By Denny Walsh
U. S. Attorney Benjamin Wagner announced this morning what he described as the largest recovery - $122.5 million - ever obtained by the government for damages caused by a wildfire.
In what Wagner described as a "creative' settlement, he said the defendants in the government's lawsuit will pay $55 million in cash and Sierra Pacific Industries Inc., targeted as the most culpable defendant and the largest private landholder in California, will convey 22,500 acres of its land to the United States.
Wagner said that land is conservatively valued at $3,000 an acre.
The Moonlight fire ignited on Labor Day of 2007 and raged across the northeast sector of the state for two weeks, laying waste to 65,000 acres in Plumas and Lassen counties, including 46,000 acres of national forest. It was one of the most devastating wildfires in California history.
The government blames a bulldozer driver employed by a logging company that was, in turn, hired by Sierra Pacific on a timber project for starting the fire on private property.
William Warne, the Sacramento attorney who was lead outside counsel for Sierra Pacific in the suit, said in a teleconference this afternoon: "My clilent believes it had nothing to do with the fire."
He said Sierra Pacific signed off on the settlement because it is very favorable to the company, because juries are unpredictable, and because a recent ruling by U.S. District Judge Kimberly J. Mueller found that the compay may be legally liable for the fire even if it had nothing to do with its origin.
On the other hand, Warne, said he is confident Sierra Pacific, with a level playing field, would have had a strong chance of prevailing at trial on the issue of liability.
He said a defense investigation turned up misconduct and ineptness on the part of U.S. fire investigators that left the government's case on liability "in tatters."
Warne also emphasized that California law needs to be changed in order to reign in overzealous federal prosecutors who go after private entities for huge damages that can wipe out businesses and cost jobs.