United States of America v. Osage Wind, LLC et al
Filing
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OPINION AND ORDER by Judge James H Payne ; denying 24 Motion for Partial Summary Judgment; denying 25 Motion to Accelerate/Extend/Reset Hearing(s)/Deadline(s); finding as moot 26 Motion to Dismiss; granting 26 Motion for Summary Judgment; denying 39 Motion to Strike Document(s); denying 42 Motion to Strike Document(s) (pll, Dpty Clk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA,
Plaintiff,
v.
(1) OSAGE WIND, LLC;
(2) ENEL KANSAS, LLC; and
(3) ENEL GREEN POWER NORTH
AMERICA, INC.,
Defendants.
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Case No. 14-CV-704-JHP-TLW
OPINION & ORDER
Before the Court are Defendants’ Motion to Dismiss or for Summary Judgment [Doc.
No. 26] and Plaintiff’s Motion for Partial Summary Judgment as to Counts I and II of the
Amended Complaint [Doc. No. 24]. After consideration of the briefs, and for the reasons stated
below, Defendants’ Motion is GRANTED and Plaintiff’s Motion is DENIED.
BACKGROUND
I.
Factual Background
The material facts are undisputed. Defendant Osage Wind, LLC (“Osage Wind”) has
engaged in constructing the Osage Wind Farm Project (“the Project), a wind farm constructed in
Osage County, Oklahoma. [Doc. No. 17-1, at ¶ 3 (Declaration of Bill Moskaluk)]. The Project
is undertaken pursuant to leases of approximately 8,400 acres of privately owned fee surface
estate lands. [Id. at ¶ 5]. Once completed, the Project will consist of 84 turbines, underground
collection lines running between turbines and a substation, one overhead transmission line, two
permanent meteorological towers, and access roads, with the total footprint covering
approximately 1.5% of the 8,400 acres of leased property. [Id. at ¶ 9].
1
The turbine foundations are made from concrete, with each foundation measuring
approximately 10 feet deep and between 50 and 60 feet in diameter. [Id. at ¶¶ 15(a)(i)-(ii)]. For
each turbine foundation, Osage Wind excavated soil, sand, and rock of varying shapes and sizes.
[Id. at ¶ 15(a)(i)]. Rock pieces that were larger than three feet long were stockpiled beside the
hole and remain in place. [Id.]. Excavated rock pieces that were less than three feet long were
crushed to a size of roughly three inches or smaller. [Id. at ¶ 15(a)(ii)]. Once the foundation for
a turbine was poured and cured, the crushed rock, sand, and soil excavated from the hole were
pushed back into the foundation site from which they came and compacted into the excavated
site. [Id. at ¶ 15(a)(iv)].
The excavated soil, sand, and rock were not used for any purpose other than to return
them to the hole from which they came. [Id. at ¶ 15(a)(v)]. None of the excavated soil, sand, or
rock was moved to or used at another location, except for backfilling purposes. [Id.]. None of
the excavated sand, soil, or rock was used to mix or prepare the concrete for any foundation.
[Id.]. No excavated material was sold or used for any commercial purpose. [Id. at ¶ 15(a)(vi)].
II.
Procedural History
In 2011, the Osage Nation, acting through the Osage Minerals Council, filed a Complaint
for Declaratory and Injunctive Relief against Osage Wind and other defendants in the Northern
District of Oklahoma. [Doc. No. 2 in Case No. 11-CV-643-GKF-PJC] (the “Prior Litigation”).
The U.S. Government was not a party to the Prior Litigation. [Doc. No. 37 in Case No. 11-CV643-GKF-PJC]. In the Prior Litigation, the Osage Nation sought to prevent interference with its
oil and gas rights guaranteed by 25 C.F.R. § 226, as a result of digging incident to the
defendants’ planned wind energy project.
On December 20, 2011, Chief Judge Frizzell
dismissed the Prior Litigation on the merits. [Id.].
2
Plaintiff, the United States of America (“Plaintiff” or “United States”), filed this action
on November 21, 2014.
[Doc. No. 2].
