IN THE UNITED STATES COURT OF FEDERAL CLAIMS

Transcription

1 IN THE UNITED STATES COURT OF FEDERAL CLAIMS THE OSAGE TRIBE OF INDIANS ) OF OKLAHOMA, ) ) Electronically Filed: Plaintiff, ) September 22, 2008 ) v. ) No L ) (into which has been consolidated ) No L) THE UNITED STATES OF AMERICA, ) Judge Emily C. Hewitt ) Defendant. ) ) DEFENDANT S BRIEF IN RESPONSE TO PROPOSED INTERVENORS AMENDED MOTION TO INTERVENE

2 TABLE OF CONTENTS INTRODUCTION...1 BACKGROUND...2 A. Factual Background...2 B. Procedural History...5 ARGUMENT...9 STANDARD OF REVIEW...9 I. Movants Fail to Demonstrate that Their Intervention As to Pre-Distribution Claims is Permissible under RCFC A. Movants Motion is Untimely with regards to Pre-Distribution Claims...10 B. Movants Cannot Demonstrate Entitlement to Intervention of Right under Rule 24(a) with regards to the Pre-distribution Claims Because their Interests are not at Risk C. Movants Motion Fails under Rule 24(b) with regards to Pre-distribution Claims...16 II. If Movants Are Allowed to Intervene as to the Pre-distribution Claims, They Should Not Be Permitted to Enlarge the Issues III. Movants Should Not Be Permitted to Intervene on Behalf of any Group...19 A. Personal Owners of Headright Interests is Not an Identifiable Group of American Indians for purposes of 28 U.S.C B. Even if the Movants were members of an Identifiable Group of Indians, there is no authority entitling them to act as the Group s representatives CONCLUSION...30 i

3 TABLE OF AUTHORITIES FEDERAL CASES Agostini v. Felton, 521 U.S. 203, 117 S.Ct (1997)...13 Applegate v. United States, 52 Fed.Cl. 751 (2002)...13 Audler v. CBC Innovis Inc., 519 F.3d 239 (5th Cir. 2008)...26 Belton Indus., Inc. v. United States, 6 F.3d 756 (Fed. Cir. 1993)...11 Bighorn Lumber Co., Inc. v. United States, 49 Fed. Cl. 768 (2001)...21 Cape Fox Corp. v. United States, 456 F.Supp. 784 (D. Alaska 1978)...22 C.I.R. v. Tufts, 461 U.S. 300, 103 S.Ct (1983)...20 Cherokee Freedmen v. United States, 195 Ct. Cl. 39 (1971)...28 Cheyenne-Arapaho Tribes of Indians of Oklahoma v. United States, 671 F.2d 1305 (Ct.Cl. 1982)...14 Cheyenne-Arapaho Tribes of Indians v. United States, 1 Cl.Ct. 293 (1983)...10, 13, 15, 16 Chippewa Cree Tribe of the Rocky Boy s Reservation v. United States, 73 Fed. Cl. 154 (2006)...28 Chippewa Cree Tribe of the Rocky Boy s Reservation v. United States, 69 Fed. Cl. 639 (2006)...25 Cobell v. Babbitt, 30 F. Supp. 2d 24 (D.D.C. 1998)...18 Cobell v. Kempthorne, ii

4 --- F. Supp. 2d ---, 2008 WL (D.D.C. 2008)...5 Davis v. Coca-Cola Bottling Co. Consol., 516 F.3d 955 (11th Cir. 2008)...27 Delorme v. United States, 354 F.3d 810 (8th Cir. 2004)...27, 28 Flast v. Cohen, 392 U.S. 83, 88 S.Ct (1968)...26 Freeman v. United States, 50 Fed. Cl. 305 (2001)...10 Grey v. United States, 21 Cl. Ct. 285 (1990)...26 Gutierrez v. Ada, 528 U.S. 250, 120 S.Ct. 740 (2000)...21 Hansberry v. Lee, 311 U.S. 32, 61 S.Ct. 115 (1940)...28 Hebah v. United States, 428 F.2d 1334 (Ct.Cl. 1970)...23 John R. Sand & Gravel Co. v. United States, 59 Fed.Cl. 645 (Fed.Cl. 2004), aff d, 143 Fed. Appx. 317 (Fed.Cir. Jul 22, 2005)...9, 10, 11, 14, 15, 16 Meridian Homes Corp. v. Nicholas W. Prassas & Co., 89 F.R.D. 552 (N.D. Ill. 1981)...16 Montoya v. United States, 180 U.S. 261, 21 S.Ct. 358 (1901)...22 Navajo Tribal Utility Authority v. Arizona Dept. of Revenue, 608 F.2d 1228 (9th Cir. 1979)...22 Nissei Sangyo America, Ltd. v. United States, 31 F.3d 435 (7th Cir. 1994)...11 Osage Nation v. United States, iii

5 57 Fed. Cl. 392 (Fed. Cl. 2003)...5, 8, 12, 15, 18 Osage Nation v. United States, 72 Fed. Cl. 629 (2006)...7 Osage Nation v. United States, 81 Fed. Cl. 340 (2008)...6 Quinault Allottee Ass'n & Individual Allottees v. United States, 453 F.2d 1272 (Ct.Cl. 1972)...26, 28 Red Lake & Pembina Bands v. Turtle Mountain Band of Chippewa Indians, 355 F.2d 936 (Ct. Cl. 1965)...24 RHI Holdings, Inc. v. United States, 142 F.3d 1459 (Fed. Cir. 1998)...21 Richards v. Jefferson County, Ala., 517 U.S. 793, 116 S.Ct (1996)...28 Seminole Nation of Oklahoma v. Norton, 206 F.R.D. 1 (D.D.C. 2001)...17 Seneca Nation of Indians v. New York, 213 F.R.D. 131 (W.D.N.Y. 2003)...13 Sidwell v. Express Container Services, Inc., 71 F.3d 1134 (4th Cir. 1995)...21 Snoqualmie Tribe of Indians v. United States, 178 Ct.Cl. 570, 372 F.2d 951 (1967)...28 Southwestern Pennsylvania Growth Alliance v. Browner, 121 F.3d 106 (3d Cir. 1997)...17 Taylor v. United States, 73 Fed.Cl. 532 (2006)...13 Tee-Hit-Ton Indians v. United States, 120 F.Supp. 202 (Ct. Cl. 1954)...24 Thompson v. United States, 122 Ct. Cl. 348 (Ct. Cl. 1952)...24 United States v. Mitchell, iv

