AP - Judge dismisses fraud suit against Pacific Lumber

Posted on Wed, Jun. 15, 2005
Judge dismisses fraud suit against Pacific Lumber
Associated Press

EUREKA, Calif. - A judge has dismissed a lawsuit brought by Humboldt County prosecutors against Pacific Lumber, alleging the company knowingly submitted false data on landslides.

Humboldt County Superior Court Judge Richard L. Freeborn found Pacific Lumber Co. was immune from prosecution while lobbying during the Headwaters Forest negotiations of the late 1990s.

The ruling was praised by Pacific Lumber officials.

"Hopefully, we go forward and the DA goes in another direction," said company spokesman Chuck Center. "We're just trying to get trees into our mills."

District Attorney Paul Gallegos was not in the office Wednesday. A telephone message from The Associated Press was not immediately returned.

Steve Schectman, a private attorney recently hired to assist the DA's office in the case, told the Eureka Times-Standard he believes the decision should be appealed.

Schectman said the ruling would encourage corporations to lie and put the truth-finding burden on administrative agencies.

In the suit, filed by Gallegos soon after he took office in 2002, prosecutors alleged the lumber company submitted faulty data to get access to timber on steep slopes it would otherwise have been unable to touch.

Soon after the suit was filed, a recall election bid was launched against Gallegos that was heavily funded by the lumber company. However, Gallegos survived the 2004 recall.

In his ruling, released Tuesday, Freeborn wrote that the chain of events leading to submission of the landslide study was not initiated by the lumber company, but by a request from the North Coast Regional Water Quality Control Board.

The lumber company later filed a corrected version of the landslide report, but it was sent to a local agency. The suit alleged Pacific Lumber should have sent the report to the California Department of Forestry's main office in Sacramento.

The judge said the subject of the lawsuit was not whether the decision to allow logging was right or wrong. He said the company is immune from prosecution because of a legal argument based on free speech rights which makes a company immune from liability when lobbying the government to do something.

That doctrine doesn't hold if a company is pulling a sham, for instance, trying to delay a competitor from getting a license. But the judge noted there was no such situation in this case.