(CN)- The federal government acted legally and in good faith when it suspended 14 timber contracts in the late 1990s in response to a court order to protect the Mexican spotted owl, the Federal Circuit Court ruled. The decision reverses a $3.3 million award to a logging company.
An environmental lawsuit from 1994 led to the court order requiring the Forest Service to consult with the Fish and Wildlife Service over the effects of logging on the Mexican spotted owl, a species listed in 1993 as endangered. Logging was suspended across Southwest forests for about 16 months.
Precision Pine & Timber sued the government in 1998 after the Forest Service suspended logging in Arizona forests.
A trial court awarded the company $3.34 million in damages for lost profits, saying that the length of the Forest Service's suspensions was unreasonable.
The Federal Circuit disagreed, saying that the timber contracts held no express warranty for uninterrupted performance.
In finding that the government didn't act in bad faith, the Washington-based court ruled that the forest agency's delay in consulting with the Fish and Wildlife Service involved no "bait-and-switch"or "double-crossing" on the part of the government.
Also, the Forest Service was within its authority to suspend logging because it was complying with a court order, the opinion stated.