Opinion ID: 888159
Heading Depth: 2
Heading Rank: 2

Heading: preliminary factual and legal issues

Text: ¶ 107 It has been a lawful business or occupation in this State since 1917 to acquire, breed, own, harvest, sell, and otherwise control privately owned game animals on an alternative livestock ranch. [1] This activity has been regulated, and the regulations have become more rigorous over the years. At the same time, however, the Legislature has enacted provisions designed specifically to protect the business owners' interests  e.g., through statutory recognition of their alternative livestock as private property and their businesses as viable economic opportunities, and through the statutory guarantee that their alternative livestock ranch licenses would be renewed each year upon payment of the renewal fee and compliance with all recording and reporting requirements. See generally Kafka Dissent, ¶¶ 103-109. ¶ 108 I-143, which was passed on November 7, 2000, gutted the alternative livestock industry and rendered the regulatory scheme pointless. The Sportsmen, who were the principle forces behind the passage of I-143, sought to snuff out alternative livestock ranching without the public's having to foot the bill. To that end, they carefully crafted a citizen initiative (I-143) to prohibit remuneration for shooting alternative livestock on alternative livestock ranches, thereby forcing all businesses in the industry to operate, essentially, without any income. See Kafka Dissent, ¶¶ 114-120. As counsel for the Sportsmen explained during oral argument: There was a recognition by my clients that if they passed a statute that simply said, Every game farm is done tomorrow, that that would be a very difficult takings claim to defend against. And we didn't want to have to go down that road. And so the statute was carefully crafted to address the problem in a way that was not offensive to taking but at the same time benefitted the wildlife and the wildlife management of this State. The assertion that the Sportsmen's transparent charade is not offensive to the guarantee of just compensation for a taking or damaging of private property is preposterous. ¶ 109 In any event, the Sportsmen did not detail their intentions to the voters. Rather, according to the Sportsmen, [f]oremost among the issues presented to the voters in I-143 were concerns about disease, loss of fair chase hunting ethics and European style privatization of wildlife. In other words, the Sportsmen told the voters not that I-143 had been carefully crafted to obliterate an entire industry  an industry that had been sanctioned, encouraged, and nurtured by the State for 83 years, no less  but that I-143 was aimed at the alluring goal of protecting Montana's wildlife and hunting heritage from a variety of dangers posed by game farms. An analysis of the Initiative, however, reveals that it did not actually address any of these dangers. As a matter of fact, the Sportsmen tacitly admit that I-143 was a fraud on Montana voters. ¶ 110 For instance, regarding disease, the Sportsmen paint a grim picture. They state that [c]ontact between game farm animals and wildlife can result in disease and parasite transmission, with devastating impacts to native wildlife. They complain that [g]ame farm enclosures require only a single fence and do not prevent nose to nose contact between wild ungulates and game farm animals. Plus, [i]t is virtually impossible to keep game farm animals from coming into contact with wild animals, as escaped animals are a fact of life for game farm owners. Moreover, aside from direct contact, [s]ome diseases are transmitted by intermediate hosts, making any form of enclosure ineffective for disease prevention. ¶ 111 The Sportsmen argued these concerns to the voters. Indeed, the Sportsmen cite the 2000 Voter Information Pamphlet for the proposition that [o]ne of I-143's primary purposes was to minimize the CWD threat to Montana's wildlife. (CWD is short for chronic wasting disease.) Accordingly, given these concerns, one would expect I-143 to target the problems related to diseases, perhaps through more stringent fencing and enclosure requirements, additional testing requirements, or even an outright seizure of all alternative livestock along with a prohibition on private ownership of alternative livestock. However, I-143 did none of these things. As the Sportsmen acknowledge, [g]ame farms licensed prior to November 2000, are still legal in Montana, even after I-143, and [g]ame farm operators are free to `acquire, breed, grow, pursue, handle, sell or dispose' of game farm animals. I-143 imposed no new fencing or testing requirements. It does not prohibit people from owning alternative livestock on alternative livestock ranches, and it does not address the problem of transmission of diseases through intermediate hosts or inadequate fencing. In spite of the dire threat posed by diseases, the Sportsmen's initiative contains nothing addressing that issue. ¶ 112 As for hunting ethics, the Sportsmen state that Montana has a proud heritage of ethical hunting and the protection of wildlife, and I-143 was intended to protect the state's interest in those