Railroad to Pay Record $102M Settlement for California Wildfire

Union Pacific Railroad Co. will pay $102 million to settle a federal lawsuit over damage from a massive California wildfire sparked by railroad employees in 2000, officials said Tuesday.

U.S. Attorney McGregor Scott said the settlement marks the U.S. Forest Service's largest ever damage recovery for a wildfire.

The Omaha, Neb.-based company agreed to settle after a federal judge in Sacramento ruled against it in February, Union Pacific spokeswoman Zoe Richmond said.

U.S. District Judge Frank C. Damrell Jr. decided the federal government could seek damages far beyond the lost market value of burned trees and the cost of fighting the fire.

He ruled that a jury also could consider the loss of public recreation, scenery and wildlife, as well as wilderness areas with old-growth trees that never would have been logged for sale.

The government was seeking damages as high as $190 million, a figure the railroad was disputing, according to court records.

Sparks from welders repairing tracks caused the Storrie Fire on August 17, 2000, in Plumas County, about 100 miles northeast of Sacramento. The fire burned more than 52,000 acres in the Plumas and Lassen national forests before it was contained three weeks later at a cost of $22 million.

Richmond said railroad employees thought they had extinguished the sparks that were burning alongside the tracks. Union Pacific said it was likely that a passing train blew them back to life.

The employees gave conflicting accounts of their attempts to put out the fire. Richmond blamed the conflicts on the time lag between the fire and when employees were questioned under oath after the government sued in 2006.

"We feel our employees handled the situation as best they could. It was a rare and unfortunate set of circumstances that this fire became bigger than it should have," Richmond said. "We are very fortunate that we didn't have any injuries or any major damage (to homes). It could have been a lot worse."

The judge said the government could seek more than $13 million for "damage to wildlife habitat and public enjoyment of the forest," as much as $33 million to plant new trees and $122 million in lost timber.

"The forests' use for recreation and scenic enjoyment was also sorely impacted," Damrell wrote, summarizing the government's claim. "Much of the devastated areas involved old growth forests, designated wilderness and trees that were hundreds of years old. The damage to the soil, according to plaintiff, may take hundreds of years to rebuild, if ever."