Full Opinion

10/13/2026 DA 25-0808 Case Number: DA 25-0808 IN THE SUPREME COURT OF THE STATE OF MONTANA 2026 MT 243 GATEWAY CONSERVATION ALLIANCE, Plaintiff and Appellant, v. STATE OF MONTANA, and MONTANA DEPARTMENT OF ENVIRONMENTAL QUALITY, Defendant and Appellee, TMC, Inc., Intervenor and Appellee. APPEAL FROM: District Court of the Eighteenth Judicial District, In and For the County of Gallatin, Cause No. DV-2024-838A Honorable Peter B. Ohman, Presiding Judge COUNSEL OF RECORD: For Appellant: Robert Farris-Olsen, David K. W. Wilson, Jr., Morrison Sherwood Wilson Deola, PLLP, Helena, Montana Graham Coppes, Emily Wilmott, Anders K. Newbury, Ferguson and Coppes, PLLC, Missoula, Montana For Appellee Montana Department of Environmental Quality: Samuel King, Jeremiah Langston, Kaitlin Whitfield, Department of Environmental Quality, Helena, Montana For Appellee TMC, Inc.: Mark L. Stermitz, Crowley Fleck PLLP, Missoula, Montana For Amicus Curiae Montana Contractors Association: Brian P. Thompson, Hallee C. Frandsen, Browning, Kaleczyc, Berry & Hoven, P.C., Helena, Montana Submitted on Briefs: August 5, 2026 Decided: October 13, 2026 Filed: __________________________________________ Clerk 2 Justice Beth Baker delivered the Opinion of the Court. ¶1 Appellant Gateway Conservation Alliance (Gateway) appeals the Eighteenth Judicial District Court’s dismissal of its complaint for failure to exhaust administrative remedies. We conclude that Gateway may challenge the constitutionality of the statute authorizing the DEQ permit at issue only after completing its administrative appeal before the Board of Environmental Review. We therefore affirm. FACTUAL AND PROCEDURAL BACKGROUND ¶2 In March 2024, the Montana Department of Environmental Quality (“DEQ”) approved Opencut Permit #3462 (“Permit 3462”). TMC, Inc., which applied for the permit in May 2023, plans to mine clay, gravel, and sand at the “Black Site” in Gallatin County, Montana, for twenty years. ¶3 Opencut mines must conform to The Opencut Mining Act (“the Act”), codified at Title 82, chapter 4, part 4, MCA. The Act is intended to “provide adequate remedies for the protection of the environment[] . . . from degradation and . . . to prevent . . . [the] degradation of natural resources.” Section 82-4-402(1), MCA. DEQ is responsible under the Act for determining whether to grant or deny opencut mining permits. Section 82-4-422(1)(a), MCA. During the 2021 Montana Legislative Session, the Legislature passed House Bill 599 revising opencut mining laws to “provid[e] less stringent applications for certain opencut operations[.]” ¶4 The contested case provisions of the Montana Administrative Procedure Act (“MAPA”) apply to permits issued under the Act. Section 82-4-427(4), MCA. A person seeking to appeal approval of a permit application must submit a written request to the 3 Board of Environmental Review (“Board”) within 30 days of DEQ’s decision. Section 82-4-427(1)(a), MCA. Gateway filed a notice of appeal with the Board in March 2024. Gateway claimed that Permit 3462 violates the Act’s intentions, ground water requirements, plan of operation requirements, and the requirement that DEQ verify information submitted by the applicant. Gateway requested that the Board find that DEQ violated statutory requirements and set aside the approval of Permit 3462. ¶5 Four months after filing its administrative appeal, Gateway filed a complaint against DEQ in Gallatin County District Court, while the appeal was pending before the Board.1 Gateway asserted that the HB 599 amendments to the Act violated the right to a clean and healthful environment under Article II, Section 3 of the Montana Constitution. Gateway sought a declaration that HB 599 is unconstitutional, a permanent injunction against its enforcement, and vacatur of Permit 3462. TMC intervened with leave of court. ¶6 DEQ moved to dismiss Gateway’s constitutional challenge to HB 599 because Gateway did not exhaust its administrative remedies in accordance with MAPA. The District Court agreed and granted the DEQ’s motion to dismiss. Gateway now appeals. This Court granted the Montana Contractors Association leave to file an amicus curiae brief supporting DEQ’s position. 1 Gateway also filed a separate action challenging DEQ’s Environmental Assessment in the District Court simultaneously with its challenge to the Board. That action is not involved in this appeal. 