Oregon Counties Fight State on $1.4 Billion in Timber Revenue

     ALBANY, Ore. (CN) — An Oregon judge should dismiss a proposed class action by 15 counties claiming the state owes more than $1.4 billion from lost timber revenue, attorneys for the state told the court Monday.
     But attorneys for Linn County and the proposed class say the lawsuit is a straightforward breach of contract action and should continue. Both sides argued various motions for more than three hours on Monday in Linn County Circuit Court.
     Linn County filed the lawsuit in March, claiming Oregon mismanaged revenue received from timber harvests on state lands to the tune of $1.4 billion. That figure comes from what the class claims are lost revenues since 2001.
     The county and the other proposed class members are called “forest trust land” counties. Based on a 1939 law called the Forest Acquisition Act, the state allows counties to convey forests to the state to manage.
     While the counties acknowledge that the state is entitled to keep some of the revenue, they say it is obligated to return the rest to the counties and has not “maximized the potential revenue that should be generated from the forest trust lands.”
     Attorneys for the state told Judge Daniel Murphy that counties cannot sue the state for damages in an alleged breach of a statutory contract.
     The plaintiffs are bringing a “full-frontal challenge” to the state’s Forest Management Plan, which has been adopted as rules, attorney Sarah Weston argued for the state. Under the Administrative Procedures Act, they can only challenge that rule with the state’s Court of Appeals, Weston argued.
     The disputed rule is called “greatest permanent value.” The plaintiffs say the state is required to pass on the money for the 650,000 acres of state-managed forest lands to the counties.
     Arguing for the plaintiffs, attorney John DiLorenzo disputed the notion that the counties are challenging the greatest permanent value rule.
     “We are not challenging the validity of any administrative rule,” DiLorenzo told Judge Murphy. Rather, they are arguing “the state has deprived our clients of the benefit of their bargain,” he said. “That is the essence of our complaint.”
     He added, “The state has a perfect right to breach its contracts. But if the state chooses to breach its contract, the state must pay damages.”
     A group of intervenors, including salmon and clean-water advocates, have applied to enter the case. Representing them, attorney Ralph Bloemers said the plaintiffs are leading the court into a “thicket” of conflicting federal and state laws.
     “It is not the province of the courts to dictate the decisions of federal agencies,” Bloemers told Murphy. “The Legislature entrusted these decisions to the Department of Forestry.”
     Further, there is nothing is state law that requires timber revenue to be maximized, Bloemers said.
     DiLorenzo disagreed with Bloemers’ assessment.
     “We’re not intending to guide the court into this ‘thicket,’ as Mr. Bloemers mentioned,” he said. “I think only he is.”
     Regarding the motion to intervene, Murphy asked Bloemers how the intervenors would decide who gets to intervene.
     “How is it that every single entity in the state that might benefit from a decision involving the harvesting of timber wouldn’t also be able to intervene in the case?” Murphy asked.
     Bloemers said that would be up to Murphy’s discretion, and that each party would have to show a unique interest.
     Linn County’s attorney Aaron Stuckey argued that the intervenors in the case should serve as “friends of the court” rather than directly intervening in the case.
     Stuckey said the plaintiffs “are not seeking to silence the applicants” but “the policies are not at issue.”
     The intervenors’ argument that Oregon might defund conservation programs if it loses the case and is forced to pay a large money judgment is “entirely speculative,” Stuckey told the court.
     Allowing them to intervene would “open the door to any person who benefits or has any interest in state’s funding to intervene in any case in which money damages are sought,” Stuckey argued.
     Attorney Scott Kaplan for the Oregon Justice Department said much of the damages pleaded by the plaintiffs are for “future damages.”
     “They’re saying ‘Either you pay us $700 million going forward until the end of time, or you change your policies,'” Kaplan said. “This is absolutely a challenge to the state’s policies on forest management.”
     “This money doesn’t exist in the state budget,” Kaplan added. “They’re just saying ‘You need to generate more.'”
     The parties still have motions to argue before the judge, including regarding class certification. Murphy scheduled another hearing for Aug. 17.
     The other forest trust land counties are Benton, Clackamas, Clatsop, Columbia, Coos, Douglas, Josephine, Klamath, Lane, Lincoln, Marion, Polk, Tillamook, and Washington.

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