6 445 U.S. 535, 100 S.Ct (1980)...27 United States v. Nordic Village, 503 U.S. 30, 112 S.Ct.1011 (1992)...21 United States v. Williams, 514 U.S. 527, 115 S.Ct (1995)...21 Upper Chehalis Tribe v. United States, 155 F.Supp. 226 (Ct. Cl. 1957)...24, 28 Vinson v. Washington Gas Light Co., 321 U.S. 489 (1944)...17, 18 Wash. State Dep t of Social and Health Servs. v. Guardianship Estate of Keffeler, 537 U.S. 371, 123 S.Ct (2003)...21 Wash. Elec. Coop. v. Mass. Mun. Wholesale Elec. Co., 922 F.2d 92 (2d Cir. 1990)...17 Wolfchild v. United States, 62 Fed.Cl. 521 (Fed.Cl. 2004)...24 Zepeda v. U.S. I.N.S., 753 F.2d 719, 727 (9th Cir. 1983)...26 FEDERAL STATUTES 25 U.S.C. 70a (1946) U.S.C U.S.C. 1401(a) U.S.C U.S.C passim 34 Stat , 3 60 Stat Stat v

7 FEDERAL RULES Fed. R. Civ. P. 23(b)(1)(A)...18 RCFC , 17 OTHER AUTHORITIES 7C Charles Allen Wright, FEDERAL PRACTICE & PROCEDURE: CIVIL 2d 1916 (1986) 11 vi

8 INTRODUCTION In this action, plaintiff Osage Nation and/or Tribe of Indians of Oklahoma (the Tribe ) asserts claims that the United States has breached its fiduciary obligations with regards to certain trust assets and funds. Specifically, the United States acts as trustee with respect to a tribal trust fund wherein monies such as oil and gas royalties obtained from leases on the Tribe s mineral estate are deposited. Monies from the tribal trust fund are segregated and distributed, on a quarterly basis, to individuals and entities owning headright interests in the Osage mineral estate. To this point, the parties have litigated only claims that the government mismanaged trust assets and trust funds, causing losses to accrue to the tribal trust fund ( pre-distribution claims ); the parties have not litigated nor has Plaintiff thus far asserted with any specificity any claims that the government breached obligations following distribution of monies to the headright owners ( post-distribution claims). The parties have litigated this case for nearly nine years, including completing a trial of some of the Tribe s pre-distribution claims, after which the Court awarded the Tribe damages in the amount of nearly $1.9 million. Seven individual headright owners ( Movants ) now seek to intervene in this action, asserting that they are entitled to damages, including a portion of those already awarded, resulting from the United States alleged mismanagement of its trust obligations. Movants seek to intervene, not only on behalf of themselves, but on behalf of an illdefined group of similarly situated headright owners. While in their motion Movants seek to minimize any concern they will impact or delay the existing litigation, their proposed amended complaint raises issues that would complicate the current case, at least with regards to predistribution claims. Specifically, Movants appear to espouse a theory of recovery that they are entitled damages, not because they are beneficiaries of any damages awarded the Tribe, but

9 because the United States allegedly breached fiduciary duties it directly owed them with regards to management of the trust assets. The United States does not oppose Movants request to intervene in its entirety, but asserts that their intervention, if granted, must be limited in several significant respects. First, given the Court s 2003 determination that the Tribe, and not the headright owners, is the real party in interest for the pre-distribution claims and the impact that Movants delayed intervention would have on the litigation of these claims, Movants should not be allowed to intervene as to the pre-distribution claims. Next, even if Movants were allowed to intervene, under wellestablished case law, they should not be permitted to enlarge the issues in this litigation, such as by inserting their new claims of pre-distribution breaches of fiduciary duties owed the headright owners. Finally, Movants should be allowed to intervene only on behalf of themselves, as their request to represent other headright owners as an identifiable group of American Indians fails under 28 U.S.C BACKGROUND A. Factual Background By virtue of the Osage Allotment Act of June 28, 1906, 34 Stat. 539 (the Act ), Congress created a trust fund whereby all funds belonging to the Osage tribe, and all moneys due, and all moneys that may become due, or may hereafter be found to be due the said Osage tribe of Indians, shall be held in trust by the United States. 34 Stat. 539, Section three of the 1906 Act reserved the oil, gas, coal, and other minerals covered by the lands for the selection and division of which provision is herein made... to the Osage tribe for a period of twenty-five years from and after the eighth day of April, nineteen hundred and six... and authorized the Tribe to enter into leases allowing private development of oil, gas, and other 2

