MINERAL TITLE EXAMINATION ON NATIVE AMERICAN LANDS

• Jurisdiction: United States

Oil & Gas Mineral Title Examination (Sep 2019)
CHAPTER 8A
MINERAL TITLE EXAMINATION ON NATIVE AMERICAN LANDS
TJ Oram ¹
Oram & Houghton PLLC
Phillipsburg, MT

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TJ ORAM is a founding member of Oram & Houghton, PLLC, and he leads a group of twenty attorneys who draft title opinions in Montana, Utah, North Dakota, Wyoming, Oklahoma, Texas, New Mexico, and Colorado. He has experience drafting and supervising the drafting of numerous drilling and division order title opinions on federal, fee, state, and Native American lands. Prior to forming Oram & Houghton, TJ was the Rockies Case Manager and District Coordinator for a Texas based law firm, where TJ personally supervised and managed a large group of attorneys who drafted title opinions for and provided other drilling and division order advice to many oil and gas operators in the Rocky Mountain Region. Before joining that firm, TJ was trained by many of the finest and most well respected natural resource law and business law attorneys in Montana and North Dakota at Crowley Fleck, PLLC in Billings, Montana. TJ also has experience with oil and gas transactions, administrative and regulatory matters, oil and gas commissions, condemnation actions, health care law, large real estate transactions, probates and estates, commercial litigation, entity formation, and other commercial legal matters. TJ graduated Cum Laude with a J.D. from the University of Idaho and an M.B.A. from Washington State University. He is a member of the Rocky Mountain Mineral Law Foundation, the Denver Association of Petroleum Landmen, the Montana Petroleum Association, and has spoken at a number of events on oil and gas title issues and Native American law. He is currently admitted to practice in Montana, Wyoming, North Dakota, Colorado, Oklahoma, New Mexico, and Utah.

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TABLE OF CONTENTS

I. Introduction

II. Brief History of Ownership on Native American Lands

III. Location and Search of Records

A. Record Repositories

B. Land Titles and Records Offices

C. Title Status Reports

D. BLM State Offices, Regional BIA Offices, Agency Realty Offices, and Other Repositories

E. Access

IV. Short List of Some Unique Native American Title Issues

A. Leasing Methods and Approval of Lease

B. Claims to Navigable Riverbeds

C. Expanding Boundaries

D. Rights-of-Way and Surface Access Issues

E. Sovereign Immunity Doctrine

F. Trust and Fee Patents

G. Fractionation and Probate

H. Taxation

I. Assignment Approval and Overriding Royalty Assignments

J. Recording Statute

V. Unique Issues in Different Jurisdictions

VI. Indian Leasing, Including Unitization, Communitization, and Lease Severance

VII. Conclusion

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I. INTRODUCTION

Native American lands,² for purposes of mineral title examination, are made up of the following:

a. lands held by the United States in trust for tribes and for individual Native American allottees, whether those lands are located within the exterior boundaries of Native American reservations ("reservations") or outside those boundaries,

b. lands owned in fee by tribes or Native American and Non-Native American individuals, located within the exterior boundaries of reservations, and

c. lands owned by state and federal governments, located within the exterior boundaries of reservations. ³

This paper primarily focuses on mineral title examination of Native American lands as described in a. above, those lands held in trust by the United States and subject to restrictions that prohibit or limit transfer of ownership (i.e., restrictions on alienation) applied by the federal government.⁴ It is important to note there exist some lands that have restrictions on alienation but that are not trust lands. Such lands are treated the same for purposes of real property and natural resource management [under jurisdiction of the Bureau of Indian Affairs ("BIA") Land Titles and Records Offices ("LTROs")], as well as the mineral title examination practices discussed herein, so reference throughout the remainder of this paper to "trust lands" is intended to encompass lands that are restricted from alienation but not held in trust.

