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Grand Canyon Ranch, LLC v. Jewell

United States District Court, Ninth Circuit

October 11, 2013

Grand Canyon Ranch, LLC, an Arizona limited liability company, f.k.a. Grand Canyon West Ranch, LLC, Plaintiff,
v.
Sally Jewell, Secretary, United States Department of Interior; Mike Pool, in his official capacity as the Acting Director of the Bureau of Land Management; and Mohave County, an Arizona political subdivision, Defendants.

ORDER

NEIL V. WAKE, District Judge.

Before the Court is Plaintiff's Application for Preliminary Injunction, etc., (Doc. 177), and related filings (Docs. 178, 186, 193, 198, and 213). For the following reasons, certain construction activities on the New Diamond Bar Road will be temporarily restrained until October 29, 2013, at which time the Court will have a further hearing to determine whether a preliminary injunction is necessary. This order states the Court's findings of fact and conclusions of law pursuant to Rule 52(a)(2) of the Federal Rules of Civil Procedure.

I. FINDINGS OF FACT

A. Background

Grand Canyon Ranch is a western hospitality ranch owned and operated by Grand Canyon Ranch LLC, of which Nigel Turner is the principal owner. It spans 1, 200 acres in Mohave County, Arizona, and holds grazing permits from the Bureau of Land Management ("BLM") over an additional 105, 000 acres of surrounding property. It caters to tourists interested in ranch activities, such as horseback rides, buffalo safaris, and helicopter tours of the Grand Canyon. It also conducts cattle and ranching operations and provides helicopter transportation between its property and Las Vegas.

In 1974, Grand Canyon Ranch's predecessor dedicated a right-of-way and easement to Mohave County for the use of a dirt road running across its property. The easement was part of the Old Diamond Bar Road, which provided access to the Western Rim of the Grand Canyon and Hualapai Indian Reservation. In the early 1990's, the Hualapai Tribe sought federal funds from the Tribal Transportation Program to improve the Diamond Bar Road to facilitate access to a tourist facility the tribe was constructing along the Western Rim. The tribe's facility competes with Grand Canyon Ranch for tourist business.

The United States began examining ways to improve the road, and to that effect, the BLM issued a Final Environmental Impact Statement, which contemplated that the Bureau of Indian Affairs ("BIA") would construct the new road over the general path of the existing road. The preferred route identified by the BLM had the new road crossing Grand Canyon Ranch several hundred yards south of where of the old road crossed its property. The government tried to obtain an easement from Grand Canyon Ranch to relocate the road, but negotiations between Grand Canyon Ranch, the BLM, and the BIA were initially unsuccessful.

On December 4, 2003, the BLM issued a Record of Decision granting the BIA a right of way across BLM land and approving construction of the new road. Grand Canyon Ranch appealed the BLM's decision and filed a separate suit against Mohave County and the United States government challenging the validity of the easements executed by its predecessor. The parties reached a settlement in 2007 (the "Settlement Agreement") (Doc. 118-2), which granted the United States a new easement across Grand Canyon Ranch's property to construct, operate, and maintain a new road. In exchange for an easement across the property, the United States agreed, among other things, to construct certain amenities, including at least three underpasses for "cattle/horse and rider, " with one underpass being located on ranch property. The United States also agreed to build an entrance to the Ranch from the road, with acceleration lanes, turning lanes, signage, and cattle guards. In addition, Mohave County agreed to abandon any prior easement it held for the old road four years after Grand Canyon Ranch conveyed an easement for the new road. The parties agreed that the United States District Court for the District of Arizona would retain jurisdiction to enforce the settlement.

But the United States government did not directly undertake construction of the road. Instead, a contract was executed with the Hualapai Tribe for the BIA to provide grant funding and technical assistance in designing the road. The Hualapai Tribe was given the authority to seek bids, award contracts, and oversee construction, but was required to construct the road in accordance with the specifications outlined by the BIA. The finished road would be a contract deliverable to the BIA, meaning it would need to be inspected and approved by the BIA before the federal government accepted the road.

B. First Request for a Preliminary Injunction

Funding for the road was delayed, and it was not until 2012 that the Hualapai Tribe concluded it had sufficient funds to complete the segment of the road that crossed Grand Canyon Ranch's property. The tribe solicited bids and awarded the construction contract to Fann Contracting, Inc. Construction progressed, and Grand Canyon Ranch quickly became concerned that the tribe did not intend to construct the amenities promised in the Settlement Agreement. In May 2013, Grand Canyon Ranch filed an Emergency Motion to Reopen Case (Doc. 115) (which was granted on May 15 and July 1, 2013 (Doc. 121, 162)), and an Emergency Motion for Enforcement of Settlement Agreement (Doc. 116), which it amended to explicitly seek a temporary restraining order and to schedule a preliminary injunction hearing. Those motions alleged, among other things, that the construction plans did not include the amenities required by the Settlement Agreement. The Hualapai Tribe was not brought into those motions, as it was not a party to the original action in 2003, and the Settlement Agreement is with the United States.

After those motions were filed, relations between the government parties, Fann Contracting, the Hualapai Tribe, and Grand Canyon Ranch grew more contentious. Under the Settlement Agreement, the County abandoned its easement over the old road in 2011, but, because the new road was not complete, the public continued to use the old road after the easement had expired. In May 2013, after the motion to reopen proceedings and enforce the Settlement Agreement, Grand Canyon Ranch erected a toll booth on its property over the old road and started charging tourists an "admission fee" for passage. In response, Defendants began building a temporary bypass road ("Bypass Road") within the meets and bounds of the easement for the new road. The Bypass Road allowed traffic to bypass the toll booth while the new road was under construction. Grand Canyon Ranch responded by closing the old road altogether, blocking nearly all traffic from crossing through its property.

Grand Canyon Ranch then filed its First Amendment to Motion for Temporary Restraining Order and to Set Hearing for Motion for Preliminary Injunction (Doc. 127), arguing (1) that the Bypass Road violated its property rights, (2) that traffic on the temporary road irreparably harmed its hospitality operations, which are adjacent to the construction, (3) that drainage from the Bypass Road was damaging its property, and (4) that the construction plans failed to address the amenities agreed to as part of the Settlement Agreement. The injunction was denied because the Court concluded that Grand Canyon Ranch failed to show that any drainage-related harm from the Bypass Road could be prevented by a preliminary injunction, as the road grading was already constructed. Grand Canyon Ranch also failed to show that the Bypass Road violated any property rights or that the existing ...


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