Thursday, December 10, 2015

Hage v. United States Lives on, 24 Years Later


Although Cliven Bundy has gained some recent fame for resisting the BLM’s efforts to bring him into compliance with his federal grazing permits, he was a flash in the pan compared to the Hage family, whose 24-year litigation siege continues to stymie the Department of Justice.     Although it is barely possible to put this 24-year history in a nutshell version, the essence of it is E. Wayne Hage and his children’s belief that Interior’s partial cancellation, and eventual revocation, of their grazing permits in the early 1990s violated their constitutional and statutory rights.  Several of these cases have been resolved, but two live on… and on, and on:  Hage v. United States (U.S. Court of Federal Claims) and United States v. Estate of E. Wayne Hage (9th Cir.).

In the former case, the Hages alleged that the Forest Service’s partial cancellations of E. Wayne Hage’s grazing permits in 1991 effected a taking of their fee simple rights in several ditches and water rights located on the Forest Service grazing allotments historically used by their ranch.  E. Wayne and Jean Hage bought the Pine Creek Ranch in 1978, which consists of 7,000 acres of private land, serving as base property for 752,000 acres of grazing allotments located nearby.  The Hages first started grazing these six allotments (managed by BLM and the Forest Service) pursuant to federal permits in 1978.  In the early years, the Hages and the agencies had an uneventful relationship.  In the late 1980s, however, the Hages started to resist Forest Service management actions that they deemed to be in conflict with their “rights” to graze the allotments at levels they, rather than the Forest Service, deemed appropriate.   This resulted in the Forest Service enforcing permit violations by lowering authorized stocking levels on two of the allotments in 1990 – one by 25% for repeated violations of prior permit terms, and one by 38% for trespass. Forest Service later impounded Hages’ cattle after they refused to remove enough to comply with the reductions.

Things heated up in 1991, when E. Wayne Hage and a friend were criminally convicted of removing trees on one allotment, which conviction was later overturned by the Ninth Circuit. That same year, the Hages filed the predecessor action to Hage v. United States, alleging physical and regulatory takings of their ranch, cattle, “forage rights”, water rights, and ditch rights.  In addition, they argued that grazing permits were bilateral contracts, and reduction or cancellation of the permits constituted an enforceable breach.  In a series of decisions (8 in total), the Court of Claims repeatedly held that cancellation or reduction of the permitted stocking levels did not constitute takings, but struggled with the factual issues related to the water rights, finally holding that the Forest Service’s denial of the Hages’ requests for access to their ditches and water rights constituted a taking.  In 2010, the district court awarded Wayne N. Hage (now pursuing the family litigation after his father had passed away in 1996) and the Hage Estate approximately $14,000 in damages.  The federal defendants appealed, and Hage cross-appealed.  Over the ensuing five years, the case again bounced back and forth from the district court to the Court of Claims, with the federal defendants seeking reversal of the takings ruling and Hage seeking to reopen the merits of “unresolved liability theories” yet to be tested. The Court of Claims eventually reversed the district court on the takings and damage assessment in 2012.  Yet, Hage filed a motion to reopen the case, and so it continues…Currently, the parties are battling over whether the case is closed, with Hage arguing that he did not receive notice of his right to appeal the last district court ruling.  On December 2, the court agreed, granting Hage leave to file an appeal to the Federal Circuit, which will hear the case in 2016.   

The Ninth Circuit appeal arises out of a trespass enforcement action by the Department of Interior, which Wayne N. Hage defended using a theory of vested grazing rights predating the passage of the Taylor Grazing Act in 1934.  Essentially, he argued that the Pine Creek Ranch had acquired grazing rights under territorial law and the Treaty of Ruby Valley.  The federal district court ruled against Hage on those arguments, but, in a novel interpretation of federal grazing laws, held that a) there is a property right for the purposes of the Due Process Clause (both “substantive and procedural”) in a grazing permit and b) that the federal government may not deprive a permittee of a grazing permit without observing “certain procedural safeguards.”  In addition, the court held, there are certain circumstances in which the federal government may not take “adverse action” against a permittee, regardless of the procedure. 

