Judge orders Cal Fire to pay $30 million for ‘reprehensible conduct’ in Moonlight fire case

February 5, 2014

The Sacramento Bee

Bill Warne and Mike Thomas comment in The Sacramento Bee on the recent court order requiring the State of California to pay more than $30 million in damages to Sierra Pacific Industries and other landowners incurred in defending against the Moonlight Fire lawsuit.  The award is one of the country’s largest civil court recovery actions.

See full article below or view it online at The Sacramento Bee.

By Denny Walsh and Sam Stanton for The Sacramento Bee

In a blistering ruling against Cal Fire, a judge in Plumas County has found the agency guilty of “egregious and reprehensible conduct” in its response to the 2007 Moonlight fire and ordered it to pay more than $30 million in penalties, legal fees and costs to Sierra Pacific Industries and others accused in a Cal Fire lawsuit of causing the fire.

The ruling is the latest twist in an epic legal battle that began not long after the fire erupted on Labor Day 2007, scorching more than 65,000 acres in Plumas and Lassen counties.

Sierra Pacific, the largest private landowner in California, was blamed by state and federal officials for the blaze, with a key report finding it was started by a spark from the blade of a bulldozer belonging to a company working under contract for Sierra Pacific.

But company officials have steadfastly denied responsibility and have accused the California Department of Forestry and Fire Protection and the U.S. Forest Service of conspiring to cover up their own shortcomings that allowed the fire to rage out of control.

Even after Sierra Pacific agreed to settle a federal lawsuit over the devastation in two national forests by paying $55 million in cash and handing over 22,500 acres of land to the government, the company insisted it was undone by an erroneous ruling of U.S. District Judge Kimberly J. Mueller, and then was a victim of stonewalling by Cal Fire in that agency’s Plumas County suit, including the alleged withholding of thousands of pages of key internal documents relevant to the legal struggle.

In a 28-page order issued Tuesday, retired Superior Court Judge Leslie C. Nichols essentially agreed with all of Sierra Pacific’s points, adopting a separate, 57-page order proposed by Sierra Pacific and the other defendants almost word-for-word, and excoriating the behavior of Cal Fire and two lawyers from the office of Attorney General Kamala Harris, which represented the agency.

“The court finds that Cal Fire’s actions initiating, maintaining and prosecuting this action, to the present time, is corrupt and tainted,” the judge wrote. “Cal Fire failed to comply with discovery obligations, and its repeated failure was willful.”

The agency withheld documents for months, “destroyed evidence critical (to the case) and engaged in a systematic campaign of misdirection with the purpose of recovering money from (Sierra Pacific).”

After calculating defense attorneys’ fees and costs, Nichols, sitting on special assignment, said he was adjusting that total upward by a 1.2 multiplier to more than $30 million in a move to punish Cal Fire and state lawyers who represented it and to protect the integrity of the court. He also issued a terminating sanction; that is, he threw the lawsuit out as having little if any foundation.

“My clients are deeply gratified by the court’s decision, but I can add nothing to what the court has so clearly set forth in its own orders,” said Sacramento attorney William Warne who, with his colleague Michael Thomas, led the defense team.

Rick Linkert, attorney for a private forester and the owners of the land on which the fire started and where Sierra Pacific was conducting a timber harvest, added: “I am happy and relieved for my clients and that justice at long last has been accomplished.”

Cal Fire spokeswoman Janet Upton said the agency “vigorously disputes many of the facts and legal findings in the orders. We are assessing our next steps, up to and including appeal.”

Cal Fire sought to recover $8 million spent fighting the fire from Sierra Pacific and others connected to the timber harvest on private property in Plumas County.

After Nichols, who retired from the Santa Clara Superior Court bench in 2009, found in July that Cal Fire had virtually nothing to back up its allegations, Sierra Pacific launched a massive legal counteroffensive that led to Tuesday’s withering ruling, which compared Cal Fire to disgraced former U.S. Sen. Joseph McCarthy, quoted Shakespeare and cited Albert Einstein’s theories.

“Time and again, the court found exaggeration and hyperbole in the papers submitted by Cal Fire,” Nichols wrote.

At one point, the judge noted that Sierra Pacific’s proposed order included the word “perjury” aimed at the agency, but Nichols said he was changing that to “false” because “perjury is a word most commonly used in a criminal law context.”

Nichols also had harsh criticism for the two state lawyers who handled the case for Cal Fire.

“The sense of disappointment and distress conveyed by the court is so palpable, because it recalls no instance in experience over 47 years as an advocate and as a judge, in which the conduct of the Attorney General so thoroughly departed from the high standard it represents and, in every other instance, has exemplified,” Nichols wrote.

While the record does not clearly establish the two lawyers “directed or advised the egregious and reprehensible conduct of” Cal Fire, “there is plenty of evidence to support a strong suspicion,” he wrote.

The judge made it clear he is only addressing “the statutory basis for sanctions,” and is “in no way speak(ing) to issues of legal ethics or compliance with the requirements of the State Bar Act,” which is a separate matter.

Harris’ office said officials were aware of the ruling but did not respond to a request for comment.

Sierra Pacific has maintained that Cal Fire seized upon a theory that the bulldozer started the fire and pinpointed the spot of origin within 48 hours of a U.S. Forest Service tower employee spotting it, a time period that would have allowed for little investigation.

The company also has said there is evidence the federal watcher in a lookout tower may have been smoking marijuana at a time the blaze was smoldering in its infancy, and defense lawyers had to work hard to pry that information out of the Forest Service. By the time the watcher saw it, there were flames in addition to smoke, the company contended.

Nichols’ ruling comes nearly seven years after the Moonlight fire, and the judge said he fully expects the issue to be appealed to a higher court.

Even after agreeing in 2012 to settle the federal lawsuit at a high cost in money and land, Sierra Pacific said it did so only because it believed the government was seeking $1 billion and Mueller had ruled a short time before that Sierra Pacific could be held legally liable even if it had nothing to do with starting the fire.