McK Press - Gallegos: Dismissal of Palco fraud case will be appealed

here's McK Press story (it'll also be in the Independent)

Pg 2:
Gallegos: Dismissal of Palco fraud case will be appealed
Sept 20, 2005
by Daniel Mintz
Press Staff Writer

District Attorney Paul Gallegos has announced that his office will appeal the ruling that put an end - temporarily, perhaps - to movement toward a trial on the lawsuit that symbolizes his political identity.

Gallegos' fraud lawsuit against pacific Lumber Company fell like a bomb when it was filed three years ago as the DA began his first term in office. An aggressively fought attempt to Recall Gallegos followed, mainly funded by the company. But the lawsuit that defined Gallegos as an ally of environmentalists was dismissed last spring, when a Lake County judge assigned to the case ruled that state and federal laws shield the company from liability related to information exchanged during government agency reviews.

The case focuses on a landslide study the company submitted to the state's Department of Forestry during reviews that led to the 1998 Headwaters Deal. The information on it was wrong, and Gallegos alleges that the error was intentional, devised to mislead regulators into allowing an additional $40 million worth of additional annual logging.

Judge Richard Freeborn has ruled that a constitutional liability shield known as the Noerr-Pennington Doctrine protects participants in government processes from being sued or prosecuted for the content of their exchanges. But Gallegos will appeal the ruling based on his belief that Freeborn mistakenly interpreted the law as being relevant to permit applications.

DA to argue appeal himself

With the appeal, the focus of debate on the lawsuit shifts from whether Pacific Lumber committed fraud to whether the Noerr-Pennington Doctrine and similar laws provide liability protection. "I do not believe the Judge's ruling in the PALCO (Pacific Lumber) case is an accurate statement of the law." said Gallegos in an email interview. "IF it is, I think the law should be changed. I also think that if it is the law, the people of this community and the State of California are entitled to an appellate and or Supreme Court decision telling them that so they also can decide whether the law needs to be changed."

Gallegos clarified that he is "not opposed, philosophically, with the idea behind the Noerr-Pennington Doctrine" but rejects Freeborn's determination that PALCO's submission of information to environmental agencies can be defined as "lobbying" for changes in government policy.

Tim Stoen, once Gallegos' assistant and the case's lead prosecutor, has left Humboldt for work at the Mendocino County District Attorney's office. Stoen is considered the architect of the lawsuit complaint - and by some, he's viewed as the root of political problems for Gallegos.

Stoen will probably not be returning to work on the case. Asked who would argue the appeal and the case itself if it succeeds, Gallegos said that "right now, the case is assigned to me" and added that "there is a good likelihood that it will stay that way."

The DA also said that challenging Freeborn's ruling is chancy, as it risks what Gallegos considers to be a troubling precedent etched in appellate law. :I have and I am carefully considering the possible impact of an adverse appellate decision on my brethren, the other 57 district attorney's in the State of California, because the court's decision affects all of us in our efforts to make this a safer and more just place to live," Gallegos said.

but he has also weighed his responsibilities as a DA. "My greatest obligation is to the people of Humboldt County," he explained. "Therefore, I believe it is better to risk an adverse decision and deal with the consequences of that, than to conceded that the law allows a corporation to deceive the public for monetary gain."

"A successful appeal will put that allegation to a courtroom test."

"Politically charged"

Essential to the lawsuit is its claim that Palco tried to bureaucratically bury a corrected study by delivering it to local offices of the California Department of Forestry (CDF) and the North Coast Regional Water Quality Control Board instead of the CDF's main office in Sacramento. Freeborn, however, ruled that the point is moot because state law guarantees "the utmost freedoms of access" to judicial and quasi-judicial reviews :without the fear of being harassed by derivative (legal) actions."

The Noerr-Pennington Doctrine also provides an immunity shield, Freeborn ruled. Application of the terms "lobbying" will be one thrust of the appeal's argumentation, as the law protects parties who lobby government agencies on policy issues. Gallegos disagrees that Palco's Headwaters participation amounts to lobbying, but Freeborn noted in his ruling that the word was used to describe the company's activities in the lawsuit itself.

But he went beyond those questions, saying that the incorrect study the lawsuit hinges on comprises " a single act" in a process that involved a huge volume of studies and environmental analyses. Freeborn didn't believe that the study allowed the financial advantage the DA alleges, and the judge indicated that if Palco truly intended to commit fraud, the company would have fudged data in several instances during the Headwaters process and not just one.

Though in suspension until the appeal is adjudicated, the lawsuit has been alternately cited as evidence of Palco's corporate opportunism and Gallegos' pandering to special interest groups. The DA advises the case's observers to leave judgement to judges.

"I regret the media attention that filing the appeal will bring because the case should be tried in the courts and not in the press," said Gallegos. "However, I understand the role of the media and that, because Palco is the defendant, it is a politically charged case."