Forest Industry Court Cases: Current Litigation May Affect Forest Practices

While the debate over the Bush administration's Healthy Forests Initiative continues to garner national media attention, recent and current litigation targeting certain timber industry practices has received much less coverage. This litigation, however, has the potential to shape national forest policy to a much greater extent than the significant, yet comparatively limited, scope of the president's Initiative.

Environmental activists have been successfully utilizing the power of the federal Endangered Species Act (ESA) for decades. Litigation to enforce compliance with the ESA, undertaken to protect certain species in danger of extinction, eventually reduced federal timber production by over 80% and profoundly changed the timber industry and economy of our region. Although by no means gone, such litigation seemed to have mostly run its course by the mid-1990s. Timber industry survivors now look primarily to state and private timberlands to maintain a reliable, albeit diminished, timber supply. Over the past two years, however, environmental groups have developed new tactics for using environmental laws to challenge federal, state and private forest management practices--including new litigation.

One of the most important of these recent cases is the Ninth Circuit's opinion in League of Wilderness Defenders v. Forsgren (2002) (Forsgren), which the Supreme Court let stand on October 6th, 2003. Forsgren concerned aerial application of pesticides to control Douglas Fir Tussock Moth on national forest lands in Oregon and Washington (see Filippi/Morford, Insider #308). The plaintiffs asserted that § 402 of the federal Clean Water Act (CWA) requires an National Pollution Discharge Elimination System (NPDES) permit for aerial application of pesticides above surface water and the Ninth Circuit agreed. With the Supreme Court declining review, Forsgren is now law in the Ninth Circuit.

The Forsgren decision has caused some consternation within the timber industry. In Oregon (and similarly in other northwest states), aerial application of pesticides is closely regulated under a state Forest Practices Act. Rules administered by the Oregon Department of Forestry impose a range of restrictions on aerial pesticide spraying for the specific purpose of preventing pesticides from affecting surface water. In addition, pesticide labeling required by the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) impose restrictions specific to each pesticide. Timberland owners and pesticide applicators reasonably believed that compliance with these requirements was all that was necessary to avoid enforcement actions.

This same view was shared widely by water quality permitting agencies. Even following Forsgren, the US Environmental Protection Agency (EPA) takes the position that Forsgren was wrongly decided and that NPDES permits are not required if applicators comply with FIFRA. However, EPA's position cannot overturn Forsgren and will do little to protect timberland owners and pesticide applicators from more citizen suits.

Somewhat more accustomed to accommodating judicial changes to the CWA, the Oregon Department of Environmental Quality (DEQ) issued an NPDES permit to the Oregon Department of Agriculture this past summer for aerial application of a pesticide on federal land (see Brief, Insider #316). That permit was limited to a specific pesticide applied to a specific tract of land and contained many conditions that are unlikely to be practical for other types of pesticides or other timberlands. USFS has indicated that it likely will seek NPDES permits again for aerial pesticide applications in 2004. Few in the timber industry see such permits as a workable solution.

A more practical means of living with the Forsgren case may lie in the nuances of what the court did not address or decide. First, the court's decision is limited to aerial spraying "directly over," "directly into," and "directly above" streams and rivers. The court did not address aerial application of insecticide that is not directly to surface water. The court also did not define what constitutes aerial application of insecticide directly to surface water. In Forsgren, the USFS did not dispute that it was spraying insecticides directly into rivers-so this issue was not argued before the court. The USFS also did not argue, and the court did not address, whether compliance with forest practices rules and other laws that regulate aerial spraying prevent direct application to surface water.

If future citizen suits are brought alleging that forest chemicals are being discharged into rivers and streams in violation of the CWA, demonstration that aerial spraying is being conducted in compliance with forest practices and other state and federal rules will be an important first line of defense. Timberland owners reasonably may assert that Forsgren is limited to direct application of pesticides to surface water and that such direct application should be presumed not to occur if one complies with state rules that are specifically designed to prevent such direct impacts. Compliance with these requirements should at least raise the plaintiff's burden of demonstrating that forest chemicals were directly discharged to surface water. Even if a plaintiff can demonstrate that pesticides are present in regulated waters after spraying has been conducted, the mere presence of such chemicals in the water is not evidence of spraying "directly over," "directly into," or "directly above" surface water. Forsgren did not determine that an NPDES permit is required if forest chemicals enter rivers and streams through non-point sources or other sources which are not regulated under the CWA.

