May 9th 2008

By Mike Geniella

The Press Democrat

May 9, 2008

The state Supreme Court heard arguments Thursday in an environmental case stemming from the nearly $500 million public purchase of Headwaters Forest.

A 1999 lawsuit filed by the Sierra Club and the Environmental Protection Information Center claims that the now-bankrupt Pacific Lumber Co. duped state regulators into agreeing to less stringent logging rules for 210,000 acres of company timberlands in Humboldt County.

Similar allegations were at the center of a 2002 decision by Humboldt County District Attorney Paul Gallegos to file civil fraud charges against Pacific Lumber because of the terms of the Headwaters deal.

Two weeks ago, Supreme Court justices refused to hear Gallegos' appeal of the dismissal of his fraud case.

Now the high court is reviewing the original Headwaters lawsuit filed by the Sierra Club and the environmental center in Garberville.

Environmental attorneys want the state high court to overturn a lower court's dismissal of their case, contending that there are "far reaching" timber-management consequences involved for the North Coast and California.

After Thursday's arguments, attorneys on both sides agreed the numerous questions asked by the justices gave no hint as to which way they might be leaning.

"I think it would be very difficult to read anything into the questions posed by the justices," said Edgar Washburn, a San Francisco attorney representing Pacific Lumber.

Scott Greacen, a spokesman for the environmental center, agreed. "It was a very lively session, and we're hopeful. But the issues are very complicated."