In the First Amended Complaint for Declaratory
Judgment and Damages, Plaintiff alleges the Defendants’ construction activities interfere with
the Osage Nation’s reserved mineral rights, and Defendants failed to obtain the necessary prior
approvals before excavating the turbine foundations for the Project. [Doc. No. 20]. Specifically,
Plaintiff asserts Defendants violated 25 C.F.R. § 211.48, which prohibits “exploration, drilling,
or mining operations on Indian land” without obtaining permission from the Secretary of the
Interior (“Secretary”), and 25 C.F.R. § 214.7, which forbids “mining or work of any nature” on
reserved Osage County land unless a mineral lease covering such land is approved by the
Secretary.
[Id.].
Plaintiff alleges “Defendants initiated excavation work and substantial
disturbance and invasion of the mineral estate” without obtaining the required prior approvals or
appropriate lease. [Id.].
The First Amended Complaint alleges five counts, all of which hinge on whether the
Defendants violated 25 C.F.R. § 211 and/or 25 C.F.R. § 214. Count I seeks a declaration
regarding the applicability and violation of 25 C.F.R. § 211 as to Defendants’ construction
activities. Count II seeks a declaration regarding the applicability and violation of 25 C.F.R. §
214 as to Defendants’ construction activities.
On December 19, 2014, Plaintiff filed a Motion for Partial Summary Judgment as to
Counts I and II of the Amended Complaint, along with a Motion for Expedited Consideration.
[Doc. Nos. 24, 25]. On December 29, 2014, Defendants filed a Motion to Dismiss or for
Summary Judgment.
[Doc. No. 26].
On March 27, 2015, Defendants filed a Notice of
Supplemental Authority [Doc. No. 38], which Plaintiff moved to strike as improperly filed [Doc.
No. 39]. On July 14, 2015, Defendants filed a Notice to the Court, advising construction of the
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Osage Wind Farm has been completed and the Wind Farm has commenced commercial
operation. [Doc. No. 41]. Plaintiff also moved to strike Defendants’ second Notice as improper.
[Doc. No. 42]. The pending motions are now fully briefed and ripe for review.
DISCUSSION
To resolve the dispositive motions at issue, the Court must consider facts outside the
pleadings, specifically, the documents and affidavits accompanying the parties’ briefing. 1 For
this reason, the summary judgment standard applies. As a general rule, summary judgment is
appropriate where “the pleadings, depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c). An
issue is genuine if the evidence is such that “a reasonable jury could return a verdict for the
nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A fact is
material if it “might affect the outcome of the suit under the governing law.” Id. In making this
determination, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences
are to be drawn in his favor.” Id. at 255. Thus, the inquiry for this Court 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.” Id. at 251-52.
The central issues of this case are (1) whether the doctrine of res judicata bars the United
States’ claims in this matter, and (2) the proper interpretation of the scope and meaning of 25
C.F.R. Parts 211 and 214. With all material facts regarding Defendants’ excavation processes
being undisputed, this case presents a pure question of law that is appropriately decided on
summary judgment. Plaintiff contends Osage Wind’s extraction and use of limestone, dolomite,
1
Defendants objected to Plaintiff’s submission of Exhibits 1-3 attached to its Motion for Partial Summary Judgment
as not properly authenticated. In response, Plaintiff submitted an affidavit from Mary Jeannine Hale verifying the
authenticity of Exhibits 1-3. Accordingly, Plaintiff’s objection is moot.
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and other sedimentary minerals from the Osage mineral reserve to facilitate the placement of
wind turbine foundations require approval from the Bureau of Indian Affairs (“BIA”) and a lease
between Defendants and the Osage Nation that is accepted by the BIA. [Doc. No. 24, at 4].
Plaintiff argues Osage Wind’s failure to obtain the proper approvals and persistence with its
excavation and extraction activities amount to violations of Parts 211 and 214. Defendants
contend Osage Wind’s construction activities do not constitute “mining” for purposes of the
regulations and therefore no lease or permit pursuant to either regulation is required. [Doc. No.
26]. Defendants further contend the final judgment in the Prior Litigation bars the United States’
claims in this action under the doctrine of res judicata.
III.
Res Judicata
As a threshold matter, the Court will address Defendants’ argument that the doctrine of
res judicata bars the United States’ First Amended Complaint. “‘Under res judicata, or claim
preclusion, a final judgment on the merits of an action precludes the parties or their privies from
relitigating issues that were or could have been raised in the prior action.’” Wilkes v. Wyo. Dep’t
of Emp’t Div. of Labor Standards, 314 F.3d 501, 503-04 (10th Cir. 2002) (quoting Satsky v.
