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January 5, 2007
In Reply Refer To:
4100, 7250 (220) P
Information Bulletin No. 2007-034
To:                   All Field Officials
From:               Chief, Division of Rangeland Resources
Subject             Recent Decision Stating That Ownership of A Nevada State-Based Water Right Does Not, In And Of Itself, Constitute A Legal Right To Graze
           On Public Lands
Program Area: Rangeland/Water Rights
Purpose:  The purpose of this Information Bulletin (IB) is to provide a brief overview of the November 1, 2006, decision from the United States Court of Appeals (Colvin Cattle Company, Inc v.United States, No. 06-5012) which upheld a decision of the Court of Federal Claims in favor of the United States.
Policy/Action: This IB is for informational purposes only.
Timeframe: United States Court of Appeals’ decision is effective November 1, 2006.
Budget Impact: None
Background:  Colvin Cattle Co. originally filed suit in 2003, asserting takings claims relating to its state-based water rights and ranching operations. Specifically, Colvin contended that the Bureau of Land Management (BLM) actions restricting its ability to graze on the Montezuma Allotment in Nevada constituted a taking of its water rights. Colvin alleged that BLM had affected a taking through its issuance of a trespass notice in March 1995 due to Colvin’s failure to pay the annual grazing fee; the subsequent cancellation of Colvin’s grazing lease in 1997; followed by the cancellation of Colvin’s range improvement permits in 2002. In November 2003, three months after Colvin filed its lawsuit, BLM issued a final decision ordering all of Colvin’s range improvements removed, excluding any “facilities necessary for exercise of water rights established pursuant to Nevada law.” The BLM did not impede Colvin’s access to the water on the allotment.
In its arguments, Colvin did not claim to have a free-standing right to graze. Instead, Colvin argued that such a right is inherent in its state-appropriated water right. Thus, Colvin alleged the interfering with its ability to graze constitutes a taking of its water right. Colvin argued that the United States recognizes vested state-law based water rights and that under Nevada law a stock watering right includes the right to graze. The court rejected Colvin’s argument, concluding that nothing in Nevada law establishes such a right. The court therefore concluded that because Colvin’s water rights do not have an attendant right to graze, no governmental action restricting Colvin’s ability to graze on federal land can effect a taking of its water rights under the Fifth Amendment.
In addition, Colvin argued that the government’s alleged failure to prevent the successor to its lease from infringing on Colvin’s water rights constituted a taking. The court reiterated an earlier ruling which states that the United States cannot be held responsible for the incursion on water rights by a private party.
Colvin also asserted a breach of contract claim relating to its grazing lease and a claim for compensation under 43 U.S.C. § 1752(g) for the value of improvements made to the allotment. Each of these claims was dismissed by the court on the merits. The Court of Appeals affirmed the trial court’s dismissal, but did so for lack of jurisdiction. The court concluded that Colvin’s breach of contract claim was barred by the six-year statute of limitations and that Colvin had failed to exhaust administrative remedies under the Taylor Grazing Act for its claim for the value of improvements.
Takings cases are different from most cases in which a BLM action is challenged and reviewed by a court under the Administrative Procedure Act’s arbitrary and capricious standard. In a takings case, the issue is not whether BLM’s action was lawful, but whether BLM’s action has taken someone’s compensable property interest.
This decision could be appealed to the United States Supreme Court. Additional information on the recent United States Court of Appeals for the Federal Circuit decision can be found at http://www.fedcir.gov/opinions/06-5012.pdf and the United States Court of Federal Claims 2005 opinion is found at http://www.uscfc.uscourts.gov/Opinions/Wiese/05/WIESE.ColvinCattle.pdf.
Directives Affected: None
Coordination: Development of this bulletin occurred in coordination with legal counsel at the Department of the Interior.

 If you have any questions regarding the information in this IB, contact Ken Visser at (775) 861-6492 or Michael Eberle at (202) 452-5179.
Signed by:                                                       
Authenticated by:
Robert D. Roudabush                                      
Robert M. Williams
Acting, Division Chief                          
Division of IRM Governance,WO-560
Rangeland Resources

Last updated: 10-21-2009