Fletcher v. United States

153 F. Supp. 3d 1354, 2015 U.S. Dist. LEXIS 172877, 2015 WL 9581771
CourtDistrict Court, N.D. Oklahoma
DecidedDecember 30, 2015
DocketCase No. 02-CV-427-GKF-PJC
StatusPublished
Cited by5 cases

This text of 153 F. Supp. 3d 1354 (Fletcher v. United States) is published on Counsel Stack Legal Research, covering District Court, N.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Fletcher v. United States, 153 F. Supp. 3d 1354, 2015 U.S. Dist. LEXIS 172877, 2015 WL 9581771 (N.D. Okla. 2015).

Opinion

OPINION AND ORDER

GREGORY K. FRIZZELL, CHIEF JUDGE, UNITED STATES DISTRICT COURT

In the early twentieth century, large quantities of oil and gas were discovered on lands belonging to the Osage Nation. Shortly thereafter, Congress enacted the Osage Allotment Act of 1906, see Act of June 28,1906, Pub. L. No. 59-321, 34 Stat. 539 (“Osage Allotment Act” or “1906 Act”), which severed the mineral estate underlying Osage lands from the surface estate, placed the mineral estate in .trust, and directed the Secretary of Interior to collect and distribute royalty income every quarter to persons on the 1906 tribal membership roll. The right to receive such royalty payments is called a “headright.”

The sole remaining claim in this long-running case concerns the federal government’s duty to account to individual Osage headright owners. Certified as a class in 2014, plaintiffs are Osage Indians who receive headright payments pursuant to the 1906 Act. They brought this claim pursuant to the Administrative Procedure Act (“APA”), 5 U.S.C. § 701 et seq., against the United States of America, the Department of Interior, Sally Jewell in her official capacity as Secretary of the Interior, the Bureau of Indian Affairs, and Kevin Wash-burn in his official capacity as Assistant Secretary of the Interior-Indian Affairs (collectively, “the government”), seeking an accounting of tribal trust funds held on their behalf. In particular, plaintiffs request an accounting of the Osage tribal trust account — an account within the United States Treasury which holds Osage royalty income prior to its distribution to the headright owners. In response, the government maintains that the account at issue is held in trust for the Osage Nation only and that, as such, plaintiffs are not entitled to the accounting they seek. For the reasons stated in this Opinion and Order, the court holds that the plaintiffs are entitled to accounting of the Osage tribal trust account in accordance with the requirements set forth herein.

I. Background

“In 1872, Congress established a reservation for the Osage Nation in present day Oklahoma.” Osage Nation v. Irby, 597 F.3d 1117, 1120 (10th Cir.2010) (citing Act of June 5, 1872, ch. 310, 17 Stat. 228). In 1904 and 1905, large quantities of oil and gas were discovered on the reservation. See Cohen’s Handbook of Federal Indian Law § 4.07[1][d][ii], at 311 (Nell Jessup Newton et al., eds., 2005) [hereinafter, “Cohen’s Handbook”]. To manage the Osages’ newfound wealth, Congress enacted the Osage Allotment Act which, as previously mentioned, placed the mineral estate [1357]*1357underlying Osage lands in trust, directed the Secretary of Interior to collect royalty income, and required the Secretary to distribute such income (with interest) to tribal members on a quarterly, pro rata basis. See 1906 Act, § 4.1 The government’s trusteeship over the Osage mineral estate was originally set to last twenty-five years,, see 1906 Act §§ 3, 4, but has since been extended “in perpetuity,” see Pub. L. No. 95-496, § 2(a), 92 Stat. 1660 (1978).

As previously mentioned, the right to receive quarterly trust distributions is referred to as a “headright.” Taylor v. Tayrien, 51 F.2d 884, 886 (10th Cir.1931). Under the 1906 Act, there are 2,229 headrights — one for each person on the 1906 tribal membership roll. See Big Eagle v. United States, 300 F.2d 765, 765 (Ct.Cl.1962); see also 1906 Act §§ 1, 4. Today, “[m]ost persons of Osage Indian ancestry own no headrights, and thus receive no tribal income. Some persons own more than one headright, or 'own fractional shares of headrights, arid some head-rights are owned by non-Osages.” Cohen’s Handbook, supra, at 313. “This fractionalization is a result of succession to headrights by inheritance and devise. Succession by non-Indians is now severely limited, but during earlier periods there were fewer restrictions.” Id. at 313 n.873 (citation omitted).

Prior to distribution, royalty income collected under the 1906 Act is held in a U.S. Treasury account, titled the Osage tribal trust account. The tribal trust account “was established by the 1906 Act,” Osage Tribe of Indians of Okla. v. United States, 81 Fed.Cl. 340, 348 (2008), and is the means by which' the government carries out its duties to collect, hold, and distribute funds pursuant thereto, [see Dkt. #1212-1, Administrative Record, p. 2], Although some distributions from this account are “made by direct check to head-right owners, the vast majority are done via transfers to Individual Indian Money (“IIM”) accounts. An IIM account is “an interest bearing account for trust funds held by the Secretary that belong to a person who has an interest in trust assets.” 25 C.F.R. § 115.002. Unless restricted in some way, an- account holder may freely withdraw funds from his or her IIM account. See id.

II. Procedural History

This case has a long and complicated history. Originally filed in 2002 as a dis[1358]*1358pute over the tribal voting rights of non-headright-owning Osage Indians [see Dkt. #1, p. 6], the case later evolved into an action over the government’s allegedly wrongful distribution of Osage royalty income to non-Osages and its failure to account to the headright owners, [see Dkt. #985-1, pp. 27-31, 33]. Today, however, plaintiffs’ only remaining claim is their request for an accounting.

Plaintiffs first asserted their accounting claim in 2006, as part of their First Amended Complaint. [See Dkt. #24, pp. 9, 11], In May 2011, after litigating issues related to plaintiffs’ other causes of action, the government moved to dismiss this claim along with, what was then, the plaintiffs’ Third Amended Complaint.2 [Dkt. #1126]. As to the accounting claim, the government argued that dismissal was warranted because (1) there was no trust relationship between the federal government and headright owners and (2) the statutes on which plaintiffs relied did not afford them the right to an accounting. [Id. at 8-12].

This court rejected the government’s first argument, but accepted its second. As an initial matter, the court concluded that the 1906 Act created a limited trust relationship between the federal government and the Osage headright owners but that this relationship “differ[ed] from the trust relationship between the federal government and the Osage Nation.” [Dkt. #1162, p. 10 n.6]. Specifically, the court determined that the government’s trust relationship with the Osage headright owners only took effect upon distribution and that, prior to distribution, royalty funds were held in trust for the Osage Nation only. [See id. at 10 n.6, 11, 13], Based on this limited trust -relationship; the court held that plaintiffs could not seek an accounting:

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Cite This Page — Counsel Stack

Bluebook (online)
153 F. Supp. 3d 1354, 2015 U.S. Dist. LEXIS 172877, 2015 WL 9581771, Counsel Stack Legal Research, https://law.counselstack.com/opinion/fletcher-v-united-states-oknd-2015.