4.25.2008

ER - District Attorney Paul Gallegos' fraud lawsuit halted by California Supreme Court

Ending a five-year legal odyssey through the state’s court system, the California Supreme Court has refused to review Humboldt County District Attorney Paul Gallegos’ appeal of his fraud lawsuit against The Pacific Lumber Co.

The Supreme Court acted on Wednesday to deny the petition from Gallegos to review his appeal of the First District Court of Appeal’s ruling in January, which upheld a Humboldt County Superior Court ruling that tossed out his lawsuit.

The Supreme Court also denied his petition seeking depublication of the Appellate Court’s lengthy written ruling, which now becomes established case law.

With the high court’s ruling, Gallegos has no further ability to appeal.

Gallegos alleged in his original lawsuit filed in Humboldt County Superior Court in 2003 that PALCO intentionally committed fraud to increase timber harvesting when it manipulated reports during the environmental review phase of PALCO’s Sustained Yield Plan for the historic Headwaters Deal in 1999.

But in a 2005 decision, visiting Judge Richard Freeborn sustained a previous court ruling that Gallegos’ lawsuit had no legal basis and that PALCO’s submission of an allegedly erroneous report and the subsequent resubmission of corrected data were protected under California Civil Code “litigation privilege.”

Gallegos appealed Freeborn’s ruling to California’s First District Court of Appeals, which upheld the ruling that the fraud charges brought against PALCO under unfair competition laws weren’t legally sufficient to warrant a trial.

But going beyond just affirming the lower courts ruling, the appellate court justices published a rare and critical 23-page decision and opinion that stated Gallegos failed to prove that his case could be fixed to move forward and even if it did, the evidence presented “would not justify their prevailing at trial.”

Following that ruling, Gallegos held a news conference and adamantly defended his decision to pursue the lawsuit despite it being dismissed twice because the court found it had no legal merit.

Gallegos did not return a phone call to comment Thursday.

In a written statement Thursday, a PALCO official said Gallegos could not state a single valid legal claim even after the court gave him numerous opportunities to amend his complaint.

“The trial court, the appellate court and now the California Supreme Court have all recognized this case to be more an exercise in spite and sloganeering than an action of any substance or legal merit,” stated Frank Bacik, PALCO’s vice president and general counsel, who responded to the news in a statement Thursday.

“There’s nothing left now but to marvel at the truly irresponsible waste of public money, time and energy this case represents.”

District Attorney Paul Gallegos' fraud lawsuit halted by California Supreme Court
By NATHAN RUSHTON, The Eureka Reporter
Published: Apr 24 2008, 5:59 PM · Updated: Apr 25 2008, 12:31 AM

Last night Gallegos was on Channel 3 TV News saying that The Supreme Court didn't really reject his appeal, that they were just "too busy" to hear it. I'm not kidding.