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  • Office of U.S. attorney

    Smoke rises from the Moonlight fire, which burned in Plumas and Lassen counties for 22 days in September 2007. A report said that a spark from a bulldozer started the fire, and the logging company could have extinguished the fire early if workers had remained on the scene. Office of U.S. attorney

  • Anne Chadwick Williams / Bee file, 2007

    Anne Chadwick Williams Bee file, 2007 Fire crews take their positions on a smoky evening in September 2007, as the Moonlight fire rages nearby in Plumas National Forest. Both sides expressed satisfaction with the settlement of a lawsuit awarding damages for the fire to the United States, but a Sierra Pacific attorney said the battle would continue with six pending lawsuits.

Moonlight fire settlement ends epic legal battle with feds

Published: Wednesday, Jul. 18, 2012 - 12:00 am | Page 1A
Last Modified: Wednesday, Jul. 18, 2012 - 6:25 am

Predictably, the clash of the titans ended loudly Tuesday.

With the U.S. attorney's office in Sacramento and lumber giant Sierra Pacific Industries Inc. trotting out competing versions of a settlement's meaning, their epic legal match over who started the Moonlight fire and who should pay for the damages is closed.

It was a bitter battle royal from the start between prosecutors who zealously guard the millions of acres of natural resources under federal control in eastern California and the largest private landholder in the state and second-largest timber producer in the country.

"We were outmanned, out-spent and out-papered, but not out-lawyered," said U.S. Attorney Benjamin Wagner at a press conference.

Even before the smoke cleared Tuesday, a Sierra Pacific attorney said the fight will move to Plumas Superior Court, where six pending lawsuits seek money from the same defendants for damages caused by the fire – including one brought by the state.

Wagner said the government is happy with the settlement – it will get $55 million in cash and 22,500 acres of Sierra Pacific land. He described it as "the largest recovery ever received by the United States for damages caused by a forest fire." He said the land is adjacent to or surrounded by national forest and is conservatively estimated to be worth $3,000 an acre.

He did acknowledge, however, that the recovery would not pay for all the damages.

Wagner said $47 million of the cash will come from Sierra Pacific, $7 million from owners of the private property where the fire started, and $1 million from a logging company. The owners had hired Sierra Pacific for a timber project and the company, in turn, had hired the logger.

Most of the money will be used to restore and reforest the scorched earth, Wagner said, cautioning that this is slow, tedious work and parts of the Plumas and Lassen national forests will not be the same for more than a century.

William Warne, the Sacramento attorney who was lead counsel for Sierra Pacific, said in a teleconference his client, too, is happy, because the government was on record as seeking $791 million plus interest, boosting its asking price to nearly $1 billion.

Wagner disputes that, saying his office has always placed the figure at $200 million or less.

The government's lawsuit was based on a report of an investigation by federal and state officials that, according to Warne, was thoroughly discredited by the defense's own investigation.

The suits in Plumas County are likewise based on the report, and that's where the defendants may make their stand, Warne said.

He said U.S. District Judge Kimberly J. Mueller ruled just before the trial was to begin that Sierra Pacific could be legally liable even if it had nothing to do with starting the fire.

"That changed the playing field," he said, and it gave him and his client pause about going to trial with her theory possibly being one of the instructions on the law she would give the jury.

The Moonlight fire was ignited on Labor Day of 2007, and it raged for two weeks, laying waste to 65,000 acres in Plumas and Lassen counties, including 46,000 acres of national forest.

The report and the lawsuits allege it was started by a bulldozer belonging to the logging company striking a rock and sending a spark into dry growth. It smoldered for at least 1 1/2 hours before breaking open, the report and lawsuits say. They say the only two people on the scene – bulldozer operators – improperly left the area, otherwise the blaze likely could have been doused in its infancy.

"My client believes it had nothing to do with the fire," declared Warne. He said the evidence contradicts the government's findings as to the origin's location.

"If you're not looking in the right place, you're never going to find out what started a fire," he said.

The report deserves no credence, Warne stated, because evidence was hidden and investigators were guilty of misconduct and ineptness.

He said that, during the course of the suit, he discovered a document showing investigators designated Sierra Pacific the culprit less than 48 hours after the fire started, when little investigation could have been done.

Warne called for reform of California law, which, he said, allows "overzealous" federal prosecutors with "bounty-hunter mentalities" to go after the private sector for damages so big they threaten the very existence of businesses and risk people's jobs.

In 2008, Wagner's office settled with Union Pacific Railroad Co. for a record-setting $102 million in connection with the 2000 Storrie fire. Part of it was compensation for damages to the environment, including forest species, habitat and watersheds, plus loss of the public's enjoyment of the burned areas.

That broke the mold for wildfire recovery, where damages had been calculated primarily on pre-fire value of the timber, cost of fighting the blaze and loss of buildings.

Since then, Wagner's office has gone after environmental compensation.

"It's impossible to put a dollar value on intangible environmental damages," Warne said. "There's no way to assess what a jury would do with something like that."

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Denny Walsh



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