Gilmore v. Weatherford

• Citation: 694 F.3d 1160
• Decision Date: 04 September 2012
• Docket Number: No. 11–5025.,11–5025.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)
• Parties: James E. GILMORE; Tammy S. Gilmore Springer; Joanna K. Stand, individual owners in Indian trust property, Plaintiffs–Appellants, v. Cathy J. WEATHERFORD, personal representative of the estate of Joseph E. Mountford, deceased; Bingham Sand & Gravel Company, Inc., a foreign corporation, Ken Salazar; Karen Ketcher; Paul Yates, Defendants–Appellees.

694 F.3d 1160

James E. GILMORE; Tammy S. Gilmore Springer; Joanna K. Stand, individual owners in Indian trust property, Plaintiffs–Appellants,

v.Cathy J. WEATHERFORD, personal representative of the estate of Joseph E. Mountford, deceased; Bingham Sand & Gravel Company, Inc., a foreign corporation, Ken Salazar; Karen Ketcher; Paul Yates, Defendants–Appellees.

No. 11–5025.

United States Court of Appeals, Tenth Circuit.

Sept. 4, 2012.

Stephen Richard Ward (John L. Williams and Daniel E. Gomez, with him on the briefs), Conner & Winters, LLP, Tulsa, OK, for Plaintiffs–Appellants.

Matthew Littleton (Ignacia S. Moreno, Elizabeth Ann Peterson, and Mary Gabrielle Sprague, on the briefs), United States Department of Justice, Environment & Natural Resources Division, Washington, DC, for Defendants–Appellees Ken Salazar, Karen Ketcher, and Paul Yates.

Theodore Q. Eliot (Graydon Dean Luthey, Jr., with him on the briefs), Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Tulsa, OK, for Defendants–Appellees Bingham Sand & Gravel, Co.

Barry G. Reynolds and Kelley Gilbert Loud, Titus Hillis Reynolds Love Dickman & McCalmon, Tulsa, OK, and Charles Wylie Chesnut, Chesnut & Chesnut, Miami, OK, filed a brief for Defendant–Appellee Catherine J. Weatherford.

Before LUCERO, MCKAY, and GORSUCH, Circuit Judges.

LUCERO, Circuit Judge.

Decades of lead and zinc mining in northeastern Oklahoma have left behind piles of mine tailings, known locally as “chat,” that now have value as fill and gravel. This case concerns two chat piles, the Sooner and Ottawa piles, which share a convoluted ownership history. Some of the chat in these piles is owned by descendants of members of the Quapaw Tribe who were deemed incompetent to manage their own affairs. These individuals hold undivided “restricted” ownership interests; that is, they cannot freely alienate their interests in the chat as a matter of federal law. Not all of the chat in the Sooner and Ottawa piles, however, is restricted. These piles are considered “comingled” because they contain both restricted chat and unrestricted chat.

Plaintiffs in this case are three restricted owners of chat in the Sooner and Ottawa piles. They allege that Bingham Sand and Gravel Co., Inc. (“Bingham”), an owner of unrestricted chat, has been removing tailings from the Ottawa pile without compensating the restricted owners. Plaintiffs further claim that the Estate of Joseph Mountford (the “Estate”) has sold chat from the Sooner pile to Bingham. Under plaintiffs' theory of the case, federal law prohibits the sale or removal of any chat from commingled piles without the approval of the Bureau of Indian Affairs (“BIA”). Despite numerous informal requests that the BIA halt chat removal by Bingham and the Estate (collectively, the “private defendants”), the agency has not done so.

Seeking to stop chat removal and obtain an accounting for the chat that has already been removed, plaintiffs sued the Secretary of the Interior and several BIA officials (collectively, the “federal defendants”), Bingham, and the Estate in federal court. Against the federal defendants, they asserted claims under the Administrative Procedure Act (“APA”) and pled an accounting claim that they contend arises under federal common law. The district court dismissed these claims for failure to exhaust administrative remedies. Although it assumed that plaintiffs could plead a common law accounting claim outside the ambit of the APA, the court nonetheless required exhaustion as a matter of judicial discretion. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm that determination.

As to the private defendants, plaintiffs asserted claims for conversion and an accounting. Following dismissal of the federal defendants, the district court concluded it lacked jurisdiction over these claims. We reverse that holding. Plaintiffs' conversion claim rests on a substantial and disputed issue of federal law in which the federal government possesses a serious interest: whether BIA approval is required before restricted Indian personal property may be sold. Because we hold that the district court had jurisdiction over this claim, we reverse and remand for further proceedings.

