Free Reply to Response to Motion - District Court of Federal Claims - federal

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS __________________________________________ ) BLUE LAKE FOREST PRODUCTS, INC., ) ) Plaintiff, ) ) v. ) No. 01-570C ) (Judge Williams) ) THE UNITED STATES, ) ) Defendant. ) __________________________________________) __________________________________________ ) TIMBER PRODUCTS COMPANY, ) ) Plaintiff, ) ) v. ) No. 01-627C ) (Judge Williams) ) THE UNITED STATES, ) ) Defendant ) __________________________________________) _ CLR TIMBER HOLDINGS, INC., ) ) Plaintiff, ) ) v. ) ) No. 04-501C THE UNITED STATES, ) (Judge Williams) ) Defendant. ) )

PLAINTIFFS' REPLY TO DEFENDANT'S RESPONSES/OBJECTIONS TO PLAINTIFFS' PROPOSED FINDINGS OF UNCONTROVERTED FACT

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INTRODUCTION This reply is organized in the following manner. First, plaintiffs restate each proposed finding in its entirety. Where defendant has expressly agreed with the finding or has cited no contrary evidence and interposes only a legal objection, plaintiffs have shaded the text within the restated proposed finding.1 Second, plaintiffs have reproduced defendant's response and/or objection to each proposed finding. Third, plaintiffs reply to defendant's factual or legal objections.

Plaintiffs have proposed a substantial number of findings of uncontroverted fact, including multiple findings in support of plaintiffs' legal theories of liability. As the party opposing plaintiffs' motion for partial summary judgment, defendant has the burden to "by affidavits or otherwise . . . set forth specific facts showing that there is a genuine issue for trial." RCFC 56(e). Defendant has failed to meet this burden. Consequently, all of plaintiffs' adequately supported findings are established for deciding plaintiffs' motion for partial summary judgment. RCFC 56(h)(3). Of course, it is not necessary for plaintiffs to establish that all of the proposed findings in support of any particular legal theory are uncontroverted if the Court can determine from the uncontroverted facts that there are no genuine issues of material fact and that plaintiffs are entitled to summary judgment on the issue of liability as a matter of law.

Plaintiffs' decision not to shade all or part of a proposed finding is not an admission that defendant has successfully controverted the proposed finding. Rather, the shading is offered as an aid to the court in identifying those very few places where there is at least an argument over whether the proposed finding is uncontroverted. 2

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FORMATION OF THE HAPPY THIN, JACK HELI AND TOO WILD FOREST SERVICE TIMBER SALE CONTRACTS 1. The process by which a timber sale comes into being starts with initial planning and the

preparation of a preliminary document, the timber sale project plan, in which the feasibility of proceeding with the project, which may contain one or more sales, is verified. App. Tab 8 (United States Forest Service ("Forest Service") Manual ("FSM") § 2432.1, 2432.11 (amend. 953, eff. Apr. 28, 1995)).

Defendant's Response: Defendant objects characterization of the FSM because the document speaks for itself. Defendant denies that the FSM has the force and effect of law or regulation. Furthermore, the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are neither material nor relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: The proposed finding does not assert that the Forest Service Manual carries the force of law. Rather, it is an internal agency document that instructs Forest Service personnel on the standards and practices they are to abide by when performing various duties. Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding.

Additionally, Forest Service actions and responsibilities prior to the award of plaintiffs' contracts are relevant to proving that Forest Service conduct caused the Forest Service to breach plaintiffs' contracts by suspending them afterward. Plaintiffs respectfully refer the Court to their briefs where this point is addressed in full. Plaintiffs' Motion for Partial Summary Judgment

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(hereinafter "Pls.' Br.") at 42-43; Plaintiffs' Reply in Support of Plaintiffs' Motion for Summary Judgment (hereinafter "Pls.' Reply Br.") at 61-63. PLEASE NOTE: Plaintiffs incorporate this reply into each of the following replies where defendant has raised this relevance objection.

2.

The timber sale project plan must present appropriate data needed by the responsible

Forest Service official to determine whether to proceed with the environmental analysis and project design. App. Tab 8 (FSM § 2432.13 (amend. no. 95-3, eff. Apr. 28, 1995)). Such data is to include current surveys, aerial photos, and inventories plus on-the-ground reviews of the project areas to verify existing data. Id. (FSM § 2432.14 (amend. 95-3, eff. Apr. 28, 1995)).

Defendant's Response: Defendant objects to plaintiffs' characterization of the FSM because the document speaks for itself. Defendant denies that the FSM has the force and effect of law or regulation. Furthermore, the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are neither material nor relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: See reply to proposed finding no. 1.

3.

After completion of the timber sale project plan, the Forest Service conducts "an

intensive field investigation within and adjacent to the proposed project area." App. Tab 8 (FSM § 2432.2 (amend. 95-3, eff. Apr. 28, 1995)). As part of this step, the Forest Service is to perform its statutory obligations under the National Forest Management Act, 16 U.S.C. § 1600 et seq. 4

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("NFMA"), and the National Environmental Policy Act, 42 U.S.C. § 4321 et seq. ("NEPA"): complete the appropriate environmental analysis (typically either an Environmental Impact Statement ("EIS") or an Environmental Assessment ("EA")), prepare alternative actions (including a no-action alternative), decide which alternative to select and document the decision in a Decision Notice with a Finding of No Significant Impact, or a Record of Decision. App. Tab. 8 (FSM § 2432.22g (amend. 95-3, eff. Apr. 28, 1995)).

Defendant's Response: Defendant objects to plaintiffs' characterization of the FSM because the document speaks for itself. Defendant denies that the FSM has the force and effect of law or regulation. Furthermore, the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are neither material nor relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: See reply to proposed finding no. 1.

4.

The FSM makes it clear that it is the Forest Supervisor's duty to ensure that sale planners

consider the environmental effects both in the environmental and sale preparation process. App. Tab 8 (FSM § 2432.04b (amend. 95-3, eff. Apr. 28, 1995)).

