United States v. Estate of Hage

• Citation: 810 F.3d 712
• Decision Date: 15 January 2016
• Docket Number: No. 13–16974.,13–16974.
• Parties: UNITED STATES of America, Plaintiff–Appellant, v. ESTATE OF E. Wayne HAGE; Wayne N. Hage, Defendants–Appellees.
• Court: United States Courts of Appeals. United States Court of Appeals (9th Circuit)

810 F.3d 712

UNITED STATES of America, Plaintiff–Appellant,

v.ESTATE OF E. Wayne HAGE; Wayne N. Hage, Defendants–Appellees.

No. 13–16974.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Dec. 9, 2015, as to Appellant and Estate of Hage.^* Filed Jan. 15, 2016.

Elizabeth Ann Peterson (argued), William B. Lazarus, David C. Shilton, Stephen G. Bartell, Anna K. Stimmel, Bruce K. Trauben, and Vivian H.W. Wang, Attorneys, Environment and Natural Resources Division, United States Department of Justice, Washington, D.C.; John C. Cruden, Assistant Attorney General, Robert G. Dreher, Acting Assistant Attorney General, Daniel B. Bogden, United States Attorney, Elizabeth White, Appellate Chief, and Blaine T. Welsh, Assistant United States Attorney, District of Nevada, United States Department of Justice, Las Vegas, NV; and Nancy C. Zahedi, Regional Solicitor's Office, United States Department of the Interior, Sacramento, CA, and Kenneth D. Paur, Assistant Regional Attorney, Office of General Counsel, United States Department of Agriculture, Denver, CO, for Plaintiff–Appellant.

Mark L. Pollot (argued), Boise, ID, and John W. Hoffman, Hoffman, Test, Guinan & Collier, Reno, NV, for Defendant–Appellee Estate of E. Wayne Hage; and Wayne H. Hage, Tonopah, NV, pro se, as and for Defendant–Appellee.

John Echeverria and Hillary M. Hoffmann, Vermont Law School, South Royalton, VT, for Amici Curiae Natural Resources Defense Council, Inc., and Sierra Club.

Brian T. Hodges, Pacific Legal Foundation, Bellevue, WA, as and for Amicus Curiae.

Before: SUSAN P. GRABER, KIM McLANE WARDLAW, and MARY H. MURGUIA, Circuit Judges.

GRABER, Circuit Judge:

The United States brought this action for damages and injunctive relief against E. Wayne Hage (now deceased) and his son, Wayne N. Hage, alleging that they grazed cattle on federal lands without a permit or other authorization. The district court found that, in fact, the Hages had grazed cattle on federal lands without a permit or other authorization. The court nevertheless ruled almost entirely against the government by holding—contrary to longstanding binding precedent—that the Hages' water rights provided a defense to the government's claims of trespass. The district court also ruled against the government on a counterclaim—filed at the district court's invitation—even though the counterclaim plainly was barred by the statute of limitations. Finally, the district court held two federal agency officials in contempt of court for their ordinary actions, lawfully carried out within the scope of their regulatory and statutory duties, despite the fact that the actions had no effect whatsoever on this case. In this opinion, we vacate in part and reverse in part the judgment on the merits, and we remand for further proceedings before a different district judge. In a separate disposition filed today, we reverse the findings of contempt against the government officials.

FACTUAL AND PROCEDURAL HISTORY

Beginning in 1978, E. Wayne Hage ("Hage Senior") grazed cattle on federal lands managed by the Bureau of Land Management ("BLM") and the United States Forest Service. Early on, he applied for and received the necessary grazing permits. In 1993, Hage Senior filed an application for renewal of the grazing permit, but the BLM denied it because, in its view, the application had not been completed properly. Hage Senior has not held a federal grazing permit since the early 1990s; his son, Wayne N. Hage ("Hage"), has never held a federal grazing permit. Despite the lack of a permit or other authorization, the Hages continued to graze cattle on federal lands.

The United States filed this action in federal district court in Nevada, alleging that, between 2004 and 2008, the Hages intentionally grazed cattle on federal lands without a permit or other authorization. After Hage Senior died, his estate was substituted as a defendant. The government moved for summary judgment, which the district court denied because of its idiosyncratic view that Defendants' water rights—perfected by Defendants' predecessors-in-interest in the late 1800s and early 1900s—provided a defense to the government's action. The court also noted that, "[a]lthough the Hages may or may not be able to bring a counterclaim[,] ... the Court invites them to try."

Defendants then filed an amended answer that included counterclaims against the government, including an alleged violation of the Administrative Procedure Act ("APA"). The government moved to dismiss the APA counterclaim on the ground that neither the BLM nor the Forest Service had taken any "final agency action" under the APA within the applicable six-year statute of limitations. The district court denied the government's motion to dismiss the APA counterclaim, reasoning that "[t]he United States ... has taken ‘final agency action’ by filing the present lawsuit."

