Lawsuit: Who Should Benefit From Revenue From State Forests?

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Image: Washington State Department of Natural Resources

Can Washington manage its vast forests in part to, say, slow climate change or protect drinking water, or must it manage them exclusively to generate money for public school construction and the budgets of cash-strapped counties? This question is not merely rhetorical. The state has believed for decades that it has a constitutional duty of “undivided loyalty” to the schools and governments that benefit – though not much — from sales of public timber. This belief has long frustrated some Washington environmentalists, who think that the state also has a broader constitutional duty.

Now, they’ll have their day in court. Conservation Northwest (CNW), the Washington Environmental Council (WEC) and co-plaintiffs have sued the state, arguing that “the Washington State Constitution, through its mandate that ‘[a]ll the public lands granted to the state are held in trust for all the people, requires the State to not only manage forests to produce revenue from timber harvest, but also to promote the broader public interest.” (Disclosure: The complaint echoes arguments I made 20 years ago in the Seattle University Law Review).

This new challenge is part of the litigation that has followed the adoption of a plan to protect the marbled murrelet – the threatened old-growth-nesting seabird – on state land. Last December, only 27 years after the murrelet was federally listed as a threatened species, the state Board of Natural Resources approved a final plan. (Its other duties notwithstanding, the state must comply with the federal Endangered Species Act.) It forbids logging on some land that had not been protected by the state’s interim plan, and opens to logging some land that had been.

Inevitably, no one liked this plan. Counties and others that get money from logging on state lands felt it went too far. Environmental groups felt it didn’t go far enough. Skagit County quickly sued, not over the murrelet plan but over a sustainable harvest level adopted at the same meeting. An industry group, the American Forest Resource Council, four counties, and various special taxing districts sued over the plan. They say that the state has shirked its constitutional duty to manage public lands solely to make more money for them. Conservation Northwest and its co-plaintiffs say that the state has violated its constitutional trust duty to manage public lands for “all the people.”

In 1889, the federal enabling act that made Washington Territory into a state gave it millions of acres that could generate revenue for public schools and other public institutions. This was standard procedure: the feds had given land to all the states created beyond the borders of the original 13. The Washington state constitution made it clear that money generated from those lands had to be used for the benefit of the schools and other named institutions. In the real world of the late 19th and early 20th centuries, private interests wound up with much of the most valuable timber, “management” was not really a possibility on most of the land, and no one talked about the state’s solemn duties.

Then along came Skamania County.

The late 1970s were a boom time for the Northwest’s forest products industry. Companies made boom-time bids for contracts to cut timber on state land. When the time came to actually cut it, though, the boom had been replaced by a bust. The recession of the early 1980s, when Washington unemployment peaked at 12 percent, was particularly unkind to timber country, and the companies that held the contracts were going to lose a lot of money. The state legislature passed a law that let them out of their obligations.

Skamania County sued. (It was joined by the state board of education and the University of Washington regents.) The suit argued that the state was a trustee, so it couldn’t favor the timber companies over the beneficiaries without violating its trust responsibilities. The state supreme court agreed. The state couldn’t give the financial benefits away. But the court didn’t stop there. In sweeping dicta – remarks not necessary to the decision and without the binding power of precedent – the court said the state constitution “impose[s] upon the State the same fiduciary duties applicable to private trustees . . . [who] must act with undivided loyalty to the trust beneficiaries… [The state] may not sacrifice this goal to pursue other objectives, no matter how laudable those objectives may be.” The state has reasoned ever since that managing forests for anything but the beneficiaries’ financial gain would violate its trust duties. Standard wisdom has held ever since that other objectives are irrelevant.

What if conventional wisdom is wrong? The plaintiffs argue that it is. But there are nuances. Over-reaching and poorly reasoned though it was, the Skamania decision was nevertheless unanimous. Rushing headlong, Charge-of-the-Light-Brigade-style into the teeth of a 9-0 decision seems like a bad idea. And indeed, that’s not what the plaintiffs have done. They haven’t argued that the state has no duty to the named beneficiaries, just that it also has a duty to act in the interest of “all the people.”

And it doesn’t argue that Skamania was wrongly decided. Rather, it points out that the decision was way narrower than the state has assumed. “Skamania only stands for the unremarkable proposition that, consistent with the Washington State Constitution, when the State sells trust assets it must do so at ‘full market value’ and cannot give away legally-secured funds to private timber companies,” the plaintiffs argue. “Indeed, the first sentence of the opinion states: ‘This case concerns the sale of timber from state lands.’”

It’s not as if the state’s public schools depended heavily on state timber sales. Back in 1889, people assumed that state timber sales would pay handsomely for the schools’ operating expenses. They never did. During the 1960s, Washington’s population grew, districts built new schools, and citizens started balking at the construction costs. In 1969, the people passed a constitutional amendment that shifted timber revenue from school operations to school construction. It currently pays less than 10 percent of the bills for school construction. (And it reimburses districts for money they’ve already spent. They still have to raise the full cost of capital projects in bond elections.) They don’t depend on timber sales for any of their operating budgets.

The plaintiffs argue that schools and other beneficiaries can’t really rely on state lands to pay their bills, quoting state Superintendent of Public Instruction Chris Reykdal, who told the other participants in that December Natural Resources Board meeting that state forests provide “an almost invisible share” of school construction expenses,” and warned that “this money is not the future of school construction.” Reykdal argued that climate change was by far the biggest thing coming down the pike, and “we need to get on to that bigger conversation.”

A legal victory for Conservation Northwest and its allies would make it easier to have that
conversation. No one has ever taken the language of Article XVI seriously. But then, no one took seriously the constitution’s statement that public education is the state’s “paramount duty” until 1978, when the state supreme court decided – with no historical support – that the language meant exactly what it said. More recently, that language underlay nearly a decade of McCleary litigation, a long standoff between the court and the legislature, and billions of dollars in new appropriations (which still leaves the state woefully short of adequately funding public education).

Taking “a trust for all the people” seriously would be less expensive but equally revolutionary. It wouldn’t let the state screw the schools or counties to benefit third parties. It would let the state manage its millions of acres in line with some 21st-century values.

It’s about time.

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