WAYNE HAGE/US COURT OF FEDERAL CLAIMS

Hage v. United States
Takings and Liability Trial

May 3, 2004

Reported by Margaret Byfield, Executive Director

Day One

The Hage family is finally seeing their day in court. But more importantly, the pattern and practice of the federal land management agencies to drive western landowners off the range is on trial. The stories of harassment, taking of cattle, government interference in the daily operations of Pine Creek Ranch are being told in the modest Nevada courtroom under the jurisdiction of the United States Court of Federal Claims with Judge Loren Smith presiding.

Today was the beginning of trial in the takings and valuation phase of the landmark takings case, Hage v. United States, the case filed in 1991 by Wayne and Jean Hage for the taking of their ranch by the US Forest Service and Bureau of Land Management. With the property rights phase completed, where the court ruled Hage owned the water on his grazing allotments, ditch rights of ways, and several other key property rights in the federal lands, the court has now turned its attention to determining whether the government’s action took these critical property rights and whether the Hages should be compensated.

It is the first case of its kind. It is the first time these agencies have had to defend their regulatory actions in the Claims Court on western grazing issues. It is the first time the environmental organizations have had to sit on the sidelines and watch the court weigh the evidence of how the environmental agenda is stealing the property rights and livelihoods of America’s landowners.

There wasn’t one seat left open today as trial began. The room was filled with supporters of the Hages and advocates of property rights. The government witnesses were the crowded minority as supporters of the Hages filled the 50 available seats.

The Judge, clerk and court reporter preside at the front. The government’s table was filled with three Department of Justice attorneys, Dorothy Burakreis, David Spore, and Tim Raciacot. Representing the Department of Interior is Al Brant. Dave Grider, the District Ranger who carried out the confiscation of Hage’s cattle and who was responsible for the final actions that drove the plaintiffs out of business, was sitting directly behind the government attorneys, nervously supplying notes throughout the day.

For the plaintiffs, attorneys Ladd Bedford and Mike Van Zandt sit on the right side of the room, along with plaintiff Wayne Hage. Ramona Morrison is temporarily filling in for their legal assistant who was in an accident prior to trial.

Off to the side is Tom Lustig, attorney for the National Wildlife Federation, Toyiabe chapter of the Sierra Club, Nevada Department of Wildlife, Natural Resource Defense Council and several other environmental groups. Sitting next to him is the State of Nevada representative, Michael Whales. These two represent the Amicus Curie parties.

The Judge began trail by welcoming all the parties and asking if there were any new motions before the court. None were offered, so he then asked if either party had opening remarks. Lead attorney for Hage, Ladd Bedford, declined, stating that their position has been made clear in their briefs.

Second chair for the government, David Spore, did give brief opening remarks where he laid out the arguments we could look forward to hearing over the next three weeks. He began by stating this case is about responsible and irresponsible grazing, not about property rights. The government was forced to get involved because, “to use a colloquial, plaintiffs acted like they owned the place.” In the end they got what they deserved, but if the agency did act illegally it is an issue for the District Court and not the Claims Court.

In regards to the value of the ranch in the event the court found there was a taking, which the government was confident they would not, plaintiffs had significantly overstated the value of their ranch, only making a profit 2 of the 14 years they were in business. The court has already ruled the government has a right to reasonably regulate. The reason Hage went out of business was because of poor management.

And so the day began, with no new arguments from the government, but a clear indication they were uncomfortable defending this property rights case in the United States Court of Federal Claims. Rather, they would prefer to be discussing the rules and regulations Hage presumptively broke in District Court.

Wayne Hage was called to the stand as the plaintiff’s first witness. He was questioned by Ladd Bedford. They began by describing how the Pine Creek Ranching operation was run. Hage explained that in the spring, the 2000 mother head of cattle were on the southern end of the ranch, comprising of the Ralston, Silver King and McKinney grazing allotments. The crew would begin moving the cattle up the valley making sure no more than 200-300 cows were at a water source so as not to run out of water at any of the locations.

The cattle would migrate through a narrow pass at the top of the Ralston allotment, through Belmont, and drop into Monitor Valley, which would be home base for the summer. Once the cattle were collected, classified and branded, they would be distributed on the two mountain ranges that bordered the valley, Table Mountain and the Jefferson Range. Then the crew would begin putting up the hay. After labor day, they would begin to gather the cattle out of the mountains to Pine Creek facilities, sorting out the yearlings, old cows and any bulls that needed to be sold. These animals would be shipped out. In November and December, the cattle would
migrate back down the valley to the winter range.