Defendant's Response: Defendant objects to this contention because it is plaintiffs' opinion, not a statement of fact. Additionally, plaintiffs' characterization of the FSM because the document speaks for itself. Defendant denies that the FSM has the force and effect of law or regulation. Furthermore, the documents cited concern the Forest Service's actions and responsibilities prior 5

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to the award of these timber sale contracts, and, therefore, are neither material nor relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: See reply to proposed finding no. 1. Additionally, the proposed finding is not plaintiffs' opinion but rather a statement of fact supported by the FSM.

5.

Throughout the 1990s, including all time periods pertinent to the ONRC Action lawsuit

filed in July 1998, the Forest Service had a regular practice of completing the environmental analysis and issuing the final NEPA decision document required for a timber sale months or even years before that timber sale would be offered to the public and involve any ground-disturbing activities. App. Tab 172 (R. Devlin Dep. Tr. (1/8/07) 34:23-35:8; 58:14-61:3; 121:11-122:14).

Defendant's Response: Defendant objects to this contention because it is not supported by the testimony cited. Mr. Devlin testified that completing the environmental analysis for a timber sale in advance of that sale's being offered to the public was "not a common practice as much as it is a given just because of the time of preparing projects." R. Devlin Dep. Tr. 35:7-8. Additionally, this contention contains plaintiff's legal conclusion concerning what constitutes "ground-disturbing" activities, which is not a contention of fact, and was not the subject of Mr. Devlin's testimony. Furthermore, the testimony cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are neither material nor relevant to plaintiffs' claims for breach of contract.

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Plaintiffs' Reply: Defendant objects that the proposed finding refers to the Forest Service's "regular practice" of signing NEPA decisions months or years before a timber sale is offered to the public when Mr. Devlin testified that such actions were a "given." At best, defendant's objection is one of characterization. Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding. Defendant also objects that plaintiffs make a legal conclusion by using the term "ground-disturbing activities." In the context of the proposed finding, plaintiffs merely use "ground-disturbing activities" in accordance with the commonly accepted meaning of these words. This usage comports with the definition identified by defendant in response to plaintiffs' proposed finding of fact no. 18 and plaintiffs' reply thereto.

6.

The NEPA decision notice for the Happy Thin timber sale was issued on September 15,

1998. App. Tab 142. The Happy Thin timber sale contract no. 060772 ("Happy Thin") was awarded to plaintiff Blue Lake Forest Products, Inc. ("Blue Lake") on July 6, 1999. App. Tabs 122, 124. The NEPA decision notice for the Jack Heli timber sale was issued on July 14, 1998. App. Tab 143. The Jack Heli timber sale contract no. 060715 ("Jack Heli") was awarded to plaintiff Timber Products Company ("Timber Products") on March 2, 1999. App. Tabs 91, 93. The NEPA decision notice for the Too Wild timber sale was issued on June 15, 1998. App. Tab 40. The Too Wild timber sale contract no. 075862 ("Too Wild") was awarded to plaintiff CLR Timber Holdings, Inc. ("CLR") on May 14, 1999. App. Tabs 110-11.

Defendant's Response: Defendant does not dispute these facts.

Plaintiffs' Reply: No dispute. 7

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7.

The advertisements, prospectuses, instructions to bidders and all contract terms and

conditions for each of the timber sale contracts involved in this consolidated action (Happy Thin, Jack Heli and Too Wild) were drafted entirely by the Forest Service. All three contracts are contracts of adhesion, the terms and conditions of which are not negotiable. App. Tabs 93, 111, 124.

Defendant's Response: Defendant admits that the Forest Service drafted the advertisements, prospectuses, and instructions to bidders for each of the timber sale contracts involved in this action. Defendant objects to plaintiff's characterization of the contracts as "contracts of adhesion" because it is plaintiffs' legal conclusion, not a factual contention that the terms of the contract were not negotiable. Additionally, defendant states that the Forest Service has continually consulted with the timber industry in drafting the standard timber sale contract (designated 2400-6), and the timber industry has participated in the drafting of timber sale contracts, including the contracts at issue here. App. __ (R. Fitzgerald Declaration).

Plaintiffs' Reply: Defendant admits that the Forest Service drafted the advertisements, prospectuses and instructions to bidders. Plaintiffs' characterization of the Forest Service's timber sale contract as one of adhesion is supported by precedent. See Pls.' Br. at 22-23. Defendant's argument regarding its communications with members of the timber industry is irrelevant to the issue of whether plaintiffs' contracts were contracts of adhesion. See Pls.' Reply Br. at 5-10. Defendant does not claim that anyone other than plaintiffs and the Forest Service were parties to plaintiffs' contracts when awarded or that plaintiffs' contracts were presented by defendant to each plaintiff on a take-it-or-leave-it basis. 8

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8.

Happy Thin and Jack Heli were located on the Klamath National Forest in northern

California within Region 5 of the National Forest System. Too Wild was located on the Siskiyou National Forest within Region 6 of the National Forest System. At all times the National Forest land on which all three sales were located was within the area governed by the Northwest Forest Plan ("NFP") and under the complete administration and control of the Forest Service. App. Tabs 93, 111, 124; App. Tab 1 (Record of Decision for Amendments to Forest Service and Bureau of Land Management Planning Documents Within the Range of the Northern Spotted Owl ­ Standards and Guidelines for Management of Habitat for Late-Successional and Old Growth Forest Related Species Within the Range of the Northern Spotted Owl).

Defendant's Response: Defendant agrees that Happy Thin and Jack Heli are located in the Klamath National Forest, which falls within Region 5 of the National Forest System. Defendant also agrees that Too Wild is located in the Siskiyou National Forest, which falls within Region 6 of the National Forest System. Defendant objects to plaintiffs' characterization of the forests as being under the "complete administration and control of the Forest Service" as that is plaintiffs' opinion and not a contention of fact. Additionally, plaintiffs' opinion is not supported by the documents cited. The Forest Service is charged with managing National Forests within the United States and administering timber contracts, but it does not have "complete" control over the forests which are subject to weather conditions, fires, and unpredictable natural disasters, as well as encompassing areas of private rights such as easements and contract rights.

