Audrey Caro Gomez
What is the Greatest Permanent Value of Oregon’s forests?
The answer to that question is one that will help determine the outcome of Linn County’s $1.4 billion breach of contract lawsuit against the State of Oregon and the State Forestry Department.
The Linn County Board of Commissioners recessed half an hour into their scheduled meeting on Aug. 17 and headed upstairs for a court hearing in that case, which was filed March 10.
The session was the second day of arguments for motions that were filed previously. The first hours-long hearing was held July 11 before District Judge Daniel Murphy.
John DiLorenzo Jr. and Christopher McCracken, of the Portland law firm Davis Wright Tremaine, are representing Linn County. The state is represented by Senior Assistant Attorneys General Scott Kaplan and Frank Hammond.
Attorneys for the county contend that the state did not manage the Forest Trust Lands pursuant to the Forest Acquisition Act of 1939 (see accompanying story).
The complaint states that the “GPV Rule defined ‘greatest permanent value’ in a way that does not emphasize maximization of revenues to the Forest Trust Land Counties and their intended beneficiaries.”
The county believes that the state failed in its obligation to manage the lands for the greatest permanent value, part of which it interprets as revenue maximization.
The state has breached its “contract with the Forest Trust Land Counties by adopting the GPV Rule, by managing the Forest Trust Lands in accordance with that rule and by failing to manage the Forest Trust Lands in a manner consistent with the parties’ understanding when they contracted,” according to the complaint.
The statutes have always provided for multiple use, Kaplan said.
“The 1939 statute, in addition to recognizing the production of forest crops, recognized watershed protection and development…recreation, grazing, and forest administration,” Kaplan said.
Kaplan cited a 1938 ballot initiative that addressed “the need for the protection and conservation of fish, aquatic life, and migratory birds and the importance of controlling the pollution of the waters.”
“People of Oregon had other values beside timber production,” he added. “The forests themselves weren’t simply viewed as a crop to be harvested.”
The GPV statute’s wording said “greatest permanent value to the state,” Kaplan emphasized.
“We had the voters and the legislature tell us what these words mean. And they mean more than just timber production,” he said.
DiLorenzo disagreed.
“We’re not talking about enhancing the overall value of the state, we’re talking about enhancing the overall value of the lands which the state happens to hold in its portfolio,” he said.
Also at issue is whether or not this case should receive class certification.
If Murphy grants class certification, the lawsuit would include the 15 other Forest Trust Land Counties.
According to the state, class certification should not be granted because of the variation of the areas that would be represented and their different land uses.
The state’s memorandum in opposition to the class certification states that according to the county’s litigation agreement, that the county’s attorney’s fees have been paid for by timber companies: Stimson Lumber Company, Hampton Tree Farms, LLC, Oregon Forest Industries Council and The Sustainable Forests Fund.
A footnote in the state’s pleading states the only public information available “about the Sustainable Forests Fund indicates that it was registered with the Secretary of State on January 11, 2016, one day before the Litigation Agreement and two days before the county’s contract with its counsel were executed.”
The SFF shares an address with Gibson Law Firm, LLC, in Portland.
“Here, the conflict is apparent between a case developed by timber industry groups interested in increasing timber sales and counties that, while also interested to a greater or lesser degree in those timber sales, have other interests, such as recreation, fish and wildlife, and watershed protection,” according to the document.
DiLorenzo said that he thought that was a veiled attempt to disparage Linn County’s motives or to suggest that it has irreconcilable conflicts, so it was no longer an adequate class representative.
“There is no question that Linn County believes that contract calls for revenue maximization,” he said. “It also believes that the contract was breached. It also believes in the legal theories and approach which has been prepared by its counsel.”
He compared the case to Brown vs. Board of Education. It was prepared based on years of research and preparation before Mr. Brown was involved, he said.
“This is typical of public interest litigation,” DiLorenzo said. “Just because Linn County and its council were not involved in the day-to-day preparation of the basic theory does not mean they lack the ability to whole-heartedly endorse it. Which is what has happened here.”
As for the funding of the litigation, the Oregon Forest Industry Council’s portion is capped at $125,000, he said.
“I will inform the court that to date, the total amount of contributions from that fund, which includes Linn County’s money, has been $277,000,” DiLorenzo said.
DiLorenzo cited an editorial from the Albany-Democrat Herald that supported their cause.
“They said, it’s because they live in this community too,” he said. “They have facilities here. They have employees here. They, like any other business are interested in a vibrant local community.”
DiLorenzo added that a verdict in this case could establish a political precedent.
“That is that the state, driven by democratic principles, we know where most of the votes are in this state,” he said. “The state can establish whatever forest or environmental policy it wishes, but when it does so, it picks winners and losers. If the losers happen to have a contract with the state, the state owes them damages to compensate them for their losses. This way, the burdens from whatever forest policy or environmental policy the state chooses, are shouldered by everyone, not just those in rural Oregon. Those are among the reasons why third parties have found it useful to contribute to this case.”
Murphy said the court will issue a decision on the motions no later than Sept. 17.
“It’s premature to have a serious discussion about this, but just to give me some idea of what I need to be planning for does anyone have a sense of how long this trial would be?” Murphy asked. “I understand it would be the ruling on the motions that I heard today and a summary judgment could change that but let’s assume that the complaint looks like it does today and the answer looks like it does today, if that’s the case, we’re going to trial.”
DiLorenzo said he anticipates two weeks: one week devoted to what the contract is and the history and one devoted to a battle of the experts.
Kaplan said the issues they are talking about are complex and he thinks it may take closer to one month.