Cutting Through the Confusion of State and Federal Forest Regulation

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Forest products companies struggle to conduct timber harvesting activities on private lands in compliance with myriad state and federal laws. The challenges associated with federal government enforcement of the Endangered Species Act ("ESA") and Clean Water Act ("CWA"), juxtaposed with efforts by states to manage and regulate forest practices, are monumental. The intersection of federal and state regulation of timber harvest activities presents a classic example of the conflict between federal environmental policy and state resource management programs. Washington, Oregon and California are all in the midst of addressing this difficult interface between federal and state regulation of private timberlands. This alert provides Stoel Rives' clients an overview of recent developments in these three Western states.

WASHINGTON

In 1999, after several years of negotiation between federal and state agencies, treaty tribes, counties and small and large private landowners, the State of Washington adopted the Forests & Fish Report ("FFR"). The Washington State Department of Natural Resources has stated that the

"FFR represents an historic shift in the way our state manages natural resources, resolves problems, and makes future management changes. It provides the basic framework for successfully managing our state's non-federal forests to meet the needs of a viable timber industry while continuing compliance with state laws and the federal [ESA] and [CWA]. The basic founding principles of the FFR provide flexibility to adapt elements over time based on new scientific and management information." "DNR's Federal Assurances Program," Washington State Department of Natural Resources, available at www.wa.gov/dnr/htdocs/agency/federalassurances.

The Washington State Forest Practices Board passed permanent forest practices rules consistent with the FFR in May 2001. The Washington Legislature has mandated that the State develop a Habitat Conservation Plan ("HCP") to obtain the federal assurances that private timber harvest activities conducted consistent with the new forest practice rules will not violate the ESA and CWA. See HB 2570, State of Washington, 57th Legislature (2002). Approximately 2.5 million acres of state-managed land and private forestland are currently managed under approved HCPs. Stoel Rives is assisting the forest products industry in Washington obtain the best possible result in the ongoing federal assurances process.

OREGON

The Oregon and federal Endangered Species Acts indirectly affect private landowners through the requirements of the Oregon Forest Practices Act ("FPA"), which applies to forest practices on private lands in Oregon. The FPA provides substantive standards for the protection of species listed under the Oregon and federal ESAs. However, compliance with the FPA has never insulated a private landowner from liability under the federal ESA.

On February 28, 2002, Pacific Rivers Council ("PRC") and a number of other environmental organizations filed a lawsuit against the State Forester, Oregon Department of Forestry, in federal district court asserting that the state forester had violated the ESA by taking Oregon coastal coho salmon in approving harvest plans on high-risk sites. The State of Oregon, on behalf of the State Forester, moved to dismiss the complaint, but on December 23, 2002, Judge Anna Brown denied the motion to dismiss. Judge Brown did not decide whether the harvesting activities on these high-risk sites are in fact harming species.

On January 27, 2003, the Oregon Board of Forestry approved a temporary amendment to the forest practice rules to clarify for private landowners and timber operators that when conducting timber harvest operations on private lands, they are responsible for avoiding violation of the federal ESA. Additionally, on January 10, then-Governor John Kitzhaber and Governor-elect Ted Kulongoski joined in a formal request to the National Marine Fisheries Service to promulgate a special regulation under section 4(d) of the ESA that would insulate actions taken pursuant to and consistent with the Oregon Plan for Salmon and Watersheds from liability under the ESA.

On February 11 and 12, Judge Brown heard evidence in the PRC case regarding the plaintiffs' assertions that timber harvests conducted under the forest practices rules harm listed coho. The plaintiffs are seeking to stop all private timber harvest activities on high-risk sites that require prior approval from the State Forester, such as sites within 100 feet of a fish-bearing stream and sites that include a resource site. The plaintiffs have the burden to prove harm to the species as articulated by the U.S. Supreme Court. See Babbitt v. Sweet Home Ch. of Commun. for Great Or., 515 US 687, 115 S Ct 2407, 132 L Ed 2d 597 (1995). Plaintiffs do not have specific evidence of harm, however. They therefore rely on statistical models and inferential evidence to meet their burden of proof. They argue that it is reasonable certain that coho salmon will be harmed by harvesting trees on high-risk sites and that the State Forester should assume such harm and not approve written harvest plans. For all their efforts, plaintiffs were unable to produce any direct evidence linking a specific approval of the state forester with a particular harvest operation on private land that resulted in a "take" of coho. Judge Brown took the preliminary injunction under advisement and stated that if she decided that the plaintiffs had met their burden of proof, she would provide further briefing opportunity over the form and content of a preliminary injunction.

