CHAPTER 10 ADMINISTRATIVE APPEAL PROCEDURES FOR RIGHTS-OF-WAY, MINERAL LEASES, AND MINERAL AGREEMENTS ON INDIAN LANDS

• Jurisdiction: United States

Natural Resources and Environmental Administrative Law and Procedure II
(Sep 2004)
CHAPTER 10
ADMINISTRATIVE APPEAL PROCEDURES FOR RIGHTS-OF-WAY, MINERAL LEASES, AND MINERAL AGREEMENTS ON INDIAN LANDS
Robert S. Thompson, III
Matthew L. Crockett
Pruitt Gushee
A Professional Corporation
Salt Lake City, Utah

Robert S. Thompson, III is a shareholder and a managing director of the Salt Lake City law firm Pruitt Gushee. His present practice concentrates on oil and gas transactional work on Indian and public lands, access and rights-of-way issues on Indian and public lands, and appeals of Bureau of Indian Affairs' decisions regarding Indian land development, access, and oil and gas operational matters.

Bob received his B.S. in Education, magna cum laude, from the University of Georgia in 1973, and his J.D. from the University of Wisconsin in 1979. Upon his graduation from the University of Wisconsin, he was selected for the Solicitor's Honors Program, Office of the Solicitor, U.S. Department of the Interior, where he remained until 1981.

He entered the private practice of law in 1981, and since that time has been extensively involved in the development of Indian natural resources both as counsel for tribal lessors and industry clients doing business on Indian lands. He is an enrolled member of the Cherokee Nation of Oklahoma; has made presentations on the development of Indian minerals to the National Academy of Sciences and the Federal Indian Bar Association; was a committee member on the group drafting the existing valuation regulations for natural gas production from Indian lands; has negotiated and assisted in the passage of legislation addressing the dual severance tax imposed on Indian lands; and has litigated acceptable and proper manufacturing allowances for natural gas from Indian lands.

Bob is a member of the Bars of Wisconsin and Colorado, the U.S. Supreme Court, the U.S. Court of Claims, and the Eighth, Ninth and Tenth Circuit U.S. Courts of Appeals, and various Indian Bar associations. Email: rst@pruittgushee.com.

Matthew L. Crockett is a shareholder of the law firm Pruitt Gushee. His practice is concentrated in access to and development of public and Indian lands, transactions involving those lands, and environmental law. Matt is admitted to practice in the state and federal courts of Utah and Wyoming.

He earned a B.S. in Geography from University of Utah in 1994 and a J.D. from the University of Wyoming in 2002. Matt interned with the U.S. Department of Justice's Environment and Natural Resources Division and joined the law firm as a clerk in 2001. Prior to being a lawyer, Matt had a career as an environmental scientist and project manager with a national engineering firm. Email: mlc @pruittgushee.com.

TABLE OF CONTENTS

BACKGROUND

INTRODUCTION

I. INDIAN RIGHTS-OF-WAY, MINERAL LEASING and MINERAL DEVELOPMENT AGREEMENT STATUTES.

1.1 Rights-of-Way.

1.1.1 Application for and Assignments of Rights-of-Way.

1.1.2 Termination of Rights-of-Way.

1.2 Indian Mineral Leasing Acts -- Leases for Mining Purposes.

1.2.1 Grant and Approval of Mining Leases, Agreements and Assignments.

1.2.2 Geological and Geophysical Permits.

1.2.3 Non-Compliance and Cancellation of Mining Leases.

1.3 Indian Mineral Development Agreements.

1.3.1 Negotiation and Approval of Minerals Agreements.

1.3.2 Amendments to and Assignments of Minerals Agreements.

1.3.3 Non-Compliance, Penalties and Cancellation of Minerals Agreements.

II. HIERARCHY OF THE BIA and BIA APPEAL PROCEDURES.

2.1 The Agency Office.

2.2 The Regional Office.

2.3 The IBIA and the Assistant Secretary.

2.3.1 Finality of Decisions Pending Appeal.

2.3.2 Procedural Rules of OHA and the IBIA.

2.4 Elements of the Notice of Appeal, Statement of Reasons, and Briefs to IBIA

2.4.1 Notice of Appeal.

2.4.2 Statement of Reasons.

2.4.3 Briefing Before the IBIA.

2.5 Time, Service, and Scope of Review.

2.5.1 Computing Time.

2.5.2 Service and Filing.

2.5.3 Scope of Review.

2.6 Final Agency Action and Decisions Appealable to District Court.

III. CONCLUSION

BACKGROUND

Not surprisingly, many mineral development practioners have managed to represent their clients throughout their entire careers without ever having encountered the need to appeal an administrative decision of the Bureau of Indian Affairs ("Bureau" or "BIA"). In today's ever shrinking land market within the United States and in an era of strong mineral pricing, that is likely no longer to be the case. The underlying reason why administrative appeals involving the leasing, use, and/or development of minerals or lands in which Indian tribes and Native Americans hold beneficial title is quite simple.

