United States of America v. Osage Wind, LLC et al
Filing
386
OPINION AND ORDER by Judge Jennifer Choe-Groves ; granting in part and denying in part 294 Motion for Summary Judgment; denying 297 Motion for Partial Summary Judgment; granting in part and denying in part 300 Motion for Summary Judgment (Re: 294 MOTION for Summary Judgment and Brief in Support, 297 MOTION for Partial Summary Judgment , 300 MOTION for Summary Judgment ) (clb, Dpty Clk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA,
Plaintiff,
and
OSAGE MINERALS COUNCIL,
Plaintiff-Intervenor,
Court No. 4:14-cv-00704-JCG-JFJ
v.
OSAGE WIND, LLC, ENEL
KANSAS, LLC, AND ENEL
GREEN POWER NORTH
AMERICA, INC.,
Defendants.
OPINION AND ORDER
The United States and the Osage Nation have litigated against the private
developers of a wind turbine farm in Osage County, Oklahoma for more than ten
years. For the reasons discussed below, the Court will award permanent injunctive
relief to the Osage Nation and the United States in the form of ejectment of the
wind turbine farm for continuing trespass. The Court will hold a damages trial to
assess the amount of monetary damages for trespass and conversion.
The U.S. Court of Appeals for the Tenth Circuit (“Tenth Circuit Court of
Appeals”) determined that construction of the wind farm project constituted
mining and required a lease under 25 C.F.R. §§ 211 and 214. United States v.
Osage Wind, LLC, 871 F.3d 1078 (10th Cir. 2017). The developers failed to
acquire a mining lease during or after construction, as well as after issuance of the
Tenth Circuit Court of Appeals’ decision holding that a mining lease was required.
This case presents questions of whether the wind farm developers’ continued lack
of a lease and presence of the wind farm constitute continuing trespass and whether
permanent injunctive relief and damages are appropriate.
Plaintiff United States (“Plaintiff”) asserts five counts in its Amended
Complaint: (1) violation of 25 C.F.R. § 211; (2) violation of 25 C.F.R. § 214;
(3) trespass; (4) continuing trespass; and (5) conversion. Pl.’s Am. Compl. [Doc.
20]. Plaintiff-Intervenor Osage Mineral Council (“Plaintiff-Intervenor”) alleges
the same first four counts but does not raise a claim for conversion in its Amended
Complaint in Intervention. Pl.-Interv.’s Am. Compl. Interv. (“Pl.-Interv.’s Am.
Compl.”) [Doc. 164].
Before the Court are motions for summary judgment filed by Plaintiff,
Plaintiff-Intervenor, and Defendants Osage Wind, LLC, Enel Kansas, LLC, and
Enel Green Power North America, Inc. (collectively, “Defendants”). Pl.-Interv.’s
Mot. Summary J. [Doc. 294]; Defs.’ Mot. Part. Summary J. Opening Br. (“Defs.’
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Br.”) [Doc. 297]; Pl.’s Mot. Summary J. (“Pl.’s Br.”) [Doc. 300]. Plaintiff and
Plaintiff-Intervenor ask the Court to declare that Defendants violated 25 C.F.R.
§§ 211 and 214; find Defendants jointly and severally liable for damages for
tortious trespass and conversion; award permanent injunctive relief in the form of
ejectment of Defendants’ wind turbines, or alternatively, monetary damages, for
Defendants’ continuing trespass; find that Defendants did not reasonably rely on
the advice of counsel in good faith to mitigate damages; and award attorneys’ fees.
Pl.-Interv.’s Mot. Summary J.; Pl.-Interv.’s Br. Supp. Pl.-Interv.’s Mot. Summary
J. (“Pl.-Interv.’s Br.”) [Doc. 294-1]; Pl.’s Br. Defendants’ Motion for Partial
Summary Judgment asks the Court to deny the claim of continuing trespass and not
order removal of the wind turbines. Defs.’ Br.
Also before the Court are Plaintiff’s Motion to Strike the Testimony of
Defendants’ Expert Witness Kimberlee Centera (“Plaintiff’s Motion to Strike” or
“Pl.’s Mot. Strike”) and Defendants’ Motion to Exclude the Testimony of
Plaintiff’s Expert Witness Steven J. Hazel and Opening Brief in Support
(“Defendants’ Motion to Exclude” or “Defs.’ Mot. Exclude”). Pl.’s Mot. Strike
[Doc. 290]; Defs.’ Mot. Exclude [Doc. 337].
Oral argument was held on September 20, 2023. Min. Proceeding (Sept. 20,
2023) [Doc. 379]. For the following reasons, the Court grants in part and denies in
part Plaintiff’s Motion for Summary Judgment and Plaintiff-Intervenor’s Motion
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for Summary Judgment and concludes that Defendants have violated 25 C.F.R.
§§ 211 and 214 and committed trespass, conversion, and continuing trespass. The
Court concludes that declaratory relief, monetary damages, and injunctive relief
are appropriate. The Court denies Defendants’ Motion for Partial Summary
Judgment and defers judgment on Plaintiff’s Motion to Strike and Defendants’
Motion to Exclude.
BACKGROUND
I.
Legal Background
Osage County incorporates the area designated by Congress as the Indian
reservation for the Osage Nation. Okla. Const. art. XVII, § 8; Act of June 5, 1872,
ch. 310, 17 Stat. 228 (1872). Congress severed the surface estate from the mineral
estate in Osage County in 1906. Act of June 28, 1906 (“Osage Act”) §§ 2–3, ch.
3572, 34 Stat. 539, 540–44 (1906). Under the Osage Act, the surface estate was
allotted to members of the Osage Nation. Id. § 2, 34 Stat. at 540–43. The mineral
estate was not allotted to individuals but was reserved for the benefit of the Osage
Nation. Id. § 3, 34 Stat. at 543–44. The Osage Act authorized the Osage Nation,
with the approval of the Secretary of the Interior, to issue “leases for all oil, gas,
and other minerals” in the mineral estate. Id.
25 C.F.R. Part 214 regulates the leasing of resources other than oil and gas
in the mineral estate. 25 C.F.R. § 214. Section 214.7 provides that “[n]o mining
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or work of any nature will be permitted upon any tract of land until a lease
covering such tract shall have been approved by the Secretary of the Interior and
delivered to the lessee.” Id. § 214.7. The term “mining” is defined under 25
C.F.R. § 211.3 as:
the science, technique, and business of mineral development including,
but not limited to: opencast work, underground work, and in-situ
leaching directed to severance and treatment of minerals; Provided,
when sand, gravel, pumice, cinders, granite, building stone, limestone,
clay or silt is the subject mineral, an enterprise is considered “mining”
only if the extraction of such a mineral exceeds 5,000 cubic yards in
any given year.
Id. § 211.3. The Tenth Circuit Court of Appeals held that altering the natural size
and shape of rocks in order to use the rocks for structural purposes in the
construction of wind turbines constituted mineral development and mining under
sections 211.3 and 214.7, requiring a lease. Osage Wind, 871 F.3d at 1091–92.
II.
Factual Background
Beginning in 2010, Defendants leased approximately 8,400 acres of surface
rights in Osage County, Oklahoma on which to construct a commercial wind farm.
Id. at 1083. The wind farm involved the construction of 84 wind turbines,
underground electrical lines, an overhead transmission line, meteorological towers,
and access roads. Id. The wind towers were secured into the ground with
reinforced concrete foundations. Id. In 2011, Plaintiff and Plaintiff-Intervenor
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expressed concern that the project would block access to the mineral estate and
interfere with oil and gas production. Id. at 1083.
The Osage Nation filed a lawsuit in October 2011 to halt the construction of
the proposed wind farm, alleging that the project unlawfully deprived the Osage
Nation of access to and the right to develop the mineral estate. Compl. [Doc. 2],
Osage Nation v. Wind Capital Grp., LLC, Case No. 11-00643. The Osage
Nation’s claims were denied and the case was dismissed on its merits. Osage
Nation v. Wind Capital Grp., LLC (“Wind Capital Grp.”), 2011 U.S. Dist. LEXIS
146407 (N.D. Okla. Dec. 20, 2011).
Defendants’ construction on the wind towers began in October 2013 with
site preparation, and excavation work began in September 2014. Osage Wind, 871
F.3d at 1083. Defendants excavated holes to accommodate cement foundations
measuring 10 feet by 60 feet for each tower. Id. Smaller excavated rocks were
crushed and used as backfill for the cement foundations. Id. Larger rocks were
positioned near the holes from which they were removed. Id.
