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The state of Oregon was in breach of contract with more than a dozen counties including Columbia and 151 tax districts for not maximizing timber harvests and related payments in the past two decades, according to a Linn County jury.

A trial regarding the matter lasted nearly a month and was concluded on Wednesday, Nov. 20. A jury found the state must pay $1 billion in damages for lost revenue after the state failed to cut down enough trees since 2001. The payout includes future damages under the assumption that state forest management will continue status quo. The state reportedly plans to appeal the verdict.

If the appeal fails, Tillamook, Washington and Linn Counties would reap large portions of the judgment. Despite being a major timber producer, Clatsop County opted out of the lawsuit. No funding mechanism for paying the judgement has been put in place at this time and state budgets are nearly universally challenged by gaps.

The Oregon Department of Forestry issued a statement saying the agency believes balanced, 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. The forestry department said it was disappointed by the jury decision and would be reviewing options with attorneys from the Oregon Department of Justice.

The Oregonian reported that expert witnesses testified the state could have cut an additional 3.6-billion board feet of timber from the state forests since 2004. Including future lost revenue assuming the state continues to manage the forests in the same fashion, the counties asked the jury for some $1.1 billion in damages, according to the Oregonian’s report.

State attorneys defended the lawsuit from the standpoint that the Department of Forestry managed the forests with goal of earning the greatest amount possible statewide rather than for a portion of the counties. The defense also said it was focused on more than revenue, aiming for environmental and wildlife protection as well as recreational opportunities.

At the root of the lawsuit is the argument over the definition of the greatest permanent value. The counties say that in 1941, greatest permanent value meant the state would manage the lands to maximize timber production and revenue generated for the counties.

The lawsuit said in the late 1990s, the state’s Board of Forestry changed the arrangement through new rules that loosened the definition of greatest permanent value. The court found 1941’s Forest Acquisition Act was a contract between the state and counties that was breached by the state.

State Rep. Brad Witt (D-Clatskanie) previously served as a head of the forestry board and was subpoenaed to testify as a witness during the lawsuit. He was among those who told the court that rule changes for state forest were prompted by growing environmental and recreational demands as well as pressure from then-Gov. John Kitzhaber (D).

After the judgement, Witt said he was called in because he was on the forestry board when it was trying to determine what the greatest permanent value meant in order to form a forest plan. He said having been a juror himself, he thinks juries tend to be thorough in making good decisions and he thinks that likely happened in this case.

Witt also said he did not know where the money would come from for the massive judgement against the state. He said it would be a serious challenge for the government and suggested a settlement could be worked out before the taxpayers bear the full brunt of the award.

State Senate Republican Leader Herman Baertschiger Jr. (R-Grants Pass) issued statement after the judgment and said the “extra money” had better not be spent because the state will have to pay for decades due to forest mismanagement.

“This morning, the economic forecast said we had an additional billion dollars,” Baertschiger said in the statement. “This afternoon, a jury said they want it back.”


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