Plum Creek Me. Timberlands, LLC v. Vt. Dep't of Forests, Parks & Recreation, 14-063

• Decision Date: 16 September 2016
• Docket Number: No. 14-063,14-063
• Citation: 155 A.3d 694
• Parties: PLUM CREEK MAINE TIMBERLANDS, LLC v. VERMONT DEPARTMENT OF FORESTS, PARKS AND RECREATION and Vermont Department of Taxes
• Court: Vermont Supreme Court

155 A.3d 694

PLUM CREEK MAINE TIMBERLANDS, LLC

v.VERMONT DEPARTMENT OF FORESTS, PARKS AND RECREATION and Vermont Department of Taxes

No. 14-063

Supreme Court of Vermont.

September 16, 2016

David L. Grayck of Cheney Saudek & Grayck P.C., Montpelier, for Plaintiff-Appellee.

William H. Sorrell, Attorney General, and Bridget C. Asay and Kyle H. Landis-Marinello, Assistant Attorneys General, Montpelier, for Defendant-Appellant.

Robert E. Woolmington of Witten, Woolmington, Campbell & Bernal, P.C., Manchester Center, for Amicus Curiae Vermont Land Trust, Inc.

C. Daniel Hershenson of Hershenson Carter Scott & McGee, P.C., Norwich, for Amici Curiae Vermont Forest Products Association and the Vermont Forestry Foundation.

PRESENT: Reiber, C.J., Dooley, Skoglund, Robinson and Eaton, JJ.

REIBER, C.J.

¶ 1. This appeal concerns a timber harvest by landowner Plum Creek Maine Timberlands, LLC in forestland enrolled in the current-use, tax-incentive program. The Vermont Department of Forests, Parks and Recreation (FPR) issued an adverse inspection report, concluding that Plum Creek violated its forest-management plan and failed to comply with minimum acceptable standards during the harvest. Consequently, the Department of Taxes removed the land from the current-use program and levied a tax assessment. Following Plum Creek's appeal, the superior court reversed those administrative decisions. FPR now appeals, arguing that the superior court failed to give appropriate deference to FPR's determination of the proper methodology for measuring compliance with the forest-management plan. We reverse the court's decision, and remand.

¶ 2. The property in question consists of approximately 56,600 acres in northeastern Vermont. Formerly part of the Champion International Corporation holdings, the land was sold in 1998 to the Essex Timber Company. Essex Timber enrolled it in the Use Value Appraisal (UVA), or current-use, program. This tax-incentive program was designed to "encourage and assist the maintenance of Vermont's productive agricultural and forestland" by taxing property enrolled in the program at its "current use" value rather than its fair market value. 32 V.S.A. §§ 3751, 3756(a). To be eligible for the program, forestland must be "under active long-term forest management ... in accordance with minimum acceptable standards for forest management." Id. § 3752(9)(A). "Minimum acceptable standards for forest management" are defined as standards set by FPR. Id. § 3752(13). Eligibility also generally requires compliance with "the regulations adopted by the [Current Use Advisory] Board." Id. § 3755(a). The UVA Program Manual adopted by the Board¹ sets forth minimum standards for forest-management plans, minimum standards for forest management and regeneration, standard forms for use by landowners enrolled in the program, and appendices containing additional guidance for foresters and landowners.

¶ 3. To enroll in the UVA program, a landowner must file a "forest management plan" and obtain the approval of FPR, which is tasked with periodically reviewing the plan and inspecting each enrolled parcel. Id. § 3755(c). If upon inspection FPR "finds that the management of the tract is contrary to the ... forest management plan, or contrary to the minimum acceptable standards for ... forest management," it is required to file an "adverse inspection report" with the landowner and the PVR Director. Id. When a report is filed, the PVR Director, in turn, is required to "remove from use value appraisal an entire parcel of managed forestland and notify the owner." Id. § 3756(i)(1). This appeal involves FPR's issuance of such an adverse-inspection report to Plum Creek.

I. Facts

¶ 4. Essex Timber prepared a forest-management plan, which FPR approved in 2007. See 32 V.S.A. § 3755(b), (b)(1) (providing that "[m]anaged forestland" must be "subject to a forest management plan" to be eligible for enrollment in UVA program). The following year, Essex Timber sold its holdings to Plum Creek, which formally adopted the existing management plan.

¶ 5. Under a strategy developed by FPR to accommodate large landowners, Plum Creek's forest-management plan provided more conceptual, and less stand-specific, information than is generally required by FPR for participation in the UVA program. When an actual timber harvest is planned, however, the landowner must submit a "harvest prescription amendment" to the management plan containing more detailed information, and obtain the approval of the county forester for this amendment.

