Monday, January 18, 2016

With Astonishing Speed, the Ninth Circuit Holds Hage Family Liable for Trespass, Damages

A little over a month ago, the Ninth Circuit heard oral arguments in United States v. Estate of E. Wayne Hage, a trespass action by the federal government against E. Wayne Hage and his family for decades of unauthorized grazing on public allotments in central Nevada.  The district court (Jones, J.) ruled in favor of the Hages, finding that their water rights created an easement by necessity to bring cattle onto the allotments (without a permit) and established a defense to the trespass claims, and that BLM officials who had investigated the trespass incidents and denied Hage’s applications for grazing permits violated his Due Process rights.  Moreover, the district court held those officials in contempt for their actions.  On Friday, in a strongly worded 30-page opinion, issued with relative lightning speed (slightly more than 30 days after oral argument), the Ninth Circuit vacated the easement ruling, reversed the APA ruling, and reprimanded the district court for both its legal reasoning and stated opinions during trial in this and other cases--opinions that reflected “both pre-judgment of the merits and bias against the federal agencies.”  Remanding the trespass issue for a determination of damages, the panel instructed that the case be assigned to a different judge, and wrote separately to reverse the contempt ruling against the two BLM officials.

As noted in the previous post about this case, the Ninth Circuit appeal arose out of a trespass enforcement action by the Department of Interior, which the Hages defended using a theory of vested grazing rights predating the passage of the Taylor Grazing Act in 1934.  Essentially, they argued that the Pine Creek Ranch had implied grazing rights under territorial law and the Treaty of Ruby Valley, by virtue of water rights acquired in the early 1900s.  The federal district court ruled against the Hages on those arguments, but, in a novel (and unsupported) 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 latter rationale formed the basis for the contempt ruling against the two BLM officials.  Remarkably, the district court also encouraged the Hages to counterclaim under the APA, which they did, arguing that the 1993 denial of E. Wayne Hage’s grazing permit application was arbitrary and capricious agency action.

On the trespass claim, the Ninth Circuit held that the Property Clause, its progeny cases, and in particular the Taylor Grazing Act, “revoked” any prior federal practices and policies of allowing indiscriminate grazing on the public domain.  Approximately 15 years after the Taylor Act was passed, Congress revoked any implied license to graze on national forest lands.  The court emphasized that both Congressional acts expressly disclaimed the creation of any “right, title, or interest” in the public lands leased or permitted for grazing.  With respect to the water rights argument (the district court had held that possession of water rights on a grazing allotment created an easement by necessity allowing the holder to bring cattle onto the allotment, without a permit, to water and graze them), the court held that the “preference” provision of the Taylor Act conferred only the benefit of being first in line for holders of water rights when a grazing permit is first offered, but that it has “no effect” on the independent requirement that “a rancher obtain a grazing permit … before allowing cattle to graze on public lands.”  Therefore, the court held that the Hages were liable for trespass under the federal grazing statutes, vacated the trespass ruling, and remanded the case for a determination of the damages owed.

As for the Hages’ counterclaim under the APA, the Ninth Circuit reversed, holding that it was time-barred.  The Hages had attempted to argue, under the continuing violations doctrine, that the federal government’s filing of the trespass suit in 2011 constituted a final agency action for which an appeal could be taken.  The panel disagreed, noting that the case upon which the district court relied for its ruling that a litigation action could constitute final agency action – AT&T Co. v. EEOC, 270 F.3d 973, 975 (D.C. Cir. 2001) – actually reached the opposite result.  In sum, agency decisions about litigation are committed to agency discretion by law and cannot constitute the basis for an APA claim.

Finally, the Ninth Circuit remanded the case to the district court for a determination of damages on the trespass claims.  Notably, the panel instructed the chief judge of the district court to assign the remaining issues to a different judge because Judge Jones’s rulings on the trespass claim and APA counterclaim had “contravened” the law, and he had “grossly abused the power of contempt by holding two federal agency officials in contempt of court for taking ordinary, lawful actions that had no effect whatsoever on this case.”  In fact, over one-sixth of the opinion (almost 6 full pages) was dedicated to an explanation of Judge Jones’ conduct in this and other cases, demonstrating – in the words of the panel – “bias” against federal agency officials ("[I]t’s my experience that the Forest Service and the BLM is very arbitrary and capricious"); “arrogance”; abuse of discretion in routinely declining to admit federal agency attorneys from out of state (noting that even a “reasonable observer” would conclude that his "feelings against out-of-state attorneys are both well-established and inappropriately strong"); and generally “troubling” views about the law and appellate review (“Judge Jones’ actions ‘can only be explained as a deliberate attempt to evade review by higher courts’”).  In a separate memorandum opinion, the panel reversed the contempt rulings against those officials, holding that the district court had applied “the wrong legal standard,” but even applying the correct standard, no finding of contempt was warranted.

This decision is certainly a victory for the federal government in its decades-long struggle to enforce federal grazing law against the Hage family, but it remains to be seen what will come of the Federal Circuit Court of Appeals’ consideration of the related takings claims in Hage v. United States. That litigation appeared to be finally resolved in 2012, but, through a series of post-trial procedural motions, the Hages have managed to stoke the litigation flames at least through 2016, and perhaps beyond.

Hillary Hoffmann

Hillary Hoffmann is a Professor at Vermont Law School, specializing in federal grazing law.  She and her colleague, Professor John Echeverria, wrote an amicus brief in the Ninth Circuit appeal, on behalf of NRDC and the Sierra Club.

https://lawprofessors.typepad.com/environmental_law/2016/01/ninth-circuit-holds-hage-family-liable-for-trespass-damages.html

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Comments

Congratulations to Professors Hoffman and Echeverria for a job well done.

Posted by: Jennifer Shaw | Jan 19, 2016 6:24:25 PM

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