In 1998, the Mount Ashland Association (MAA) proposed an expansion of the Mount Ashland Ski Area into land generally west and downslope of the existing ski area, in the Middle Branch watershed of the East Fork of Ashland Creek. The proposal included construction of a second lodge near the base of the glacial moraine, a new chairlift in the Middle Branch watershed serving 72 acres (290,000 m2) of new intermediate and advanced terrain, and 200 additional parking spaces.
Leading local conservation groups objected to the expansion plan, citing concerns about the effects of soil erosion on streams and wetlands in Ashland's municipal watershed. There are also concerns for old-growth forest, the McDonald Peak Inventoried Roadless Area, and sensitive wildlife such as the Pacific fisher.
In 2000, the United States Forest Service issued its first draft environmental impact statement (EIS) considering the MAA expansion proposal. The EIS drew over 6,000 public comments, about half of which supported the MAA plan and half opposed.
In 2001, Jack Williams, supervisor of the Rogue River-Siskiyou National Forest, announced preparation of another EIS draft to address public comment regarding a lack of alternatives to the MAA proposal.
In 2003, the Forest Service issued its second draft EIS on expansion, this one with a broader range of alternatives. The second option was the MAA's original ski area expansion proposal. The third would develop half of the MAA proposal on the east side of the Middle Branch watershed and avoid development on the west side of that creek, thereby reducing impacts to the McDonald Peak Roadless Area. The fourth would develop additional ski facilities east of the existing ski area on The Knoll. The fifth advanced a community proposal to develop the ski area largely within its existing footprint. The sixth slightly modified the MAA proposal with a different ski run placement and a wetland crossing design introduced by the Forest Service. The second EIS draft drew a similar level of public comment as the first one, with about 50 percent favoring the MAA plan and half opposed.
In December 2004, Scott Conroy, supervisor of the Rogue River-Siskiyou National Forest, issued a Record of Decision that approved a blend of options 2 and 6 in the Final EIS. The Forest Service received 28 notices of appeal and denied all of them.
In January 2005, three organizations—Oregon Natural Resources Council, Headwaters and Sierra Club—and an individual, Eric Navickas, filed suit in the U.S. District Court of Oregon alleging that the Record of Decision violated the National Forest Management Act (NFMA) and the National Environmental Policy Act (NEPA). In February 2007, District Judge Owen Panner granted summary judgment to the Forest Service stating, "You cannot make an omelet without breaking a few eggs."
ONRC, Headwaters and Sierra Club, but not Navickas, appealed Panner's judgment to the U.S. Court of Appeals for the Ninth Circuit. A motions panel of the appellate court issued an injunction that prevented implementation of the expansion while the conservation groups' appeal was under review. The motions panel, which included appointees of Presidents Jimmy Carter, George H.W. Bush and George W. Bush, cited a likelihood of irreparable harm to Pacific fisher, a rare forest carnivore known to hunt at the exact location where the ski area would expand.
In September 2007, the Court of Appeals issued an opinion written by Judge Milan Smith, an appointee of President George W. Bush, holding that the Forest Service violated federal law in four ways when it approved the ski area expansion. Specifically, the court held that the 2004 Record of Decision:
(1) Violated the Rogue River National Forest Plan and the NFMA by failing to designate and manage geologically unstable landslide terrain as Riparian Reserve.
(2) Violated the Rogue River National Forest Plan and the NFMA by failing to recognize and observe mandatory soil disturbance limits on Restricted Watershed lands.
(3) Violated the Rogue River National Forest Plan and the NFMA with an arbitrary and capricious biological evaluation of effects to Pacific fisher.
(4) Violated the NEPA by failing to disclose significant cumulative effects to the Siskiyou Crest biological corridor used by Pacific fisher.
The appellate court specifically noted that the Aquatic Conservation Strategy of the Northwest Forest Plan "prohibits the Forest Service from 'us[ing] mitigation or planned restoration as a substitute for preventing habitat degradation' within Riparian Reserves, and explains that '[p]riority must be given to protecting existing high quality habitat' rather than compensating 'or management actions that degrade existing habitat' through mitigation and restoration." It remanded the case to the district court and instructed the lower court to enjoin the ski area expansion "until the Forest Service has corrected the NFMA and NEPA violations we find in this opinion."
In October 2007, Linda Duffy, ranger of the Siskiyou Mountains Ranger District, announced that the Forest Service would produce a supplemental EIS to address the legal violations identified by the Ninth Circuit Court of Appeals and move the ski area expansion forward.
In April 2011, the Forest Service issued a Final Supplemental Environmental Impact Statement regarding the Mt. Ashland Ski Area Expansion. It described approximately 67 acres of Riparian Reserve on geologically unstable lands that were overlooked in the 2004 Final EIS, as well as numerous locations where the expansion project would disturb hazardous landslide terrain. It further disclosed that the ski area expansion would render approximately 500 acres of roadless, old-growth forest habitat unusable to Pacific fisher.
Concurrent with the supplemental EIS, forest supervisor Conroy issued a Supplemental Record of Decision approving the original expansion plan without modification. Subsequently, Judge Panner lifted the injunction on the expansion.
In 2013, the ski area successfully undertook several projects identified in its expansion plans, including a 20% increase to its parking lot and the widening the Sonnet beginner ski run, in addition to several other ski runs.
As of 2016, a complaint of Oregon Wild, Sierra Club and Center for Biological Diversity alleging need for additional supplementation of environmental analysis is pending in the Ninth Circuit.