Crow Tribe of Indians v. Peters
| Decision Date | 19 December 2011 |
| Docket Number | Case No. CV 10–95–BLG–CSO. |
| Parties | CROW TRIBE OF INDIANS, Westmoreland Resources Inc., and Absaloka Coal LLC., Plaintiffs, v. Daniel PETERS, as Personal Representative of the Estate of Pauline Peters, Defendant. |
| Court | U.S. District Court — District of Montana |
OPINION TEXT STARTS HERE
Roger J. Renville, Executive Branch of the Crow Nation, William C. Watt, Crow Tribal Legal Department, Crow Agency, MT, W. Anderson Forsythe, Moulton Bellingham PC, Billings, MT, for Plaintiffs.
Thomas E. Towe, Towe Ball Enright Mackey & Sommerfeld, Billings, MT, for Defendant.
ORDER GRANTING IN PART PLAINTIFFS' MOTION FOR PARTIAL SUMMARY JUDGMENT and SETTING STATUS CONFERENCE
Plaintiffs Crow Tribe of Indians, Westmoreland Resources Inc., and Absaloka Coal LLC [collectively Westmoreland] initiated this action against Daniel Peters, as the personal representative of the estate of Pauline Peters [Peters], alleging illegal interference with Westmoreland's rights, as mineral lessee, to use the surface of Peters' land. Upon the parties' consent, the case was assigned to the undersigned for all purposes. Court Doc. 8. This Court has jurisdiction under 28 U.S.C. §§ 1331 and 1362.
Currently pending are the parties' cross motions for partial summary judgment. Based on the following analysis, Peters' motion will be denied and Westmoreland's motion will be granted in part.
Peters is the current owner of the surface estate in lands specifically described as follows: Township 1 South, Range 38 East, M.P.M. Big Horn County, Montana: Section 17–S 1/2 S 1/2 N 1/2, S 1/2 N 1/2 S 1/2 N 1/2, S 1/2 N 1/2 N 1/2 S 1/2 N 1/2, N 1/2 N 1/2 S 1/2, and N 1/2 S 1/2 N 1/2 S 1/2, comprising 260 acres, more or less [“Property”]. Court Doc. 36–3. The Property is located within the territory described in the Fort Laramie Treaty of May 7, 1868, 15 Stat. 650, and is within the exterior boundaries of the Crow Indian Reservation. Court Docs. 36 at 2–3, ¶ 2; 45 at 2, ¶ 2;
In 1925, the United States issued a fee simple patent to Peters' predecessor in interest, Lois Bompart. Court Doc. 36–1. The patent contained the following reservation: “Also reserving to the United States for the benefit of the Crow Tribe, in accordance with the provisions of the Act of Congress of June 4, 1920 (41 Stat., 751), all the coal, oil, gas, or other mineral deposits in the lands above described.” The Act provided that allotments “may be made of lands classified as chiefly valuable for coal and other minerals which may be patented as herein provided with a reservation, set forth in the patent, of the coal, oil, gas, or other mineral deposits for the benefit of the Crow Tribe....” 41 Stat. 753. More generally, the Act provided that any and all minerals “on any of the lands to be allotted hereunder are reserved for the benefit of the members of the tribe in common and may be leased for mining purposes upon the request of the tribal council under such rules, regulations, and conditions as the Secretary of the Interior may prescribe....” Id. See also Act of Congress of May 17, 1968, 82 Stat. 123, Pub.L. 90–308.
Pursuant to the terms of the Indian Mineral Development Act of 1982, 25 U.S.C. § 2101 et seq., the Crow Tribe leased to Westmoreland Resources, Inc., the coal, and the right to mine and remove the coal, from lands including the Property. See Court Doc. 36–4 at 9. The lease expressly granted to Westmoreland “the use of the surface and the subsurface overlying ... the Leased Premises.” Id. Westmoreland subleased to Absaloka Coal LLC the right to mine and remove the coal in and under the Property. See Court Doc. 36–4, ¶ 4. The lease and sublease were approved by the United States Department of the Interior. Court Doc. 36–4 at 20–21. The lease was also approved by the Crow Tribe. Court Doc. 36 at 4, ¶ 9. According to the affidavit of the Chairman of the Crow Nation Executive Branch, Crow Tribe of Montana, “the Absaloka Mine is critical to the Crow Nation's financialindependence now, over the past 37 years, and well into the future.” Court Doc. 36–5 at ¶ 7.
