Linn, Douglas and other Oregon counties can sue the state for breach of contract after all, a Linn County Circuit Court judge has ruled.
The ruling came in a $1.4 billion class action lawsuit that revolves around forest lands formerly owned by 15 Oregon counties and now held in trust by the state. The counties argued they gave up the lands to the state on the condition they would be managed for timber revenue that would be shared with the counties. They’ve alleged that amounted to a contract, which they argue the state has breached by leaving too much timber standing, depriving the counties of the money they say they were promised.
Judge Daniel Murphy had ruled June 20 that the state was protected from the counties’ claim by sovereign immunity. At the time, Murphy said the counties, as entities of the state, could seek more favorable timber management but they could not sue the state for money.
After a July 13 hearing, Murphy changed his mind. In a final letter opinion July 17, the judge reversed himself, rejected the state’s sovereign immunity defense, and ruled that the case could proceed.
The July 17 decision was actually the second time Murphy had reversed himself on the immunity question. He had initially ruled to strike the state’s sovereign immunity defense. With the immunity defense out of the way again now, the case can move forward.
A pre-trial conference is scheduled for Sept. 14.
Douglas County’s portion of the land involved in the lawsuit is mostly located in the Elliott State Forest, and the total acreage is relatively small compared with that in other counties; however, Douglas County Commissioner Tim Freeman said the 4,800 acres the county gave to the state could potentially generate around $1 million a year in timber revenues.
Freeman said if the counties win the lawsuit, the additional money coming in to Douglas County would help reduce the amount the county needs to draw from its reserves to pay for county services. The county currently draws about $9 million a year out of its reserves.
Freeman said $1 million a year is a substantial figure, amounting to about half the annual cost to operate the former Douglas County Library System, or half the cost to pay for the county’s deputy district attorneys.
“A million dollars a year is real money. It would certainly be an important part of a revenue stream for Douglas County,” Freeman said.
Freeman said the judge’s decision on sovereign immunity is good news for citizens because states and counties have many contracts with each other. Frequently, those contracts talk about resolving contract disputes in the courts.
“So it’s funny that in some of their contracts (the state) literally talked about using the courts as a place to resolve issues, but then they made a case on this, they made an argument on this case that they had sovereign immunity with contracts with counties,” he said.
Freeman said his guess is that’s one reason the judge ruled against the state’s sovereign immunity argument.
“It would be nice if there were never conflicts between levels of government, but that’s a pretty big reach,” he said. “There’s going to be times when issues arise and having that branch of government, that court branch of government help us resolve those is pretty important for the citizens.”