HomeMy WebLinkAboutCity Trial Memorandum Oct 2008
J ENS SCHM1DT
Admitted in Oregon
jens.schmidt@harrang.com
HARRANG LONG GARY RUDNICK P.c.
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EUGENE OFFICE
October 8, 2008
VIA FACSIMILE (541-776-7057)
Han. Mark S. Schiveley
Circuit Court Judge
Jackson County Courthouse - Dist No~ 1
Justice Building
100 S. Oakdale Avenue
Medford, OR 97501
Re: Mt. Ashland Association v. City of Ashland
Jackson County Circuit Court Case NOt 07-2744-E2(7)
Dear Judge Schiveley:
As requested, enclosed is Defendant's Trial Memorandum~
urs,
~
ens Schmidt
JS:pam
Ene.
cc via email only:
Darrel Jarvis (w/enc)
Sarah Crooks (w/enc)
0021 0981.DOC~ 1
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IN THE CIRCUIT COURT OF THE STATE OF OREGON
FOR THE COUNTY OF JACKSON
8 Plaintiff,
Case No~ 07-2744-E2(7)
DEFENDANT'S TRIAL
MEMORANDUM
MT. ASHLAND ASSOCIATION, an
7 Oregon non-profit corporation,
9 VS~
10
11
12
13
14
CITY OF ASHLAND,
Defendant
I.
INTRODUCTION
15 The City of Ashland ("City") is the holder of the Special Use Permit ("SUP")
16 from the United States Forest Service which authorizes the City to construct, operate and
17 maintain the Mount Ashland Ski Area~ With the permission of the Forest Service, the
18 City leases its rights and obligations under the SUP to plaintiff Mount Ashland
19 Association ("MAA"), which operates the ski area. The City, however, remains
20 responsible for MAA' s compliance with the SUP.
21 MAA has for years tried to expand the ski area. Most recently, those efforts have
22 been - and still are - blocked by litigation in federal court. Since May 2007, an expansion
23 project approved by the Forest Service has beel1 enjoined by the Ninth Circuit Court of
24 Appeals.
25 Notwithstanding the temporary injunction then in place, MAA in July 2007 filed
26 this lawsuit, accusing the City of delaying the expansion project by interfering with
HARRANG LONG GARY
RUDNfCK P. c.
360 East 10lh Avenue
SuUe300 Page 1- DEFENDANT'S TRIAL MEMORANDUM
Eugene, OR 97401-3273
Phone (541) 485-0220
Fax (541) 686.6564
1 MAA's ability to work directly with the Forest Service on the expansion project. MAA
2 sought damages for breach of contract, a declaratory judgment that the City had
3 interfered with the ski area expansion, and an injunction against further interference by
4 the City.
5 Just two months after MAA filed this lawsuit, the Ninth Circuit issued an
6 injunction against the expansion of the ski area because the expansion project violates
7 federal enviromnentallaws. That injunction remains in place todaYt
8 That injunction will remain in place unless and until the Forest Service corrects
9 the expansion project's violations of federal environmental laws.. Even then, the
10 injunction will remain in place unless and until the Forest Service and MAA overcome
11 any further legal challenges to the Forest Service's proposed solutions to the legal
12 infirmities in the expansion plan which were identified by the Ninth Circuit
13 Notwithstanding the injunction, MAA has persisted in the prosecution of this
14 lawsuit MAA has abandoned its claim that the City has caused MAA any financial loss..
15 Now all that remains for this court to decide is MAA's claims for declaratory and
16 injunctive relief~
17 Those two remaining claims are without merit The City denies that it has
18 breached its lease with MAA~ More importantly, however, there is nothing that the court
19 can decide ill this case~
20 In light of the federal court injunction against the ski area expansion, there is no
21 justiciable controversy for the court to resolve on MAA's claim for declaratory relief~
22 Moreover, the Forest Service is a necessary party on at least part of that claim, and in the
23 absence of the Forest Service as a party, the court cannot grant MAA's request for
24 declaratory relief~
25 MAA's claim for injunctive relief is equally umipe for adjudication~ In light of
26 the federal court injunction, and the uncertainty over if and when it will ever be lifted,
HARRANG LONG GARY
RUDNICK P.C.
360 East 10th Avenue
Suite 300 Page 2 - DEFENDANT'S TRIAL MEMORANDUM
Eugenet OR 97 401 ~3273
Phone (541) 485--0220
Fax (541) 686-6564
1 and the uncertainty over how MAA, the Forest Service and the City will interact if and
2 when that time comes, MAA cannot prove, as it must, by clear and convincing evidence,
3 that it will suffer irreparable harm if this court does not grant MAA's request for
4 injunctive relief~
5
6 A.
II.
SUMMARY OF THE FACTS
The Mt. Ashland Ski Area Lease
7 The Mount Ashland Sl(i Area is located south of Ashland in the Rogue River -
8 Siskiyou National Forest. The ski area is located almost entirely in the Ashland Creek
9 Watershed, which is the City's primary source of drinking water~
10 The ski area was operated by a succession of private, for-profit companies until
11 1992, when the private operator decided to close the ski area because of financial
12 difficulties~ The City interceded at that point in order to keep the ski area operating.