Paramount Comm., Inc., 7 F.3d 1464, 1467-68 (10th Cir. 1993)). To apply res judicata, three
elements must be present: “‘(1) a final judgment on the merits in an earlier action; (2) identity of
parties or privies in the two suits; and (3) identity of the cause of action in both suits.’” Id. at
504 (quoting King v. Union Oil Co., 117 F.3d 444-45 (10th Cir. 1997)) (alterations omitted).
Here, Defendants’ argument that res judicata bars the United States’ action fails on the
second element. 2 Defendants assert the United States is in privity with the plaintiff in the Prior
Litigation, the Osage Nation, and is therefore bound by the final judgment on the merits in the
Prior Litigation. Preclusion is in order “when a person who did not participate in a litigation
2
It is undisputed the Prior Litigation reached a final judgment on the merits.
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later brings suit as the designated representative of a person who was a party to the prior
adjudication.” Taylor v. Sturgell, 553 U.S. 880, 894-95 (2008). Here, the United States is acting
as the trustee with respect to the Osage Nation and its mineral estate, with the Osage Nation as
the beneficiary. [Doc. No. 20, at ¶ 4]. However, it is settled law that when the United States is
acting on behalf of an Indian tribe, the United States cannot be bound by a prior action brought
by the tribe in which the United States did not participate. This is the case because, when the
United States litigates on behalf of Indians, it is both acting formally as a trustee and “asserting
its own sovereign interest in the disposition of Indian lands.” United States v. Jicarilla Apache
Nation, 131 S. Ct. 2313, 2324 (2011) (citing Heckman v. United States, 224 U.S. 413, 445
(1912)). In effect, “the Government assumed a fiduciary role over the Indians not as a commonlaw trustee but as the governing authority enforcing statutory law.” Id. Here, the United States
is protecting the Osage Nation’s interest in the mineral estate while also enforcing the federal
Osage Allotment Act and federal regulations that protect Osage mineral rights.
Therefore, the Prior Litigation, which the Osage tribe brought to protect its interest in the
land on which Osage Wind built the wind farm, does not bind the United States in protecting its
own sovereign interest in such land. See, e.g., Minnesota v. United States, 305 U.S. 382, 386 n.1
(1939) (“In the case of patents in fee with restraints on alienation it is established that an
alienation of the Indian’s interest in the lands by judicial decision in a suit to which the United
States is not a party has no binding effect but that the United States may sue to cancel the
judgment and set aside the conveyance made pursuant thereto.”); United States v. Candelaria,
271 U.S. 432, 443-44 (1926) (United States’ interest in protecting Indian land rights “cannot be
affected by . . . a judgment or decree” “where the United States has not authorized or appeared in
the suit”); Choctaw and Chickasaw Nations v. Seitz, 193 F.2d 456, 459 (10th Cir. 1952), cert.
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denied 343 U.S. 919 (1952) (noting Supreme Court precedent “clearly recognized the rights of
restricted Indians and Indian tribes or pueblos to maintain actions with respect to their lands,
although the United States would not be bound by the judgment in such an action, to which it
was not a party, brought by the restricted Indian or an Indian tribe or pueblo.”).
Although Defendants correctly note that where the United States has litigated an issue
affecting an Indian tribe, the tribe may not re-litigate the matter, see Nevada v. United States,
463 U.S. 110, 135 (1983), the reverse is not true. Bryan County, Oklahoma v. United States, 123
F.2d 782, 786 (10th Cir. 1941), cert. denied 315 U.S. 819 (1942) (concluding that, although a
prior judgment “operated to estop the [Indian] allottees from asserting a claim in their own
right,” “this in nowise affects the right of the United States to maintain this suit” both as “a
guardian of the Indians to enforce an agreement creating a vested right in the Indians” and “in its
own behalf as a sovereign right.”).
Moreover, it is well established the United States “‘must have a laboring oar in a
controversy’” to be bound by prior litigation in which it was not formally a party. United States
v. Power Eng’g Co., 303 F.3d 1232, 1240 (10th Cir. 2002), cert. denied, 538 U.S. 1012 (2003)
(quoting Drummond v. United States, 324 U.S. 316, 318 (1945)). The United States bears the
“laboring oar” when it “‘assume[s] control over litigation.’” Id. (quoting Montana v. United
States, 440 U.S. 147, 154 (1979)). Here, the United States did not bring the Prior Litigation and
there is no evidence the United States “assumed control” over it. See Montana, 440 U.S. at 155
(listing seven factors to consider in determining whether the United States assumed control over
an action).