10 mineral resources contained within this Osage mineral estate. Under section four of the Act, royalties received from such leases were to be: placed in the Treasury of the United States to the credit of the members of the Osage tribe of Indians as other moneys of said tribe are to be deposited under the provisions of this Act, and the same shall be distributed to the individual members of said Osage tribe according to the roll provided for herein, in the manner and at the same time that payments are made of interest on other moneys held in trust for the Osages by the United States Stat. 539, 59 Cong. Ch. 3572, 4. Under the provisions of the Act, 2229 members of the Osage Tribe were identified to be included in the roll referred to in section four. Each of these members received one equal share of the Osage tribal trust estate, which share has come to be referred to as a headright. (Declaration of Charles Hurlburt [hereinafter Hurlburt Decl., ], attached hereto as Exhibit A, 2.) Pursuant to the Act, every year since 1906, the Department of Interior has made quarterly distributions of the monies derived from the Osage mineral estate (such as rents, royalties, lease bonuses, late payments), and any other income derived from trust assets or investment of trust funds. (Id.) Prior to these monies being distributed to the headright owners, they are deposited and reside in the tribal trust fund established under section four of the Act. (Id.) As time has passed, the interests in the headrights have been distributed and subdivided among various individuals and entities through inheritance, devise, and assignment. (Hurlburt Decl., 3.) Today, the original 2229 headrights 1/ are owned by 6453 individuals and entities (the headright owners ). (Hurlburt Decl., 4.) Current headright owners include not just descendants of the original Osage enrolled members, but also non-osage Indians, non-indian 1/ More precisely, due to the fact that when headright interests are subdivided, the Department of Interior rounds the resulting percentages down to avoid exceeding the overall number of headrights, there are currently headrights. (Hurlburt Decl., 3.) 3

11 individuals, corporations, non-profit organizations, private trusts, and the Osage Tribe itself. 2/ Specifically, 4363 headright owners are individuals who are descendants of the original enrolled Osage tribal members, 3/ 773 headright owners are individuals who are members of tribes other than the Osage nation, and 1317 headright owners are either non-indian individuals or entities not associated with the Osage Nation. (Id.) These entities include churches and related organizations, charitable organizations, and for-profit companies. 4/ (Hurlburt Decl., 5.) To further complicate matters, not all headright owners own equivalent species of interests. For instance, headright owners sometimes voluntarily elect to bequeath some of their interest as a life estate. (Hurlburt Decl., 7.) Further, in 1978, Congress enacted a statute prohibiting headright owners from transferring any interest greater than a life estate to any non-osage individual. Act of October 21, 1978, 92 Stat As a result, approximately 336 of the Osage Native American headright owners, 39 of the Non-Osage Native American headright owners, and 267 of the Non-Native American headright owners currently own their 2/ The Tribe first acquired headright interests in 1993, when it received the headrights that it owns in a general capacity. In 2006, it inherited an additional headrights to be used to fund educational programs. (Hurlburt Decl., 6.) 3/ Some of these individual headright interests are held in the form of revocable trusts or by the estates of deceased individuals. (Hurlburt Decl., 4.) 4/ The entities include, among others, the University of Oklahoma, the Sisters of St. Francis of Philadelphia, the Vestrymen of St. Paul's Episcopal Church, Southland Royalty Co., the Orange County Rehabilitation Institute, First Presbyterian Church, the Los Angeles Orthopedic Foundation, the Houston Oil and Minerals Corporation, Martin Luther Homes of Colorado Springs, the Shriners Hospital for Children, the Tulsa Boys' Home, the Baptist Foundation of Oklahoma, the CEJA Corporation, the Immaculate Conception Catholic Church, the Tenneco Oil Company, the Roman Catholic Diocese of Tulsa, Oklahoma, the Board of Regents for the University of Texas, the Hefner Company, Inc., the First National Bank and Trust Company, the Aladdin Petroleum Corporation, the Adobe Royalty Co., as well as a variety of private trusts. (Hurlburt Decl., 5.) 4

12 interest, at least in part, as a life estate. (Id.) Additionally, some Indian headright owners receive their distributions from the Osage mineral estate tribal trust fund account into Individual Indian Money ("IIM") accounts, of the type that are at issue in the class action Cobell v. Kempthorne, Civ. No (D.D.C.), while other Indian headright owners do not hold IIM accounts. See Cobell v. Kempthorne, --- F. Supp. 2d ---, 2008 WL , at *8 (D.D.C. 2008). Five of the seven Movants here receive their disbursements through IIM accounts. (Declaration of Melvin E. Burch, [ Burch Decl. ], attached hereto as Exhibit B, 3.) B. Procedural History On August 2, 1999, the Osage Tribe of Indians of Oklahoma filed a Complaint in Case Number 99-cv-00550, asserting claims that the United States mismanaged trust assets. On March 31, 2000, the Osage Nation and/or Tribe of Indians of Oklahoma filed suit in Case No. 00-cv-00169, asserting claims that the United States mismanaged tribal trust funds and failed to provide an accounting. The two cases were consolidated on September 14, On July 25, 2001, the United States filed a motion to dismiss in Case Number 00-cv In its motion, the United States argued, among other things, that to the extent the Tribe was seeking to recover on behalf of the Osage headright owners, it lacked standing to do so, and that [a]ny claims for royalties... must be brought by the true owners of such claims, the headright owners themselves. (Br. Supp. Mot., Dismiss, Doc. No. 28, at 29, 30.) The Court disagreed, stating: Plaintiff maintains that headright holders are not in fact the real parties in interest because the Tribe, not the headright holders, is the direct trust beneficiary. The court agrees. Osage Nation v. United States (hereinafter Osage I ), 57 Fed. Cl. 392, 395 (2003). The Court further reasoned: The responsibility of the government is to the tribal trust fund account. The tribal 5

