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•Appeals Court Overturns Hage

from American Stewards

News & Updates | August 22, 2012

Plaintiffs Have Until September 10th to File for Rehearing

On July 26, 2012, the U.S. Court of Appeals for the Federal Circuit in Washington D.C. overturned the landmark takings case of Hage v. United States. The case was filed in 1991 by the now deceased Wayne and Jean Hage after the U.S. Forest Service and Bureau of Land Management had regulated the family out of business. It was the first Fifth Amendment takings case filed in America seeking to protect the property rights of western ranchers on federal lands.

In 2008, Senior Justice Loren Smith of the U.S. Court of Federal Claims found in favor of the Hages and issued a precedential ruling determining that the federal government had taken the Hage’s water, rights of way and range improvements without just compensation through both regulatory actions and physical takings of the property. The Claims Court reached this decision after conducting two extensive trials, multiple hearings and re-hearings, reviewing numerous briefs and even conducting a site visit to the Hage’s ranch.

It was a 17-year process for the lower court to thoroughly review everything from title documents to agency personnel testimony and testimony from Wayne Hage before his passing. Ultimately, the court found that the federal agencies had crossed the line in regulating the Hages through the grazing permit system which led to the taking of their rights without compensation. The court originally awarded $4.4 million for the property plus interest, and attorney fees.

The government appealed the decision to the Federal Circuit. After reviewing the appeal briefs and conducting a short 30-minute hearing, the Appeals Court overturned a part of the Claims Court ruling and remanded other parts back to the lower court.

During the Appeal hearing, the three-Judge panel directed their questions at whether or not the plaintiffs should have applied for a special use permit to clean their historic ditches which pre-dated the creation of the National Forest. Judge Smith with the Claims Court ruled the permit was not necessary and would have been futile for Hage to apply for one given the conduct of the agencies towards the Hages on similar issues.

The Forest Service insisted that maintaining the 28-plus miles of ditches through Nevada’s rugged terrain would only be allowed if the maintenance was done with hand tools. The lower court found this restriction made clearing the ditches prohibitive and therefore prevented the Hage’s water from reaching the private meadows. The Appeals court disagreed.

“The Appeals Court decision reads very similar to the government’s briefs filed in the case,” commented Margaret Byfield, daughter of Wayne and Jean Hage and executive director of American Stewards. “Where the lower court very carefully examined the facts and went to great effort to understand not only the law, but how the western grazing lands function, the Appeals Court deferred to the government’s position. It is very unfortunate that the facts determined by the lower court, as well as, its ruling were so easily and eagerly dismissed.”

In another part of the ruling, the Appeals Court found that even though the Forest Service had fenced off one of Hage’s critical springs, this was not a physical taking because the fences were only up for five years and some of the water flowed out of the fenced area where the Hage’s could access the water.

In contrast to this ruling, the lower court recognized that the Hage’s held two court decrees and final adjudication from the state of Nevada determining that they own the full use of the water at the point of diversion, which was the spring itself. Judge Loren Smith, who issued this ruling, recognized that the states, not the federal government, determine the extent of a water right so he deferred to the state’s position that the Hages owned the right to use all the water.

The Appeals Court rationalized its reversal by deciding that since Hage could use some of the water, the government’s action did not result in the physical taking of the water right.

The court’s ruling opens the door for the federal government to fence off any private citizen’s water right that resides on the federal lands and take whatever they want without paying compensation. In this case, the Forest Service had fenced off Hage’s spring in order to pipe the water into their ranger station for their domestic use. “What is most outrageous about that is the Forest Service holds a water right on a different spring that is closer to their station for this very purpose. They did not need to take our water. It was done to create a controversy they believed they could get away with, and the Appeals court just let them do so,” stated Byfield.

Attorney, Lyman Bedford with Clausen Law Group (who successfully litigated the lower court ruling along with Mike Van Zandt with Bridgett Hanson) has recommended to the executor’s of the Hage estate that they file for an en banc review or a rehearing before the Federal Circuit, the filing for which must be done by September 10, 2012. If this fails then he has recommend they prepare a Cert petition to the Supreme Court.

“We are not too surprised by the Appeals Court decision after hearing the questions raised during arguments. We have always believed that this case had a very high chance of being heard in the Supreme Court,” Byfield continued. “It is a very important case with high stakes on both sides. If we ultimately prevail, the federal government will be restricted from over-regulating western landowners and western property rights will finally have protection from unconstitutional takings by the federal government.”

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