CALIFORNIA

In California last month, Pacific Lumber Company ("PALCO"), represented by Stoel Rives, reported a clean victory. PALCO had been attempting to conduct timber harvesting operations on its property pursuant to a timber harvesting plan approved by the California Department of Forestry ("CDF") and pursuant to a Sustained Yield Plan and HCP approved by federal and state resources and wildlife agencies. CDF had approved a timber harvesting plan, but the California State Water Resources Board ("Water Board") had asserted independent authority to regulate timber harvesting because of alleged impacts to water quality. On January 24, 2003, Judge J. Michael Brown ruled in a case establishing new legal precedent that the CDF, not the Water Board, was the agency with authority to regulate timber harvesting activities. See The Pacific Lumber Company v. California State Water Resources Control Board, Case No. DR010860 (Jan. 24, 2003) (Petition Re Writ of Mandate).

This ruling came after a long and difficult history of negotiation to develop an approach to timber harvesting on private lands while complying with state and federal laws. In the early 1990s, after the listing of the Northern spotted owl and marbled murrelet under the federal ESA, much of the harvest management on private lands was restricted or completely shut down. The interpretation of federal and state laws as they applied to private lands became a dominant issue. In February 1990, PALCO voluntarily agreed to a harvesting moratorium in the Headwaters Forest. Ultimately, PALCO agreed to sell the Headwaters Forest while retaining the ability to manage 200,000 acres according to the terms of an HCP. In fall 1998, the draft Environmental Impact Statement/Environmental Impact Report associated with the Headwaters Forest Agreement was released for public comment and public hearings were held. In spring 1999, the Headwaters Forest Agreement was signed by PALCO and the participating federal and state governmental agencies. However, the Water Board was not a signatory to the agreement.

PALCO sought and received a timber harvesting plan from CDF. The Water Board submitted comments on the timber harvesting plan that were partially adopted by CDF for the timber harvesting plan review and approval process established by state law. CDF eventually adopted and approved PALCO's timber harvesting plan, and the Water Board did not appeal. Instead, the Water Board held its own independent hearings, outside the plan review and approval process, and imposed its own order on PALCO requiring additional water quality monitoring. PALCO successfully sought a writ to set aside the Water Board's order.

The court found that the regulation of timber harvesting is vested exclusively with CDF. The purpose of evaluating a timber harvesting plan in one forum under the authority of one agency is to address all issues and "allow the timberland owner to have finality, once the plan is approved, and appeals exhausted, and yet allow protection of the environment through public input, as well as input from state agencies involved in the timber harvest plan process. Such intent would be vitiated should involved agencies, unhappy with the final plan, ignore the appeal process, and simply issue their own orders to the timberland owner."

HEALTHY FORESTS INITIATIVE AND COOPERATIVE STEWARDSHIP CONTRACTING

The Bush Administration has committed itself to taking steps to assist federal, state and private land managers to restore forest health and prevent catastrophic wildfires. The Departments of Agriculture and Interior are proposing a new procedure that will enable priority fuels treatment through thinning and reforestation projects to proceed rapidly. The Departments of Interior and Commerce are working on expediting Endangered Species Act processes for reviewing fuels treatment projects. Additionally, the Council on Environmental Quality will provide guidance for the Department of Interior and Agriculture to develop a focused process for reviewing forest health projects. See www.whitehouse.gov. As part of implementing the Healthy Forests Initiative, on February 14th, President Bush signed a bill that among other things provides for cooperative stewardship contracting. The Forest Service and the Bureau of Land Management may enter into stewardship contracting projects with private persons or other public or private entities to perform services to achieve land management goals for the national forests and the public lands that meet local and rural needs. Section 347 Omnibus Consolidated Appropriations Act of FY 1999, as amended by (The Omnibus Appropriations Act of FY 2003). The new law authorizes the Forest Service and the Bureau of Land Management to offset the cost of services received from private entities with timber or other forest products removed as part of the stewardship agreement. Stoel Rives continues to advise clients as these and other forestry-related issues unfold across the West. Stoel Rives has a strong tradition of advising businesses on regulatory matters, which when coupled with an equally strong tradition of environmental and natural resource litigation allows us to see a problem from all angles and to provide our clients the best possible representation and service.

Key Contributors

Barbara D. Craig
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