Plaintiff United States commenced this action on November 21, 2014,
seeking a declaratory judgment that Defendants engaged in unauthorized mining
and excavation in the Osage Mineral Estate without first obtaining a lease,
permanent injunctive relief requiring the cessation of Defendants’ activities, and
monetary damages. Pl.’s Compl. [Doc. 2]; Pl.’s Summons [Doc. 3]. Plaintiff later
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amended its Complaint to add claims of trespass, continuing trespass, and
conversion based on Defendants’ extraction of minerals during the construction of
the wind tower project. Pl.’s Am. Compl. Plaintiff moved for partial summary
judgment on its claims for declaratory relief, asking the Court to rule that
Defendants’ excavation of minerals during the construction of the wind towers
required a lease for mining activities under 25 C.F.R. §§ 211 and 214. Pl.’s Mot.
Part. Summary J. Counts I and II Am. Compl. Request Expedited Consideration
[Doc. 24]. Defendants also moved for summary judgment on Plaintiff’s claims.
Defs.’ Mot. Dismiss Summary J. Opening Br. Supp. [Doc. 26]. The Court granted
Defendants’ summary judgment motion, holding that Defendants’ activities did not
constitute mining under 25 C.F.R. § 214 and that a lease was not required. United
States v. Osage Wind, LLC, 2015 U.S. Dist. LEXIS 132480 (N.D. Okla. Sept. 30,
2015), rev’d, 871 F.3d 1078 (10th Cir. 2017).
Plaintiff-Intervenor Osage Mineral Council appealed the District Court’s
opinion dismissing Plaintiff’s claims. Pl.-Interv.’s Notice Appeal [Doc. 49]. The
Tenth Circuit Court of Appeals reversed the District Court’s order, finding that
Defendants’ activities constituted mining and that a lease was required under 25
C.F.R. § 214.7. Osage Wind, 871 F.3d at 1093.
On remand, Plaintiff-Intervenor filed Plaintiff-Intervenor’s Motion for
Summary Judgment. Pl.-Interv.’s Mot. Summary J. Defendants filed Defendants’
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Motion for Partial Summary Judgment and Opening Brief. Defs.’ Br. Plaintiff
filed Plaintiff’s Motion for Summary Judgment. Pl.’s Br. Each of the three
motions for summary judgment included a statement of undisputed facts. Pl.Interv.’s Br. at 1–10; Defs.’ Br. at 9–11; Pl.’s Br. at 1–3.
Upon review of the Parties’ statements of material facts and supporting
exhibits, the Court finds the following undisputed material facts:
The Osage Nation is a federally recognized tribal nation. Pl.-Interv.’s Br. at
1; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 1 [Doc. 324]. Plaintiff-Intervenor
Osage Mineral Council is an independent agency within the government of the
Osage Nation “established for the sole purpose of continuing its previous duties to
administer and develop the Osage Mineral Estate in accordance with the [Osage
Act], as amended, with no legislative authority for the Osage Nation government.”
Pl.-Interv.’s Br. at 1; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 1; Osage
Nation Const. art. XV, § 4. Plaintiff United States acts as trustee for the Osage
Mineral Estate and holds the Osage Mineral Estate in trust for the benefit of the
Osage Nation. Pl.’s Br. at 1; Defs.’ Resp. Pl.’s Mot Summary J. at 2 [Doc. 321];
Pl.-Interv.’s Br. at 1; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 1; Osage Act
§ 3, 34 Stat. at 543–44. Defendant Enel Kansas is a holding company, whollyowned and controlled by Defendant Enel Green Power North America, Inc. Pl.Interv.’s Br. at 4; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 5.
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Pursuant to six lease agreements, Defendants leased 8,400 acres from
surface estate owners in Osage County, Oklahoma. Defs.’ Resp. Pl.’s Mot.
Summary J. at 6; Pl.-Interv.’s Reply Mot. Summary J. at 4 [Doc. 342]. Defendants
leased only surface rights in 2010 for the construction of the wind farm. Pl.’s Br.
at 1; Defs.’ Resp. Pl.’s Mot. Summary J. at 2. No lease was obtained under 25
C.F.R. § 214.7 for mining activities. Pl.-Interv.’s Br. at 2–3; Defs.’ Resp. Pl.Interv.’s Mot. Summary J. at 2–5.
Defendants owned the assets that constituted the wind farm in 2013 and
2014. Pl.-Interv.’s Br. at 4–5; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 6.
TradeWind Energy purchased Wind Capital Group’s ownership interest in Osage
Wind, LLC in August 2013. Pl.-Interv.’s Br. at 4; Defs.’ Resp. Pl.-Interv.’s Mot.
Summary J. at 5. The 2013 Membership Interest Purchase Agreement between
TradeWind Energy and Wind Capital Group included a provision that excluded
“Native American Tribes” from the definition of “Governmental Authorities.” Pl.Interv.’s Br. at 6; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 8. Enel Kansas
purchased TradeWind Energy’s ownership interest in Osage Wind in September
2014. Pl.-Interv.’s Br. at 5; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 7.
Defendants constructed 84 wind turbines on the leased surface estate. See
Defs.’ Br. at 9; Pl.’s Resp. Defs.’ Mot. Summary J. at 1 [Doc. 319]; Pl.-Interv.’s
Resp. Defs.’ Mot. Summary J. at 4 [Doc. 316]. When constructing the wind
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turbines, Defendants excavated sand, soil, and rock while digging holes for wind
turbine foundations. Defs.’ Br. at 10; Pl.’s Resp. Defs.’ Mot. Summary J. at 2; Pl.Interv.’s Resp. Defs.’ Mot. Summary J. at 4. Pieces of excavated rock were
crushed into smaller sizes and used as backfill to support the wind turbines. Defs.’
Br. at 10; Pl.’s Resp. Defs.’ Mot. Summary J. at 4; Pl.-Interv.’s Resp. Defs.’ Mot.
Summary J. at 5. None of the soil, sand, or rock excavated by Defendants during
construction was sold. Defs.’ Br. at 10; Defs.’ Resp. Pl.’s Mot. Summary J. at 4;
Defs.’ Resp. Pl-Interv.’s Mot. Summary J. at 13; Pl.’s Reply Mot. Summary J. at 4
[Doc. 345]; Pl.-Interv.’s Reply Mot. Summary J. at 3; Pl.’s Resp. Defs.’ Mot.
Summary J. at 3; Pl.-Interv.’s Resp. Defs.’ Mot. Summary J. at 5. Defendants did
not purchase other minerals for use as backfill from offsite sellers. Pl.’s Br. at 2;
Defs.’ Resp. Pl.’s Mot Summary J. at 3–4; Pl.-Interv.’s Br. at 9; Defs.’ Resp. Pl.Interv.’s Mot. Summary J. at 10. Defendants completed all excavation work and
rock crushing in 2014. Defs.’ Br. at 10; Pl.-Interv.’s Resp. Defs.’ Mot. Summary J.
at 6; Defs.’ Resp. Pl.’s Mot. Summary J. at 5; Pl.’s Reply Mot. Summary J. at 4;
Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 13; Pl.-Interv.’s Reply Mot.
Summary J. at 3.
In October 2014, Robin Phillips, Superintendent of the Osage Agency,
notified Enel Green Power North America that a permit was required for
excavation activities related to the wind farm project and requested that excavation
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of minerals should cease until a permit was obtained. Pl.-Interv.’s Br. at 5–6;
Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 7; see also Pl.-Interv.’s Mot.
Summary J. at Ex. 15 [Doc. 294-10].
The wind farm entered commercial operation in 2015. Defs.’ Br. at 10; Pl.’s
Resp. Defs.’ Mot. Summary J. at 3; Pl.-Interv.’s Resp. Defs.’ Mot. Summary J. at
6; Defs.’ Resp. Pl.’s Mot. Summary J. at 5; Defs.’ Resp. Pl.-Interv.’s Mot.
Summary J. at 13; Pl.’s Reply Mot. Summary J. at 4; Pl.-Interv.’s Reply Mot.
Summary J. at 3. The wind farm employs 10 people full-time as engineers and
technicians. Defs.’ Resp. Pl.’s Mot. Summary J. at 6; Pl.-Interv.’s Reply. Mot.
Summary. J. at 4; see Pl.’s Reply Mot. Summary J. at 6. Two Osage County
schools receive tax revenue from the wind farm project. Defs.’ Resp. Pl.-Interv.’s
Mot. Summary J. at 14; Pl.-Interv.’s Reply at 4; Defs.’ Resp. Pl.’s Mot. Summary
J. at 6; Pl.’s Reply Mot. Summary J. at 5.
LEGAL STANDARD
Summary judgment is appropriate if “there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). In determining whether a genuine issue of material fact exists, the
Court considers “the record, including depositions, documents, electronically
stored information, affidavits or declarations, stipulations (including those made
for purposes of the motion only), admissions, interrogatory answers, or other
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materials.” Fed. R. Civ. P. 56(c). The essential inquiry for the Court in ruling on a
motion for summary judgment is “whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so one-sided that one
party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S.