Plaintiffs' Reply: Plaintiffs agree that the Forest Service does not have "complete control" over National Forests in the sense that the Forest Service cannot control acts of nature and that some 9

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national forest areas are subject to private rights. Defendant does not dispute that all of plaintiffs' sales in this action were subject to the NFP.

9.

By awarding Happy Thin, Jack Heli and Too Wild, the Forest Service represented that it

had complied with all pre-award requirements under NFMA and NEPA. App. Tabs 93, 111, 124; ¶¶ 1-8 above.

Defendants' Response: Defendant objects to this contention because it is plaintiff's legal conclusion and not a contention of fact. Defendant specifically denies that the Happy Thin, Jack Heli, and Too Wild timber sale contracts contained any express or implied warranty of compliance with any particular legal requirement. App. Tabs 93, 111, 124.

Plaintiffs' Reply: Defendant makes only a legal objection to the proposed finding. Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding.

10.

During the 1990s and at least through the pendency of the ONRC Action lawsuit, all

Forest Service line officers on National Forests, including District Rangers and Forest Supervisors, were regularly assigned certain target volumes of timber which each National Forest was expected to sell to the public, including the forests within the NFP, such as the Umpqua National Forest and the Klamath National Forest. Regional Foresters and the Chief of the Forest Service had similar target volumes for timber sales on the regional and national levels. One element of each of these line officers' job performance evaluations included whether or not

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they met these targets or had very good reasons for not meeting these targets. App. Tab 172 (R. Devlin Dep. Tr. (1/8/07) 119:17-120:6).

Defendant's Response: Defendant objects to plaintiffs' characterization of Mr. Devlin's testimony because it is not supported by the testimony cited. Mr. Devlin testified "It is just I think as an agency I have always assumed that if we're given a task to do and financing to do it, we have an obligation to the public to meet that." App. Tab 172 (R. Devlin Dep. Tr. 119:23120:1). Thus, Mr. Devlin testified that meeting the timber sale volume targets was important because it was a responsibility of the agency to the public. Furthermore, the testimony cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is neither material nor relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: That Mr. Devlin believes that meeting timber sale targets is part of the Forest Service's duties to the public does not contradict the existence of those targets and the requirement that line officers meet them. Defendant's response also ignores the deposition testimony of Mr. Devlin cited in the proposed finding in which Mr. Devlin states that most line officers in the Forest Service have timber sale volume targets and that an employee who does not meet those targets "won't be in that job very long." App. Tab 172 (R. Devlin Dep. Tr. (1/8/07) 119:17-120:6). Moreover, plaintiffs' proposed finding is supported by defendant's similar proposed finding and appendix thereto. Defendant's proposed finding of fact no. 38 states: "The Forest Service must meet congressionally-mandated timber-harvest levels." In support of this finding, defendant cites to the declaration of Mr. Devlin in which he states: "Most line officers, 11

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from the District Rangers up to the Forest Supervisors in Region 6, had performance requirements to meet their allocated sale offerings." Def. App. 109, R. Devlin Decl. ¶ 4. Although plaintiffs contend that there is no support for the proposition that "harvest levels" are mandated, plaintiffs agree that there were congressionally specified timber sale "offering" targets, i.e., the Forest Service was expected by Congress to use its best efforts within the law to award a target volume of timber sales each fiscal year. See Pl. Response to Defendant's Proposed Findings of Uncontroverted Fact ("DPFUF") ¶ 38. There is no legal or factual basis for concluding that there are any "harvest levels" mandated by Congress or otherwise. The Forest Service including the Klamath and Siskiyou National Forests did have timber sale offering targets. See Pls.' Reply Br. at 50 n.24.

11.

As a prerequisite to receiving the award of Happy Thin, Jack Heli and Too Wild, the

Forest Service could have required that Blue Lake, Timber Products or CLR, respectively, execute a release and waiver of all claims for replacement timber costs or lost profits arising out of any suspension of operations specifically resulting from the ONRC Action lawsuit regardless of whether Forest Service fault or failure to comply with law was the ultimate cause of the suspension. The Forest Service did not request any such releases or waivers even though it has done so with other timber sale purchasers as a prerequisite before awarding other timber sales threatened with litigation in Region 5. See App. Tab 163 (Letter from Mark Bosetti, Sierra Pacific Inc., to Joseph Franco, Forest Service (June 28, 2005) with attached "Pre-award Waiver, Release and Limitation of Liability Agreement 04/09/2007").

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Defendant's Response: Defendant objects to this contention because it is plaintiff's legal conclusion, and constitutes parol evidence, and not a contention of fact. Additionally, it is irrelevant what the Forest Service may have done with another timber contract signed six years after the contracts at issue in this lawsuit, and the letter cited is inadmissible under Federal Rule of Evidence 407 as a subsequent remedial measure.

Plaintiffs' Reply: The proposed finding makes statements of fact, not law. Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding. The parol evidence rule only bars evidence of prior or contemporaneous statements between the parties when used to contradict an integrated agreement. The rule has no application in this instance because the proposed finding concerns a third-party agreement made after the execution of plaintiffs' contracts. Moreover, plaintiffs do not rely upon the proposed finding or its supporting evidence to contradict the terms of their contracts but to show that it was feasible for the Forest Service to draft a contract clause that limited its liability for suspending a timber sale contract for any reason. The "subsequent remedial measures" bar of Federal Rule of Evidence ("FRE") 407 does not apply to the proposed finding and the evidence on which it relies because "evidence of remedial measures does not run afoul of Rule 407 when it is used to prove the feasibility of a particular measure." M.A. Mortenson Co. v. United States, 40 Fed. Cl. 389, 421 (1998) (quoting Neal & Co., Inc. v. United States, 36 Fed. Cl. 600, 626 n.49 (1996)). The proposed finding is used by plaintiffs to prove the feasibility of the Forest Service requiring a purchaser to execute an explicit waiver of liability for the suspension of its contracts. This purpose is both relevant and expressly allowed under FRE 407 ("This rule does not require the exclusion of evidence of

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subsequent measures when offered for [the purpose of proving] feasibility of precautionary measures, if controverted"). 2

12.

