It’s been nearly four years since Linn County and 150 other counties and taxing districts filed a $1.4 billion breach-of-contract lawsuit against Oregon and the state Department of Forestry.

But a recent hearing in Linn County Circuit Court demonstrated that time and numerous court conferences have not narrowed the divide between the two sides.

Timber suit

“Your honor, the state still believes this case is about state statute, but it’s not,” plaintiff’s attorney John DiLorenzo of the Portland law firm Davis Wright Tremaine told Judge Thomas McHill. “It has always been about a breach of contract, pure and simple.”

But state’s attorney Scott Kaplan has said numerous times that the state has not only the right, but an obligation, to residents to amend management of the state’s forests, especially when those changes affect the environment and wildlife.

Beginning Thursday, a 12-person jury will be asked to determine the issue in what is scheduled to be a three-week trial. The verdict, whatever it may be, likely will be appealed. The lawsuit potentially could have a big impact in how the state manages its timberlands, and could add a new chapter in the sometimes strained relationship between the state and counties.

Linn County and its fellow plaintiffs will be represented by a legal team headed up by DiLorenzo. The state’s legal team is led by Kaplan, assistant attorney-in-charge at the Oregon Department of Justice.

Clatsop County commissioners voted to opt out of the lawsuit.

The breach-of-contract lawsuit has its origins in the Great Depression, when thousands of acres of timberlands were harvested by privately owned companies. After the trees were harvested, many of the landowners determined it would be more cost-effective to let the lands go back to the counties for unpaid taxes, rather than replant millions of trees and wait 40 to 60 years to harvest them.

Because the nation was in the grips of the Depression, counties did not want the properties, nor could they afford to reforest them.

Working with the state, the counties turned the timberlands over to the Board of Forestry through the Forest Acquisition Act, with the understanding that the state would replant them and upon harvest, share the income with the counties based on a tenet of “greatest permanent value.”

And it is upon those three words — “greatest permanent value” — that the lawsuit rests.

Members of the class-action lawsuit say the term means timber management that provides the most annual income on a sustainable basis over the long term.

The decisions that led to the lawsuit date back some two decades.

In 1998, after several public hearings, the Oregon Board of Forestry approved a new management plan based on a definition of “greatest permanent value” that was expanded to include factors such as recreation, riparian zones, wildlife enhancement, water quality and more.

The new rules went into effect in 2001.

Since then, the plaintiffs argue, the 15 counties in which the state’s six state forests totaling more 700,000 acres — known as the forest trust counties — have seen their annual share of revenues decrease by $35 million per year.

The lawsuit is seeking more than $500 million in lost revenues, plus $800 million in future losses.

Clatsop is the only forest trust county to opt out. Linn County is joined by Benton, Clackamas, Columbia, Coos, Douglas, Josephine, Klamath, Lane, Lincoln, Marion, Polk, Tillamook and Washington counties.

“This lawsuit is all about economic development and jobs,” said David Yamamoto, a Tillamook County commissioner and chair of the Council of Forest Trust Land Counties. “This deal, this contract, was made many years ago, in the ‘30s and ‘40s, but unfortunately production from our forestlands is not what it could be.”

Yamamoto said that over the last 15 years, Tillamook County — which is home to more than half of all state forest lands — has received about $15 million per year in state forest funds.

“People see that number and say, ‘Wow, the county is flush with money,’” Yamamoto said. “But as soon as we get those funds, we get to keep about 25%, and checks are immediately cut for the other 75% to 20 districts. They include three school districts, a community college, fire and rescue and the like. People think the money stays with us, but it doesn’t.”

But Bob Van Dyk, policy director for the Wild Salmon Center in Portland, thinks the term “greatest permanent value” entails much more than income from timber sales.

“We think ‘greatest permanent value’ for Oregon — the statutory direction for state forestlands — is best served by balanced management that provides a range of values for the present and future,” Van Dyk said in written statement. “Those include clean water, fish and wildlife habitat, timber supply, revenue, hiking and camping and hunting, off-road vehicle use and carbon storage.”

Van Dyk added, “Whatever the decision in the Linn County trial, we are sure each side will appeal the verdict, so there are years of litigation to come.”

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