242 (1986). The Court views all evidence and draws all reasonable inferences in
the light most favorable to the non-moving party. Matsushita Elec. Indus., Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986).
DISCUSSION
I.
Dismissal of Enel Kansas
Defendants concede liability on the claims of trespass and conversion as to
Defendants Osage Wind and Enel Green Power North America, but not for Enel
Kansas. Defs.’ Resp. Pl.’s Mot. Summary J. at 1; Defs.’ Resp. Pl.-Interv.’s Mot.
Summary J. at 1, 25. Defendants argue that Enel Kansas is a separate holding
company that neither owned nor constructed the wind farm project, and that
liability for Enel Kansas has not been established. Defs.’ Resp. Pl.’s Mot.
Summary J. at 1; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 1, 25. Although
Defendants have not filed a motion to dismiss Enel Kansas from this suit, they
asserted at oral argument that the Court could dismiss Enel Kansas from this case
sua sponte. See Transcript of Oral Argument (“Tr.”) at. 162–63 [Doc. 380]. The
only attempt made by Defendants to challenge Enel Kansas’ involvement in this
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case was a footnote in Defendants’ response to Plaintiff’s Motion for Summary
Judgment and a single paragraph in Defendants’ Response to Plaintiff-Intervenor’s
Motion for Summary Judgment. Defs.’ Resp. Pl.’s Mot. Summary J. at 2 n.1
(“Defendants incorporate by reference Part V of their response to [PlaintiffIntervenor’s] summary judgment motion[], to further explain why the Motion
should be denied as to Enel [Kansas].”); Defs.’ Resp. Pl.-Interv.’s Mot. Summary
J. at 25.
The Court observes that Enel Kansas was named as a defendant when this
case was initially filed in 2014. See Pl.’s Compl. Over the life of this case, a
multitude of filings were made by the Parties in the District Court, the Tenth
Circuit Court of Appeals, and the U.S. Supreme Court. The three Defendants have
shared the same counsel during all phases of this case. At no time during nearly
ten years of litigation did Defendants file a motion to dismiss Enel Kansas.
Defendants did not formally challenge Enel Kansas’ status as a party to the
litigation before the District Court issued its earlier opinion. Nor did they formally
challenge Enel Kansas’ status on appeal. The Tenth Circuit Court of Appeals
considered the activities of Osage Wind, LLC, Enel Kansas, LLC, and Green
Power North America, Inc. together as one entity, noting that “Osage Wind, LLC
is wholly owned by Defendant Enel Kansas, LLC, which is wholly owned by
Defendant Enel Green Power North America, Inc.” Osage Wind, 871 F.3d at 1081
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n.1. The appellate court described Defendants’ activities as one entity and never
discussed Enel Kansas taking actions independently from the other Defendants.
Enel Kansas has participated in every stage of this case for almost a decade,
including filing pleadings and responding to and issuing discovery requests
seeking evidence. Notably, Plaintiff Osage Mineral Council argued that:
The clearest binding admission [that Defendants acted as one] was in
their own petition for a writ of certiorari to the United States Supreme
Court: “Petitioners [Osage Wind, LLC, Enel Kansas, LLC and Enel
Green Power North American, Inc.] are business entities that have
built and are operating a wind energy project in Osage County,
Oklahoma.” This is a binding admission.
Pl.-Interv.’s Supp. Resp. Br. at 4 [Doc. 384] (alteration and emphasis in original)
(citing Pet. for a Writ of Certiorari (“Cert. Pet.”), Osage Wind, LLC v. United
States, Case No. 17-1237 (S. Ct. 2017). In addition, the Court takes judicial notice
of another statement in Defendants’ petition for a writ of certiorari, when
Defendants informed the U.S. Supreme Court that, “[b]y 2014, [P]etitioners had
initiated excavation work for the planned wind turbines.” Cert. Pet. at 1 (in which
“Petitioners” were identified as Osage Wind, LLC, Enel Kansas, LLC, and Enel
Green Power North America, LLC). The Court agrees with Plaintiff-Intervenor’s
argument that statements made in briefs are to be taken as binding admissions. See
Pl.-Interv.’s Supp. Resp. Br. at 4 (citing 10A CHARLES ALAN WRIGHT & ARTHUR
R. MILLER, FEDERAL PRACTICE & PROCEDURE CIVIL § 2723 (4th ed. 1990); 4
FRANCIS C. AMENDOLA ET AL., C.J.S. APPEAL AND ERROR § 746 (2023)). In
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Defendants’ pleadings filed with the U.S. Supreme Court, Enel Kansas was never
identified as an inappropriate party to the case, and in fact was described as a
business entity that had built and operated the subject wind farm and had initiated
excavation work for the planned wind turbines. Cert. Pet. at 3.
In summary, the Court concludes that it would be improper and unfair to the
opposing Parties if the Court were to sever and dismiss Enel Kansas after nearly
ten years of litigation based on nothing more than an unsupported argument raised
in a footnote and one paragraph in Defendants’ response briefs at summary
judgment. An important function of summary judgment is to eliminate factually
unsupported claims. See Celotex Corp. v. Catrett, 477 U.S. 317, 322–24 (1986).
Unsupported conclusory allegations, however, do not create an issue of fact.
Salehpoor v. Shahinpoor, 358 F.3d 782, 789 (10th Cir. 2004).
Enel Kansas’ allegation that it never made decisions regarding the
construction of the wind farm is unsupported by evidence, and is simply
inconsistent with the admissions that it made to the U.S. Supreme Court in its
petition for a writ of certiorari that it built and operates a wind farm, and that it
engaged in excavation work for the wind turbines. The unsupported allegations,
when compared to Enel Kansas’ contrary statements in pleadings filed with the
U.S. Supreme Court, do not rise to the level of a genuine dispute of material fact.
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In light of the admissions in Defendants’ petition for a writ of certiorari to
the U.S. Supreme Court that Petitioners Osage Wind, LLC, Enel Kansas, LLC, and
Enel Green Power North America, Inc. are business entities that have built and are
operating a wind energy project in Osage County; Defendants’ engagement in
excavation work for the wind farm; and Defendants’ failure to file any motions to
dismiss Enel Kansas from the case, weighed against the mere allegation at this late
stage of litigation that Enel Kansas should not be held liable as a defendant in this
case, the Court finds that the facts support the conclusion that all three Defendants
acted as one.
Plaintiff-Intervenor argues that Defendants are jointly and severally liable
for all damages in this case. Pl.-Interv.’s Am. Compl. at 15–19. Liability is joint
and several when the harm suffered is indivisible amongst multiple tortfeasors.
The state of Oklahoma has abolished joint and several liability in favor of several
liability. 23 Okla. St. § 15. Before the federal courts, “state law is preempted if it
stands as an obstacle to the accomplishment of the full purposes and objectives of
Congress.” Pac. Gas and Elec. Co. v. State Energy Res. Conservation & Dev.
Comm’n, 461 U.S. 190, 220–21 (1983) (internal quotation and citations omitted).
The Tenth Circuit Court of Appeals has recognized the “paramount federal policy
that Indians develop independent sources of income and strong self-government.”
Seneca-Cayuga Tribe of Okla. v. Okla., 874 F.2d 709, 716 (10th Cir. 1989).
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Sections 211 and 214 reflect this policy and the Congressional objective to ensure
the Osage Nation’s authority over the mineral estate. See 25 C.F.R. §§ 211, 214.
Defendants acted in concert in the performance of all relevant actions and may be
held jointly and severally liable for any resulting damages. Enel Kansas shall
remain a defendant in this case and the Court will consider the activities of
Defendants as one entity for the purposes of deciding the pending motions for
summary judgment.
II.
Declaratory Relief on Counts I and II
Counts I and II of both Plaintiff’s Amended Complaint and PlaintiffIntervenor’s Amended Complaint seek declarations from the Court regarding the
applicability and violation of 25 C.F.R. §§ 211 and 214. Pl.’s Am. Compl. at 7–9;
Pl.-Interv.’s Am. Compl. at 14–15. Section 211 contains regulatory provisions that
“govern leases and permits for the development of Indian tribal oil and gas,
geothermal, and solid mineral resources.” 25 C.F.R. § 211.1. Section 214
specifically governs the leasing of lands held by the Osage Nation for mining. Id.
