Court Tosses Challenge |To Sale Of Redwood Forest

SAN FRANCISCO (CN) - A state appeals court affirmed dismissal of a lawsuit accusing Pacific Lumber Co. of misrepresenting and concealing crucial facts during an environmental review of its deal to sell the government an ancient redwood forest for $300 million.

In 1996 Pacific Lumber agreed to sell 5,625 acres of property, including 2,738 acres of old-growth redwoods in Headwaters Forest, in exchange for letting the lumber company log its remaining 200,000 acres in compliance with federal environmental standards.

In a complaint filed in May 2004, District Attorney Paul Gallegos accused Pacific Lumber of submitting hiding a finding that the timber harvesting could trigger more landslides in the Bear Creek and Elk River watersheds.

Gallegos claimed Pacific Lumber submitted this false information at administrative proceedings to keep the sale moving forward.

But Justice Horner found that because the company's communications "fall squarely within the scope of the litigation privilege," the state may not sue for unfair competition. See ruling.

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