SALEM — The $1 billion award against the state in a class-action lawsuit over forestry practices will likely be subject to lengthy appeals, but it may also put pressure on the government to consider settlement talks.

A jury in Linn County Circuit Court on Wednesday found Oregon liable for breaching contracts with western counties by logging an insufficient amount of timber from state forests, thereby costing them money.

The plaintiffs include Benton, Clackamas, Columbia, Coos, Douglas, Josephine, Lane, Lincoln, Linn, Marion, Polk, Tillamook and Washington counties and other taxing districts.

Timber suit

A jury verdict awarding counties $1 billion for the state’s alleged breach of contract is expected to raise questions about forest management.

Clatsop County opted out of the lawsuit, but numerous taxing districts within the county are part of the legal challenge.

The counties originally donated more than 600,000 acres to the state in return for timber revenue, but they argued the government violated those contracts by prioritizing environmental and recreational qualities in a 1998 rule change.

While the lawsuit was about the state government’s contractual obligations, the case hinged on whether the “greatest permanent value” from forests came from timber production or whether environmental and recreational considerations must also be considered.

“While we are disappointed in today’s verdict, we believe there are strong arguments to be made on appeal, and we plan to appeal this decision,” said Fred Boss, deputy attorney general with the Oregon Department of Justice.

The Oregon Department of Forestry believes the best long-term outcome for the state’s residents, including the counties and taxing districts, is achieved with “balanced and science-based public forest management,” said Liz Dent, chief of the state forests division.

“We are disappointed that the jury did not agree, but we respect their time commitment and the disruption to their daily lives as they analyzed complex information and difficult legal questions,” Dent said.

John DiLorenzo, an attorney for the county governments, said the $1 billion award shows that Oregon’s forest managers can’t unilaterally decide how the forests should be managed without considering the state’s contractual obligations to the counties.

“I kind of consider this verdict a repudiation of the state’s position that there’s no contract and they don’t need permission from their rural partners when they decide to change our deal,” he said.

If the state government decides to challenge the validity of contracts with the counties, or argues that it has sovereign immunity that prohibits such lawsuits, the litigation may continue for years before the Oregon Court of Appeals and the Oregon Supreme Court, he said.

However, the county plaintiffs will try to convert the jury award into a court judgment as soon as possible, at which point the state may be liable for 9% annual interest if it eventually loses the case — increasing the verdict by $90 million a year, he said.

“Certainly, they can talk to us about settling the case,” DiLorenzo said. “Settlements can occur at any time.”

When asked if a potential settlement would involve a change to state forest policies, DiLorenzo said there’s an “infinite” number of ways the problem could be ironed out, and may involve the Legislature weighing in on the situation.

“I hope our current governor gets interested in resolving this in a way that will help the people in these rural towns,” he said.

Charles Boyle, press secretary for Gov. Kate Brown, said the verdict “was not an unexpected first step in what will be a lengthier legal process, and it would be premature at this point to make budget decisions based on the jury’s decision.”

Linn County, the lead plaintiff, will soon be discussing the verdict with other counties and taxing districts, but is appreciative of the jury’s decision, said Roger Nyquist, a Linn County commissioner.

“Going forward, this will create a lot of conversations and I think that’s a good thing,” Nyquist said.

The Wild Salmon Center and several other nonprofit groups tried to intervene in the case as defendants, but a state judge denied the request because the lawsuit dealt with contractual rather than environmental concerns.

Ralph Bloemers, an attorney with the Crag Law Center who represented those groups, said he expects the jury’s verdict will be overturned on appeal.

“Since Oregon acquired these logged-over lands in the Great Depression, Oregonians have invested millions of our tax dollars in fixing them for everyone’s benefit,” Bloemers said. “While we all use and enjoy wood products, state law recognizes that our forests also provide us with clean drinking water, fish and wildlife.”

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