§ 214. In Osage Wind, the Tenth Circuit Court of Appeals considered: (1) whether
Defendants’ “excavation, modification, and use of rock and soil during the
installation of wind turbines” constituted “mining” under 25 C.F.R. § 211 and
(2) whether Defendants were required to obtain a lease for their activities. Osage
Wind, 871 F.3d 1078. The Tenth Circuit Court of Appeals answered both
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questions in the affirmative. Id. at 1089–93. The Court is bound by the Tenth
Circuit Court of Appeals’ ruling in Osage Wind and now enters declaratory
judgment that Defendants were subject to and are in violation of 25 C.F.R. §§ 211
and 214.
III.
Trespass and Conversion
Plaintiff and Plaintiff-Intervenor move for summary judgment on the claims
of trespass and conversion. Pl.’s Br. at 3–6; Pl.-Interv.’s Br. at 5–6; Pl.’s Am.
Compl. at 9–10, 11–12; Pl.-Interv.’s Am. Compl. at 16–17. Defendants do not
oppose summary judgment as to liability for Osage Wind and Enel Green Power
North America on the trespass and conversion claims. Defs.’ Resp. Pl.’s Mot.
Summary J. at 1; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 1. Defendants do
contest liability for Enel Kansas. Defs.’ Resp. Pl.’s Mot. Summary J. at 1; Defs.’
Resp. Pl.-Interv.’s Mot. Summary J. at 1.
Because no federal statute addresses the torts of trespass and conversion
against the property interests of Native American tribes, the Court looks to state
law in defining the offenses. See Davilla v. Enable Midstream Partners, L.P., 913
F.3d 959, 965 (10th Cir. 2019). Under Oklahoma law, a right of action in trespass
exists when a person “actual[ly] physical[ly] inva[des] . . . the real estate of another
without the permission of the person lawfully entitled to possession.” Id. at 966
(quoting Williamson v. Fowler Toyota, Inc., 956 P.2d 858, 862 (Okla. 1998)). The
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court has recognized three elements to a trespass claim: (1) “the [plaintiff] must
prove an entitlement to possession of the [property];” (2) “[the plaintiff] must
prove [that the defendant] physically entered or remained on the [property];” and
(3) the defendant must “lack[] a legal right—express or implied—to enter or
remain.” Id. Conversion is an “act of dominion wrongfully exerted over another's
personal property in denial of or inconsistent with his rights therein.” Welty v.
Martinaire of Okla., Inc., 867 P.2d 1273, 1275 (Okla. 1994). The elements of civil
conversion are: “(1) that the plaintiff owns certain property at the time of its
conversion; (2) that defendant converted plaintiff’s property by a wrongful act of
disposition of the property; and (3) that damages are suffered by the plaintiff.” See
Tri-State Floors, Inc. v. Old Rule Servs., LLC, 2022 U.S. Dist. LEXIS 178361, at
*39 (N.D. Okla. Sept. 30, 2022).
Plaintiff’s and Plaintiff-Intervenor’s ownership and entitlement to the Osage
Mineral Estate under the first elements of trespass and conversion are undisputed.
The mineral estate was severed from the surface estate by the Osage Act and held
in trust for the collective benefit of the Osage Nation. Osage Act § 3, 34 Stat. at
543–44. The Parties agree that Plaintiff acts as the trustee for the mineral estate.
Pl.’s Br. at 1; Defs.’ Resp. Pl.’s Mot Summary J. at 2; Pl.-Interv.’s Br. at 1; Defs.’
Resp. Pl.-Interv.’s Mot. Summary J. at 1; see also Osage Act, 34 Stat. at 543–44.
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As to all three Defendants Osage Wind, Enel Kansas, and Enel Green Power
North America, the remaining elements of trespass and conversion were decided
by the Tenth Circuit Court of Appeals’ opinion in Osage Wind. The appellate
court held that Defendants’ extraction, sorting, and crushing of rocks that were
then used as backfill for support constituted mineral development and triggered the
leasing requirement of 25 C.F.R. § 214.7. Osage Wind, 871 F.3d at 1091–92.
Based on the Tenth Circuit Court of Appeals’ opinion in Osage Wind, there is no
genuine dispute of material fact that the construction of the wind towers involved
entering the mineral estate, extracting minerals, and using the extracted minerals
without first obtaining the necessary lease, and the Court concludes that the second
and third elements of trespass and conversion are satisfied.
As noted earlier, although the Defendants attempt in their briefs to raise
questions about Enel Kansas’ role in the wind project, the Court finds dispositive
the Defendants’ admission in their petition for a writ of certiorari to the U.S.
Supreme Court that Defendants Osage Wind, LLC, Enel Kansas, LLC, and Enel
Green Power North America, Inc. are business entities that have built and are
operating a wind energy project in Osage County, weighed against the mere
allegation that Enel Kansas should not be held liable as a defendant in this case.
The Court finds that the facts support the conclusion that all three Defendants acted
as one in their building and operating of the wind farm at issue in this litigation.
20
The Court grants summary judgment and holds that all three Defendants are
liable for the claims of trespass and conversion.
IV.
Continuing Trespass
Plaintiff and Plaintiff-Intervenor assert claims of continuing trespass, despite
the fact that no physical digging or mineral extraction has occurred for almost a
decade. Pl.’s Am. Compl. at 10–11; Pl.-Interv.’s Am. Compl. at 18–19. Plaintiff
proffers three theories in support of its continuing trespass claim. First, Plaintiff
argues that the physical presence of the wind towers, transmission lines, and
collector system within the mineral estate constitutes a continuing trespass. Pl.’s
Br. at 6. Second, Plaintiff asserts that each wind tower creates a mining setback
that inhibits use and development of the mineral estate within a certain proximity
of the structure. Id. at 7–8. Third, Plaintiff argues that the support provided by the
surrounding mineral estate and improperly extracted rocks used as backfill for
support amounts to a continuing trespass. Id. at 8–9. Defendants contend that only
the first theory was pled in the Amended Complaints and is properly before the
Court. Defs.’ Resp. Pl.’s Mot. Summary J. at 6; Defs.’ Reply Pl.’s Resp. Defs.’
Mot. Summary J. at 7, 8 [Doc. 346]; Defs.’ Reply Pl.-Interv.’s Resp. Defs.’ Mot.
Summary J. at 2–3 [Doc. 347].
21
A.
Legal Standard
Because no federal body of law governs trespass against Indian property, the
Court must rely on Oklahoma state law to define the elements of continuing
trespass, to the extent that the state law comports with federal policy. See Davilla,
913 F.3d at 965–66. Trespass under Oklahoma law requires three elements: (1) the
plaintiff must be entitled to possession of the property, (2) the defendant must have
physically entered or remained on the property; and (3) the defendant must have
lacked a legal right to enter or remain on the property. Id. at 966. Continuing
trespass occurs when “the ongoing, unabating nature of certain trespasses
continuously gives rise to causes of action that the victim can sue on, and
eventually can support equitable relief.” Id. at 971 n.8 (citing Hughes v. Harden,
151 P.2d 425, 427 (Okla. 1944); Bradley v. Renfrow, 84 P.2d 430, 431 (Okla.
1938)); see also Fairlawn Cemetery Ass’n v. First Presbyterian Church, U.S.A. of
Okla., 496 P.2d 1185, 1187 (Okla. 1972) (holding that an unauthorized
encroachment upon property that had continued for several years and was likely to
continue unless enjoined constituted a continuing trespass). Defendants assert that
the case law discussing the elements of continuing trespass should be read to
impose an additional requirement that the cause of the alleged injury be abatable.
Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 16; see also Def.’s Supp. Br. at 4
[Doc. 374]. In support of this argument, Defendants rely on Hughes v. Harden,
22
151 P.2d 425 (Okla. 1944), in which the Oklahoma Supreme Court stated, in
discussing continuing trespass in the context of nuisance law, “[w]here the cause of
injury may be abated by the expenditure of labor or money the same is said to be a
temporary one, and successive actions may be maintained for damages resulting
therefrom.” Id. at 427 (citation omitted).
The Court does not read Hughes to impose the additional requirement that
Defendants suggest. In Davilla v. Enable Midstream Partners L.P., 913 F.3d 959
(10th Cir. 2019), the Tenth Circuit Court of Appeals observed that under
Oklahoma law, “‘[c]ontinuing trespass’ is not a distinct legal wrong.” Id. at 971
n.8. The Court is aware of no case subsequent to Hughes that has required that the
injury resulting from a continuing trespass be abatable. The relevant distinction
between a temporary and continuing trespass is that the ongoing nature of a
continuing trespass necessitates the need for equitable relief.
B.
Theories Before the Court
As an initial step, the Court must determine what arguments have been
properly presented for consideration. Defendants contend that the only theory of
continuing trespass presented in the Amended Complaints relates to the placement
of the wind tower foundations within the mineral estate. Defs.’ Resp. Pl.’s Mot.