4 STANDARDS OF REVIEW ¶7 “We review de novo a district court’s ruling on a M. R. Civ. P. 12(b)(6) motion to dismiss.” Roaring Lion Ranch, LLC v. YC Properties, 2026 MT 60, ¶ 10, 427 Mont. 201, 586 P.3d 278. We review a district “court’s decision that a party failed to exhaust administrative remedies” for correctness as a conclusion of law. Flowers v. Bd. of Pers. Appeals, Mont. Dep’t of Fish, Wildlife, & Parks, 2020 MT 150, ¶ 6, 400 Mont. 238, 465 P.3d 210. DISCUSSION ¶8 Section 2-4-702(1)(a), MCA, allows judicial review in a contested agency case after the exhaustion of all available administrative remedies. A party generally may not raise any question not raised in front of the agency without a showing of good cause. Section 2-4-702(1)(b), MCA. The statute provides, however, that “[a] party who proceeds before an agency under the terms of a particular statute may not be precluded from questioning the validity of that statute on judicial review[.]” Section 2-4-702(1)(b), MCA. And an agency action “is immediately reviewable if review of the final agency decision would not provide an adequate remedy.” Section 2-4-701, MCA. ¶9 The District Court looked to City of Great Falls v. Int’l Ass’n of Fire Fighters, 2024 MT 302, 419 Mont. 262, 560 P.3d 621 (City of Great Falls), for guidance in considering DEQ’s motion to dismiss. The District Court explained that although City of Great Falls recognized a facial constitutional challenge to the administrative scheme as an exception to exhaustion requirements, the exception was not present in Gateway’s case. 5 ¶10 In City of Great Falls, the City imposed a new drug and alcohol policy on all employees, including union members subject to a collective bargaining agreement. City of Great Falls, ¶ 3. The City failed to obtain the consent of the unions and denied demands for collective bargaining regarding the new policy. City of Great Falls, ¶ 3. The unions began filing individual labor practice complaints with the Montana Board of Personnel Appeals (“MBPA”). City of Great Falls, ¶ 4. The MBPA consolidated the complaints for a contested case administrative hearing and adjudication. City of Great Falls, ¶ 5. The agency hearing examiner issued a decision in favor of the unions. City of Great Falls, ¶ 6. Rather than file exceptions to the proposed decision and order for final MBPA review, the City petitioned the district court for judicial review under § 2-4-701, MCA. City of Great Falls, ¶ 7. In district court, the City argued that assertions of error for pure questions of law are exempt from administrative remedy as required by § 2-4-702(1)(a), MCA. City of Great Falls, ¶ 7. The City also argued that waiting for review of a final agency decision by a “non-judicial board” would not remedy the asserted errors of law and would “not be in the interests of judicial economy.” City of Great Falls, ¶ 7. The unions responded that the City could not circumvent the exhaustion requirement and distinguished the case from prior cases that allowed exception from administrative exhaustion. City of Great Falls, ¶ 7. The district court dismissed the City’s petition for failure to exhaust administrative remedies in accordance with the remedy provided under the requirements of the Unfair Labor Practices Act. City of Great Falls, ¶ 7. ¶11 On appeal, this Court reasoned that “a sweeping jurisprudential pure question of law, or narrower pure question of constitutional law, exception to § 2-4-702(1)(a), MCA, 6 would irreconcilably conflict with the authorized scope of the final agency review remedy expressly provided by [MAPA] . . . .” City of Great Falls, ¶ 28. A facial constitutional challenge must contest the administrative procedure to escape the exhaustion requirement. City of Great Falls, ¶¶ 28, 30. We clarified that a constitutional issue accompanied by assertions of error regarding correctness of an agency decision does not qualify for the exception to the exhaustion doctrine. City of Great Falls, ¶ 23; see generally Shoemaker v. Denke, 2004 MT 11, 319 Mont. 238, 89 P.3d 4 (exception applies only to pure constitutional law questions not dependent on fact-based determinations in the jurisdiction of the agency to decide) (abrogated in part by City of Great Falls). ¶12 Under § 82-4-427(1), MCA, “a person whose interests are or may be adversely affected by a final decision of the department to approve or disapprove a permit application . . . is entitled to a hearing before the board[.]” Gateway acknowledges that it was required to proceed under this statute but asserts that because its District Court complaint presents a “facial constitutional challenge,” it permissibly brought that claim independently. Gateway argues that exhaustion is not required because the District Court and the Board are considering different legal and factual