13 In 1992, the Forest Service issued the SUP to the City for the purposes of
14 constructing, operating and maintaining the ski area for a term of25 years~ Subsection
15 VII.A~ of the SUP allows the City to sublease the ski area with the consent of the Forest
16 Service. However, that subsection also provides that the City will "continue to be
17 responsible for compliance with all conditions of this permit by persons to whom such
18 premises may be sublet."
19 A week after the Forest Service issued the SUP to the City, the City and MAA
20 entered into the Mt.. Ashland Ski Area Lease ("Lease") for a term of 25 years. MAA is a
21 non-profit corporation which was formed for the purpose of operating the ski area under
22 the terms of the Lease.
23 Under Section 3 of the Lease, MAA has the "sole and exclusive possession and
24 use" of the property covered by the SUP for the purposes of "constructing, improving,
25 maintaining, and operating year-round educational and/or recreational facilities for the
26 benefit of the general public (including but not limited to a ski area and/or winter sports
HARRANG LONG GARY
RUDNICK P. C.
360 East 10th Avenue
SuUe300 Page 3 - DEFENDANT'S TRIAL MEMORANDUM
Eugene. OR 97401-3273
Phone (541) 485-0220
Fax (541 ) 686~6564
1 resort)~" Section 6.1 of the Lease gives MAA certain rights to make improvements to the
2 ski area.
3 Under Subsection 2.2 of the Lease, all the terms of the SUP are incorporated into
4 the Lease. Among those terms is Section X.A., which requires the SUP holder (the City)
5 to remove the structures and improvements on the ski area site, and to restore the site to a
6 condition satisfactory to the Forest Service, if the SUP is terminated or revoked.
7 Although Subsection 2.2 of the Lease requires MAA to assume responsibility for
8 payment and performance of all of the City's obligations under the SUP, the City, under
9 Subsection VII.A. of the SUP, remains responsible to the Forest Service for all of its
10 responsibilities under the SUP if MAA fails to perform them. That includes the so-called
11 "restoration liability" under Section X.A. of the SUP. Thus, if the ski area ceased to
12 operate, and the Forest Service terminated the SUP and required restoration of the site,
13 the City would be responsible for the restoration of the site ifMAA was unable to bear
14 the cost
15 B.
MAA's Expansion Project and the Lawsuits to Stop It
16 In September 2004, the Forest Service approved an expansion project for the ski
17 area. In January 2005, two lawsuits seeking to stop the expansion project were filed and
18 consolidated in the United States District Court in Medford. The plaintiffs contended that
19 the expansion project approved by the Forest Service violated federal enviromnental
20 laws~ Oregon Natural Resources Council Fund v~ Goodman, 505 F.3d 884 (9th Cir.
21 2007)~
22 The Forest Service and MAA were parties to those lawsuits~ The City was not a
23 party to either lawsuit.
24 C.
City Council Resolution 2005-35
25 On September 6, 2005, the Ashland City Council adopted Resolution 2005-35.
26 The resolution required the City to make efforts to reach agreement with MAA on certain
HARRANG LONG GARY
RUDNICK P.C.
360 East 10th Avenue
Suite 300 Page 4 - DEFENDANT'S TRIAL MEMORANDUM
Eugene~ OR 97401-3273
Phone (541) 485-0220
Fax: (541) 686.6564
1 matters relating to the expansion of the ski areat
2 First, the resolution required the City Council to take reasonable steps to estimate
3 the liability for restoration of the ski area upon termination of the SUP, and to make
4 reasonable efforts to reach an agreement with MAA regarding maintenance of reserves,
5 bonding or other security to fund the estimated cost of the restoration~ Second, it
6 requested that MAA provide a business plan for the expansion of the ski area~ Third, it
7 required the City Council to cooperate with MAA in appointing a Quality
8 Assurance/Quality Control ("QA/QC") team to oversee construction of the expansion and
9 the protection of the City's water supplYt Finally, the resolution required the City Council
10 to make reasonable efforts to reach agreement with MAA to implement the resolution
11 before MAA commenced future construction activities at the ski area.
12 On August 8, 2006, MAA General Manager Kim Clark sent two letters to City
13 Administrator Martha Bennett about Resolution 2005-35.
14 In one letter, Clark wrote that MAA agreed to work with the City and with the
15 Forest Service on the cost estimate for the restoration of the ski area~ The initial estimate
16 would come from the Forest Service depending upon the outcome of the ONRCv~
17 Goodman litigation.. MAA also agreed to work with the City to reach agreement on the
18 maintenance of reserves, bonding or other financial security to fund the estimated cost of
19 the restoration of the ski area.
20 In the other letter, Clark enclosed what he stated was a business plan for Phase 1
21 the ski area expansion~ He also wrote that MAA would continue to work with the City on
22 the appointment of a QA/QC team..
23 D.
The Events Which Gave Rise to This Lawsuit
24 On September 20, 2006, U.S~ District Court Judge Owen Panner issued a minute
25 order in ONRC v~ Goodman which stated that he had denied the plaintiffs' motion for
26 summary judgment and had granted the defendants' motion for summary judgment, and
HARRANG LONG GARY
RUDNICK P. C.