Summary J. at 9; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 14–15. In general,
a party is not precluded from asserting a theory of recovery that was not set forth in
23
the initial complaint as long as the theory is not first presented so late as to
prejudice the opposing party. See Evans v. McDonald’s Corp., 936 F.2d 1087,
1090–91 (10th Cir. 1991) (citing 5 CHARLES ALAN WRIGHT & ARTHUR R. MILLER,
FEDERAL PRACTICE & PROCEDURE CIVIL § 1219 at 194 (4th ed.1990)). The Federal
Rules of Civil Procedure require only that the pleadings articulate (1) a basis for
the court’s jurisdiction, (2) “a short and plain statement of the claim showing that
the pleader is entitled to relief;” and (3) “a demand for the relief sought.” Fed. R.
Civ. P. 8(a). This rule ensures that defendants have fair notice of the claims
alleged, but it does not require that all facts be developed and theories identified
before the time of filing.
The continuing trespass claims alleged by both Plaintiff and PlaintiffIntervenor read in almost identical language:
By placement of the turbine foundation and other materials, Defendants
trespassed on the Osage [M]ineral [E]state, in violation of law and, in
doing so, caused damage to the estate. The insertion and placement of
materials or structures in the mineral estate is a continuing trespass and
diminishes the estate or diminishes the use and enjoyment of the
mineral estate.
Pl.’s Am. Compl. at 11; see Pl.-Interv.’s Am. Compl. at 18. Both continuing
trespass claims also reallege and incorporate by reference the preceding paragraphs
of their respective Amended Complaints. Pl.’s Am. Compl. at 10; Pl.-Interv.’s
Am. Compl. at 18. Plaintiff’s Amended Complaint describes Defendants’
offending actions as:
24
Defendants conducted unauthorized mineral excavation activities in
connection with the construction of a wind energy project on 8,400
acres in Osage County, Oklahoma. The project consists of between 84
and 94 wind turbines and associated infrastructure. Defendants
excavated and constructed foundations for the wind turbines, as well as
trenches for cables. Defendants excavated numerous pits measuring
more than 50 feet wide and more than 10 feet deep. As part of this
process, Defendants excavated sand, soil of various types, and rock
encountered in place. Defendants crushed some of these extracted
materials and used them to reinforce the concrete turbine foundations.
Defendants invaded, and irreparably altered, the mineral estate by
virtue of placement of turbine foundations in these pits.
Pl.’s Am. Compl. at 1–2. Similarly, Plaintiff-Intervenor’s Amended Complaint
includes a paragraph stating:
The project consists of 84 wind turbines and associated infrastructure.
Defendants excavated and constructed foundations for the wind
turbines, as well as trenches for underground electrical lines.
Defendants excavated numerous pits measuring approximately 60 feet
in diameter and 10 feet deep. As part of this process, Defendants
excavated soil, sand, and rock of varying sizes encountered during
Defendants’ excavation. Defendants crushed some of these extracted
materials and used them to reinforce the concrete turbine foundations
and for associated infrastructure.
Pl.-Interv.’s Am. Compl. at 2. These statements make clear that Plaintiff’s and
Plaintiff-Intervenor’s allegations involved activities encompassing the entire wind
farm project, not only the foundations for the wind towers. After nearly ten years
of litigation, it cannot be said that Plaintiffs are asserting new theories or facts at
the eleventh hour to the detriment of Defendants in this case. Accordingly, the
Court will consider all of Plaintiff’s theories of continuing trespass.
25
C.
Wind Tower Foundations
Plaintiff’s first theory of continuing trespass argues that the continued
presence of the wind towers and ancillary structures constitutes a continuing
trespass. Pl.’s Br. at 6. Defendants argue that Plaintiff’s theory is inconsistent
with the Tenth Circuit Court of Appeals’ discussion in Osage Wind and is contrary
to the rights of the surface estate owners to use and develop their land. Defs.’
Resp. Pl.’s Mot. Summary J. at 7–8 (citing Osage Wind, 871 F.3d at 1092). As the
Tenth Circuit Court of Appeals observed, construction activities such as the
building of a swimming pool or basement necessarily involve a degree of
disruption to the mineral estate. Osage Wind, 871 F.3d at 1092. Such incidental
encroachment into the mineral estate by the surface estate owner does not involve
the commercialization of the mineral estate or the exploitation of the minerals
contained therein. Id. Deeming the presence of construction extending below the
ground’s surface to be a continuing trespass into the mineral estate would result in
an unreasonable limitation on the “expansive authority” of surface owners to
develop and use their land. See id. The Court concludes that the physical presence
of foundations for the wind turbines and other structures below ground level does
not constitute a continuing trespass against the mineral estate.
26
D.
Mining Setback
Plaintiff’s second theory of continuing trespass is that the presence of the
wind towers creates a mining setback and inhibits the development of the mineral
estate within a certain radius around the structures. Pl.’s Br. at 7–9. The Court
notes that this argument appears to be a redressing of arguments raised and
resolved in the predecessor litigation involving the wind farm. See Wind Capital
Grp., 2011 U.S. Dist. LEXIS 146407. In that case, the Osage Nation sought to
enjoin the construction of the wind farm, in part because it might have interfered
with oil and gas development of the mineral estate. Under Oklahoma law, the right
of a mineral estate owner to use the surface is limited to what is reasonably
necessary for the development of the mineral estate and must be exercised with due
regard to the surface owners’ competing rights. Id. at *23 (citing Roye Realty
Dev. Inc. v. Watson, 791 P.2d 821, 824 (Okla. Ct. App. 1990) and Thompson v.
Andover Oil Co., 691 P.2d 77, 82 (Okla. Ct. App. 1984)). The Court held that:
[I]n general, the Wind Farm’s planned surface use is lawful and
reasonable. Its facilities will take up less than 1.5% of the surface of
the 8,500 acres in the Wind Farm lease. The underground infrastructure
of collection lines and the access roads are typical of the type of surface
restrictions mineral lessees regularly encounter. The Tribe has not
shown this court the presence of a specific impediment that
unreasonably interferes with its use of the surface for oil and gas
operations and marketing. The mere possibility that a dispute might
arise in the future is insufficient to merit an injunction of the Wind
Farm’s construction and operation.
Id. at *25–26.
27
The Court is aware of no new facts that require a different conclusion at this
time. The Parties disagree as to the size of the mining setback for each of the wind
towers in which new construction would be inhibited.1 Even accepting the
Plaintiff’s most generous figure of a 500-foot mining setback for each tower, the
total encumbered area would be a relatively small percentage of the leased surface
estate.2 Plaintiffs have also shown no evidence that any action has been taken
toward developing the relevant portions of the mineral estate. The Court concludes
that the mining setback created by the mere presence of the wind towers does not
constitute a continuing trespass.
E.
Support Provided by Backfill
Plaintiff and Plaintiff-Intervenor argue that the support provided for each
wind tower by the surrounding mineral estate and the backfill created from
extracted rocks is a continuing trespass. Pl.’s Br. at 8–9; Pl.-Interv.’s Resp. Defs.’
1
The Parties disagree as to whether the mining setback encompasses a 90-foot
radius or 500-foot radius for each tower. The 90-foot radius relates to the area in
which the wind towers receive structural support from the surrounding mineral
estate. The 500-foot radius relates to the area in which mineral development
would be potentially unsafe.
2
Assuming a 500-foot mining setback and that the foundation for each tower is 10
feet by 60 feet, the area affected for each tower would be 1,070,600 square feet
(1,010 ft2 x 1,060 ft2). For 84 wind towers, presuming that the setback areas do not
overlap, the maximum area affected would be 89,930,400 square feet
(1,070,600 ft2 x 84), which equates to approximately 2,064.52 acres
(89,930,400 ft2 / 43,560 ft2). Less than 25 percent of the leased 8,400 acres of
surface estate would be restricted.
28
Mot. Summary J. at 12–15. Defendants counter that Plaintiff and PlaintiffIntervenor over-extend the Tenth Circuit Court of Appeals’ holding in Osage
Wind. Defs.’ Resp. Pl.’s Mot. Summary J. at 9–10; Defs.’ Reply Pl.-Interv.’s
Resp. Defs.’ Mot. Summary J. at 3–6. Defendants argue that Osage Wind held that
the only conduct that required a lease was the crushing of rocks for backfill, and
because the use of the backfill to provide passive support for the wind turbines
does not involve acting upon to the minerals, it is not mining. Id. at 9–10.
Defendants also contend that surface owners have a right to support for structures
under Oklahoma law and federal regulations. Id. at 9–10.
In Osage Wind, the Tenth Circuit Court of Appeals adopted a broad meaning
of the terms “mining” and “mineral development” under the applicable regulations.
