Stillwater County fight over citizen zoning continues

A group of landowners in Stillwater County say their county commissioners, having already changed the rules once in their fight to stymie a citizen-initiated zoning district, are now misinterpreting state law to achieve the same end.

The arguments are made in a “plaintiff’s response” filed Friday in Stillwater County District Court in Columbus. It is a response to the Stillwater County Commission’s motion to dismiss a lawsuit filed by the citizens in February.

That original lawsuit, filed by the Beartooth Front Coalition and several individual landowners, accused the commission of suddenly deciding that petitions to create a zoning district needed not only the signatures of at least 60 percent of landowners in the proposed district, but of 60 percent of mineral-rights holders as well.

The citizens began working several years ago to establish a zoning district, hoping commissioners would then adopt regulations that would require any oil and gas development to “be conducted in a responsible manner,” in the words of the lawsuit.

They filed the lawsuit after turning in the signatures of more than 60 percent of landowners within the 83,000-acre district along the Beartooth Front — and after only then being told that they had to round up the same number of mineral owners’ signatures. The lawsuit also named county Clerk and Recorder Heidi Stadel, who told commissioners, based on the county attorney’s advice, that mineral interests had to be considered under state law.

In its motion to dismiss the lawsuit, the county commissioners barely mention the question of mineral rights, instead relying on a new argument — that only the Montana Board of Oil and Gas Conservation has the legal authority to regulate oil and gas activity in the state.

“Stillwater County has no authority to regulate oil and gas activities,” the motion says. “In Montana, the BOGC has exclusive jurisdiction to regulate oil and gas activities and any attempt to undermine the BOGC’s jurisdiction is preempted by state law.”

“If the Petition is invalid because the County lacks the authority to do what the Petition proposes,” the County Commission’s motion says, there is no reason to address the plaintiffs’ claims in regard to the commission’s rejection of their petition.

In their response, the Beartooth Front Coalition says there are two big problems with the county’s legal arguments. One is that state law, the response says, clearly does not give the BOGC exclusive authority over oil and gas regulation, and that the Montana Legislature just as clearly intended there to be “concurrent jurisdiction” of oil and gas activity.

The response also that says several counties have already adopted zoning districts that include comprehensive regulation of oil and gas development — including four such districts in Gallatin County alone.

The bigger problem, they say, is that the County Commission, in its motion, makes repeated references to “regulations,” “proposed regulations” and “permitting terms and conditions” supposedly called for by the plaintiffs.

The citizens’ response points out that at this point there are no regulations, proposed or otherwise. Under citizen-initiated zoning, as laid out in state law, petitioners have no authority to adopt regulations — only the affected county commission does, and only after the commission itself votes to approve creation of the district.

The response says that “the ‘event’ that Defendants fear — implementation of zoning regulations — has not occurred, nor it is known if it will occur as Defendants predict. In basing their argument on the potential impacts of what they term the ‘proposed regulations’, the County Defendants completely misinterpret the nature and statutory scheme” for citizen-initiated zoning.

A bit later, the plaintiffs say: “In other words, the ‘regulations’ that the County assails in its brief have not yet been adopted … by the Defendant Commission.” (Ellipses in original.)

David Katz, a spokesman for the plaintiffs, said, “We are confident that the judge will quickly dismiss Stillwater County’s request to throw out our case. Their position is completely unsupported by the law. Then we can get on to discussing the real issue — the county’s misuse of existing law in requiring the signatures of mineral-rights holders to set up our zone.”

Meanwhile, Katz and others have raised questions about the law firm representing the Stillwater County commissioners and clerk and recorder. That firm is Budd-Falen Law Offices, in Cheyenne, Wyoming, described by Katz on his Preserve the Beartooth Front blog as “one of the preeminent property rights law firms in the country.”

“They are famous for representing ranchers in disputes with federal land agencies like the Bureau of Land Management (BLM),” Katz wrote. “They consistently oppose regulation and advocate for the disposal of federal land. Karen Budd-Falen, the lead attorney for the firm, has achieved a national profile by taking unusual, sometimes extreme landowner rights cases in opposition to federal agencies.”

In January, High Country News reported that Karen Budd-Falen was being considered by Interior Secretary Ryan Zinke as the next director of the Bureau of Land Management, even though she “has long been a harsh critic of the agency she would lead.”

In response to a public records request from Last Best News, Stillwater County Attorney Nancy Rohde released a copy of the fee agreement between the county and the Bidd-Falen firm. It is signed by Budd-Falen lawyer Brandon Jensen, who says he will be assisted in the case by Karen Budd-Falen and Bethany Gross.

He and Karen Budd-Falen, as senior-level lawyers, charge $250 an hour, while Gross, a second-level lawyer, charges $200 an hour. If a trial or hearing is required, the agreement says, “an additional $10,000.00 will be required prior to the start of the hearing or trial.”

You can view all provisions of the agreement by going here.

Last Best News had also asked to see copies of correspondence between county officials and the firm. In denying that request, Rohde wrote: “Any correspondence between the people listed and the law firm is classified as attorney-client privilege.”

She added: “Please do not contact the County Commissioners, the Clerk and Recorder or myself to discuss this matter.  It is an ongoing litigation and as such, it will not discussed.”

The lawyer for the citizens group is David “Kim” Wilson of Morrison, Sherwood, Wilson and Deola, a law firm in Helena.

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