360 East 10th Avenue
Sulte300 Page 5 - DEFENDANT'S TRIAL MEMORANDUM
Eugene. OR 97401-3273
Phone (541) 485-0220
Fax (541) 686~6564
1 that his written opinion would follow in due course. The apparent impact of the ruling
2 might have been to allow MAA to move forward with the expansion project in some
3 manner, depending on the content of the written opinion Judge Panner intended to issue
4 later. As of the date of Judge Panner's minute order, MAA and the City had not reached
5 agreement on the issues addressed in Resolution 2005-35~
6 On September 24,2006, MAA announced that it would delay any timber-felling
7 or ground-disturbing activities until at least October 20, 2006, in order to give the
8 plaintiffs in the ONRC v. Goodman lawsuit time to seek an injunction pending any appeal
9 they might file.
10 On October 3, 2006, City Administrator Martha Bennett sent a letter to Linda
11 Duffy, the Ashland District Ranger for the Rogue River-Siskiyou National Forest The
12 letter stated that, under the SUP, the City remained responsible for compliance with the
13 SUP. Bennett wrote that the City had requested information from MAA in order for the
14 City to ensure that MAA was financially capable of completing the ski area expansion
15 project and operating the expanded ski area~ Bennett wrote that MAA had not yet
16 produced the information requested by the City. Therefore, Bennett requested that the
1 7 Forest Service direct all future contracts and permits related to the expansion of the ski
18 area to the City, as the holder of the SUP, rather than to MAA. Finally, Bennett
19 requested that the Forest Service provide an estimate of the cost of restoration of the
20 expanded ski area.
21 Bennett sent a copy of that letter to MAA with a cover letter~ That cover letter
22 stated that, notwithstanding the progress the parties had made on the issues identified in
23 Resolution 2005-35, the City Council was concerned that the City and MAA had not
24 been able to reach agreement on the parts of the resolution which were intellded to
25 protect the City's financial interests.. Bennett explained that the City had therefore sent
26 the letter to the Forest Service which requested that the City be directly involved in all
HARRANG LONG GARY
RUDN!CK P. C.
360 East 10th Avenue
Suae300 Page 6- DEFENDANT'S TRIAL MEMORANDUM
Eugene, OR 97401-3273
Phone (541 ) 485-0220
Fax (541) 6a6~6564
1 communications and permit decisions concerning the expansion project until the financial
2 questions were resolved.
3 MAA subsequently asked the City to withdraw Bennett's letter to the Forest
4 Service~ The City declined, which led to MAA filing this lawsuit many months later.
5 E.
Subsequent Events in the ONRC Litigation
6 On November 1, 2006, the plaintiffs in the ONRC lawsuit filed a Motion for
7 Preliminary Injunction and a Motion for Preliminary Injunction Pending Appeal. On
8 November 2,2006, MAA announced that it would delay expansion activities until May 1,
9 2007 ~
10 On February 9,2007, Judge Panner issued his Opinion and Order in ONRCv.
11 Goodman, and entered judgment for the defendants. However, he also temporarily
12 enjoined MAA from proceeding with construction until March 12, 2007, so that the Ninth
13 Circuit Court of Appeals would have an opportunity to rule on any motion for stay
14 pending appeal. The plaintiffs appealed to the Ninth Circuit February 12~
15 On March 3,2007, MAA announced that it did not expect to be able to proceed
16 with the expansion prior to June 1, 2007.
17 The ONRC plaintiffs filed an emergency motion for injunction pending appeal to
18 the Ninth Circuit on March 12, 2007. On May 25, 2007, the Ninth Circuit granted a
19 limited injunction pending appeal without prejudice to reconsideration by the panel
20 assigned to hear the merits of the appeaL That limited injunction was not lifted before
21 the Ninth Circuit issued its decision on the merits.
22 On September 24,2007, the Ninth Circuit issued that decision. The Ninth Circuit
23 reversed the federal district court and remanded with instructions to enjoin the ski area
24 expansion project until the Forest Service corrected the violations of federal law which
25 the Ninth Circuit discussed in its opinion. Oregon Natural Resources Council Fund v.
26 Goodman, 505 F.3d 884 (9th Cir. 2007).
HARRANG LONG GARY
RUDNICK P.C.
360 East 10th Avenue
Suite 300 Page 7 - DEFENDANT'S TRIAL MEMORANDUM
Eugene, OR 97401~3273
Phone (541) 485~0220
Fax (541) 666-6564
1 The ski area expansion project is currently enjoined by the Amended Judgment
2 and Injunction entered by Judge Panner in ONRC v. Goodman on December 26, 2007.
3 F.
4
The Filing of this Lawsuit
1.
MAA's Complaint
5 On July 12, 2007, MAA filed this lawsuit, alleging that the City was interfering
6 with MAA's efforts to move forward with the expansion of the ski area. MAA alleged
7 that City Administrator Bennett's October 3, 2006 letter to the Forest Service had
8 interfered with MAA's ability to work with the Forest Service directly and to move
9 fOlWard with planning, permitting, contracting and logging for the ski area expansion.