13 trust fund is then responsible for the ultimate distribution to the individual headright owners. Importantly, the alleged mismanagement of the mineral royalties is described as taking place when the funds were within the tribal trust fund...the mismanagement is not alleged to take place at the point of distribution of the funds to the individual headright holders. Although the Tribe may have no further interest or claim to the funds once they are distributed to the headright owners, the court finds that the Tribe does have both an interest in and a claim to the funds when those funds are within the tribal trust account that was established by the 1906 Act. Id. (internal quotations omitted). From that point onwards, this case has been litigated with the assumption the Tribe is the real party in interest, at least for purposes of the pre-distribution claims. See e.g., Osage Nation v. United States, 81 Fed. Cl. 340, 345, 348 (2008) (noting that the Osage Nation is the beneficiary of the Osage mineral estate and tribal trust fund account created by the 1906 Act and reaffirming its holding that the Tribe, not the headright holders, is the direct trust beneficiary ). In the Spring of 2006, the parties tried the Tribe s claims that the United States violated its duty as trustee of the Osage mineral estate by failing to collect all moneys due from Osage oil leases and to adequately deposit and invest those moneys for four oil leases during five months (the Tranche One claims). As a result of this trial, on March 16, 2007, the Court entered judgment in favor of the Tribe in the amount of $ 1,876, Currently, the parties are in the process of analyzing extensive documentary discovery in preparation for briefing, commencing in December 2008, of the Tribe s motion for partial summary judgment. The Tribe s motion will address the Tribe s pre-distribution claims with regards to: (a) all deposit-lag, excessive-cash-balance, and investment-yield claims for United States fiscal years 1973 to 1992 and (b) all oil-royalty undercollection claims for July 1974 to December (See May 19, 2008 Sch. Order, at 1.) Thus, the parties and the Court have to this point focused on pre-distribution claims. As 6

14 demonstrated above, these claims have been, and continue to be, extensively litigated, and certain baseline assumptions have been established by the Court s orders. However, the full scope of the claims at issue in this case remains unclear. (See, e.g., United States Opp. Mot. Sch. Order, filed April 7, 2008, at 6) (noting that [t]he United States cannot comment on whether the time frames set forth by the Plaintiff are sufficient or insufficient as it cannot determine the universe of remaining claims from the limited characterization Plaintiff has provided ). The case thus may include post-distribution claims; i.e., claims regarding alleged misconduct by the United States following distribution of the funds, or segregation for distribution of the funds for distribution, to the headright owners. See Osage Nation v. United States, 72 Fed. Cl. 629, 631 n. 3 (2006) ( Osage II ) (noting that claims regarding alleged breaches by the government of any fiduciary duty in regard to the treatment of Osage trust funds that have been segregated for disbursement had been deleted from Tranche One); (Pl. s Stmt. Supp. Revised Proposed Amd. Sched. Order, filed March 23, 2005, at 4) (noting that it may have claims based on the Government s failure to invest these funds properly while they were held in trust or disburse these funds properly from the trust accounts to their rightful owners, including the Nation ). To the extent such post-distribution claims are part of this litigation, they have not been extensively litigated, nor has the Court issued definitive rulings outlining the scope of any such claims. Importantly, to the extent such claims properly exist in this litigation, the Court has not decided whether the Tribe is the proper party to be bringing such claims. But see Osage I, 57 Fed. Cl. at 395 (noting that the Tribe may have no further interest or claim to the funds once they are distributed to the headright owners ). Movants, seven individual headright owners, now seek to intervene in this case. In their 7

15 Motion, Movants indicate that they seek to intervene because they are interested in a share of damages already awarded and claims remaining to be tried because they will be beneficiaries of certain damages that may be awarded on them, (Mot., at 3) (emphasis added). However, in the proposed amended complaint attached to their motion, they appear to take a different tack, asserting that they are not simply beneficiaries entitled to a share of the Tribe s damages, but claiming entitlement to their own money judgment against the United States, as trustee, for the full amount of their pro rata share of those damages. (Mot., Ex. D thereto, 25.) The proposed complaint alleges that the United States owes fiduciary duties directly to the Movants with regards to the trust and trust assets. For instance, Movants allege that the United States owes them duties including: to make the assets of the trust productive for the benefit of the [headright owners];... to offer for lease the Osage mineral estate in such quantities and at such times as may be deemed for the best interests of the [headright owners]; and to provide the headright owners with an accounting of the revenue that the United States, as trustee, has collected or was required to collect under the oil and gas leases that the United States issued for the benefit of the [headright owners]. (See Mot., Ex. D, 20-21, 23.) And, Movants appear to assert that their damages arise from the government s alleged breach of these duties, not its alleged breach of fiduciary duties owed the Tribe. (See Mot., Ex. D, 20.) Such assertions conflict with the Court s determination that the Tribe is the real party in interest (at least until funds are distributed to the headright owners) and the course of litigation since the July 23, 2003 order. Movants also seek to intervene, not just on behalf of themselves, but on behalf of parties who are not currently before the Court. Specifically, Movants claim that they, as personal owners of headright interests, constitute members of an identifiable group of American Indians for purposes of the Indian Tucker Act, and ask to be allowed to intervene on behalf of 8

16 this group. ARGUMENT The United States does not completely oppose the Movants intervention in this case, but believes that any intervention should be significantly limited in several respects. First, Movants intervention should be limited to participating only in post-distribution claims, to the extent any have been asserted, as their request to participate in the pre-distribution claims is untimely and unnecessary. Regardless, to the extent they are permitted to intervene, Movants should not be allowed to enlarge the issues, as by asserting that they are entitled to pre-distribution damages as a result of fiduciary duties owed directly to them. Finally, Movants should be allowed only to intervene on behalf of themselves, and not their ill-defined identifiable group of American Indians. STANDARD OF REVIEW Under Rule 24, whether seeking intervention as of right or permissive intervention, an applicant must demonstrate that its request is timely. John R. Sand & Gravel Co. v. United States, 59 Fed.Cl. 645, 649 (Fed.Cl. 2004), aff d, 143 Fed. Appx. 317 (Fed.Cir. Jul 22, 2005). Additionally, a party seeking to intervene as of right under Rule 24(a)(2) must demonstrate that (1) it has an interest relating to the property or transaction that is the subject of the action; (2) without intervention the disposition of the action may, as a practical matter, impair or impede the applicant s ability to protect that interest; and (3) its interest is inadequately represented by the existing parties. John R. Sand & Gravel Co., 59 Fed. Cl. at 652 (quoting Freeman v. United States, 50 Fed. Cl. 305, (2001)). Alternatively, an applicant may be granted permissive intervention under Rule 24(b)(2) if it demonstrates that its claim or defense and the main action 9