Because the United States cannot be bound by the Prior Litigation under the second
element of the test for claim preclusion, the Court need not address the third element—whether
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the same issues in this case were or could have been decided in the Prior Litigation.
Accordingly, the Court will proceed to address the merits of the case.
IV.
Osage Mineral Leasing—Statutory and Regulatory Background
In 1906, Congress passed the Osage Allotment Act, which severed the mineral estate
from the surface estate in Osage County, Oklahoma, and placed it in trust for the Osage Nation.
Osage Allotment Act of 1906 (“Osage Act”), ch. 3572, 34 Stat. 539, § 3; Osage Nation v. Irby,
597 F.3d 1117, 1120 (10th Cir. 2010). Under the Osage Act, the affected surface lands could be
alienated, subject to restrictions, Osage Act, § 2(7), and owners of such surface land were
granted “the right to use and to lease said lands for farming, grazing, or any other purpose not
otherwise specifically provided for herein.”
Osage Act, § 7.
The Osage Act further
contemplated uses of the surface estate that included “houses, orchards, barns, or plowed land.”
Osage Act, § 2(2).
Those same lands, however, were also subject to leasing for mineral exploitation by the
Osage Nation, with the approval of the Secretary and “under such rules and regulations as he
may prescribe.” Id. at § 3. Although the reservation of the mineral estate to the Osage Nation
originally lasted only twenty-five years, the reservation currently runs “in perpetuity.” Act of
Oct. 21, 1978, Pub. L. No. 95-496, 92 Stat. 1660, § 2. As a result, the surface lands of the
Project site may be privately held and properly leased to Defendants, while the underlying
mineral estate remains subject to a separate mineral lease secured from the BIA and the Osage
Nation.
Pursuant to its rulemaking authority, the Department of Interior (“DOI”) promulgated 25
C.F.R. Parts 211 and 214. Part 211 governs the development of reserved Indian tribal solid
mineral resources generally, while Part 214 implements the Osage Act and applies specifically to
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the Osage mineral estate. Plaintiff alleges Defendants’ construction activities violated both of
these regulations.
Specifically, Plaintiff alleges violation of § 211.48(a), which prohibits
“exploration, drilling, or mining operations on any Indian lands” without first obtaining a
mineral lease or permit, and § 214.7, which prohibits “mining or work of any nature” in affected
areas of Osage County without first obtaining a lease from the Secretary.3
Therefore,
Defendants’ liability turns on the proper interpretation of these two regulations.
V.
Osage Wind’s Construction Activities Do Not Violate 25 C.F.R. § 211
A.
“Mining” Is Limited to Commercial Mineral Development
Plaintiff contends Defendants engaged in “mining” under Part 211, which required
Defendants to obtain a mineral lease or permit. Section 211.3 defines “mining” 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.
Plaintiff argues Defendants’ “extensive extraction, handling, sorting, crushing, and utilization of
minerals,” which were incident to construction of a large-scale commercial wind farm operation,
amounted to the “science, technique, and business of mineral development” under the regulation.
[Doc. No. 24, at 9]. However, it is clear to the Court that “mineral development” covers the
activities of an entity engaged in the science, technique, and business of developing minerals, not
those of an entity that incidentally encounters minerals in connection with surface construction
3
25 C.F.R. § 211.48(a) provides in full: “No exploration, drilling, or mining operations are permitted on any Indian
lands before the Secretary has granted written approval of a mineral lease or permit pursuant to the regulations in
this part.” The first sentence of 25 C.F.R. § 214.7 provides: “No mining 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.”
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activities. In other words, a commercial mineral development purpose is required to invoke the
leasing requirements of § 211.48.
The Court reaches this conclusion for several reasons. First, each of the key terms used
in § 211.3 under the limitation of “including but not limited to” relates to the phrase “mineral
development,” and each term refers to a specific method of extracting minerals for commercial
purposes—opencast work, underground work, and in-situ leasing directed to severance and
treatment of minerals. Other terms that would fall within the scope of “including but not limited
to” must be of the same character. See Bloate. v. United States, 559 U.S. 196, 209 (2010)
(rejecting a broad reading of the phrase “including but not limited to” on the ground that “such a
reading would violate settled principles of statutory construction because it would ignore the
structure and grammar of [the statute], and in so doing render even the clearest of the
subparagraphs indeterminate and virtually superfluous.”).
