Judge hears elk farm arguments

The first day of a hearing asking the state government to compensate the owners of a local game farm for the effects of a state law, included arguments Wednesday by Kim and Cindy Kafka that Initiative-143 reduced the value of their Diamond K ranch to nothing.

The state, on the other side, argued that the property is still there, and that people entering the game farm industry knew what risks they were taking.

Kim Kafka said that after he spent several years investigating game farming, helping the state write regulations on the business, and investing time and money creating the ranch, I-143 which was passed in 2000, destroyed any possible profits.

"It took a business that in the year 2000 was growing, and basically grossed $300,000, and took it to zero," Kim Kafka testified.

The Kafkas filed a lawsuit against the state Department of Fish, Wildlife and Parks in April 2002. The lawsuit claimed I-143 and FWP's enforcement of it was unconstitutional, and that the results of it were a taking of the Kafkas property without just compensation.

The initiative banned fee shooting on elk farms and banned selling of elk farm licenses and issuing new licenses,

District Judge John Warner, later appointed to the state Supreme Court, in August 2002 denied the Kafkas an injunction that would have allowed them to continue operating their farm until their lawsuit was resolved. He later ruled against their arguments that the initiative was unconstitutional, leaving only their claim that their property was taken without compensation.

The Kafkas were later joined in their suit by Jack and Myra Bridgewater, who own a game farm and shooting operation near Townsend, and by Jim and Barb Bouma, who own a game farm near Choteau.

Sportsmen for I-143 and the Montana Wildlife Federation have intervened in the suit as defendants.

The purpose of the hearing that started Wednesday and continued into today is to determine whether the plaintiff's property was taken without just compensation. The next step the court will take if it determines the property was taken is to determine the value lost.

Montana Assistant Attorney General Chris Tweeten, representing the state, said in his opening statements the parties still own their property, including the land, the elk and any improvements to the land. That property still has substantial value, he said.

He also said the state disagrees how the legal idea of takings applies to the case. Court cases show that compensation for takings only applies to the taking of land, Tweeten said. Economic loss in a business is not covered, he said.

He said that people entering the game-farm business knew that it was a contentious, highly regulated industry. People entered the business knowing there were regulations they had to comply with that could change, Tweeten said.

"That was part of their business plan, or should have been, from the start," Tweeten said.

Kafka testified that he changed his farm and ranch operation to include elk farming starting in 1996, when he applied for a license from FWP to raise elk. He put land into the U.S. Department of Agriculture's Conservation Reserve Program, sold his pigs and slightly increased his cattle operation along with starting to raise elk.

Kafka said that he invested close to $1 million into the conversion, including about $400,000 of his own money, about $300,000 in loans, and time and labor.

Kafka said he received a license in 1999 to start a fee-shooting operation. He said he received about $135,000 for 22 elk shot in 1999, and about $275,000 for 47 harvested in 2000.

Since I-143 has prohibited fee-shooting, he has had to restructure his debt, he said, with the loan for the fee-shooting operation going from about $110,000 before I-143 was passed to about $950,000. His annual payments jumped from $23,000 to about $87,000, he said.

Kafka said his cattle operation is now subsidizing the elk operation, instead of supplementing its income.