Final battle in the war for the West? Result of property fight could spell end to ranching on federal land

By Henry Lamb
for eco-logic powerhouse

5/15/04

The little-known U.S. Court of Federal Claims has set up shop in Reno, Nevada, to hear what may be the final phase of a 13-year legal battle between Wayne Hage and the federal government, the result of which will either send seismic shockwaves through the government and the environmental community, or signal the end of ranching and other resource use on federal land.

Much to the chagrin of federal agencies and the environmental community, Presiding Judge Loren Smith already ruled on January 29, 2002, that Hage does, indeed, have a "vested water right" and title to certain "fee lands" adjacent to the water on his Pine Creek Ranch in Nevada.

Hage has been denied the use of his private property since 1991, when the federal government confiscated his cattle because, according to David Spohr, the government's attorney, "[Hage] continually broke the law, repeatedly trespassing cattle on public lands after being warned to remove them."

Hage has contended that the government had no power to require him to remove his cattle, since he owned the water rights and title to adjacent "fee lands."

Judge Smith told both sides: "We're not here to question whether the government could do what it did. The question is, can the government do what it did, without compensation?"

If the court rules the government's denial of use of Hage's private property constitutes a "taking," then the government will be required to pay "just compensation" as required by the Fifth Amendment.

The budget-busting implications of this ruling has federal bureaucrats biting their nails. Hage believes compensation is due, and that compensation must be paid on the basis of highest and best use of the resource. Since his property rights were denied in 1991, water has become an extremely valuable commodity, especially for drought-stricken urban areas such as Las Vegas and Reno. Should the government have to pay compensation for lost water sales, to which the judge has already ruled that Hage has exclusive rights, the size of the award could be staggering.

Moreover, the precedent could open a floodgate of similar claims throughout the West. Ranchers have been following this case closely, and many have undertaken the research necessary to produce an "exhaustive chain of title" to document their own water and forage rights.

Since the early 1980s, environmental organizations have pressured the government to reduce cattle grazing in the West. Consequently, ranchers' allotments have been reduced, driving many ranchers out of business. If Hage prevails, ranchers who have been adversely affected may be entitled to compensation, and at the same time be freed from the tightening grip of the federal government on their ranching operations.

The broader question at issue is: Can federal agencies extinguish private property rights that existed before the federal agency was created without paying "just compensation" as required by the Fifth Amendment?

Hage has demonstrated that private property rights were created on the property he now owns by Liabb D. Smith in 1867, who recorded his claim and deed to a 160-acre homestead. His "Declaration of Homestead" includes a land survey and description, which notes "... a lot of land, dwellings, home, and its appurtenances. ..."

Throughout the West, land use was based on the doctrine of prior appropriation. That is, the first person to find water, and put it to beneficial use had the first right to the use of the water, and to the land the water would support, either for grazing, mining, farming, or for any other beneficial purpose.

This practice was not merely custom, it was Mexican law and territorial law well before the territories became states.

The "appurtenances" listed in the original Declaration of Homestead included vast grazing areas. This fact is evidenced by the tax records at the time, which included inventories of cattle, sheep, oxen, and horses in numbers that could not possibly be supported by the 160-acre homestead.

More evidence comes from a 1913 "Certificate of Appropriation of Water" from the State Engineer, which includes the words "... for irrigation, stock, and domestic purposes."

The question of ownership of property rights in water and in forage appears to be quieted by a 1942 court case brought by prior owners of the Hage property, in which a Nevada judge said that the owners of "all stock-watering rights, together with all range rights, range water rights, and range privileges used in connection with the said lands ... has, by itself and its predecessors in interest, been continuously the owner of, in the actual, exclusive and adverse possession of, as against all persons and the whole world. ..."

The final decree of the court order says that "... all persons ... are hereby perpetually enjoined and restrained from asserting any right, title, interest, claim, estate, or possession in or lien upon the said property or any part thereof adversely..."

The federal government ignored this order issued by a state court, claiming total jurisdiction over all but the 160-acre homestead of the Hage ranch.

The question at issue is huge. Hage says that if the federal agencies can extinguish property rights established in territorial law and state law before the existence of the federal agency - without compensation - then the Fifth Amendment to the U.S. Constitution is meaningless.