Section 211.3 defines “mining” as the “science, technique, and business of mineral
development[.]” 25 C.F.R. § 211.3. The court concluded that mining
encompasses more than just the commercialization and relocation of minerals.
Osage Wind, 871 F.3d at1089–90. The Osage Wind court explained that the
definition of § 211.3 “contemplates an activity that is aimed at developing
minerals.” Id. at 1090 (emphasis in original). The court acknowledged that the
Osage Act and regulations leave ambiguous what is meant by “develop” minerals,
but found the examples provided in § 211.3 informative. Id. at 1090–91. The
regulation provides that mining “include[s], but [is] not limited to: opencast work,
29
underground work, and in-situ leaching directed to severance and treatment of
minerals.” 25 C.F.R. § 211.3. Considering all elements of the list, the court held
that:
“mineral development” involves some action upon the minerals to take
advantage of them for some purpose. Because it is natural to construe
a definition in light of its examples, this suggests at the very least that
“mineral development” includes, but is not limited to, action upon the
minerals in order to exploit the minerals themselves.
Osage Wind, 871 F.3d at 1091. Based on this reading of the regulation, the Tenth
Circuit Court of Appeals concluded that Defendants “sorted the rocks, crushed the
rocks into smaller pieces, and then exploited the crushed rocks as structural support
for each wind turbine” and that these acts constituted mineral development. Id. at
1091–92 (emphasis in original).
Defendants suggest that the Court should interpret the holding of Osage
Wind narrowly. Defs.’ Resp. Pl.’s Mot. Summary J. at 7, 9–10; Defs.’ Reply Pl.Interv.’s Resp. Defs.’ Mot. Summary J. at 3–6. Defendants argue that the Tenth
Circuit Court of Appeals never held that passive support constituted mining, but
rather held that only the sorting and crushing of rocks were acts of mineral
development. Defs.’ Reply Pl.-Interv.’s Resp. Defs.’ Mot. Summary J. at 3–6;
Defs.’ Reply Pl.’s Resp. Defs.’ Mot. Summary J. at 7. Under this interpretation,
Defendants contend that there can be no continuing trespass because the relevant
acts of sorting and crushing of rocks ceased in 2014.
30
It appears that Defendants conflate the support provided by the surrounding
mineral estate and the support provided by the crushed rocks used as backfill. As
discussed above, the Court agrees that passive support provided by the surrounding
mineral estate is not an act of mineral development and cannot be the basis for
continuing trespass. As the Tenth Circuit Court of Appeals noted, “surface
construction activities may often implicate and disrupt the mineral estate—building
a basement or swimming pool necessarily involves digging a hole in the ground,
displacing rock and soil in the process” and “merely encountering or disrupting the
mineral estate does not trigger the definition of ‘mining’ under 25 C.F.R. § 211.3.”
Osage Wind, 871 F.3d at 1092. Oklahoma law also recognizes a right of surface
owners to lateral and subjacent support provided by neighboring land. See 60
Okla. St. § 66. The Court agrees that to hold that passive support provided to a
structure by the surrounding ground constituted mineral development requiring a
lease would be an unreasonable restriction on the rights of surface estate owners to
develop their property.
The Court does not agree with Defendants’ contention that the support
provided by backfill consisting of unlawfully mined minerals is equally innocuous.
The Tenth Circuit Court of Appeals held that mineral development “includes, but
is not limited to, action upon the minerals in order to exploit the minerals
themselves.” Osage Wind, 871 F.3d at 1091. Defendants’ argument attempts to
31
draw a distinction between those actions that involved some force altering the
natural shape and size of the rocks and the subsequent use of the altered materials.
See Tr. at. 27. In Osage Wind, the Tenth Circuit Court of Appeals described
Defendants’ actions in multiple ways. At times, the court described the project as
involving excavation, modification, and use of the minerals. See Osage Wind at
1081, 1091. At other points in the opinion, the court only referenced the sorting
and crushing of the rocks. See id. at 1091–92. Defendants contend that the Court
should look to the common denominator between all of the descriptions—sorting
and crushing—and conclude that the only activities deemed mining by the Tenth
Circuit Court of Appeals were those that altered the rocks. Tr. at 20–31, 57–60.
The Court does not read Osage Wind so narrowly to draw a distinction
between actively altering the minerals and subsequently using the minerals.
Defendants are correct that the Tenth Circuit Court of Appeals did not always
explicitly include the use of crushed rocks as backfill to support the wind towers in
its description of Defendants’ conduct. For example, the section of the Osage
Wind opinion considering whether Defendants’ actions constituted mining is titled
“Sorting and Crushing for Backfill Constitutes ‘Mineral Development.’” Osage
Wind, 871 F.3d at 1091. A reading of the opinion in its entirety, however, makes
clear that the court viewed Defendants’ actions in the totality. The final paragraph
of the preceding section describes Osage Wind’s mining actions as: “[i]t sorted the
32
rocks, crushed the rocks into smaller pieces, and then exploited the crushed rocks
as structural support for each wind turbine.” Id. (emphasis in original). The Tenth
Circuit Court of Appeals also observed specifically that the sorting and crushing of
rocks were done with the purpose of providing structural support for the wind
towers. Id. (“Osage Wind needed to stabilize these tall wind turbines, and
‘develop[ed]’ the removed rock in such a way that would accomplish that goal.
This constitutes “mining” as defined by § 211.3.”).
The Tenth Circuit Court of Appeals observed that, “at the very least[,]
‘mineral development’ includes, but is not limited to, action upon the minerals in
order to exploit the minerals themselves.” Id. at 1091 (emphasis added). The court
did not limit the exploitation of minerals to only the instance in which an outside
force is acting upon them. In this case, exploitation of the minerals did not end
with the crushing of rocks. It is undisputed that the minerals were pushed back
into the holes and actively incorporated into the construction of the wind turbines
as backfill. The structures continue to receive the benefit of that backfill support
today.
In their response to the Court’s request for additional information,
Defendants raise for the first time the argument that the continued use of the
extracted minerals as backfill falls under the exception to 25 C.F.R. § 211.3.
Defs.’ Resp. Pl.-Interv.’s Supp. Br. at 6–7 [Doc. 382]. 25 C.F.R. § 211.3 provides
33
that “when sand, gravel, pumice, cinders, granite, building stone, limestone, clay or
silt is the subject mineral, an enterprise is considered “mining” only if the
extraction of such a mineral exceeds 5,000 cubic yards in any given year.”
25 C.F.R. § 211.3. Defendants argue that because no extraction has occurred since
2014 and continued use is distinct from extraction, the use of the backfill since
2014 is not mining. Defs.’ Resp. Pl.-Interv.’s Supp. Br. at 6–7. The intent of the
exception is to exclude from the scope of mining small scale projects that displace
common minerals from the ground, such as the construction of a basement or
swimming pool. The exception does not operate to excuse mining activities in
which the exploitation of the extracted mineral persists longer than one year.
Before the Tenth Circuit Court of Appeals, the Parties agreed that the total volume
of minerals extracted from the mineral estate exceeded 5,000 cubic yards. Osage
Wind, 871 F.3d at 1089 n.9. At the time of their extraction, the minerals did not
fall under the exception, and the extraction was deemed by the Tenth Circuit Court
of Appeals to be mining under 25 C.F.R. § 211.3. The continued exploitation of
the extracted minerals beyond one year does not create a situation in which
Defendants can claim that their conduct became excluded under the exception
merely through the passage of time, and this Court rejects Defendants’ argument
accordingly.
34
As further support for a broad interpretation of “mineral development” that
includes the use of minerals as backfill for support, the Court recognizes the Indian
canon of interpretation that requires the Court to liberally construe ambiguity in
laws intended to benefit Indians in favor of Indians. See Milsap v. Andrus, 717
F.2d 1326, 1329 (10th Cir. 1983). As the Tenth Circuit Court of Appeals
observed, “[w]ithout question, the regulations at issue here are designed to protect
Indian mineral resources and ‘maximize [Indians]’ best economic interests.’”
Osage Wind, 871 F.3d at 1090 (second alteration in original). If ambiguity
remains in the scope of the meaning of “mineral development” under 25 C.F.R.
§ 211.3 and Osage Wind, the Indian canon of interpretation requires the Court to
balance its decision in favor of the Osage Nation’s interests. The Court concludes,
therefore, that Defendants’ use of crushed rocks as backfill for support falls within
the definition of “mining” and required a lease under 25 C.F.R. §§ 211 and 214.
The Court holds that Defendants are liable for continuing trespass because of the
continuing use of the minerals as backfill for support.
V.
