80 



zones along fish and non-fish bearing streams, and imposes severe 

 restrictiona on the seasons in which logging can occur. 

 Similarly, the Forest Service in the inland west has adopted the 

 Inland Native Fish Strategy (INFISH) , and the Pacific Anadromous 

 Fish Strategy (PACFISH) . A screening process for timber sales 

 has been adopted, as well as California spotted owl, Mexican 

 spotted owl, and northern goshawk protection standards. 



The Winstar decision should leave little doubt that the 

 government will be contractually liable to the timber purchasers 

 for the reduction or elimination of timber sold under the 

 contract. I'd first like to summarize the Supreme Court's 

 decision in Winstar and then apply those principles to federal 

 timber sale contracts. 

 I. THE WINSTAR DECISION . 



During the savings and loan crisis in the mid-1980s, 

 Congress enacted the Financial Institutions Reform, Recovery, and 

 Enforcement Act of 1989 (FIRREA) . The Act forbid thrifts from 

 counting good will as capital credits in computing the required 

 minimum capital reserves. The plaintiffs in the case were three 

 federal thrifts, two of which were seized and liquidated by 

 federal regulators for failing to meet the new capital 

 requirements. The thrifts sued the government contending that, 

 the Federal Home Loan Bank Board and the Federal Savings and Loan 

 Insurance Corporation (FSLIC) had breached the contractual 

 promise that the thrifts could count supejrvlsory good will 

 towards the regulatory capital requirements. The government 



-2- SWB\auh)cTT96 



