Northern Cheyenne Tribe v. Lujan
| Citation | 804 F. Supp. 1281 |
| Decision Date | 24 July 1991 |
| Docket Number | Civ. No. 82-116-BLG-JFB. |
| Parties | NORTHERN CHEYENNE TRIBE, Plaintiff, v. Manuel LUJAN, Jr., Secretary of the Interior, et al., Defendants. |
| Court | U.S. District Court — District of Montana |
COPYRIGHT MATERIAL OMITTED
Stephen Foster, Holland & Hart, Billings, Mont., for Internal Thermal Energy.
Thomas Ebzery, and Lawrence Peterson, Dorsey & Whitney, Billings, Mont., for Interv. Westco.
Urban Roth, Gary L. Walton, Butte, Mont., for Western Energy Co.
Fred Wagner, John Gregory, Gen. Litigation Section, Solicitors Office, Washington, D.C.
Steven Chestnut, & Mark Slonim, Ziontz Law Firm, Seattle, Wash., and Calvin Wilson, Lame Deer, Mont., for plaintiffs (Tribe).
Kris McLean, Asst. U.S. Atty., Butte, Mont., Doris Poppler, U.S. Atty., Billings, Mont., for defendants.
Intervenors Thermal Energy Company ("Thermal") and Wesco Resources, Inc. ("Wesco") have moved the Court for an order (1) voiding their lease interests in federal coal, located adjacent to the Northern Cheyenne Reservation in southeastern Montana, and (2) seeking a refund of monies paid to the government to secure these lease interests. For the reasons set forth below, these Motions are granted.
The facts of this case are well-known to the Court and the parties, and they are succinctly summarized in several previous Memorandum Opinions issued by this Court and by the Ninth Circuit Court in Northern Cheyenne Tribe v. Hodel, 851 F.2d 1152 (9th Cir.1988). As a result, the background of the coal lease sale, and the various Court decisions arising from that sale, will not be discussed in detail. The Court shall refer only to those facts which are pertinent to the pending motions.
In April, 1982, the Secretary of the Interior ("Secretary") offered for lease various coal-bearing tracts in southeast Montana and northern Wyoming. At the time, the Northern Cheyenne Tribe (the "Tribe") sought a preliminary injunction to block the sale, based on the Secretary's failure to follow the National Environmental Policy Act ("NEPA"), and the Federal Coal Leasing Amendments Act of 1976 ("FCLAA"), and because the Secretary allegedly neglected his trust responsibilities to protect Tribal interests.
The Court denied the Tribe's request for a preliminary injunction, but preserved the Tribe's right to seek permanent relief. The coal lease sale took place in 1982, and is now known as the Powder River Coal sale. Prior to the commencement of the bidding, however, all potential purchasers were instructed about the pendency of the Tribe's challenge to the sale and were told that any coal leases acquired would be subject to the outcome of the litigation. The Secretary accepted Thermal's bid on the Cook Mountain Tract (Tract M-54714), and the Bureau of Land Management ("BLM") issued a lease to Thermal on May 19, 1983. In perfecting this lease, Thermal paid to the Secretary the following amounts:
Bonus Payment $2,670,000.00
Rental Payment 18,864.00
_____________
Total $2,688,864.00
Wesco submitted the winning bid for the Coal Creek lease (Tract M-54710), but the award of the lease was contingent upon Wesco's receipt of permission to mine from the surface owners. During 1983-1985, Wesco actively negotiated for this permission. To preserve its rights to obtain the lease, Wesco paid to the Secretary:
Bonus Payment $70,244.00
Rental Payment 3,099.00
__________
Total $73,343.00
Both Thermal and Wesco contemplated opening new coal production operations on these tracts. To date, no coal has been produced.
On May 28, 1985, this Court granted the Tribe's motion for summary judgment and held that:
the decision to make the Montana leases violated the National Environmental Policy Act, 42 U.S.C. § 4321 et seq.; the Federal Coal Leasing Amendments Act of 1976, 30 U.S.C. § 201 et seq.; and the responsibilities of the United States as trustee of the Tribe. The court held all leases issued as a result of the sale void.
Northern Cheyenne Tribe, 851 F.2d at 1154. After the Court voided the lease sales, Thermal, Wesco, and another successful bidder at the 1982 sale, Western Energy Company ("Western Energy"), petitioned the Court to intervene in the litigation in support of the government's Motion to Reconsider. The Court granted these petitions with a strict limitation: "The applications for intervention are granted for the limited purposes of reconsidering the relief granted and protecting the lessees' right of appeal." See Memorandum Opinion, at 2 (Oct. 8, 1985) (emphasis supplied). As the Ninth Circuit explained, the intervenors entered the case subject to the proceedings that had occurred prior to their intervention. The Court refused to relitigate the sufficiency of the environmental impact statement, for example, based on new arguments advanced by the intervenors. Northern Cheyenne Tribe, 851 F.2d at 1154.
