Judge axes PL suit

Wednesday, June 15, 2005 -

EUREKA -- The Humboldt County district attorney's fraud suit against Pacific Lumber Co. was tossed out by a judge Tuesday.

Ruling in Humboldt County Superior Court, Judge Richard L. Freeborn found the company was immune from prosecution for its lobbying efforts during the Headwaters Forest negotiations in the late 1990s.

Freeborn wrote in a 23-page ruling that the chain of events that led to Palco's submission of a bogus landslide study wasn't even initiated by the company, but by a request from staff of the North Coast Regional Water Quality Control Board.

The DA's office alleged that Palco committed fraud by filing the study on Jordan Creek and allegedly caused the California Department of Forestry to free up additional timber with serious environmental consequences.

"Was the agency decision in some objective sense, right or wrong?" Freeborn asked. "That is not the subject of this lawsuit."

Freeborn wrote that the DA didn't prove an exception to the so-called Noerr-Pennington Doctrine, which makes a company immune during lobbying efforts. The doctrine does not hold if a company pulls a sham on the government to gain an advantage over a competitor.

"This complex and extensive proceeding was not some fabrication of Palco initiated as a sham to take advantage of others," Freeborn wrote of the Headwaters negotiations.

Palco spokesman Chuck Center said the company is pleased with the decision. He said that the ruling removes a potential threat to the company's ability to harvest trees and keep its operations running.

"Hopefully we go forward and the DA goes another direction," Center said. "We're just trying to get trees into our mills."

District Attorney Paul Gallegos was out of town and had not read the ruling when the Times-Standard contacted him. Gallegos said he would not comment until he saw the decision.

Deputy District Attorney Tim Stoen, who was trying the case, did not immediately return a phone call left at his office.

But Steve Schectman, a private attorney recently pulled in by Stoen to assist in the case, said he believes the decision should be appealed. However, he added that was not an official statement. He said the judge's ruling would encourage corporations to lie, and place a burden on administrative agencies to be truth-finders, like a court.

"If you get it by hook or by crook, you get a pass," Schectman said.

Richard Salzman, a key political supporter of Gallegos, said he didn't believe the ruling would hurt the district attorney.

"His office isn't about this lawsuit," Salzman said. "I think the leadership, the real leadership that Paul shows in the community is what is important to me."

Others hoped that the ruling would mend the rift between Palco supporters and its critics that they believe was made wider by the lawsuit.

"I would hope there's healing once we get past this suit," said Odell Shelton, a critic of the DA and a Fortuna city councilman. "It really split the community up when this all started."

Fellow Councilman Mel Berti said he believes that the suit was politically motivated, and caused lots of angst, as well as costing taxpayers.

"I think it's a giant step forward," Berti said of the ruling.

Others were dismayed by the news. Mark Lovelace of the Humboldt Watershed Council said it sounds like the judge is "completely out of touch."

"It sounds like the ruling does not deny that they lied, it just says they're protected by doing so," Lovelace said.

The DA filed the lawsuit shortly after taking office in 2002. Soon afterward, a recall election bid was launched, supported heavily by Palco funding, to unseat the district attorney. Gallegos survived the attempt.

The ruling is available through the Times-Standard's website at <http://extras.times-standard.com/temp/palco_suit.pdf>http://extras.times-standard.com/temp/palco_suit.pdf

Times-Standard reporter James Faulk contributed to this report.