Heirs and Successors in Interest to Mose Daniels v. Eastern Oklahoma Regional Director, Bureau of Indian Affairs, 55 IBIA 139 (2012)

INTERIOR BOARD OF INDIAN APPEALS Heirs and Successors in Interest to Mose Daniels v. Eastern Oklahoma Regional Director, Bureau of Indian Affairs 55 IBIA 139 (06/25/2012)

United States Department of the Interior

OFFICE OF HEARINGS AND APPEALS INTERIOR BOARD OF INDIAN APPEALS 801 NORTH QUINCY STREET SUITE 300 ARLINGTON, VA 22203

HEIRS AND SUCCESSORS IN INTEREST TO MOSE DANIELS, Appellants, v. EASTERN OKLAHOMA REGIONAL DIRECTOR, BUREAU OF INDIAN AFFAIRS, Appellee.

Order Affirming Decision in Part, Vacating in Part, and Remanding

Docket No. IBIA 10-029

June 25, 2012

Twenty-five individuals (Appellants)1 who collectively own a two-thirds beneficial interest in a parcel of trust land in Oklahoma (Property)2 appeal to the Board of Indian Appeals (Board) from an October 22, 2009, decision (Decision) of the Eastern Oklahoma Regional Director (Regional Director), Bureau of Indian Affairs (BIA). In the Decision, the Regional Director assessed damages, penalties, and costs against the Muscogee (Creek) Nation (Nation) for trespass on the Property through the unauthorized extraction of fill material for a road project and the associated destruction of trees and other vegetation. Appellants contend that the amount assessed against the Nation is far too low. As a threshold argument, Appellants assert that the Regional Director and an attorney in the

Appellants refer to themselves as the heirs and successors in interest to Mose Daniels, from whom their interests in the trust property are derived. Appellants are identified as Miley A. Beaver Hargis; Edwin S. Moore, Jr.; Edwin Stanton Moore, Sr.; David Glenn Moore, Sr.; Blanche Yeager Beaver; Leila J. Beaver; Dora L. Beaver; Miley Jean Beaver; Robert P. Beaver; Hanna L. Beaver; William Beaver Moore; Kelly R. Moore Wilson; Reta K. Beaver; Terri Diane Beaver; William P. Beaver; Johni M. Beaver; Mose A. Beaver; Nancy Beaver Osceola; Della R. Walkingsky; Karen Beaver Geyer; Cora S. Berryhill; Sally B. Beaver Wittman; Anita S. Daney; Letha M. Beaver Rutherford; and Martha J. Froman.1

Field Solicitor’s office had conflicts of interest and were thus biased against Appellants. On the merits of the Decision, Appellants claim that the Regional Director applied the wrong regulations, under-estimated the damages, and wrongfully failed to charge the Nation for legal fees that Appellants incurred in a related Federal suit. As to the threshold issue, we reject as without merit, and as unsupported by the evidence, Appellants’ allegations that the Regional Director and the attorney had conflicts of interest or were biased, thus tainting the Decision and denying Appellants due process. On the merits, we first conclude that the Regional Director misapplied the test for determining which of two statutes (and implementing regulations) govern this case, but we also conclude that Appellants have not demonstrated that it affected the outcome, i.e., they have not shown that the amount of damages would differ depending on which statute is applied. As to the Regional Director’s calculations and assessment of damages against the Nation, we affirm in part and vacate in part: Most of the Regional Director’s damages determinations were reasonable and properly supported by the record, but she did not adequately explain her conclusions related to activity at the site prior to the Nation’s trespass. Next, we affirm in part and vacate in part the Regional Director’s assessment of restoration costs against the Nation. While we agree with the Regional Director that the Nation’s liability for restoration costs is limited by the reasonableness and proportionality of those costs in relation to the harm done by the Nation, we conclude that the Regional Director erred in calculating restoration costs based on simply returning the Property to some type of productivity, in this case making it agriculturally productive, rather than using the pre-trespass condition as the restoration objective, even if restoration-based damages ultimately are limited. Finally, we affirm the Regional Director’s decision not to assess against the Nation Appellants’ attorney fees from the related Federal litigation. Background I. Procedural and Factual History

