Fourteen counties and roughly 130 tax districts are involved in a $1.4 billion lawsuit that accuses Oregon's government of insufficiently logging state forests. A judge has ruled federal environmental statutes don't shield the state from potential damages.

A judge has ruled that counties can’t sue the State of Oregon for financial damages, potentially undermining a $1.4 billion class action lawsuit over state logging practices.

Linn County Circuit Court Judge Daniel Murphy has reversed an earlier ruling in the case, which held that Oregon’s “sovereign immunity” doesn’t bar counties from seeking such damages.

In his most recent June 20 decision, Murphy has agreed with Oregon’s attorneys that counties — as subdivisions of the state — cannot sue the state government for money.

Murphy said he’s “well aware this interpretation contradicts” his earlier opinion, but he will provide the plaintiff counties with “the opportunity to re-plead their case in such a manner that is supported by the law if they can.”

“Like peeling a very large onion this case contains complex layers of legal issues and theory that can take time to unravel,” he said.

The judge has left open the possibility for the plaintiffs to seek an “equitable” remedy, such as an injunction or order that requires the state government to take certain actions without paying financial damages.

However, the counties have repeatedly said they’re not aiming for Oregon to change its logging practices, but instead seek compensation for insufficient timber revenues.

The class action lawsuit was filed on behalf of 14 counties that donated forestland to the state government in exchange for a portion of logging proceeds.

The counties argue that a 1998 rule change emphasizes environmental and recreational values over timber harvest, thereby violating a contract that required logging to be maximized.

John DiLorenzo, attorney for the counties, said his clients may decide to recharacterize their complaint or seek clarification from an appellate court regarding sovereign immunity and other issues.

In the long term, such an opinion would provide a “road map” for the litigation, DiLorenzo said.

“Maybe we’re better off having clear declarations from the appellate courts on what the law is,” he said.

The EO Media Group/Pamplin Media Group Capital Bureau was unable to reach an attorney representing Oregon in the case.

Ralph Bloemers, an environment attorney with the Crag Law Center, said that Murphy’s latest ruling has effectively “torpedoed” the counties’ lawsuit.

“In essence, he’s granting the motion to dismiss for sovereign immunity,” Bloemers said, adding that he expected the state’s attorneys to refile a motion for the complaint to be thrown out.

“The case should be dismissed,” he said.

The plaintiffs face an uphill battle if they decide to seek an equitable remedy, Bloemers said.

It’s tough enough to win an injunction, let alone an order requiring the state government to manage its forests a certain way, he said.