Counties Sue State of Oregon to Enforce Forest Management Contract
By Wally Hicks
Class Action Lawsuit Includes 14 Counties and Over a Hundred Local Districts
In the 1930’s and 1940’s, it was common for owners of forest lands to abandon their tracts rather than pay property taxes. Consequently, Oregon counties acquired hundreds of thousands of acres of forestlands through tax foreclosure. While the counties’ property inventories ballooned, the removal of those forestlands from the tax rolls caused a substantial revenue loss to the public treasury. Additionally, losing the jobs that were tied to maintaining and harvesting timber hurt the economy of the surrounding communities.
For such reasons, in 1939 Josephine County and other counties entrusted the State of Oregon with owning and managing 654,077 acres of forestlands by accepting a contract offered by the State. The State, in cooperation with the 15 Forest Trust Land Counties, enacted legislation which authorized the counties to convey their properties to the State. Through the Forest Acquisition Act of 1939, the counties and the State forged a contract. The counties transferred land to the State. As consideration for the land, the State provided “payment to such counties of the percentage of revenue” specified by the Act. The State was – and still is – required to manage the lands for the benefit of the Forest Trust Land Counties and local governments such as school districts whose jurisdictions cover the properties.
During the mid-1980’s, the State waned in the performance of its management responsibilities. Accordingly, revenue to the counties and local districts declined. The counties successfully sued the state and in 1986 the Oregon Supreme Court held that: (1) counties possess interests that may be asserted against the State; (2) the Forest Acquisition Act authorized a statutory land exchange and revenue distribution scheme which gave the counties the option of transferring the forestlands to the State to manage; and (3) the Act contemplates consensual dealings between the counties and the State which created enforceable rights insofar as the State’s management of the forestlands is concerned.
The 1939 Act mandates that the state “shall manage” the trust lands “so as to secure the greatest permanent value” of the lands. However, in 1998 the State passed the Greatest Permanent Value (GPV) rule. The GPV rule defined “greatest permanent value” in a way that did not emphasize maximization of revenues to counties and local governments. The State’s GPV rule sought to manage forests in a way that, “… over time and across the landscape provide a full range of social, economic, and environmental benefits to the people of Oregon.” The rule combined the goal of producing forest products with other goals such as recreation. The counties did not consent to the State’s GPV rule because it was inconsistent with the contract.
The counties again sued the State over its inappropriate management of the forestlands (“Tillamook II”). In 2005, the court confirmed that the State is contractually bound to properly manage the forestlands, and that the State had breached the contract. In ruling for the counties, the court recognized how the State, “gave ‘assurances that the lands would be used to produce revenue.’” The court ordered the State to abide the terms of its decades old contract. Unfortunately, the state failed to comply.
In the Spring of 2016, Linn County filed a third lawsuit against the State. The case (16CV07708) is currently pending in Linn County Circuit Court. The lawsuit seeks over $1.4 billion in damages. This is a class action suit, meaning the Plaintiffs have teamed up in a way that facilitates working together. Josephine County is a member of the class, along with Three Rivers School District, Rogue Community College, Southern Oregon Education Service District, and 4H. At this stage it is impossible to accurately predict how much of the recovery would go to each participant. Because only 2,467 acres of Forest Trust Lands are located here, the amount of damages due to Josephine County and its districts would be less than that due to many other participants.
Nevertheless, the amount at issue for Josephine County is significant and justice must be served by enforcing the longstanding contract. Since the lawsuit was filed two years ago, the counties and local governments have prevailed against the State’s preliminary challenges. The case continues to move forward and may be decided later this year.
[BIO: Wally Hicks was sworn-in as Josephine County’s elected Legal Counsel on January 5, 2015. Prior to that he represented most of Josephine County in the Oregon House of Representatives. He has worked as a Deputy District Attorney for Josephine County and has also handled cases in private practice.]
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