Flathead Lake Litigation
Mattson, et al. v. Montana Power Company, et al., No. DV-99-548A (MT 11th Jud.Dist.Ct., Flathead Co.)
Our office, with our co-counsel Christian, Samson, Jones & Chisolm from Missoula, MT, currently represents a class of plaintiffs who own property on the lakeshore of Flathead Lake and the northern shores of the Flathead River in Montana.
The case is pending in the Montana Eleventh Judicial District Court in Kalispell, MT. It was filed on November 8, 1999. The plaintiffs have alleged that Montana Power Company, which owned and managed Kerr Dam on the south shore of Flathead Lake since the late 1930's, operated the dam in a manner that resulted in continuing erosion and property damage on their lakefront or riverfront properties.
In December 1999, shortly after the plaintiffs filed this lawsuit, Montana Power Company ("MPC") sold all its interests in Kerr Dam to PP&L Global, Inc., which assigned its interest to PPL Montana, LLC ("PPLM"), and in March 2001, the District Court gave plaintiffs permission to add PPLM as an additional defendant in this case. MPC then underwent a series of corporate changes, and, as a result, plaintiffs added four additional defendants to the case: Touch America Holdings, Inc., NorthWestern Energy Company, NorthWestern Corporation, and Montana Power LLC. All defendants except PPLM subsequently entered bankruptcy proceedings. We have filed claims in both the NorthWestern and Touch America bankruptcies in the Bankruptcy Court for the District of Delaware.
In March 2001, July 2003, and August 2003, the District Court certified the case to proceed as a class action against all defendants. The plaintiffs thus represent the entire class of persons and entities that own real property with lake frontage on the shoreline of Flathead Lake in Flathead or Lake Counties, and/or real property which contains a bank of the Flathead River in Flathead County.
In August 2003, the parties briefed and argued cross-motions for summary judgment and asked the court to decide whether the easements owned by Montana Power Company bar the plaintiffs' claims. On April 25, 2007, the court ruled in favor of PPLM and entered judgment in favor of all the defendants. You can read the court's decision here.
We appealed this decision in the the Montana Supreme Court, where we are asked Montana's highest court to reconsider the District Court's opinion and find that the easements do not permit the power company to cause the type of damages that have occurred as a result of the operation of the dam. On September 13, 2007, we filed the plaintiffs' opening brief in the Montana Supreme Court. Click here to view the entire brief. Oral argument was held on September 24, 2008 in the Montana Supreme Court in Helena, MT.
UPDATE August 26, 2008: class counsel filed a claim in the bankruptcy proceeding of Touch America (formerly Montana Power Company) in 2003 and has been attempting to secure a recovery in that forum for the class for several years. Recently, we reached a preliminary settlement of the class claim against Touch America, and the Bankruptry Court for the District of Delaware granted preliminary approval on July 8, 2008. The settlement, if granted final approval by the Bankruptcy Court, will include cash payments to two organizations in the Flathead Lake area and the right for the class to pursue payment under insurance policies purchased by the former Montana Power Company.
Click here to view the Settlement Agreement and here to view the Preliminary Approval Order. This settlement does not affect the main case going forward in Montana and will not release your rights in the Montana litigation. It applies only to the classwide claim filed against the bankrupt entity Touch America in the Delaware bankruptcy action.
Notice of the Touch America settlement was mailed to the class members on July 21, 2008. Click here to view the Class Notice.
A final approval hearing was held on August 21, 2008 in the Bankruptcy Court for the District of Delaware. The Court entered a Final Approval Order certifying the settlement class and approving both the settlement and the petition for attorneys' fees and costs. You can view the Final Approval Order here.
IMPORTANT UPDATE August 26, 2009: The Montana Supreme Court has ruled in favor of the plaintiff landowners in an opinion issued on August 25, 2009. Click here to read the entire opinion. The Montana Supreme Court reversed the lower court's grant of summary judgment and sent the case back for further development and trial. This is a significant victory for the plaintiffs and we will now re-enter "litigatlon mode" to move this case quickly toward trial.
The Supreme Court reviewed the history of Kerr Dam and the legal arguments presented by the parties, then concluded that "the easement holder does not have an inherent right to inflict unreasonable damage" on the landowner's property, and that PPLM's argument to the contrary was "utterly divorced from reality" (Opinion, pp. 30-31). The Court concluded that "while the dam operator may use those properties in a manner that is reasonably necessary for the convenient enjoyment of its easements, it has a separate obligation not to cause unreasonable damage to the properties or interfere unreasonably with their enjoyment" (Opinion, p. 33). The Court then reversed the lower court's decision and sent the case back to the trial court to complete discovery and proceed to trial.
We will update this site regarding the upcoming schedule when we have received that information from the trial court.
