Sacramento Grazing Association, Inc. v. United States
04-786
| Fed. Cl. | Jul 23, 2021Background
- The Sacramento Allotment in Lincoln National Forest contains many stock-water sources; the USFS built fenced exclosures (1983–1992) to protect the threatened Sacramento Mountains thistle and other values.
- Sacramento Grazing Association (SGA) bought the Goss Ranch in 1989 and held a USFS grazing permit; USFS initially allowed limited cattle access to some exclosures (1989–1990) but later restricted use by correspondence.
- On May 5, 1998 the Forest Service issued an AOP amendment formally prohibiting livestock in six riparian exclosures and warning that noncompliance could lead to permit suspension or cancellation.
- SGA sued the United States on May 4, 2004 alleging physical and regulatory Fifth Amendment takings of appurtenant stock-water rights; a 2017 opinion (SGA III) found a physical taking and that the claims were timely.
- The government moved under RCFC 54(b) for reconsideration, arguing (1) the six-year statute of limitations bars the claim because accrual occurred when fences/communications first existed, and (2) SGA lacked a cognizable New Mexico water right at the time of the alleged taking.
- The court applied the interlocutory ‘‘as justice requires’’ standard, held the statute of limitations did not bar SGA (accrual = May 5, 1998), but modified SGA III by finding SGA lacked a compensable water right under New Mexico law and dismissed the physical-takings claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard for RCFC 54(b) reconsideration | Reconsideration should require "exceptional circumstances" | Interlocutory reconsideration is available "as justice requires" | Court adopted the flexible "as justice requires" standard |
| Accrual / statute of limitations (28 U.S.C. § 2501) | Claim accrues when all events fixing government liability occur; that happened with the May 5, 1998 AOP amendment | Accrual occurred earlier — when fences were constructed (1983–1992) or when USFS first denied access in early 1990s | Court held accrual was May 5, 1998 (AOP amendment); statute of limitations does not bar SGA's 2004 filing |
| Existence of compensable property interest (New Mexico water right; appurtenancy) | SGA relied on continuous pre‑1907 beneficial use, customary implicit transfer when land sold, OSE Declarations and a 2017 OSE licensing order to show a prima facie stock-water right | New Mexico law treats water rights (except irrigation) as real property needing explicit, written conveyance; pre-1907 rights still governed by prior-appropriation rules (Walker) | Court held under New Mexico law water rights (except irrigation) are not appurtenant and require a written conveyance; SGA did not prove a cognizable water right, so no compensable property interest existed |
| Effect of OSE declarations / licensing | Declarations accepted by the State Engineer and the 2017 licensing order establish prima facie and support SGA's water rights | OSE acceptance/licensing does not validate pre-1907 water rights; State Engineer lacks authority to create or validate those rights against statute-of-frauds requirements | Court held OSE declarations/licensing do not substitute for the required written conveyance; they do not establish the pre-1907 water right for takings purposes |
Key Cases Cited
- John R. Sand & Gravel Co. v. United States, 457 F.3d 1345 (Fed. Cir. 2006) (accrual may occur when government physical barrier cuts off access)
- Ingrum v. United States, 560 F.3d 1311 (Fed. Cir. 2009) (takings claim accrues when all events fixing government liability have occurred)
- Estate of Hage v. United States, 687 F.3d 1281 (Fed. Cir. 2012) (fence construction can trigger accrual in physical-occupation cases)
- Walker v. United States, 162 P.3d 882 (N.M. 2007) (New Mexico: water rights are separate property interests and, except for irrigation, require written conveyance under statute-of-frauds principles)
- Stop the Beach Renourishment, Inc. v. Fla. Dep't of Envtl. Prot., 560 U.S. 702 (2010) (state law defines property interests protected by the Takings Clause)
- Lucas v. S.C. Coastal Council, 505 U.S. 1003 (1992) (landowner must possess a legally cognizable property interest to prevail on a takings claim)
- Goodrich v. United States, 434 F.3d 1329 (Fed. Cir. 2006) (objective accrual standard: plaintiff need not have actual knowledge of all facts for claim to accrue)
- Boise Cascade Corp. v. United States, 296 F.3d 1339 (Fed. Cir. 2002) (two-step takings analysis: identify protected interest, then decide if government action took it)