questions and because exhaustion would be futile, as the Board has no authority to resolve a facial constitutional challenge. ¶13 DEQ responds that Gateway’s complaint does not raise a pure question of constitutional law that challenged the administrative scheme. It instead challenges the statutory basis for the permit. DEQ argues that, in accordance with MAPA, Gateway cannot evade its contested case proceeding before the Board by filing a separate action in District Court because the request for declaratory relief is not independent of an agency 7 action. TMC and the Montana Contractors Association likewise urge this Court to follow the rationale of City of Great Falls and affirm the District Court’s grant of DEQ’s motion to dismiss. ¶14 Gateway’s appeal to the Board advanced various alleged violations of the Act specific to TMC’s permit application and the Black Site. Gateway requested that the Board set aside approval of Permit 3462 as unlawful and void. Gateway’s District Court complaint similarly recounts the alleged errors specific to TMC’s application and the Black Site in support of its request to declare HB 599 unconstitutional and vacate Permit 3462.2 Gateway pleaded that its “constitutional rights to a clean and healthful environment and adequate remedies to prevent unreasonable environmental harms was infringed by [] DEQ’s permitting of the Black [Site] . . . .” Both in its appeal to the Board and in its complaint before the District Court, Gateway requested vacatur of Permit 3462 because of its alleged unconstitutional or otherwise unlawful issuance. ¶15 The District Court reasoned that “to have an adequate picture of the constitutional implications of the challenged statute, the [c]ourt needs facts that pertain to that question[]” presented to the agency. As discussed in City of Great Falls, constitutional issues accompanied by assertions of error by an agency do not qualify for the exception to the exhaustion doctrine as a pure question of law. City of Great Falls, ¶ 23. Gateway’s 2 Section 82-1-401, MCA, provides that “the plaintiff shall first establish the unconstitutionality of the underlying statute” prior to “invoking the [district] court’s original jurisdiction to challenge the constitutionality” of a permitting decision under Title 82. The parties do not cite this statute, but it does not in any event displace the administrative exhaustion requirement or the ability to petition properly for judicial review, at which time Gateway may bring its constitutional challenge. 8 constitutional challenge is not an independent claim for declaratory relief untethered to an agency action. The present case fits squarely within the scope of what we explained in City of Great Falls. Gateway’s constitutional claim is not a facial constitutional challenge to the administrative scheme but instead implicates the agency’s action specific to the challenged permit. Because of this, Gateway’s complaint does not fall within this Court’s recognized exception to administrative remedy exhaustion. City of Great Falls, ¶ 28. ¶16 Gateway points out that the Board does not have the authority to decide constitutional issues in a declaratory judgment action. Gateway argues that, due to the jurisdiction conferred to the District Court and the doctrine of separation of powers, proceeding with its constitutional question in front of the Board is improper. DEQ counters that Gateway conflates the District Court’s jurisdiction to hear the constitutional question with the timing of when it may exercise that jurisdiction. DEQ argues that the Uniform Declaratory Judgment Act (“UDJA”) cannot be invoked to escape MAPA requirements. ¶17 Immediate review of an agency action is available “if review of the final agency decision would not provide an adequate remedy.” Section 2-4-701, MCA. As stated above, parties who have “exhausted all administrative remedies available within the agency” and are “aggrieved by a final written decision in a contested case [are] entitled to judicial review[.]” Section 2-4-702(1)(a), MCA. The administrative remedy exhaustion requirement “prevents courts from ‘premature . . . entangl[ement] . . . in abstract disagreements over [regulatory] policies’ . . . .” N. Star Dev., LLC v. Mont. Pub. Serv. Comm’n, 2022 MT 103, ¶ 20, 408 Mont. 498, 510 P.3d 1232 (alterations in original) (abrogated on other grounds by City of Great Falls). As noted, § 2-4-702(1)(b), MCA, 9 allows the constitutional claim to be coupled with a petition for judicial review of the Board’s decision. We agree with Gateway that it did not waive its right to go to the district