Buhmann v. State

• Citation: 348 Mont. 205,201 P.3d 70,2008 MT 465
• Decision Date: 31 December 2008
• Docket Number: No. 05-473.,05-473.
• Parties: Bruce BUHMANN, Shirley Buhmann, Circle Eagle Game Farm, Len Wallace, Pamela Wallace, and Big Velvet Ranch, Plaintiffs and Appellants, v. STATE of Montana, Mike McGrath, and Jeff Hagener, Defendants and Appellees, Sportsmen for I-143, Montana Wildlife Federation, Defendant-Intervenors and Appellees.
• Court: Montana Supreme Court

201 P.3d 70

2008 MT 465

348 Mont. 205

Bruce BUHMANN, Shirley Buhmann, Circle Eagle Game Farm, Len Wallace, Pamela Wallace, and Big Velvet Ranch, Plaintiffs and Appellants, v. STATE of Montana, Mike McGrath, and Jeff Hagener, Defendants and Appellees, Sportsmen for I-143, Montana Wildlife Federation, Defendant-Intervenors and Appellees.

No. 05-473.

Supreme Court of Montana.

Argued September 13, 2006.

Submitted June 20, 2007.

Decided December 31, 2008.

Rehearing Denied February 10, 2009.

For Appellants: Arthur V. Wittich (argued), Wittich Law Firm, P.C., Bozeman, Montana, Richard M. Stephens (argued), Groen, Stephens & Klinge, LLP, Bellevue, Washington.

For Appellees: Hon. Mike McGrath, Montana Attorney General, Chris D. Tweeten, (argued), Assistant Attorney General, Helena, Montana.

For Defendant-Intervenors and Appellees: Jack R. Tuholske (argued), Tuholske Law Office, P.C., Sarah K. McMillan, Attorney at Law, Missoula, Montana.

Justice PATRICIA O. COTTER delivered the Opinion of the Court.

¶ 1 Bruce and Shirley Buhmann (Buhmanns), owners and operators of the Circle Eagle Game Farm, and Len and Pamela Wallace (Wallaces), owners and operators of the Big Velvet Ranch, appeal an order of the First Judicial District Court which denied their takings claims under the Fifth Amendment to the U.S. Constitution and Article II, Section 29 of the Montana Constitution. These claims alleged that the enactment and enforcement of initiative measure no. 143 (I-143), which was approved by the citizens of Montana on November 7, 2000, constituted a taking of their private property and that they were entitled to just compensation for this taking. For the reasons set forth below, we affirm the District Court.

FACTUAL AND PROCEDURAL BACKGROUND

¶ 2 The case at bar involves takings claims very similar to claims we recently addressed in Kafka v. Mont. Dept. of Fish, Wildlife and Parks, 2008 MT 460, 348 Mont. 80, 74 P.3d 8, 2008 WL 5413504. Insofar as the background information and our decision and reasoning in Kafka applies to the case at bar, we will refer to that case. Where the arguments and issues raised by the present appellants are distinct from those raised by the parties in Kafka, we will address their merits accordingly.

¶ 3 The appellants in this case were owners and operators of alternative livestock game farms (Game Farms) within the state of Montana. The Game Farm industry is premised on the notion that individuals are willing to pay significant amounts of money to shoot captive animals, primarily elk, within the confines of a Game Farm. Since 1917, it has been lawful for individuals to own alternative livestock, such as elk, and keep them in captivity. Game Farms are heavily regulated by the Montana Department of Fish, Wildlife, and Parks (FWP) because of the threat posed by chronic wasting disease (CWD), a fatal disease of the central nervous system of captive and free-ranging animals such as mule deer, white-tailed deer, and Rocky Mountain elk. Kafka, ¶ 2. To operate a Game Farm, the owner/operator must possess an alternative Game Farm license and comply with the rigorous and extensive licensing requirements set forth in Title 87, chapter 4, part 4, MCA. See Kafka, ¶¶ 2, 8.

¶ 4 On November 7, 2000, the voters of Montana passed I-143, which made two significant changes to the regulation of Game Farms in Montana. See Kafka, ¶¶ 6-9. First, it prohibited fee-shooting on Game Farms in Montana. Second, I-143 prohibited licensees from transferring their alternative livestock licenses to others. These changes had a significant impact on the Game Farm industry in Montana because the vitality of the Game Farm industry was premised upon the profits derived from fee-shooting. The ban on the transfer of licenses was significant because it essentially prohibited Game Farm owners from selling those Game Farms to others, since a Game Farm could not operate without a valid license. I-143 did not, however, eliminate all uses of alternative livestock as it still permitted Game Farm operators to own herds, harvest the animals for their meat or antlers, or sell them in out-of-state markets where fee-shooting was legal. Kafka, ¶¶ 7-8.