traditions. They assert that [i]n addition to the enormous economic benefits of traditional big game hunting, Montanans hold dear their hunting tradition as an important component of their western heritage, particularly the concept of fair chase hunting. The Sportsmen explain that they and other citizens opposed the `penned hunts' offered by many game farms because [s]hooting an animal in an enclosed facility is repugnant to these ethical hunting traditions. Again, citing the 2000 Voter Information Pamphlet, the Sportsmen state that [t]he protection of fair chase hunting, as an ethical consideration for Montanans, was an integral part of I-143's provisions to eliminate penned shoots. ¶ 113 I-143, however, contains no provisions to eliminate penned shoots. I-143 did three things: it prohibited the establishment of any new alternative livestock ranches; it revoked the right of existing alternative livestock businesses to transfer their alternative livestock ranch licenses; and it prohibited charging a fee or other remuneration for shooting alternative livestock on an alternative livestock facility. See generally Laws of Montana 2001, 2000 Ballot Issues, Initiative No. 143, §§ 1, 4, 6. But shooting an animal in an enclosed facility is still perfectly legal. Indeed, the Sportsmen concede that [g]ame farm operators are not prohibited by I-143 from shooting or otherwise `harvesting' their animals themselves. For that matter, I-143 does not prohibit the friends, relatives, and acquaintances of an alternative livestock operator from shooting alternative livestock on an alternative livestock ranch. The only activity on licensed game farms prohibited under I-143, the Sportsmen state, is that of allowing a fee-paying individual the opportunity to personally shoot a game farm animal. But anyone who is not a fee-paying individual may still participate in penned hunts and personally shoot a game farm animal notwithstanding I-143. So much for protecting Montana's proud heritage of ethical, fair-chase hunting. ¶ 114 Lastly, with respect to European-style privatization of wildlife, the Sportsmen state that [c]entral to Montana's hunting heritage is the availability of big game hunting to ordinary individuals: inexpensive licenses available to all citizens, access to big game on public and private lands ... and plentiful populations of native wildlife. According to the Sportsmen, I-143's proponents made this a central issue in their campaign to ban penned shoots (citing the 2000 Voter Information Pamphlet). Yet, as the Sportsmen are forced to concede, I-143 allow[s] the continued ownership of game farms and elk, and alternative livestock ranchers are free to `acquire, breed, grow, pursue, handle, sell or dispose' of game farm animals in Montana. Moreover, I-143 does not provide for less expensive hunting licenses or greater access to big game on public and private lands. ¶ 115 In sum, the Sportsmen's initiative purported to address disease, hunting ethics, and privatization of wildlife, but I-143 did not actually address any of these. Rather, it was carefully crafted to achieve the Sportsmen's ulterior goal of putting all alternative livestock ranches out of business. The Proponents' argument in favor of the Initiative was blatantly misleading in assuring voters that [e]xisting game farms will be allowed to continue all operations, except for canned hunts. I-143 was designed to shut down all alternative livestock ranches by forcing them to operate with no income. ¶ 116 The Sportsmen claim that I-143 merely added to the existing restrictions on the operation of alternative livestock ranches. They also assert that the Ranchers have not established that the additional restrictions are so onerous that the effect is the same as `an appropriation of property through eminent domain or physical appropriation.'  This is hypocrisy personified. I-143 did not add to existing restrictions. It devised a whole new restriction previously unheard of in the industry: no remuneration for shooting alternative livestock. The Sportsmen's contrary characterization of I-143 is absurd. It is one thing to strengthen fencing, testing, and reporting requirements through additional restrictions, as the Legislature did over the years. But it is quite another to require alternative livestock ranchers to operate with no income through the expedient of prohibiting remuneration for the key economic activity on which their businesses depended: fee shooting. The Sportsmen carefully crafted I-143 to destroy the Ranchers' businesses, and they succeeded in doing so. It is difficult to conceive of a regulation that more closely approximates an appropriation of property. ¶ 117 In conclusion, the Ranchers entered the alternative livestock industry in the 1990s. Alternative livestock ranching had been in existence for over 75 years. The 1983 Legislature had enacted explicit statutory rights to protect the interests of participants in the industry. See Kafka Dissent, ¶¶ 105-106. As late as 1999, the State characterized alternative livestock ranching as a viable economic opportunity for any private property owner as well as the traditional livestock producers who are interested