Thursday, September 6, 2012

Scott Timber Co. v. United States

Sep 5: In the U.S. Court of Appeals, Federal Circuit, Case No. 2011-5092. Appealed from the United States Court of Federal Claims. The United States appeals from a judgment of the Court of Federal Claims (Claims Court) finding that the government breached three timber-harvesting contracts and awarding damages to Scott Timber Company (Scott). See Scott Timber Co. v. United States (Damages Decision), 97 Fed. Cl. 685 (2011); Scott Timber Co. v. United States (Liability Decision), 86 Fed. Cl. 102 (2009). The Appeals Court reversed the Claims Court.
    The Appeals Court explains that this is another in a series of cases involving allegations that the government breached contracts for the sale of timber on public lands. Timber-harvesting contracts, such as those at issue here, allow the contract holder to cut and remove a specified volume of timber from designated Federally-owned lands during a designated period of time. Because of the risk posed by potential environmental litigation, and by litigation against the government for the resulting delays, the government included provisions in the timber-harvesting contracts involved here authorizing the Forest Service to suspend the awarded contracts in order to comply, for example, with a court order enjoining harvesting on the involved lands.
    In this case, at the time of the award, Oregon Natural Resources Council Action (Oregon Natural) had brought suit against the government claiming that the Forest Service had violated the Northwest Forest Plan adopted in 1994, and hence had violated applicable statutes, by authorizing timber sales without first conducting surveys for certain species of wildlife. Oregon Natural Res. Council Action v. U.S. Forest Serv., 59 F. Supp. 2d 1085, 1087 (W.D. Wash. 1999).
    The Claims Court found the government liable for breaching each of the contracts and first concluded that the Forest Service's award of the three contracts without informing Scott of the risks to those contracts posed by the litigation; "unreasonably delayed" completing the surveys of timber areas which "unduly lengthened" the contract suspension periods"; and further delayed because of another lawsuit in which no injunction was ever issued.
    The majority Appeals Court found that, "Scott has not established that any delay in performance of the Pigout, Jigsaw, and Whitebird contracts resulted in lost profits. . . [and] "Scott is thus precluded from recovering damages on a theory of material breach, including the $129,599 in claimed re-placement costs. For these reasons, we reverse the judgment of the Claims Court."
    The dissenting Justice indicates, "The court errs when it finds Scott I and Precision Pine reconcilable and Scott I inapplicable in this case. See Majority Op. at 15-18. These cases are irreconcilable, and therefore this court should take the case en banc to re-solve the conflict the two cases present or the panel should hold that Scott I is the earlier, and therefore precedential, decision over Precision Pine. [Interested parties should review the case for details regarding the referenced cases.]
    Access the complete opinion and dissent (click here).  [#Land, #CAFed]
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