In another related case, Environmental Protection Information Center v. Pacific Lumber Company (PALCO), the federal district court for northern California relied on Forsgren to rule October 14th, 2003, that NPDES permits are required for manmade culverts and other conduits that discharge stormwater runoff. In Forsgren, the USFS' defense relied entirely on the assertion that a regulatory exemption for certain silviculture activities protected it from NPDES permitting requirements [40 CFR § 122.27]--the Ninth Circuit concluded that the regulatory exemption does not apply to point source discharges. In PALCO, the district court relied on Forsgren and went a step further to substantially expand what constitutes a point source in the forestry context.

Section 122.27 defines the term "silvicultural point source" to mean discharges associated with rock crushing, gravel washing, log sorting, or log storage facilities operated in connection with silvicultural activities and from which pollutants are discharged to waters of the United States. Section 122.27 adds: "The term [silvicultural point source] does not include non-point source silvicultural activities such as nursery operations, site preparation, reforestation and subsequent cultural treatment, thinning, prescribed burning, pest and fire control, harvesting operations, surface drainage, or road construction and maintenance from which there is natural runoff." (Emphasis by the court in PALCO). Point sources discharging pollutants ordinarily must obtain NPDES permits; non-point source do not.

Relying on Forsgren, the court in PALCO held that "the type of 'harvesting operations, surface drainage, or road construction and maintenance from which there is natural runoff' identified in section 122.27 ... cannot encompass the ditches, culverts, channels, and gullies otherwise deemed 'point sources'" under the CWA's general definition of "point source." The court explained that where a "water runoff system ... utilizes the kinds of conduits and channels embraced" by the CWA's general definition of "point source," section 122.27 does not control. According to the court, this is so because the CWA's general definition of "point source" trumps section 122.27, and because "section 122.27's own terms are unsatisfied; once runoff enters a conduit like those listed in [the CWA's general definition of 'point source'], the runoff ceases to be the kind of 'natural runoff' that section 122.27 expressly targets."

PALCO would have tremendous impacts if broadly applied. Unless general permits were made available on a watershed scale or other basis, timber landowners would have to apply for individual NPDES permits for hundreds of drainage features that deliver stormwater to waters of the US or their tributaries. The process for issuing individual permits often is resource-intense and time-consuming.

Unlike Forsgren, PALCO is not the law throughout the Ninth Circuit. Other federal courts could reject its reasoning. Nonetheless, environmental groups may begin sending notices of intent to sue and then file citizen suits relying on PALCO's reasoning. It should be noted that the Ninth Circuit's recent Phase II stormwater rule decision remanded to EPA the issue of whether forest roads and their associated drainage features require NPDES permits under CWA § 402(p).

Just as the Supreme Court was deciding to let the Ninth Circuit's decision in Forsgren stand, the Western Environmental Law Center (WELC) in Eugene was opening an attack on aerial application of fire retardants. Representing Forest Service Employees for Environmental Ethics, WELC has sued USFS in Montana, alleging violations of the National Environmental Policy Act (NEPA) and the ESA. The plaintiffs assert that fire retardants applied by USFS have entered surface water and injured fish and other aquatic life. Interestingly, although the plaintiff's alleged Forsgren-like CWA violations in their 60-day notice letter, they did not assert CWA claims in their complaint. Instead, the plaintiffs argue that USFS should have prepared an environmental impact statement under NEPA to assess its decision to use chemical fire retardants and should have considered other alternatives. The plaintiffs also allege USFS was required by the ESA to consult with federal fisheries agencies before deciding to use fire retardants. Although the legal arguments are about compliance with these federal statutes, WELC devoted most of the complaint to criticizing USFS's policy of fighting forest fires. Clearly, their agenda is not just compliance with these laws, but to reshape national forest management policy regarding fire fighting.