in diversifying their ranch productivity. Section 87-4-431, MCA. Moreover, as the State reluctantly conceded at oral argument in Kafka, There is some evidence to suggest that it was the policy of the political branches of government to encourage people to look at game farming as an alternative to traditional agriculture  actually, to subsidize traditional agriculture so they could stay on the farms and ranches. The Sportsmen, however, objected to alternative livestock ranching. They decided to shut down the industry. They did so for the stated purpose of protecting Montana's wildlife and hunting heritage. They argued to the voters that I-143 was intended to benefit the entire Montana populace. Yet, the Sportsmen sought to place all of the economic costs associated with achieving this goal on the alternative livestock ranchers. They sought, in other words, to give the public something for nothing. ¶ 118 The Sportsmen represent the voices of thousands of Montana men and women who believe I-143 is vital to the protection of Montana's wildlife and to the tradition of fair chase hunting. According to the Sportsmen, I-143 was designed and enacted to address very serious dangers to Montana's wildlife and fair chase hunting heritage. It has been said that the guarantee that private property shall not be taken for a public use without just compensation was designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole. Armstrong v. United States, 364 U.S. 40, 49, 80 S.Ct. 1563, 1569, 4 L.Ed.2d 1554 (1960). On this principle alone, it seems abundantly obvious that the costs of achieving the Sportsmen's goals must be borne by the public as a whole, not disproportionately placed on the shoulders of the alternative livestock ranchers.
¶ 119 The State asserts that a means-ends analysis of I-143  i.e., inquiring whether the Initiative substantially advances some legitimate public purpose  is improper in the takings context. The State is correct, at least with respect to the Fifth Amendment. The Supreme Court has explained that the critical question in a regulatory takings analysis is whether the regulation is so onerous that its effect is functionally equivalent to the classic taking in which government directly appropriates private property or ousts the owner from his domain. Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537, 539, 125 S.Ct. 2074, 2081, 2082, 161 L.Ed.2d 876 (2005). A substantially advances test is ineffective for answering this question. It reveals nothing about the magnitude or character of the burden that the regulation imposes upon private property rights. Rather, it probes the regulation's underlying validity. Lingle, 544 U.S. at 542, 543, 125 S.Ct. at 2084. Yet, such an inquiry is logically prior to and distinct from the question whether a regulation effects a taking, for the Takings Clause presupposes that the government has acted in pursuit of a valid public purpose. The Clause expressly requires compensation where government takes private property for public use. It does not bar government from interfering with property rights, but rather requires compensation in the event of otherwise proper interference amounting to a taking. Conversely, if a government action is found to be impermissible  for instance because it fails to meet the public use requirement or is so arbitrary as to violate due process  that is the end of the inquiry. No amount of compensation can authorize such action. Lingle, 544 U.S. at 543, 125 S.Ct. at 2084 (citation and some internal quotation marks omitted). ¶ 120 The Ranchers acknowledge the Supreme Court's clarifications of federal takings doctrine in Lingle; however, they point out that  Lingle did not, and in fact could not, foreclose an independent interpretation of the Montana Constitution. The Ranchers suggest that under Article II, Section 29, [i]n order to avoid the constitutional mandate of just compensation, the State must show a compelling state interest that is narrowly tailored to impose the least restraints possible on [the Ranchers'] interests. In an alternative formulation, the Ranchers assert that the State must demonstrate that it has employed the least restrictive means in accomplishing the purposes of I-143. While I agree with the Ranchers that this Court may  indeed, must  provide an independent interpretation of Article II, Section 29, I agree with the State that the Ranchers' proposed test is inapt for analyzing claims brought under Article II, Section 29. ¶ 121 Article II, Section 29 states, in pertinent part, that [p]rivate property shall not be taken or damaged for public use without just compensation to the full extent of the loss. This language requires compensation where the State takes or damages private property for public use, but it does not require the public use to be compelling, nor does it require the State to employ the least restrictive means for achieving its goals. Rather, when considering whether a regulation has taken or damaged private property, the analysis presupposes that the regulation is permissible and the focus is properly directed to the regulation's effect on the property and whether just compensation is owed. Cf. Lingle, 