Friday, January 7, 2022
CapitalPress.com 9
Counties, state battle over more than timber
Court set to hear
appeal of $1B verdict
By MATEUSZ PERKOWSKI
Capital Press
If most arguments over
money aren’t really about
money, the lawsuit brought
by several “timber” counties
against the State of Oregon
over forestry revenues is no
exception.
In 2019, a jury in Linn
County held the state lia-
ble for breaching contracts
with 14 counties and numer-
ous taxing districts by log-
ging an insufficient amount
of timber from state forests,
reducing their share of prof-
its. It awarded the plaintiffs
$1 billion.
As the state government
seeks to overturn the jury’s
verdict, it has exposed a
broader rift between itself
and the predominantly rural
communities.
“This is a lot bigger issue
than a $1 billion judgment.
It’s about rural jobs and eco-
nomics — and a way of life,”
said Roger Nyquist, a com-
missioner for Linn County,
the lawsuit’s lead plaintiff.
The dispute goes beyond
the stereotypical conflict
between the survival of rural
sawmills and the survival of
protected species.
It’s a legal conundrum
that’s also about power: The
counties want to stick up for
themselves, while the state
wants to protect its preroga-
tive to set forest policy.
“We’ve been residing on
opposite planets,” said John
DiLorenzo, attorney for the
counties.
The disagreement cen-
ters on timber revenues
from 700,000 acres of state
forestlands, most of which
were donated to the state by
county governments in the
1930s and 1940s.
Counties and other tax-
ing bodies are entitled to a
share of logging revenues,
and historically these mon-
ies have been a big part of
their budgets.
The state is required to
manage the forestlands for
their “greatest permanent
value.” The state’s interpre-
tation of that concept has
evolved since the land first
changed hands.
In recent decades, the
state has reduced timber har-
vests to protect wildlife hab-
itat and enhance recreational
opportunities.
The plaintiffs and the
state disagree on what was
promised when the counties
gave up the land.
The state claims the law-
suit shouldn’t have even
gone to a jury, since the
counties lack an enforce-
able contract governing the
land’s management.
The county governments
argue they never would’ve
given up such massive
swaths of forestland if the
state could simply reduce
logging levels and timber
revenues at will.
“Who in their right mind
would have done that?”
asked DiLorenzo.
On Feb. 22, the Ore-
gon Court of Appeals will
hear arguments to decide
which of their perspectives
is legally correct.
A key question in the lit-
igation is whether the coun-
ties have the ability to chal-
lenge the state’s forestry
decisions, since they’re
subdivisions of the state
government.
While the state’s attor-
neys argue the counties lack
this power, the counties say
they have a right to enforce
their contract with the state.
“What’s the point of a
contract if the state doesn’t
have to live up to it?”
Nyquist asked.
It’s an “absurd notion”
that the counties can’t chal-
lenge the state in court over
the matter, said Rob Bovett,
legal counsel for the Associ-
ation of Oregon Counties.
“If the state can walk
away from its contracts,
then we’ve got nothing,” he
said. “Then we would have
a partnership that’s not only
broken, but not a partnership
at all. It would be master and
servant.”
More than two decades
ago, the state’s Board of For-
John
DiLorenzo
Joshua Bessex/EO Media Group
Logging in the Clatsop State Forest in 2016.
estry enacted a definition of
“greatest permanent value”
that emphasized “healthy,
productive and sustainable
forest ecosystems” that gen-
erate “social, economic and
environmental benefits.”
The counties contend
that state foresters have cur-
tailed logging as a result,
depriving local govern-
ments of roughly $1 billion
in past and future revenues
needed for law enforcement,
schools, libraries and other
services.
After a month-long trial
in 2019, a jury in Linn
County Circuit Court deter-
mined the state government
had violated its contrac-
tual obligation to maximize
timber revenues for the
counties.
“You can call this a breach
of contract, but it’s a broken
promise,” Bovett said. “It
is a direct promise from the
state to the counties.”
Though the judgment
amount has since been accu-
mulating roughly $260,000
in interest per day, the
state government has opted
against settling the lawsuit.
Oral arguments are
expected to take place in
early 2022 but the timeline
for a ruling is unknown,
in light of the case’s
complexity.
The state government is
urging the Court of Appeals
to reverse the jury verdict,
arguing the judge presid-
ing over the case should not
have allowed it to get that
far.
