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10th Circuit won’t revisit Osage Nation wind farm lease case

The Tenth Circuit on Tuesday declined to revisit its decision that said wind farm developers should have obtained a mineral lease from the Osage Nation along with Bureau of Indian Affairs approval before starting surface construction for an Oklahoma wind farm.

The denial means that the Tenth Circuit panel’s decision from September in favor the Osage Nation through the Osage Minerals Council will hold. That decision said excavation work that included supporting turbines with rocks dug up from the holes they were placed in constituted “mineral development” as defined by BIA regulations, and thus required a mineral lease from the Osage Nation and a permit from the BIA.

The panel overturned a decision from an Oklahoma federal judge in 2015 that rejected arguments that digging holes to build foundations for turbines for an Osage County, Oklahoma, wind farm amounted to mineral development and interfered with the Osage Nation’s reserved mineral rights.

The developers, including Osage Wind LLC, Enel Kansas LLC and Enel Green Power North America Inc., requested a rehearing of the panel decision earlier this month.

“The petition for rehearing en banc was transmitted to all of the judges on the court who are in regular active service. As no member of the panel and no judge in regular active service on the court requested that the court be polled, that petition is … denied,” the order said.

The Tenth Circuit panel said that although digging holes in the ground for wind turbines doesn’t constitute “mineral development,” the developers’ use of it does.

“The problem here is that Osage Wind did not merely dig holes in the ground – it went further,” the panel opinion said. “It sorted the rocks, crushed the rocks into smaller pieces and then exploited the crushed rocks as structural support for each wind turbine.”

The issue was that the BIA’s regulations contained ambiguity, the panel said. The panel decided to adopt the broader interpretation of “mining development” that favored the Osage Nation.

In its petition for rehearing, Osage Wind said that the Osage Minerals Council didn’t have grounds to bring the case at the appellate level.

“The court allowed the [Osage Minerals Council] to prosecute the appeal despite never having been made a party to the proceedings, based on the [Osage Minerals Council]’s purported ‘unique interest’ in the subject matter of the case,” the companies’ rehearing petition said. Although the government declined to appeal the decision, the Osage Minerals Council did, and the Tenth Circuit allowed the appeal to proceed.

The developers also said the case should be reheard because the panel incorrectly decided that the 2014 claims were not barred by the legal standard called res judicata, which says previously adjudicated matters may not be pursued further by the same party. The panel found that the developers did not adequately show that the 2014 claims would have been ripe for adjudication in 2011, which was prior to when the excavation work began. A ccording to an attorney for the Osage Minerals Council, the developers now have to figure out how to negotiate a lease with the Osage Nation, which won’t be an easy task.

On Tuesday, an attorney for Osage Minerals Council, Jeff Rasmussen of Fredericks Peebles & Morgan LLP, referred to a statement from when the decision was made that called the panel’s determination “an important victory.” He said that the Osage Minerals Council is happy that the appeals court process is over.

A representative for the developers did not immediately return a request for comment on Tuesday.

Osage Wind is represented by Ryan A. Ray of Norman Wohlgemuth Chandler Jeter Barnett & Ray PC, and Lynn H. Slade and Sarah M. Stevenson of Modrall Sperling Roehl Harris & Sisk PA.

The Osage Mineral Council is represented by Jeffrey S. Rasmussen, Rebecca Sher and Peter J. Breuer of Fredericks Peebles & Morgan LLP.

The case is U.S. v. Osage Wind LLC et al., case number 15-5121, in the U.S. Court of Appeals for the Tenth Circuit.

Additional reporting by Keith Goldberg and Juan Carlos Rodriguez. Editing by Stephen Berg