By MATEUSZ PERKOWSKI
Capital Press

An Oregon ranch company is challenging a decision by the U.S. Forest Service to cancel two grazing permits due to doubts about cattle ownership on the national forest allotments.

The Fence Creek Cattle Co. claims it should have had more opportunity to straighten out the disagreement before the agency canceled the permits in the Wallowa-Whitman National Forest.

According to the Forest Service, the permits were canceled because Fence Creek wasn't able to prove the company owned all the cattle on the allotments, as required by the agency.

The ranch company claims the Forest Service violated various federal laws by ignoring mandatory procedures for permit cancellation.

The cancellation decision had already been "crystallized" before Fence Creek got a chance to fully address the issues brought up by the agency, said Paul Turcke, attorney for the ranch company.

The case stems from a series of transactions that began in 2003, according to court records.

The owners of Fence Creek at that time, Bruce and Mary Agar, bought land and cattle from the Lucky Diamond Ranch in eastern Oregon and then entered into a joint venture with several other ranchers.

Fence Creek obtained permission from the Forest Service to run more than 1,000 head of cattle purchased from Lucky Diamond Ranch on the two allotments in question, according to court records.

In June 2005, the Forest Service began to question whether all the cattle were actually owned by the Agars, since some of the animals were marked with the brand of another rancher involved in the joint venture, according to court documents.

That same month, disputes among ranchers in the joint venture caused the partnership to break up.

As part of the dissolution, the Agars transferred ownership of the Fence Creek Cattle Co. -- including cattle and brands -- to other parties, according to court documents.

In December 2005, the Forest Service canceled Fence Creek's two grazing permits. The agency said the company violated of the terms of its license by allowing unauthorized cattle to graze on the allotments.

In 2008, a federal district court ruled that Forest Service officials had acted properly in canceling the permits. Fence Creek is now challenging that decision in the 9th U.S. Circuit Court of Appeals. Oral arguments were held March 1.