10 MAA further alleged that the City's efforts to enforce Resolution 2005-35 had likewise
11 impeded and delayed the expansion project.. In particular, MAA alleged that the City had
12 prevented the Forest Service from issuing a timber settlement sale contract to MAA,
13 which would have allowed MAA to begin timber-clearing operations~
14 MAA alleged that the City's actions amounted to a breach of the Lease. MAA
15 alleged three claims for relief: (1) a claim for breach of contract, seeking monetary
16 damages; (2) a claim for a declaratory judgment; and (3) a claim for injunctive relief
17 The only specific declaratory relief sought by MAA in its original complaint was
18 a declaration that the City had breached the Lease by (1) directing the Forest Service not
19 to deal directly with MAA on contracts and permits relating to the expansion project and
20 (2) by not allowing MAA and the Forest Service to execute the timber settlement sale
21 contract for the cutting of trees for the expansion project. Complaint at , 30..
22 The injunctive relief sought by MAA was an injunction against the City from
23 breaching the Lease, from interfering with the expansion of the ski area, from preventing
24 MAA from working directly with the Forest Service with respect to the ski area
25 expansion project, and from otherwise breaching the Lease. Complaint at ~ 33.
26 The City denied the material allegations ofMAA'g claims. Defendant's Answer
HARRANG LONG GARY
RUDMCK P.C.
360 East 10th Avenue
Sulte300 Page 8 - DEFENDANT'S TRIAL MEMORANDUM
Eugene, OR 97401.3273
Phone (541) 485~0220
Fax (541) 68&6564
1 to Plaintiff's Complaint. The City denied that there was any justiciable controversy
2 between the parties. Id~ at ~ 26~ The City also alleged that the Forest Service was a
3 necessary party on MAA' s claims for declaratory and injunctive relief, and alleged that
4 MAA's claims were not ripe for adjudication. Id~ at ~~ 37 and 38..
5
2.
MAA's Amended Complaint
6 Pursuant to the stipulation of the parties, MAA filed its Amended Complaint
7 July 3, 2008~ MAA dropped its claim for breach of contract for monetary damages, and
8 now pursues only its claims for declaratory relief and injunctive relief MAA's claim for
9 injunctive relief remains the same as in its original Complaint
10 However, MAA has expanded the scope of the declaratory judgment it seeks~ In
11 addition to the two declarations MAA sought in its original complaint, MAA now seeks
12 five additional declarations, which are found at subparagraphs 24C - G of its Amended
13 Complaint. MAA asks this court to declare (1) that the City has no right to impose
14 restoration standards for the ski area, and no right to require security for the restoration
15 liability under the SUP, above and beyond requirements set by the Forest Service; (2) that
16 the City has no right under the Lease to request any business plan from MAA or to
17 interfere with MAA's financial affairs in connection with the ski area expansion project
18 or otherwise; (3) that the City has no right to impose requirements on MAA for oversight
19 of the ski area expansion project construction, including construction activities which
20 have an impact on erosion, sediment control, mitigation, and restoration or remediation;
21 (4) that the City may not impose requirements on MAA relating to Resolution 2005-35
22 without first modifying the Lease; and (5) that the Lease generally confers all rights
23 concerning the operations of the ski area to MAA, and the City may not impose any
24 requirements on MAA in connection with the operation and expansion of the ski area
25 unless the City is authorized to do so under the Lease..
26 The City served its Answer to Plaintiffs Amended Complaint on August 13,
HARRANG LONG GARY
RUON~CK P. C.
360 East 10th Avenue
Sulte300 Page 9 - DEFENDANT'S TRIAL MEMORANDUM
Eugene. OR 97401~3273
Phone (541) 485~0220
Fax (541) 686~6564
1 2008~ The City denied that there was a justiciable controversy on these new allegations,
2 or on the previous allegations on MAA's claim for declaratory relief~ Defendant's
3 Answer to Amended Complaint at' 22. The City also reiterated that MAA had failed to
4 join a necessary party and that MAA's claims were not ripe for adjudication. Id. at 28-29.
5 The City also alleges that MAA's claims were moot. Id. at' 30.
6
7 A.
8
III.
THE ISSUES BEFORE THE COURT
MAA's Claim for Declaratory Relief
1.
Introduction
9 MAA' s claim for declaratory relief is brought under the Uniform Declaratory
10 Judgments Act, ORS 28..010 et seq~ ORS 28.010 gives a circuit court the power "to
11 declare rights, status, and other legal relations, whether or not further relief is or could be
12 claimed." The court's declaration may be either affirmative or negative in form and
13 effect, and it has the force and effect of a judgment. ORS 28.010. The court has
14 discretion to refuse to grant declaratory relief if a declaratory judgment would not
15 terminate the uncertainty or controversy giving rise to tIle proceeding. ORS 28.060.
16
2.
The Requirement of a Justiciable Controversy
17 In order to invoke the provisions of the Uniform Declaratory Judgment Act, a
18 justiciable controversy must exist. State Farm Fire & Cas~ v~ Reuter, 294 Or 446, 449,
19 657 P2d 1231 (1983). If there is no justiciable controversy, then the claim for declaratory
20 relief must be dismissed~ A court cannot exercise jurisdiction over a nonjusticiable
21 controversy. Brown v. Oregon State Bar, 293 Or 446, 449,648 P2d 1289 (1982)~
22 A justiciable controversy exists "where there is an actual and substantial
23 controversy between parties having adverse legal interests." Brown v~ Oregon State Bar,
24 293 Or at 449. The Oregon Supreme Court has more fully explained the contours of a
25 justiciable controversy as follows:
26 "To be a justiciable controversy there must be parties
HARRANG LONG GARY
RUON~CK P. C.
