Fletcher v. United States

Decision Date14 February 2020
Docket NumberNo. 19-5023,19-5023
PartiesWILLIAM S. FLETCHER, individually and on behalf of all others similarly situated; TARA DAMRON, individually and on behalf of all others similarly situated, Plaintiffs - Appellants, v. THE UNITED STATES OF AMERICA; DEPARTMENT OF INTERIOR; DAVID BERNHARDT, in his official capacity as Acting Secretary of the U.S. Department of the Interior; BUREAU OF INDIAN AFFAIRS; TARA KATUK MACLEAN SWEENEY, in her official capacity as Assistant Secretary for Indian Affairs, Defendants - Appellees.
CourtU.S. Court of Appeals — Tenth Circuit

(N.D. Okla.)


Before HARTZ, BALDOCK, and EID, Circuit Judges.

After fifteen years of litigation and three appeals to this Court, Plaintiffs obtained an order in the district court requiring the Government to provide an accounting of distributions from the Osage Mineral Estate. Although the district court determined Plaintiffs were the prevailing parties, the court denied Plaintiffs' motion for attorney fees under the Equal Access to Justice Act ("EAJA") because (1) Plaintiffs had not "incurred" attorney fees, and (2) the Government's position was substantially justified. This appeal follows. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.

* * *

In 1872, Congress established a reservation for the Osage Tribe in what is now Osage County, Oklahoma. In the early 1900s, deposits of oil, gas, coal, and other minerals were found on the reservation. In light of this discovery, Congress enacted the Osage Allotment Act of 1906, which placed the reservation's mineral estate in a trust for the Osage Tribe with the Government as the trustee. The Act charged the Secretary of the Interior with distributing royalties to Osage tribal members whose names were recorded on an official roll. These royalty interests are known as headrights. Initially, Osage tribal members transferred their headrights to people outside the Osage Tribe, but Congress later amended the Act to prohibit that practice. The Act also requires the Secretary of the Interior to provide an accounting for the daily and annual balance of all funds held in the trust. 25 U.S.C. § 4011(a).

Plaintiffs are a certified class of Osage tribal members who own headrights. Plaintiffs initiated this suit in 2002 and alleged: (1) the Government violated Plaintiffs' right to political association and participation in the Osage government; (2) the Government breached its trust responsibilities under the Osage Allotment Act by (a) eliminating Plaintiffs' right to participate or vote in Osage tribal elections and (b) allowing headrights to be alienated to persons who are not members of the Osage Tribe; (3) the Government's failure to manage the tribe's assets, coupled with the alienation of headrights to persons who are not Osage Indians, constituted a Fifth Amendment taking; and (4) the Government's actions with respect to Osage Tribal elections constituted illegal agency action. Notably, Plaintiffs did not seek an accounting at that time. The Government moved to dismiss the complaint for failure to join the Osage Tribal Council, an indispensable party. The district court granted the motion and dismissed the case.

Plaintiffs abandoned their voting rights claims on appeal and pursued only the breach of trust and takings claims. Because the district court did not address whether the Osage Tribal Council was an indispensable party as to those claims, we remanded for further proceedings. In April 2006, on remand from this Court, Plaintiffs filed their first amended complaint. Therein, Plaintiffs alleged: (1) the Government breached its statutory trust responsibilities by (a) wrongfully distributing royalty payments to persons who are not Osage Indians and (b) failing to account for trust funds; (2) the Government's failure to properly manage the tribe's trust account and funds, coupled with the distribution of royalties to persons who are not Osage Indians, constituted a Fifth Amendment taking; and (3) the Government's administrative actions, or failures to act, were not in accordance with the law and were contrary to Plaintiffs' property rights.

Thereafter, the Government moved to dismiss Plaintiffs' first amended complaint for (1) failure to join other necessary and indispensable parties, including the Osage Nation and non-Osage headright owners, and (2) failure to challenge a specific agency action within the applicable statute of limitations. The district court granted the motion in part and ordered Plaintiffs to file a second amended complaint adding all non-Osage headright owners and identifying the challenged agency actions or inactions. Following the court's order, Plaintiffs filed a second amended complaint joining approximately 1,700 non-Osage headright owners. Plaintiffs failed, however, to identify the challenged agency action or inaction. As a result, the court directed Plaintiffs to file a third amended complaint.

