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United States of America v. Sierra Pacific Industries; et al


May 22, 2012



This matter comes before the court on defendant W.M. Beaty and Associates' ("Beaty") motion for partial summary judgment. (ECF 380.) It is decided without hearing. For the following reasons, Beaty's motion is denied as moot as to plaintiff's negligent hiring claim and denied as to capping property damage at the pre-fire fair market value.


The Moonlight Fire ignited on September 3, 2007. (Beaty's Reply to Plaintiff's

Response to Beaty's Statement of Undisputed Facts ¶ 5, ECF 413-1 (hereinafter "ECF 413-1-A").) It burned 46,000 acres of land in the Lassen and Plumas National Forests. (Beaty's Response to Plaintiff's Statement of Undisputed Facts ¶ 2, ECF 413-1 (hereinafter "ECF 413-1-B").)

Plaintiff filed its original complaint on August 31, 2009. (ECF 1.) On May 26, 2010, plaintiff filed the operative second amended complaint against defendants Sierra Pacific Industries ("SPI"); Beaty; Eunice E. Howell individually and doing business as Howell's Forest Harvesting Company (together, "Howell"); and a set of defendants identified here as the "landowner defendants."*fn2 (ECF 53 ¶¶ 5-8.) The second amended complaint alleges seven (7) causes of action: 1) negligence against all defendants; 2) liability under the Fire Liability Law, California Health & Safety Code §§ 13007-13009.1 and Civil Code §§ 3287 & 3288 against all defendants; 3) negligence and negligence per se under 14 Cal. Code Regs. § 938.8 and the Fire Protection Plan against all defendants; 4) trespass by fire against all defendants; 5) negligent supervision against SPI, Beaty, landowners, and Eunice Howell; 6) negligent hiring against SPI, Beaty, and landowners; and 7) interest and penalties against all defendants. (Id.) Plaintiff claims approximately $662,480,066 in damages, consisting of the following: $22,535,051 for fire suppression costs; $50,984,757 for lost timber value; $68,261,085 for reforestation costs; $1,525,093 for burned area emergency rehabilitation; $1,000,000 for environmental and ecological damages; $77,663,271/$87,934,047 in interest; and $331,240,033 in double damages. (ECF 413-1-A ¶ 11.)

Beaty and the landowner defendants filed their answers to the second amended complaint on June 10, 2010 (ECF 54 & 55 respectively); Howell and SPI filed their answers to the second amended complaint on June 15, 2010 (ECF 56 & 57 respectively).

Beaty filed the present motion for partial summary judgment on plaintiff's negligent hiring claim and to cap property damage on January 27, 2012. (ECF 380.) SPI and Howell joined in Beaty's motion to cap property damage on January 27, 2012. (ECF 386.) Plaintiff filed its opposition on February 10, 2012. (ECF 405.)*fn3 Beaty filed its reply on February 17, 2012. (ECF 413.)


A. Standard

A court will grant summary judgment "if . . . there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). The "threshold inquiry" is whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986).*fn4

The moving party bears the initial burden of showing the district court "that there is an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986). The burden then shifts to the nonmoving party, which "must establish that there is a genuine issue of material fact . . . ." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585 (1986). In carrying their burdens, both parties must "[cite] to particular parts of materials in the record [or show] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support that fact." FED. R. CIV. P. 56(c)(1); see also Matsushita, 475 U.S. at 586 ("[the nonmoving party] must do more than simply show that there is some metaphysical doubt as to the material facts"). Moreover, "the requirement is that there be no genuine issue of material fact . . . . Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson, 477 U.S. at 247-48.

In deciding a motion for summary judgment, the court draws all inferences and views all evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88; Whitman v. Mineta, 541 F.3d 929, 931 (9th Cir. 2008). "Where the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no 'genuine issue for trial.'" Matsushita, 475 U.S. at 587 (quoting First Nat'l Bank of Arizona v. Cities Serv. Co., 391 U.S. 253, 289 (1968)).

B. Application

1. Negligent Hiring

Plaintiff has abandoned its negligent hiring claim against Beaty. (See Pl.'s Opp'n at 1:21-24, ECF 400; Pl.'s Response to Beaty's Statement of Material Facts at 2, ECF 400-1.) Accordingly, Beaty's motion for partial summary judgment as to plaintiff's negligent hiring claim is denied as moot. Because the motion is not directed to any negligent retention claim, the court does not reach any such claim here.

2. Property Damage Calculation

Beaty contends plaintiff's claim for property damages should be capped at the pre-fire fair market value of the property. (Mot. at 8; Reply at 2.) Specifically, Beaty contends that the Moonlight Fire burned "typical timberland" and the assessment of damages should be consistent with this fact. (Mot. at 9.) It states that common law tort principles require that the total property damage not exceed the pre-injury fair market value. (Id. at 10.) It further maintains that the concepts of "full compensation" and "any and all damages" "work hand-in-hand with the basic principle of not awarding more than what a Plaintiff possessed before an injury." (Reply at 3.) Plaintiff contends it should be compensated for all damages suffered without regard to market value. (Opp'n at 6.)

California law applies to plaintiff's claims for damages. United States v. Union Pacific R.R. Co., 565 F. Supp. 2d 1136, 1142 (E.D. Cal. 2008) (citing United States v. California, 655 F.2d 914, 917-20 (9th Cir. 1980)). California Health and Safety Code § 13007 provides: "Any person who personally or through another willfully, negligently, or in violation of law, sets fire to, allows fire to be set to, or allows a fire kindled or attended by him to escape to, the property of another, whether privately or publicly owned, is liable to the owner of such property for any damages to the property caused by the fire." The measure of damages "is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not." CAL. CIV. CODE § 3333.

