Jun 10, 11:06 PM EDT

Nev. rancher awarded $4.2M for 'taken' water right

By SCOTT SONNER
Associated Press Writer

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RENO, Nev. (AP) -- A judge awarded more than $4.2 million to a late Nevada rancher's estate after finding that the U.S. Forest Service engaged in an unconstitutional "taking" of water rights out of hostility to the rancher, a property rights activist.

The decision by U.S. Court of Federal Claims Judge Loren A. Smith involved the Fifth Amendment clause against private property being taken for public use without just compensation.

The rancher, Wayne Hage, bought the sprawling Pine Creek Ranch in central Nevada in 1978.

In the early 1980s, the Forest Service began to notify him he was in violation of his federal grazing permit. In 1983, the Forest Service sent him 40 letters and agency officials made 70 visits to his ranch.

Smith, based in Washington D.C., said the cancellation of Hage's grazing permit because of overgrazing and trespassing did not violate the Fifth Amendment because a grazing permit is a license, not property.

However, Smith said, the taking occurred when the Forest Service made it impossible for Hage to maintain irrigation ditches, which deprived the ranch of water and made it unviable.

The government demanded that he maintain the ditches using nothing more than hand tools. As willows, pinion, juniper and other vegetation grew unchecked in the irrigation ditches, Hage had argued that his ranch lost water.

"The court finds the government's actions had a severe economic impact on plaintiffs and the governments' actions rose to the level of a taking," Smith wrote.

Hage first filed a claim seeking $28 million in 1991. In an interview in 2004, two years before his death, he told The Associated Press his case could dramatically impact states' rights and federal lands in the West.

"It's the first time in nearly a century that someone has effectively challenged the government over who owns the range rights and water rights out here on these federal lands," he told The Associated Press.

The judge noted that hand tools would not be effective over such vast expanse of land. The ditches brought water to the 7,000-acre ranch as well as the 700,000 acres of national forest land where Hage grazed his cattle.

Hage "offered ample evidence that the Forest Service had engaged in harassment toward (him), enough to suggest that the implementation of the hand tools requirement was based solely on hostility to plaintiffs," Smith said.

Hage was one of the leaders of the so-called "Sagebrush Rebellion" during the 1980s, a movement among Western landowners who believed the federal government had no jurisdiction over their property because the ranches predate the federal agencies that sought to regulate them.

The judge also ordered the government to pay back interest to Hage's family. A lawyer estimated the interest dating to 1991 would be an additional $4.4 million.

"It sends a pretty important message to the government that if you screw with a small ranching family and put them out of business, you have to pay big bucks," said Lyman "Ladd" Bedford, a San Francisco-based lawyer who argued the case since its beginning.

Ed Monnig, supervisor of the Humboldt-Toiyabe National Forest, said Tuesday there had been no decision made yet on whether to appeal.

"We're aware of Friday's court decision and our agency is now considering the implications of this ruling and carefully weighing options," Monnig said.

The Pine Creek Ranch is owned now by Hage's children. Calls to them were not returned.