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In late May 2013, Chief Judge Robert C. Jones of the Federal District Court of Nevada issued a historic 104-page ruling protecting western ranchers' grazing preferences and finding conspiracy by federal agents to deprive ranchers of vested property rights. The decision stems from a 2007 trespass case, U.S. v. Hage, brought by the U.S. Forest Service (USFS) and Bureau of Land Management (BLM) against embattled central Nevada rancher Wayne N. Hage and the Estate of his father, well-known property rights activist, E. Wayne Hage.

Wayne Hage commented from Pine Creek Ranch, "This decision is landmark for western ranchers. I am pleased to announce for the ranchers of the Western states that it has been proven that a permit is not simply a revocable privilege, but rather there is a property interest in the permit for the purpose of the Due Process Clause, both procedural and substantive. This is important because it will safeguard rancher’s rights and historical grazing practices."

Hage added, "More importantly we proved a ‘forage right.’ Ranchers in the state of Nevada are protected from trespass within a half-mile from a water source."Notably, the court said "the Government may not abuse its discretion in refusing to renew, or in revoking, a [grazing] privilege." Significantly, the family will be under permanent injunctive relief and the Government shall not reduce the Hage's permits by more than 25% for any period of time without the courts' consent, and never permanently.

Specifically, the court found, "The Government has abused its discretion in the present case through a series of actions designed to strip the Estate of its grazing permits, and ultimately to strip Defendants of their ability to use their water rights...". He explained, "Substantive due process protects individuals from arbitrary deprivation of their liberty by government."

The court further explained "the Government cannot withdraw them (grazing permits) or refuse to renew them vindictively or for reasons totally unrelated to the merits of the application as governed by published laws and regulations, lest the Government abuse its executive power in a way that shocks the conscience."

Because of the government's refusal to consider any grazing applications from the Hages, the Court found the subsequent "chain of events is the result of the Government's arbitrary denial of E. Wayne Hage's renewal permit for 1993-2003, and the effects of this due process violation is continuing."

The court found, "In the present case, the Government's actions over the past two decades shocks the conscience of the Court...". This finding, coupled with the court’s finding that agents of the BLM and the USFS engaged in a conspiracy to deprive the Hage family of their vested property rights, opens the door to potential lawsuits against the individual agents personally for their unconstitutional actions.

The ruling chronicles the drama of 21-day trial in Reno, Nevada last spring between rancher Wayne N. Hage who, unable to afford an attorney, represented himself, and Mark Pollot, the Estate's attorney, who were defending their case against two federal agencies represented by a cadre of attorneys and staff from the Justice Department.

The court noted the government's motive for their pursuit of the present trespass case. "In 2007... the government brought the present civil trespass action against Hage and the Estate" because the USFS and BLM were "unsatisfied with the outcome" in the ongoing related 1991 Constitutional Fifth Amendment takings case of Hage v. U.S. before the U.S. Court of Federal Claims (CFC).

However, during the pendency of the trespass case, the agencies pursued remedies outside the jurisdiction of the court, leading to a referral to the U.S. Attorney for obstruction of justice and findings of contempt of court. Specifically, the BLM invited others, including Gary Snow of Fallon, to apply for grazing permits on allotments where the Hages previously had permits; the BLM testified they knew Snow’s cattle would use Hage waters; the BLM and USFS both applied to the State of Nevada for stock watering rights over Hage waters, even though neither agency owns cattle, for the "purpose of obtaining rights for third parties other than Hage in order to interfere with Hage's rights"; and they attempted to intimidate witnesses in the trespass case by issuing trespass notices and demands for payments against persons who had cattle pastured at Pine Creek Ranch, despite having been notified that Hage was responsible for these cattle.

Judge Jones reasoned the trespass notices and demands for payment were meant "to pressure other parties not to do business with the Hages, and even to discourage or punish testimony in the present case." The court noted such demands for payment were even issued to "witnesses soon after they testified in this case."

Tonopah BLM Manager Tom Seley and Forest Ranger Steve Williams were both found to be in contempt of court, and were referred to the U.S. Attorney for possible prosecution for criminal obstruction of justice. Noting that Seley and Williams knew of ongoing litigation between the parties in this court and the CFC, they "took actions to interfere with the defense of the present trespass action by intimidating witnesses." A written order is pending from the separate August 2012 contempt hearing.

The court stated, "In summary, the government officials, and perhaps also Mr. Snow, entered into a literal, intentional conspiracy to deprive the Hages not only of their permits but also their vested water rights. This behavior shocks the conscience of the Court and provides a sufficient basis for a finding of irreparable harm" to support permanent injunctive relief.

The court did find instances where Hage willfully permitted cattle to wander onto USFS and BLM lands more than a half mile from Hage water sources, but determined under state law the damages resulting from those trespasses only amounted to $165.88.

The court refused to award punitive damages for trespass under state law, because there "is not 'clear and convincing' evidence of 'oppression, fraud, or malice, express or implied' on behalf of Defendants. Defendants clearly had a good faith belief in their right to use the land as they did and had no intention to disregard the right of others. This does not prevent a trespass claim, but it does prevent punitive damages."

A permanent injunction was granted to both the government, to prevent ongoing trespass, and to the Hages. The court noted, "There is great probability that the Government will continue to cite Defendants and potentially impound Defendant's cattle in the future in derogation of their water rights and those statutory privileges of which the Government has arbitrarily and vindictively stripped them."

The court will require Hage to apply for a permit, but will also require the Government to grant it. The government is enjoined from issuing trespass or impound notices to Hage or anyone leasing cattle to him; the government must request permission from the court to issue such notices.

The court added, "The government's normal discretion is restricted under the present injunction, an injunction required in this extreme case because of the conspiracy noted and the history of violations of the Hages' due process rights in their permits and vested property rights in the use of water, and the obvious continuing animus against Hage by the government officials charged with administering his permits."

Although Hage noted defending this case created a tremendous personal hardship, "I hold the successful defense of my family’s rights, particularly for the beneficiaries of the Estates, the most important part of this decision and worth all the time and work that went into this case. No longer are we subject to the arbitrary and vindictive rule of man—we now have the protection of the rule of law."

The related Hage v. U.S. takings case has been appealed by the Hages to the U.S. Supreme Court on the narrow issue of whether or not a permit is required for normal maintenance of a historic 1866 Mining Act ditch right-of-way. That case is slated for a June 18 conference in the U.S. Supreme Court to determine if the Court will grant the Hage's appeal. A similar right-of-way case from the City of Tombstone, AZ is also on appeal to the USSC.