Expanding Fee-Shifting under Montana’s UDJA:
A Detailed Commentary on Upper Missouri Waterkeeper v. Broadwater County & DNRC (2025 MT 137)

1. Introduction

Upper Missouri Waterkeeper, several local residents, and senior water-rights holders sued Broadwater County and the Montana Department of Natural Resources & Conservation (DNRC) after the County granted preliminary plat approval for the Horse Creek Hills subdivision near Canyon Ferry Reservoir. 71 Ranch, LP intervened as the developer. The plaintiffs alleged that:

• Broadwater County violated Montana’s Subdivision and Platting Act by glossing over environmental impacts.
• DNRC misapplied the “exempt well / combined appropriation” exception in the Water Use Act, allowing the subdivision to skirt the normal water-right permitting process.

The District Court granted declaratory relief in the plaintiffs’ favor but denied their request for attorney fees under three theories: the Water Use Act, the Uniform Declaratory Judgments Act (UDJA), and the Private Attorney General Doctrine (PAGD). Only the fee question reached the Montana Supreme Court.

In a unanimous opinion by Justice Beth Baker, the Court affirmed the denial of fees under the Water Use Act, but reversed on the UDJA claim, holding that attorney fees were “necessary or proper” supplemental relief even though the plaintiffs did not satisfy the so-called “possession” prong of the tangible-parameters test. It remanded for the amount and apportionment of fees, sidestepping the PAGD. A concurrence by Justice Bidegaray urged fuller discussion of the PAGD and constitutional dimensions.

2. Summary of the Judgment

1. Merits (unchallenged on appeal): The District Court correctly ruled that DNRC’s predetermination letters and the County’s approval violated statute, rule, and precedent (Clark Fork Coalition v. Tubbs). No party appealed the merits.
2. Fees under § 85-2-125, MCA (Water Use Act): Denied. Predetermination letters are not a “final decision…on an application for a permit or change authorization,” so the Act’s fee-shifting clause never triggered.
3. Fees under § 27-8-313, MCA (UDJA): Granted. The Court held that:
   • Equities “weigh heavily” for the nonprofit and local residents confronted by a state agency, a county government, and a well-financed developer.
   • The tangible-parameters test (possession / necessity / status-quo change) is non-exclusive; failure of the “possession” prong is not fatal.
   • Declaratory relief here changed the legal landscape statewide, forcing DNRC and DEQ to scrap their predetermination process and amend rules.
   Therefore, fees are “necessary or proper” supplemental relief. The Court remanded for calculation and allocation among DNRC, Broadwater County, and 71 Ranch.
4. PAGD: Not reached once UDJA provided relief.

3. Analysis

3.1 Precedents Cited and Their Influence

• Clark Fork Coalition v. Tubbs, 2016 MT 229 – Defined “combined appropriation” for exempt wells. Here, the District Court found DNRC “blatantly ignored” Clark Fork by analyzing each subdivision phase separately. The Supreme Court reiterated Clark Fork to underscore DNRC’s misinterpretation but dealt with it chiefly as background.
• Trustees of Indiana Univ. v. Buxbaum, 2003 MT 97 – First recognized §27-8-313, MCA as authority for attorney fees and introduced the tangible-parameters test via Ohio’s McConnell decision. Upper Missouri applies Buxbaum but clarifies it is non-exclusive.
• City of Helena v. Svee, 2014 MT 311 – Granted UDJA fees to homeowners beating the City; emphasized resource imbalance. The District Court relied heavily on Svee to find the equities favorable.
• Town of Kevin v. NCM Regional Water Authority, 2024 MT 159 – Latest UDJA fee case; upheld award although the “possession” was conceptual. The High Court used Town of Kevin to show that the possession prong is flexible.
• Friends of Lake Five v. Flathead County, 2024 MT 119 – Awarded fees with no tangible-parameters analysis, reinforcing that the test is guidance, not gatekeeping.