"For tortious injury to real property, the general rule is that the plaintiff may recover the lesser of (1) the diminution in the property's fair market value, as measured immediately before and immediately after the damage; or (2) the cost to repair the damage and restore the property to its pretrespass condition, plus the value of any lost use. The practical effect of this rule is to limit damages to property to the fair market value of the property prior to the damage." Kelly v. CB&I Constructors, Inc., 179 Cal. App. 4th 442, 450 (2009). However, "[t]here is no fixed, inflexible rule for determining the measure of damages for injury to, or destruction of, property . . . ." Heninger v. Dunn, 101 Cal. App. 3d 858, 862 (1980) (internal quotation omitted); see also Santa Barbara Pistachio Ranch v. Chowchilla Water Dist., 88 Cal. App. 4th 439, 446-47 (2001) ("The measure [of damages] that most appropriately compensates the injured party for the loss sustained should be adopted."). "[I]f a plaintiff has a personal reason to restore the property to its former condition, he or she may recover the restoration costs even if such costs exceed the diminution in value." Kelly, 179 Cal. App. 4th at 450-51 (also holding that restoration costs must still be reasonable, as determined by the trier of fact); see also Orndorff v. Christiana Cmty. Builders, 217 Cal. App. 3d 683, 688 (1990). Moreover, damages may be "measured by the value of the trees on the premises in their growing state" and "costs of replacing the trees or restoring the property to its condition prior to the injury." Santa Barbara Pistachio Ranch, 88 Cal. App. 4th at 447.

The theory used to measure damages must "fit the particular circumstances of a case." Id. at 447; see also Givens v. Markall, 51 Cal. App. 2d 374, 379 (1942) ("There is no fixed rule with respect to the measure of damages for the wrongful injury or destruction of property. Each case must be determined on its particular facts."). "[T]his court must consider, as many courts have, the unique character of the land at issue." Union Pacific, 565 F. Supp. 2d at 1143. Beaty does not dispute that the burned land included spotted owl Protected Activity Centers, large and mature trees, Northern goshawk Protected Activity Centers, and American marten habitat. (See, e.g., ECF 413-1-B ¶¶ 14-23.) Moreover, Beaty does not dispute the fact that the burned lands had been held and preserved for public benefit, "open space, habitat, animal species, recreation, and use and enjoyment by future generations." (Id. ¶ 30.) In addition to timber value, plaintiff seeks compensation for "the loss of pre-merchantable trees, reforestation costs, [and] interim environmental or ecological degradation during the century required for a forest to return to its pre-fire state." (Opp'n at 17.) Whether or not a national timberland market exists within which National Forest land is sold is irrelevant to the fact that "the primary object of an award of damages in a civil action, and the fundamental principle on which it is based, are just compensation or indemnity for the loss or injury sustained by the complainant, and no more." Mozzetti v. City of Brisbane, 67 Cal. App. 3d 565, 576 (1977) (emphasis omitted). Given that "[t]here are many separate, identifiable categories of damages potentially awardable to fully compensate plaintiff for its injuries," Union Pacific, 565 F. Supp. 2d at 1145, whether or not capping damages at the market value of the land, assuming such a value can be determined, would compensate plaintiff for all the detriment proximately caused by the Moonlight Fire is a question of fact for the jury.

Beaty contends that whatever methodology is used, it "does not affect the overarching rule that Plaintiff may not recover more than the pre-injury Fair Market Value." (Mot. at 13.) Beaty states that allowing damages that exceed the pre-fire fair market value "would unjustly place Plaintiff in a better position than had the fire never occurred." (Id. at 15.) However, Beaty does not provide convincing support for these assertions. The facts of this case suggest that a "reasonable" award of damages, which complies with both California Civil Code §§ 3359 and 3333, could very well exceed the pre-fire fair market value if one can be determined. While the court recognizes that damages are generally calculated with reference to the property's fair market value, see Kelly, 179 Cal. App. 4th at 450, this "market value" gauge is merely one way to ensure that the damages will fully and reasonably compensate an injured party as required by California statutes; it does not follow that such a calculation is a blanket requirement in determining every award of damages. See Safeco Ins. Co. v. J & D Painting, 17 Cal. App. 4th 1199, 1202 (1993) (finding that the general rule allowing recovery of either the cost of repair or diminution in value is a way to ensure the injured party is not placed in a better position than he would have been if the wrong had not been done and that "[a]llowing both measures of recovery would generally violate this principle"); see also Union Pacific, 565 F. Supp. 2d at 1143-45 (discussing applicable California and Ninth Circuit cases where courts did not consider the fair market value of damages for fire injuries to forest lands); Feather River Lumber Co. v. United States, 30 F.2d 642, 644 (9th Cir. 1929) ("[W]hile the measure of damages in such a case is ordinarily the difference in the value of the land before and after the fire, here, there being no law to authorize the sale of the lands injured by the fire, the trial court admitted such evidence as was available to show the damage actually sustained, that is to say, what was required to make the government whole . . . ."). As previously stated, whether or not damages in the amount of the pre-fire fair market value of the land in question, if one can be determined, will serve to fully compensate plaintiff is a disputed question of fact to be decided by the jury.


On March 1, 2012, Beaty filed an objection to plaintiff's proposed order (ECF 416). (ECF 421.) Beaty asks the court to strike plaintiff's proposed order because "it contains new and additional, substantive and lengthy arguments that should have been included, if at all, in plaintiff's memorandum of points and authorities in opposition to the motion for partial summary judgment" and "effectively allows plaintiff to exceed the page limit for opposition memoranda." (See generally id.)

The court has not consulted plaintiff's proposed order. Beaty's request is denied as moot.


For the foregoing reasons, Beaty's motion for partial summary judgment is denied as moot as to plaintiff's negligent hiring claim and denied as to capping property damage at the pre-fire fair market value.


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