¶ 6. In 2009, Plum Creek sought to harvest timber for six stands in its managed forestland and worked with the county forester for Caledonia and Essex Counties to adopt a prescription amendment to its management plan. The plan set both numerical and qualitative goals for each stand to be harvested. Those goals were memorialized in a prescription amendment. For the three stands at issue in this appeal, the prescription provided the following. Stand 34 was to receive a two-staged shelterwood² and the target residual basal area (RBA)—the amount of tree stock left after cutting—was set at 30-40 ft². Stand 43 also was to receive a two-staged shelterwood cut and some overstory removal and the target RBA was 60 ft². Stand 44 was to receive intermediate thinning with a target RBA of 60 ft².

¶ 7. In late January 2010, after cutting had begun, the county forester visited the site with several other individuals including Plum Creek's forester, an FPR forester, and a forester from the Vermont Land Trust to review the harvest's progress. The county forester expressed concern about the level of cutting in Stand 34. Trees, which had been marked for retention, had been cut, and this sight "raised alarm with everyone as it suggested excessive cutting in disregard of the prescription." Based on the observations of cutting, all, including Plum Creek's forester, were concerned about the level of cutting and whether the proper outcome could be met if logging continued. The county forester also observed several violations of the Acceptable Management Practices (AMPs), which are designed to protect water quality during logging operations. The AMPs violations included the siting of equipment too close to water, improper stream crossings, and mud and sediment where equipment had crossed a stream. In response, Plum Creek's forester went to the home of the contracted logger and stopped all cutting in Stand 34. Subsequently, Plum Creek worked to correct the AMPs violations by removing the crossings and remediating the sites deemed to be contrary to the AMPs.

¶ 8. In early February 2010, Plum Creek suspended the entire harvest pending further investigation. Later that month, the county forester visited the site again with two other state officials: FPR's forester in charge of AMPs compliance and the Agency of Natural Resources (ANR) officer for AMPs enforcement. In a letter to Plum Creek written shortly thereafter, the FPR forester identified several additional AMPs violations involving erosion controls, logging debris, stream crossings, seeding and mulching, and protective strips along streams. The letter detailed the necessary remediation measures and closed with the observation that FPR's intentions were to ensure remediation in a timely manner and to educate Plum Creek's logging operators so that they could "implement proper practices in the future."

¶ 9. In the course of additional site visits in March and April 2010, the county forester measured the RBA in the harvested portions of the stands. The county forester issued an adverse-inspection report identifying violations in Stands 34, 43, and 44 consisting of "cutting contrary to the approved forest management plan," as well as practices contrary to the AMPs. His cut contrary finding was based on the following measurements. The county forester calculated that the RBA for 91 harvested acres of the 137 acres in Stand 34 was 19.7 ft², well below the prescription level of 30 to 40 ft². He determined that the RBA for 40 harvested acres in Stand 43 was 23.3 ft², below the prescription target RBA of 60 ft², and that the regeneration goal was not met with only 15% of the plots stocked. In Stand 43, the county forester also found that the harvest had failed to meet the prescription's tree-regeneration goal, which called for a "Two Staged Shelterwood ... and Overstory Removal (OSR)" with the goal of "releas[ing] quality growing stock and provid[ing] gaps to promote regeneration." The county forester determined that the RBA for the 8 harvested acres in Stand 44 (out of a total of 37) was 16.3 ft², again below the prescription's target level of 60 ft².

¶ 10. Related to the AMPs violations, FPR's forester for AMPs compliance sent a letter to Plum Creek confirming that he had inspected the sites of the previously identified AMPs violations and had "observed that all of the major remedial actions relating to the AMPs violations have been accomplished" and that Plum Creek was now in compliance with the AMPs.

¶ 11. In May 2010, FPR informed Plum Creek that it had forwarded the county forester's report to PVR, see 3 V.S.A. § 2289(a), with the recommendation "that the property be removed from UVA for harvesting contrary to the management plan." In July 2010, PVR notified Plum Creek that, based on the adverse-inspection report, its "entire parcel" had been removed from the UVA program. Plum Creek appealed that decision to the PVR Director pursuant to 32 V.S.A. § 3758(a),³ contesting removal of the entire 56,604-acre tract from the program rather than the 470 acres that comprised the harvest area. Plum Creek also appealed the adverse-inspection report to the Commissioner of FPR pursuant to 32 V.S.A. § 3758(d).

¶ 12. The FPR Commissioner provided an informal hearing at which no evidence was taken and of which there is no transcript or audio recording.⁴ Plum Creek provided "remarks" by its lawyer and two employees and also sent a written argument. Apparently,...