On May 6, 2010, Plaintiffs filed their third amended complaint. Therein, Plaintiffs alleged substantially the same claims presented in the first amended complaint. As the district court summarized, each of the three claims for relief contained two central elements: (1) that the Government had "improperly paid royalties to non-Osage persons and entities"; and (2) that the Government had "failed to provide a required accounting and audits." Fletcher v. United States, No. 02-CV-427-GKF-FHM, 2012 WL 1109090, at *4 (N.D. Okla. Mar. 31, 2012). Thus, the claims centered around the Government's misdistribution of royalties (the "misdistribution claims") and failure to account (the "accounting claims").

Once joined in the third amended complaint, many of the non-Osage headright owners filed motions to dismiss. The district court granted one of these motions filed by non-Osage headright owner Ben T. Benedum. In doing so, the court rejected Plaintiffs' overarching legal argument that the Osage Allotment Act, in and of itself, precludes non-Osage persons from receiving royalties from the Osage Mineral Estate. The court recognized that "perhaps, after an accounting has been completed, plaintiffs will be able to show that [Mr.] Benedum is not entitled to a headright interest." But as it stood, Plaintiffs were unable to allege Mr. Benedum's headright interest was obtained unlawfully. On that basis, the district court dismissed Mr. Benedum and the remaining non-Osage headright owners from the litigation.

Thereafter, the Government filed its motion to dismiss. The Government argued Plaintiffs' misdistribution claims must be dismissed for: (1) failure to state a claim; (2) lack of subject matter jurisdiction; and (3) failure to identify a specific final agency action for judicial review. The district court agreed and dismissed the misdistribution claims for the same reasons that it dismissed the non-Osage headright owners. That is, the district court held Plaintiffs did not plead any specific facts supporting their allegation that any headright was transferred illegally. Having already disclaimed the general legal proposition that the Osage Allotment Act precludes non-Osage persons from receiving royalties, the court held Plaintiffs' misdistribution claims were purely speculative and dismissed them without prejudice.

The Government further argued the accounting claims must be dismissed because (1) there is no trust relationship between the Government and headright owners and (2) the statutes upon which Plaintiffs premised their relief did not afford them a right to an accounting. The district court rejected the argument that the Government did not have a trust relationship with headright owners but held Plaintiffs did not identify a statutory right to an accounting. Accordingly, the district court also dismissed the accounting claims.

Plaintiffs appealed the dismissal of the accounting claims only—apparently realizing they could not prevail on their misdistribution claims until after they received an accounting. See Aplt. Opening Br. at 31-32. We reversed the district court's order and held Plaintiffs are entitled to an accounting under 25 U.S.C. § 4011(a). Fletcher v. United States, 730 F.3d 1206, 1209 (10th Cir. 2013). On remand, the district court ordered the Government to provide an accounting running from the first quarter of 2002. Plaintiffs then filed a Rule 59(e) motion to alter or amend the judgment requesting (1) a more detailed accounting and (2) to expand the time frame of the accounting back to 1906. The district court denied Plaintiffs' request, and again, Plaintiffs appealed. We affirmed the district court and acknowledged that "even if a more detailed accounting might uncover additional evidence of misdistribution, the increased expense to do so is not justified." Fletcher v. United States, 854 F.3d 1201, 1207 (10th Cir. 2017).

Having reached the end of this fifteen-year litigation, Plaintiffs filed a motion for attorney fees and costs under the EAJA. The district court awarded Plaintiffs costs in the amount of $34,839.61. The district court declined to award fees, however, because Plaintiffs did not incur any attorney fees, and even if they did, the Government's position was substantially justified. This appeal followed. Because we agree that the Government's position was substantially justified, we do not reach the other issues presented on appeal.

* * * Under the EAJA, "a court shall award to a prevailing party other than the United States fees and expenses . . . incurred by that party . . . unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust." 28 U.S.C. § 2412(d)(1)(A). Relevant to our analysis is whether the Government's position was substantially justified.

A position is substantially justified if it has "a reasonable basis in both law and fact." Pierce v. Underwood, 487 U.S. 552, 565 (1988); see also Hackett v. Barnhart, 475 F.3d 1166, 1172 (10th...

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