court by appealing DEQ’s permitting decision to the Board. But because Gateway filed its complaint without a final Board decision, administrative remedies have not been exhausted. ¶18 Gateway attempts to liken its situation to Held v. State, 2024 MT 312, 419 Mont. 403, 560 P.3d 1235. It concedes, however, that “no underlying permit was at issue” in that case. Gateway also cites Mont. Env’t Info. Ctr. v. Dep’t of Env’t Quality, 1999 MT 248, 296 Mont. 207, 988 P.2d 1236 (MEIC), to support its contention that this Court has allowed facial challenges to proceed in the absence of an administrative proceeding. DEQ responds that Held is distinct from the current case because it involved a constitutional challenge that was independent from agency action. ¶19 Gateway’s reliance on Held and MEIC is misplaced. Held did not involve a challenge to a specific permit. Held, ¶ 53. It instead involved a challenge to the Montana Environmental Policy Act, untethered to an ongoing agency action. Held, ¶ 5. MEIC also did not involve a pending administrative review; the plaintiffs there challenged an amendment to the Water Quality Act that excluded “certain activities from review pursuant to the act’s nondegradation policy[.]” MEIC, ¶ 37. Both of these cases thus presented a procedural posture distinct from the current case. MEIC, ¶ 17. In MEIC, we did not disturb the premise that parties are entitled to bring a direct action to enforce fundamental rights, and we need not do so here. MEIC, ¶¶ 28, 45. In this case, both actions seek invalidation 10 of the same permit. Gateway’s pending administrative case requires it to comply with MAPA requirements before filing in the District Court. ¶20 Section 2-4-702(1)(b), MCA, creates an exception to the exhaustion requirement for a party to question the validity of a particular statute. But the statute makes clear the required procedure and process. A party challenging an agency decision subject to MAPA first must bring its claims to the agency and obtain a final ruling. Once that final agency decision is issued, the aggrieved party may seek judicial review of (1) all questions raised before the agency, (2) the validity of the statute underlying the agency’s actions, and (3) upon a showing of “good cause,” “any other” question it did not first raise in the contested case proceeding. Section 2-4-702(1)(b), MCA. Therefore, though Gateway is correct that it does not have to litigate its constitutional claim to the Board, it does first have to exhaust its contested case proceeding on the permit. If the Board rules adversely, Gateway may petition for judicial review, at which time it may present the constitutional claim.3 ¶21 As City of Great Falls explained, this honors both the judiciary’s exclusive authority “to determine, interpret, or apply applicable statutory or constitutional law” and the Legislature’s express constitutional authority to “provide for direct review by the district court of decisions of administrative agencies.” City of Great Falls, ¶ 28; Mont. Const. art. VII, § 4(2). “As an express procedural prerequisite for judicial review of 3 Counsel for Gateway filed a notice of supplemental authority in this appeal on October 8, 2026, referencing two recent Montana district court decisions. Both decisions support our conclusion here that a facial constitutional challenge to a statute may be coupled with a petition for judicial review of the Board’s decision following a final decision by the Board. 11 contested case agency decisions under §§ 2-4-702 through -704, MCA, the exhaustion of administrative remedies requirement of § 2-4-702(1)(a), MCA, is a threshold procedural justiciability requirement for exercise of that district court subject matter jurisdiction.” City of Great Falls, ¶ 18 (internal quotation marks and citations omitted). ¶22 As we further clarified, an exception to MAPA’s exhaustion requirement may be found “only when the matter at issue involves a pure question of constitutional law, not accompanied by an issue regarding a fact-based determination within the pertinent jurisdiction of the agency to decide.” City of Great Falls, ¶ 23. In this action, Gateway challenges the Permit—its constitutional arguments are “accompanied by” issues regarding determinations within the Board’s jurisdiction. Section 2-4-702(1)(b), MCA, expressly preserves Gateway’s ability to raise its constitutional challenge on judicial review of any adverse Board decision. ¶23 This Court long has recognized that “courts should avoid constitutional issues whenever possible.” In re License Revocation of Gildersleeve, 283 Mont. 479, 