The facts in this case centered around Hage’s application for a new grazing permit in 1993, after the criminal case and the takings case had been filed.  Despite this tension, the BLM was willing to allow Hage to renew his BLM permits.  Hage filled out the permit application form, but next to his signature, wrote “without prejudice-UCC 1-207.”   The BLM denied the permit because of the UCC language, uncertain that Hage was fully accepting the terms and conditions of the proffered permits.  Despite the fact that he lacked permits, Hage continued to graze the BLM allotments, resulting in the trespass violations which eventually gave rise to the enforcement action. 

Ultimately, at the conclusion of a 103-page decision that essentially rewrote federal grazing law, Judge Jones held that the federal government had violated Hage’s due process rights “through a series of actions designed to strip the Estate of its grazing permits… for reasons unrelated to the appropriate use of the range or ensuring that historical grazing use is respected.”  United States v. Estate of Hage, No. 2:07-CV-01154-RCJ, p. 41 (D. Nev. May 24, 2013).  Apparently, the court viewed the federal actions (such as failing to issue the BLM permits because of the UCC annotation, and failing to entertain any further grazing applications after the trespasses occurred) as a sort of conspiracy designed to deprive Hage of his “rights” to graze, going so far as to say that the federal actions “shock[ed] the conscience of the court.”  Id. at 42.  Furthermore, the court recognized a “forage right” to graze within one-half mile on either side of a vested water or ditch right, granting Hage a one-mile easement alongside each of his ditches and around each of his springs and wells, for his cattle to drink and “wander,” without a federal grazing permit.

These rulings were remarkable for several reasons, primarily because federal courts have refused to recognize any property right in a grazing preference, a grazing permit, or any associated aspect of public lands grazing, for over one hundred years.  The United States Supreme Court has issued no less than five opinions declining to recognize property rights in permits, preferences, or in the public lands grazed pursuant to federal permits.  Moreover, this decision reverses the statutory presumptions, in the Taylor Grazing Act, National Forest Management Act, Multiple-Use and Sustained Yield Act, and the Federal Lands Policy and Management Act, and recognized by the federal courts in every circuit, that the Forest Service and the BLM possess the right to modify, cancel, or decline to renew grazing permits for a broad variety of reasons – not just related to the permittee’s behavior (although violations of permit conditions certainly constitute grounds for suspension, cancellation, or modification of a permit’s terms), but in light of other management concerns, such as a modification to the management plan, or because of drought, competing uses, or other reasons. This decision flips that model on its head – declaring that the agency has the burden to prove that the permit should be modified, cancelled, or suspended, and once it has satisfied that burden, changes may only be made for reasons related to the permittee and his “historical use” of the allotments.  Finally, this decision deviates markedly from the line of federal cases recognizing the Forest Service and BLM’s statutory authority to impose reasonable conditions on access to private inholdings – in this case water and ditch rights.  Every other court that has considered this issue has ruled that the federal agencies can restrict, bar, or otherwise condition a right of access based on the private inholder’s past conduct, or for reasons unrelated to that inholding (depending on the protected status of the surrounding federal land).  This decision intimates that anyone possessing a private inholding has an absolute right to access an inheld water or ditch right, which cannot be regulated by the federal agency, and expands that right to include the one-half mile “buffer zone” on all sides.

The Department of Interior has appealed this decision to the Ninth Circuit, which hears oral argument from the parties today.  A decision is expected on this appeal in 2016 as well.

 - Hillary Hoffmann

Guest blogger Hillary Hoffmann teaches grazing law, among other subjects, at Vermont Law School.

| Permalink


The Federal trial judge's decision was reversed on 1/15/16 in a published opinion shown on the newspaper's page linked below. The 3 judge 9th Circuit panel issued an unpublished Memorandum chastising the judge for wrongfully finding 2 Federal employees in contempt.


The Hages had good lawyers, Mark Pollot from Boise, ID, who is with Idaho Freedom Foundation and John Hoffman from Reno, NV who is often the State of Nevada's outside lawyer on multistate water law cases.

Posted by: Jennifer Shaw | Jan 18, 2016 11:14:22 PM

Post a comment