360 East 10th Avenue
Sulte300 Page 10- DEFENDANT'S TRIAL MEMORANDUM
Eugene! OR 97401-3273
Phone (541) 485-0220
Fax (541) 686-6564
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2
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having existing and genuine rights or interests; controversy
on which judgment may effectively operate; controversy of
a nature as to lend itself to final judgment in law or equity
on rights, status or other legal relationships of one or more
of real parties in interest; and the proceedings must be
genuinely adversary in character as to engender thorough
research and analysis of major issues~" State Farm Fire &
Cas. v~ Reuter, 294 Or at 449.
6 A justiciable controversy is a controversy which is current As explained below, a
7 declaratory judgment action cannot be used to obtain declarations about past events.
8 Likewise, it cannot be used to obtain declarations which are dependent upon the outcome
9 of future events.
lOA declaratory judgment action t;'is preventative justice, designed to relieve parties
11 of uncertainty by adjudicating their rights and duties before wrongs have actually been
12 committed or damages suffered." Beason v~ Harcleroad, 105 Or App 376, 380, 805 P2d
13 700 (1991), quoting LaMarche v~ State afOregon, 81 Or App 216,220,725 P2d 378
14 (1986)(emphasis in Beason). Seeking a declaration of liability against a party for past
15 actions is not appropriate in a declaratory judgment action. In Beason, the Court of
16 Appeals affirmed a judgment on the pleadings for the defendants on that basis~ 105 Or
17 App at 380~
18 Likewise, in order to present a justiciable controversy, the case must present "a
19 dispute based on present facts rather than on contingent or hypothetical events~" TVKO v.
20 Howland, 335 Or 527,534, 73 P3d 905 (2003). Consequently, courts may not issue a
21 declaratory judgment "where plaintiffs rights are contingent on an event that no one can
22 predict and that might never occur." Id., citing Drake v. City of Portland, 172 Or 558,
23 599, 143 P2d 213 (1943)~ Declaratory relief is only available when it can affect rights
24 between the parties in the present. Id~ (Emphasis in the original). See also US West
25 Communications v~ City of Eugene, 336 Or 181,191,81 P3d 702 (2003) ("As the
26 legislature's use of the present tense phrase 'are affected' [in ORS 20.020] implies, the
HARAANG LONG GARY
RUDNICK P .Ct
360 East 10th Avenue
Suite 300 Page 11 - DEFENDANT'S TRIAL MEMORANDUM
Eugene. OR 97401.3273
Phone (541) 485~0220
Fax (541) 686~6564
1 controversy must involve a dispute based on present facts rather than on contingent or
2 hypothetical events.").
3 In order for a controversy to be justiciable, the court's decision must have some
4 practical effect on the rights of the parties. Powell v~ Bunn, 185 Or App 334,346,59 P3d
5 559 (2002). The court cannot grant declaratory relief and must dismiss for lack of
6 standing if "the plaintiff cannot demonstrate an injury or other impact on a legally
7 recognized interest," or if the injury is too speculative~ Powell, 185 Or App at 346;
8 League of Oregon Cities v~ State, 334 Or 645, 658, 56 P3d 892 (2002).
9 A justiciable controversy results in "specific relief through a [binding] decree" as
10 opposed to a nonbinding advisory opinion. Cummings Constr. v. School Dist. No.9, 242
11 Or 106, 110, 408 P2d 80 (1965). 'A court may not exercise jurisdiction over a
12 nonjusticiable controversy because, in the absence of constitutional authority, a court
13 may not render an advisory opinion. Brown, 293 Or at 449~
14 Applying the foregoing law to the facts of this case, there is no justiciable
15 controversy regarding the declarations MAA requests in paragraph 24 of its Amended
16 Complaint
17
18
3.
The Declarations Requested by MAA
a.
Subparagraph 24A
19 In subparagraph 24A of its Amended Complaint, MAA seeks a declaration that
20 "the City has breached the Lease by directing the Forest Service to not deal directly with
21 MAA on contracts and permits relating to the expansion project~"
22 The City did not breach the Lease by requesting, in City Administrator Bennett's
23 letter two years ago, that the Forest Service direct all future contracts and permits related
24 to the expansion of the ski area to the City, as the holder of the SUP, rather than to MAA~
25 There is no provision in the Lease which prohibited the City, as holder of the SUP, from
26 making that request. However, the court need not - and indeed, cannot - decide the issue
HARRANG LONG GARY
RUDNICK P.C.
360 East 10th Avenue
Suite 300 Page 12 - DEFENDANT'S TRlAL MEMORANDUM
Eugene~ OR 97401-3273
Phone (541) 485-0220
Fax (541) 686~6564
1 because it does not present ajusticiable controversy for the following reasons.
