Valleys in String Foam Suppress Quantum Coherence

We exhibit string contributions to the $\nd{S}$ matrix relating in- and out- state density matrices that do not factorize as a product of $S$ and $S^\dagger$ matrices. They are associated with valley trajectories between topological defects on the string world sheet, that appear as quantum fluctuations in the space-time foam. Through their ultraviolet cut-off dependences these valleys cause non-Hamiltonian time evolution and suppress off-diagonal entries in the density matrix at large times.