Nevada rancher wins landmark ‘takings’ case

Published April 1, 2002

A long-anticipated decision on Hage v. United States, a takings case filed by Nevada ranchers Wayne Hage and family, was issued by Senior Judge Loren A. Smith on January 29.

The Hages had filed their takings claim against the U.S. Forest Service and Bureau of Land Management in 1991, after excessive regulations and physical takings of their property had run them out of business. They filed their case in the U.S. Court of Federal Claims in Washington DC, placing question before the court an important question: “What property rights do ranchers own on their grazing allotments?”

Smith ruled Hage owns extensive property rights: water rights, 1866 Act ditch rights of way, the right to have his livestock consume the forage adjacent to his waters, and right of access to his waters.

“The court specifically rejected the position of the BLM and Forest Service that ranchers have no property rights on their grazing allotments,” explained Hage attorney Ladd Bedford. “The court further stated that if the government’s interference with these rights makes it impossible for the rancher to use them, the government will be required to pay compensation for their loss.”

In addressing the issue of the Hages’ access to their water rights, Smith noted:

“The Government cannot deny citizens access to their vested water rights without providing a way for them to divert that water to another beneficial purpose if one exists. The Government cannot cancel a grazing permit and then prohibit the plaintiffs from accessing the water to redirect it to another place of valid beneficial use. The plaintiffs have a right to go onto the land and divert the water.”

The court did rule against Hage’s argument that he owned the surface estate of his grazing allotments, but Hage said he was not troubled by that aspect of the court’s position. “When you combine everything the court has ruled that we own in this final decision, it is clear that the key property rights essential to a western livestock grazing operation are recognized,” noted Hage.

The court also clarified the relationship between the rancher and the grazing permit system by ruling the grazing permit is a license and the government has the authority to exercise reasonable regulations. Nevertheless, the landmark decision is likely to protect ranchers against abusive grazing regulations if those regulations cause the taking of access to the ranchers’ 1866 Act ditch rights of ways or water rights.

“For the first time in history, a federal court has defined the balance between the western ranchers’ property rights and the government’s ability to regulate,” explained Bedford. “This decision is a major step forward for the security of federal land ranchers.”

The court has established an aggressive briefing schedule to complete the final phase of the case: determining whether the Hages’ property rights, as described by the court’s Final Decision, were in fact taken by the government. If the Hages prevail in this final stage, compensation will be awarded to them for the taking of their property, and the rights of ranchers everywhere will have the same protection.

“For ten years, Stewards of the Range and its members have been working towards the protection of ranchers’ property rights,” commented Frank Duran, president of Stewards of the Range, which funded and supported the Hages’ litigation since its filing in 1991.

Duran continued, “We now have the most important legal precedent ever set in modern times to protect these rights, and we look forward to winning the next and final round, proving the government must compensate western ranchers when their actions go too far.”

J. Zane Walley is Grantee of the Paragon Foundation.

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