Relief
Plaintiff claims that it is entitled to monetary damages resulting from
Defendants’ trespass for fair rental value, an accounting of any and all excavation
and mining work performed, and equitable relief in the form of ejectment of the
wind turbines. Pl.’s Br. at 9–15. Plaintiff-Intervenor asserts that the Court should
35
order the ejectment of the wind towers, but monetary damages are appropriate as
an alternative form of relief. Pl.-Interv.’s Br. at 13–18, 21–22. Defendants
contend that Plaintiff and Plaintiff-Intervenor have failed to demonstrate that they
are entitled to injunctive relief and that the calculation of damages must await a
trial. Defs.’ Br. at 18–25; Defs.’ Resp. Pl.-Interv.’s Mot. Summary J. at 14–25;
Defs.’ Resp. Pl.’s Mot. Summary J. at 12–25. For the reasons discussed below, the
Court will grant Plaintiff’s and Plaintiff-Intervenor’s request for damages and
injunctive relief. The Court orders that ejectment of the wind turbine farm is an
appropriate equitable remedy for continuing trespass. The Court orders that a
damages trial will be held to assess the amount of damages to be awarded for
trespass and conversion. The Court denies Plaintiff’s claim for an accounting.
A.
Damages
The Court concludes that Plaintiff and Plaintiff-Intervenor are entitled to
damages on their claims for trespass and conversion. The Parties disagree as to the
proper method of calculating damages. Plaintiff and Plaintiff-Intervenor urge the
Court to adopt the figure calculated by Steven Hazel in the amount of
$25,969,607.00. Pl.-Interv.’s Br. at 21–22; Pl.’s Br. at 9–13. Defendants ask the
Court to reject Hazel’s calculation and to instead adopt the calculations of either
Robert Freas or John Pfahl as the total value of the extracted minerals, which are
$247,979.42 and $68,993.00, respectively. Defs.’ Br. at 20–22; Defs.’ Resp. Pl.36
Interv.’s Mot. Summary J. at 18; Defs.’ Resp. Pl.’s Mot. Summary J. at 22–23.
Defendants also argue that the calculation of damages must take into consideration
Defendants’ alleged good faith reliance on the advice of counsel. Def.’s Resp. Pl.Interv.’s Mot. Summary J. at 19–24; Defs.’ Resp. Pl.’s Mot. Summary J. at 24–25.
Plaintiff challenges Defendants’ claim that they sought and relied on the advice of
counsel in deciding not to obtain the lease. Pl.’s Br. at 15–19. Specifically,
Plaintiff calls into question whether Defendants, or another party, solicited the
relevant advice and the scope of the question presented for counsel’s opinion. Id.
at 17–19. Because disputes of material fact exist regarding a monetary award,
summary judgment cannot be granted and a trial shall be set to determine damages.
B.
Accounting of Excavation and Mining Work
Plaintiff argues that it is entitled to an accounting from Defendants for the
profits derived from Defendants’ trespass. Pl.’s Br. at 13–14. Plaintiff previously
sought to file a Second Amended Complaint to modify its Prayer for Relief to seek
an accounting of revenues attributable to the wind farm, disgorgement, and unjust
enrichment. Pl.’s Mot. Leave File Second Am. Compl. [Doc. 98]. The Court
denied Plaintiff’s motion for leave to amend and concluded that the newly
requested relief did not relate to the mining, excavation, and other work that was
the subject of Plaintiff’s Amended Complaint and that permitting the amendment
37
would prejudice Defendants. Order and Opinion (Jul. 1, 2020) at 12–13 [Doc.
161].
Though Plaintiff’s renewed demand for an accounting of profits is arguably
more narrowly tailored to the trespass into the mineral estate, rather than the
entirety of the wind farm project, it suffers from the same defects as Plaintiff’s
earlier attempt to amend. Plaintiff’s Amended Complaint includes no reference to
claims against Defendants’ profits and Plaintiff has offered no explanation for why
an accounting was not previously sought. To allow Plaintiff to seek an accounting
now when it was not demanded in the Amended Complaint would unjustly
prejudice Defendants. Plaintiff’s claim for an accounting is denied.
C.
Permanent Injunction and Ejectment
Plaintiff and Plaintiff-Intervenor seek permanent injunctive relief in the form
of ejectment of the wind turbines. Pl.-Interv.’s Br. at 13–18; Pl.’s Br. at 14–15.
Defendants contend that Plaintiff and Plaintiff-Intervenor have not established that
a permanent injunction is appropriate in this case. Defs.’ Resp. Pl.-Interv.’s Mot.
Summary J. at 15–18; Defs.’ Resp. Pl.’s Mot. Summary J. at 13–19.
The Court may grant equitable relief against a party that is found liable for a
continuing trespass. See Fairlawn Cemetery Ass’n, 496 P.2d at 1187. Federal case
law has established a standard for courts to apply when considering equitable
relief. See Davilla, 913 F.3d at 973. It is not enough for a party to simply succeed
38
on the merits of their claim. Id. A court’s decision to enjoin a continuing trespass
must take into consideration: (1) whether the injunction is necessary to prevent
“irreparable harm;” (2) whether the harm caused by the continuing trespass
outweighs the harm that might be suffered by the enjoined party; and (3) whether
the injunction would adversely affect the public interest. Kitchen v. Herbert, 755
F.3d 1193, 1208 (10th Cir. 2014).
1.
Irreparable Harm
Plaintiff-Intervenor contends that permitting the wind turbines to remain in
place will cause the Osage Nation to suffer irreparable harm to its sovereignty and
its authority to manage the mineral estate. Pl.-Interv.’s Br. at 13–16. PlaintiffIntervenor contends that this harm cannot be remedied by a payment of money
damages. Id. at 15–16. Defendants contend that the only injury suffered by
Plaintiff was the loss of royalties that Plaintiff-Intervenor would have received if
Defendants had purchased backfill from one of the local quarries operating under a
lease. Defs.’ Resp. Pl.’s Mot. Summary J. at 14.
Irreparable harm is the type of injury that is:
certain, great, actual and not theoretical. Merely serious or substantial
harm is not irreparable harm. The party seeking injunctive relief must
show that the injury complained of is of such imminence that there is a
clear and present need for equitable relief to prevent irreparable harm.
It is also well settled that simple economic loss usually does not in and
of itself, constitute irreparable harm; such losses are compensable by
monetary damages.
39
Schrier v. Univ. of Co., 427 F.3d 1253, 1267 (10th Cir. 2005) (citations and
quotations omitted). Economic harms that can be compensated through an award
for monetary damages are not irreparable harms. Id.
Defendants contend that the crushing of rocks for backfill without a lease is
compensable through monetary damages and point to expert testimony offered by
Plaintiff quantifying damages in this case. Defs.’ Br. at 20–23. The Oklahoma
courts have adopted a method of damage calculation for compensating the
unauthorized extraction of minerals: market value of the minerals less the cost of
extraction. See Dilworth v. Fortier, 405 P.2d 38, 45 (Okla. 1964); Edwards v.
Lachman, 534 P.2d 670, 674 (Okla. 1974). Though this approach might be
appropriate in an ordinary commercial case, the Osage Mineral Council is not a
normal actor in the marketplace. The Osage Mineral Council is an extension of the
Osage Nation’s government and the Court must consider the non-economic
impacts of Defendants’ unlawful conduct on the Osage Nation’s tribal rights.
Plaintiff-Intervenor cites to multiple cases in support of its contention that
injury to an Indian tribe’s sovereignty can amount to irreparable harm. Pl.Interv.’s Br. at 13–16; see Prairie Band of Potawatomi Indians v. Pierce, 253 F.3d
1234 (10th Cir. 2001); Seneca-Cayuga Tribe of Okla., 874 F.2d 709; Winnebago
Tribe of Neb. v. Stovall, 216 F. Supp. 2d 1226 (D. Kan. 2002), aff’d, 341 F.3d
1202 (10th Cir. 2003); Sac and Fox Nation of Mo. v. LaFaver, 905 F. Supp. 904
40
(D. Kan. 1995). These cases are distinguishable from the facts before the Court in
that each involved a conflict between the authority of an Indian tribe and a state
government. Defendants are private actors and did not act under state authority or
in the furtherance of state policy.
The question left for the Court is whether the actions of private entities can
rise to the level of contesting the sovereignty of an Indian tribe. Courts have
recognized the Federal Government’s persistent policy of promoting selfgovernment by Indian tribes. See Iowa Mut. Ins. Co. v. LaPlante, 480 U.S. 9, 14
(1987). “Tribal authority over the activities of non-Indians on reservation lands is
an important part of tribal sovereignty.” Id. at 17. This includes the power of the
tribal government to exclude outsiders. See Norton v. Ute Indian Tribe of the
Uintah and Ouray Rsrv., 862 F.3d 1236, 1244–45 (10th Cir. 2017). “The tribe’s
‘traditional and undisputed power to exclude persons’ from tribal land, for
example, gives it the power to set conditions on entry to that land via licensing
requirements and hunting regulations.” Plains Commerce Bank v. Long Family
Land and Cattle Co., 554 U.S. 316, 335 (2008) (quoting Duro v. Reina, 495 U.S.