2 First, MAA seeks a declaration that the City is liable for a past breach of the
3 Lease. That request is inappropriate, and it cannot be granted by the court As stated
4 above, seeking a declaration of liability against a party for past actions is not appropriate
5 in a declaratory judgment action. Beason v. Harcleroad, 105 Or App 376, 380, 805 P2d
6 700 (1991).
7 Second, the City anticipates that the evidence at trial will show that Bennett's
8 letter is presently having no significant impact on MAA's ability to communicate with
9 the Forest Service over contracts and permits for the expansion of the ski area. The
10 expansion project has been stalled since before Bennett wrote her letter, either because
11 MAA itself decided not to move fOlWard with the expansion project, or because of
12 injunctions against the expansion project issued in the ONRC v. Goodman litigation~ The
13 expansion project is currently dead in the water as a result of the Ninth Circuit's decision
14 over a year ago. The expansion project will remain blocked unless and until the Forest
15 Service fixes the legal infirmities with the expansion project, and the Forest Service and
16 MAA survive the administrative and judicial challenges which may follow the Forest
17 Service's proposed solution to those legal infirmities. When, if ever, MAA will be in, a
18 position to obtain permits and contracts from the Forest Service and move forward with
19 the expansion project is anyone's guess.
20 Third, the issue is moot Since well before the filing of this lawsuit, the City has
21 clarified to MAA and to the Forest Service that MAA may communicate directly with the
22 Forest Service about the expansion project The City has simply requested that it be
23 notified about those communications.
24 Consequently, there is no justiciable controversy regarding subparagraph 24A.
25
b.
Subparagraph 24B
26 In subparagraph 24B, MAA seeks a declaration that the City breached the Lease
HARRANG LONG GARY
RUDMCK P. C.
360 East 10th Avenue
Sulte300 Page 13 - DEFENDANT'S TRIAL MEMORANDUM
Eugene, OR 97401.3273
Phone (541) 485~0220
Fax (541) 68&-6564
1 by refusing to allow MAA and the Forest Service to execute a timber settlement sale
2 contract. The City denies that allegation and anticipates that MAA will be unable to
3 prove it.
4 Even assuming for the sake of argument that MAA could prove it, MAA's
5 allegation falls squarely within the rule that a court cannot make declarations about a
6 party's liability for past actions. Beason v~ Harcleroad, 105 Or App 376, 380,805 P2d
7 700 (1991)~ Moreover, the City anticipates that the evidence at trial will show that MAA
8 has made no effort to execute a timber settlement sale contract with the Forest Service
9 since the Ninth Circuit's September 2007 injunction against the ski area expansion.
10 Consequently, there is no present dispute over the execution of a timber settlement sale
11 contract, and no justiciable controversy for the court to resolve.
12
c.
Subparagraphs 24C.. F
13 These four subparagraphs request a d,eclaration that the City cannot require MAA
14 to comply with Resolution 2005-35~ MAA asks this court to declare (1) that the City has
15 no right to impose restoration standards for the ski area, and no right to require security
16 for the restoration liability under the SUP, above and beyond requirements set by the
17 Forest Service; (2) that the City has no right under the Lease to request any business plan
18 from MAA or to interfere with MAA's financial affairs in connection with the ski area
19 expansion project or otherwise; (3) that the City has no right to impose requirements on
20 MAA for oversight of the ski area expansion project construction, including construction
21 activities which have an impact on erosion, sediment control, mitigation, and restoration
22 or remediation; and (4) that the City may not impose requirements on MAA relating to
23 Resolution 2005-35 without first modifying the Lease. Again, these issues d,Q not present
24 a justiciable controversy..
25 MAA did not raise these issues until it filed its Amended Complaint on July 3,
26 2008, almost a year after MAA filed this lawsuit When the City served its Answer on
HARRANG LONG GARY
RUDN~CK P.C.
360 East 10th Avenue
Suite 300 Page 14- DEFENDANT'S TRIAL MEMORANDUM
Eugene, OR 97401-3273
Phone (541) 485-0220
Fax (541) 686-6564
1 August 13, the City admitted that it could not require MAA to comply with the
2 resolution~ Defendant's Answer to Plaintiffs Amended Complaint at ~ 22C-F.
3 The resolution does not require MAA to do anything. It requires the City to try to
4 reach agreement with MAA on the issues which are addressed in the resolution~ fu
5 response to the resolution, MAA agreed to work with the City towards an agreement on
6 the issues. The parties have tried to reach agreement on those issues, but have thusfar
7 been unsuccessful.
8 Under these circumstances, there is no justiciable controversy before the court on
9 subparagraphs 24C-F~
10
d.
Subparagraph 24G
11 The last declaration MAA seeks is that the Lease generally confers all rights
12 concerning the operations of the ski area to MAA, and the City may not impose any
13 requirements on MAA in connection with the operation and expansion of the ski area
14 unless the City is authorized to do so under the Lease~ Again, MAA did not raise this
15 issue in its claim for declaratory relief until it filed its Amended Complaint on July 3,
16. 2008. When the City served its Answer to Plaintiff's Amended Complaint on August 13,
17 the City admitted that its rights to impose restrictions or requirements on MAA with
18 respect to the operation and expansion of the ski area are set forth in the Lease and the
19 SUP ~ There is no justiciable controversy between the parties on this issue~
20
4.
