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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

Friday, April 17, 2015

Judge Issues Ruling Denying Sierra Pacific’s Motion To Set Aside The Settlement In The Moonlight Fire Case

SACRAMENTO, Calif. — United States District Judge William B. Shubb issued a detailed, 63-page order today denying Sierra Pacific Industries’ motion to set aside the settlement of the Moonlight Fire case and emphatically rejecting each and every allegation by Sierra Pacific’s counsel that there was fraud on the court.

After an exhaustive review of the law and the record of this case, Judge Shubb concluded that the defendants “have failed to identify even a single instance of fraud on the court, certainly none on the part of any attorney for the government. They repeatedly argue that fraud on the court can be found by considering the totality of the allegations. Here, the whole can be no greater than the sum of its parts. Stripped of all its bluster, defendants’ motion is wholly devoid of any substance.” [Order at page 63.]

“I have repeatedly stated that a full examination of the actual record in this case would demonstrate that the misconduct claims made by the attorneys for Sierra Pacific were bogus, and I am very gratified by the Court’s thorough and thoughtful ruling,” said United States Attorney Benjamin B. Wagner. “Sierra Pacific’s reckless accusations have been broadcast in open court and in numerous media stories throughout the country. It is not an inconsequential thing to besmirch the integrity of dedicated public servants. Assistant United States Attorneys David Shelledy and Kelli Taylor provided skilled representation to the United States in holding the Sierra Pacific defendants responsible for the incredible damage they caused, and they provided that representation in accordance with the high ethical standards regularly demanded of Department of Justice employees. I am thankful for their service, and proud to be their colleague.”

The Moonlight Fire ignited on September 3, 2007, on private forest land in Plumas County, California, and raged for more than two weeks, consuming about 65,000 acres of land, including more than 46,000 acres of federal public lands. 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, but the parties entered into a settlement shortly before trial. At an estimated value of at least $122,500,000, the settlement was the largest recovery ever received by the United States for damages caused by a forest fire. In October 2014, Sierra Pacific filed a motion to set aside the judgment for damages resulting from the Moonlight Fire, claiming there had been a fraud on the court.

In rejecting each and every claim by Sierra Pacific’s attorneys, Judge Shubb noted that they were aware of almost all of the facts, which they now claim show fraud-on-the-court before they decided to settle the case. As the Court put it, “defendants made the calculated decision on the eve of trial to settle the case knowing everything that they now claim amounts to fraud on the court.” [Order at page 27.] Moreover, regardless of when the facts became known, the Court found that each of Sierra Pacific’s claims was without merit.

As to arguments that an Assistant U.S. Attorney facilitated perjury by an investigator in a deposition when he testified about what the defendants characterized as a “white flag” near the origin location, the Judge ruled that “[w]hen the record is examined there is no substance whatsoever to defendants’ contention.” [Order at page 34.] As to defendants’ suggestion that the removal of former Assistant U.S. Attorney Robert Wright from the Moonlight Fire case in early 2010 “tends to show” some sort of fraudulent intent by the government, Judge Shubb wrote, “[i]t neither shows nor suggests any such thing.” [Order at page 61.] As to claims relating to a state fund administered by CalFire, Judge Shubb observed that the defendants do not even allege the federal government had the documents at issue, and the state audit report revealing details of the fund did not even exist prior to the settlement of the Moonlight Fire case.

Judge Shubb noted that the defendants “have been represented by numerous high‑priced attorneys throughout this litigation,” and he chided some of those attorneys several times in the order for reckless or disingenuous arguments. He noted in a footnote that the attorneys “may be playing loose with their characterizations of the deposition testimony” that they cited. [Order at page 37, fn 10.] The court described another defense claim as “misleading” [Order at page 48], and stated that he was concerned “that defendants would so flippantly” make one representation to the court in arguing this motion, when it argued precisely the opposite to the court during the pre-settlement litigation of this case. [Order at pages 58-59.]

In its brief filed in February, the Government outlined instances in which the defendants’ attorneys manipulated the excerpts of record to support defense claims of witness perjury by excising portions of deposition transcripts that contradicted these claims.

Docket #: 2:09-cv-2445

Updated May 6, 2015