Thus, excavating minerals
incidentally to construction is not contemplated by the term “mineral development.”
Second, contrary to Plaintiff’s assertion, the term “opencast work” refers to a method of
mining with a purpose of developing the excavated material. The Bureau of Mines defines
“opencast method” in relevant part as a “mining method consisting of removing the overlying
strata or overburden, extracting the coal, and then replacing the overburden.” U.S. Bureau of
Mines, Dictionary of Mining, Mineral, and Related Terms 2171 (U.S. Dep’t of the Interior 2d ed.
1996). “Opencast” is defined as “[a] working in which excavation is performed from the
surface. Commonly called open pit.” Id. These definitions make it plain that opencast mining
involves the extraction of mining material for the purpose of using it elsewhere.4 This activity is
fundamentally different from the excavation and backfilling activities in which Osage Wind
4
The Tenth Circuit has found it “helpful to refer to dictionary definitions” in matters of statutory interpretation.
Chickasaw Nation v. United States, 208 F.3d 871, 876 (10th Cir. 2000).
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engaged in constructing the wind farm. Accordingly, Defendants’ activities did not constitute
“opencast work.”
Third, other subsections of Part 211 confirm “mineral development” refers only to
mineral development for commercial purposes. For example, § 211.27 provides an initial lease
term of ten years which, “absent specific lease provisions to the contrary, shall continue as long
thereafter as the minerals specified in the lease are produced in paying quantities.” (emphasis
added). Further, Section 211.47(a) provides the lessee shall “[e]xercise diligence in mining . . .
on the leased lands while mineral production can be secured in paying quantities.” (emphasis
added). These provisions presuppose that “mining” subject to a lease under Part 211 results in
the commercial development of minerals. Perhaps tellingly, the United States fails to address the
meaning of these provisions or how they could be squared with a broader definition of “mining”
that would cover excavation incident to construction.
Additionally, the definition of “lease” in § 211.3 does not further Plaintiff’s cause. The
regulation defines “lease” as “any contract approved by the United States . . . that authorizes
exploration for, extraction of, or removal of any minerals.” Plaintiff takes this definition to mean
that a lease is required for any exploration, extraction, or removal of any minerals. However, §
211.48 is the operative provision that states when a lease is required, which is prior to any
“exploration, drilling, or mining operations.” As discussed above, Defendants’ construction
activities do not fall within the definition of “mining.”
Further, the Indian Mineral Development Act of 1982, 25 U.S.C. § 2102, does not offer
support to Plaintiff’s argument that mineral “development” encompasses mere extraction and
processing. In § 2102, Congress provided that tribes could, subject to the Secretary’s approval,
enter into joint ventures, leases, or other agreements “providing for the exploration of, or
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extraction, processing, or other development of . . . mineral resources” or “providing for the sale
or other disposition of the production or products of such mineral resources.” (emphasis added).
According to a plain reading, § 2102 refers to agreements with tribes for the “development” of
mineral resources.
Nowhere does it indicate that incidental excavation and backfilling of
minerals amounts to extraction and processing for “development” purposes, as contemplated by
§ 2102.
Though Plaintiff correctly points out that the regulation should be read broadly in favor
of the Osage Nation, Plaintiff’s interpretation of “mining” would cover such a broad range of
activity as to render the term meaningless. This cannot have been the regulators’ intent, and the
Court declines to read the regulation as broadly as Plaintiff proposes. Accordingly, the Court
concludes Defendants did not engage in “mining” under 25 C.F.R. Part 211.
B.