Failure to Join a Necessary Party
21 The City raised as an affirmative defense in the answer it served on August 15,
22 2007, and again in the answer it served August 13, 2008, that the Forest Service was a
23 necessary party on MAA's claims for declaratory and injunctive relief~ In its Opinion and
24 Order on Defendant's Motion for Summary Judgment, this court ruled that the Forest
25 Service was not a necessary party~ The court's ruling should be revisited during the trial
26 when the court will have the benefit of a more thorough evidentiary record than it had
HARRANG LONG GARY
RUDNICK P.C.
360 East 10th Avenue
Suite 300 Page 15 - DEFENDANT'S TRIAL MEMORANDUM
Eugene~ OR 97 401 ~3273
Phone (541) 485-0220
Fax (541 ) 686~6564
1 when it made its earlier ruling~
2 In a declaratory judgment action, "all persons. . ~ who have or claim any interest
3 which would be affected by the declaration" must be made parties to the action and "no
4 declaration shall prejudice the rights of persons not parties to the proceeding~"
5 ORS 28.110. A court cannot render a declaratory judgment pursuant to the Uniform
6 Declaratory Judgments Act "unless all persons who have an affected interest are before
7 it" Dewberry v~ Kulongoski, 220 Or App 345, 357, 187 P3d 220 (2008). This
8 requirement both serves to protect absent parties' interests and protects "the certainty of
9 the judgment itself~" fd. (quoting Vance v. Ford, 187 Or App 412,424,67 P3d 412
10 (2003))~
11 The Oregon Rules of Civil Procedure allow courts to proceed to the merits of in
12 some instances where an interested person has not been joined in the action~ ORCP 29A;
13 Dewberry, 220 Or App at 358. ill contrast, the requirement to join a necessary party
14 under ORS 28~ 110 is jurisdictional. Id~
15 The Forest Service is a necessary party on the declarations MAA seeks in
16 subparagraphs 24A and B of its Amended Complaint. With respect to subparagraph 24A,
17 the Forest Service has an "affected interest" if this court declares that the Forest Service
18 cannot grant the request of the holder of its SUP that the Forest Service deal directly with
19 the holder, in addition to the sublessee of the SUP, with respect to the expansion project
20 With respect to subparagraph 24B, the Forest Service has an "affected interest" in a
21 decision as to whether the City interfered with the execution of a timber settlement sale
22 contract between MAA and the Forest Service.
23 MAA's failure to join the Forest Service as a party is exacerbated by the July 31,
24 2008 ruling in City of Ashland v. Schafer, United States District Court of Oregon Case
25 No.08-3048-CL. The federal court ruled that the City cannot subpoena to depositions or
26 to trial in this case the Forest Service employees who know whether the City's alleged
HARRANG LONG GARY
RUDNICK P. C.
360 East 10th Avenue
Suite 300 Page 16 - DEFENDANT'S TRIAL MEMORANDUM
Eugene, OR 97 401 ~3273
Phone (541) 48&-0220
Fax (541) 686-6564
1 actions in this case had the impact on MAA'g efforts to move forward with the expansion
2 project, as MAA alleges~ The City tried to subpoena Linda Duffy, the District Ranger;
3 Steve Johnson, the project manager for the expansion project; and Michael Roney, who
4 was in charge of negotiating the timber settlement sale contract with MAA. As a result of
5 the federal court's ruling, the City cannot present to the court live testimony on the
6 allegations of subparagraphs 24A and B, or on any other issue in this lawsuit Had MAA
7 joined the Forest Service as required by ORS 28.110, the court would have had the
8 benefit of this critical evidence.
9 In the absence of the Forest Service as a party to this case, the court does not have
10 jurisdiction to make the declarations in subparagraphs 24A and B~
11 B.
MAA's Claim for Injunctive Relief
12 MAA alleges in its claim for injunctive relief that the City's actions threaten
13 irreparable harm to MAA and to the continued viability of the ski area, and that closure
14 of the ski area would cause irreparable injury to the community at large~ Plaintiff's
15 Amended Complaint at ~ 27. MAA requests the court "to immediately enjoin the City
16 from continuing to breach the lease, enjoin the City from interfering with MAA's right to
17 possess and improve [the ski area], enjoin the City from improperly preventing MAA
18 from dealing directly with the [Forest Service] regarding the expansion project, and
19 enjoin the City from otherwise breaching the Lease~" Id. at ~ 28~
20 The evidence at trial will show that the City is not breaching the Lease; is not
21 interfering with MAA'g right to possess and improve the ski area; is not preventing MAA
22 from dealing with directly with the Forest Service; and is not othelWise breaching the
23 Lease~ Moreover, the evidence will show that MAA cannot meet the extraordinarily high
24 legal standard for obtaining an injunction.
25 An injunction is an extraordinary remedy that may only be granted by the court
26 on "clear and convincing proof of irreparable harm" and where plaintiff does not have a
HARRANG LONG GARY
RUDNICK P.C.
