Fletcher case plaintiffs due federal accounting
Osage headright owners are to receive confidential information about Osage funds held in trust at the United States Treasury, according to a recent ruling by the chief federal judge in Tulsa.
As part of an opinion issued Dec. 30, U.S. District Judge Gregory Frizzell ordered a special accounting of those tribal funds for plaintiffs in a longstanding Osage trust case: Fletcher v. United States of America.
Frizzell said the Fletcher lawsuit’s plaintiffs — who are all shareholders in the Osage Mineral Estate shareholders (i.e. headright owners) — are entitled to detailed information about the Osage Nation Trust Account. According to the ruling, federal officials have six months to provide Fletcher plaintiffs with organized, specific information about the Osage account.
Lawyers in the case called Frizzell’s ruling “historic.”
“This is the first time in a century the United States has been ordered to account to the members of the Osage tribe,” said Jason Aamodt, the lead attorney for Fletcher.
The lawsuit was filed in 2002 by Hominy resident William S. Fletcher and four other shareholders (also known as headright owners) of the Osage Mineral Estate. At that time it was initiated, the suit’s primary focus was tribal voting rights for non-headright holding Osages. Trust aspects of the case came through its allegations that the U.S. government violated trust responsibilities to the tribe by allowing non-Osages to receive mineral royalty payments.
During its tumultuous 13-year history, the Fletcher suit has survived seven dismissals and been restored by two successful federal appeals. The Frizzell ruling comes after the U.S. Court of Appeals 10th Circuit reversed the district court’s dismissal of the case in 2013.
Three original plaintiffs (Cora Jean Jech, Charles Pratt and Betty Woody) have died since the case began its long and winding journey through the legal system. The Fletcher lawsuit was given class-action status two years ago, allowing for more than 5,000 Osage headright owners to be added as plaintiffs.
In his 27-page opinion and order, Frizzell said Fletcher plaintiffs are attempting “to prove that the government has paid headright distributions to ineligible recipients and, in that way, improperly diminished their pro rata share.”
The judge rejected the U.S. Government’s contention that the Fletcher plaintiffs’ request for an accounting had been rendered invalid by the U.S. government’s 2011 settlement agreement with the tribe in the “Highest Posted Price” trust case — which included a $380 million federal payout to the Osages. Frizzell’s ruling pointed out that individual Osage headright owners had been denied the opportunity to intervene in that case by the U.S. Court of Criminal Appeals and, therefore, were not bound by the settlement agreement.
“The plaintiffs’ stated purpose for seeking an accounting is to obtain information that will enable them to prove that the government has paid headright distributions to ineligible recipients and, in that way, improperly diminished their pro rata share,” Frizzell stated in the opinion.
Frizzell called the misdistribution claim “misguided” and pointed out that, prior to 1978, headrights could be legally transferred to non-Osages and said it was unlikely the lawsuit would result in a return of headrights by non-Osage individuals and religious institutions.
He added that “(t)he likelihood that plaintiffs will be able to successfully attack these transfers in such a way as to meaningfully increase their beneficial interest is remote.”
“If plaintiff’s were to show that one full headright (out of 2,229 outstanding) had been wrongfully transferred and no longer had a rightful recipient — which, given the fractionalization of headrights, is no easy task — that headright, once redistributed among the remaining headright owners, would only increase their quarterly distribution by approximately $3.58 per full headright,” Frizzell said in the order, basing those figures on the average distribution amount between 2006 and 2013. The order stipulates that the sources of the materials, documents and other data collected for the accounting are to remain confidential.
Frizzell’s opinion noted that the accounting procedure would need to balance “completeness and transparency” with “speed, practicality, and cost.” The order requires the accounting period to run from the first quarter of 2002 until the last available quarter and be divided and organized either by month or by quarter. Date and dollar amounts are to be shown for each receipt and distribution.
The sources of every trust receipt must be identified and briefly described (with the name of the payer/lessee, the contract number for the oil and/or gas lease on which the payment is made, etc.) and the names of individuals or organizations to whom the trust funds were distributed must be stated, according to the order. For headright distributions, the accounting must state the headright interest that each beneficiary possessed at the time of distribution and show the amount of interest income generated from the tribal trust account, plus the date on which such interest was credited to the account, said the order, which further stipulates that the sources of the materials, documents and other data collected for the accounting are to remain confidential.