As early as November 20, 1998, the Forest Service was considering a new timber sale

contract clause that would explicitly allow the Forest Service to unilaterally modify the contract for the protection of survey and manage species. App. Tab 61. The Forest Service elected not to include this clause in the Happy Thin, Jack Heli or Too Wild contracts. See App. Tabs 93, 111, 124.

Defendant's Response: Defendant objects to this contention because it is plaintiff's legal conclusion, and constitutes parol evidence, and is not a contention of fact.

Plaintiffs' Reply: The proposed finding makes statements of fact, not law. The parol evidence rule only bars evidence of prior or contemporaneous statements between the parties when used to contradict an integrated agreement. The rule has no application in this instance because the proposed finding concerns a third-party agreement made after the execution of plaintiffs' contracts. Moreover, plaintiffs do not rely upon the proposed finding or its supporting evidence

Moreover, FRE 407 is written in the language of tort, not contract. The public policy underlying FRE 407 also is directed to issues of tort and personal injury. "The rule [principally] rests on . . . a social policy of encouraging people to take, or at least not discouraging them from taking, steps in furtherance of added safety." FRE 407 advisory committee's notes to 1972 proposed rules. "Rule 407 bars the use of safety measures only when offered to show a belief by the actor that he was guilty of a breach of a duty of care, either under the law of torts or under a criminal statute punishing negligent conduct." Charles Alan Wright, Kenneth W. Graham, Jr., 23 FEDERAL PRACTICE AND PROCEDURE § 5285. The issues in this case have nothing to do with safety or any of the purposes underlying FRE 407. Consequently, it is reasonable to conclude that FRE 407 does not apply to breach of contract claims at all. 14

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to contradict the terms of their contracts but to show that it was feasible for the Forest Service to draft a contract clause that limited its liability for suspending a timber sale contract for any reason. Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding.

THE NFP WILDLIFE AND PLANT SURVEYS 13. In April 1994, Secretaries of the United States Department of Agriculture on behalf of the

Forest Service and the United States Department of the Interior on behalf of the BLM issued a Record of Decision ("ROD") for "Amendments to Forest Service and Bureau of Land Management Planning Documents Within the Range of the Northern Spotted Owl." This document amended the plan and resource management plans governing the operation of the National Forest and BLM forestlands in the states of Washington, Oregon and Northern California where it was believed that populations of northern spotted owls existed. The Klamath National Forest in Northern California and the Umpqua National Forest in Oregon were among those forests governed by the NFP. The provisions in the NFP were drawn from Alternative 9 of the Final Environmental Impact Statement prepared as part of the planning effort leading up to the adoption of the Plan. The fundamental purpose of the Plan was to permit a predictable and sustainable level of timber sales and use of non-timber resources that would not degrade or destroy the environment or endanger the viability of a variety of species of plants and animals present on NFP federal forests. App. Tab 1.

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Defendant's Response: Defendant agrees with the contentions in the first four sentences, but objects to the contention in the last sentence, because it constitutes plaintiff's opinion, and not a contention of fact.

Plaintiffs' Reply: Defendant agrees with all but the last sentence of the proposed finding. The last sentence addresses the fundamental purpose of the NFP, which is a statement of fact based on the NFP language, not opinion. Defendant cites no fact, document, or deposition testimony that contradicts the last sentence of the proposed finding.

14.

As part of the NFP ROD, survey and manage standards and guidelines were developed as

mitigation measures for over 400 old-growth related species where there was a concern for the continued persistence of these species across the landscape, but where little knowledge existed of the species themselves. App. Tab 185 (R. Holthausen Dep. Tr. 7:23-15:4); App. Tab 1 at A-3 to A-5; App. Tab 6.

Defendant's Response: Defendant objects to this contention because it is plaintiff's opinion of the survey and manage guidelines, and not a contention of fact. Additionally, the Mr. Holthausen's memo refers to "300+" species that were covered by the original Survey and Manage mitigation measure, but states that "only 70 require specific survey requirements prior to ground-disturbing activity." (Tab 6, A-43). Similarly, the ROD (App. Tab 1) refers to 71 species covered by the survey and manage requirements, not 400 species. (Tab 1 at A-4). Moreover, pages 7-14 of Mr. Holthausen's deposition are not provided at Tab 185. Furthermore, the document cited concerns the Forest Service's actions and responsibilities prior to the award of 16

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these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Plaintiffs agree that Mr. Holthausen's memo refers to "300+ species covered by the measure," not "over 400" and so amend their proposed finding to read "over 300" species. Defendant's other objection asserting that only 71 Category 2 species required surveys prior to ground disturbing activities is inapposite. Plaintiffs' amended proposed finding indicates that the "over 300" species refers to all species included in the survey and manage standards and guidelines, which includes all Category 1, 2, 3, and 4 species and not just the 71 Category 2 species. As explained in plaintiffs' errata, plaintiffs inadvertently omitted pages 7-14 of Mr. Holthausen's deposition transcript. Plaintiffs' corrected App. Tab 185 includes these pages, which further support the proposed finding.

15.

The NFP identified four survey strategies for the Survey and Manage ("S&M") species:

(1) manage known sites; (2) survey prior to ground-disturbing activities; (3) conduct extensive surveys to find high priority sites for management; and (4) conduct general regional surveys to acquire additional information to determine necessary levels of protection. App. Tab 1 at A-10 to A-12; App. Tab 11. Survey and manage species fall into one or more of these categories, also sometimes called "components" or "strategies." Id.

Defendant's Response: Defendant objects to plaintiffs' characterization of the documents; the documents are the best evidence of their contents. Furthermore, the documents cited concern the

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Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant points to no language in the NFP, ROD or standards and guidelines, or any other document, or deposition testimony that contradicts the proposed finding.

16.