¶ 5 The enactment and enforcement of I-143 led to several lawsuits in both state and federal court in Montana. At the time of this suit, the Buhmanns resided in Blaine County, Montana, and owned and operated the Circle Eagle Game Farm, a twenty-nine acre game farm which was regulated by FWP. The Buhmanns began the Circle Eagle Ranch in 1997 after applying for and receiving a loan from the state of Montana's Department of Commerce. The Buhmanns' loan application included a business plan describing an elk-breeding program they planned to institute. This plan included the annual selling of wholesale mature bulls to shooting operations, and the selling of retail mature cows to other breeding operations. The Buhmanns and the Circle Eagle Ranch received an alternative livestock license through FWP which allowed them to keep sixty elk. They began selling elk in 1999. In addition to selling elk, the Buhmanns also sold a mineral supplement for captive deer and elk called Sweet Pro.

¶ 6 The Wallaces started the Big Velvet Ranch in Ravalli County, Montana, after obtaining a Game Farm license in 1992. The Big Velvet Ranch eventually encompassed roughly 2000 acres. In the course of developing their ranch, the Wallaces purchased material for fencing and other infrastructure, constructed a lodge on the property, removed the native deer and elk, and then imported alternative livestock (elk) from other locations. The Wallaces raised captive elk, and provided opportunities for the fee-shooting of elk on the Big Velvet Ranch. Under this service, clients would come and stay on the Big Velvet Ranch and be guaranteed to shoot an elk within the confines of the ranch. Additionally, the Wallaces bred captive elk for other Game Farms.

¶ 7 According to the factual assertions in their complaint, the Wallaces invested millions of dollars in developing the Big Velvet Ranch, and took a number of measures to ensure that their alternative livestock was of the highest quality and was disease-free. In 1999, after a three-year testing process, the Big Velvet Ranch was certified as tuberculosis-free, and in 2001 certified as brucellosis-free. Additionally, the Wallaces tested roughly 700 animals from the Big Velvet Ranch for CWD, and all those tests came back negative. The Wallaces also claim they developed prototype feed trucks, and appropriate facility modifications which would allow them to maintain a high nutritional level of the elk, at a cost of over $600,000. The Wallaces further stated that they took other measures, including the hiring of a veterinarian and the development of extensive monitoring systems, to ensure that their operation established a reputation as one of the most successful private elk ranches in the United States.

¶ 8 From 1997 through 1999, the Wallaces claim to have harvested over 100 mature bulls and earned gross revenues of over $1 million per year. The Wallaces allege that their ranch guests would pay on average $7,000 for hunting mature bull elk, and that this comprised the majority of the ranch's revenues. Between 1995 and 2000, the Wallaces hosted more than 600 clients.

¶ 9 After the passage of I-143, and its interpretation by the Attorney General's office and FWP, the Wallaces claim that their existing and prospective customers cancelled their plans to visit the Big Velvet Ranch, and that many demanded refunds on their deposits. Similarly, there was a cancellation of promised purchases of animals and feed from the Circle Eagle Ranch. The Wallaces claim that in order to stem the financial hemorrhaging at the ranch, they contacted various Indian tribes in Montana to assess their interest in receiving approximately 500 animals from the Big Velvet Ranch. After obtaining the appropriate permits, the Wallaces thereafter entered into an agreement with the Crow Indian Tribe to transfer some of their animals. After the first shipment of 67 elk, the Wallaces were enjoined in the First Judicial District Court from transferring any more of their alternative livestock to the Crow Indian Reservation to be released in an unfenced area. The Wallaces appealed the issuance of this injunction to this Court, and it was upheld in Hagener v. Wallace, 2002 MT 109, 309 Mont. 473, 47 P.3d 847. The Wallaces also sought injunctions against the enforcement of I-143 in Ravalli County District Court, as well as separately in the federal district of Montana, both of which were denied. Moreover, Len Wallace was tried and convicted in Justice Court for violating I-143's ban on fee-shooting.

¶ 10 On June 6, 2002, the Wallaces and Buhmanns filed a joint action against the state of Montana, Attorney General Mike McGrath, and FWP Director Jeff Hagener in the Seventeenth Judicial District Court, Blaine County, seeking damages for the taking of their private property under the Fifth Amendment and Article II, Section 29 of the Montana Constitution. The Wallaces and Buhmanns alleged that I-143 violated the Fifth Amendment's prohibition on the taking of private property without just compensation, as well as Article II, Section 29's prohibition on a damaging of their property. The Wallaces and Buhmanns alleged that I-143 affected a taking of their private property rights without just compensation "by specifically taking the only viable source of profitability (i.e., shooting animals for a fee), and thereby destroying the Montana breed stock sale market, and prohibiting the transfer of licenses." The Wallaces and Buhmanns alleged that the State enforced I-143 to the detriment of their property rights and that this enforcement imposed new retroactive liabilities on them, damaging their vested property rights as well. Additionally, the Wallaces and Buhmanns alleged that by prohibiting the transfer of their licenses and the value of...