360 East 10th Avenue
Suae300 Page 17 - DEFENDANT'S TRIAL MEMORANDUM
Eugenet OR 97401-3273
Phone (541) 485-0220
Fax (541) 686-6564
1 legal remedy~ Gildow v~ Smith, 153 Or App 648, 653, 957 P2d 199 (1998). An
2 injunction is not a matter of right; its issuance is within the discretion of the court~ fd. If
3 a plaintiff does not show irreparable harm, the remedy of an injunction is not appropriate.
4 fd. In order for an injunction to issue, it must appear that the outcome the plaintiff seeks
5 to avoid is probable or threatened. See McCombs v, McClelland, 223 Or 475, 485,354
6 P2d 311 (1960)~
7 MAA cannot demonstrate clear and convincing proof of irreparable harm. The
8 evidence at trial will show that, since September of 2006, MAA has either voluntarily
9 suspended expansion activities or has been enjoined from pursuing expansion activities
10 by the federal courts. Any harm resulting from MAA's inability to proceed with the
11 expansion is attributable either to MAA's own actions or to the federal injunction, over
12 which the City has no controL
13 MAA cannot show that any harm is probable or threatened~ The federal court
14 injunction continues to prevent MAA from proceeding with the expansion.. Unless and
15 until the expansion is allowed to move forward, there is nothing for this court to enjoin.
16 The next step with respect to the expansion project is for the Forest Service to
17 issue a draft Supplemental Environmental Impact Statement ("SEIS"), the purpose of
18 which is to address the violations off~derallaw identified by the Ninth Circuit 40 CFR
19 S 1502~9(c)~ After the Forest Service publishes notice of the draft SEIS in the Federal
20 Register, a 45-day comment period will follow~ 36 CFR g 215.6(a)(ii)~ After that, the
21 Forest Service will publish a final SEIS and a Record of Decision. 36 CFR S 215 ~ 7; 40
22 CFR g 1506~ 10. After that, there is a 45-day period during which administrative appeals
23 maybe filed. 36 CFR S 215~15(a). If there is an appeal, the Forest Service must issue a
24 decision wi thin 45 days after the appeal period ends. 36 CFR S 215 ~ 15( e )(2).
2S After exhausting this administrative process, a party may seek review in federal
26 court under the Administrative Procedures Act 5 use S 702. The judicial review in the
HARRANG LONG GARY
RUDNJCK P,C.
360 East 10th Avenue
Sutte300 Page 18 - DEFENDANT'S TRIAL MEMORANDUM
Eugenel OR 97401-3273
Phone (541) 485-0220
Fax (541) 686-6564
1 ONRC v~ Goodman has been going on for over three years, and counting~
2 In light of the uncertainty when the Forest Service will issue the draft SEIS and
3 what legal challenges will follow, MAA cannot prove by clear and convincing evidence
4 that the City's alleged actions are creating a probable threat of irreparable harm~ MAA's
5 claim for injunctive relief is not ripe for adjudication and should be dismissed~
6 Moreover, for the same reasons the Forest Service is a necessary party on MAA's
7 claim for declaratory relief, the Forest Service is a necessary party on MAA's claim for
8 injunctive relief
9
IV.
CONCLUSION
10 MAA's claims are without merit~ At the conclusion of the trial, the City will
11 request that the court enter a judgment in favor of City, dismissing MAA's claims, and
12 under the attorney fee clause in the Lease, awarding the City its reasonable attorney fees
13 in an amount to be determined by the court~
14 Dated October 2, 2008.
15 HARRANG LONG GARY RUDNICK P~C.
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By:
Jens S idt, OSB #843417
.ell ~schmidt hatTan .com
Lauren Sommers, OSB #065989
lauren.solum.er@harrang. COIn,
Telephone: (541) 485-0220
Facsimile: (541) 686-6564
Of Attorneys for Defendant
Trial Attorney: J ens Schmidt
HARRANG LONG GARY
RUDNICK P.C.
360 East 10th Avenue
Suite 300 Page 19 - DEFENDANT'S TRIAL MEMORANDUM
Eugene~ OR 97401~3273
Phone (541) 485-0220
Fax (541) 686-6564
CERTIFICATE OF SERVICE
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I certify that on October ~, 2008, I served or caused to be served a true and
complete copy of the foregoing DEFENDANT'S TRIAL MEMORANDUM on the
party or parties listed below as follows:
x
Via First Class Mail, Postage Prepaid
Via Email
Via Personal Delivery
Darrel R. Jarvis
Huycke, O'Connor, Jarvis & Lohman, LLP
823 Alder Creek Drive
Medford, OR 97504
Sarah J. Crooks
Christopher L. Garrett
Perkins Coie LLP
1120 NW Couch Street, Tenth Floor
Portland, OR 97209-4128
Attorneys for Plaintiff
00204726. DOC; 1
HARRANG LONG GARY
RUDNICK P .C.
360 East 10th Avenue
Suite 300 CERTIFICATE OF SERVICE
Eugenet OR 97401~3273
Phone (541) 485~0220
Fax (541 ) 666-6564
HARRANG LONG GARY RUDNICK p.e.
By:
J e Schmidt, OSB #843417
i ns.scl1ll1idt@harrang..com
Lauren Sommers, aSH #065989
laurel1~ sommers@harrang~coln
Telephone: (541) 485-0220
Facsimile: (541) 686-6564
Of Attorneys for Defendant
~