Spotted owl case pivotal
Gov. Gary Locke will decide early this week whether Washington takes the unusual step of settling a property rights lawsuit by buying 232 acres of timberland in Klickitat County.
In an ironic twist, the state may eventually log the same parcel of spotted-owl habitat it had ordered a private company to leave alone.
Environmental groups are lobbying Locke to veto the $2.7 million buyout of Bingen-based SDS Lumber Co.'s land, saying it would set a bad precedent and hamper the government's ability to protect natural resources on private land. Timber industry lobbyists say the settlement may cause state officials to think twice about imposing regulations that become too onerous on property owners.
Locke's decision will be closely watched around the nation, one attorney said.
"If the state accepts liability, it's a sure bet the industry would tout this settlement as an important precedent across the country," said John Echeverria, executive director of the Environmental Law and Policy Institute at Georgetown University in Washington, D.C. Echeverria is prepared to argue the state's case on behalf of the Washington Environmental Council.
"What are they going to say to other landowners, not as politically well-placed, when they come forward and say they want a bailout, too?"
But if the governor turns down the purchase agreement, the stakes for the state go up.
"The Washington Supreme Court may give a very strong ruling in favor of private-property rights that sets a much larger precedent than our case and its specifics would ever dream to set," said SDS president Jason Spadaro.
Jury verdict 3 years ago
The controversy began when a pair of northern spotted owls were discovered making a home on an SDS parcel of timberland between BZ Corner and Trout Lake.
SDS was denied a state permit to log all but about 5 percent of the parcel to protect the nesting owls. SDS sued the state Department of Natural Resources alleging an economic "taking" of private property. In May 2000, a Yakima County jury awarded the company $2.25 million to compensate for the lost market value of the timber.
At the time, a DNR deputy commissioner called the ruling "devastating to the owls." An assistant to state Attorney General Christine Gregoire said that if the ruling stood, it could undermine the state's authority to protect public assets such as clean water, fish and wildlife on private land.
State officials vowed to appeal.
Since then, two-term lands commissioner Jennifer Belcher, a darling of environmental groups, stepped down. Republican Doug Sutherland, a political moderate who campaigned to ease the regulatory burden on private landowners, defeated former Gov. Mike Lowry in November 2000. All the while, the state attorney general's office continued to prepare an appeal of the SDS case directly to the state Supreme Court.
Then, last year, Sutherland negotiated a radical solution: The state would cut its losses by buying the land outright.
Sutherland said the $2.7 million purchase price accounts for the value of the timber, attorney's fees and 12 percent annual interest.
"It makes good sense to settle this lawsuit, rather than try to use this case to try to determine what is a taking," Sutherland said in an interview last week. "Quite frankly, it's a constitutional question."
Gregoire's office concurred.
"Commissioner Sutherland's decision to settle this case is reasonable and in the state's interests," she wrote in an April letter to state Rep. Hans Dunshee. "While I believe the state has a solid case, and my office will vigorously pursue the appeal if the settlement is not funded, there is risk to both sides of proceeding forward to a final decision."
Gregoire added that the legal issues are not clear and the state stands a chance of losing.
Locke included the $2.7 million buyout, no strings attached, in the budget he submitted to the Legislature in December.
Sen. Mark Doumit, D-Cathlamet, helped rewrite the legislation that Locke is now considering.
Doumit said the revised legislation puts the onus on the federal government, which listed the owl as threatened in the first place under the Endangered Species Act. It also shifts the responsibility to the DNR to pay back the state's general fund. If the DNR doesn't recoup the investment by selling timber within a year, the legislation directs the agency to persuade the federal government to reimburse the state. Failing that, the $2.7 million would come out of the department's forest practices program budget in 2005-07.
Those provisions are prompting Locke to reconsider the buyout, said Jim Cahill, senior budget assistant to the governor.
Doumit said the rewrite was not intended as a poison pill, but he did indicate he's uncomfortable with the settlement.
"The precedent that would be set here opens a Pandora's box," Doumit said. "There could be literally hundreds of settlements like this in the future if we're not careful."
Sutherland disagrees that this case will create problems for his department.
Because SDS has agreed to drop the case, Sutherland said there will be no legal precedent established. He also argued that few property owners would likely want to emulate the SDS predicament. Since identifying the parcel of mature and second-growth trees for logging, Sutherland said, SDS has spent 12 years and a quarter of a million dollars in legal fees trying to harvest the trees.
"I don't think anyone else is willing to put up this kind of investment," Sutherland said.
DNR may log it after all
Sutherland said he's "not terribly happy" with the provisions lawmakers added to the buyout, but he's still encouraging Locke to go through with it.
Sutherland said the state may be able to log the property even though SDS could not.
By folding the parcel into the 1.2 million acres of state trust land covered by a federal Habitat Conservation Plan, Sutherland said the state has the latitude to log some owl habitat while protecting owls in other areas of its vast land holdings. In contrast, SDS has only about 59,000 acres of timberland scattered across four counties in the Columbia River Gorge, making it harder to make the case that owls would be adequately protected elsewhere on its property.
"They're more at risk," Sutherland said. "They don't have that landscape understanding with the federal government that we do."
But the federal government has no such "understanding" with the DNR, at least, not yet.
Craig Hansen, manager of the U.S. Fish & Wildlife Service's division of conservation planning in Lacey, said state officials will have to make the case that the DNR has reserved enough habitat for owls elsewhere to justify logging the former SDS parcel. "We have not had those discussions," Hansen said.
Owls are scarce in Southwest Washington, said Paula Swedeen, forests habitat coordinator for the Washington Department of Fish and Wildlife. Regardless of who owns the property, Swedeen said the owl nests should remain undisturbed for the foreseeable future.
"Nobody should be logging it," Swedeen said. "The population is not in good shape right now."
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