The “De Minimus” Exception Does Not Apply to Defendants’ Activities
Nor did Defendants engage in “mining” by virtue of the amount of minerals extracted
during Osage Wind’s construction activities. Plaintiff argues the final provision in § 211.3’s
definition of mining applies to Defendants’ activities because Defendants’ “extraction” of
common minerals such as sand, limestone, and silt exceeded 5,000 cubic yards in one year.5
Plaintiff argues the use of the term “extraction” in § 211.3 means that whether common minerals
are being “mined” turns on the total volume of “extracted” minerals, not whether the extraction
5
The Court notes its skepticism with the United States’ conclusory assertion that Defendants extracted more than
5,000 cubic yards in a year. While the Court agrees Defendants excavated more than 5,000 cubic yards of minerals
across the 84 turbine foundations, the Court is not convinced that the 5,000 cubic yard threshold is meant to apply
across all excavations done by a single entity. The Project’s 84 turbines span across 8,400 acres, and no single
foundation hole would satisfy the 5,000 cubic yard threshold. By Plaintiff’s own math, Defendants likely excavated
only around 720 cubic yards of material per foundation. It strains logic to conclude that the regulators intended the
5,000 cubic yard threshold to apply across all holes excavated by one entity, no matter how far apart or how many
surface estates are covered. The United States has failed to provide any rationale for aggregating all 84 turbine sites
in concluding Defendants’ excavations exceeded the 5,000 cubic yard threshold.
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is for any a commercial purpose or indeed, any particular purpose. [Dkt. 24, at 11-12; Dkt. 29, at
8].
However, Plaintiff’s broad interpretation of the “de minimus” exception does not square
with other provisions in the regulation. Specifically, Plaintiff’s interpretation does not account
for the definition of “permit” in Section 211.3, which states, “Permit means any contract issued
by the superintendent and/or area director to conduct exploration on; or removal of less than
5,000 cubic yards per year of common varieties of minerals from Indian lands.” (emphasis
added). By reading the definitions of “mining” and “permit” together, it becomes clear that the
5,000 cubic yard threshold applies only to extraction or removal of common minerals for
development purposes. A broader reading would mean that any time a surface owner digs a hole
on his or her land that would disturb any quantity of common minerals, he or she would have to
obtain either a permit or a lease for any digging and backfilling. A broader reading would also
mean that every proposed construction project in Osage County that requires digging and
backfilling, including building a single-family home, multi-family apartment building,
commercial building, or septic tank, would be subject to approval by the Osage Nation. The
United States does not allege this is the case in Osage County, and the Court will not impose
such a requirement.
The Court’s narrower reading of the “de minimus” exception, which requires a mineral
development purpose, is bolstered by the agency’s statements during rulemaking: “[c]ommon
varieties of mineral resources extracted in small amounts are excluded from the definition of
mining, especially because the purpose of such extraction is often for local and/or tribal use.
However, permits for these small operations are still reviewed and approved at the
superintendent’s office.” 61 Fed. Reg., 35,634, 35,640 (July 8, 1996) (emphasis added). The
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agency’s statement focuses on the “purpose” for extracting and using the minerals, and the
agency’s use of the term “operations” indicates a permit is required only when minerals are
being used for some purpose other than extraction and backfilling incident to surface
construction.
Accordingly, the “de minimus” exception in Part 211 does not apply to
Defendants’ construction activities. Plaintiff’s claim that Defendants violated 25 C.F.R. § 211
fails as a matter of law.
VI.
Osage Wind’s Construction Activities Do Not Violate 25 C.F.R. § 214
Plaintiff contends Defendants engaged in “mining or work of any nature” in Osage
County without securing a lease from the Secretary of the Interior, in violation of 25 C.F.R. §
214.7. “Mining” is not defined in Part 214. However, as discussed above, under the instructive
definition of “mining” found in 25 C.F.R. § 211.3, Defendants’ excavation activities do not
constitute “mining.”
Plaintiff separately asserts Defendants’ activities amount to “work of any nature” under §
214.7 because of Defendants’ large-scale excavation that “necessarily, purposefully, and
repeatedly requires invasion and conversion of the sub-surface minerals.” [Doc. No. 29, at 4].
Plaintiff points out that without the limestone and rock materials found in place, “Defendants
would have had to purchase backfill materials elsewhere or negotiate a lease with the Osage tribe
providing recompense for the backfill materials mined from the mineral estate.” [Id. at 4-5]. In
other words, Plaintiff argues both the large-scale displacement of minerals and the backfilling of
minerals amount to “mining or work of any nature,” even if Defendants did not move the
extracted material offsite or sell this material. [Doc. No. 24, at 6-7]. To bolster its argument,
Plaintiff points to negotiations that took place between a contractor for the Oklahoma
Department of Transportation (“ODOT”) and the DOI for a Sandy Soil Permit or Lease, when
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the contractor performed roadwork on U.S. Highway 60 that required excavation and backfilling
of minerals. [Id. at 7; Doc. No. 24-1]. In this regard, Plaintiff attaches an unexecuted “Sandy
Soil Lease” between the Osage Nation and ODOT. [Doc. No. 24-2].
