BBER Study Finds Local Communities Bear Largest Burden of Timber Sale Litigation

May 07, 2015

MISSOULA – A study completed by the University of Montana’s Bureau of Business and Economic Research examined the costs and impacts associated with litigation of U.S. Forest Service timber sales in the Northern Region. The study found that economic impacts to communities – in the form of lost jobs; labor income; and federal, state and local taxes – are the largest potential outcomes from litigation. 

“Payments of plaintiffs’ attorney fees, which have been of interest to Congress, are just the tip of the iceberg when it comes to the cost of litigation of Forest Service projects,” said Todd Morgan, BBER director of forest industry research.

Using the Spotted Bear River project as a case study, Morgan found that even though no plaintiff attorney fees were paid in the case, the economic impacts of litigation could have exceeded $10 million and 130 jobs for the state’s forest-products industry and local communities.

In comparison, the study showed smaller litigation costs to the federal agencies associated with the SBR project. Direct costs to the Forest Service were about $95,000 and about $4,500 for the U.S. Fish and Wildlife Service, not including the costs of the Department of Justice and Office of General Council attorneys defending the Forest Service and FWS.

“When a project is litigated, it is typically the agency’s environmental analysis of the project that is questioned,” Morgan said. “And the agency with its legal counsel must defend the analysis.”

These analyses often have links to other Forest Service projects because highly interrelated issues, such as endangered species habitat, are the basis of many cases. This interconnectedness often stalls other Forest Service projects that are not being litigated directly.

In recent years, litigation has encumbered 40 to 50 percent of the Northern Region’s planned timber harvest volume and treatment acres, and litigation of the SBR project alone involved more than 25 percent of the Flathead National Forest’s fiscal year 2013 timber program.

“These figures are particularly important because litigation of individual cases often exceeds one or two years,” Morgan said. “The relatively simple SBR project we examined spent over 1,000 days in litigation.”

On Feb. 23, the district court judge ruled in favor of the Forest Service on the SBR case. The decision was not appealed to the Ninth Circuit Court within the 60-day appeal period.

The duration of litigation, particularly for cases with a high level of interconnectedness, has a chilling effect on many other projects because of the uncertainty that exists while cases remain in litigation (including appeals to higher courts). The delays and uncertainty caused by litigation affect local businesses and communities, as well as the Forest Service – even when the agency prevails in court and the timber sales eventually go forward.

The study was completed for the Forest Service and the Montana Forest Products Retention Roundtable. It is available online at: http://www.bber.umt.edu/pubs/forest/BBERLitigationRpt2015.pdf.

BBER is a leading collector of primary data for business, economic and social science in Montana, providing information about Montana’s state and local economies for more than 50 years. The bureau’s Forest Industry Research Program has provided analysis of the forest products industry throughout the West for more than 35 years. For more information visit: http://www.bber.umt.edu/fir/.  

Contact: Rob Van Driest, marketing director, UM Bureau of Business and Economic Research, 406-243-5113, rob.vandriest@business.umt.edu.