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Although it's been nearly four years since it was first filed, Linn County's breach-of-contract lawsuit against the state of Oregon and the Oregon Department of Forestry gets its first big test this week: Selection is underway for jurors to hear the case, and attorneys on both sides are prepared to give their opening arguments on Thursday. The trial is expected to last three weeks.

We've been tracking the ins and outs of the case over the last four years, but it will be fascinating to see how the case fares before an actual jury — even though it's clear that whatever jurors decide almost certainly will be appealed, first to the Court of Appeals and then to the state Supreme Court.

Certainly, there's a lot at stake in the case: Linn County and 150 other counties and taxing districts are seeking $1.4 billion in both lost revenues and future losses. And the case's final resolution could impact how the state manages its timberlands.

So, this would be a good time for a fast review of the essentials: At issue are about 700,000 acres of state forest trust lands. The story begins during the Great Depression, when thousands of acres were harvested by privately owned companies. After the harvest, many of the landowners decided it would be more cost-effective to let the lands go back to the counties for unpaid taxes, rather than replant the lands and wait decades for the next harvest. But at the time, the counties didn't want the properties and so turned them over to the state, with the understanding that the state would replant them and, upon harvest, share the income with the counties based on a tenet of "greatest permanent value."

At the time, it generally was understood that the term "greatest permanent value" required timber management that provides the most annual income on a sustainable basis over the long term.

In 1968, however, after a series of public hearings, the Oregon Board of Forestry approved a new management plan for the forests that expanded the definition of "greatest permanent value" so that it included factors such as recreation, riparian areas, wildlife enhancement, water quality and more. That plan went into effect in 2001. One result, the plaintiffs argue, is that they've seen their annual share of revenue from timber harvests on the land decrease by $35 million per year. That decline, witnesses will tell jurors, has had a real impact on the budgets of those counties and the dozens of other taxing districts that are among the plaintiffs.

John DiLorenzo, the lead attorney for the plaintiffs in the class-action suit, will tell jurors that the state had what amounts to a contract with the counties to maximize revenue from the lands — and that the decision to expand the definition of "greatest permanent value" amounts to a breach of that contract. He'll work hard to keep the focus of the case as simple as possible: He will tell jurors that the case is a straightforward breach of contract.

The state's attorneys, led by Scott Kaplan, will make the case that the state has the right to amend management of the state's forests, especially when those changes involve the environment and wildlife. That's true. But it may not matter if jurors buy into DiLorenzo's theory of the case: The state can amend those forest plans for the best of reasons — but those amendments also could represent a breach of the contract between the state and the counties.

The entire lawsuit plays out against a backdrop of strained relations between the state and some of its counties, and Linn County has been a leader of that resistance. Playing on its home court, so to speak, the county could find a receptive audience in the jury box. It will be fascinating to follow the case's twists and turns in the courtroom over the next few weeks, but it's worth remembering that this ballgame is still in the early innings.

— Corvallis Gazette-Times



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