State’s billion-dollar timber case might be better resolved by Legislature

The state court case of Linn v. Oregon has involved a stake of a billion dollars and turned on a subtle interpretation of state law, but it ought to cause Oregonians to reflect on the meaning of … value.

The value, that is, of their state lands.

The case Linn County v. State of Oregon and State Forestry Department is being fought (it will no doubt be appealed to the Oregon Supreme Court) over whether the state owes 15 counties about a billion dollars – no small consideration by itself.

Here’s the basis for the claim.

In 1931 the Oregon Legislature passed a law setting up a program to expand state forest operations (then just a couple of decades old). The state Forestry Board was allowed to obtain land from counties, whether by gift or purchase or other transfer. In voluntary agreements, as long as the land would be used for “[g]rowing forest crops, water conservation, watershed protection, [or] recreation;” these tracts would become state forest lands.

The counties would be compensated. Since some of those lands would be leased, or the state would get other payments for their use, the counties would by law receive from the state “5 cents per acre annually and 12 1/2 per cent of all revenues received from said lands.”

State laws controlled how state forestry was supposed to manage its lands, but the basic rule was, “The board shall manage the lands acquired pursuant to this act so as to secure the greatest permanent value of such lands to the state.”

Beyond that, the details have been up for grabs.

Differing benefits

Lands used for water conservation, for example, aren’t likely to generate as much immediate income as lands used for forestry. How the lands are used reflects how much money the counties receive.

The counties maintain that if the state had managed the lands for the highest payout, they would have over the years gotten about a billion dollars more than they did.

What exactly, precisely, was this deal between the state and the counties? Was it a contract or something a little less formal?

That can matter, because contracts legally often are taken to have a long shelf life, and their terms can (in some cases) supersede laws. Or were these agreements just administrative actions, which could be altered over time?
That’s the core issue in the new Court of Appeals decision. The court distilled the matter this way: “For the purposes of our analysis, the dispositive issue presented by defendants’ seventh assignment of error [there were other issues the court didn’t specifically address] is whether the board’s obligation to manage certain forestlands ‘so as to secure the greatest permanent value of those lands to the state’ … is a term in a statutory contract between the state, on the one hand, and various Oregon counties, on the other. Plaintiffs say yes; defendants say no.”

A billion dollars rests largely on that obscure point.

The decision was almost a split-the-difference matter, in that it held that a contract of sorts had been made and the counties did have a financial interest they could seek to protect in court. But the court also ruled, “We treat a statute as a contractual promise ‘only if the legislature has clearly and unmistakably expressed its intent to create a contract.”

The reason for that is simple reason: The acts of one legislative session ordinarily cannot bind those of another session in the future (just as a future governor typically can reverse actions taken by a previous governor).

Court’s view

The court also didn’t accept the counties’ argument that the state had committed to managing the lands in a specific way, that “the greatest permanent value” necessarily equated to the highest immediate payout to the counties. Maybe “permanent value” implies a different kind of management.

Here we come to what, for most of us, should be the core of the matter: What does “greatest permanent value” mean?

A state administrative rule says it “means healthy, productive, and sustainable forest ecosystems that over time and across the landscape provide a full range of social, economic, and environmental benefits to the people of Oregon.” Several benefits are listed – timber production, fish and wildlife environments, protection against flooding, recreation and more – but actually managing the lands means balancing these objectives.

How best to balance those benefits is also a matter of time and conditions. The best use of the lands may have seemed far different in 1931 than in 2021, or how they may seem decades from now.

This is the sort of messy calculation that, strange as it may seem, politics should help resolve. It sounds like another useful subject for this year’s gubernatorial campaigns to address.