485, 942 P.2d 705, 709 (1997) (citation omitted). The District Court reasoned that if it issued “a ruling that agreed with [Gateway] that the statutory scheme is facially an environmental violation of constitutional proportions” and then the Board found no evidence of damage, “it would operate as a reversal of the facial challenge.” We agree with the District Court. Tethered as it is to Permit 3462 at issue, Gateway’s constitutional challenge may be mooted if the Board invalidates Permit 3462 on other grounds. This process thus harmonizes with our oft-invoked principle that the courts will not reach constitutional issues except as a last resort. The exhaustion of administrative remedies “allows an agency to make a factual 12 record and correct its own errors within its specific expertise.” City of Great Falls, ¶ 17 (internal quotations omitted; citation omitted). If the Board agrees with Gateway’s arguments in the administrative appeal, consideration of the constitutional claims would be unnecessary to grant Gateway the relief it seeks. ¶24 Contrary to Gateway’s claim of futility (citing Schuster v. NorthWestern Energy Co., 2013 MT 364, 373 Mont. 54, 314 P.3d 650), the relief of vacatur of Permit 3462 is available both by action in front of the Board and on judicial review in the District Court. Section 2-4-702(1)(b), MCA, expressly permits Gateway to challenge the statute on judicial review of a final Board decision should it be unfavorable.4 Therefore, Gateway’s argument that proceeding in front of the Board would be futile is incorrect. ¶25 Gateway also argues that developing a record about how the agency formerly proceeded prior to the challenged statutory amendments would be irrelevant to the Board’s review of the underlying permit, and it should be entitled to develop that record before the District Court. DEQ responds that exhaustion is not futile just because of the possibility that evidence will not be admitted by the Board or that it will not rule in Gateway’s favor. We agree that Gateway has not demonstrated futility when it “has neither attempted to exhaust its administrative remedies, nor [] alleged facts that if proven would show the futility of the available administrative remedies.” Mountain Water Co. v. Mont. Dep’t of Pub. Serv. Regul., 2005 MT 84, ¶ 15, 326 Mont. 416, 110 P.3d 20. What is more, MAPA 4 We ruled in Schuster that the plaintiff was not required to exhaust an administrative remedy before filing an action in district court because the administrative agency could not grant the requested remedy he sought—monetary damages for the defendant’s negligence. Schuster, ¶¶ 11-13. 13 provides a process for receipt of additional evidence on judicial review if certain criteria are shown “to the satisfaction of the court[.]” Section 2-4-703, MCA. Administrative review is not futile; it is a required part of the process. ¶26 The District Court additionally addressed its concern with piecemeal litigation. Gateway argues that first requiring a permit at the administrative level gives the agency a gatekeeping veto over statutory interpretation for whether statutes satisfy constitutional protections. DEQ responds that the fundamental purpose of exhaustion would be defeated if Gateway proceeds on its constitutional claim in the District Court. Montana Contractors Association argues that Gateway’s appeal demonstrates an attempt at piecemeal litigation. ¶27 “The statutory bar until a final action is issued aims to avoid piecemeal litigation and micromanagement by the court in the environmental review process.” Jefferson Cnty. v. Dep’t of Env’t Quality, 2011 MT 265, ¶ 32, 362 Mont. 311, 264 P.3d 715. Exhausting administrative remedies “furthers both the interests of ‘judicial economy,’ by relieving congestion and stress on the overburdened judicial system, and the interest of agency ‘efficiency’ in the attendant performance of legislatively-assigned legal duties and functions.” City of Great Falls, ¶ 18 (citation omitted). We decline to abandon the rationale of our prior cases. Gateway currently is pursuing three separate cases—one in front of the Board and two in the District Court—to challenge a single permit. Here, requiring administrative exhaustion avoids piecemeal litigation, furthers judicial economy, and facilitates efficiency in the ongoing administrative action. 14 CONCLUSION ¶28 The District Court did not err in dismissing Gateway’s complaint for failure to exhaust administrative remedies. The order of dismissal is affirmed. /S/ BETH BAKER We Concur: /S/ CORY J. SWANSON /S/ JAMES JEREMIAH SHEA /S/ LAURIE McKINNON /S/ JIM RICE 15