appointed board for damages, costs, and attorneys fees regarding employees whether Tribal or not.[3]
    • The Compact creates a Compact Implementation Technical Team (CITT) to oversee the changes to the Flathead Irrigation Project, enlisting the state in implementing the adaptive management plan which is based on the property takings of its citizens in favor of the Tribe.

Taken as a whole, the overall goal of the compact is to transfer the use of agricultural water to instream flow both on and off-reservation, and to create an administrative system that makes it too cumbersome and costly to use water especially for agricultural purposes.

These physical and regulatory takings, and the economic implications to property values, represent potentially significant harm to Montanans, a liability that could exceed a billion dollars to the state. That would of course be passed on to taxpayers.

The question of Montana’s exposure to liability claims in the Compact was one of those posed by fifty legislators to the Water Policy Interim Committee (WPIC) in 2014, as well as the question of impacts to individual water users. The WPIC did not address any of these issues in its year-long study of the Compact. Although an economic study was commissioned by individual irrigators independently of WPIC that promised to produce information on the economic benefits of the compact, no report came forward.

Such economic analysis easily could have been done, even with rough calculations using the state’s own DNRC data. For example, a MSU study found that 1 acre foot of water added to one acre of farm land adds at least $2,000 to the value of that acre.   Could the reduction of 1 acre foot of water per acre to farmlands in the FIP—the minimum reduction contemplated by the compact—result in a corresponding drop in the value of an acre of farmland? Calculated over the entire FIP, some estimate of economic impacts on property values and crop productivity could have been made using just this factor alone.

Off reservation, what is the value of the Kootenai river 6 million acre feet of water annually, now owned by the CSKT/United States in terms of its cost to Montana’s future development? Could Montana have other uses for that water? What are the impacts of off-reservation calls to irrigation on municipalities, given that senior irrigation water users will call junior municipal uses? Allowing an off-reservation water right and calls of surface and ground water appear to be regulatory takings that may have associated physical and/or economic damages, unaccounted for in this rush to pass the Compact.

Who is responsible for this significant taking in Montana? The state and the federal government. There were no studies done to justify such a significant change in public policy. And the compact grants the state and Tribes immunity from damages and costs in suits from those takings.

Would such blatant takings survive a court of law? Neither the state nor the federal governments have the right to take property without compensation but will political expediency rule instead? The federal government cannot force a state to violate its own constitution in order to resolve what is essentially a federal dispute. Not only will the state, that is taxpayers, be responsible for this taking, but damages and attorney’s fees could also be awarded if the state continues to insist the Compact is valid or continues implementation once a court has ruled the compact invalid.

In the context of the takings described above, and in returning to the FJBC v. State lawsuit, it is easy to see why this particular clause in the compact must have legal scrutiny, and the 2/3 vote in the legislature, even though identical language is in the other Montana tribal compacts. Importantly, none of the other Montana tribal compacts, or Indian water settlements in the western states, has gone so far as to reject the dual sovereign administration program as a means of protecting both state and federal interests and sovereign prerogatives. In this case, the administration of water is handed over to an adversary in a state adjudication and that adversary and state granted immunity from suit for money, damages, or attorneys fees when property rights are damaged.

In the plain reading of the Compact and the Montana Constitution, the 64th legislature did not pass the CSKT compact. If our judges rule otherwise, their decision will clearly show their political bias and will guarantee that the final resolution of the proposals advanced in the CSKT Compact will be decided in the United States Supreme Court, a multimillion-dollar hit to the Montana taxpayers.

[1] Transcript of discussion between Senator Jedediah Hinkle and Melissa Hornbein, Senate Judiciary hearing on SB 262, February 23, 2015 [2] The only water uses off reservation that the Tribes can “call” are agricultural surface water and ground water users in excess of 100 gpm. [3] Neither the state nor the Tribe can confer immunity on Tribal employees or governing officials. The Tribe cannot confer immunity on itself without the approval of Congress.