The Oregon red tree vole, five species of salamanders, and the Canada lynx were initially

designated as the Category 2 species (also sometimes referred to as "Component 2" or "Strategy 2" species). App. Tab 11. Prior to the award of Happy Thin, Jack Heli, and Too Wild, the Canada lynx was removed from the Category 2 species by the Regional Interagency Executive Committee ("RIEC") under a provision of the NFP which allowed such modifications. App. Tab 1 at A-12. Surveys for these species were required for certain timber sales as of October 1, 1996. App. Tabs 1, 11. Approximately seventy-one other invertebrate species, including certain bryophytes, lichens, fungi, mollusks, and vascular plants, were also designated as Category 2 species, and surveys for those species were required for certain timber sales as of October 1, 1998. App. Tab 11.

Defendant's Response: Defendant objects to the final sentence because it is plaintiffs' legal conclusion and not a contention of fact. Additionally, the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

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Plaintiffs' Reply: Defendant agrees to all but the final sentence of the proposed finding. The final sentence is not a legal conclusion as defendant argues, but rather a fact that the defendant has not attempted to controvert through citation to any other fact, document, or deposition testimony.

17.

The Category 2 surveys required under the NFP were important to an environmental

evaluation of the sales before the sales were authorized, and it was important to have this information before the issuance of a decision notice approving the sales as in compliance with NEPA and NFMA. App. Tab 178 (E. Boling Dep. Tr. 38:9-42:5).

Defendant's Response: Defendant objects to plaintiffs' characterization that it was "important" to have the Category 2 surveys "before the issuance of a decision notice" because it constitutes plaintiffs' opinion, not a contention of fact. Additionally, the Category 2 survey requirements are governed by the ROD, not by Mr. Boling's testimony. Furthermore, the testimony cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: The proposed finding is not plaintiffs' legal conclusion but rather the statement that Edward Boling agreed to at his deposition. Although defendant asserts that the ROD governs Category 2 survey requirements, defendant makes no citation to language in the NFP, ROD or any other fact, document, or deposition testimony, contradicting the proposed finding.

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18.

Category 2 surveys were "designed to address the high-risk species (persistence

concerns) for which survey protocols exist or could be developed reasonably soon, and for which adequate searches could be conducted in a single year." "High-risk" species refers to the risk of extirpation as does the phrase "persistence concerns." App. Tab 185 (R. Holthausen Dep. Tr. 15:10-16:3; 19:24-20:21). For Category 2 species, it was necessary that surveys be conducted prior to ground-disturbing activities which could result in the destruction or impairment of habitat necessary for those species' survival. App. Tabs 9, 35, 49; App. Tab 185 (R. Holthausen Dep. Tr. 15:8-23:18). The Category 2 surveys were the most restrictive in terms of the potential impact on federal lands, including Forest Service timber sales, of the NFP wildlife and plant surveys. App. Tab 185 (R. Holthausen Dep. Tr. 23:3-18).

Defendant's Response: Defendant agrees with the first sentence of this contention. Defendant objects to the contention in the second sentence because it is not supported by the documents or testimony cited. The September 11, 1998 memorandum states only that Category 2 surveys were required to be done prior to ground-disturbing activity, it did not define "ground-disturbing activity." (App. Tab 49). The October 26, 1996 document titled "Survey and Manage Component 2 Implementation Issues," and the December 2, 1994 "Meeting Notes on Intent of Survey and Manage Strategies in ROD" define "ground-disturbing activity" as "Activities with disturbances having a likely "significant" negative impact on the species' habitat. . ." (App. Tab 9 at A-62 and Tab 35 at A-278). Furthermore, the documents and testimony cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

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Plaintiffs' Reply: Defendant does not dispute Mr. Holthausen's deposition testimony and admits that "ground-disturbing activity" at least includes "Activities with disturbances having a likely `significant' negative impact on the species' habitat. . ." Plaintiffs agree with this assertion, which is even broader than the "destruction or impairment of habitat necessary for those species' survival."

19.

As more time passed and more activities such as timber sales were undertaken prior to

the implementation of the Category 2 surveys, the risk of extirpation to Category 2 species in all or part of the NFP area increased. App. Tab 185 (R. Holthausen Dep. Tr. 28:19-29:24).

Defendant's Response: Defendant objects to plaintiffs' characterization of the Mr. Holthausen's testimony. Mr. Holthausen testified that "I think the general concept is correct, that the more time passed and the more activities that were undertaken prior to effective implementation of these strategies, would increase risk to species, but that's a very general statement." (App. Tab 185, Holthausen Dep. 30:15-19). Mr. Holthausen also testified that "Although our knowledge of these species was so poor that it would be impossible to quantify that increase in risk." (App. Tab 185, Holhausen Dep. 31:13-15). Furthermore, the testimony cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Plaintiffs' proposed finding does not address the quantity of increase in risk or state that the risk was quantifiable. Plaintiffs' proposed finding is merely that there was an

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increase in risk. Defendant's response presents no evidence that contradicts this proposed finding.

20.

One of the fundamental purposes of the Category 2 surveys was for the government to

acquire a sufficient knowledge base to have a better idea of the degree of risk of extirpation to species prior to the initiation of ground-disturbing projects like timber sales. App. Tab 185 (R. Holthausen Dep. Tr. 31:1-21).

Defendant's Response: Defendant objects to plaintiffs' characterization of Mr. Holthausen's testimony. Mr. Holthausen stated that "Although our knowledge of these species was so poor that it would be impossible to quantify that increase in risk." (App. Tab 185, Holhausen Dep. 31:13-15). Furthermore, the testimony cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant's objection ignores that the text of the proposed finding was read nearly word-for-word to Mr. Holthausen at his deposition. When asked whether the statement was true, Mr. Holthausen replied, "Correct." Defendant's objection that the proposed finding does not indicate that the degree of risk was not quantifiable is belied by the text of the finding itself, which states that the purpose of the Category 2 surveys was to provide the government with the knowledge of the species so that it could then assess the degree of risk. The finding does not purport to state that at the time of the NFP ROD the government already possessed sufficient knowledge to quantify the risk of extirpation to the species. 22

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21.

A critical purpose of the Category 2 surveys was to help insure the viability of the species

that were being surveyed. App. Tab 172 (R. Devlin Dep. Tr. (1/8/07) 30:17-32:3).