17 have a question of law or fact in common. 5/ I. Movants Fail to Demonstrate that Their Intervention As to Pre-Distribution Claims is Permissible under RCFC 24. Movants should not be permitted to intervene as to pre-distribution claims. Not only is their petition untimely in that regard, but they are unable to establish the requisites of Rule 24(a) and (b). A. Movants Motion is Untimely with regards to Pre-Distribution Claims. Whether seeking permissive intervention or intervention of right, Movants must demonstrate that their application is timely. John R. Sand & Gravel Co., 59 Fed. Cl. at 657. The question of timeliness is largely committed to the discretion of the trial court. Cheyenne-Arapaho Tribes of Indians v. United States, 1 Cl.Ct. 293, 294 (1983) (hereinafter Cheyenne-Arapaho II ). The Court examines three factors when determining whether a motion to intervene is timely: (1) the length of time during which the would-be intervenors actually knew or reasonably should have known of their rights to intervene; (2) whether the prejudice to the rights of existing parties by allowing intervention outweighs the prejudice to the would-be intervenors by denying intervention; and (3) existence of unusual circumstances militating either for or against a determination that the application is timely. John R. Sand & Gravel Co., 59 Fed. Cl. at 649 (citing Belton Indus., Inc. v. United States, 6 F.3d 756, 762 (Fed.Cir.1993)). A court s analysis of the second factor is normally determinative: the most important consideration in deciding whether a motion for intervention is untimely is whether the delay in moving for intervention will prejudice the existing parties to the case. Nissei Sangyo Am., Ltd. v. United 5/ RCFC 24(a)(1) and (b)(1) are not applicable as Movants point to no federal statute that might grant them an unconditional or conditional right to intervene. 10

18 States, 31 F.3d 435, 439 (7th Cir. 1994) (quoting 7C Charles Alan Wright, et al., FEDERAL PRACTICE & PROCEDURE: CIVIL 2d 1916 (1986)). With regards to pre-distribution claims, Movants request to intervene is untimely given the prejudice that would result to the existing parties. Regarding the first factor, the Movants do not inform the Court when they first knew or should have known of their rights to intervene in this action (despite bearing the burden of demonstrating that intervention is proper). Under the circumstances, the Court may reasonably presume that they knew or should have known of their rights from at least the time the two complaints in this consolidated action were filed (on August 2, 1999 and March 31, 2000) since they are members of the Osage Tribe/Nation that filed the complaints. Regarding the third factor, the Movants fail to demonstrate any unusual circumstances militating for a determination that their application is timely. See John R. Sand & Gravel Co., 59 Fed.Cl. at 649. At best, Movants argue that they were not sufficiently put on notice that their rights to a pro-rata share were at risk until the Court and the parties examined and opined on the 2004 Sovereignty Act and the 2006 Osage Constitution. (Mot., at 10.) This argument is unavailing: earlier in their motion, Movants identify events from 2004 that gave rise to their concern that the Tribe would not adequately represent their interests (including the March 15, 2004 testimony before Congress by Chief Jim Gray; the subsequent enactment in 2004 of the Sovereignty Act; and the October 20, 2004 filing of the Third Amended Complaint). (See Mot., at 7-9.) Movants provide no excuse for their failure to not seek intervention in In any case, the timeliness analysis here turns on the second factor. First, the existing parties would be significantly prejudiced were Movants allowed to intervene as to the predistribution claims at this stage of the litigation. As the Court is aware, the Tribe and the United 11

19 States have already undertaken extensive discovery, briefed several dispositive motions, and even tried portions of the Tribe s claims, resulting in a damages award being entered in favor of the Tribe. In the next several months, the parties will be briefing the Tribe s motion for summary judgment. The briefing will require combing through, analyzing, and organizing in a presentable form the immense amount of documentary discovery that has been exchanged in the nine years this case has been active, as well as the application of principles established by previous orders in this case. Movants, as new entrants to the case, will be unable to acquire a sufficient mastery of the factual and legal issues in order to meaningfully participate in this briefing as scheduled. More importantly, the Movants proposed amended complaint appears to assert claims and theories for recovery that are at odds with the law of the case and the parties course of litigation in this case. Movants theory of recovery appears to be that they are entitled to damages arising from the United States alleged breach of fiduciary duties owed directly to them, rather than as beneficiaries of any damages awarded the Tribe. (Mot., Ex. D, 20.) This new theory will, at very least, require new discovery and motions practice. More importantly, it conflicts with the law of the case established in this action, and therefore could have an impact on the partial judgment already entered in this case. See, e.g. Osage I, 57 Fed. Cl. at 395 (finding that the Tribe, not headright owners, is the real party in interest). See also Taylor v. United States, 73 Fed.Cl. 532, 538 (2006) (quoting Agostini v. Felton, 521 U.S. 203, 236, 117 S.Ct (1997)) ( [t]he law of the case doctrine prevents a court from reopen[ing] issues decided in earlier stages of the same litigation ). Under such circumstances, Movants intervention would prejudice the existing parties and unduly complicate the litigation of the predistribution claims. Cf. Seneca Nation of Indians v. New York, 213 F.R.D. 131, 135 (W.D.N.Y. 12

