The biggest question before federal judge Jennifer Choe-Groves on Wednesday was the issue of whether Osage Wind LLC was continuing to trespass on the Osage Mineral Estate. The plaintiffs in the case, the federal government as the trustee, say unequivocally yes. The rock Osage Wind pulled from the ground through backhoe and dynamite continues to buttress the giant wind turbines that dot the prairie north of Pawhuska.
The defendants say no, this is not continued trespass. Osage Wind admits they did not have a permit and did trespass by pulling rock from the ground but says that was it. The trespassing doesn’t continue and therefore they should not be held liable for further damages, only a one one-time payment for damages already done.
What those damages look like in a dollar amount – the two sides are wildly far apart.
The federal government and the Osage Minerals Council’s figure sits at $247,979.42. Enel’s figure is $68,993.
A lawsuit was filed in late 2014 by the federal government against subsidiaries of the Italian energy giant Enel, which owns Osage Wind.
When the lawsuit was first filed, U.S. District Court Judge James H. Payne ruled that Enel wasn’t illegally mining limestone and other minerals that belonged to the Osage Nation when erecting the turbines.
Two years later Payne was overruled by the U.S. Court of Appeals, which said the activity was mining because Enel gathered rock, crushed it, and then used it for a commercial purpose: building the base for the turbines with rock. Enel appealed that decision to the U.S. Supreme Court. They declined to hear the case.
Both parties made their arguments in front of a new judge, Jennifer Choe-Groves, who took over the case from Judge Frizzell.
After taking the bench, Choe-Graves admitted there was a long history and she needed to be caught up on the facts and wanted an education on some of the issues before her.
The entire hearing lasted nearly five hours and both sides honed in on the main issue which was ripe for discussion: was this continued trespass under applicable Oklahoma law?
Nolan Fields, Asst. U.S. Attorney who argued the case said if this constitutes a one-time trespass, then give the materials that buttress the wind turbines back and remove all 84 wind turbine structures from the OME.
In briefs filed before the Northern District, Fields relied on two Oklahoma cases: Fairlawn Cemetery Ass’n v. First Presbyterian Church, which was decided in 1972 where the defendant (a neighboring church) had placed “huge amounts of dirt” directly against the wall and, more than a decade later, the wall had started to crack and lean. Even though in that case, the encroachment occurred several years ago, the dirt was still piled against the fence, causing it to crack and lean and therefore constituted continued trespass. The Tenth Circuit said Fields rightly cited that law.
Defendants’ counsel, Thomas McCormack, said no. The crushing of rock stopped nine years ago and the sin his clients committed was not getting a permit. It’s not continual development and shouldn’t be considered continued trespass.
Judge Choe-Graves asked whether the crushed rock at the base of the development constitutes development?
McCormack countered that landowners in Osage County have rights. He asked, are the construction materials and foundations dug for homes to be considered continued trespass? He said surface rights and subsurface rights owners must work together to meet a common goal.
Herein lies the rub, said the U.S. Government and John Rasmussen for the Osage Minerals Council – homeowners have a permit. Osage Wind Group failed to get one.
In their brief, the U.S. said: “The problem here is that Osage Wind did not merely dig holes in the ground—it went further. It sorted the rocks, crushed the rocks into smaller pieces, and then exploited the crushed rocks as structural support for each wind turbine. The ultimate question is whether this operation constitutes ‘mineral development’ as we have conceptualized the term. We hold that it does.”
During one exchange, to demonstrate Osage Wind wasn’t merely using shovels to dig into the ground to dig permits, the plaintiffs played a video of workers for Osage Wind blasting dynamite to create the holes to mine the rocks for the base of the turbine. It was a dramatic effect the defendants objected to that elicited a gasp from the audience.
Lawyers for the mineral estate say get a permit and pay royalties to shareholders, some of whom were in the courtroom to listen to the nearly five-hour hearing in the federal courthouse in Tulsa.
“The issue is our sovereignty,” shareholder Julie Malone told Osage News.
In 2017, the 10th Circuit Court of Appeals wrote that “[B]ecause Osage Wind was required to procure a lease under 25 C.F.R. § 214.7” and did not do so, defendants’ mining activities resulted in an invasion of “the mineral estate reserved to the Osage Nation.”
“The presence of turbines doesn’t rise to continued trespass,” McCormack said. Further, he said it wasn’t mining at all.
McCormack was quick to point out the good that his client Osage Wind does for the community. He motioned the judge to acknowledge Enel employees and the Shidler school superintendent who attended the hearing. He said ejecting the turbines from the prairie would result in a loss of jobs and closure of schools. McCormack pointed to Rick Rogers, the superintendent of Shidler Schools who told Osage News the money he receives has made a significant impact.
But the plaintiff’s side wasn’t buying it. Fields said the defendants made a poor business decision and that if a permit was obtained to erect the turbines Osage County taxpayers would continue to see support for their endeavors.
Judge Choe-Graves did ask why Osage Wind didn’t just get the lease. “We’re not mining, we’re not using the minerals,” said McCormack, who contends the lease they did get from Osage County was enough.
“Landowner owns the land until the center of the earth,” McCormack said.
“Not in Osage County,” Joe Cheshewalla whispered to other Minerals Council members and shareholders who attended the hearing.
“You can’t just take the tribe’s land,” said John Rasmussen for the Osage Minerals Council, who contends the defendants are trying to rewrite the 10th circuit’s decision by saying it wasn’t mining.
Fields, arguing on behalf of the United States, said Osage Wind engaged in unauthorized mining and continues to do so. The Osage Allotment Act, he said, prevents severability only under a lease.
“You don’t want to use it anymore, pull it out of the ground and remove the turbines,” Fields told the defendants.
The other ongoing issue cited by the plaintiffs is the setback zone for the turbines doesn’t allow for engagement in new leasing or oil exploration on land where the wind turbines reside.
One figure cited was 500 feet, while another said 90. McCormack said the area where wind turbines are located isn’t the size of Central Park, as plaintiffs noted in their brief. He said it’s smaller.
Plaintiffs also argued that Enel Kansas should be liable in this case and that lawyers for the defendants have never submitted a motion to dismiss them during the nine-year life of the case.
After nearly five hours of testimony, Judge Choe Graves said the case was submitted and would render a decision, which could mean oral arguments on the pending motions.