A dispute over a Montana wind farm's potential to harm nearby nesting eagles and other birds should be heard in California, the Montana Supreme Court said Friday, in an opinion that deals a legal setback to the project's developers.

The legal row over the Rim Rock wind farm near Cut Bank began last year, when San Diego Gas & Electric accused developer NaturEner of concealing the possibility that eagles and other birds could be harmed by the 126-turbine project.

NaturEner, whose parent company is based in Spain, filed a competing lawsuit in Montana. Its attorneys alleged SDG&E was trying to get out of an unfavorable contract and using the eagle issue as an excuse.

The Rim Rock wind farm is near an area with seven golden eagle nests and Montana's densest concentration of ferruginous hawks. Under federal law, a take permit is required for activities that could injure, kill or otherwise harm protected birds such as eagles.

SDG&E alleges federal officials recommended to NaturEner that the wind farm needed such a permit. NaturEner has denied the claim.

Montana District Judge Brenda Gilbert ruled in May that the case should be heard in Montana because of Rim Rock's importance to the economies of Glacier and Toole counties. She also issued an injunction requiring the utility to pay NaturEner nearly $2 million a month.