The Property is included in what Westmoreland refers to as the “South Extension.” Court Doc. 36 at 5 ¶ 16. The South Extension occupies about 3,300 acres within the Crow Reservation and consists entirely of Crow-owned coal leased to Westmoreland. Westmoreland, which has long mined coal owned by the Crow Tribe, is currently conducting open pit coal mining in the South Extension and expects to reach the Property within four to five years. Id. at ¶¶ 11, 16.
Westmoreland estimates that: (1) the process of overburden removal, coal removal, recontouring, topsoiling, and planting for the Property will take five to seven years; (2) that the land will be restored to prior grazing capacity about eight to ten years after mining commences; and (3) the land will be released back to the owner after about fifteen to twenty years, following release of reclamation bonds. Id. at 6–7, ¶ 18. It estimates that approximately 5.2 million tons of minable coal underlies the Property, at a value “well in excess of $15 million.” Id. at 7, ¶ 19. If the Property is not mined, this coal will be isolated and uneconomical to mine, and thus lose its value to the owners, including the Crow Tribe. Id. at 10, ¶ 25.
Peters does not consent to open pit coal mining at his Property and contends that Westmoreland may not proceed without his written consent. Court Docs. 39, 40.
Westmoreland makes four arguments in support of its summary judgment motion. First, Westmoreland contends that the mineral estate, owned by the United States in trust for the Crow Tribe, includes the right to mine the surface estate held by Peters. Id. at 7–12.
Second, Westmoreland asserts that the Surface Mining Control and Reclamation Act of 1977 [SMCRA], 30 U.S.C. § 1304, is the applicable federal statute and does not require surface-owner consent on Indian lands. Id. at 12–15. Specifically, Westmoreland points to 30 U.S.C. § 1304(f), which excepts Indian lands from the statute's requirement of surface-owner consent. Id. at 12.
Third, Westmoreland argues that, although federal law should be deemed conclusive, Montana law also grants Westmoreland the right to a reasonable use of Peters' surface estate, as an incident to its mineral interest. Id. at 15–19. Fourth, Westmoreland asserts that surface owner consent to post-mining land use is not required. Id. at 19–21.
Although asserting that a mineral owner has no obligation (absent an express statute or deed provision) to compensate the surface owner, Westmoreland agrees that it will pay Peters a reasonable amount for damage and loss of use in an amount to be determined by the Court. Westmoreland contends that this amount should not exceed the fair market value of the surface disturbed. Id. at 21–24.
First, Peters argues that federal law requires Westmoreland to obtain surface owner consent before the Office of Surface Mining Reclamation and Enforcement [OSM] may issue a mining permit. Id. at 4–7. As support for this position, Peters cites SMCRA and 30 C.F.R. § 778.15(b)(1)-(3).
Second, Peters asserts that the Crow Tribe lacks the regulatory authority to force him to allow the Tribe to mine coal. Id. at 7–9. He contends that, under Montana v. United States, 450 U.S. 544, 565, 101 S.Ct. 1245, 67 L.Ed.2d 493 (1981), the inherent sovereign powers of an Indian tribe do not extend to the activities of nonmembers of the Tribe, with exceptions not here applicable.
Third, Peters claims that the present suit is not yet ripe for judicial review. Id. at 9–13. Peters suggests that Westmoreland has not exhausted administrative remedies because it has not obtained his permission or a conveyance to allow it to surface mine. Peters also argues that Westmoreland must appeal OSM's decision to the Interior Board of Land Appeals (“IBLA”) before seeking judicial review.
Fourth, Peters argues that Westmoreland must either meet the requirements of 30 C.F.R. 778.15(b)(1) or (2) (surface owner consent or express written grant to surface mine), or Westmoreland must show that these regulations are illegal or unconstitutional. Id. at 14. Peters maintains that Westmoreland must either meet the requirements of that regulation or challenge its legality and constitutionality. Id. at 14. Peters cites several United States Supreme Court cases, however, to show that the regulation has been found constitutional. Id. at 15–16.
Finally, although Peters suggests that Montana law may apply, he does not present any arguments on the substance of Montana law as it relates to these issues. Id. at 16.
The court must grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). “[A] party seeking summary judgment always bears the initial responsibility of informing the court of the basis for its motion, and identifying those portions of ‘the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,’ which it believes demonstrate the absence of a genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Material facts are those which may affect the outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable fact-finder to return a verdict for the nonmoving party. Id.
This case involves a dispute over property rights. It highlights the tensions between the rights of a surface owner and the rights of a severed mineral interest owner. The issue arises in the specific context of severed minerals owned by the United States for the benefit of an...
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