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Everett Plywood Corp. v. United States

Citation: 11 ELR 21026
No. No. 199-75, 651 F.2d 723/(Ct. Cl., 05/20/1981)

The Court of Claims reverses the trial court and holds that the United States Forest Service's (USFS's) cancellation of a timber contract because of anticipated environmental damage constitutes a breach for which the government is liable in damages. Under the terms of the contract, plaintiff agreed to buy standing timber located in the Mount Baker National Forest from USFS and to construct 3.2 miles of permanent timber access roads. USFS unilaterally terminated the contract after it concluded that road construction and logging planned for two of the contract areas would result in soil and watershed damage. First, the court rues that the government did not meet its burden of proving that the doctrine of frustration excused its performance since the contract allocated the risk of being in breach to the government if it cancelled the contract due to anticipated environmental damage. In addition, performance was not excused under the doctrine of sovereign acts since the government's unilateral termination was neither a public nor general act. Next the court rules that plaintiff is entitled to recover compensation costs and breach damages, but is not entitled to interest on its award since plaintiff's breach claim was initiated prior to passage of the Contract Disputes Act. The court therefore remands the case for a determination of damages according to the USFS method embodied in 36 C.F.R. § 223.9(a)(5).

The full text of this opinion is available from ELR (18 pp. $2.75, ELR Order No. C-1262).

Counsel for Plaintiff
William F. Lenihan, Sigurd B. Borgersen
Lenihan, Ivers & McAteer, P.S.
1218 Third Ave., Seattle WA 98101
(206) 624-4212

Counsel for Defendant
Aice Daniel, Ass't Attorney General; Frances L. Lunn
Civil Division
Department of Justice, Washington DC 20530
(202) 724-7218

Nichols, J.