On October 24, Linn County Circuit Court Judge Thomas McHill told 14 prospective jurors, “Welcome to this journey we are about to take together.”
Over the course of nearly a month, they heard more than 100 hours of testimony and saw hundreds of exhibits, some dating back to the early 1900s.
On Wednesday afternoon — after only five hours of deliberation — 12 Linn County residents told McHill they believed the state of Oregon had indeed breached a nearly 80-year-old contract that calls for timber production to be the top priority on state forest lands.
They also said 13 counties and 151 taxing districts in which more than 600,000 acres of state forests are located should receive more than $674 million in current damages and another nearly $392 million in future damages for a total of almost $1.1 billion.
Linn County’s total share of past and future damages is about $51 million, and Benton’s share is about $6.7 million.
McHill told the jury earlier Wednesday that it needed to have at least nine jurors voting for each of the four issues to reach a verdict. When asked by McHill what the vote tally was, the presiding juror said it was 10 to 2 on each issue.
Clatsop County did not participate in the class action lawsuit, which was filed in March 2016. Earlier this week, McHill removed Klamath County from litigation because its forests operate under a pre-2001 forest management plan. Several taxing districts in Clatsop County remained class participants and will share in the damage award.
John DiLorenzo of Davis Wright Tremaine, which represented the class members, said this was a case of the state’s rural-urban divide. He said that since 1998, the state hasn't considered the counties as full partners in what has been a long-standing relationship dating back to the 1930s.
He said that when the Board of Forestry enacted a newly defined "greatest permanent value" rule in 1998, rural residents were expected to shoulder the burden associated with having state forests — such as lack of annual taxes — but the entire state shared all of the benefits, such as recreation, watershed quality and wildlife habitat.
“Today, the jury said the burden should not fall on the counties alone,” DiLorenzo said. “They said everyone should share the burden along with the benefits.”
DiLorenzo added that the counties continue to say they believe the state can manage the forests more intensively in terms of annual timber harvesting, while obeying all state and federal environmental regulations such as the Forest Protection Act and the Endangered Species Act. The only way the counties could get the state’s attention, he continued, was by asking for money, compensation for what they say is a failed timber management program.
The state is likely to appeal, DiLorenzo said, but it could cost about 9% interest, or about $90 million per year for every year the case goes on.
Linn County Commissioner Roger Nyquist didn’t jump into the air when he heard the verdict, but he couldn't have had a bigger grin.
“We are very grateful for the jury’s service,” he said. “They took a month out of their lives — a month when we had some really nice weather — to resolve this very important matter.”
Nyquist said the state forests are multi-million dollar assets for rural counties.
“It just seems unconscionable to me to watch the Oregon Department of Forestry devalue the assets for the citizens of Linn County and the other counties,” he said. “The facts spoke for themselves.”
“The Oregon Department of Forestry believes that balanced and science-based public forest management produces the best long-term outcomes for all Oregonians, including the counties and taxing districts that receive revenue from state forests," said State Forests Division Chief Liz Dent. "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. We will be reviewing options and next steps with attorneys from the Oregon Department of Justice."
Dent added, "The Oregon Department of Forestry greatly values relationships with the counties and local service providers that receive revenue from state forests. We are committed to continuing and building on these productive working relationships.”
The jury began with 14 members, but one person was released from duty a week ago due to personal issues. An alternate was chosen by draw Wednesday morning, leaving 12 to decide the facts.
McHill provided the jurors with an extensive list of instructions, noting that the court had already ruled that a contract exists between the counties and the state.
But, he said, the issue was that the term “greatest permanent value” meant when that contract was agreed upon nearly 80 years ago. The counties alleged that in 1941, when the Forest Acquisition Act was approved by the Legislature, it was clear that those involved considered “value” to mean revenue.
Counties that deeded thousands of acres of mostly cut-over or burned timber lands from the 1930s to 1960s, expected to receive two-thirds of the revenues when timber sales were held. The state keeps one-third of the proceeds for management and program operations.
The process worked well, the plaintiffs said, until 1998, when the state Board of Forestry — at the urging of former Gov. John Kitzhaber — approved the greatest permanent value rule, which removed timber production as the top forest priority and made it equal with other conditional uses such as water quality, wildlife habitat and recreation.
The plaintiffs presented expert witnesses who estimated that the shift has cost the counties about $35 million per year. They also believe that the creation of wildlife habitat — which is not required by state or federal laws — could lead to much of the forest lands being off-limits to timber harvesting, or having enhanced harvest regulations that make timber sales on those lands more difficult and less profitable.
But the state contends there was no contract, that management of the forest lands has always been ruled by statute, which includes the words greatest permanent value to the state. Attorneys have repeatedly said that means the entire state, not just the forest trust counties, and that there was always the intent of a balance between timber harvesting and other public uses.
They also said over 18 days of testimony that timber harvests and revenues to the counties are at record levels. But the plaintiffs said that is because the forests, which were planted 50 to 80 years ago, are now mature and ready for harvest, and stumpage prices are up after the recent recession, not due to an intensive effort to increase revenues by the state.
McHill said that in a civil trial, the plaintiffs must prove a preponderance of evidence — that something is “more likely than not” to have occurred.
The court will ultimately determine how monetary damages will be distributed to participants, but that would not occur until appeals are exhausted.
State’s attorney Scott Kaplan asked McHill after the verdict was announced to poll the jury, which was done in private.
The counties had originally asked for $1.4 billion in current and future damages, but amend that to about $1.1 billion, based on a recalculation of future damages when the trial began.
The jury awarded the following current damages: Benton, $509, 858; Clackamas, $25,381,067; Clatsop (districts), $176,478,590; Columbia, $7,551,189; Coos, $32,268,012; Douglas, $8,8455,710; Josephine, $761,707; Lane, $55,025,487; Lincoln, $6,075,056; Linn, $37,476,762; Marion, $9,626,092; Polk, $4,766,551; Tillamook, $246,985,207; Washington, $62,259,582.
The following future damages were awarded: Benton, $6,161,270; Clackamas, $3,154,360; Clatsop (districts), $109,565,036; Columbia, $7,355,610; Coos, $6,554,882; Douglas, $3,565,736; Josephine, $693,168; Lane, $17,948,504; Lincoln, $14,591,775; Linn, $14,518,637; Marion, $11,552,647; Polk, $3,631,354; Tillamook, $144,113,203; Washington, $48,492,346.