3.2 Court’s Legal Reasoning

1. Water Use Act: Statutory text confines fee-shifting to appeals of permit/change decisions. Predetermination letters fell under a separate subdivision-review framework, so §85-2-125 never applied. The Court’s tight textual approach reinforces bright-line boundaries for fee-shifting statutes.
2. UDJA:
   a. Threshold Equities: Nonprofit + local senior water-rights holders versus agency + county + developer = gross resource disparity.
   b. Tangible Parameters: The Court performed all three steps but stressed their non-mandatory nature.
   c. Possession Factor Re-framed: A defendant need not “possess” a concrete object; it can possess a legal position (here, erroneous predetermination letters and subdivision approval). However, because the other two factors and equities sufficed, the Court deemed denial of fees an abuse of discretion.
   d. UDJA’s Remedial Purpose: Citing §27-8-102, MCA, the Court emphasized liberal construction; fee awards promote access to declaratory relief when citizens police governmental error.
3. Remand Instructions: Reasonable fee calculation and equitable apportionment across defendants. Open question: will percentages track relative fault? (E.g., DNRC’s misinterpretation vs. County’s approval vs. developer’s defense costs.)

3.3 Likely Impact of the Decision

• Broader Fee Eligibility under UDJA – Trial courts now have explicit authority to award fees even when the defendant does not “possess” tangible property; emphasis will shift to equities and whether declaratory relief changed the status quo.
• Exempt Well Regulation Reset – DNRC scrapped its predetermination letter protocol; DEQ amended its subdivision rules. Developers must now confront unified combined-appropriation analysis earlier or pursue formal permits.
• Litigation Strategy for Public-Interest Groups – The case signals that nonprofits challenging misinterpretation of regulatory statutes can recover fees, easing financial risk and incentivizing watchdog litigation.
• Private Attorney General Doctrine (PAGD) Still Alive – Although unresolved here, Justice Bidegaray’s concurrence invites future litigants to plead PAGD in tandem, especially where environmental and constitutional rights are at stake.
• Government Conduct Scrutiny – Agencies cannot rely on procedural work-arounds (e.g., predetermination letters) to avoid judicial review and potential fee awards.

4. Complex Concepts Simplified

Exempt Well

A groundwater well allowed to pump small amounts (≤ 35 gpm / 10 acre-feet per year) without a formal water-right permit, unless multiple wells together (“combined appropriation”) exceed the threshold.

Combined Appropriation

Aggregate pumping by two or more wells that are physically connected or serve the same project. If the total volume exceeds the exempt limit, a formal permit is required.

Predetermination Letter

DNRC’s advisory letter (now discontinued) telling DEQ whether a proposed subdivision’s wells qualified as “exempt.” It was intended for platting purposes, not an actual water-right decision.

Uniform Declaratory Judgments Act (UDJA)

A statute letting courts declare rights, status, or legal relations before damage occurs; under §27-8-313, courts may grant “further relief”—including attorney fees—when necessary or proper.

Tangible-Parameters Test

Guide from Buxbaum/McConnell: (1) defendant possesses what plaintiff seeks; (2) plaintiff needed declaration; (3) declaration changes status quo. Upper Missouri clarifies this is illustrative, not mandatory.

5. Conclusion

Upper Missouri Waterkeeper v. DNRC is now the leading Montana case on fee-shifting under the UDJA. It:

• Sets a clear boundary on fee recovery under the Water Use Act—formal permitting decisions only.
• Expands UDJA fee availability by declaring that the tangible-parameters test is advisory; possession of a physical or concrete object is not a prerequisite.
• Affirms the judiciary’s commitment to leveling the playing field when citizens challenge governmental misinterpretation of environmental statutes.
• Triggers concrete regulatory reforms: DNRC’s abandonment of predetermination letters and DEQ’s rule amendments.
• Leaves the door open for robust application of the Private Attorney General Doctrine in future environmental and constitutional litigation.

Going forward, litigants can point to 2025 MT 137 as authority that when declaratory relief exposes and corrects substantial governmental error—and especially when it drives policy change—attorney fees are “necessary or proper.” Trial courts retain discretion, but the presumption has palpably shifted in favor of public-interest plaintiffs who shoulder the burden of vindicating statutory and constitutional mandates.