Opinion ID: 2780805
Heading Depth: 2
Heading Rank: 1

Heading: Basis for Termination

Text: The termination clause relied upon by the Forest Service allowed termination when EM Logging had “engaged EM LOGGING v. DEPARTMENT OF AGRICULTURE 7 in a pattern of activity that demonstrates flagrant disregard for the terms of this contract . . . .” J.A. 1211. To uphold the termination, we must agree that substantial evidence in the record supports the Board’s decision that EM Logging flagrantly disregarded the terms of the contract. We must first consider the proper interpretation of “flagrant disregard.” Merriam-Webster defines “flagrant” as “so obviously inconsistent with what is right or proper as to appear to be a flouting of law or morality.” Merriam-Webster’s Collegiate Dictionary 475 (11th ed. 2003). This plain meaning is confirmed by the usage of “flagrant disregard” in the contract. In full, the termination clause states that the contract may be terminated if EM Logging: Has engaged in a pattern of activity that demon- strates flagrant disregard for the terms of this contract, such as, but not limited to, repeated suspensions for breach pursuant to B9.3, causing un- designated timber meeting Utilization Standards to be unnecessarily damaged or negligently or willfully cut, or causing other serious environmental degradation or resource damage J.A. 1211–12. Examples of activity that demonstrate flagrant disregard include “repeated suspensions for breach” or causing “serious environmental degradation or resource damage.” Id. The plain meaning of flagrant and the context of its usage in the contract make clear that termination for “flagrant disregard” must be predicated on more than technical breaches of minor contract provisions or isolated breaches of material contract provisions which caused no damage. The Forest Service, which bears the burden of proof that it properly terminated the contract, must not only prove that EM Logging violated the contract, but that it did so in a way that was in flagrant disregard of the terms of the contract. 8 EM LOGGING v. DEPARTMENT OF AGRICULTURE