Two new chapters have been written in one of California’s longest-running environmental dramas. The latest installments lack the emotional wallop of earlier parts, which featured celebrities, death and torture, but may ultimately prove more significant.

On January 30, the state Supreme Court upheld the authority of state water boards to regulate logging activities that have the potential to degrade streams. The ruling was a rebuke to Pacific Lumber Co. (PALCO), which had argued that the Forest Practice Act granted the California Department of Forestry and Fire Protection (CDF) sole authority to regulate logging. In a blunt assessment, the justices concluded that PALCO’s interpretation of the law “makes no sense.”

The much-vilified Humboldt County logging company fared better at the hands of the First District Court of Appeal. In December, the appellate court overturned a trial court ruling and reinstated the controversial set of plans and permits negotiated as part of PALCO’s $480 million deal with state and federal agencies to protect the Headwaters grove of old-growth redwoods. Perhaps the most significant element of that ruling was the court’s upholding of the “no surprises” assurance attached to an incidental take permit issued under the California Endangered Species Act. The permit authorized the company to kill protected species in the course of its operations, in exchange for development of a habitat conservation plan (HCP) that would boost protections elsewhere.

No-surprises assurances typically immunize permit recipients from future changes in mitigation requirements, even if new information or changed circumstances suggest the adopted measures may not be adequate. Although contested by environmental groups and criticized by biologists, “no surprises” has been a cornerstone of the HCP process since the mid-1990s, serving as an incentive for landowners to participate in the program.

Both court cases grew out of the 1996 Headwaters forest agreement, intended to resolve a bitter, drawn-out and violent dispute over forest management. The agreement transferred about 7,000 acres of old-growth redwoods in Northern California from PALCO’s hands into public ownership for $480 million in state and federal money.

Certainty was one of the major goals for both sides in the deal. The company retained ownership of more than 200,000 acres of adjacent timber land, home to a number of endangered or rare species. Conservationists wanted assurances that logging on that land would not imperil those creatures. For its part, the company wanted to end the tree-by-tree warfare with protesters and their attorneys that had hobbled PALCO’s efforts to meet timber production goals.

The Headwaters deal included a commitment by the company to adopt an HCP for its remaining Humboldt County property, limiting logging to protect such species as coho salmon, the northern spotted owl and the marbled murrelet. Based on that HCP, the company received approval for a sustained-yield logging plan, federal and state incidental-take permits, and a streambed alteration agreement.

The Sierra Club and the Environmental Protection Information Center, a Garberville-based organization that has been a thorn in PALCO’s side for years, sued in March 1999. The plaintiffs challenged CDF’s approval of the sustained-yield plan, the issuance of the incidental-take permit and approval of the streambed alteration agreement by the Department of Fish and Game (DFG), and the findings issued by both state agencies under the California Environmental Quality Act.

The plaintiffs alleged that the state agencies had failed to follow proper procedures, and they contended that the incidental-take permits failed to include sufficient steps to offset harm to imperiled species. With respect to the no-surprises assurance, the plaintiffs argued that by agreeing not to change the mitigation requirements during the 50-year life of the permit, DFG was violating its legal obligation to ensure full mitigation of harm to rare species.

The Humboldt County Superior Court ruled in the environmentalists’ favor in July 2003, throwing out the plans and permits and bringing a halt to further logging. PALCO appealed, and in December won on most of the disputed items. The appeals court found that the state agencies had for the most part acted properly, and that the no-surprises assurance was legal.

Despite the longstanding controversy over HCPs, the First District’s decision was one of the first published state court opinions regarding the no-surprises rule, making the decision a noteworthy rarity (see CP&DR Environment Watch August 2004).

The justices did find, however, that DFG had overstepped its bounds when it included 13 unlisted species in the incidental-take permit, relieving PALCO of any responsibility for additional mitigation if those species were listed in the future. Incidental-take permits can be issued only if the agency determines that such action will not jeopardize the species’ continued existence, and there’s no way to make such a determination in advance, the court ruled. Rather than invalidate the entire incidental-take permit, however, the court ruled that the section pertaining to the unlisted species should be stricken and the remaining provisions should remain in force. The plaintiffs have asked the Supreme Court to take up the case.

PALCO did not fare as well in its other case, which concerned a timber harvest plan adopted for about 700 acres in the Elk River watershed that the company acquired through the Headwaters negotiations. The CDF approved the plan, finding that it included adequate steps to protect streams from contamination by sediment, but the North Coast Regional Water Quality Control Board disagreed. It issued an order requiring the company to conduct substantial monitoring to make sure the Elk River remained unimpaired.

PALCO appealed to the State Water Resources Control Board, which upheld the regional board. The company then sued the state board, arguing that the Forest Practice Act pre-empted the water board’s authority to regulate activity carried out under an approved timber harvest plan. The trial court agreed, but that ruling was overturned on appeal. PALCO then took the case to the Supreme Court, where the justices made quick work of the company’s argument.

The Forest Practice Act, they pointed out, does not grant CDF authority to supersede the water boards in regulating water quality. In fact, it contains language specifically stating that “no provision” of the logging law limits the power of other agencies to carry out their legal mandates.

“We take the phrase ‘no provision’ to mean what it says, that nothing within the Forest Practice Act … implicitly bars the water boards from fulfilling their independent obligations,” the justices ruled.

Pacific Lumber Company, (707) 764-2222.
Environmental Protection Information Center, (707) 923-2931.

The cases:
Environmental Protection Information Center v. California Department of Forestry and Fire Protection, No. A104828, 05 C.D.O.S. 10468, 2005 DJDAR 14291.
Pacific Lumber Co. v. California State Water Resources Control Board, No. S124464, 06 C.D.O.S. 886, 2006 DJDAR 1195.