SACRAMENTO, Calif - The United States has settled a major lawsuit for damages resulting from the Moonlight Fire, United States Attorney Benjamin B. Wagner announced. At an estimated value of at least $122,500,000, the settlement is the largest recovery ever received by the United States for damages caused by a forest fire.

The Moonlight Fire ignited on September 3, 2007 on private forest land in Plumas County, Calif., and raged for more than two weeks, consuming about 65,000 acres of land. More than 46,000 of the acres burned were public lands in the Plumas and Lassen National Forests. A jury trial in the case before U.S. District Judge Kimberly J. Mueller had been scheduled to begin on July 9, 2012 in Sacramento.

The Moonlight Fire ignited on the 2007 Labor Day holiday as a result of logging operations by industry giant Sierra Pacific Industries and its contractor. Two employees operated bulldozers in a remote area on a red flag warning day — a condition of high fire danger declared by the National Weather Service. The employees — one of whom had started a fire with his bulldozer earlier that season — were unsupervised. The fire ignited when the track or blade of one of the bulldozers struck a rock and created sparks that ignited the surrounding dry ground fuels. The fire smoldered for a long period of time, but went undetected because the employees did not conduct their company-required fire patrol after shutdown. Instead, the designated fire watch left the work area and drove 30 minutes away to get a soda. When he returned over an hour later, there was a 100-foot wall of smoke billowing from the work area. The employee was without a means of calling the fire in and had no access to fire suppression equipment, which was situated about a mile away from the work area. Defendants deny liability for the fire.

In both size and scope, the fire was among the most devastating forest fires in California history. The fire burned primarily at high intensity, killing more than 15 million trees on public land, some of which were over 400 years old. Of the trees killed on public land, two million could have been harvested for commercial use, with enough timber to build more than 73,000 single-family homes. The fire also destroyed thousands of acres of critical habitat reserved for sensitive species, including the California spotted owl, the northern goshawk, and the American martin. Additionally, the fire threatened several communities, including the city of Susanville in Lassen County, Calif. More than 3,000 firefighters were assembled to contain the fire, and the Forest Service of the U.S. Department of Agriculture spent more than $22.5 million fighting the fire.

The settlement amount is to be paid as $55 million in cash and a conveyance of 22,500 acres of land in California owned by Sierra Pacific. The Forest Service will choose the land at its sole discretion from large selections offered by Sierra Pacific. The 22,500 acres currently has an approximate estimated private economic value of at least $3,000 per acre, or a total value of approximately $67.5 million. The current private economic value of the property may increase depending on the nature and location of specific parcels selected by the Forest Service. Once the property is selected and rededicated to the use and enjoyment of future generations, the value of the land to the public is expected to substantially exceed that figure. Much of this land is expected to bridge gaps between existing National Forest land and support sensitive species and critical watersheds and habitat.

"The Moonlight Fire was a devastating fire that destroyed millions of trees and critical wildlife habitat, and threatened communities, and like many forest fires it may have been easily avoided with proper safeguards," said Ignacia S. Moreno, Assistant Attorney General for the Environment and Natural Resources Division. "The settlement is just and fair and will compensate the people of California for public lands and natural resources lost to the Moonlight Fire."

"We are very pleased with this settlement, which is fair and reasonable given the scope of the damage suffered by National Forest land due to the Moonlight Fire. The Moonlight Fire was a devastating blow to National Forest land here in California," said U.S. Attorney Wagner. "What was lost was priceless and will not return for over a century. The recovery in this case will help start the process of making the public whole."

"We're pleased with the settlement and with the opportunity to restore the landscape on two national forests," said Pacific Southwest Regional Forester Randy Moore. "This settlement furthers the Region's Ecological Restoration efforts across the state of California."

Assistant United States Attorneys Kelli L. Taylor and Richard M. Elias prosecuted the case with assistance from Assistant United States Attorneys Todd Pickles, Colleen Kennedy, Glen Dorgan and Neil MacDonald.

The settlement in this case follows the announcement in March that the U.S. Attorney's Office had settled two other wildfire cases for a total of $29.5 million. PG&E was the defendant in both cases: Freds Fire, which ignited on Eldorado National Forest land in 2004, and the Sims Fire, which started on Six Rivers National Forest land in 2004.

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