Although on its face, the phrase “work of any nature” is not limited to mining work, in
context it was plainly intended to mean mining-related exploration and construction.
Specifically, applying § 211.3’s definition of “mining” to Part 214’s regulations using the
doctrine of in pari materia,6 the Court concludes the activities requiring a Part 214 lease are
those that are defined as “mining” in Part 211, and not “work of any nature” unrelated to mining.
As discussed above, § 211.3 defines “mining” by reference to commercial “mineral
development.” Thus, Part 214 requires a lease only for work related to “mining” as defined in
Part 211. “Work of any nature,” read in isolation, could describe any kind of “work,” but the
phrase takes meaning when read as work related to “mineral development.”
The Court finds Plaintiff’s interpretation of the phrase “work of any nature” to be overly
broad and impractical, particularly in light of the permissible uses of the surface estate that may
involve disturbing underlying minerals. The 1906 Osage Act contemplated uses of the surface
estate that included “houses, orchards, barns, or plowed land,” all of which would necessarily
involve some incidental digging and backfilling of minerals, but none of which, according to the
record before the Court, require a lease or permit from the BIA prior to construction. Osage Act,
§ 2(2). Further, the United States acknowledges that Part 214 has “not precluded the building of
the many houses, ranches, commercial business, water towers and sports fields already existing
6
In pari materia is a canon of construction pertaining to related statutes. Statutes that are in pari materia “may be
construed together, so that inconsistencies in one statute may be resolved by looking to another statute on the same
subject. BLACK’S LAW DICTIONARY (10th ed. 2-14). The rule means that “a legislative body generally uses a
particular word with a consistent meaning in a given context. Thus, for example, a later act can be regarded as a
legislative interpretation of an earlier act in the sense that it aids in ascertaining the meaning of the words as used in
their contemporary setting and is therefore entitled to great weight in resolving any ambiguities and doubts.”
Erlenbaugh v. United States, 409 U.S. 239, 243-44 (1972) (citation, quotation marks, and alterations omitted).
15
in Osage County.” [Dkt. 29 at 10]. Despite this acknowledgment, the United States fails to offer
any practical measure of when a surface use infringes on the mineral rights.
Moreover, Part 214 is silent as to leasing requirements for any activity other than mining,
which is reflected in the title of Part 214, “Leasing of Osage Reservation Lands, Oklahoma, for
Mining, Except Oil and Gas.” See United States v. Hernandez, 655 F.3d 1193, 1197 (10th Cir.
2011) (noting that legislative titles may be helpful when interpreting ambiguous statutory
language). Further, the title of Part 214.7 itself refers to “operation,” which suggests a reference
to a mining operation, rather than any surface activity that requires digging and backfilling.
Other sections of Part 214 bolster the Court’s conclusion that “mining or work of any
nature” is limited to mining operations and mining-related activities. See 25 C.F.R. § 214.13
(“Lessees shall exercise diligence in the conduct of prospecting and mining operations”); 25
C.F.R. 214.14(a) (“Lessees may use so much of the surface of the leased land as shall be
reasonably necessary for the prospecting and mining operations and buildings required by the
lease.”) (emphasis added); 25 C.F.R. § 214.10(d) (for “substances other than gold, silver, copper,
lead, zinc, coal, and asphaltum the lessee shall pay quarterly a royalty of 10 percent of the value
at the nearest shipping point of all ores, metals or minerals marketed.”). In light of the language
of the Osage Act, and as a matter of common sense, the drafters of Part 214 could not have
intended to require BIA approval prior to any surface use that requires incidental digging and
backfilling.
The Tenth Circuit’s decision in Millsap v. Andrus, 717 F.2d 1326 (10th Cir. 1983), does
not require a different conclusion. In Millsap, the Tenth Circuit considered the extent to which
the Osage hard mineral estate included common rock, such as limestone or dolomite, and
concluded such minerals were indeed reserved to the mineral estate. Importantly, however, the
16
offending party in Millsap was excavating minerals for a commercial purpose, namely, selling
the limestone as road base. Id. at 1327 n.1. By contrast, Osage Wind backfilled the excavated
materials into the hole from which they came or left them on the surface beside the hole. The
limestone and other excavated materials were not developed, moved offsite for use elsewhere, or
sold at a profit. As a result, Osage Wind’s excavating and replacing the materials at the same
location did not affect any right of the mineral estate owner, which distinguishes it from the
commercial activity addressed in Millsap.
