Decision due Wednesday on appeal of $1.1 billion verdict against state over Oregon forest logging

The Oregon Court of Appeals will deliver a decision Wednesday in the state’s appeal of a $1.1 billion award to 13 rural counties and 151 local taxing districts after a Linn County jury determined in 2019 that the state had broken a contract by failing to maximize timber harvests from state forests located in those counties.

Notice of the pending decision was posted on the court’s website Tuesday and comes just two months after a three-judge panel heard oral arguments in the case. That’s an unusually quick turnaround for the court. That may be a signal the court found the issues fairly straightforward, or that it prioritized a decision because the award is collecting interest at 9% a year, or $260,000 a day, which has nominally added another $230 million to the award since the verdict.

At issue is whether more than 700,000 acres of state forestland needs to be managed to maximize revenues for the counties, or whether the state has discretion to manage them for multiple uses, including wildlife habitat, clean drinking water, recreation and other values. A Linn County jury previously concluded the state breached a decades-old agreement with counties by failing to maximize revenues, costing counties money to pay for local services.

In briefs filed before oral arguments in February, the state took issue with more than 20 findings by the Linn County judge and jury. Oral arguments and the panel’s questions to the parties’ lawyers, however, focused on just a handful of those issues.

The first was whether a 1941 statute directing it to manage the state lands for the “greatest permanent value to the state” amounted to a statutory contract to maximize revenues for the counties. Another focus of judges’ questions was whether amendments to statutes governing management of the forests were mutually agreed upon, particularly a 1967 amendment that codified the state’s discretion to manage the forests for multiple uses.

The state’s response was that amendments to the statutes over the years resulted from a normal legislative process, and that while the counties participated in some of those hearings and on the Board of Forestry, there is no record of the Legislature giving them special consideration or veto power in the process, as would be expected if the statutes constituted a contract between the state and the counties.

The counties’ lawyers, meanwhile, argued that the counties had given their consent to modify the statutes in multiple ways, including through their representation on the Board of Forestry, through regular consultation on how to manage the lands, and through the Oregon Association of Counties.

There’s a lot riding on the decision for all parties. The state’s decision not to engage in serious settlement talks indicated its apparent confidence that the award will be overturned. Whichever way the decision goes, it could be appealed to the Oregon Supreme Court.

The counties’ lawyer, John DiLorenzo, declined to comment Tuesday. A spokesperson for the Oregon Department of Justice also declined to comment.