Bedford asked what Hage understood he purchased when he bought the ranch in 1978. Hage said, “the entire ranch,” which included numerous holdings of private property and the neighboring grazing lands which were adjudicated by the Forest Service and Bureau of Land Management, range improvements, ditch rights of way, water rights, wells, road system, trails, fencing and other necessary components of the ranch. He described the range improvements as serviceable and functioning as long as normal maintenance was done.

He then described the many water sites he developed after purchasing the ranch, the pipelines he installed, drift fences he constructed and other new improvements made to increase the productivity of the ranch.

With this foundation laid, Bedford’s questions, and Hage’s responses, turned to the actions of the government over the 13 year history which led to the closure of Pine Creek Ranch. Throughout the day and into the next, they painted a picture of how the Forest Service changed its policies in a manner that made it increasingly hard for Hage to operate an efficient livestock operation, and pointed to the many property rights the government blocked Hage’s access to, or confiscated out right.

He described how the Forest Service took over the ranch’s cow camp on Table Mountain in the first years he purchased the ranch. The site had holding pens and facilities to temporarily house the crew for the work necessary on the 12,000 foot mountain with over 125 miles of Hage’s grazing lands. The Forest Service had begun using the facility but within a few years of Hage’s purchase of the ranch, they posted a sign at the site designating it a Forest Service Administrative site.

As a part of their new policy, the Forest Service wanted Hage to keep a man on the mountain as long as the cattle were there. Hage testified that the first time he sent a man up there, he had to fire him because he got a hold of some drugs he presumed from the Forest Service. The second man he sent up there he also had to fire because he became so liquored up he couldn’t do the work.

He discontinued using the site and recommended another location, 4 mile, where they could build some holding pens out of the quaking aspens and sleep in tents. The Forest Service agreed but wouldn’t allow the use of the natural materials. The told Hage he would have to haul all the posts and other necessary items to build the facility by pack horse. The mountain was made roadless some years before, and the cost to haul in all the materials would be prohibitive, so Hage didn’t establish a new cow camp on the mountain.

Then they turned to the issue of the Elk introduction on Table Mountain. Bedford asked when did Wayne first learned about the Elk introduction. Hage testified that in 1979 he heard the Forest Service had unloaded 49 Elk on the mountain but didn’t notice the Elk until 1982-83 when their fences were severely torn up. By the mid 80’s you would see 20-30 head at a time.

When asked if this impacted his cattle grazing operation, he said it sure did. It was extremely difficult to keep the fences maintained. One day they were repairing fences on the mountain and watched a bull Elk jump through an area they had just fixed, having to go back and repair it again.

Once the Fish and Game department opened hunting season on the Elk, it caused considerable problems because the end of the grazing season and hunting season were at the same time. You couldn’t get the semi-wild cattle off the narrow single file trails with hunters coming up. You couldn’t keep the cattle in authorized areas with a minimum of 80 riders scouting for the elk and shooting rifles.

Bedford then turned to the incident when the Forest Service fenced off his springs in Meadow Canyon on the Jefferson Range. Wayne testified that he ran into a Forest Service employee who had been touring his range and was told that he was surveying the water because since the Federal Land Policy and Management Act was enacted in 1976 the Forest Service believed they owned all the waters in the National Forest.

Shortly after that, the Forest Service expanded their horse pasture next to an administrative site they have in Meadow Canyon taking in Hage’s primary spring system, which water the cattle on the Meadow Canyon allotment. Hage objected to this and the Nevada State Engineers held a field hearing with the Forest Service and Hage. At the hearing Hage brought stacks of title documents showing the chain of title and his ownership of the water. The Engineer ruled that Hage owned the water not the Forest Service. “Even though I won the ruling, the Forest Service wouldn’t take out the fences that blocked my water.” Still today those fences remain and the Forest Service continues to use the water for its purposes.

Wayne then described several other places where the Forest Service had fenced off, or blocked access to his water.

Bedford began questioning Hage on the stacks of complaints the Forest Service had filed against him over the 13 years. Hage testified these were primarily trespass notices and charges of not maintaining fences. During the 105 day grazing season in 1983, they had 40 visits and 70 certified letters from the Forest Service all alleging different violations of his grazing permit. For instance, they didn’t like his temporary repairs to the fence he would make through the season until he could get the necessary fencing equipment up on the mountain. They wanted him to use a different splicing method, which he later found out was a rule they made locally in the Tonopah office.

