Appeals court reinstates Osage trust case claims

Staff Writer
Pawhuska Journal-Capital

DENVER — A federal appeals court ruled favorably for Osage headright owners last week in a 2002 lawsuit that charges the United States government with breaching its trust responsibilities in the accounting of tribal member oil royalties.

In the Sept. 17 ruling, the Tenth Circuit U.S. Court of Appeals reversed a March 2012 decision to dismiss the Osage mineral rights case, Fletcher versus U.S. The overturned ruling was made 18 months earlier by Gregory Frizzell, the chief judge of the federal district court in Tulsa.

Among the reasons cited for dismissal of the Fletcher case, Frizzell said “the allegations fail to provide a sufficient focus for judicial review.” The Tulsa judge also ruled against the lawsuit’s contention that the government permitted royalty payments to non-Osages, saying such claims were “merely speculative” and based on an “overarching legal argument.”

Judge Neil Gorsuch said the appeals court declined to reach a decision on the charges of improper distribution due to the fact that lawsuit plaintiffs informed the judges “that they do not seek a ruling from us now on that claim.”

The three-member appeals court ruled unanimously to remand the case back to the district level, sending instructions for the lower court to “work through the matter” promptly with “further proceedings consistent with this opinion.”

Following is an excerpt from the appeals court’s published opinion:

“After settlers displaced the Osage Nation from its native lands, the federal government shunted the tribe onto the open prairie in Indian Territory, part of what later became the State of Oklahoma.

“At the time, the government had no idea those grasslands were to prove a great deal more fertile than they appeared. Only years later did the Osages’ mammoth reserves of oil and gas make themselves known. When that happened, the federal government appropriated for itself the role of trustee, overseeing the collection of royalty income and its distribution to tribal members. That role continues to this day.

In this lawsuit, tribal members seek an accounting to determine whether the federal government has fulfilled the fiduciary obligations it chose to assume. The district court dismissed the tribal members’ claims. We reverse.”