Oregon Counties Court Battle Continues

Oregon Court of Appeals heard arguments in late February on a 2019 jury decision appealed by the state that awarded $1.1 billion to 13 counties and 151 local taxing districts after the counties sued the state of Oregon and Oregon Dept. of Forestry, claiming officials reduced timberland management goals and violated the law that created much of the state’s forest system.

Legal language from 1941 when many counties returned timberland to the state required that the lands be managed for the “greatest permanent value.” The counties claimed the state reduced timber harvests in favor of other values and owed the counties for 20 years of missing timber revenues—and for future lost revenues through the year 2069.

According to the counties, the Oregon Dept. of Forestry adopted a rule in 1998 that redefined “greatest permanent value” to mean managing for sustainable ecosystems and environmental benefits in addition to economic revenues. The rule change violated the original law, the counties’ legal team argued, and cost the counties $674 million since 2001 and a projected $392 million in future damages through 2069 if the rule isn’t changed. A Linn County jury agreed.

The verdict has been under appeal since, collecting interest at 9% a year. A three-judge panel heard oral arguments from the two sides. The counties claim that timber production was the main objective in 1941 and remained so until the late 1990s. At that point, they say the state breached its contract with the counties when it adopted new administrative rules that included a broader definition of greatest permanent value. Since then, they contend, the state has shortchanged them by under-harvesting on state forests and undercutting their revenues.

The state appealed the verdict on a variety of grounds. The chief argument was that the statutory term in question—greatest permanent value—is not contractual, and even if it is, does not mean what the counties assert: that they have a right to maximum revenue.