The Montana Supreme Court has ruled that a state agency unlawfully granted an operating permit for a controversial water-bottling plant in the Creston area.

The rulings come following a seven-year court battle over the proposed expanded operations of the Montana Artesian Water Company that resulted in multiple lawsuits. The water company has sought to produce up to a billion bottles of water per year.

The nonprofit Water for the Flathead’s Future, along with a list of residents, sued the state Department of Environmental Quality and the Department of Natural Resources and Conservation challenging the two permits — for wastewater discharge and water usage — the state agencies issued to allow the water company to operate its bottling plant.

In regard to the DNRC permit, the Supreme Court on May 16 upheld a decision by a district judge in Helena that said the state erred when it issued a permit to Montana Artesian in 2017, saying the company didn't provide sufficient data, required by the DNRC's own rules, for the agency to conduct a valid scientific analysis and justify issuing the permit.

“Objectors [to the plant] marshalled extensive expert testimony and addressed a voluminous record to support their claims,” the court said in its decision. “Objectors uncovered the errors in DNRC’s review process that led the District Court, and now this Court, to reject the permit, despite usual deference owed to the agency. After extensive effort, Objectors are clearly the prevailing party.”

Steve Moore, board chair for the nonprofit, said the decision shows the Supreme Court recognizes that the DNRC was not following the law in regard to the permit for the plant.

“This decision represents the culmination of our seven-year-long battle to prove in court what we have always known — that Montana Artesian Water Company and the Montana Department of Natural Resources and Conservation violated the law in an attempt to move forward the largest water bottling plant ever proposed in Montana,” Moore said.

It was frustrating that the lawsuit filed by a group of citizens against the state even became necessary, Moore said.

“If DNRC had done what it was supposed to do and follow the law, then this would not have been seven years of agony,” he said.

Darryl James, the public relations representative for Montana Artesian, said the company is disappointed with the decision and the requirement that it must cover attorneys fees based on a state error while the business is unable to make money.

“They didn’t find any impact with the permit, but that DNRC didn’t check every box,” he said. “This is a case of NIMBYism in that they didn’t want a development right next to them so they claimed an issue with the state process.”

How the company moves forward is still to be determined, James said.

“I’m not sure what business in their right mind would pursue this at this point,” he added.

In its 44-page unanimous decision, the Supreme Court said DNRC made a mistake in its decision to approve the permit by committing errors of law during the processing of the application, including the failure to submit all the data and failure by the agency to fulfill its duty to analyze all potentially affected water sources. Because there is so much water in the aquifer, the agency “assumed the proposed well would have little impact and passed it along without diligent review,” the court said.

“The errors of law and process undermine confidence in the agency’s determinations,” the court said in its decision.

IN THE case involving the DEQ discharge permit, the Supreme Court, however, ruled a Flathead County District Court judge erred in determining that the DEQ unlawfully granted the permit by failing to abide by the Montana Environmental Policy Act when reviewing the permit. The judge in December 2021 ruled that the state agency had failed to evaluate the potential environmental impact resulting from the water company’s operations at full build-out.

But the Supreme Court on May 16 said the lower court’s decision was in error because the district court sought to require the DEQ to consider the full-scale operation of the plant that could come later rather than the discharge of the water associated with the start-up phase of the plant, which was the purpose of the proposed permit.

DEQ argued that it assessed the potential direct, secondary and cumulative impacts of the permit issues and thus satisfied its statutory obligations.

The bottling plant has been tied up in litigation for several years with opposition from neighboring landowners, Water for Flathead’s Future and the Flathead Lakers.

In a separate case regarding zoning, the Montana Supreme Court in March 2022 ruled that the plant would keep its grandfathered-in status continuing to operate as a nonconforming use in Flathead County’s Egan Slough Zoning District.

The court upheld the citizen-initiated special zoning district that prohibits industrial operations precluding further development of the plant, but that the zoning district could also not force the plant to cease operation because it existed prior to the district’s creation in 2018.

Features Editor Heidi Desch may be reached at 758-4421 or [email protected].