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State denied summary judgment in timber lawsuit
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State denied summary judgment in timber lawsuit

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Circuit Court Judge Daniel Murphy has denied a motion by the state to dismiss a $1.4 billion breach of contract lawsuit brought by Linn County against the Oregon Department of Forestry. 

Linn County Circuit Court Judge Daniel Murphy has denied a motion to dismiss Linn County's $1.4 billion breach of contract lawsuit against the Oregon Department of Forestry.

Murphy's Tuesday ruling came in the wake of a Jan. 4 hearing at which attorneys representing the state asked for a summary judgment to dismiss the lawsuit based on several arguments, many of which Linn County’s attorney, John DiLorenzo, said had already been raised at earlier court hearings.

In his letter to attorneys representing the state, Linn County and 140 other members of the lawsuit, Murphy noted that in granting a summary judgment to dismiss, “the court must find that no objectively reasonable juror could return a verdict for the adverse party.”

He does not believe that is the case.

At the hearing, the state’s attorneys restated their arguments that the lawsuit should end because the state has sovereign immunity that bars lawsuits against it by other government bodies.

Murphy said this is the same argument the state presented in earlier hearings and the court “does not find that argument any more persuasive than it did in 2016.”

Linn County argues in the lawsuit that the state violated a contract with the county to manage state forest trust lands with an eye toward the "greatest permanent value." At the time these lands were conveyed to the state, the county argues, it was assumed that "greatest permanent value" entailed maximizing timber harvests, and earmarking money from those harvests to the counties and other government entities.

But the state's attorneys argued that the term “greatest permanent value,” is ambiguous and also applies to other goals in managing the land, such as clean water and recreation. As the state began to manage the land with those other goals in mind, timber harvests declined, and so did the payments to the counties. Linn County's suit argues that represents a breach of contract.

Murphy's ruling indicated that a jury would be capable of deciding the meaning of the term "greatest permanent value."

The judge also denied the state’s motion that the county and taxing districts cannot seek damages based on possible further loss of income.

“Defendants argue that no one can know with any degree of certainty what damages will be far into the future and they are therefore speculative,” Murphy noted. “Future damages are a question of fact. If plaintiff can prove future damages in a manner that satisfies the jury this court is not supposed to remove that from the jury.”

Murphy also said that there are numerous mathematical models used by companies to estimate future income “that are accurate enough for large industries to make billion dollar decisions on reliance on them. This court therefore cannot say that computing future damages in a reliable manner is not possible and as long as it is possible there should not be any dismissal.”

On another issue raised by state attorneys, Murphy ruled that a letter submitted by the Benton County Board of Commissioners in the 1990s does not disqualify the county from being a plaintiff in the class-action suit.

The letter from the commissioners expressed support for the long-term management goals of the forest lands. The state argued that Benton County cannot have it both ways.

Linn County’s attorneys argued that the Benton County letter was not an official action by the county officials as an entity.

Murphy denied the state’s motion because he said barring the county by estoppel would require five specific elements, and none of them exists in this case.

On another issue, Murphy declined to block written testimony from Paul Levesque from Tillamook, a self-taught historian on the subject of state trust forest lands. Linn County attorneys at the Jan. 4 presented a considerable amount of information from Levesque.

The state argued that Levesque, who spent much of his work life as a Tillamook County administrator, has no formal education in history or forestry, and therefore should not be considered an expert.

But the county’s attorneys argued that Levesque has spent 41 years researching forest issues and has published a 1,100-page book, “Chronicle of the Tillamook County Forest Trust Lands.”

Judge Murphy noted that “people without advanced degrees or professional titles testify every day in Oregon courts as experts.”

He said their testimony is allowed if “their scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue …”

Linn County Commissioner Roger Nyquist welcomed the judge's ruling.

He added: “It’s regrettable that we find ourselves in this spot in the first place, but these forest lands are assets to rural counties and we have a fiduciary responsibility to hold the state accountable.”

He said attorneys for the county and state now have to work out the issue of whether the case should go directly to the Court of Appeals.

Contact Linn County reporter Alex Paul at 541-812-6114.


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