Indian land ¹ comprises approximately 5 percent of the land area of the United States, and contains an estimated 10 percent of all energy reserves in the United States. ² Those estimates include 5 percent of the known onshore oil deposits, 10 percent of known onshore gas and 30 percent of known onshore coal deposits in the United States. ³ The Department of the Interior estimates that only 25 percent of the oil and less than 20 percent of all natural gas reserves on Indian land have been developed. ⁴ In the year 2000, 9.3 million barrels of oil, 299 billion cubic feet of natural gas, and 21.4 million tons of coal were produced from Indian land. ⁵ The BIA reports that in 1997 it administered 3,952 mineral leases, licenses, permits, and applications including 3,754 producing or producible Indian oil and gas leases, 6 coal leases, and 45 leases for other minerals on Indian lands. ⁶

Assuming that a mineral company acquires an interest in minerals located on Indian land and/or requires access on Indian land, it can anticipate, or should anticipate, finding itself in disputes with the Indian landowner upon whose property the activity is occurring. Landowners, lessors, and development companies being who and what they are, disagreements are likely inevitable. In the event a developer or user versus Indian landowner dispute demands adjudication for its resolution, the developer or user of Indian land may find itself without a tribal defendant ⁷ or litigating its action in a judicial forum that is seen by some as unsympathetic to oil and gas and other mineral interests. ⁸ The BIA and Interior Board of Indian Appeals ("Board" or "IBIA") appeal procedures offer to mineral development interests an independent and alternative avenue to resolve such disputes if and when they arise. ⁹ Accordingly, the holder of a BIA-issued or approved grant of access or mineral lease should become familiar with the procedures to appeal the actions of a BIA official or Assistant Secretary-Indian Affairs, as appropriate, affecting the holder's rights under and to enforce the grant. ¹⁰

Moreover, access to Indian lands and minerals for exploration and development may be obtained only with the consent of the Indian landowner and the approval of the BIA. ¹¹ Indian land grants of access are subject to the specific act under which granted and the applicable BIA regulations in Title 25 C.F.R. ¹² Special leasing statutes and regulations for certain Indian lands in several states including Alaska, Montana, Oklahoma and Wyoming also govern access grants in those states, but are not addressed in this paper because of their specificity. Nevertheless, the same administrative appeal procedures described herein also apply to these lands. ¹³

INTRODUCTION

This paper addresses the administrative appeal procedures within the BIA for BIA-issued or approved rights-of-way, mineral leases, and mineral agreements for Indian lands. The applicable federal statutes and the regulations thereunder impose strict procedural requirements on the non-Indian grantee, the Indian landowner, and on the BIA. ¹⁴ In brief summary, non-Indians such as mineral development companies operating on Indian lands have standing to use the BIA's appeal procedures only with regard to (1) an action of a BIA official, or (2) the inaction of a BIA official concerning the company's right to occupy and use Indian land. ¹⁵

The administrative appeal procedures described below, applicable filing requirements, and time limitations are the general procedures for BIA appeals found in 25 C.F.R. part 2 and 43 C.F.R. part 4. These general procedures apply to Indian rights-of-way, mineral leases, and mineral agreements, and control a BIA appeal in the absence of another specific appeal procedure contained in a particular statute or regulation. ¹⁶ The procedures are presented in a stepwise fashion as the regulations would be encountered when making an appeal up through the hierarchy of the BIA to the IBIA.

To better encompass the topic of doing business on Indian lands and making administrative appeals within the BIA, the discussion first introduces those Indian rights-of-way and leasing statutes and regulations pertinent to mineral extraction and development on Indian lands, then moves to the organizational hierarchy of the BIA, and concludes with the BIA's internal appeal procedures.

I. INDIAN RIGHTS-OF-WAY, MINERAL LEASING and MINERAL DEVELOPMENT AGREEMENT STATUTES.

An oil and gas or other mineral exploration, development, and/or production company's ("mineral company" or "company") right to occupy, explore, and/or develop Indian land is made at the permission of the Indian landowner and the United States through the BIA. ¹⁷ The company's rights to use and occupation will be defined by the documents granting access, all of which are either issued or approved by the BIA. The company's duties and rights under a grant of access are further defined by federal statute and regulation. Decisions of the BIA affecting such duties and rights are subject to the appeals discussed in Section II below. A summary of those statutes and regulations most commonly applicable to a mineral company operating on or using Indian land follow.

1.1 Rights-of-Way.

Rights-of-way...