Supreme Court Upholds Osage Nation in Wind Farm Dispute

Published January 29, 2019

The U.S. Supreme Court declined, without comment, to consider an appeal from Osage Wind LLC of an appeals court decision granting the Osage Nation the right to seek damages from the operators of an 8,400-acre wind farm in Osage County, Oklahoma.

In 2015, Principal Chief Geoffrey Standing Bear said he strongly opposed wind turbines and he hoped the ones already constructed in Osage county would be torn down and no new turbines authorized.

Two other wind projects approved by Osage County officials are in limbo since the Supreme Court’s action effectively upheld the circuit court’s decision.

Court: Excavation=Mining

Overturning a lower court ruling, a three-judge panel of the U.S. 10th Circuit Court of Appeals in Denver, Colorado unanimously ruled Osage Wind’s excavation work fit the definition of mining and therefore required a lease from the Osage Nation agency, the Osage Mineral Council (OMC).

Osage Wind is a subsidiary of Italian energy giant Enel S.p.A. through its U.S.-based renewables subsidiary, Enel Green Power North America.

In 2010, Osage Wind leased surface rights to about 8,400 acres of private land in Osage County to install 84 wind turbines and began digging large holes for placement of the turbines. The project included digging 84 holes up to 30 feet deep and 60 feet in diameter apiece; extracting more than 60,000 cubic yards of limestone, dolomite, and other materials; and then crushing the material to fill and cover the excavated sites.

Feds Quit, Tribe Stepped Up

The Obama administration sued on behalf of the Osage Nation over the mineral extraction activities, claiming treaty provisions and relevant law required either a permit from the Bureau of Indian Affairs (BIA) acting on behalf of the Osage Nation, or approval from OMC. In a summary judgment, the Northern District Court of Oklahoma rejected the administration’s claims and allowed Osage Wind to conduct excavation work without BIA or OCM approval.

The Osage Wind project was completed before the appeal, and the turbines began operating even as the case was being litigated.

When the government declined to appeal on behalf of the tribe, OCM intervened and took the case to the 10th Circuit Court. In September 2017, a three-judge panel consisting of judges appointed by Presidents Reagan, Clinton, and Obama unanimously agreed with the tribe the excavation work constituted mining and therefore required a lease.

Favoring Tribes’ Rights

The court held Interior regulations governing mineral development of the tribal subsurface estate should be broadly interpreted to include excavating activities, especially in light of legal precedents requiring courts weighing laws designed to favor tribes “liberally construe” any ambiguity in tribes’ favors.

Osage Wind appealed the 10th circuit’s decision to the U.S. Supreme Court, challenging it on the grounds the tribe should not have been allowed to appeal to the 10th Circuit because it was not a party in the original case and Osage Wind was not engaged in mining.

The U.S. Solicitor General’s office, under President Donald Trump, filed an amicus brief supporting the tribe’s position, and the Supreme Court on January 7 declined to take up the company’s appeal, leaving in place the 10th Circuit Court’s decision.

The circuit court’s ruling entitles the Osage Nation to seek damages from the company.

Uncertain Future

Two other wind projects already approved by Osage County are now on hold as a result of the 10th Circuit Court’s ruling. The tribe has yet to comment on whether it will grant permits for any further wind projects or when it will make those decisions. The tribe also has not yet stated what compensation it will seek for damages.

The future of the Osage County turbines is certainly in doubt, and the company will undoubtedly try to work out a settlement with the tribe, says Byron Schlomach, director of the 1889 Institute.

“I have no insight on whether the lawsuit represents a true desire on the part of the tribe to preserve its lands or an effort to grab a cut of the financial gains from an industry enjoying so much tax favoritism,” said Schlomach. “The ultimate result of the decision depends on what happens next and to what extent other Oklahoma tribes have similar veto rights over what happens near lands they still control.

“If the Osage agree to a financial deal with Osage Wind that looks at all lucrative, I expect other tribes will raise objections to future projects on lands over which they have rights, in order to hop on the gravy train, if they can,” Schlomach said.

Osage Control Mineral Rights

The BIA does not have an approval process in place for mining permits for wind turbines in Osage County, and the Osages’ longstanding opposition to wind projects suggests the tribe may not be satisfied with a monetary settlement, says A. J. Ferate, vice president of regulatory affairs for the Oklahoma Independent Petroleum Association.

“The Osage Reservation is coterminous with Osage County and holds all of the mineral rights for its 1,475,000 acres, thanks to a provision of Oklahoma law that allowed them to be split off from surface rights,” Ferate said. “The district court’s job now would normally be to determine just compensation for the taking.

“But it might not be that simple,” said Ferate, “Other issues, including the tribe’s long-stated opposition to wind turbines, indicate this case potentially opens up more questions than it provides answers for.”

Duggan Flanakin ([email protected]writes from Austin, Texas.