Pacific Northwest states have the most stringent state laws regulating the forest products industry. Nevertheless, environmentalists have for years contended that these laws are insufficient to protect ESA-listed species. They have fought in the courts, legislatures, and administrative agencies to impose additional restrictions on private forest activities. A key difference between northwest states forest practices laws and other states is that in some instances a private timber operation requires approval from the state. This approval requirement, which is meant to ensure that resource protective measures are in place and followed, ironically provides the hook for a new ESA tactic.

In the late 1990's, successful environmental litigation in two eastern federal appellate courts established that states and counties can be liable under the ESA if they permit private activity that leads to "take" of an ESA-listed species (see Filippi/Gravatt, Insider #259). Section 9 of the ESA prohibits any "person"--including states and their political subdivisions-from engaging in conduct that would "take" a listed species. "Take" is broadly defined to include, among other things, direct harm to a species or habitat modifications that impair the species ability to survive. In Strahan v. Coxe, the First Circuit considered whether a state that licenses private commercial fishing operations that used equipment caused the take of endangered whales. Then in Loggerhead Turtle v. County Council of Volusia County, the Eleventh Circuit considered whether a county beachfront lighting ordinance caused take of loggerhead turtles that are drawn to the lights. In each case the court found that liability for take could be assigned to the government permitting the private activity.

Environmental plaintiffs are now applying the rationale behind these court decisions to western forests. The first case came in California, but was dismissed because the plaintiffs failed to identify any particular timber sales that had caused a take as a result of California's law. That case was quickly followed litigation questioning the sufficiency Oregon's Forest Practices Act in terms of protecting ESA-listed species. In Pacific Rivers Council v. Brown (Brown), a collection of environmental plaintiffs alleged that the State Forester is causing take of ESA-listed fish species on the Oregon coast by approving timber harvest plans that could impact streams where listed fish are found (see Scurlock, Insider #308; Horngreen, Insider #312; and Brief, Insider #312). The complaint also identified specific private timber harvest operations that plaintiffs alleged were conducted with state approval and had caused take of listed fish. The individual timber companies were not named as defendants, but the importance of the case was not lost on the timber industry, which immediately intervened. If successful, plaintiffs could halt a significant amount of private timber harvest activity in Oregon. But just as important is that for plaintiffs to succeed, they must prove that individual private timber harvests have caused a take. The ESA imposes significant civil liability for taking listed species, making the case important to the industry as a whole.

Brown has taken a number of turns since first filed. The judge in the case denied the plaintiffs' motion to enjoin the state from approving timber harvest plans, but also denied the state's and timber industry's motions to dismiss the case and ordered that the case proceed to trial. The Oregon Board of Forestry (Board) and the Legislature then took action to remove from the State Forester approval authority under the Forest Practices Act that is the basis for the case. Without the authority to approve timber harvest plans, the State Forester cannot be responsible for take of listed fish, effectively putting an end to the case. Plaintiffs adapted, however, and have filed a new complaint naming the individual members of the Board as additional defendants in the case and seeking to force them to take actions that plaintiffs believe are necessary to protect listed fish (see Brief, this Insider). The case is pending in federal court in Portland. If it goes to trial, plaintiffs will face the difficult task of proving that any of the activities approved by the state have caused a take of listed fish.

A potential new case would bring the theory in Brown to roost in Washington. On November 3rd, 2003, the Seattle Audubon Society and the Kittitas Audubon Society sent a letter to six Washington state officials, one private timber company, and a variety of federal officials alleging take of spotted owls. The ESA requires that potential defendants be given 60-days notice of an intent to file suit, so this is the first step toward filing a new case. The letter, using the same theory as in Brown, claims that officials of the Washington Department of Natural Resources are violating section 9 of the ESA by permitting timber harvests that cause take of spotted owls. Although similar to Brown, the letter goes further by singling out and naming as a potential defendant a particular timber company. It also names four Washington Department of Natural Resources officials as individually liable. This step is significant because it brings home one of the principle industry concerns in Brown, that plaintiffs are seeking not just to affect changes to the law, but also to impose significant civil liability on individual timber companies and state officials.

These various cases reach well past the traditional scope of the CWA, ESA and NEPA and have the potential to dramatically change the rules by which our forests are managed.

Originally published in Oregon Insider, Issue #332, November 15, 2003).  Authored by Barbara Craig, David Filippi, and J. Mark Morford.