Osage Tribe of Indians v. United States

97 Fed. Cl. 345, 2011 U.S. Claims LEXIS 53, 2011 WL 477042
CourtUnited States Court of Federal Claims
DecidedFebruary 8, 2011
DocketNos. 99-550 L, 00-169 L
StatusPublished
Cited by18 cases

This text of 97 Fed. Cl. 345 (Osage Tribe of Indians v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Osage Tribe of Indians v. United States, 97 Fed. Cl. 345, 2011 U.S. Claims LEXIS 53, 2011 WL 477042 (uscfc 2011).

Opinion

ORDER

HEWITT, Chief Judge.

Before the court are Defendant’s Motion for Partial Reconsideration (defendant’s Motion or Def.’s Mot.), Docket Number (Dkt. No.) 610, filed on January 14, 2011, and Osage Nation’s Response to the United States’ Motion for Partial Reconsideration (plaintiffs Response or Pl.’s Resp.), Dkt. No. 618, filed on January 27, 2011.

I. Background

The court’s Opinion of December 29, 2010 (Opinion) resolved three factual disputes identified by the court “during its consideration of plaintiffs motion for summary judgment on damages owed to plaintiff ... stemming from defendant’s breach of its fiduciary duty to collect, deposit and invest revenues generated from Osage oil leases.” Opinion of Dec. 29, 2010, at 394. These three factual disputes have been broadly characterized by the court as the Koch data issue, the gravity adjustment issue and the interest credit issue. Id. at 394-95. Defendant requests that the court reconsider the portion of its Opinion analyzing the gravity adjustment issue, specifically “Whether Mr. Reineke’s Use of the Gravity-Adjustment Scales from the Joint Database for Koch Transactions Is Reasonable.” See Def.’s Mot. 1; see generally Opinion of Dec. 29, 2010 at 444-48.

In Osage Tribe of Indians of Oklahoma v. United States (Osage II), 72 Fed.Cl. 629, 631 (2006), the court held that “the United States violated its duty as trustee of the Osage mineral estate by failing to collect all moneys due from Osage oil leases and to deposit and invest those moneys as required by statute and according to the fiduciary duty owed to the Osage Tribe.” In an effort to determine royalty values in accordance with the law of Osage II — and as a result of defendant’s failure to collect and maintain data required of it under regulations that were in effect from January 1981 to September 12, 1990, 25 C.F.R. § 183.11(a)(2) (1975) (1974 Regulations) — defendant’s expert (Mr. Martin) and plaintiffs expert (Mr. Reineke) developed a Joint Database, Opinion of Dec. 29, 2010 at 400-01. However, the Joint Database lacked certain data relevant under the 1974 Regulations. Id. Plaintiff subpoenaed Koch Industries, Inc. (Koch), a major oil purchaser, to help supply this information. Id. Koch provided plaintiff with “Top 50 Lists” for each day from January 1981 to December 1990. Id.

In connection with them generation of the Joint Database, the experts also “developed gravity-adjustment scales for each month for each of the major purchasers.” Id. at 401. Ideally, Mr. Reineke and Mr. Martin would have had available to them “the gravity scales for each and every purchaser for all the timeframes and ... the 40[-]degree price for each purchaser,” June 30 and July 1, 2010 Revised and Corrected Transcript (Tr.) 309:20-24 (Mi-. Reineke), Dkt. Nos. 575, 577; however, because this information was unavailable, the experts “determined the posted prices and gravity tables from the various pricing bulletins of the major purchasers or published reports of pricing bulletins,” Def.’s Resp. to Pl.’s Am. Mot. for Partial Summ. J. (Def.’s Resp.), Dkt. No. 420, Ex. A (Decl. and Expert Rpt. of Ronnie A. Martin) ¶ 19; see also id. ¶ 11. In accordance with the court’s Osage II ruling, Mr. Martin and Mr. Reineke [347]*347applied these gravity scales to each of the transactions in the Joint Database to normalize the highest offered prices to the 40-degree gravity standard. Opinion of Dec. 29, 2010 at 401-03, 444-45.

