Bloomberg News

Sierra Pacific Reaches $114.5 Million Wildfire Settlement

July 17, 2012

Sierra Pacific Industries Inc., a California lumber company, agreed to pay $47 million and convey 22,500 acres of land worth $67.5 million to the U.S. to resolve a lawsuit claiming it was responsible for a 2007 wildfire.

The fire in Plumas County in northern California damaged 46,000 acres of national forest. It started when a bulldozer working on a Sierra Pacific timber project caused a spark, the U.S. government said in a 2009 complaint filed in federal court in Sacramento, California.

The blaze was among the most devastating forest fires in California history, U.S. Attorney Benjamin Wagner said in an e- mailed statement. About 15 million trees, some of them more than 400 years old, were killed and thousands of acres of wildlife habitat was destroyed.

The U.S. sought as much as $791 million in damages, said William Warne, Sierra Pacific’s attorney. The government’s investigation of the fire “was seriously off the rails” and sought to hold the company liable for the conduct of the independent contractor running the bulldozer, he said in a conference call.

Sierra Pacific wasn’t at the site of the fire the day it started and didn’t own the forest land where the fire occurred, Warne said. No one knows what caused the blaze, he said.

‘Settlement Number’

“A defendant needed to be found to pay for this fire,” Warne said. “What we uncovered drove the settlement number down.”

Sierra Pacific and other parties failed to take preventive measures against fires and were responsible for firefighting and mitigation costs, according to the complaint. The company, based in Anderson, California, didn’t admit wrongdoing as part of the settlement filed today.

Wagner said the land to be conveyed to the U.S. had an estimated private economic value of at least $3,000 an acre, or a total of $67.5 million.

The case is U.S. v. Sierra Pacific Industries, 09-2445, U.S. District Court, Eastern District of California (Sacramento).

To contact the reporter on this story: Karen Gullo in San Francisco at kgullo@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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