20 2003) (denying application for intervention as untimely when, among other things, the case has progressed in litigation through discovery, motion practice, and determination of liability,... [and because] the proposed intervenor's claim that it is a successor-in-interest to the historic Seneca Nation is challenged by all of the existing principal parties, necessitating further discovery, additional motion practice ). 6/ In contrast to the prejudice intervention would work on the parties, Movants fail to demonstrate that they will be prejudiced should their intervention be denied. Movants overriding concern, which is purely speculative at this point, appears to be that they will not receive their pro-rata share of any damages because the Tribe may attempt to dilute the property rights of headright owners. (Mot. at 9.) However, Movants have made no attempt to demonstrate that this lawsuit presents the only or even the best opportunity that they will have to protect their interests to a fair share of the damages. See Cheyenne-Arapaho II, 1 Cl.Ct. at 296 ( [w]hile the movants may face the prospect of being excluded from the distribution of judgment funds, they have made no showing that other future avenues of relief, either in Congress, or against the Tribe or others are totally unavailable ). See also John R. Sand & Gravel Co., 59 Fed. Cl. at 651 ( [n]umerous courts have found the prejudice to potential intervenors to be slight and intervention to be inappropriate where relief is available elsewhere ) 6/ The Movants claims are, of course, consistent with the position that the United States has previously argued in this litigation: the headright owners, if anyone, are entitled to seek damages from the United States with regards to its alleged mismanagement of trust assets and funds. The United States does not abandon this position, but at this juncture considers the issue effectively closed under the present circumstances, unless and until the Court either reconsiders its previous ruling or it is overturned on appeal. See Applegate v. United States, 52 Fed.Cl. 751, 765 (2002) (absent extraordinary circumstances, interests of judicial economy and promotion of consistency of decision prohibit relitigation of matters already adjudicated). Movants can of course file an amicus brief when the issue reaches the Court of Appeals. 13

21 (internal quotation omitted). Indeed, the United States believes that the determination of the specific allocation of any damages award in this case should not be adjudicated in this case. Rather, upon final entry of a judgment herein, the United States believes that the provisions of the Indian Tribal Judgment Funds Use or Distribution Act should apply, requiring Department of the Interior to establish a plan for use or distribution of these judgment funds, subject to Congressional oversight. See 25 U.S.C See also Cheyenne-Arapaho Tribes of Indians of Oklahoma v. United States, 671 F.2d 1305, 1311 n.4 (Ct.Cl. 1982) (hereinafter Cheyenne-Arapaho I ). Such an administrative process falls within the expertise of the Department and is preferable to the cumbersome and difficult attempt to ensure that all interested parties are joined or represented in this litigation. Movants provide no reason why they would be unable to participate in such a process. 7/ In any case, the distribution of any damages awarded the Tribe is addressed by federal statutes. See Osage I, 57 Fed. Cl. at 395; 2004 Sovereignty Act, Pub. L , 118 Stat (2004) (expressly prohibiting the Tribe from diminishing the headright owners property interests in determining its membership). Should Movants deem any eventual damages allocation unlawful, they would presumably have recourse to an appropriate court to compel 7/ Plaintiff s position as to how any damages award will be allocated is not clear: however, it currently appears to take the position that the damages will be allocated under the self-executing machinery of the 1906 Act. (See Excepts of Transcript of Feb. 5, 2008 hearing, at 45-46, attached hereto as Exhibit C). In particular, Plaintiff s counsel stated: [w]here the tribe receives money from the United States where there are claims against it monies will be paid into that tribal trust fund account and distributed to headright holders just as they were if it was proceeds from the mineral estate. Id. Even assuming that Plaintiff s proposal is correct, then it would appear that the allocation of the damages would still be made administratively by the Department of Interior and after final judgment was entered in this case and the case closed. 14

22 distribution in accordance with applicable law. See Cheyenne-Arapaho II, 1 Cl.Ct. at 296. As a result, the possible prejudice to Movants is at best slight and significantly outweighed by the prejudice that would accrue to the existing parties, and intervention under either Rule 24(a) or (b) is inappropriate with regards to the pre-distribution claims. See id.; John R. Sand & Gravel Co., 59 Fed.Cl. at / B. Movants Cannot Demonstrate Entitlement to Intervention of Right under Rule 24(a) with regards to the Pre-distribution Claims Because their Interests are not at Risk. For similar reasons, and given the law of the case, Movants also cannot demonstrate that the remaining Rule 24(a) factors support their claim with regards to pre-distribution claims. Arguably Movants meet the first factor (i.e., they have an interest relating to the property or transaction that is the subject of the action). But see John R. Sand & Gravel Co., 59 Fed.Cl. at 653 ( [t]he interest of applicants in the property or transaction must be of such a direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment ) (emphasis added and internal quotation omitted). However, regarding the second factor, Movants make no showing that they will be unable to protect their interest absent intervention. As discussed above, under the law of the case, the proper party to bring claims seeking damages under the pre-distribution claims is the Tribe. While headright owners such as the Movants may have an interest in any damages awarded the Tribe, Movants have failed to demonstrate that this action will impair or impede their ability to protect such interest. See Meridian Homes Corp. v. Nicholas W. Prassas & Co., 89 F.R.D. 552, 554 (N.D. Ill. 1981) 8/ In contrast, because the parties have not yet dedicated significant time or resources to litigating any post-distribution claims, the parties would not be significantly prejudiced by Movants intervention as to any such claims. 15

23 (refusing to allow intervention by parties which had right to some of joint venture s profits in dispute between joint venturers because, while the outcome of this action will of course affect Intervenors, it would not impair their ability to protect their interests). Indeed, as discussed above, Movants will have other opportunities to ensure their interests are represented in an allocation of any damages. See, e.g., See Cheyenne-Arapaho II, 1 Cl.Ct. at 296. Finally, Movants admit that their interest up to the point of allocation of any damages award is adequately represented by the Tribe. (Mot., at 6.) Because it is unclear that an allocation will even be adjudicated in this case, they fail to satisfy the third factor inadequate representation of their interest by the existing parties as well. Consequently, because Movants fail to demonstrate that the Rule 24(a) factors each support their intervention as to pre-distribution claims, they should not be permitted to intervene as of right as to such claims. 9/ C. Movants Motion Fails under Rule 24(b) with regards to Pre-distribution Claims. Movants also do not demonstrate that permissive intervention is appropriate with regards to the pre-distribution claims. Trial courts possess broad discretion in resolving applications for permissive intervention. John R. Sands & Co., 59 Fed. Cl. at 649 (internal quotations omitted). First, as discussed above, Movants request is untimely with regards to the pre-distribution claims, and permissive intervention is inappropriate for that reason alone. See id., at 657. Furthermore, under Rule 24(b), the court must consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties. Id., (quoting RCFC 24(b).) For the reasons discussed above, allowing Movants to intervene at this late date as to the 9/ Again, any post-distribution claims are distinguishable: unlike with pre-distribution claims, the Court has not determined that the Tribe, rather than the headright owners, is the real party in interest for any post-distribution claims. 16

