TS - Board axes Gallegos' request for help in lawsuit

Board axes Gallegos' request for help in lawsuit
By James Tressler The Times-Standard
March 12, 2003

EUREKA -- Humboldt County District Attorney Paul Gallegos and his assistant Tim Stoen may have to go it alone in their lawsuit against Pacific Lumber Co.

After listening to more than three hours of public debate, the Board of Supervisors Tuesday by a 4-1 vote rejected the district attorney's request to contract a San Francisco Bay area law firm to act as special counsel in the lawsuit.

The board's decision was made before a packed chamber divided between PL employees and contractors, who defended the timber company, and PL critics who are standing by the district attorney's lawsuit.

The district attorney sued the timber giant last month, alleging the company concealed key information during the 1999 Headwaters negotiations that allowed it to cut timber on steep slopes that otherwise would have been off limits. The district attorney alleges PL subsequently harvested more trees than it was allowed under the agreement. The lawsuit seeks tens of millions of dollars in damages.

On Tuesday, Gallegos was asking the board to give him the OK to hire Cotchett, Pitre, Simon and McCarthy, a Burlingame firm with extensive experience in corporate fraud litigation. Although the details of the proposal were still being finalized, the firm would have kept 14.5 percent of any recovered damages. The District Attorney's Office, as was proposed Tuesday, would have paid most of the legal expenses out of its own budget.

The board, in refusing to let him contract with the firm, cited California government code 25203, which gives the board by a two-thirds vote authority to employ or not to employ outside counsel in matters of litigation affecting the county.

The majority of the board members who voted against the proposal said they didn't feel comfortable committing county dollars to the lawsuit in a year when the county faces severe state budget cuts. Also, several board members said they weren't certain the district attorney had made a convincing case against PL -- and in fact, that they had serious questions about the validity of the lawsuit.

Prior to the meeting, the board received copies of a letter the California Department of Fish and Game sent Monday to Stoen. In the letter, department officials said they believe there are factual errors in the facts presented in the lawsuit.

Chairman Jimmy Smith voiced similar doubts. He said that by supporting the outside counsel, the board risked taking a position against state agencies like Fish and Game, which has stood firm behind PL's practices since the Headwaters deal.

"I'm not being critical of the district attorney," Smith said after the meeting. "He has a big job and he makes his decisions and we'll all live by that. But ... in a case of this magnitude, we all needed individually to do what research we could to find if it's a prudent decision. We represent all of the county. The risk is there and it could be substantial."

The controversial proposal put a heavy spotlight on two of the supervisors, Roger Rodoni and Bonnie Neely. Rodoni was asked by some to recuse himself from the vote due to a perceived conflict of interest because Rodoni rents land from the timber company. Rodoni, prior to the vote, displayed comments from the Fair Political Practices Commission, which Rodoni said had no problem with him voting on the matter.

Neely is the wife of former District Attorney Terry Farmer, who Gallegos upset in last year's election. After the board's vote, Neely said her decision was not personal, but made in the interest of the county, which faces a severe budget crisis over the next year. The Fish and Game letter also influenced Neely, who said the letter affirms that the state's regulatory agencies don't appear to support the lawsuit.

"What I'm seeing is that you're standing alone," Neely said, to Gallegos and Stoen.

Neely ended her argument against the proposal by urging the district attorney to get in line behind other departments if it wants any of the county's money to pay for the lawsuit.

"You have to compete along with them in terms of money being allocated," she said.

Third District Supervisor John Woolley cast the lone vote in support of the district attorney's proposal. Before the board's vote, Woolley put forth a motion to continue the discussion for two weeks, to allow the district attorney to bring forth a finalized proposal. Fifth District Supervisor Jill Geist supported that motion, but the rest of the board voted it down.

Woolley argued unsuccessfully that while he had some serious questions himself about the lawsuit, he said the board shouldn't reject the proposal outright until they'd seen the final version.

The board's rejection for special counsel won't stop Gallegos from pursuing his lawsuit using his own budget. Nevertheless, he and Stoen tried to convince the board Tuesday that they need outside counsel to handle some of the workload so that the lawsuit won't drain too much time and resources from other cases.

After the board's vote, Gallegos seemed disappointed but unfazed.

When asked what happens next, he said, "Time for lunch."

Earlier, Gallegos stood by his controversial lawsuit, arguing that the financial cost shouldn't outweigh his responsibility to pursue what he believes are serious charges against PL. Otherwise, companies like PL, backed by high-priced corporate lawyers, would seem to be given a double standard, Gallegos said.

"Do you make decisions to prosecute a wrong based on cost? No," he said. "What is the price of the integrity of our government system?"

PL officials said they were pleased with the board's decision, saying it reinforced other support that the company has received, including from the state Attorney General's Office.

"The facts are on our side," said Jim Branham, PL's director of government relations.

Branham added that the district attorney's failure to present a convincing case to the board Tuesday could prove a telling statement "on their ability to prosecute this case."

Even before the board convened Tuesday, the outside of the courthouse was jammed with log trucks and timber industry workers, who held what they called a "right-to-work" demonstration. Some even held up "Recall the D.A." signs.

"We have to stand up for our rights," said Tony Leonardo, owner of Leonardo Trucking, which contracts with PL. "Besides putting us out of work, this lawsuit is going to cost taxpayers a lot of money whether he wins or loses.

Petrolia resident Ellen Taylor said that while she sympathized with the timber workers, she still supports the lawsuit. Taylor owns a ranch which she maintains suffered from erosion as a result of PL's logging practices.

"These workers have suffered, but in reality they cut themselves out of a job," Taylor said. "The D.A. is just performing his responsibility. ... It's very brave of him to do this."