In September 2007, the appellate court ruled that USFS violated the NFMA and NEPA in four ways when it approved the expansion.
First, the court noted USFS failure to substantiate its assertion that expansion would not harm Fisher, in violation of the 1990 Rogue River National Forest Land and Resource Management Plan (LRMP) requirement to base its analysis on study of local and total populations of sensitive wildlife known to exist at sites proposed for development.
Second, the court ruled that USFS overlooked adverse cumulative effects to Fisher resulting from development in a roadless forest corridor of significant biological importance linking the Klamath-Siskiyou Mountains with the Cascade Mountains, as well as from other concurrent forest management activities planned nearby.
Third, the court rejected as unreasonable USFS claims that known landslides should be excluded from riparian reserve under the 1994 Northwest Forest Plan. It noted significant consequences to the City of Ashland's watershed resulting from the erroneous agency interpretation of riparian management criteria.
Finally, the court found that 35 acres (140,000 m2) which USFS approved for development in fact merits designation as restricted watershed under the 1990 Rogue River National Forest LRMP. That designation limits soil disturbance caused by management activities. In its 2004 decision, the Forest Service stated that it is not possible to limit soil disturbance below allowed thresholds in the course of ski area development.