The DNR recently sold the rights to a company to log about 1,700 trees in the forest near Nashville.
The lawsuit alleged the company engaged in damaging logging practices and breached its contract.
In 1990, activists collected 1,500 signatures to oppose the project. Nearly 30 years later, the Indiana Department of Transportation has begun construction.
The Department of Natural Resources auctioned off timber rights for several state forest areas Thursday.
Citizens opposed to logging on public land are hoping to educate people on what they say is happening to the state’s forests.