Oregon Counties Win Billion-Dollar Forest Battle Against the State

Published December 24, 2019

In a precedent-setting case, a jury in Linn County, Oregon, found the state government had breached its contract with 13 counties and dozens of local taxing districts by failing to generate sufficient revenue through permissions for logging on state forests.

The jury, relying on language in a 1941 agreement, awarded the plaintiffs $1.06 billion.

Changing Forest Management

The roots of the lawsuit go back more than 80 years. Counties deeded many abandoned, cut-over, or burned-out forest lands within their borders to the state, signing an agreement in 1941 requiring the state government to manage 745,000 acres of forests for “the greatest permanent value of those lands to the state.” Under the agreement, the state manages the forests, and counties get a cut of the profits.

The counties argued the language of the agreement and the stated intentions of the lawmakers at the time require the Oregon government to manage the forests to maximize profits. Given that the lands came from the counties, they were to be managed primarily to benefit the counties, not the state as a whole, and this could only be done through more logging than state management plans have allowed over the past couple of decades, the plaintiffs argued.

In the 1990s, the Oregon Department of Forestry adopted new management goals that deemphasized revenue generation and timber production, instead managing the lands primarily to produce clean air and drinking water, preserve wildlife habitat, and increase recreational opportunities. Revenues declined. The state contended managing its forests for balanced uses, not placing a priority on timber sales, benefited the entire state and by inference the counties.

The plaintiffs contended those goals illegally altered the priorities for management of the affected forests in violation of the 1941 agreement.

The jury agreed, deciding the state did not have the right to alter the definition of “greatest permanent value” in a way that diminished the flow of revenue from sustainable timber harvesting.

Adhering to Contract

In light of the historic negotiations of the agreement and its written terms, the state does not have free rein to manage the forests however it sees fit, says John DiLorenzo, an attorney for the plaintiffs

“The big idea behind the lawsuit [was] that normally, government and state agencies can just impose their will on local government, but if there is a contract and if the state government violates it, it has to pay damages,” DiLorenzo said.

The trial was the first in Oregon and possibly the nation to be heard by an empaneled jury, as opposed to judges only, for such a case.

State officials are expected to appeal the verdict, with Charles Boyle, Gov. Kate Brown’s press secretary, saying “the verdict was not an unexpected first step in what will be a lengthier legal¬†process.”

Counties will have to fight to get their money, predicts John A. Charles Jr., president of the Cascade Policy Institute.

“The award could be paid out from several sources, such as the state-run lottery, and should certainly include increased logging revenue from state trust land forests,” said Charles. “Of course, this is Oregon, run by clueless politicians, so the state will deny any responsibility and refuse to pay damages for as long as possible.”

Sustainable Logging

The forests should be managed sustainably, for long-term use, says Todd Myers, director of the Center for the Environment at the Washington Policy Center, and that includes ongoing logging.

“Timber harvests are done sustainably to ensure future generations will also have forests and timber,” Myers said. “The counties and others cannot and don’t want to cut trees today in a way that harms the future of these forests.

“Earning revenue from timber harvests is good for the environment,” said Myers. “In many places the only revenue available to thin forests, to fix habitat needed for fish, etc., is the revenue generated by forestry and other natural resource businesses.”

Myers says harvesting trees is good for the environment.

“In Washington State, revenue from harvests on state timber lands provided revenue to open up hundreds of miles of fish habitat,” Myers said. “Forestry is a net positive for the environment.

“In addition, wood is a renewable resource that uses less energy, and with new technologies, we can use wood to build taller buildings,” said Myers. “Portland will soon be the home to a 12-story building made primarily of cross-laminated timber rather than concrete or steel, and increased harvests mean more opportunities to create these kinds of environmentally friendly alternatives.”

Keeping Revenues Local

Revenue from timber sales should not go to fund state parks, which should pay for themselves, with the revenues flowing from logging being directed by the counties, for uses they designate, not sent to state forest or park managers, says Charles.

“I would not want to tie state park funding to timber sales, as it could incentivize managers to overcut,” Charles said. “State parks should be funded by user fees from those who enjoy them. In addition, the timber sale proceeds specific to this litigation are supposed to go back to the trust counties for all sorts of purposes. There is no legal connection to parks.”

Duggan Flanakin ([email protected])¬†writes from Austin, Texas.