Defendant's Response: The testimony cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant offers only a relevance objection to the proposed finding solely because it relates to pre-award conduct and cites no fact, document, or deposition testimony that contradicts the proposed finding. The purpose of the Category 2 surveys is directly relevant to the contention that defendant's mitigation of the Category 2 survey requirements was unreasonable.

22.

One of the important objectives of the NFP was to develop as soon as possible the

protocols necessary for the Category 2 "prior to ground-disturbing activities" surveys which the NFP directed were to be implemented for certain vertebrate species as of October 1, 1996 and for the remainder of the Category 2 species as of October 1, 1998. App. Tab 1 at A-4.

Defendant's Response: Defendant objects to plaintiffs' characterization of the document as it is plaintiff's opinion, not a factual contention concerning the document. Furthermore, the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

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Plaintiffs' Reply: Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding. This proposed finding asserts a fact not plaintiffs' opinion.

23.

Survey protocols for the five Category 2 salamanders were approved for use by the Forest

Service and available at least as early as March 16, 1996. App. Tab 14 (Memo from W. Bradley, BLM, to BLM district managers (Mar. 19, 1996)).

Defendant's Response: Defendant objects to plaintiffs' characterization of the Category 2 salamander survey protocols as "approved for use" because it is not supported by the document cited. The document states that the attached amphibian protocols are "drafts" and also refers to instructional memoranda attached that are not provided in plaintiff's appendix. Furthermore, the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiff's Reply: Plaintiffs withdraw proposed finding no. 23.

IMPLEMENTATION OF NORTHWEST FOREST PLAN SURVEYS 24. Under the NFP there were several government groups with various levels of authority for

recommending and determining the intent and meaning of the NFP survey and manage requirements. At least as early as the spring-summer of 1994, there existed a Survey and Manage Working Group (which included a smaller entity referred to as the "Survey and Manage Core Group") composed of representatives from the Forest Service, the BLM and other agencies. 24

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Among other things, the purpose of the Survey and Manage Working Group was to develop working definitions and directions for the implementation of NFP wildlife and plant surveys and to recommend the adoption of certain definitions and interpretations to higher levels of authority within the management structure of the NFP. At various times from at least December 1994 through 1998, the team leaders of this group included Cheryl McCaffrey of the BLM and Randy Hickenbottom of the Forest Service. App. Tabs 2-6, 189.

Defendant's Response: Defendant objects to this contention because the documents cited do not support plaintiffs' contentions in the final sentence. Additionally, the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant agrees with all but the last sentence of the proposed finding. The final sentence is supported by DPFUF ¶ 23 and Def. App. 126 (J. Hickenbottom Decl. ¶ 10).

25.

There was an Intermediate Management Group ("IMG") immediately above the Survey

and Manage Working Group in the NFP administrative hierarchy. This group included representatives of the Forest Service and the BLM at what was determined to be the intermediate management level. One purpose of the IMG was to act on and approve the recommendations from the Survey and Manage Working Group with regard to definitions, directions and interpretations of the survey requirements under the NFP when, in the view of the IMG members, such decisions could be made without referring the matter to the next higher level of

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authority, the RIEC. From at least December 1994 through 1998 at various times, Tom Nygren of the Forest Service and Bill Bradley of BLM were members of the IMG. App. Tab 189.

Defendant's Response: Defendant objects to this contention because it is not supported by the document cited. The document cited does not mention the Internediate Management Group; they discuss the Survey and Manage Work Group. Additionally, the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: The first sentence of the proposed finding is supported by, inter alia, Def. App. 125 (J. Hickenbottom Decl. ¶ 8), App. Tab 189 at A-1701 ("An Intermediate Management Group has been formed to provide management and policy direction. . . . Survey and Manage Core Group representatives will report and coordinate with Intermediate Management Group representatives as needed. . . . Intermediate Management Group will provide overview of Survey and Manage Work Group including securing personnel time and resources from agencies") and A-1706 ("The Survey and Manage Work Group would consist of the Survey and Manage Core Group and Taxa Group members. . . ."). The second sentence of the proposed finding is supported by, inter alia, Def. App. 112-13 (R. Devlin Decl. ¶ 12), App. Tab 189 at A-1704 ("Intermediate Management Group [Bradley (BLM), Nygren (FS), Geyer (PNW), Crete (FWS)] created to work with the Survey and Manage Core Group for guidance and policy decisions"). The third sentence of the proposed finding is supported by, inter alia, Def. App. 125-26 (J. Hickenbottom Decl. ¶¶ 8-11), App. Tab 189 at A-1707 ("Intermediate Management Group will be responsible to: provide timely direction and approval of Survey and Manage Core Group 26

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process") and A-1709 ("The Intermediate Management Group will have responsibility and authority to approve the Survey and Manage Core Group to proceed with actions or tasks, to review products, and to determine when it is necessary and appropriate to bring survey and manage issues or processes to the RIEC"). The final sentence of the proposed finding is supported by, inter alia, Def. App. 112-13 (R. Devlin Decl. ¶ 12), App. Tab 189 at A-1704 ("Intermediate Management Group [Bradley (BLM), Nygren (FS), Geyer (PNW), Crete (FWS)] created to work with the Survey and Manage Core Group for guidance and policy decisions").

26.

The RIEC represented the highest level of agency authority at the regional level within

the NFP administrative hierarchy. The RIEC included the Regional Foresters of Regions 5 and 6 of the Forest Service and the Director of the Oregon State Office of the BLM or their designated representatives. App. Tabs 12, 189.

Defendant's Response: Defendant objects because document cited does not support plaintiffs' contentions. Additionally, the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Although the documents cited by the proposed finding do not sufficiently support the proposed finding, the declarations of defendant's employees and the NFP ROD defendant included in its own appendix do support plaintiffs' proposed finding. Def. App. 10001 (T. Hussey Decl. ¶ 6), Def. App. 125 (J. Hickenbottom Decl. ¶ 7), Def. App. 152 (NFP ROD).

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Plaintiffs amend the proposed finding to include these citations. Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding.

27.