24 pre-distribution claims would delay and prejudice the original parties, and therefore their intervention should not be allowed. II. If Movants Are Allowed to Intervene as to the Pre-distribution Claims, They Should Not Be Permitted to Enlarge the Issues. Even if the Court allows Movants to intervene as to the entire case, then it should prevent Movants from enlarging the issues in this case. The Supreme Court has made clear that an intervenor is admitted to the proceeding as it stands, and in respect of the pending issues, but is not permitted to enlarge those issues or compel an alteration of the nature of the proceeding. Vinson v. Washington Gas Light Co., 321 U.S. 489, 498 (1944). In other words, [a]n intervening party may join issue only on a matter that has been brought before the court by another party. Seminole Nation v. Norton, 206 F.R.D. 1, 7 (D.D.C. 2001) (citing Illinois Bell Telephone Co. v. FCC, 911 F.2d 776, 786 (D.C. Cir.1990)). See also Wash. Elec. Coop. v. Mass. Mun. Wholesale Elec. Co., 922 F.2d 92, 97 (2d Cir. 1990) ( [i]ntervenors must take the pleadings in a case as they find them ); Southwest Penn. Growth Alliance v. Browner, 121 F.3d 106, 121 (3d Cir. 1997) ( [i]t is a general rule that an intervenor may argue only the issues raised by the principal parties and may not enlarge those issues ). As discussed above, Movants proposed amended complaint contains allegations and claims which would enlarge the issues to be litigated in this action. Movants allege, for instance, that the United States owes them a variety of duties relevant to pre-distribution claims, such as a duty to properly administer the trust;... to keep the trust assets of the [headright owners] separate from other property not subject to the trust;... to make the assets of the trust productive for the benefit of the [headright owners];... to offer for lease the Osage mineral estate in such quantities and at such times as may be deemed for the best interests of the [headright owners]. 17

25 (Mot., Ex. D, ) As importantly, Movants appear to assert that their entitlement to money damages arises, not because they are beneficiaries of any damages awarded the Tribe, but because the United States breached its obligations owing directly to them. (See Mot., Ex. D, 25.) As discussed above, the Court has previously ruled that the Tribe, and not the headright owners, is the real party in interest with regards to the pre-distribution claims, and the parties have litigated the claims with this understanding. See Osage I, 57 Fed. Cl. at 395. Movants proposed amended complaint would therefore enlarge the issues to be litigated in this case and alter the nature of the action. See Vinson, 321 U.S. at 498. As a result, to the extent Movants are allowed to intervene as to the pre-distribution claims, they should be prohibited from claiming that they are entitled to damages based on the alleged breaches of any fiduciary duty owed directly to the headright owners, or otherwise expanding the issues in this case. 10/ III. Movants Should Not Be Permitted to Intervene on Behalf of any Group. No matter the scope of the claims Movants are permitted to intervene as to, they should be allowed to intervene only as individuals representing their own interests. Specifically, the Movants basis for their request to act in a representative capacity, that they as personal owners 10/ Of note, in their proposed amended complaint, Movants appear to allege that they are entitled to some sort of an accounting. (See Mot., Ex. D, 23.) Even though what type of an accounting (or for what specific accounts) is not clear from the proposed complaint, any accounting claim would inappropriately expand the issues in this case. Moreover, five of the seven Movants receive their distributions through IIM accounts, and they already have a pending claim in the United States District Court for the District of Columbia for an accounting of their IIM accounts. See 28 U.S.C. 1500; Cobell v. Babbitt, 30 F. Supp. 2d 24, 28 (D.D.C. 1998) (noting that "[o]n February 4, 1997, the Court certified the named plaintiffs under Fed.R.Civ.P. 23(b)(1)(A) and (b)(2) as representatives of a class consisting of all present and former beneficiaries of the IIM accounts"). 18

26 of headright interests are an identifiable group under the Indian Tucker Act[,] 28 U.S.C. 1505, fails as a matter of law, and even if it did not, Movants are not authorized under 1505 to act as a group s representative in this action. In any case, at least with regards to the predistribution claims, the relevant identifiable group is already present in this litigation, i.e., the Tribe. Finally, Movant s proposed identifiable group could not adequately represent all the absent headright owners (especially those non-indian headright owners), and therefore allowing their intervention as representatives would not further interests of judicial efficiency or finality. A. Personal Owners of Headright Interests is Not an Identifiable Group of American Indians for purposes of 28 U.S.C Movants claim that they as personal owners of headright interests are an identifiable group under the Indian Tucker Act[,] 28 U.S.C (See Mot., at 11.) Movants do not specifically describe the group they seek to represent: they may be seeking to represent all individual owners of headrights, or alternatively all Indian headright owners who are original allottees or their descendants. (See id.). However, neither of these groups ever existed as a distinct, self-governing community of American Indians, or were even dealt with as a distinct group by the United States government, and thus neither can constitute an identifiable group of American Indians for purposes of the Indian Tucker Act. See infra, pp First, Movants claim that they, as personal owners of headright interests, are an identifiable group under the Indian Tucker Act[,] 28 U.S.C (Mot., at 11.) Movants do not define this proposed group, but it appears to encompass all individual headright owners. If so, Movants request is wholly without merit because their proposed group would necessarily include a significant number of individuals who are not American Indians. (See supra, pp. 4-5 supra). As discussed below, 1505 may be ambiguous as to which groups of Indians constitute 19