The donated forestlands
are governed under a spe-
cific 1941 statute and the
counties cannot enforce a
“statutory contract” related
to “matters of statewide
public concern,” according
to the state.
“At least when it comes
to matters affecting a state-
wide interest, a county can-
not seek compensation for
losses caused by the state’s
breach of a statutory con-
tract,” according to the state.
Under Oregon law, state
forestlands must be man-
aged for the “greatest per-
manent value of those lands
to the state,” which is a mat-
ter that’s within the discre-
tion of the Board of For-
estry, the state said.
“The State of Oregon
gets to decide the great-
est permanent value for
the State of Oregon,” said
Ralph Bloemers, an attorney
for fishing and conserva-
tion groups that oppose the
lawsuit. “There’s nowhere
that says: Timber first, then
everything else. It’s every-
thing. It’s multiple uses. It’s
what people enjoyed back in
those days and today.”
Bloemers doesn’t think
the $1 billion judgment has
a high chance of surviving
the Court of Appeals, given
the multitude of legal weak-
nesses identified by the state
government.
“There are numerous
errors that infected the deci-
sion,” he said. “It has a lot to
choose from.”
Private landowners had
abandoned their “logged
over” forest properties and
stopped paying taxes on
them, which is how they
were acquired by the county
governments,
Bloemers
said.
The counties didn’t want
to deal with the forestland
so they handed it over to
the state, which has heavily
invested in improving and
managing the property, he
said.
The legal problem of
Oregon’s political subdivi-
sions suing the state gov-
ernment can be explained in
familial terms, he said.
“It’s like a kid suing
his parents for not getting
Rob
Bovett
enough allowance, when the
parents have taken care of
school, taken him to the den-
tist, made sure he’s safe,”
Bloemers said. “It’s easy to
pick on the state and say the
state isn’t doing enough.”
The plaintiffs say they
realize that counties can’t
simply legally challenge
any state policy they dislike,
such as marijuana legaliza-
tion. However, they argue
local governments can’t per-
form public health functions
and carry out other tasks
on the state’s behalf if they
can’t rely on contracts.
“That would completely
blow up the delivery of ser-
vices in the state as we know
it,” Nyquist said.
Critics of the lawsuit
point out that Oregon cannot
ignore federal laws, such as
the Endangered Species Act
and Clean Water Act, which
restrict logging under cer-
tain circumstances.
There’s no argument that
state law requires coun-
ties to share in timber reve-
nues, but it’s still allowed to
take environmental and rec-
reation considerations into
account, said Bob Van Dyk,
Oregon and California pol-
icy director for the nonprofit
Wild Salmon Center.
“That doesn’t mean it has
to maximize timber revenue
at the cost of other values,”
he said. “Those are perfectly
legitimate interests but they
need to be balanced against
other interests.”
Tillamook County, one of
the plaintiffs, is dedicated to
environmental preservation
but doesn’t believe it con-
flicts with other values, said
David Yamamoto, vice chair
of the county commission.
“People think that if you
manage for timber, you
Roger
Nyquist
Ralph
Bloemers
don’t care about the envi-
ronment,” he said. “That’s
absolutely wrong.”
The problem isn’t that
Oregon follows environ-
mental laws, it’s that state
foresters have restricted log-
ging beyond what’s legally
required, said DiLorenzo,
attorney for the counties.
That management strategy
has now resulted in Endan-
gered Species Act lim-
itations that have further
decreased logging.
“There is nothing in ESA
that makes you create hab-
itat if it’s not already there.
They created ESA hab-
itat by allowing trees to
age,” he said. “They cre-
ated the habitat, then blamed
their inability to harvest on
ESA.”
The claim that inadequate
logging on state forestlands
has harmed counties finan-
cially is a “red herring” and
“misdirection” from the
real problem: Tax breaks
for large timber companies,
Bloemers said.
If major timber compa-
nies paid more in taxes, it
would benefit public ser-
vices much more than
increased logging on the
tiny fraction of forestland
owned by the state, he said.
When the $1 billion judg-
ment is struck down, it’s
only going to bring attention
to that issue.
“I’m expecting it’s going
to be a pretty big backfire,”
Bloemers said.
Van Dyk of the Wild
Salmon Center said he’s also
glad that Oregon decided
against settling the lawsuit
and is optimistic about the
state’s chances on appeal.
“One way or another, it
should get cleared up,” he
said.
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