Federal officials laud historic Union Pacific wildfire settlement

SACRAMENTO, Jul 23, 2008 (The Sacramento Bee - McClatchy-Tribune Information Services via COMTEX) -- UNP | Quote | Chart | News | PowerRating -- Two high-ranking federal officials came to Sacramento on Tuesday to hail the record-setting $102 million settlement between the U.S. Forest Service and Union Pacific Railroad for damage to two national forests from a 2000 wildfire.

It is the largest settlement ever in connection with a wildfire's origin.

The Storrie fire was accidentally started by a Union Pacific crew repairing track at a point in the Feather River Canyon that is part of the Plumas National Forest.

It spread to the Lassen National Forest and eventually scorched an area larger than San Francisco, much of it pristine timber and wilderness.

Associate Attorney General Kevin O'Connor, the third-ranking official in the U.S. Department of Justice, said the settlement jump-starts a program for litigation teams in Sacramento, Los Angeles and Utah that will pursue similar cases against companies and individuals who negligently touch off a wildfire.

O'Connor credited McGregor Scott, the U.S. attorney in Sacramento, with prodding the department to establish the program.

The Union Pacific settlement "is exactly what we had in mind when we created the fire recovery litigation teams," O'Connor said. "It is sending a message that negligence in setting these fires will have consequences, and the guilty parties will face an even more aggressive recovery effort."

O'Connor and Scott praised a groundbreaking ruling by U.S. District Judge Frank C. Damrell Jr. that set the stage for the negotiations that led to the settlement.

The railroad argued the market value of the land was close to nil because 80 percent of it was legally off limits to logging.

A team led by Assistant U.S. Attorney Kendall Newman countered that national forests have great value in terms of not just timber, but scenic beauty, recreation, wildlife and habitat.

"Damrell embraced that theory," Scott said. "His opinion will be the basis for analysis in these cases for years and years to come."

O'Connor echoed that sentiment, saying that the ruling "allowed us to recognize the true inherent value of national forests. This is a model for the nation."

U.S. Undersecretary of Agriculture Mark Rey was also on hand to celebrate the occasion.

He said the settlement is not only the largest resolution of a wildfire lawsuit, but is second in Forest Service history only to the agency's $111 million portion of the $900 million settlement with state and federal governments in connection with the 1989 Exxon Valdez oil spill in Alaska.

Rey also said there are roughly two dozen cases with $200 million or more at issue "in the pipeline" in the Sacramento-based Eastern District of California.

"Nationally, you can probably multiply that by three," he said.

The Eastern District, which stretches from the Oregon border to the Tehachapis, encompasses 16 million acres of national forest system land, 8.3 percent of the country's total.

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