[Type here] T HE 901 North Pitt Street Suite 325 Alexandria, VA 22314 GARDEN LA W F IRM P .C. ________________________________________________________________________________ (703) 535-5565 tel. (703) 997-1330 fax kevin@gardenlawfirm.com August 3, 2016 VIA EMAIL AND U.S. MAIL Kevin B. Elliott Forest Supervisor Sequoia National Forest and Giant Sequoia National Monument 1839 South Newcomb Street Porterville, CA 93257 kbelliott@fs.fed.us Re: Boyden Cavern Adventures & Tours Inc.’s Term Special Use Permit Dear Mr. Elliott: We have received and thank you for your letter dated July 28, 2016 responding to my letter dated June 15, 2016. In my letter, I inquired as to the Forest Service’s intentions and plans for restoring access to Boyden Cavern so that Boyden Cavern Adventures & Tours, Inc. (“Boyden Cavern Adventures”), the local small business which operates at that site, could reopen and its ten employees, who have been laid off, can get back to work. In your response, you stated the Forest Service has no intention whatsoever of restoring that access. Your refusal was based on the erroneous assertion that, pursuant to the terms of its permit, Boyden Cavern Adventures is “responsible for the [] reconstruction of” the government’s trail bridges which were impacted by the Rough Fire. However, as discussed below, the permit places no such obligation on Boyden Cavern Adventures to reconstruct the government-owned trail bridges. As you acknowledge, after the Rough Fire burned in the area of the government-owned trail bridges to Boyden Cavern, the Forest Service closed the area where those trail bridges are located in August of 2015. The result of the Forest Service closure was that visitors can no longer visit this destination and the ten employees at Boyden Cavern Adventures have been put out of work. In your letter, you stated that the Forest Service will not fix the government-owned bridges and put people back to work because, pursuant to Clause VIII.H in Boyden Cavern Adventures’ permit, the Forest Service believes that Boyden Cavern Adventures is responsible for “reconstruction of the trail bridges” and has insurance on the bridges which should be used to reconstruct them. However, contrary to your statements, the permit does not state that Boyden Cavern Adventures has an obligation to reconstruct the bridges if they are destroyed. Instead, the permit merely states that Boyden Cavern Adventures is responsible for “maintaining” the structures. See Permit at page 1. Clause III.E (Condition of Operations) of the permit discusses what this maintenance obligation entails, stating that “[t]he holder shall maintain the authorized ___________________________________________________________________________________________________ W A S H I N G T O N , D C * A L E X A N D R I A , V A Kevin B. Elliott Forest Supervisor August 3, 2016 Page 2 improvements and permit area to standards of repair, orderliness, neatness, sanitation, and safety acceptable to the authorized officer and consistent with other provisions of this permit.” As this clause confirms, an obligation to maintain a structure is very distinct from an obligation to make a capital improvement, which is what reconstructing the bridges would involve. Based on the language of the permit and as would be understood by any reasonable businessman, Boyden Cavern Adventures’ obligation to merely maintain the government-owned bridges, which consists of typical maintenance expenditures, does not include an obligation to reconstruct the government-owned bridges in the event of a catastrophic event, which would be a capital cost. In addition, your assertion that Boyden Cavern Adventures has this obligation because the permit requires it to have an insurance policy covering the bridges is not true and your agency has always been fully aware of this fact. The insurance clause upon which you based your assertion, Clause VIII.H (B-9), very clearly specifies that it only requires insurance for a government-owned construction camp and residence. As stated in Forest Service Handbook (FSH) 2709.11 at Chapter 52.2, if the Forest Service intends for a permit holder to have an insurance policy for any particular government-owned improvement, the permit will specifically identify the particular government improvements which the permittee must insure. (B-9. GT – Property Insurance): The following clause is mandatory when the authorized officer has elected to require property insurance. Add this clause to any form FS-2700-4 or FS-2700-5 that covers federally owned improvements. Identify the specific property to be insured. Specify whether the insurance will be based on replacement in kind or functional replacement, and specify the value of the improvement (the amount of insurance must represent between 80 and 100 percent of the value of the property). Do not require property insurance for roads or underground utilities. See http://www.fs.fed.us/cgi-bin/Directives/get_dirs/fsh?2709.11!.. (Emphasis added.) Consistent with this Handbook direction, Clause VIII.H (B-9) set out in Boyden Cavern Adventures’ permit states: Property Insurance- Government Owned Improvements (B-9). The holder shall have in force property insurance for the construction camp and residence in the minimum amount of $70,000.00 which represents replacement in kind of the insured property. The type of loss to be covered by this clause shall include but not