United States v. Estate of E. Wayne Hage

A person who holds water rights on federal lands holds a revocable license, rather than a property right; such license is subject to limitations by federal agencies, including the requirement that a rancher must obtain a grazing permit before allowing their cattle to graze on federal lands.

Starting in 1978 E. Wayne Hage grazed cattle on federal lands. He re-applied for a grazing permit in 1993, but the Bureau of Land Management (BLM) denied his application on the grounds that the application was inadequately completed. Since 1993 neither E. Wayne Hage, nor his son obtained grazing permits, but they continued to graze cattle on federal lands. The United States filed action against them alleging that the Hages deliberately grazed cattle on federal lands without a permit or authorization. The district court ruled almost entirely in favor of Hage finding that Hage had an easement by necessity to access water for their cattle and that their cattle could graze within a reasonable distance of such water source. On appeal, the Ninth Circuit analyzed the Federal Land Policy and Management Act (FLPMA), the Property Clause, and the Taylor Grazing Act to find that the issuance of a permit does not produce property rights, therefore a grazing permit is a license that is revocable, rather than a property right. While federal agencies must give preference to holders of water rights, the status as an owner of water rights does not influence the obligation of a rancher to get a grazing permit for their cattle to graze on federal lands. The panel found that Hage’s cattle grazed on federal lands without permission between 2004 and 2008; therefore, they violated federal statutes and state trespass laws. The panel also found that the Defendants’ water rights didn’t encompass an “inherent appurtenant grazing rights on federal lands” and that the district court erred in holding that the Defendants’ had an “easement by necessity” because of their water rights. REVERSED in part, VACATED in part, and REMANDED with instructions.