Cal Fire ordered to pay $32 million over court misconduct

Already under fire for siphoning money into a secret fund, the state Department of Forestry and Fire Protection has been ordered to pay more than $32 million in legal bills for those it blamed for starting a 65,000-acre forest fire.

In a scathing order, Superior Court Judge Leslie C. Nichols, sitting on assignment in Plumas County, accused the agency of covering up, lying and engaging in “egregious and reprehensible conduct.”

“The court finds that Cal Fire’s actions initiating, maintaining and prosecuting this action, to the present time, is corrupt and tainted,” the judge wrote.

The sanctions appear to be the largest ever awarded for discovery abuse, according to the forest products company Sierra Pacific Industries, one of the defendants and the largest private property owner in California.

The judge, in an order filed Tuesday, also blasted the attorney general’s office, which represented Cal Fire.

“The sense of disappointment and distress conveyed by the court is so palpable, because it recalls no instance in experience over 47 years as an advocate and as a judge in which the conduct of the attorney general so thoroughly departed from the high standard it represents,” he wrote.

The lawsuit stemmed from a September 2007 fire near Moonlight Peak in Plumas County in northeastern California. State law enables Cal Fire to seek recovery of its suppression costs from those responsible for a fire.

About two years later, Cal Fire filed a suit against Sierra Pacific, a timber harvesting company and several landowners. Cal Fire said that a logger hired by Sierra Pacific started the blaze when his bulldozer hit a rock. The agency asked for $8 million.

But after a three-day hearing last July, the judge dismissed the case, saying that there was not enough evidence to go forward. On Tuesday, the judge announced his sanctions.

“We vigorously disagree with the characterization of Cal Fire,” agency spokeswoman Janet Upton said. The agency already was appealing the judge’s dismissal of the case and is considering appealing the sanctions, she said.

The attorney general’s office had no comment.

The Times reported last year that from 2005 to 2012, Cal Fire stashed about $3.66 million from legal settlements in a wildland fire training and equipment fund it set up through a nonprofit.

Audits by the state Department of Finance and the California state auditor found that Cal Fire did not have the legal authority to place the money in an outside account, and that the money should have gone into the state’s general fund.

Much of the evidence that revealed the existence of the fund was discovered by defendants in the Moonlight Peak fire suit.

Ironically, Sierra Pacific and another defendant settled an identical case over the fire with the federal government for $55 million in 2012. Sierra Pacific also agreed to turn over 22,500 acres for public use.

A Sierra Pacific spokesman said the company settled only after a federal judge ruled that it could be liable even if an arsonist had started the fire. “Our defense was taken away from us, basically,” Mark Pawlicki said.

The company is deciding whether to try to overturn the settlement.

In his ruling, which quoted Shakespeare and made reference to Albert Einstein, Nichols spent page after page bashing Cal Fire and the lawyers and taking apart their case. “The misconduct in this case is so pervasive that it would serve no purpose for the court to attempt to recite it all here,” he wrote.

The judge said that Cal Fire had twice ignored court orders to turn over evidence about the wildland fire fund, eventually revealing that it had failed to give defendants thousands of pages of documents. “Cal Fire persistently attempted to cover up,” Nichols said.

jeff.gottlieb@latimes.com