In its response to plaintiffs May 18, 2009 amended motion for summary judgment, defendant argued that Mr. Reineke “created fabricated 40-degree prices when he gravity-adjusted prices from the Joint Database from certain transactions involving Koch.” Def.’s Mot. 2 (citing Opinion of Dec. 29, 2010 at 402-03); see Def.’s Resp. at 17-18. In the court’s opinion on plaintiffs amended motion for summary judgment, the court stated that defendant was “asking the court to draw an inference against the Tribe that is not supported by the evidence and is likely contrary to the facts.” Osage Tribe of Indians of Oklahoma v. United States (Osage IV), 93 Fed.Cl. 1, 21 (2010); see generally PL Osage Nation’s Amended Mot. for Summ. J. on all Oil-Royalty Under-Collection Claims for July 1974 to Dec. 2000 and all Deposit-Lag, Excessive-Cash-Balance, and Investment-Yield Claims for Accounts 7386 and 7886 for United States Fiscal Years 1973 to 1992, Dkt. No. 407.

On April 26, 2010, just prior to the court’s issuance of Osage IV, defendant filed a Further Motion Regarding Koch Data, Dkt. No. 514. See Opinion of Dec. 29, 2010 at 404-05; Def.’s Mot. 3. Pursuant to discussions held in telephonic status conferences on May 4 and May 5, 2010, the court issued an order granting defendant access to the tables and fields within Koch’s crude oil database that were used in developing the Top 50 Lists. Opinion of Dec. 29, 2010 at 405-06; Def.’s Mot. 3. Mr. Martin reviewed the recently accessed portions of the Koch crude oil database and concluded that it “corroborated his earlier analysis ... that the 40-degree prices related to certain Koch transactions that [Mr. Reineke] had calculated differed from the actual, historical Koch 40-degree prices.” Def.’s Mot. 3; see Opinion of Dee. 29, 2010 at 444-45. In its pretrial filings, defendant indicated that it would be introducing testimony from Mr. Martin showing that the newly accessed Koch data “demonstrated the inaccuracy of Mr. Reineke’s price calculations.” Def.’s Mot. 3; see Opinion of Dec. 29, 2010 at 444-45. On June 16, 2010 plaintiff filed a motion in limine, arguing that “Mr. Reineke’s methods for gravity adjusting Osage County purchase prices in the Joint Data[b]ase ... are not within the scope of the upcoming trial, because they were already rejected in Osage TV_” PI. Osage Nation’s Mot. in Limine to Exclude Irrelevant Testimony by Def.’s Expert Ronnie Martin, and Mot. to Expedite, Dkt. No. 533, at 2. In response, the court denied plaintiffs motion in limine “[i]n light of the new [Koch] information that defendant ha[d] obtained,” and ordered that Mr. Reineke be made available for deposition regarding gravity adjustment. Order of June 21, 2010, Dkt. No. 539, at 2.

At the June 30 and July 1, 2010 trial, defendant argued that using the actual 40-degree prices found within the Koch database, rather than the 40-degree prices calculated by Mr. Reineke using the Joint Database gravity scales, results in ‘“the most accurate calculation possible’ ” for Koch transactions. Opinion of Dec. 29, 2010 at 445 (quoting Tr. 549:22-25 (Mi’. Martin)); see Tr. 549:1-18 (Mr. Martin) (stating that, although he had used the Joint Database gravity scales in his 2009 expert report, he has found “more accurate data from the Koch [T]op 50 [Lists],” that allowed him to “simply substitute[] the 40[-]degree price that Koch had for Osage leases into Mr. Reineke’s model instead of the 40[-] degree price that [Mr. Reineke] calculated [from the Joint Database gravity-adjustment scales]”).

Plaintiff countered that both Mr. Reineke and Mr. Martin had consistently used the “agreed-to gravity scales” in the Joint Database “to calculate gravity-adjusted offered prices using the purchase prices of major purchases in the Joint Database.” Opinion of Dec. 29, 2010 at 446 (internal quotations omitted). Citing the Rebut[t]al Expert Report of Daniel T. Reineke, P.E. (Reineke Rebuttal Report or Reineke Rebuttal Rpt.), Dkt. No.

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Cite This Page — Counsel Stack

Bluebook (online)
97 Fed. Cl. 345, 2011 U.S. Claims LEXIS 53, 2011 WL 477042, Counsel Stack Legal Research, https://law.counselstack.com/opinion/osage-tribe-of-indians-v-united-states-uscfc-2011.