544 U.S. at 537, 543, 125 S.Ct. at 2081, 2084. ¶ 122 It thus makes little sense to inquire whether the State has employed the least restrictive means of achieving a compelling state interest. Whether or not the State has done so may tell us whether the regulation sweeps more broadly than is necessary or whether the regulation fails to meet the public use requirement. But it tells us nothing about the regulation's effect and the burden the regulation imposes on private property rights. In other words, it does not tell us whether property has been taken or damaged. ¶ 123 Moreover, even if the least restrictive means have been employed and even if the State's interest is compelling, the property owner still may have suffered a taking or damaging of property. In this connection, the following reasoning by the Supreme Court in Lingle is persuasive: The owner of a property subject to a regulation that effectively serves a legitimate state interest may be just as singled out and just as burdened as the owner of a property subject to an ineffective regulation. It would make little sense to say that the second owner has suffered a taking while the first has not. Likewise, an ineffective regulation may not significantly burden property rights at all, and it may distribute any burden broadly and evenly among property owners. The notion that such a regulation nevertheless takes private property for public use merely by virtue of its ineffectiveness or foolishness is untenable. Lingle, 544 U.S. at 543, 125 S.Ct. at 2084. For these reasons, the Supreme Court's rejection of means-ends analysis under the Fifth Amendment is sensible and should apply equally under Article II, Section 29. ¶ 124 That said, the State inexplicably proceeds to argue the converse of the Ranchers' proposed test. The State asserts that property rights are subject to reasonable exercise of the police power and that Article II, Section 29 does not alter in a fundamental way the police power to adopt reasonable regulations that protect public health, safety, and welfare. Based on Mugler v. Kansas, 123 U.S. 623, 8 S.Ct. 273, 31 L.Ed. 205 (1887), the State insists that the government cannot be compelled to pay compensation whenever it reasonably determines that a commercial activity is injurious to public health, safety, or welfare. ¶ 125 The State's position, in short, is that it cannot be required to pay compensation where the challenged regulation is a valid exercise of the police power related to a commercial activity. Of course, the corollary of this rule is that the government can be required to pay compensation where the challenged regulation is an invalid exercise of the police power related to a commercial activity  the very proposition the State goes to great lengths to refute. But there are additional flaws in the State's approach. ¶ 126 First, Mugler stands for the limited proposition that the government need not pay compensation when it exercises its power to prohibit a noxious use of property, i.e., a use akin to a public nuisance. See Kafka Dissent, ¶¶ 126-129. However, alternative livestock ranching, which was done and maintained under the express authority of Title 87, chapter 4, part 4, MCA, was in no way a public nuisance, see § 27-30-101(2), MCA, and the State may not escape paying just compensation for the Ranchers' losses through the mere expedient of declaring that which formerly was not a public nuisance to have been a public nuisance all along, see Kafka Dissent, ¶¶ 132-134. In this regard, the State's smug condemnation of the alternative livestock industry as some sort of noxious or abhorrent threat to the public health, safety, and welfare rings hollow in light of the State's 83-year role in creating, developing, and nurturing the industry in the first place. ¶ 127 Second, the Supreme Court has explicitly rejected the notion that a valid police power regulation never requires compensation to the owner. In Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), the Court stated that there are limits to the noncompensable exercise of the police power. Lucas, 505 U.S. at 1026, 112 S.Ct. at 2899. Otherwise, if the uses of private property were subject to unbridled, uncompensated qualification under the police power, `the natural tendency of human nature [would be] to extend the qualification more and more until at last private property disappear[ed].' Lucas, 505 U.S. at 1014, 112 S.Ct. at 2892-93 (brackets in Lucas) (quoting Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415, 43 S.Ct. 158, 160, 67 L.Ed. 322 (1922)). ¶ 128 In conclusion, whether I-143 employs the least restrictive means of achieving a compelling state interest is irrelevant to the analysis under Article II, Section 29. Rather, in considering whether the Initiative took or damaged the Ranchers' property, the analysis presupposes that the regulation is permissible and the focus is on the regulation's effect on the Ranchers' property. Likewise, and for the same reasons, the State cannot escape paying just compensation on the ground that I-143 represents a reasonabl[e] determin[ation] that [alternative livestock ranching] is injurious to public health, safety, or welfare.