The Court is also not guided toward a different conclusion by the proffered lease
negotiations between ODOT and the DOI in connection with road work. Besides the fact that
the attached lease is unsigned, and besides the fact that the attached negotiation letters refer
confusingly to both a “permit” and a “lease,” [see Docs. 24-1, 24-2], these documents do not
persuade the Court that a lease is required under § 214.7 for mere excavation and backfilling. At
best, the evidence merely reflects that a single road contractor agreed to pay for excavation of
roadway materials.
The United States has failed to identify any prior administrative
interpretation of Part 214 (or Part 211) requiring a mineral lease or permit for otherwise lawful
excavation incident to surface construction. In short, the United States does not suggest that its
interpretation of Part 214 is a longstanding one that deserves any deference.
Although the United States denies this consequence, the United States’ broad reading of
Part 214 would require every proposed excavation in Osage County—including basements,
house foundations, septic tanks, and football fields—to secure a mineral lease under Part 214.
This was not Congress’ intent in enacting the Osage Act. The Osage Act took the former surface
estate out of reservation status and transitioned it to fee ownership. The Osage Act contemplated
that the surface estate be used for various purposes, “for farming, grazing, or any other purpose
17
not otherwise specifically provided for herein.” Osage Act, § 7 (emphasis added). This intent
would be defeated if any construction requiring excavation on privately held surface lands in
Osage County were subject to the leasing requirements of Part 214.
Osage Wind excavated holes to build foundations and then replaced the minerals or left
them on the surface. Such use is consistent with Congress’ contemplated use of the surface
estate. Here, the mineral owner has lost nothing because the excavated minerals are replaced and
not used for any purpose. Defendants have not marketed or sold minerals or otherwise engaged
in mineral development. As a result, they are not required to obtain a lease under Part 214 for
their lawful surface construction activities. Plaintiff’s claim that Defendants violated 25 C.F.R. §
214 fails as a matter of law. 7
VII.
No Deference to the United States’ Interpretations of Parts 211 and 214 Is Required
In this case, the Court finds no deference to the United States’ interpretation of the
federal regulations in Parts 211 and 214 is required. Plaintiff is correct that an agency is entitled
to deference “when it adopts a reasonable interpretation of regulations it has put in force.” Fed.
Express Corp. v. Holowecki, 552 U.S. 389, 397 (2008). In this case, however, Plaintiff’s reading
of the regulations defies their plain language and is accordingly not a reasonable interpretation or
a “permissible construction of the statute” requiring deference. See id. (“we accept the agency’s
position unless it is plainly erroneous or inconsistent with the regulation.”) (citation and
quotation marks omitted); Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837,
843 n.9 (1984) (“The judiciary is the final authority on issues of statutory construction and must
reject administrative constructions which are contrary to clear congressional intent.”).
7
As the Court decides this matter on the merits in Defendants’ favor, it need not address Defendants’ argument that
the doctrine of laches separately bars this suit.
18
Further, while Plaintiff correctly states this Court is bound to apply the general rule that
“statutes passed for the benefit of dependent Indian tribes are to be liberally construed with
doubtful expression being resolved in favor of the Indians,” the Court does not find any such
“doubtful expression” in the regulatory text at issue. Millsap v. Andrus, 717 F.2d, 1326, 1329
(10th Cir. 1983) (citing Alaska Pac. Fisheries v. United States, 248 U.S. 78, 89 (1918)).
Although the United States’ reading of the regulations would almost certainly result in a
financial boon to the Osage Nation, the Court simply cannot reasonably read the regulatory terms
“mining” and “work of any nature” to encompass any activity that disturbs or alters the hard
mineral estate.
CONCLUSION
For the reasons outlined above, the Court concludes that Plaintiff’s claims fail as a matter
of law. Accordingly, Defendants’ Motion for Summary Judgment [Doc. No. 26] is GRANTED
and Plaintiff’s Motion for Partial Summary Judgment [Doc. No. 24] is DENIED. Further,
Plaintiff’s Motion for Expedited Consideration [Doc. No. 25] is DENIED, and Plaintiff’s
Motions to Strike [Doc. Nos. 39, 42] are DENIED.
19
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