Supreme Court Rules for Water Quality, Against Palco

In a unanimous and unambiguous decision, the California State Supreme Court has ruled against the Pacific Lumber Company (Palco), determining that the Forest Practices Act in no way limits the authority of the State and Regional Water Boards to impose additional requirements on approved Timber Harvest Plans (THPs). The decision upholds a previous ruling against Palco by the State Court of Appeals.

The case brought by Palco concerns THP 520, the "Hole in the Headwaters". In 2001, the Regional Water Board issued a requirement for a monitoring and reporting program on this 705-acre THP, to ensure that sediment from logging would not impede recovery of the Elk River watershed. Palco petitioned the State Water Board to rescind the Regional Board's order, arguing that the Water Boards could not independently impose requirements beyond those imposed by the California Department of Forestry (CDF). The State Board denied Palco's petition.

Palco then sued the State Water Board in Humboldt County Superior Court, arguing that the Forest Practices Act gave CDF sole authority to determine whether or not a proposed THP complies with State water quality laws. The Humboldt court granted Palco's petition, but that ruling was overturned by the State Court of Appeal. The State Supreme Court agreed to review the case, and has upheld the decision by the Court of Appeals.

Supreme Court stated that Palco's argument "suffers from a fundamental flaw," in that it runs headlong into the Forest Practice Act's "savings clause," which states "No provision of this chapter or any ruling, requirement, or policy of the (Board of Forestry) is a limitation. On the power of any state agency in the enforcement or administration of any provision of law which it is specifically authorized or required to enforce or administer."

According to the decision, "Pacific Lumber's position boils down to the view that the Forest Practice Act implicitly precludes the Water Boards from exercising their authority under the Porter-Cologne Act to impose monitoring requirements (on an approved THP.) Section 4514, subdivision (c) expressly provides that the contrary is true, that the Forest Practice Act in no way limits the Water Board's authority in this respect."

Remarking on some of Palco's arguments, the ruling states "This interpretation makes no sense." The ruling goes on to say "Pacific Lumber's construction also ignores the obvious meaning of the directive that "[n]o provision of this chapter" will limit the power of a state agency. 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."

Mark Lovelace, of the Humboldt Watershed Council, said that this ruling was a resounding affirmation of the Water Boards' authority. "This decision cuts to the heart of the matter, and reaffirms the obvious: That the State and Regional Water Boards have the primary authority to protect and recover water quality."

Lovelace said that the ruling would likely be significant in numerous other pending cases.

Palco currently has a suit pending against the State Water Board, asserting that it has no authority over the Regional Board. In November a visiting judge denied Palco's request for a stay in that case, but allowed the suit to go forward with a hearing scheduled for February.

A related suit against the Regional Water Board was quietly dropped by Palco after the same judge dissolved a Temporary Restraining Order and denied Palco's request for a Preliminary Injunction.

In December, Palco and parent company Maxxam filed a claim against the State of California, seeking unspecified damages from the State for breach of the Headwaters agreement. In their filing, Palco and Maxxam claim that they "understood" the Headwaters agreement to assure that "water quality issues would be resolved and administered through CDF's regulatory authority," and that further regulation by the Water Boards is thus a breach of contract.

"These are the same flawed arguments" said Lovelace. "Palco is trying to say that they 'understood' something that was 'implied', when in fact the wording of the law is quite clear and unambiguous. As the court said, Palco's interpretation makes no sense."

The case is Pacific Lumber Co. v. State Water Resources Control Board, S124464.