After a 21–day bench trial, the district court ruled almost entirely in favor of Defendants. On the government's claims of trespass, the court concluded that, by virtue of their water rights, Defendants have an easement by necessity to access the water on public lands. The court further concluded that the easement allowed Defendants to bring cattle with them onto federal lands. The court also concluded that, because it is infeasible to prevent cattle from eating or wandering, the government cannot succeed on trespass claims if the cattle stayed within a reasonable distance of a water source to which Defendants possess water rights. Correctly recognizing that its determination of an appropriate distance was "arbitrary," the court selected one-half mile. Applying that newly minted legal standard to the facts of the case, the court found that, although the government proved that cattle under Defendants' control had grazed extensively on federal lands, the government had proved trespass as to only two of its many trespass claims because all other unauthorized grazing occurred within a half mile of a water source. The court awarded the government $165.88 in damages.

On the counterclaim, the district court held that Defendants had proved a procedural due process violation. The court issued a wide-ranging injunction against the government, including a requirement that the federal agencies obtain permission from the court before issuing trespass notices against Defendants and a requirement that the agencies issue grazing permits to Defendants. The court concluded that it would retain "continuing jurisdiction to enforce this Order and Injunction."

The government timely appeals.

STANDARDS OF REVIEW

We review de novo questions of law. Kohler v. Presidio Int'l, Inc., 782 F.3d 1064, 1068 (9th Cir.2015). We review for clear error the district court's findings of fact. Addington v. U.S. Airline Pilots Ass'n, 791 F.3d 967, 982 (9th Cir.2015).

DISCUSSION

A. Trespassing Claim

Article IV of the Constitution states: "The Congress shall have Power to dispose of and make all needful Rules and Regulations respecting the Territory or other Property belonging to the United States...." U.S. Const. art. IV, § 3, cl. 2. "That power is subject to no limitations." United States v. West, 232 F.2d 694, 698 (9th Cir.1956) (quoting Gibson v. Chouteau, 80 U.S. (13 Wall.) 92, 99, 20 L.Ed. 534 (1871) ); see also McFarland v. Kempthorne, 545 F.3d 1106, 1112 (9th Cir.2008) ("The Property Clause gives Congress plenary power to regulate the use of federal land."). "The United States can prohibit absolutely or fix the terms on which its property may be used." Light v. United States, 220 U.S. 523, 536, 31 S.Ct. 485, 55 L.Ed. 570 (1911). "It is also beyond question that ‘the government has, with respect to its own lands, the rights of an ordinary proprietor, to maintain its possession and to prosecute trespassers.’ " West, 232 F.2d at 698 (quoting Camfield v. United States, 167 U.S. 518, 524, 17 S.Ct. 864, 42 L.Ed. 260 (1897) ).

Before the enactment of the Taylor Grazing Act in 1934, longstanding custom allowed persons to use open, unreserved federal lands for the purpose of grazing stock. Buford v. Houtz, 133 U.S. 320, 326, 10 S.Ct. 305, 33 L.Ed. 618 (1890) ; West, 232 F.2d at 697. But the Supreme Court consistently referred to that custom as an "implied license," Buford, 133 U.S. at 326, 10 S.Ct. 305, and the Court explained in 1918 that "Congress has not conferred upon citizens the right to graze stock upon the public lands. The government has merely suffered the lands to be so used." Omaechevarria v. Idaho, 246 U.S. 343, 352, 38 S.Ct. 323, 62 L.Ed. 763 (1918) ; see also Light, 220 U.S. at 535, 31 S.Ct. 485 ("There thus grew up a sort of implied license that these lands, thus left open, might be used so long as the government did not cancel its tacit consent. Its failure to object, however, did not confer any vested right on the complainant, nor did it deprive the United States of the power of recalling any implied license under which the land had been used for private purposes." (citation omitted)).

"With [the enactment of] the Taylor Grazing Act, Congress revoked this indiscriminate ‘implied license’ in favor of an express statutory permit...." West, 232 F.2d at 697. The Taylor Grazing Act authorized the Secretary of the Interior "to issue or cause to be issued permits to graze livestock" pursuant to "his rules and regulations." 43 U.S.C. § 315b. In 1950, Congress granted the same authority to the Secretary of Agriculture with respect to national forests. Act of Apr. 24, 1950, ch. 97, § 19, 64 Stat. 82, 88, codified at 16 U.S.C. § 580l . In 1976, Congress enacted the Federal Land Policy and Management Act of 1976 ("FLPMA"), which provides specific guidance to the Secretaries in implementing the federal grazing permit systems. Pub.L. No. 94–579, § 402, 90 Stat. 2743, 2773, codified at 43 U.S.C. § 1752 ; see also 43 U.S.C. § 1740 (authorizing the Secretaries to promulgate "rules and regulations to carry out the purposes of this Act").

All three Acts clearly state that the...