Analysis of Hage v. United States

On January 29, 2002, Senior Judge Loren A. Smith issued his final opinion and findings of fact with respect to the property rights phase of Hage v. United States, which phase was tried in Reno, Nevada in October 1998, with post-trial oral arguments occurring in San Francisco in June 1999.

At issue was the nature and scope of the Hages’ property rights on the federally managed grazing allotments appurtenant to the Hages’ Pine Creek Ranch. In his decision, Judge Smith found that the Hages owned extensive water rights on the Table Mountain, Meadow Canyon, Monitor, Ralston and McKinney Allotments, which had been grazed by the Hages’ cattle prior to 1991, when the Government put them out of business. The water rights found to be owned by the Hages amount to more than 20,000 acre feet, and are located in virtually all parts of these grazing allotments.

In addition to water rights, Judge Smith found that the Hages were the owners of ten 1866 Act ditch rights of way. Judge Smith found that the scope of these 1866 Act ditches was 50 feet on either side of the ditch, and that the Hages’ livestock had the right to use the forage adjacent to these ditch rights of way. Judge Smith also found that the Forest Service could not require the Hages to obtain a special permit in order to maintain their 1866 Act ditches. In his decision, Judge Smith noted that Congress intended to give those with 1866 Act ditches access to those ditches for construction and maintenance. Anything less might make those same ditches worthless. In holding that there is no requirement under the law to seek permission to maintain an 1866 Act ditch, Judge Smith specifically found that the Forest Service manual requiring a special permit in order to maintain such a ditch does not have the force of law and cannot alter a statutory right. This decision also rejected the contention of the Forest Service that it had authority to adjudicate title to rights of way under the 1866 Act.

In addressing the issue of the Hages’ access to their water rights, Judge Smith’s opinion stated the following:

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.

Judge Smith set a another status conference for March 13, 2002, and ordered the Hages to file a brief that addresses whether the Hages had a beneficial use for the water prior to the Government revoking their grazing permits, and that there was a taking of the Hages’ right to use their vested water rights. In this regard, Judge Smith noted that the Hages must demonstrate that they could have used the water if the Government had not deprived them of access to prevent them from using the water. He stated that the Hages have a right to the water, so long as they can put it to beneficial use.

The importance of this decision is its specific rejection of the position of the BLM and Forest Service that ranchers have no property rights on their grazing allotments. Although Judge Smith rejected the Hages’ claim that they owned the surface estate of their grazing allotments, they do have private property rights, i.e., water rights, 1866 Act ditch rights of way, the right to have their livestock consume the forage adjacent to their waters and ditches, and the right of access thereto. 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 his decision, Judge Smith made it clear that the mere fact that a rancher holds a grazing permit confers no valid property interest. However, if by revoking the Hages’ grazing permits, the Forest Service and BLM prevented the Hages from accessing and using their vested water rights, then those agencies may have taken the Hages’ water rights. Those water rights are a property right, and not a license like the grazing permits. This decision will be of great help to ranchers who have vested property rights on their allotments, such as water rights and 1866 Act ditches. However, this decision will be of little or no aid to those ranchers who have no such vested property rights on the allotments their livestock graze.

 

Lyman D. Bedford, Esq.

McQuaid, Metzler, Bedford

& Van Zandt, LLP

221 Main Street, 16^th Floor

San Francisco, CA 94105