As part of the administrative structure for the NFP there existed a Regional Ecosystem

Office ("REO") under the direction of Donald Knowles, Executive Director, which functioned as the staff of the RIEC coordinating certain agency actions and reporting thereon to the RIEC. Mr. Knowles and other members of the REO from time to time worked with other administrative levels under the NFP including the Survey and Manage Working Group and the IMG. App. Tabs 12, 189.

Defendant's Response: Defendant objects to this contention because the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant offers only a relevance objection to the proposed finding solely because it related to pre-award conduct and cites no fact, document, or deposition testimony that contradicts the proposed finding.

28.

Beginning as early as May 26, 1994, Richard Holthausen, the Team Leader of the

Species Analysis Team responsible for developing recommendations regarding the species surveys which ultimately became the survey and manage program under the NFP, provided oral and written presentations explaining the background, rationale for and intent of the wildlife and

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plant surveys required under the NFP, including the Category 2 surveys. See App. Tabs 2, 6, 10; App. Tab 185 (R. Holthausen Dep. Tr. 32:21-33:8).

Defendant's Response: Defendant objects to this contention because the documents and testimony cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant offers only a relevance objection to the proposed finding solely because it relates to pre-award conduct and cites no fact, document, or deposition testimony that contradicts the proposed finding.

29.

In his paper on the background and intent of the NFP survey requirements entitled

"Development of the Survey and Manage Measure," Mr. Holthausen discussed the Category 2 surveys which he described as "survey prior to ground-disturbing activities and manage sites that are discovered (Strategy II)." He further stated, "Ground-disturbing activities also were not described, but a common sense definition would include any disturbances of a type and intensity that would have a significant, negative effect on species on the list and/or the habitat that supports them." Mr. Holthausen concluded in his paper that "the survey and manage strategy in the ROD was intended to provide additional protection for species whose outcomes were judged to be low under draft Alternative 9 [the alternative analysis under NEPA which became the NFP]," and Mr. Holthausen offered the observation that "if survey and manage is marked by

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delays, inconsistencies, and clearly inadequate processes, flexibility will likely be lost and implementation of survey and manage will be likely become more difficult." App. Tab 6.

Defendant's Response: Defendant objects to this contention because the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant offers only a relevance objection to the proposed finding solely because it relates to pre-award conduct and cites no fact, document, or deposition testimony that contradicts the proposed finding.

30.

At a meeting on December 2, 1994 involving Cheryl McCaffrey of the BLM, identified

as the "lead" for the Survey and Manage Working Group, Randy Hickenbottom, Richard Holthausen and others, Mr. Holthausen addressed the intent and meaning of the survey and manage provisions in the ROD of the NFP. The basic purpose of this meeting was to clarify both the intent and development of the survey and manage standards and guidelines and to address the meaning behind some specific terms or phrases. At this meeting it was agreed that the intent of the NFP ROD in requiring wildlife and plant surveys was "to maintain the viability of the species addressed." Also at this meeting it was generally recognized that Category 2 surveys were "designed to address the high-risk species (persistence concerns) for which survey protocols exist or could be developed reasonably soon and for which adequate searches can be conducted in a single year." App. Tab 10.

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Defendant's Response: Defendant objects to this contention because the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant offers only a relevance objection to the proposed finding solely because it relates to pre-award conduct and cites no fact, document, or deposition testimony that contradicts the proposed finding.

31.

By at least January 1996 a group called the Issue Resolution Team ("IRT") was added to

the NFP administrative structure. This team was charged with, among other things, developing and recommending interpretations of the NFP Category 2 survey requirements. Typically, recommendations from this team would be provided to the IMG and/or to the RIEC for official adoption as direction to field personnel for both the Forest Service and BLM employees. Tom Hussey (Forest Service) and Larry Larsen (BLM) were members of the IRT and John R. "Randy" Hickenbottom (Forest Service) worked with the IRT on developing interpretations of the NFP requirements for Category 2 surveys. App. Tabs 12, 20.

Defendant's Response: Defendant objects to this contention because it the documents cited do not support it. Additionally, the documents cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

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Plaintiffs' Reply: The first, second, and fourth sentences of the proposed finding are supported by, inter alia, App. Tab 12, at A-86. The fourth sentence of the proposed finding is supported by App. Tab 20, at A-201. Moreover, the entire proposed finding is supported by Def. App. 101-03 (T. Hussey Decl. ¶¶ 8-13). Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding.

32.

A joint Forest Service and BLM memorandum dated March 18, 1996 issued to all Forest

Supervisors within the area of the NFP, including Forest Supervisors for the Klamath National Forest in California and the Siskiyou National Forest in Oregon, addressed draft standard protocols for the five salamanders to be surveyed before the implementation of grounddisturbing activities in FY 1997. Although these protocols were designated at that time as "draft standard protocols," the memorandum directed that "projects surveyed according to the draft protocols (including modifications by agency biologists) will be considered as meeting the requirements of Component 2 for FY 1996." App. Tab 7.

Defendant's Response: Defendant objects to this contention because the document cited is notes from a meeting dated December 2, 1996, and does not support plaintiffs' contentions. Additionally, both the contention and the document cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

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Plaintiffs' Reply: As explained in plaintiffs' errata, plaintiffs provided the incorrect document at App. Tab 7, cited by the proposed finding. Plaintiffs' corrected App. Tab 7 well supports the proposed finding.

33.

[Intentionally left blank]

34.

The Survey and Manage Working Group meeting minutes from the August 23, 1995

meeting were reproduced in part and distributed to Survey and Manage Working Group members in connection with a Survey and Manage Working Group meeting on March 22, 1996. Those 1995 minutes stated that Component 2 (Category 2) "Surveyed Prior to GroundDisturbing Activities ("GDA")" required that surveys for 71 species be completed before ground-disturbing activities were implemented in FY 1999 (relying on ROD C-5) and that surveys for five salamanders and the red tree vole had to be completed before ground-disturbing activities were implemented before 1997 (citing ROD C-5). These minutes further stated that efforts to develop these protocols were to be started immediately. App. Tab 13.

