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Judge approves class certification in county’s $1.4 billion lawsuit

 

October 11, 2016



Linn County District Judge Daniel Murphy last week granted class certification in Linn County’s $1.4 billion breach of contract lawsuit against the State of Oregon and the State Forestry Department.

It is a welcome development, said Linn County Commissioner Roger Nyquist.

The lawsuit now includes approximately 150 taxing districts, he said.

Linn County commissioners filed the lawsuit against the state agencies on March 10 for failure to properly manage forest policy and promote timber harvests on forest trust land.

The class consists of 15 forest trust land counties and at least 130 other government entities that share or receive revenue from the Forest Trust lands, according to the initial document.

The suit alleges a breach of contract on the part of the state by its adoption of the Greatest Permanent Value Rule and that they did not manage the forest trust lands in “a manner consistent with the parties’ understanding when they contracted.”

Attorneys for the county contend that the state did not manage the Forest Trust Lands pursuant to the Forest Acquisition Act of 1939.

The state agreed to accept forestlands that counties couldn’t afford to keep, via the Forest Acquisition Act of 1939. The Act requires the state to pay those counties a percentage of revenue derived from the management of those Forest Trust Lands.

In 1998, the state adopted the Greatest Permanent Value rule, which requires that the state maintain “the greatest permanent value” in managing those forestlands – meaning “healthy, productive and sustainable forest ecosystems that … provide a full range of social, economic and environmental benefits to the people of Oregon.”

Such benefits include: “sustainable and predictable production of forest products” that financially benefit the players – the state, counties and local taxing districts; preservation of habitat for native aquatic life and wildlife; maintaining productive soil, clean air and water; protection against erosion and floods; and recreation.

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 $1.4 billion requested includes $528,6000,000 for revenues that would have been distributed to the class members if the forestlands were managed with best management practices required of private landowners (while honoring all federal regulatory requirements) and the amount of revenues that have actually been distributed.

It also includes $25,564,000 in pre-judgement interest and $881,000,000 in future damages.

In addition, the county is asking for attorney fees, costs, disbursements and “any other relief that the court deems just and equitable.”

“Elected officials and policy makers have a fiduciary responsibility to treat this opportunity as an asset,” Nyquist said.

The class includes Linn County and all other Oregon counties that conveyed forestlands to the State of Oregon pursuant to the Forest Acquisition Act of 1939, according to the order. It also includes “all other local government entities that share or receive revenue generated under the Act.

Linn County is the class representative, Davis Wright Tremaine LLP is class counsel.

The order states the certification was granted based on the Sept. 6 opinion, court-issued findings and conclusions regarding the motion for class certification and other motions.

The class action portion addressed several points including the class size, issues common among class members, and if the representative parties will fairly and adequately protect the interests of the other class members.

Having 145 separate lawsuits would be more complex and expensive than one action, according to the opinion.

“Among many problems with separate actions is that they would need to be filed in various courts throughout the state and would inevitably result in inconsistent and even contradictory rulings and decisions which would make the entire process all the more expensive and complex,” Murphy said in the opinion.

While there may be issues that are not common to all members of the class, the breach of contracts would be the same to all members, he said.

“Although the amount of damages would vary between plaintiffs, the method for computing damages would be largely the same throughout the class,” Murphy said.

The next court date is scheduled for next fall – Oct. 3, 2017, according to court documents.

 
 

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