The Shoshone Indian Tribe Of The Wind River Reservation, Wyoming v. United States

56 Fed. Cl. 639 (2003)

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Nature of the Case

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Facts

The Indian Mineral Leasing Act of 1938, 25 U.S.C. §§ 396a-396g (IMLA) was later passed to further govern the leasing of land on Indian reservations for oil and gas mining. The Indian Mineral Leasing Act of 1938, 25 U.S.C. §§ 396a-396g (IMLA) was later passed to further govern the leasing of land on Indian reservations for oil and gas mining. In 1982, the Federal Oil and Gas Royalty Management Act, 30 U.S.C. §§ 1701-1757 (FOGRMA) was passed to provide greater legislative guidance on the valuation of the oil and gas as to which royalties were owed the Tribes. Regulations were promulgated by both the Bureau of Indian Affairs (BIA). Under the terms of the Arco settlement, MDU paid Arco $39 million. Arco paid royalties to Ps on 53% of this amount. Ps claim that Arco attributed 47% of the settlement amount to 'Take-or-Pay at Sec. 107 Pricing.' Arco did not pay royalties on this portion of the settlement on the grounds that royalties were not due under 30 C.F.R. § 206 (1988). 'Take-or-Pay' provisions 'obligate the purchaser to take a specified minimum volume of gas during an identified period or to pay for that quantity even if not taken in full.' The dispute here is whether the settlement amount allocated for gas not actually produced, but due under the terms of the contract, was royalty-bearing or not. Ps filed briefs identifying the issues to be resolved. D files several motions to dismiss or for summary judgment. As to Ps' 'maximization' claim, D relies primarily on the decision of the Supreme Court in Navajo Nation holding that there was no general fiduciary duty to 'maximize' the profits of Indian Tribes absent statutory, regulatory, or contractual obligations. Ps contend that the regulations and statutory authority governing D's management of the Tribes' oil and gas establish a fiduciary duty of the government. As to the Take-or-Pay claim, D argues that under the applicable law and precedents, the Take-or-Pay portions of the Arco settlement at issue are not royalty-producing. Ps counter that D seeks to apply retroactively current regulations but that the regulations that were in effect when the lease was entered into should govern.