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Sierra Pacific loses again over $122.5 million Moonlight Fire settlement

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SACRAMENTO, Calif. - According to the Sacramento Bee, a federal appeals court on Thursday rejected efforts by Sierra Pacific Industries to back out of a $122.5 million settlement over the massive Moonlight Fire. Sierra Pacific claims the settlement was based on fraud and deception by government prosecutors in Sacramento.

Sac Bee said a three-judge panel of the 9th U.S. Circuit Court of Appeals found that claims by Sierra Pacific that it was the victim of a "trial of fraud" by government prosecutors seeking a huge payday from a deep-pocketed defendant did "not constitute fraud on the court" as the company had claimed.

The decision comes after years of intensely bitter fighting by Sierra Pacific, the state's largest private landowner, over a settlement agreement the timber giant entered into in 2012.

The Moonlight Fire ignited on September 3, 2007 on private forest land in Plumas County and raged for more than two weeks. It burned about 65,000 acres of land. More than 46,000 of the acres burned were public lands in the Plumas and Lassen National Forests.

Prosecutors said the Moonlight Fire ignited as a result of logging operations by industry giant Sierra Pacific Industries and its contractor. Two employees operated bulldozers in a remote area on a red flag warning day, a condition of high fire danger declared by the National Weather Service.

According to the government, the employees, one of whom had started a fire with his bulldozer earlier that season, were unsupervised. The fire ignited when the track or blade of one of the bulldozers struck a rock and created sparks that ignited the surrounding dry ground fuels.

The fire smoldered for a long period of time but went undetected because the employees did not conduct their company-required fire patrol after shutdown. Instead, the designated fire watch left the work area and drove 30 minutes away to get a soda.

When he returned over an hour later, there was a 100-foot wall of smoke billowing from the work area. The employee was without a means of calling the fire in and had no access to fire suppression equipment, which was situated about a mile away from the work area.

Defendants deny liability for the fire.

The settlement amount is to be paid as $55 million in cash and a conveyance of 22,500 acres of land in California owned by Sierra Pacific. The Forest Service will choose the land at its sole discretion from large selections offered by Sierra Pacific.

The 22,500 acres currently has an approximate estimated private economic value of at least $3,000 per acre, or a total value of approximately $67.5 million. The current private economic value of the property may increase depending on the nature and location of specific parcels selected by the Forest Service.

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Once the property is selected and rededicated to the use and enjoyment of future generations, the value of the land to the public is expected to substantially exceed that figure. Much of this land is expected to bridge gaps between existing National Forest land and support sensitive species and critical watersheds and habitat.

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