B-118601, OCT. 9, 1959

B-118601, OCT. 9, 1959

TO THE SECRETARY OF THE INTERIOR:

WE REFER TO A LETTER OF JUNE 12, 1959, SIGNED BY THE ADMINISTRATIVE ASSISTANT SECRETARY, IN FURTHER RESPONSE TO OUR LETTER OF MAY 8, 1958, CONCERNING AN ALLOWANCE FOR INTEREST ON ADVANCE PAYMENTS FOR THE SALE OF INDIAN TIMBER ON THE QUINAULT INDIAN RESERVATION PURSUANT TO OUR DECISION B-118601, AUGUST 13, 1957.

YOU NOTE THAT IN OUR LETTER OF MAY 8, 1958, WE STATED THAT BASED UPON CERTAIN REPRESENTATIONS MADE IN YOUR LETTER OF JANUARY 28, 1958, ACTION ON THE INTEREST ALLOWANCE UNDER THE TWO QUINAULT RESERVATION CONTRACTS COULD BE HELD IN ABEYANCE PENDING THE OUTCOME OF THE CASE OF WARM SPRINGS LUMBER COMPANY V. FRED A. SEATON, SECRETARY OF THE INTERIOR, ET AL., CIV. NO. 9046 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON. NOW APPEARS THAT ON APRIL 1, 1959, THE ACTION WAS DISMISSED WITH PREJUDICE UPON AN AGREEMENT AND STIPULATION OF THE PARTIES.

YOUR DEPARTMENT NOW SUGGESTS THAT THE WARM SPRINGS LUMBER COMPANY HAS IN EFFECT, IN AGREEING TO DISMISSAL OF ITS SUIT WITH PREJUDICE, ACCEPTED YOUR INTERPRETATION OF THE CONTRACT PROVISIONS AND THEREFORE IMPLIEDLY ADMITTED THE INVALIDITY OF ITS INTERPRETATION, WHICH WAS SUBSTANTIALLY THE SAME AS OURS. ON THIS BASIS, YOU URGE A RECONSIDERATION OF OUR DECISION OF AUGUST 13, 1957.

WE ARE INFORMED THAT THE ACTION BY THE WARM SPRINGS LUMBER COMPANY INVOLVED A CLAIM OF APPROXIMATELY 1 1/2 MILLION DOLLARS. UNDER THE SETTLEMENT AGREEMENT THE COMPANY HAS AGREED TO DISMISSAL OF THAT CLAIM. WE NOTE, HOWEVER, THAT CERTAIN ADVANTAGES WERE OBTAINED BY THE COMPANY IN CONSIDERATION FOR ITS AGREEMENT TO THE DISMISSAL OF THE SUIT. AMONG THESE WERE: (1) THE COMPANY HAS OBTAINED A 10-YEAR LEASE FROM THE TRIBE ON ITS PRESENT MILL SITE, (2) THE PROVISION WHICH WAS THE BASIS FOR THE DISPUTE HAS BEEN ELIMINATED FROM THE CONTRACT, (3) THE COMPANY OBTAINED AN OPTION PERMITTING IT TO CUT AN ADDITIONAL 12 MILLION BOARD FEET OF DOUGLAS FIR FOR EACH OF THE REMAINING 4 YEARS OF THE CONTRACT IN ADDITION TO THE ORIGINAL MAXIMUM ALLOWABLE CUT.

THE JUDGMENT BY CONSENT RENDERED IN THIS CASE CAN CERTAINLY NOT BE REGARDED AS A JUDICIAL DETERMINATION ON THE MERITS OF THE DISPUTE BETWEEN THE PARTIES. A JUDGMENT BY CONSENT IS ONLY THE AGREEMENT OF THE PARTIES; IT IS NOT A JUDICIAL DETERMINATION OF THE RIGHTS OF THE PARTIES AND DOES NOT PURPORT TO REPRESENT A JUDGMENT OF THE COURT; IT MERELY RECORDS THE PRE-EXISTING AGREEMENT OF THE PARTIES. MCRARY V. MCRARY, 47 S.E.2D 27; MCARTHUR V. THOMPSON, 299 N.W. 519, AND BERGMAN V. RHODES, 165 N.W. 598.

WHATEVER MAY HAVE BEEN THE MOTIVATION FOR THE AGREEMENT BY THE COMPANY TO THE DISMISSAL OF ITS SUIT, IT IS OBVIOUS THAT IT WAS BASED UPON VALUABLE CONSIDERATION AND NOT MERELY UPON A CONCLUSION THAT ITS POSITION COULD NOT PREVAIL IN THE COURSE OF LITIGATION. IN ANY CASE, WE ARE AWARE OF NO REASON WHY THE ACTION OF THE COMPANY WITH RESPECT TO THE SUBJECT SUIT, EVEN ASSUMING AS YOU INFER THAT THE POSITION ORIGINALLY MAINTAINED BY THE COMPANY WAS ABANDONED AS UNTENABLE, SHOULD WARRANT A CHANGE IN THE POSITION STATED IN OUR DECISION OF AUGUST 13, 1957, WHICH YOU MAY BE ASSURED WAS ESTABLISHED ONLY AFTER LONG AND INTENSIVE CONSIDERATION OF THE MATTER.

OUR AGREEMENT TO A MORATORIUM WITH RESPECT TO THE QUINAUCT CONTRACTS WAS BASED UPON THE REPRESENTATION THAT ACTION BY YOUR DEPARTMENT IN ACCORDANCE WITH OUR DECISION WOULD BE INCONSISTENT WITH AND POSSIBLY PREJUDICIAL TO THE POSITION TAKEN IN THE DEFENSE OF THE PENDING SUIT. IT WAS ALSO ANTICIPATED THAT THE PROPER INTERPRETATION OF THE CONTRACT WOULD BE SETTLED BY THE COURT'S DECISION. UNFORTUNATELY, THE CONSENT JUDGMENT ENTERED UPON THE AGREEMENT OF THE PARTIES PREVENTED SUCH JUDICIAL DETERMINATION. IT DOES NOT APPEAR, THEREFORE, THAT ANY BASIS HAS BEEN PRESENTED REQUIRING A CHANGE IN THE POSITION WE HAVE ALREADY STATED. COURSE, WE WOULD HAVE NO OBJECTION TO A RESOLUTION OF THE DISPUTE UNDER THE QUINAULT CONTRACTS BY A SUPPLEMENTAL AGREEMENT PROSPECTIVE IN CHARACTER AND NOT INCONSISTENT WITH OUR EARLIER DECISION ON THE MATTER WHICH WOULD BE ACCEPTABLE TO ALL OF THE PARTIES IN INTEREST.