ELR Citation: ELR 20055
No(s). s. 2008-5092, -5093 (Fed. Cir. Feb 19, 2010)

The Federal Circuit reversed in part and affirmed in part a lower court decision that held that the United States breached express and implied warranties to a timber harvesting company when it suspended certain timber harvesting contracts in order to comply with a court order that prohibited harvesting until, as required under ESA §7, the U.S. Forest Service had consulted with the FWS about the relevant land resource management plans. Based on the plain language of the contracts, there is no express warranty that the Forest Service will follow any particular procedures or will comply with any particular statutory requirements in devising the “special measures” listed in the contracts. In fact, the contracts disclaim any explicit or implicit suggestion that listed “special measures” are complete, unchanging, or assured to be adequate. The Forest Service also did not breach any implied duties: the plain terms of the contracts authorize the Forest Service to suspend operations under the contracts to comply with a court order. Moreover, the Forest Service’s actions during the suspension and, more particularly, during consultations with FWS did not breach any implied duty because they did not specifically target a benefit of the contracts nor did they re-appropriate any benefit guaranteed by the contracts since uninterrupted contract performance following an ESA listing was not a benefit guaranteed by the contracts. The company was, however, entitled to damages with respect to the one harvesting contract that did not contain any authority for the Forest Service to suspend operations. For that contract, substantial evidence supported the lower court’s calculation of damages, and the lower court did not abuse its discretion in refusing to reopen the record.