One notice he received gave him the usual 5 days to fix the fence. So he sent a man leading a pack horse loaded up with fencing equipment to the top of Table Mountain, and when his rider found the Forest Service’s blue flag marking the problem, there was one staple missing.

The previous owners had told him they were selling because of the increased Forest Service pressure, but Wayne thought he could get along with them. When asked if he intentionally violated any of the rules he said no. “You might say I was a little naive. I had worked for the Forest Service and BLM, taken more range courses than most of them had, so I thought I could work with them, but quickly found out it had nothing to do with good range management, but that they didn’t want me there.”

“Do you recall what led to the decision to suspend 20% of the livestock allowed on the Table Mountain Allotment?” asked Bedford. Hage said yes, and explained that with all the new policies, new fences they erected which inhibited proper grazing, and continual charges they were bringing, he decided to take non use in 1989. He was making about $13 dollars a head for a cow that was now costing him $32 when
moving it to the mountain. Since they were already appealing many of the decisions, he opted not to use the allotment until the conflict was resolved.

They said he didn’t fill out the proper form to take non-use so they suspended 20% of the cattle allowed on the allotment. Then they said he was required to put at least 90% of the cattle on the allotment. By this time there were only 30 days left in the grazing season. There wasn’t enough time to put cattle on and off without creating more trespass situations.

Bedford then turned to a letter from the Forest Service, which cancelled 25% of the cattle allowed and asked what led to this action. Hage explained that during this non-use year, the cattle that normally summered on the mountain would stay close to the gate at the head of the trail. One day, they saw a Forest Service vehicle drive up to the gate and then shortly thereafter leave. Curious as to what they were doing, he went to the same location later that day and found the gate open and saw that the cattle had gone through. A few days later he received a letter canceling 25% of his permitted numbers because he had cattle on the allotment.

At this point Judge Smith asked Wayne for clarification. He asked if what he was saying was that the Forest Service opened the gate and the cattle wandered onto the allotment and then the Forest Service filed trespass charges against him. Wayne responded, “that is correct.”

Bedford asked if the charges the Forest Service made against him affected his cattle operation. Wayne answered “yes, because usually you would have to correct the problem within five days, so you would have to drop what you are doing, often haying, and fix the problem. Stopping in the middle of haying compromises the quality of hay. One time, we were responding to their demands, and couldn’t take care of other necessary functions, and our yearlings ran out of water causing weight loss right before they were sold.”

“We had a standard policy that we would do everything we could to abide by the terms and conditions of the permit. We began a policy of having each man involved with complying with the regulations write a note telling what they did that day. I believe that is provided in the record here.”

Bedford then turned to a line of questioning on the 1866 Act ditch rights of way which caused Lead counsel for the Government, Dorothy Burakreis, to object. She stated that the ditches were a subject of the previous trial and it was not necessary to cover these again. Judge Smith asked Bedford what the relevance of this testimony was and Bedford responded that we are now in the takings phase, not proving ownership, and that this line of questioning goes towards the government’s interference with the maintenance of Hage’s ditches causing a taking of his property. The Judge said that seems to be relevant and overruled the objection.

Wayne testified that after clearing sagebrush out of one of his ditches, Bob Mason of the Forest Service said he was in violation of FLPMA, which revoked those ditches and required that he have a special use permit to conduct routine maintenance. So he took out the permits, but found that under their rules you had to use hand tools, which made it prohibitive. Later, a court ruled if the ditch was in existence prior to FLPMA you didn’t need the permit. The new District Ranger, Guy Pence, wrote a letter informing him of this decision and asked that he write a letter asserting these were 1866 act ditches which he did. So then he continued the maintenance without the special use permits.

Bedford asked Wayne to look at two letters written by the Forest Service in August and October of 1986. Both letters state Wayne is required to have a special use permit to perform maintenance on his ditch. The letters were admitted into evidence.

He then showed Wayne a letter signed by David Grider, the District Ranger that replaced Guy Pence. It informed him that he would be subject to Federal Prosecution if he continued to maintain his ditches without a special use permit. This was also admitted into evidence.

Bedford then asked Wayne to describe the condition of his ditches and their ability to transport his water to the meadows and sites of beneficial use after not being able to maintain these ditches. One by one, Wayne describe the length and condition of the ditches, now inhibited by willow growth and Junipers. He testified how little water is now running through these ditches, a fraction of what use to flow, and how his meadows are increasingly being replaced with sagebrush and other brushy species such as rabbit brush, because of the lack of water.

At this point, the Court adjourned. Wayne would resume testifying the following morning.