In moving for reconsideration, the government and intervenors argued that the leases should be suspended, rather than voided, until the Secretary prepared a Supplemental Environmental Impact Statement ("SEIS") considering the impact of coal mining on the Tribe. The Court granted this Motion to Reconsider on October 6, 1986, and suspended the leases, pending preparation of the SEIS and a decision by the Secretary, based on the SEIS, concerning whether the leases should be modified or cancelled to protect the Tribe. On appeal, the Ninth Circuit Court reversed and remanded the order suspending the leases and directed this Court to hold a hearing to determine whether it would best serve the "public interest" to void the leases, or to suspend them while the Secretary prepared the SEIS. Northern Cheyenne Tribe, 851 F.2d at 1157-58. This "public interest" hearing is now scheduled for September 23, 1991.
In the interim, the Department of the Interior issued a draft SEIS in June, 1989, and circulated it to the public for comment. The Department issued the final SEIS in June, 1990. The SEIS indicates that new coal development on both the Coal Creek Tract, held by Wesco, and the Cook Mountain Tract, held by Thermal, would have "significant" and sometimes "severe" social, economic, and cultural impacts on the Northern Cheyenne Tribe. See Draft Economic, Social, and Cultural Supplement, Powder River I Regional EIS, at 258-78 (Appendix B, "Tract Profile Package"). Despite the completion of the SEIS over a year ago, the Secretary has not taken any action, based on the information contained in the SEIS, to modify or cancel the leases, thereby minimizing the impacts of increased coal development on the Tribe. He is apparently waiting for this Court to rule on whether it is in the public interest to suspend or to void the leases, pursuant to the mandate of the Ninth Circuit Court.1
Because of the Secretary's refusal to act and the glacial pace of this litigation, neither Thermal nor Wesco has seen any return on their investment in the coal leases. Nor do they anticipate that they will be able to commence mine development anytime soon, at least not without substantial and restrictive supplemental conditions on the leases to protect the Tribe. Meanwhile, the government retains and enjoys the benefit of the monies paid to secure the leases, pursuant to the 1982 sale. As a consequence of this long delay, the prospect of exceedingly lengthy litigation in the future, the uncertainty surrounding when, if ever, the Secretary will act on the SEIS, and the prospect of added restrictive conditions placed on any new mining activities, Thermal and Wesco now move the Court to void their lease interests and to compel the government to return their bonus and rental payments, as a matter of equity and fairness. The Tribe does not oppose these motions.
The Court has carefully considered the arguments, briefs, and supporting documents on file, and is now prepared to rule.
Before launching into an extended analysis of the merits of the parties' contentions, the Court notes two important contextual facts that will influence the outcome of the motions. First, the Court's original holding that the 1982 lease sales violated NEPA, the FCLAA, and the government's trust responsibilities to the Tribe has never been disturbed and was not addressed by the Ninth Circuit Court in Northern Cheyenne Tribe, which concerned only the remedy for the defective lease sales. This holding stands today as the law of the case. Given the state of the record, therefore, the leases at issue in this case are not void; instead, the leases are voidable because of the government's failure to comply with its obligations under law.2
Second, the government and the Tribe are the primary litigants in this case, and the Tribe retains the benefit of a summary judgment ruling in its favor. The ultimate remedy and relief granted, therefore, should accrue to the benefit of the Tribe, not necessarily to the government or to the intervenors. Furthermore, the Court is mindful of the fact that the Secretary has a special trust relationship with the Tribe, rising to the level of a fiduciary responsibility. See Seminole Nation v. United States, 316 U.S. 286, 296-97, 62 S.Ct. 1049, 1054-55, 86 L.Ed. 1777 (1942); United States v. Creek Nation, 295 U.S. 103, 55 S.Ct. 681, 79 L.Ed. 1331 (1935); Pyramid Lake Paiute Tribe of Indians v. United States, 898 F.2d 1410, 1420 (9th Cir.1990). Although the Secretary also has duties to all United States citizens, "the Secretary's conflicting responsibilities and federal actions taken in the `national interest' ... do not relieve him of his trust obligations." See Memorandum Opinion, at 29 (May 28, 1985) (citing Navajo Tribe of Indians v. United States, 364 F.2d 320, 323-24, 176 Ct.Cl. 502 (1966)); see also F. Cohen, Handbook for Federal Indian Law, at 227-28 (1982) (...
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