The United States holds an undivided two-thirds interest in the Property in trust for Appellants. A single owner holds the remaining one-third undivided interest in unrestricted fee. The 160-acre Property is hilly and forested with native trees (mostly a mixture of oaks, up to 40 feet tall and over 100 years old, but “scrubby” in appearance). Foote Appraisal at 3 (Administrative Record (AR) Tab 77); Office of the Special Trustee (OST) Appraisal at 10 (AR Tab 78). The Property contains several oil wells, see Appellants’ Opening Brief (Br.)., Attach. 1 at 7, 23, and a stock pond/reservoir, see Nation’s Responses to United States’ First Interrogatories at 6 (AR Tab 158), and apparently has some capacity for grazing, but neither crops nor trees can be sustainably grown and harvested, Foote Appraisal at 6 (AR Tab 77). In 1993, Appellants’ predecessors-in-interest sold the right to 55 IBIA 140

excavate fill material for an earlier county bridge-building project (Polecat Creek Project). The damages at issue in the present case arose from the Nation’s unauthorized additional extraction from that excavation site. On June 17, 2006, one of the Appellants discovered that a road-building crew had trespassed onto the Property and was excavating fill material,3 without the consent of the owners and BIA, from the pit created by the Polecat Creek Project. Opening Br., attach. 1 at 5. The road-building crew, run by the Nation under a Self-Determination Compact with BIA, used the fill material for a nearby road project (Kellyville Project). In the process of removing the fill material, the crew enlarged the existing excavation pit and removed or destroyed trees and vegetation. It is undisputed that the Nation’s actions on Appellants’ property were not authorized and constituted a trespass. The Nation admits that it trespassed on the Property from April 4, 2005, until August 6, 2006. See Decision at 2 (unnumbered). Since the time Appellants discovered the trespass, erosion of the disturbed area has created gullies and caused flooding at nearby residential sites. The record includes one undisputed estimate of the diminution in the value of the Property caused by the excavations. An OST appraiser calculated that the diminution in value to the entire 160-acre Property was $5,600. OST Appraisal (AR Tab 78). The appraiser determined the per-acre value of the land ($800/acre) and then carved out seven acres encompassing the approximately three-acre excavation site. Id. Nothing in the appraisal suggests that the appraiser considered the diminution in value to the Property caused by the Kellyville Project separate and apart from any diminution in value caused by the Polecat Creek Project. Id. After the trespass was discovered, BIA informed Appellants that it would pursue trespass proceedings against the Nation under the American Indian Agricultural Resource Management Act, 25 U.S.C. § 3701 et seq. (AIARMA). See Letter from Field Solicitor to Appellants, Apr. 5, 2007 (AR Tab 4). BIA also informed Appellants of their option to file a claim against BIA (as administrator of the Kellyville Project) under the Federal Tort Claims Act, 28 U.S.C. §§ 1346(b), 2671-2680 (FTCA). Id.3

App. 1995)).5 Appellants therefore have not identified any personal or financial interests that Durham might have had in the outcome of this matter that would even arguably create a conflict.6 Appellants further claim that because both Durham and the Regional Director actively participated in defending BIA against Appellants’ Federal suit, they both must be barred from participating in the determination of damages against the Nation. This alleged “conflict” relates not to any conflicts of interest personal to Durham or the Regional Director, but to an alleged conflict relating to BIA’s defense of the United States from liability in response to litigation filed by Appellants on the one hand, and BIA’s action on behalf of Appellants to assess damages for the trespass against the Nation on the other. It may be that BIA must pursue administrative remedies on behalf of landowners while at the same time defending the agency against tort suits brought by the same landowners, but we are not convinced that these dual responsibilities created a conflict that required recusal by the Regional Director or Durham or that gave rise to any implied or actual bias. Appellants contend that BIA’s defense of the tort action would lead the Regional Director to minimize the damages assessed against the Nation, and they seek to bolster that5

AR Tab 75);13 39,130 CY (Boatman Engineering; professional survey; Dec. 2006; AR Tab 106; see also AR Tab 180, last document); and 126,700 CY (Warnken; engineer; Nov. 2006; AR Tab 76). Appellants produced two estimates of the total volume removed: 39,234 CY (Goss; professional survey; Oct. 2006; AR Tab 77); and 100,000 CY (Wollaston; environmental consultant; May 2009; AR Tab 93). BIA produced two estimates: 117,700 CY of compacted material,14 equivalent to 153,000 CY of uncompacted material (BLM; mining engineers; May 2009; AR Tab 79); and 52,076 CY of compacted material, equivalent to 67,698 CY of uncompacted material (Axton; professional survey; Sept. 2009; AR Tab 87). With the exception of the BLM and Axton estimates, none of the reports distinguish between compacted volume and uncompacted volume. Assuming that the measurements from the professional surveys commissioned by the Nation and Appellants were for compacted materials,15 and applying the 30 percent swell factor, the resulting estimates for uncompacted material would be 51,004 uncompacted CY (Goss) and 50,869 uncompacted CY (Boatman). These are within one percent of one another, but somewhat below the later Axton survey’s 67,698 uncompacted CY estimate.1...