The State of Oregon Must Pay $1 Billion in Timber Contract Breach Lawsuit

On November 20th, Jurors in Oregon found in favor of 14 counties and their $1 billion lawsuit claiming the state deprived them of revenue for decades by limiting logging in state forests.

Attorneys from the state argued that the counties wanted to clear cut forests and did not care about endangered species.

The lawsuit was focused on three words that were written into law 80 years ago “greatest permanent value”.

Lawyers for the counties say it meant maximizing revenue from logging. Attorneys for the state argue that it includes other factors such as recreation and habitat.

The law came from a time when private lumber companies came to Oregon and 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 jury recommended the Oregon counties receive the past and future damages they had sought. $674 million in lost revenue since 2001, and $392 million in future damages through 2069.

The state plans to appeal and go to the supreme court if necessary. However, once the judgment is filed 9% interest will be added to the total annually. That’s $96 million a year.