Douglas County was among 14 counties that won a $1 billion lawsuit against the state Wednesday, after a jury agreed with the counties’ claims that Oregon deprived them of revenue for decades by limiting logging.
The four-week trial in Albany was focused on three words — “greatest permanent value” — and what they meant when the phrase was written into law 80 years ago.
Lawyers for the counties said it meant maximizing revenue from logging. Attorneys for the state argued that it included other factors such as recreation and habitat, and they accused counties of wanting clear-cutting of forests and of not caring about endangered species.
Deputy Attorney General Fred Boss said he was disappointed by the verdict. He said the state plans to appeal. However, the judgement will accrue interest at 9%, or $90 million a year, which ups the ante considerably to resolve the case quickly.
Douglas County Commissioner Tim Freeman said although he is happy with the verdict, he expects the state to appeal the decision, meaning the case could be tied up in the courts for quite a while.
Whatever money the county will receive should the verdict remain in place — 1% of the $1 billion awarded, or about $10 million — will go toward services for Douglas County residents, Freeman said. Those services include sheriff’s office patrols, public health services, veterans services officers, services for seniors and public safety measures.
He also said the verdict could have broader ramifications on forest management practices moving forward.
“I think it has a profound effect on the policy at the state level on forest management,” Freeman said. “People get caught up in the numbers and forget that ‘greatest permanent value’ means harvesting timber. Greatest permanent value means planting, growing and harvesting timber, and then growing it again.
“I think it’s very positive that we’re having a broader discussion of forest management.”
The lawsuit sought compensation for lost revenue since 2001, along with future damages.
Douglas County will receive only a small portion of the money because it has a small amount of state forest trust land within its borders. That includes about 4,800 acres of land in and around the part of Elliot State Forest that’s in the county, as well as some forest in the Glendale area.
If the verdict in favor of the counties remains in place, increased timber harvests would follow, to the benefit of Douglas County’s budget. Freeman has said the county manages a similar acreage of county-owned timberland, and harvests on that land bring in about $1 million per year.
That’s tiny compared to the lost federal timber revenue that has led to a crisis in the county’s budget. Most of Douglas County’s conflicts over forest management revolve around the patchwork of federal timberlands that were formerly owned by the Oregon & California Railroad. The Association of O&C Counties has filed a federal lawsuit over the management of those lands. Douglas County has 800,000 acres of O&C land.
The lawsuit decided Wednesday stemmed from a time a century ago when private lumber companies clear-cut forests. Instead of paying taxes, the companies left counties to deal with the land in a practice known as cut and run.
The counties didn’t have the resources to restore the land. So, during his 1939 inaugural address, Gov. Charles Sprague urged the Legislature to pass a bill allowing the state to designate the land as state forests, grow back the trees and manage the land “to secure the greatest permanent value” and share revenue with the counties.
The law enabled the state to adopt about 1,000 square miles — roughly the size of Rhode Island — from 15 counties that receive 64% of the logging revenues. One of the counties declined to join the lawsuit.
The counties claim the state breached the contact in 1998 when it adopted a rule defining greatest permanent value to mean healthy, productive and sustainable forest ecosystems that provide a social, economic and environmental benefits to the people of Oregon.
Their lawsuit sought $674 million in lost revenue since 2001, and $392 million in future damages through 2069.
Attorneys for the counties made it clear they want the trees treated as a commodity to be exploited.
“Timber is like a crop of wheat, except for a longer growing season, isn’t that right?” John DiLorenzo, a Portland attorney hired by the plaintiffs, asked one witness at the trial.
He also noted that smaller timber harvests mean fewer jobs in logging, milling, transportation and other services.
Scott Kaplan, an attorney for the state, declared that the counties’ vision of greatest permanent value is “turning Oregon into a tree farm from the Cascades to the Pacific.”
Mills have been closing across the state for years. In the 1970s, annual Oregon timber harvests totaled more than 8 billion board feet and employed 80,000 workers at wages 30% above the statewide average, according to the Oregon Office of Economic Analysis.
Annual harvests are now under 4 billion board feet, with direct industry employment at about 30,000 and the average wage equal to the statewide average. The biggest driver behind the decline is logging on federal lands being down nearly 90%, according to the 2017 study. Around half of Oregon is federally owned land.
The Associated Press contributed to this story