Exempt Well Lawsuit Filed in Montana

On November 12, 2025, a powerful coalition filed a lawsuit challenging the administration of exempt wells in Montana. The Clark For Coalition, an environmental group that has long challenged exempt wells, joined by the Montana Environmental Information Center, Trout Unlimited, the Montana League of Cities and Towns, the Association of Gallatin Agricultural Irrigators, and the Montana Farm Bureau Federation, along with individual water users, filed suit against the Montana Department of Natural Resources and Conservation. The lawsuit alleges that the administration of the exempt well provisions in Montana violate the property rights, water rights, and other constitutional rights of senior water users in the state.
 
The plaintiffs allege that over 141,000 exempt well permits have been issued without considering the impact on existing water users. Approximately 72% of those exempt wells are for domestic use. A combination of increasing drought and rapid development in certain parts of the state have put increased focus on exempt wells. The plaintiffs allege that the lack of good records and the absence of notice and a right to be heard when issuing exempt well permits violate their constitutional rights. Similar to the landmark litigation in New Mexico, Bounds v. State of New Mexico (2013), the plaintiffs essentially argue that granting exempt well permits conflicts with the principles of prior appropriation law.
 
Prior Appropriation and Exempt Wells

In western states, the principle of prior appropriation generally governs groundwater rights. Unlike the riparian approach followed by most eastern states, prior appropriation does not tie water rights to ownership of land. Thirteen states have either formally adopted or have indicated a preference for the Prior Appropriation rule: Alaska, Colorado, Idaho, Kansas, Montana, Nevada, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. Prior appropriation begins with the principle of “first in time, first in right.” Generally, the first landowner to divert the water to beneficial use gains priority right in the amount that is used. In times of shortage, the first user gets all of the water to which he is entitled, the second user gets all of their water, and so on, until there is no more water to appropriate. Once all the water is appropriated, those users without priority get nothing.
 
Most prior appropriation states require a potential appropriator to go through a permitting process before withdrawing water. This process varies by state but can be expensive and time-consuming and includes requiring the state to investigate and make specific findings with regard to availability of water for the requested use and the potential impact the proposed use would have on other water users. This application process can take many years and tens of thousands of dollars to complete. Recognizing the burden placed on would-be appropriators and the small amount of water used by certain types of wells, many states have created exemptions for certain types of wells from at least some portion of the permitting process. These water uses have come to be known as “exempt wells,” and are commonly applied to wells withdrawing only limited quantities of water or wells used for specific purposes, such as domestic use or livestock watering. Sixteen states utilize exempt wells: Alaska, Arizona, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Washington and Wyoming. These states include 12 of the 13 prior appropriation states (only Utah does not provide for exempt wells). In addition, Arizona, Nebraska, Oklahoma, and Texas utilize exempt wells.
 
Exempt Well Disputes in Montana

Approximately ten years controversy over exempt wells in Montana resulted in a 2016 Montana Supreme Court decision that centered on “combined appropriations.” The court ruled that separate wells did not have to be physically connected to be combined for exempt well purposes. Some developers had been using separate exempt wells for each home in a residential subdivision. This ruling prevents that approach and requires developers to go through the prior appropriation process whenever the combined water use exceeds the limits for exempt wells.
 
That litigation resulted in a flurry of legislative and state agency action to amend the exempt well provisions. However, the Governor vetoed an exempt well bill passed the legislature in 2017 that would have reinstated the rule struck down by the court. The debate and controversy continued, culminating in this lawsuit.
 
The Present Litigation

The present litigation is much broader than the litigation ten years ago. The plaintiffs here ask the court to declare the exempt well statute unconstitutional on its face and as applied. If successful, exempt wells, including domestic wells, would presumably be forced to adhere the prior appropriation process, which would add cost and time to installing domestic wells.
 
Conclusions

The recent litigation initiated in Montana could dramatically alter domestic well drilling in the state. The coalition of plaintiffs is varied and powerful. The challenge is a very broad attack on the exempt well statute and may result in the elimination of any exempt well provisions in the state.
 
The litigation will likely also generate activity in the Montana legislature and perhaps in the administrative agencies. The debate will, therefore, rage on in multiple venues over the next several years. Groups and individuals interested in domestic water wells in Montana and across the West should consider having their voices heard in this litigation.
 
~ Jesse J. Richardson, Jr.