Thursday, August 2, 2012

The Biggest Natural Resource Damages Case You've Never Heard of


About two weeks ago, the Department of Justice settled a major case against Sierra Pacific Industries and several other timber industry defendants.  The case arose out of the Moonlight Fire, which burned through private and national forests in California’s northern Sierra Nevada in September, 2007.  The aggregate amount of the settlement—a $55 million monetary payment and the transfer of 22,500 acres of land, with a total estimated value of $122.5 million—makes it the largest settlement ever in a fire damages case.

The case should be of interest to environmental lawyers for several reasons.  First, the sheer scale of the damages award is striking.  These aren’t Deepwater Horizon numbers, and the settlement is for much less than the Unite States initially asked (over $1 billion, according to SPI, though the government disputes that figure).  But still, $122.5 million is enough to leave the timber industry rather concerned about potential future liabilities, particularly after decades of fire suppression (and a changing climate; see Blake's post last week) have primed much of the west for similarly catastrophic burns.

Second, the case involves natural resource damages in a somewhat unfamiliar context.  We're used to thinking of natural resource damage claims involving contaminated site cleanups or oil spills, not forest fires, and under federal laws like CERCLA or the Oil Pollution Act.  In traditional fire liability cases, plaintiffs have tended to recover for response costs and lost timber, not for environmental impacts.  Here, however, the United States also sought recovery for damage to the environment, and it did so under state statutory and common law.  To compare the legal and scientific complexities of a fire NRD case with the issues that often arise from Superfund sites and oil spills could be rather interesting. 

Torts lawyers may also find the case intriguing, partly because cases involving stray sparks and catastrophic fires are probably near and dear to their hearts, and also because the case raises some interesting questions about the scope of landowners’ duties.

For newspaper coverage of the settlement, see here.  The United States’ amended complaint is here.

- Dave Owen

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