The Montana Supreme Court issued an opinion Monday in a complex water rights dispute that pits ranchers against each other over the distribution of Beaver Creek water in Basin 41I, with the case tracing its origins to an 1882 lawsuit.
In *In the Matter of the Petition for Water Commissioner to Measure and Distribute Water on Beaver Creek*, the court addressed an appeal from Pole Creek Ranch LLC and Staubach Creek Ranch LLC, both owned and operated by Jeff and Marie Hoeffner. The Hoeffners challenged a February 2025 district court order that denied their dissatisfied water user complaint and affirmed the court-appointed water commissioner's distribution of Beaver Creek water.
Justice Katherine Bidegaray delivered the court's opinion in the case, which was decided Feb. 10 after being submitted on briefs Jan. 7. The dispute involves multiple parties including CX Ranch LLP, Darrell E. Baum, Douglas B. Baum, and Irvin G. Riis as appellees opposing the Hoeffner ranches.
The case centers on two key legal questions that highlight the complexity of Montana's water law system. First, the court examined whether the water commissioner was required to administer Beaver Creek water pursuant to a 2018 Amended Stipulation and Agreement that was incorporated into both a 2018 Water Court order and a 2022 Preliminary Decree for Basin 41I. Second, the court considered whether the district court erred in its handling of the water distribution dispute.
The legal battle has deep historical roots, referencing a prior decree entered in the original case of *Spokane Ranch & Water Co. v. C. W. Dodge and Wesley Beatty*. This connection to 19th-century water rights litigation demonstrates the enduring nature of water disputes in Montana, where early territorial and statehood-era water claims continue to influence modern agricultural operations.
Water rights disputes in Montana operate under the prior appropriation doctrine, which grants water use rights based on a "first in time, first in right" principle. This system means that earlier water claims generally take priority during times of shortage, making the precise administration of water distribution critically important for ranching operations that depend on irrigation.
The appointment of water commissioners to measure and distribute water represents a key enforcement mechanism in Montana's water rights system. These court-appointed officials have the authority to physically control water distribution during irrigation seasons, ensuring that senior water rights holders receive their allocated amounts before junior rights holders can access remaining water.
The case proceeded through the District Court of the First Judicial District in Broadwater County, where Honorable Michael F. McMahon presided. The district court's February 2025 order sided with the water commissioner's distribution decisions, prompting the Hoeffner ranches to appeal to the state's highest court.
Legal representation in the case included experienced water law attorneys from prominent Montana firms. John E. Bloomquist and Betsy R. Story from Parsons Behle & Latimer represented the appellant ranches, while Ryan P. McLane and William P. Driscoll from Franz & Driscoll PLLP represented the appellees.
The 2018 Amended Stipulation and Agreement at the center of the dispute represents an attempt by the parties to resolve water distribution issues through negotiation rather than continued litigation. Such agreements are common in Montana water law, as they allow water users to establish specific terms for water sharing while avoiding the time and expense of protracted court battles.
The incorporation of this agreement into both the 2018 Water Court order and the 2022 Preliminary Decree for Basin 41I created legally binding obligations for water distribution. The dispute arose when the Hoeffner ranches argued that the water commissioner failed to follow these agreed-upon terms in administering Beaver Creek water.
Basin 41I represents one of Montana's designated water basins under the state's comprehensive water rights adjudication process. This decades-long effort seeks to determine and quantify all water rights within the state, providing certainty for water users while protecting both existing rights and instream flows for fish and wildlife.
The Supreme Court's decision will have implications for how water commissioners interpret and implement stipulated agreements in future water distribution decisions. The ruling also affects the broader relationship between negotiated settlements and administrative discretion in Montana's complex water rights system.
For the ranching operations involved, the outcome determines access to crucial irrigation water during growing seasons. Beaver Creek water supports agricultural operations that depend on reliable water supplies for crop production and livestock operations in an increasingly arid climate.
The case illustrates the ongoing challenges facing Montana's agricultural sector as water becomes scarcer and more valuable. Competition for limited water resources continues to intensify as growing seasons become longer and precipitation patterns shift, making precise water administration increasingly critical for agricultural sustainability.