I

A

In 1895, Congress confirmed the Quapaw Tribe's allotment of certain lands in northern Oklahoma to individual members of the tribe. See Act of March 2, 1895, 28 Stat. 876, 907; see also United States v. Hallam, 304 F.2d 620, 622 (10th Cir.1962) (describing allotment process). These allotments were made inalienable for a period of 25 years. Id. At the end of that 25–year period, Congress lifted the restriction on alienation except as to lands held by 62 Quapaw members who were deemed incompetent. Act of March 3, 1921, Pub.L. No. 66–359, 41 Stat. 1225, 1248–49. The regulation of these restricted parcels has been extended indefinitely. See Act of July 27, 1939, Pub.L. No. 76–235, 53 Stat. 1127, 1127; Act of June 25, 1970, Pub.L. No. 91–290, 84 Stat. 325, 325; Act of May 24, 1990, Pub L. No. 101–301, 104 Stat. 206, 207. As a result, these lands feature a checkerboard pattern of restricted and unrestricted parcels.

Congress allowed for the leasing of Quapaw lands for mineral development, primarily lead and zinc, in 1897. See Act of June 7, 1897, 30 Stat. 62, 72; see also Haynes v. Eagle–Picher Co., 295 F.2d 761, 762–63 (10th Cir.1961) (describing lead and zinc mining practices in the “Tri–State Mining District”). Mining activity created the piles of mine tailings or chat. See Holder v. Gold Fields Mining Corp., 506 F.Supp.2d 792, 794–96 (N.D.Okla.2007) (discussing the creation of chat piles); see also40 C.F.R. § 278.1(b) (defining chat as “waste material that was formed in the course of milling operations employed to recover lead and zinc from metal-bearing ore minerals in the Tri–State Mining District of Southwest Missouri, Southeast Kansas and Northeast Oklahoma”).

In the 1930s, the federal government permitted certain mining interests to remove chat from restricted Quapaw lands to extract minerals from the tailings at off-site mills. See Holder, 506 F.Supp.2d at 795. However, the restricted Indian owners retained their proportional interests in the removed chat. Id. And because restricted chat was intermixed with unrestricted chat during the re-milling process, the chat piles at issue in this case—the Ottawa and Sooner piles—became “comingled”; that is, these piles now contain both restricted and unrestricted tailings. See id. A 2002 letter from BIA Acting Field Representative Dennis Wickliffe describes this ownership arrangement as follows: “Every interest, restricted and unrestricted, is undivided, and therefore, cannot be defined or described, except by partitioning the chat pile in proportionate shares. When you remove one grain of material, you move both restricted and unrestricted ownership.”

In 1983, the Environmental Protection Agency declared a portion of the mining area a federal Superfund site. See Holder, 506 F.Supp.2d at 796. The agency began formal remediation efforts to abate lead contamination in the area in 1996. See id. at 797. Although chat is now used as construction material, federal regulations restrict its use for federally funded projects. See40 C.F.R. §§ 278.1 to .4; see alsoCriteria for the Safe and Environmentally Protective Use of Granular Mine Tailings Known as “Chat,” 72 Fed.Reg. 39,331, 39,336 (July 18, 2007) (“Certain uses of raw chat have caused threats to human health and the environment as a result of the concentrations of lead, cadmium and zinc present in the chat.”).

To further complicate matters, the restricted ownership interests have been apportioned among the heirs of the original restricted Indian owners such that numerous individuals hold fractional shares. According to the BIA, Bingham owns 76.237% of the chat in the Ottawa pile, 78 restricted owners own 16.565%, and an unknown number of unrestricted owners hold 7.198%. Ownership of the chat in the Sooner pile is similarly dispersed. The BIA claims that the Estate owns 61.97583% of the Sooner chat, 34 restricted owners own 37.43667%, and an unknown number of unrestricted owners own the remaining 0.587%. Plaintiffs dispute the BIA's numbers.

B

Plaintiffs allege that Bingham began removing and selling chat from the Ottawa pile sometime in 2001 or 2002. They also claim that the Estate began selling chat from the Sooner pile to Bingham around the same time. Plaintiffs allege that this chat removal was not approved by the BIA and that neither Bingham nor the Estate has compensated the restricted owners for their interests in the removed chat. According to plaintiffs, the BIA requested that chat removal from the Sooner pile cease in 2002, but that the unauthorized transportation nevertheless continued.

The restricted owners claim that they requested an accounting of the removed chat as well as other action from the BIA “on multiple occasions since at least 2005.” One of the restricted owners, James Gilmore, avers that he brought the issue to the attention of the Superintendent of the BIA's Miami Agency approximately once a month since 2002. The BIA has attempted to broker an agreement between Bingham, the Estate, and the restricted owners. In 2002, a BIA Field Representativestated that the agency was “finalizing arrangements to assist restricted chat owners in selling chat.” And in 2004, a Department of the Interior Field Representative set up a meeting between representatives of Bingham, the Estate, and several restricted owners. These efforts, however, were unsuccessful. In November 2005, counsel for several restricted owners formally requested that Department of the Interior Field Solicitor halt the chat removal and provide an accounting. The record does not indicate how the agency responded, but it is undisputed that the issue was not appealed up the administrative ladder. A 2010 affidavit from the Superintendent of the Miami Agency states that Bingham recently submitted...