be limited to damage to the Government-owned improvements identified herein. At the sole discretion of the authorized officer, the Forest Service may require the holder to use all proceeds from property damage insurance policies to repair, rebuild, restore or replace damaged Government property covered by the policy, or may obtain payment of those proceeds from the concessionaire or the insurance company. (Emphasis in original.) The clause’s reference to having sufficient insurance to cover damage to the “Government-owned improvements identified herein” is clearly referring to the Kevin B. Elliott Forest Supervisor August 3, 2016 Page 3 improvements specifically identified in the clause, i.e., a construction camp and residence, as required by the direction in the Forest Service Handbook. In addition, as the Forest Service has known, Boyden Cavern Adventures’ insurance policy does not include coverage for the trail bridges. The agency cannot deny it was aware of this fact because the Forest Service required Boyden Cavern Adventures under the permit to send a copy of its insurance policy to the Forest Service prior to issuance of the permit and every year thereafter. Clause IV.J (Insurance). Boyden Cavern Adventures has done so. Notably, the Forest Service never asserted that Boyden Cavern Adventures’ insurance policy, which does not include coverage for the agency’s trail bridges, was in violation of Clause VIII.H. Therefore, the agency’s conduct before this issue arose provides proof that the Forest Service agreed that the permit did not require Boyden Cavern Adventures to insure the bridges. Otherwise, the Forest Service would (and should) have informed Boyden Cavern Adventures that it needed to change its policy coverage. While the permit clause is very clear as to what specific government-owned property must be insured, even if it were viewed as ambiguous regarding this coverage, as a matter of black letter law the parties’ actions prior to the dispute would be key evidence as to the proper interpretation of the clause. The Forest Service’s acceptance of Boyden Cavern Adventures’ insurance coverage would thus demonstrate that it too understood that the permit did not require insurance for the trail bridges. Moreover, because the government drafted the contract, any dispute over which reasonable interpretation of the clause applies would be resolved in favor of Boyden Cavern Adventures pursuant to the principle of contra proferentum. Thus, your new assertion would not be upheld. Finally, as stated in my letter, Boyden Cavern Adventures’ preference is not to file a lawsuit for breach of contract because a lawsuit will not put its ten employees back to work. However, your assertion that the outcomes in The Sweetwater v. United States and Rocky Mountain Recreation of Utah, Inc. v. United States cases are irrelevant is incorrect. Both cases involved successful challenges to Forest Service positions similar to the one you are currently taking. In both cases, the Forest Service ended up compensating the permit holders as a result of the agency having effectively stopped their operations. Moreover, it is incorrect to state that the Forest Service does not compensate permit holders when a permit operation is adversely affected due to road access restrictions, because this is exactly what the Forest Service did in The Sweetwater case. It is similarly incorrect to assert that the permit’s risk of loss clause precludes Forest Service liability. As you may recall, you initially and adamantly made the very same assertion in Rocky Mountain Recreation of Utah, Inc. However, when the case was turned over to the Department of Justice, the Forest Service was forced to recognize that this clause did not preclude its liability and it agreed to compensate the permit holder. The outcome of that case is therefore important for present substantive purposes. Your effort to dismiss this case because it is not binding legal precedent is beside the point and evasive of the actual issue. Nonetheless, as mentioned above, Boyden Cavern Adventures’ preference is not to file a lawsuit for breach of contract because that will not put its ten employees back to work. We trust Kevin B. Elliott Forest Supervisor August 3, 2016 Page 4 that is also an important concern for the agency. However, as the line officer in charge of the permit as well as being the Forest Supervisor, you have made very clear that the Forest Service is unwilling to take the actions necessary for this outcome to occur. In both The Sweetwater and Rocky Mountain Recreation of Utah, Inc. situations, the agency took similar positions, at least initially. It was only after the permittee went outside the agency and sought the assistance of objective third parties that the Forest Service was forced to meet its obligations under the permit. Therefore, Boyden Cavern Adventures will focus its efforts going forward on communications with Congressman McClintock, whom we are confident will recognize the importance of having the Forest Service meet its obligations so that this local small business can resume operations and these ten local jobs can be restored. Very truly yours, THE GARDEN LAW FIRM, P.C. Kevin R. Garden Kevin R. Garden cc: Rep. Tom McClintock Rocky Deal, District Staff Director Matt Reed, District Office Staff Assistant Carol Hallacy, USFS, Acting District Ranger Jennifer White, USFS, Permit Administrator