Feds, SPI both claim victory in Moonlight Fire settlement

Feds, SPI both claim victory in Moonlight Fire settlement

25 July 2012

published by www.plumasnews.com

USA –  The exact cause of the 2007 Moonlight Fire remains a matter for debate.

The federal government said an investigation found that a Sierra Pacific Industries (SPI) contractor started the 65,000-acre fire. Sierra Pacific still insists it was someone else.

Attorneys for both sides were claiming victory last week after SPI and other defendants agreed to pay the federal government $122.5 million in damages.

According to the Department of Justice, the settlement represents the largest recovery ever received by the United States for damages caused by a forest fire.

The largest previous settlement was $102 million paid by the Union Pacific Railroad in 2008, in connection with the 2000 Storrie Fire.

“We are very pleased with this settlement, which is fair and reasonable given the scope of the damage suffered by the national forest land due to the Moonlight Fire,” U.S. Attorney Benjamin Wagner said.

The Moonlight Fire, which ignited Sept. 3, 2007, on private forestland in Plumas County, raged for more than two weeks. More than 46,000 acres of the 65,000 acres burned were in the Plumas and Lassen National Forests.

According to a joint investigation by the U.S. Forest Service and CalFire — which attorneys for SPI claim was flawed — a subcontractor working for SPI ignited the fire.

Sierra Pacific Industries attorney William Warne said he was pleased with the settlement, considering the government was seeking more than $700 million in damages.

But he blasted the government for its “bounty hunter mentality.” Warne said SPI was named as a defendant just two days after the fire started. He said SPI was targeted because of its financial resources.

“That has been our position all along,” Warne said during a conference call with reporters after the settlement was announced Tuesday, July 17.

Sierra Pacific said it agreed to the settlement because a judge ruled that SPI could be found responsible for the fire even if neither the company nor its contractors started it.

SPI Director of Corporate Affairs Mark Pawlicki called the judge’s pretrial ruling “unprecedented.”

“Ultimately, the pretrial ruling that the defendants could be liable for someone else’s fire is unprecedented and baseless,” Pawlicki said. “And we believe any such ruling would be contrary to California law and public policy.”

However, Warne claimed the government agreed to settle for a fraction of the amount it was seeking because of evidence SPI uncovered during its own investigation. He said he didn’t want to outline details because SPI still has up to six separate state court actions associated with the fire, including an $8 million suit by CalFire to pay firefighting expenses.

“We found suppressed documents and photographs and diagrams that were not included in the public version of the report, which identified the cause of the fire,” Warne said. “And we believe that those documents and diagrams and photographs were at odds with the investigators’ conclusions.

“Typically, a settlement signifies the end of a dispute,” Warne said. “But this is just the beginning.”


The government’s investigation found that two employees for Howell’s Forest Harvesting, an SPI subcontractor, were operating bulldozers in a remote area on a red flag warning day. A red flag day is a condition of high fire danger declared by the National Weather Service.

The investigation found that the fire was ignited when the track or blade of one of the bulldozers struck a rock and created sparks that ignited a smoldering fire.

The government said the fire smoldered for a long period of time, but went undetected because the employees did not conduct their company-required fire patrol after they shut down for the day.

Instead, the investigation found the designated fire watch employee left the area and drove 30 minutes away to get a soda. When he returned an hour later, there was a 100-foot wall of smoke billowing from the work area.

According to the investigation, the employee was without a means of calling to report the fire and had no access to fire-suppression equipment, which was located about a mile from the work area.

“Like many forest fires, it may have been easily avoided with proper safeguards,” said Assistant Attorney General Ignacia Moreno.

Warne said the government’s investigation was biased.

“We believe that the investigators in this fire made numerous missteps, violated their training and started with certain defendants in mind, which is a phenomenon known as ‘expectation bias,’” Warne said. “As a consequence of expectation bias, they were engaged in an investigation where they were ultimately simply trying to support their initial conclusions.”

The settlement

Sierra Pacific and the other defendants agreed to pay $55 million in cash.

SPI’s portion includes payment of $17 million within 60 days from the date of the settlement agreement. SPI was ordered to pay an additional $30 million in twice-yearly payments of $3 million each on Jan. 1 and July 1 every year starting July 1, 2013, until full payment is received.

Howell’s, W.M. Beaty & Associates Inc. and a group of landowners will collectively pay $8 million.

U.S. Forest Service spokesman John Heil said the $55 million would be used to pay for restoration of the areas that were burned in the Plumas and Lassen national forests.

Warne said the $55 million cash settlement should be considered a victory for the defendants.

“To be in position where you were facing a financial death penalty case and to walk away with paying $55 million is a huge victory for private citizens and private business in California,” Warne said. “The only sour note is that we really wanted to try this case. And we are going to try this case in state court.”

In addition to the cash settlement, Sierra Pacific agreed to give the government 22,500 acres of land it owns in California. The land has an approximate value of $3,000 per acre, or a total of approximately $67.5 million.

Within 10 days of the agreement, SPI will identify 200,000 acres of undeveloped wildland, from which the U.S. Forest Service may select any part or parts.

If the Forest Service does not select 22,500 acres of potential settlement land from the initial 200,000 acres offered within 10 days, SPI will identify another 100,000 acres for the USFS to consider.

The process of identifying additional 100,000-acre blocks will continue until 22,500 acres of potential settlement land has been identified.

Quincy jobs safe

In a memo to employees of Sierra Pacific’s Quincy mill that was sent before the settlement was announced, SPI owners Red, George and Mark Emmerson emphasized that no jobs would be lost because of the settlement.
“We wanted you to know in advance that this settlement will not affect your job or the overall viability of SPI,” the owners said in the July 9 memo. “We will remain a strong company in the forest products industry and plan to continue operating just as we always have been.

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