27 an identifiable group of American Indians; it unambiguously does not encompass groups that include non-indians. As a result, Movants invocation of 1505 fails outright. Even assuming Movants seek to describe a more circumscribed group, such as all Indian headright owners who are original allottees or descendants of such allottees (see Mot., at 11), they cannot demonstrate that such group constitutes an identifiable group of American Indians for purposes of 1505, because it is not (and never has been) a distinct, self-governing community of American Indians. 28 U.S.C provides: The United States Court of Federal Claims shall have jurisdiction of any claim against the United States accruing after August 13, 1946, in favor of any tribe, band, or other identifiable group of American Indians residing within the territorial limits of the United States or Alaska whenever such claim is one arising under the Constitution, laws or treaties of the United States, or Executive orders of the President, or is one which otherwise would be cognizable in the Court of Claims if the claimant were not an Indian tribe, band or group. 28 U.S.C (emphasis added). Because the term identifiable group of American Indians is ambiguous with regards to what types of groups of Native Americans it encompasses, it is necessary to turn to the statute's structure and legislative history. See C.I.R. v. Tufts, 461 U.S. 300, 315, 103 S.Ct. 1826, 1835 (1983) (noting that where apparent conflict of subsections rendered the facial meaning of the Internal Revenue Code ambiguous, the Court would look to the statute's structure and legislative history ). Further, because 1505 creates a waiver of sovereign immunity, such ambiguity must be resolved in favor of the government. See United States v. Williams, 514 U.S. 527, 531, 115 S.Ct. 1611, 1616 (1995) (citing United States v. Nordic Village, Inc., 503 U.S. 30, 33, 112 S.Ct. 1011, 1014 (1992)). See also RHI Holdings, Inc. v. United States, 142 F.3d 1459, 1461 (Fed. Cir. 1998) (waivers of sovereign immunity are to be construed in favor of the government). 20

28 The structure of 1505 itself indicates that an identifiable group of American Indians is something akin to a tribe or a band, i.e., a distinct community of self-governing Indians. In particular, the term is listed as a general catch-all following the specific terms tribe and band. See 28 U.S.C [U]nder the established interpretative canons of noscitur a sociis and ejusdem generis, where general words follow specific words in a statutory enumeration, the general words are construed to embrace only objects similar in nature to those objects enumerated by the preceding specific words. Wash. State Dept. of Social and Health Servs. v. Guardianship Estate of Keffeler, 537 U.S. 371, 384, 123 S.Ct. 1017, 1025 (2003) (internal quotation omitted). See also Gutierrez v. Ada, 528 U.S. 250, 255, 120 S.Ct. 740 (2000) ( words... are known by their companions ); Bighorn Lumber Co., Inc. v. United States, 49 Fed. Cl. 768, 770 (2001) ( the rule of ejusdem generis limits general terms which follow specific ones to matters similar to those specified ). This proposition is confirmed by the fact that Congress used the word other prior to the term identifiable group. See Sidwell v. Express Container Services, Inc., 71 F.3d 1134, 1139 (4th Cir. 1995) (use of word other following the enumerated adjoining areas confirms that the scope and nature of the other adjoining area[s] are to be defined by reference to the enumerated areas; in other words, the additional unenumerated covered areas are to be understood as of the same type as those enumerated ) (emphasis added). As a result, an identifiable group of American Indians must be construed as similar in nature to a tribe or a band. follows: In 1901, the United States Supreme Court defined the terms tribe and band, stating as By a tribe we understand a body of Indians of the same or a similar race, united in a community under one leadership or government, and inhabiting a particular though sometimes ill-defined territory; by a band, a company of Indians not 21

29 necessarily, though often, of the same race or tribe, but united under the same leadership in a common design. While a band does not imply the separate racial origin characteristic of a tribe, of which it is usually an offshoot, it does imply a leadership and a concert of action. How large the company must be to constitute a band within the meaning of the act it is unnecessary to decide. It may be doubtful whether it requires more than independence of action, continuity of existence, a common leadership, and concert of action. Montoya v. United States, 180 U.S. 261, 266, 21 S.Ct. 358, (1901). In other words, both a tribe and a band constitute distinct, self-governing communities of American Indians: [i]n short, Indian tribes or bands are separate communities of citizens of Indian descent, possibly with a common racial origin, possessing the power of a sovereign to regulate their internal and social relations. Navajo Tribal Util. Auth. v. Ariz. Dept. of Revenue, 608 F.2d 1228, (9th Cir. 1979) (quoting Cape Fox Corp. v. United States, 456 F.Supp. 784, 797 (D. Alaska 1978)). Accordingly, any other identifiable group of American Indians must also constitute a separate community of citizens of Indian descent, possessing some semblance of internal governance, thereby allowing the United States government to deal with the group as a distinct group of Indians. An analysis of the relevant legislative history and context of 1505 confirms this interpretation. Section 1505 originated in the similarly worded Section 24 of the Indian Claims Commission Act ( ICCA ). Hebah v. United States, 428 F.2d 1334, 1339 (Ct.Cl. 1970) ( When Congress enacted the Indian Claims Commission Act of 1946, 60 Stat. 1049, it created, in 24 of that statute (60 Stat. 1055), the provision which later became 28 U.S.C. 1505"). The legislative history of the ICCA generally discusses its jurisdictional grant in terms of tribes. For instance, the House Committee Report stated: As respects claims accruing after its adoption this bill confers jurisdiction on the Court of Claims to determine and adjudicate any tribal claim of a character which would be cognizable in the Court of Claims if the claimant were not an Indian 22