672 F.3d 1021 (Fed. Cir. 2012), 2010-5150, Shoshone Indian Tribe of Wind River Reservation v. United States

Docket Nº:2010-5150.
Citation:672 F.3d 1021
Opinion Judge:O'MALLEY, Circuit Judge.
Party Name:The SHOSHONE INDIAN TRIBE OF the WIND RIVER RESERVATION, WYOMING, Plaintiff-Appellant, v. UNITED STATES, Defendant-Appellee. and The Arapaho Indian Tribe of the Wind River Reservation, Wyoming, Plaintiff-Appellant,
Attorney:Harry R. Sachse, Sonosky, Chambers, Sachse, Endreson & Perry, LLP, of Washington, DC, argued for plaintiff-appellant The Shoshone Indian Tribe of the Wind River Reservation, Wyoming. With him on the brief was William F. Stephens. Richard M. Berley, Ziontz, Chestnut, Varnell, Berley & Slonim, of S...
Judge Panel:Before PROST, MAYER, and O'MALLEY, Circuit Judges.
Case Date:January 09, 2012
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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672 F.3d 1021 (Fed. Cir. 2012)

The SHOSHONE INDIAN TRIBE OF the WIND RIVER RESERVATION, WYOMING, Plaintiff-Appellant,

and

The Arapaho Indian Tribe of the Wind River Reservation, Wyoming, Plaintiff-Appellant,

v.

UNITED STATES, Defendant-Appellee.

No. 2010-5150.

United States Court of Appeals, Federal Circuit.

January 9, 2012

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         Harry R. Sachse, Sonosky, Chambers, Sachse, Endreson & Perry, LLP, of Washington, DC, argued for plaintiff-appellant The Shoshone Indian Tribe of the Wind

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River Reservation, Wyoming. With him on the brief was William F. Stephens.

          Richard M. Berley, Ziontz, Chestnut, Varnell, Berley & Slonim, of Seattle, WA, argued for plaintiff-appellant The Arapaho Indian Tribe of the Wind River Reservation, Wyoming. With him on the brief was Brian W. Chestnut.

          Joan M. Pepin, Environment & Natural Resources Division, Appellate Section, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With her on the brief was Ignacia S. Moreno, Assistant Attorney General.

          Before PROST, MAYER, and O'MALLEY, Circuit Judges.

          O'MALLEY, Circuit Judge.

         The Shoshone Indian Tribe of the Wind River Reservation and the Arapaho Indian Tribe of the Wind River Reservation (collectively " the Tribes" ) appeal the United States Court of Federal Claims' dismissal of Claim II as time-barred by 28 U.S.C. § 2501 (2006), which bars all suits filed against the United States in the Court of Federal Claims unless filed within six years after the claim accrues. Because we conclude that the Tribes have alleged a continuing trespass, the Court of Federal Claims improperly determined that Claim II is time-barred in its entirety. Accordingly, as explained below, we vacate and remand for further proceedings.

         BACKGROUND

         This dispute between the Tribes and the United States (" the Government" ) is a portion of two larger suits filed in 1979, which were consolidated. See Shoshone Indian Tribe of the Wind River Reservation v. United States, 364 F.3d 1339, 1343 (Fed.Cir.2004) (" Shoshone II " ); Shoshone Indian Tribe of the Wind River Reservation v. United States, 93 Fed.Cl. 449, 452 (2010) ( " Shoshone III " ). This consolidated suit alleges that the Government breached fiduciary and statutory duties owed to the Tribes by mismanaging the Wind River Reservation's (the " Reservation" ) natural resources and the incomes derived from the exploitation of these resources. Shoshone II, 364 F.3d at 1343. The Court of Federal Claims divided the Tribes' suit into three different phases. One phase addressed sand and gravel and has been resolved via settlement. The other two phases were devoted to oil and gas issues. Oil and Gas Phase I, which has been fully resolved, involved the Government's failure to collect royalties for the period after October 10, 1973. Oil and Gas Phase II, on the other hand, addresses pre-1973 oil and gas royalty collection and a series of discrete oil-and-gas issues. Except for the second claim of this phase of the litigation— at issue here— all other aspects of the Phase II litigation have been resolved. Shoshone III, 93 Fed.Cl. at 452. In Claim II, the Tribes alleged that:

[S]even oil and gas leases were allegedly unlawfully converted from Act of August 21, 1916 (the " 1916 Act" ) leases, Pub.L. No. 64-218, 39 Stat. 519 (1916), to Indian Mineral Leasing Act (the " 1938 Act" ) leases, Pub.L. No. 75-506, 52 Stat. 347 (1938) (codified at 25 U.S.C. §§ 396a-396g (2006)). [The Tribes] claim damages based on the theory that they would have obtained better royalty and renewal terms if the leases had remained 1916 Act leases instead of being converted to 1938 Act Leases.

Shoshone III, 93 Fed.Cl. at 451 (internal citation omitted). Resolution of the statute of limitations issue raised in this appeal requires a discussion of the history of the Tribes' relationship with the Government.

