Counties pressured to exit $1.4 billion forest lawsuit

A judge has refused to overturn a $1 billion jury verdict or order a new trial in a lawsuit in which counties accused Oregon’s government of insufficiently logging state forests.

A judge will not order a new trial or overrule a jury’s verdict awarding $1 billion to local governments that sued Oregon over logging restrictions on state forestlands.

Last November, 13 Oregon counties and multiple taxing districts within them won more than $1 billion in a class action lawsuit that claimed Oregon wasn’t sufficiently harvesting timber from property they’d donated decades ago.

Attorneys for Oregon argued the judgment should be overruled or that a new trial be ordered due to legal errors and because the jury’s verdict wasn’t adequately justified by evidence.

Linn County Circuit Judge Thomas McHill has denied those motions, saying “most if not all” the issues raised by the state government had already been ruled upon before or during the trial.

Nothing raised by Oregon’s attorneys after the verdict has demonstrated a “substantial chance of prejudice” that would warrant re-trying the case, he said.

The judge has entered a judgment in the case with an interest rate of 9% per year on the $1 billion award.

An Oregon Department of Justice spokesperson said the state government will appeal the judgment.

In Oregon’s request for a new trial, the state argued that “sovereign immunity” should have blocked the lawsuit and that counties are subdivisions of the state government that can’t sue it for damages.

According to Oregon, the state government also did not enter into a contract with the counties that required logging revenues to be maximized.

Even if such an obligation did exist, the plaintiffs failed to prove that Oregon violated it, the state’s attorneys argued.

Oregon’s attorneys also claimed the judge committed procedural errors during the trial, such as barring the state government from offering certain evidence.

In the complaint, the counties alleged that Oregon has fallen short of maximizing timber revenues due to a 1998 rule change that emphasized managing for environmental and recreational factors of the forestland’s “greatest permanent value.”

More than 600,000 acres of forest properties were foreclosed upon by counties after the Great Recession in the 1930s and donated to Oregon for management, with the understanding that some of the logging revenues would be returned to local governments.

John DiLorenzo, attorney for the county plaintiffs, said that his clients face “no downside” in the litigation while the State of Oregon’s potential financial liability will accumulate by more than $260,000 per day.

“If we ultimately lose — all appeals and everything else — we’re no worse off than we are now,” he said.

Oregon engaged in quite a few settlement negotiations with the plaintiffs before the trial but so far there’s been no indication that Gov. Kate Brown is willing to resolve the issue, DiLorenzo said.

“I think this is something that certainly warrants their attention,” he said.

Counties don’t have control over how the forestlands are managed but the state government must still compensate them for breaching its contract, he said.

“They created endangered species habitat on purpose when the law imposed no obligation for them to do so,” DiLorenzo said of Oregon’s forestland management practices.

However, DiLorenzo said that Oregon still has “flexibility” in managing its forestland that could figure into an eventual settlement deal.

“If they want to propose something, our door is open and we’re willing to listen,” he said.

I've been working at Capital Press since 2006 and I primarily cover legislative, regulatory and legal issues.

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