Default Notice Issued as Stormwater Contamination Battle with Fort Bragg Escalates

Fort Bragg's failure to respond to allegations by the mill site owners adds new twist in $10–50 million lawsuit over allegedly toxic stormwater and dioxin contamination.

The Mendocino Railway presents its mill site development plans to Fort Bragg residents a day after winning a default judgement against the city. (Photo by Elise Cox)

3:28 p.m. Sept. 11: our story was updated to clarify that default was entered by a clerk, not a judge.

A court clerk on Tuesday entered a default notice in response to a request by to Sierra Northern Railway and Mendocino Railway in a case they filed against the city of Fort Bragg.

The railways sued the city in August 2024 over ongoing contamination of Mill Pond 8, located on the site of the former Georgia-Pacific lumber mill, by hazardous substances including dioxins and furans.

According to the railways, the city discharged untreated, hazardous stormwater onto their private property for years, effectively transforming the eight-acre pond into an unlicensed toxic waste dump.

The companies are seeking between $10 million and $50 million for investigation, remediation and cleanup.

The judgment comes amid a long pause in litigation between the city and the railways. The lawsuits date back four years, when the Mendocino Railway first sought to use eminent domain to take possession of 292 acres of the mill site owned by Georgia-Pacific. The lumber company had previously sold 77 acres to the railway.

At the time, Fort Bragg was negotiating what it believed was a good-faith agreement to buy the property from Georgia-Pacific. The company initially fought the railway’s eminent domain effort in court, arguing that “public interest and necessity do not require the proposed project.” But within three months it agreed to settle and hand over the parcels in exchange for $1.2 million.

Before the sale could be ratified in court, Fort Bragg sued. The city sought a ruling on a single question: could Mendocino Railway, which operates the Skunk Train, be considered a public utility? The city also asked a judge to require the railway to comply with municipal ordinances and regulations.

The California Coastal Commission joined the city’s case on Oct. 27, 2022. Mendocino Railway responded by suing the city and the commission in federal court, requesting an injunction to prevent interference in its operations. A federal judge dismissed that lawsuit, and a federal appeals court upheld the ruling on Aug. 29, 2024.

On Nov. 25, 2024, following the election of two new councilmembers — Scott Hockett and Marcia Rafanan — the city and the railway jointly asked for a 90-day stay in litigation to explore settlement terms. The stay has since been repeatedly extended while the two sides negotiate a master development agreement.

Meanwhile, the lawsuit over the allegedly toxic stormwater continued. The railways filed their first complaint in August 2024, then filed amended complaints in November and December. Fort Bragg responded in February 2025, arguing that the railways had no cause of action under the Comprehensive Environmental Response, Compensation and Liability Act. The city said the claim was not tied to actual remedial action and that the railways themselves were potentially responsible parties, further disqualifying their claim.

Because the railways had already amended their pleadings twice, the city argued that further amendments would be “futile.”

But the railways went ahead and filed a third amended complaint on Aug. 4, 2025. When the city did not respond, the railways filed a motion for default judgment, which was entered into the record on Tuesday.

On Wednesday, city officials joined the public and the Coastal Commission on a mill site tour offered by the railways to coincide with the commission’s September meeting, being held this week in Fort Bragg. A Mendo Local editor informed City Manager Isaac Whippy of the default during the tour. We will add the city’s statement when it is available.

Robert Pinoli, president and CEO of Mendocino Railway, acknowledged the ongoing cooperative efforts between the city and the railways in an interview with Mendo Local during the tour, but he says the railways want the city to pay. “The fact of the matter is that there continues to be a discharge of stormwater into the very ponds and area that people want remediated,” he said. “It’s one thing to say, ‘OK, landowner, go remediate the property,’ but if the very next day more pollutants are coming out, then the remediation is for nothing.”