Defendant's Response: Defendant objects to this contention because the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

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35.

[Intentionally left blank]

36.

In the Survey and Manage Working Group's proposed FY 1996 organization and work

plan dated July 19, 1996, the following recommendation was made: Component 2: Complete survey protocols for all species. Surveys for amphibians and red tree voles are required for FY 1997 projects. For other species, surveys required for FY 1999 projects. All protocols should be complete in FY 1996 or 1997. App. Tab 17 at A-152.

Defendant's Response: Defendant objects to this contention because the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant offers only a relevance objection to the proposed finding solely because it relates to pre-award conduct and cites no fact, document, or deposition testimony that contradicts the proposed finding.

37.

At a January 17, 1996 Forest Plan Implementation workshop designed to provide

guidance to Forest Service field personnel on the meaning and intent of the NFP, the question was asked "When is a project implemented?" At the workshop, Tom Hussey, a member of the IRT, answered that question as follows: "Project implementation is when the Forest Service has committed to a project to the point where it would be unreasonable (cost or resource impacts) to

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delay or cancel the project. When the Forest Service has entered into legal contractual agreement, the project is considered implemented (IRT Response)." App. Tab 12 at A-90.

Defendant's Response: Defendant objects to this contention because the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Defendant offers only a relevance objection to the proposed finding solely because it relates to pre-award conduct and cites no fact, document, or deposition testimony that contradicts the proposed finding.

38.

In the summer of 1996 two members of the IRT, Larry Larsen of the BLM and Tom

Hussey of the Forest Service, and Randy Hickenbottom, who was the team leader of the Survey and Manage Working Group at the time, collaborated to write a proposed answer/resolution to the question: when are ground-disturbing activities implemented on a project or timber sale for purposes of directing when Category 2 surveys are required. Multiple drafts were prepared throughout the summer and into the fall of 1996 in an attempt to provide a proposed answer/resolution. App. Tabs 16, 18, 20-24, 26-34, 39, 43, 71-72, 74-75, 77, 83, 87-88, 104-07; App. Tab 171 (L. Larsen Dep. Tr. 6:17-22); App. Tab 38 ("Notes on S&M Concerns Meeting" (Jan. 22, 1997)); App. Tab 37 ("Memo from Robin Bown, S&M Workgroup Representative, to Various Offices" (Nov. 25, 1996)).

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Defendant's Response: Defendant objects to this contention because several of the documents cited do not support plaintiffs' statements. The documents at Tab 87 and 88, 104, 105, do not concern the definition of "ground-disturbing." The document at Tab 37 does not relate to the summer or fall of 1996. Furthermore, the documents and testmony cited concern the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, are not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Plaintiffs agree that App. Tabs 87, 88, 104, and 105 do not discuss the definition of "ground-disturbing" and therefore plaintiffs withdraw the citations to these documents as support for the proposed finding. Plaintiff also agrees that App. 37 does not relate to the summer or fall of 1996; the document was written on November 25, 1996 and therefore falls within the winter season. Plaintiffs amend the proposed finding to eliminate these citations. However, this amendment does not controvert or otherwise diminish the substance of the finding. Defendant cites no fact, document, or deposition testimony that contradicts the proposed finding.

39.

[Intentionally left blank]

40.

[Intentionally left blank]

41.

In the summer of 1996, in a draft paper addressing, among other points, the definition of

implementation of ground-disturbing activities for purposes of the ROD direction requiring Category 2 surveys, Larry Larsen, a member of the IRT, wrote: 36

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Rationale: By requiring the S&M survey prior to the project decision, we can assure that the responsible official, other agencies, and the public have the benefit of the survey information prior to making an informed decision. This is consistent with the stated objective for doing the surveys: ". . . information gathered from them should be used to establish managed sites for the species." This definition of implementation would also allow us to move ahead with projects for which a decision has already been made, but will not begin operations until 1997. App. Tab 18 at A-194.

Defendant's Response: Defendant objects to this contention because it is not clear that Mr. Larsen drafted the document. Additionally, the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Regardless of whether Mr. Larsen was the author of the document, the document was among the drafts circulated amongst the IRT and its contents supports the substance of the proposed finding.

42.

In Mr. Larsen's paper referred to in paragraph 41 above, he also stated that an alternative

definition of implementation could be the date at which project operations actually began. As to this definition Mr. Larsen stated: The chief problem is that it would be inconsistent with the stated objective for doing the surveys as mentioned above. The information from the surveys would not be available in a timely manner for the project designed to include the managed sites as needed for these species. A second problem with using the initiation of project [including timber sale] operations would be that there are a number of projects [timber sales] that need to begin operations in early 1997 and they would be delayed pending the completion of surveys.

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App. Tab 18 at A-194.

Defendant's Response: Defendant objects to this contention because it is not clear that Mr. Larsen drafted the document. Additionally, the document cited concerns the Forest Service's actions and responsibilities prior to the award of these timber sale contracts, and, therefore, is not relevant to plaintiffs' claims for breach of contract.

Plaintiffs' Reply: Regardless of whether Mr. Larsen was the author of the document, the document was among the drafts circulated amongst the IRT and its contents supports the substance of the proposed finding.

43.

In Mr. Larsen's draft referenced in paragraph 41 above, he also made the following

observation: QUESTION 3: HOW SHOULD WE HANDLE SITUATIONS WHERE THE DRAFT S&M PROTOCOLS ISSUED IN THE NEXT FEW MONTHS REQUIRE SURVEYS THAT CANNOT BE PERFORMED UNTIL NEXT SPRING, YET WE NEED TO PLAN THE PROJECT AND MAKE A DECISION THIS FALL OR WINTER? Response: There may be projects [including timber sales] where the draft protocol is available but for biological reasons the survey cannot be conducted until the spring or summer of 1997. In cases where these projects [timber sales] need to have a decision made prior to the time that the survey can be conducted, then the decision document can be signed but the project [timber sale] cannot commence operations until the survey is conducted and the project design adjusted to include the S&M species considerations as appropriate. Clearly, this should be a reluctant "last resort" option because of t