Judge Rules Virginia City Contract Dispute Belongs in Lewis and Clark County

Judge Luke Berger, sitting in the 5th Judicial District in Madison County, on Feb. 3 dismissed an emergency petition from Virginia City business owners and declined requests for a temporary restraining order and preliminary injunction that would have blocked the state from ending lease contracts. Berger ruled that the contracts between the business operators and the state specify venue in the Montana First Judicial District, in and for Lewis and Clark County, moving the dispute to Helena for adjudication.

Berger’s order states, “The Montana First Judicial District, Lewis and Clark County is the proper venue for this action as provided for in the Applicants’ contracts with Respondent Montana Heritage Preservation and Development Commission.” The contracts attached to the filings include venue clauses such as the one in an exhibit from lessee Jason Lang: “The parties agree that any litigation concerning this Contract must be brought in the First Judicial District in and for the County of Lewis and Clark, State of Montana, and each party shall pay its own costs and attorney fees except as otherwise specifically provided for herein.”

Plaintiffs named in coverage include Jason Lang, Bob’s Pizza, the Wells Fargo restaurant, and Koch Productions. Plaintiffs’ attorney Stephanie Kruer said, “The court fight was not over the contract, but what the Department of Commerce was doing with the contracts.” Kruer also told reporters that the Montana Heritage Commission and the Montana Department of Commerce “are forcing small businesses out.” Kruer said plaintiffs “got the order on Tuesday” and were “still in the midst of deciding what to do next,” and she added that “the judge entering this ruling in advance of our February 23 hearing has done us a favor in terms of time, costs, and resources,” and that “we have no problem filing the follow-up complaint in Lewis and Clark County.”

Business owners tie the dispute to state decisions to terminate or cancel leases and to a recent cost increase. Bill Koch of Koch Productions said, “The state never even looked at our expenses when they put this 15% increase on this,” and called the theater “the heart and soul of this town.” Local leaders have expressed concern about the future of the state-operated historic town; Mayor Justin Gatewood has been quoted as “questioning” the town’s outlook amid the contract cancellations.

The state argued in a Jan. 15 filing that the plaintiffs “cannot satisfy their obligation to demonstrate that they are likely to succeed on the merits” and concluded that “Applicants’ cause of action is structurally flawed and should be dismissed.” Mitch Staley of the Montana Department of Commerce defended the dismissal and outlined the agency’s plan to fill vacant Montana Heritage Commission properties, saying in full that the district court properly dismissed the case and that Commerce and MHC are promoting that “17 out of 21 businesses, not to mention the privately owned properties and businesses, will be open for business in 2026,” with optimism remaining vacancies will be filled before the 2026 season begins.

What comes next for residents is procedural and practical: plaintiffs plan to refile in Lewis and Clark County, which means hearings and filings will move to Helena. The ultimate outcome in the First Judicial District will determine which leases remain in place, how quickly vacancies are filled, and whether Virginia City’s lineup of seasonal businesses and historic attractions will be stable for the 2026 season.