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          A. Factual Background

         1. History of the Reservation and Mineral Leasing

         The Tribes share an undivided interest in the Reservation in Wyoming. 1 Shoshone Indian Tribe of the Wind River Reservation v. United States, 51 Fed.Cl. 60, 61 (2001) (" Shoshone I " ). On March 3, 1905, Congress ratified an agreement between the Government and the Tribes, whereby the Tribes ceded, granted, and relinquished to the Government all of their rights, title, and interest in approximately 1,480,000 acres of the Reservation. Shoshone III, 93 Fed.Cl. at 452; see also Pub.L. No. 58-185, 33 Stat. 1016, Art. I (1905). These so-called " ceded lands" were to be " disposed of by the United States under the provisions of the homestead, town-site, coal, and mineral land laws or by sale for cash— with proceeds to be paid to [the Tribes]." Shoshone III, 93 Fed.Cl. at 452 (citing 33 Stat. 1016, Art. II). The Government, moreover, agreed to act as trustee for the Tribes; it would dispose of the ceded lands and deliver the proceeds to the Tribes. Shoshone III, 93 Fed.Cl. at 452 (citing 33 Stat. 1016, Art. IX).

         At some point around 1910, it became apparent that some of the ceded lands contained potentially valuable oil and gas resources. Shoshone III, 93 Fed.Cl. at 452. This discovery prompted Congress to enact the Act of August 21, 1916, Pub.L. No. 64-218, 39 Stat. 519-20 (1916) (the " 1916 Act" ), which authorized " the Secretary of the Interior to lease, for production of oil and gas, ceded lands of the [Reservation]." Id. Proceeds from these leases would be for the use and benefit of the Tribes. Id. Under the 1916 Act, leases: (1) were for a period of twenty years; (2) could be renewed for successive periods of ten years " upon such reasonable terms and conditions as may be prescribed by the Secretary of the Interior" ; (3) had a minimum royalty rate of ten percent; and (4) if there was no oil or gas production, the leases had a rental rate of not less than one dollar per acre per year. Id.

         Unlike the 1916 Act, which applied to the ceded lands of the Reservation, the Indian Mineral Leasing Act, Pub.L. No. 75-506, 52 Stat. 347 (1938) (codified at 25 U.S.C. §§ 396a-396g (2006)) (the " 1938 Act" ), does not apply to ceded lands. Id. at § 396f. While the 1916 Act leases were for fixed periods and did not require oil or gas production, leases under the 1938 Act were " for terms not to exceed ten years and as long thereafter as minerals are produced in paying quantities." Id. at § 396a. In addition, leases under the 1938 Act are between the lessee and the Tribes. Id. The 1938 Act, moreover, requires competitive bidding for new leases. Id. at § 396b.

          Shortly after passage of the 1938 Act, Congress ordered the Secretary of the Interior to restore ownership of " all undisposed-of surplus or ceded lands within" the Reservation to the Tribes. Act of July 27, 1939, Pub.L. No. 76-238, 53 Stat. 1128 (1939). On May 17, 1940, and August 10, 1944, the Secretary of the Interior restored all seven Claim II parcels to the Tribes, subject to any valid existing rights. Shoshone III, 93 Fed.Cl. at 453 (citations omitted). While the seven Claim II parcels were no longer ceded lands, the 1916 Act leases for these parcels remained in force. Of course, any new leases for restored portions of the Reservation, which were not previously leased, would have to

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be made pursuant to the 1938 Act because such lands were no longer ceded.

         2. Conversion of the Seven Claim II Leases

         After the 1940 and 1944 restoration of ceded lands, in 1948, the British-American Oil Producing Company (" British-American" ) asked the superintendent of the Wind River Agency to convert two of the seven existing 1916 Act leases into 1938 Act leases. Joint Appendix (" J.A." ) 156. Both of these leases were productive and in their initial twenty-year term. Id. In response to this request, in May of 1948, the Government and British-American presented the proposal to the Tribes' Joint Business Council (" the Council" ).2 J.A. 159; Appellants' Br. 11. After the Government's representative discussed British-American's proposal and some of the differences between 1916 Act leases and 1938 Act leases, the Council unanimously voted to approve the conversion of the leases. J.A. 159-60. Following this meeting, the Council adopted Resolution No. 152, which resolved " that the Commissioner of Indian Affairs be requested to ... convert the two said leases...." J.A. 161. These leases were prepared and signed by the two Council chairmen on February 11, 1949. J.A. 165, 169.

         In 1949, the Husky Refining Company (" Husky" ) requested that five of its 1916 Act leases be converted into 1938 Act leases. Unlike the converted British-American leases, these leases' initial twenty-year term had expired, so the leases were up for renewal. As with the British-American leases, the Council voted to approve the conversion of the five Husky leases. J.A. 172. Resolution 153 issued in response to this approval, directing " new leases be prepared in favor of the Husky Refining Company, covering the restored tribal lands described in the said contracts on the current tribal lease form, as provided for in the Act of May 11, 1938." J.A. 173. Four of these leases were executed by the Tribes on August 10, 1949, while the fifth was executed on July 21, 1950.

         Despite the conversion of these seven leases, when British-American requested conversion of another lease in 1957, the Government stated that " [i]t is deemed inadvisable to issue a renewal lease under the [1938 Act] as it requires that the leases be advertised for competitive bids." J.A. 202. Accordingly, this lease was never converted.

         B....

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