Native American lands contain numerous natural resources. Because of increased development of these resources, mineral title examination on Native America lands has become increasingly necessary and important. As of the year 2000, the federal government managed approximately 3,772 mineral leases, licenses, permits, and applications on Native American lands.⁵ This number appears to be significant; however, only a small portion of prospective

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Native American lands are being developed. The Department of the Interior estimated that in 2018 energy development was taking place on only 2.1 million acres of Native American lands, while another fifteen million acres with energy potential remained untouched; in other words, eighty-eight percent of Native American lands with energy potential had not been developed as of 2018.⁶ As reported in 2013, on the Fort Berthold Reservation in North Dakota, located at the center of the shale oil boom, hundreds of wells had been drilled; however the density and amount of wells drilled on the reservation pales in comparison to adjacent Non-Native American lands.⁷ The potential for increased development on Native American lands in immense.

Many issues complicate oil and gas development and mineral title examination on Native American Lands, including federal regulations⁸ and "complex bureaucracies."⁹ Examination of title to Native American lands differs from and is often more complex than examination of title to other lands due to these federal regulations and the bureaucracies, in addition to the trust relationship between the federal government and the individual Native American or tribe.¹⁰ The Unites States, as the trustee, has a fiduciary duty to serve the best interests of the beneficial owner: the tribe or the individual Native American. Because of this fiduciary responsibility, every step in a chain of title and in a mineral leasehold chain should be rigorously examined to ensure the United States always fulfilled its duty by following all proper procedures and acquiring all proper approval or consent. Proper examination of title to Native American lands requires an examiner first be knowledgeable of: a) general Native American law; b) applicable federal regulation, statutes, and orders; and c) the history of those particular Native Americans, tribes, and reservations where the lands being examined are located.¹¹ Examination begins by obtaining, when available, all of the documents needed from the various repositories of title documents for Native American lands. Then the title examiner should examine all of the documents obtained and ensure that the United States properly fulfilled its fiduciary duty throughout the chain of title.

II. BRIEF HISTORY OF OWNERSHIP ON NATIVE AMERICAN LANDS

The concept of Native American lands being held "in trust" originated with the European discovery of this country and determination that "indigenous landowners" had property rights "that could be extinguished through only federal purchase or conquest."¹² After the founding of this country, the United States Government began to hold "formal title and exercised some supervisory role over Indian lands," while Native Americans retained the occupancy rights.¹³

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The United States Constitution has provided Congress the power to "regulate Commerce with . . . Indian Tribes."¹⁴ Relying on this authority, the United States Supreme Court has maintained that Congress possesses a broad power over Native Americans and their lands,¹⁵ somewhat akin to a paternal role. For example, in one decision in 1886, the United States Supreme Court described Indian tribes as "wards of the nation."¹⁶

The Indian Removal Act was enacted in 1830 and "required the Indians to agree to relocate west of the Mississippi River or submit to state law."¹⁷ Subsequently, in 1851, the Indian Appropriations Act was passed, providing "funds to move Indian tribes onto farming reservations . . . . Indians were not allowed to leave [these farming reservations] . . . without permission."¹⁸ This forced arrangement continued until 1887 with the passage of the Dawes Act. The Dawes Act allowed the division of reservations into small plots or allotments for use by Native American individuals.¹⁹

The Dawes Act started the allotment of Native American lands to Native American individuals. "With allotment, the federal government reached into reservation boundaries, wiped clean existing indigenous systems for allocating internal land rights, and redistributed reservation properties to individual Indians in parcels . . . ."²⁰ Those advocating on behalf of allotment argued that Native American individuals required their own property to become a part of American society.²¹ Close to ninety million acres of the Native American lands that were not allotted were designated as surplus lands, and by the end of the allotment period, these surplus Native American lands had been either sold in fee to non-Native Americans or alienated.²²

Subsequently, in 1934, Congress enacted the Indian Reorganization Act, which was intended to restore Native American culture and tribal self-governance.²³ This Act stopped allotments of Native American Lands, allowed tribes to continue to own Native American lands, and allowed the federal government the power to purchase back some Native American lands for the Native Americans. However, in 1953, the federal government appears to have reversed course and moved to disband the tribes, sell their land, and relocate Native Americans into cities.²⁴ At that time, House Concurrent Resolution 108 was passed, and more than 100 tribes were terminated and no longer recognized by the United States government. In 1968, President Lyndon B. Johnson gave a message to Congress focusing on an end to paternalism over Native

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Americans. This message slowed the...