Fletcher v. United States

         APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA (D.C. No. 4:02-CV-00427-GKF-PJC)

          Jason B. Aamodt (Dallas L.D. Strimple of Indian and Environmental Law Group, PLLC; J. David Jorgenson and Mark A. Waller of Waller, Jorgenson, Warzynski, PLLC; G. Steven Stidham of Levinson, Smith & Huffman, Tulsa, Oklahoma; Amanda S. Proctor of Shield Law Group, PLLC, Jenks, Oklahoma, with him on the brief), Indian and Environmental Law Group, PLLC; Tulsa, Oklahoma, for Plaintiffs - Appellants.

          Anna T. Katselas (Joseph H. Kim and Katherine W. Hazard of U.S. Department of Justice, Environment and Natural Resources Division; John C. Cruden, Assistant Attorney General; Kenneth Dalton, Director, Dondrae Maiden, Ericka Howard and Kristen Kokinos, Attorney-Advisors of Indian Trust Litigation, Office of the Solicitor, U.S. Department of the Interior, with him on the brief), U.S. Department of Justice, Environment and Natural Resources Division, Washington, D.C., for Defendants - Appellees.

          Before KELLY, EBEL, and BACHARACH, Circuit Judges.

          KELLY, Circuit Judge.

         Plaintiffs-Appellants, a certified class of Osage tribal members who own headrights, appeal from the district court's accounting order made pursuant to 25 U.S.C. § 4011. Fletcher v. United States, 153 F.Supp.3d 1354 (N.D. Okla. 2015). Our jurisdiction arises under 28 U.S.C. § 1291, and we affirm.

         Background

         In 1872, Congress established a reservation for the Osage Tribe in present-day Osage County, Oklahoma. Just after the turn of the century, rich deposits of oil, gas, coal, and other minerals were found on the reservation. This discovery prompted Congress to pass the Osage Allotment Act of 1906 (the Act), which severed the reservation's subsurface mineral estate from the surface estate, and placed the mineral estate in a trust for the Osage Tribe with the government as trustee. The Act assigned the Secretary of the Interior (Secretary) to distribute pro rata royalties from the mineral estate to Osage tribal members whose names were recorded on an official roll. These royalty interests are known as headrights. At first, Osage tribal members transferred their headrights to people and entities outside of the Osage tribe, but several subsequent amendments to the Act prohibited that practice. The Act also requires the government to provide an accounting for the trust: "The Secretary shall account for the daily and annual balance of all funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian which are deposited or invested pursuant to section 162a of this title." 25 U.S.C. § 4011(a).

         Plaintiffs brought this action in 2002^[1] and filed a third amended complaint in 2010. In that complaint, Plaintiffs alleged that the government was improperly distributing royalties to non-Osage tribal members, which diluted the royalties for the Osage tribal members - the rightful headright owners. The complaint attributes this misdistribution to the government's mismanagement of the trust assets and the government's failure to perform an accounting pursuant to § 4011. Thus, Plaintiffs sought to compel the government to perform an accounting and to prospectively restrict royalty payments to Osage tribal members and their heirs.

         The district court dismissed Plaintiffs' accounting claim because it found that § 4011 only required the government to account for deposits, not withdrawals, and that such an accounting would not support Plaintiffs' misdistribution claim. Fletcher v. United States, No. 02-CV-427-GKF-FHM, 2012 WL 1109090, at *7 (N.D. Okla. Mar. 31, 2012) (unpublished).

         We reversed and remanded because an accounting of only the deposits and not the withdrawals would be incomplete and of little use. Fletcher v. United States (Fletcher II), 730 F.3d 1206, 1212 (10th Cir. 2013). We also provided general guidance about the design of any accounting on remand: the accounting "must give some sense of where money has come from and gone to." Id. at 1215. The trial court's overarching task, we said, is to "balance the often warring (and admittedly incommensurate) considerations of completeness and transparency, on the one hand, and speed, practicality, and cost, on the other." Id. at 1214. We explained that Plaintiffs are "entitled . . . to some measure of information about the government's handling of deposits [and] . . . disbursements." Id. But the accounting cannot include "information that only loosely relates to [trust beneficiaries'] own personal beneficial interests, or to information that is unlikely (because it is so old, or so de minimis, say) to have a meaningful effect on their beneficial interests." Id. at 1215. We further cautioned that the accounting should not be a "green eye-shade death march through every line of every account over the last one hundred years." Id. at 1214.

[E]quity does not require an accounting so punctilious, so expensive, and so laboriously long in coming that the final volume is released with great fanfare only after generations of beneficiaries have come in and gone out, the Bureau of Indian Affairs has been forced to turn a blind eye to other pressing needs in the Native American community, the public fisc has been thirstily drained, and only the lawyers have grown fat.

Id. at 1215.

         With this guidance in mind, the district court ordered that the accounting (1) "run from the first quarter of 2002 until the last available quarter;" (2) "be divided and organized either by month or by quarter;" (3) "state the date and dollar amount of each receipt and distribution;" (4) "briefly identify and describe the source of each trust receipt (i.e., the name of the payer/lessee and the contract number for the oil and/or gas lease on which the payment is made);" (5) "state the name of the individual or organization to whom each trust distribution was made;" (6) "state the headright interest that each beneficiary possessed at the time of distribution" for headright distributions; and (7) "state the amount of interest income ...