676, 696 (1990)).
Defendants were advised by the Bureau of Indian Affairs and the Osage
Mineral Council on multiple occasions that the wind farm project required a lease
related to the mineral estate. Pl.’s Br. at Ex. 20 (“BIA Letter of Oct. 9, 2014”);
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Pl.’s Br. at Ex. 21 (“OMC Letter”); Pl.’s Br. at Ex. 22 (“BIA Letter of Jul. 19,
2012”). Defendants failed to obtain the required lease. The Tenth Circuit Court of
Appeals held in 2017 that a lease was required. Osage Wind, 871 F.3d at 1087–93.
Even following the appellate court’s ruling, Defendants have taken no steps to
obtain a lease during the years following the appellate court’s opinion. On the
record before the Court, it is clear that Defendants are actively avoiding the leasing
requirement. Permitting such behavior would create the prospect for future
interference with the Osage Mineral Council’s authority by Defendants or others
wishing to develop the mineral estate. The Court concludes that Defendants’ past
and continued refusal to obtain a lease constitutes interference with the sovereignty
of the Osage Nation and is sufficient to constitute irreparable injury.
2.
Balance of Harms
In order for the Court to grant a permanent injunction, the harms suffered by
Plaintiff as a result of Defendants’ trespass must outweigh the harms that would be
suffered by Defendants if the relief were to be granted. On Plaintiff’s side of the
scale weighs the “paramount federal policy that Indians develop independent
sources of income and strong self-government.” See Seneca-Cayuga Tribe of
Okla., 874 F.2d at 716. This is balanced against Defendants’ claim that Osage
Wind would suffer the inevitable loss of hundreds of millions of dollars if the wind
towers were removed. Def.’s Resp. Pl.’s Mot. Summary J. at 15–17. Though the
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significant loss of money might be sufficient to outweigh a property owner’s
interests in a more common case of trespass, this case involves an infringement on
the self-governance of Indian lands. The Court is also cognizant of Defendants’
continuing trespass even after the Tenth Circuit Court of Appeals issued the Osage
Wind opinion, and the fact that Defendants have ignored opportunities to address
the failure to procure a lease over the last decade. Notably, the Tenth Circuit Court
of Appeals held in 2017 that Defendants were required to obtain a mining lease,
and the Supreme Court denied the appeal of the Tenth Circuit Court of Appeals’
decision in 2019, so for at least four years between 2019 and 2023, Defendants
have failed to obtain a lease in contravention of the court’s order. Based on these
considerations, the Court concludes that the balance of harms weighs in favor of
Plaintiff.
3.
Impact on the Public Interest
Plaintiff-Intervenor contends that ejectment would serve the public interest
by protecting the sovereignty of the Osage Nation. Pl.-Interv.’s Br. at 17–19.
Defendants argue that the removal of the wind turbines would result in the loss of
revenue for two local schools, jobs, income for the surface estate owners, and
renewable energy for 50,000 homes. Defs.’ Br. at 17–18.
The Court is not persuaded by Defendants’ argument. Because construction
of the wind farm has concluded, the only jobs that would be impacted by the
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removal of the wind towers are the 10 permanent employees of the wind farm.
Defs.’ Resp. Pl.’s Mot. Summary J. at 6; Pl.-Interv.’s Reply. Mot. Summary J. at 4;
see Pl.’s Reply Mot. Summary J. at 6; Wind Capital Grp., 2011 U.S. Dist. LEXIS
146407, at *16. The benefit to the local schools appears to be related to
Defendants’ tax obligations. Wind Capital Grp., 2011 U.S. Dist. LEXIS 146407,
at *16. There is no guarantee that such funding would continue or remain at
consistent levels in the future or that it would not be eclipsed by offsets or tax
benefits to Defendants. See Pl.’s Resp. Defs.’ Mot. Summary J. at 5. Similarly, it
is possible that the income that surface owners would derive from surface leases
could be replaced by leases with other parties wishing to develop the area if the
wind towers were removed.
Even if negative effects were to result, including the significant monetary
impact of hundreds of millions of dollars, such effects would not negate the public
interest in private entities abiding by the law and respecting government
sovereignty and the decisions of courts. Nor would those negative effects
overshadow the public interest in preserving the Osage Nation’s tribal sovereignty.
4.
Injunctive Relief
For the foregoing reasons, the Court orders injunctive relief in the form of
ejectment of the wind towers. The Court concludes that a permanent injunction is
appropriate relief for Defendants’ continuing trespass and failure to obtain a lease
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but the Court will allow input from the Parties as to timing of ejectment of the
wind farm. A trial on damages will be held forthwith to determine a monetary
award for trespass and conversion.
VI.
Motion to Strike and Motion to Exclude
Plaintiff has filed Plaintiff’s Motion to Strike, arguing that Centera’s
opinions are not relevant to the remaining issues in this case. Pl.’s Mot. Strike.
Defendants have filed Defendants’ Motion to Exclude, seeking to exclude Hazel’s
testimony as irrelevant and unreliable. Defs.’ Mot. Exclude.
The Federal Rules of Evidence provide that a qualified expert may provide
testimony that “will help the trier of fact to understand the evidence or to
determine a fact in issue.” Fed. R. Evid. 702(a). Hazel was retained by Plaintiff to
provide an assessment of damages suffered by the Osage Nation. Expert Report
Steven Hazel [Doc. 338-1]. Centera was retained by Defendants to respond to the
report prepared by Hazel on the calculation of damages. Expert Report Kimberlee
Centera [Doc. 200-1]. Her report addressed two questions: (1) “whether a
knowledgeable and experienced wind developer would have reasonably anticipated
that a lease from the mineral owner would be required prior to construction of the
project” and (2) “if a wind energy developer was clearly apprised prior to
construction commencing that a mining lease was required to engage in ordinary
turbine foundation excavation for a wind energy project, would the developer have
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[a] practical and effective alternative to using minerals so ‘mined’ from the mineral
estate in the construction of foundations for the Project.” Id. at 4.
Damages remain a live issue in this case. As the Parties have not yet
presented their evidence on damages at trial, Plaintiff’s Motion to Strike and
Defendants’ Motion to Exclude are premature. Both motions are deferred until the
damages trial.
CONCLUSION
The Court holds that no genuine issues of material fact exist for Plaintiff’s
and Plaintiff-Intervenor’s claims for declaratory relief regarding Defendants’
violation of 25 C.F.R. §§ 211 and 214. The Court also holds that no issues of
material fact exist as to the liability of Defendants Osage Wind, LLC, Enel Kansas,
LLC, and Enel Green Power North America, Inc. for the torts of trespass,
continuing trespass, and conversion. Summary judgment is appropriate on these
claims, monetary damages shall be awarded on the claims of trespass and
conversion after a damages trial, and equitable relief shall be awarded on the claim
of continuing trespass. The Court defers Defendants’ Motion to Exclude and
Plaintiff’s Motion to Strike until the damages trial.
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ORDER
ACCORDINGLY, IT IS HEREBY ORDERED THAT:
(1)
Plaintiff-Intervenor’s Motion for Summary Judgment [Doc. 294] is
granted in part as it pertains to the granting of declaratory, monetary,
and equitable relief against Defendants Osage Wind, LLC, Enel
Kansas, LLC, and Enel Green Power North America, Inc. and denied
in part as it pertains to the calculation of damages and fees.
(2)
Defendants’ Motion for Partial Summary Judgment [Doc. 297] is
denied.
(3)
Plaintiff United States’ Motion for Summary Judgment [Doc. 300] is
granted as it pertains to the granting of declaratory, monetary, and
equitable relief against Defendants Osage Wind, LLC, Enel Kansas,
LLC, and Enel Green Power North America, Inc. and denied in part as
it pertains to the calculation of damages and fees and an accounting.
(4)
Plaintiff United States’ Motion to Strike the Testimony of
Defendants’ Expert Witness Kimberlee Centera [Doc. 290] is
deferred.
(5)
Defendants’ Motion to Exclude the Testimony of Plaintiff United
States’ Expert Witness Steven J. Hazel [Doc. 337] is deferred.
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(6)
Trial will be scheduled on the issue of damages. The Court will
contact the Parties to arrange a status conference to discuss trial
scheduling and pre-trial matters.
IT IS SO ORDERED this 20th day of December, 2023.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves
U.S. District Court Judge*
*
Judge Jennifer Choe-Groves, of the United States Court of International Trade,
sitting by designation.
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