Beck

A group of water users along the Clark Fork River in southeastern Montana 1 appeal the dismissal without prejudice of their claim under Montana law against Atlantic Richfield Company (“ARCO”) for compensatory damages for diversion of water from the River. ARCO cross-appeals because the dismissal was without prejudice. We reverse the dismissal and order the district court to remand the case to state court.

I.

ARCO’s corporate predecessor discharged mining wastes into the Clark Fork River for many years. The United States Environmental Protection Agency (“EPA”) ordered ARCO to clean up the resulting contamination pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq. To implement the cleanup, the EPA ordered ARCO to divert the water into tailing ponds where the waste could settle to the bottom, allowing cleaner water to flow back into the River. The order specified that ARCO was not to cause any injury to vested water rights, and that the order did not alter any obligation ARCO might have to pay for use of the water.

Plaintiffs contend the diversion diminished the amount of water available to downstream users.…