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Judge rules Enel must produce financial profitability of wind farm

The Minerals Council and the United States are asking that the wind development be removed from the prairie, a prospect that Enel claims would cost about $300 million

A federal judge delivered a densely packed ruling Feb. 9 ordering Enel Green Power North America to produce financial information detailing the profitability of the Osage Wind development near Burbank on the Osage Reservation.

U.S. District Court Magistrate Judge Jodi Jayne issued the ruling and four others without listening to any argument from 12 lawyers attending the telephonic hearing.

The lawsuit was first filed in late 2014 by the United States against subsidiaries of the Italian energy giant Enel, which owns Osage Wind.

At the time, U.S. District Court Judge James H. Payne ruled that Enel and its underlings had not illegally mined limestone and other minerals that belonged to the Osage Nation when erecting the turbines. In 2016, Payne was overruled by the U.S. Court of Appeals, which deemed the activity mining because Enel gathered rock, crushed it, then used it for a commercial purpose: buttressing its own turbines. Enel appealed that decision to the U.S. Supreme Court, which refused to hear it.

Since then, Enel, the Osage Minerals Council and the United States have been duking it out over damages and whether Enel trespassed on the mineral estate willfully.

The Minerals Council and the United States are asking that the wind development be removed from the prairie, a prospect that Enel claims would cost about $300 million.

Chairman Waller to be deposed again

Jayne’s oral ruling on Feb. 9 took an hour to deliver and was so intricate that she suggested the lawyers order up a transcript to fully get a grip on it.

In addition to ruling that Enel Green Power North America must divulge the profitability of Osage Wind, she ordered that Osage Minerals Council Chairman Everett Waller should be deposed for no more than three hours regarding events that transpired before the United States sued Enel in November of 2014.

Among the questions Enel lawyers asked but Waller did not answer were those about conversations he might have had with the Bureau of Indian Affairs about the BIA’s uncertainty whether there was a “minerals component” to the wind development, and whether he spoke with Assistant Principal Chief Raymond Red Corn and Minerals Councilor Joe Cheshewalla about whether the mineral’s council should develop renewable energy projects.

Good faith trespasser, or a cunning one?

Jayne also opened what she deemed “a small door” for Enel to explore evidence that it was “a good faith trespasser” on the Osage mineral estate when it gathered and crushed rock then used it to buttress the wind turbines that comprise the Osage Wind project.

If Enel can prove it acted in good faith when it mined the rock, the damages it would have to pay would be considerably less than what it could face if it is found to have acted with willful disregard of the law that required it to obtain a mining permit from the Bureau of Indian Affairs and the Osage Minerals Council.

In October 2014, the BIA sent a letter to the project leaders demanding that construction cease and that they get a permit to mine and use rock. The letter was roundly ignored, which prompted the U.S. to file the suit the following month.

By the time the case was litigated up to the 10th Circuit, the wind farm was completed and producing electricity for cooperatives in Missouri.

Not unfair to Enel

Jayne noted that Enel’s motions have an overarching theme that it is being treated unfairly in the case and that the Minerals Council and United States have been allowed much broader latitude in seeking evidence.

“I want to dispel that notion of unfairness,” Jayne said. “First, I am permitting some of the new discovery requests on good faith. But that’s not because I’m concerned about reciprocity or fairness. That’s because I find the requests are not barred by prior orders and are indeed relevant.”

Jayne admitted she was giving Enel some leeway to seek evidence that the Minerals Council and United States viewed as a potential “back door” to get evidence Enel had already been barred from seeking. However, she noted, District Court Judge Gregory Frizzell, the judge who presides over the case, “is capable of sorting out the proper and improper uses of any evidence, if needed.”

Enel argument ‘self-serving’

The decision that Enel will have to detail Osage Wind’s profits was the biggest win for the Minerals Council, which would like to show that a $300 million hit to the utility giant would not be devastating – if in fact that is an accurate estimate of ejecting or evicting the wind project.

Enel Green Power North America “argues that it is not alleging that it, as a parent company, will suffer financial harm due to ejectment and therefore its financial information is not relevant to provide context for Osage Wind’s costs or expenses,” Jayne said. “I reject this argument by EGPNA in this case. Firstly, EGPNA is a named defendant and plaintiffs seek to hold these defendants jointly liable.

“OMC is entitled to the relevant discovery regarding how all defendants will be impacted by the injunctive relief requested.

“Second, as argued by the United States … just because EGPNA makes the self-serving argument that only Osage Wind will suffer the cost of ejection, that does not make it so.”

Citing a “technical objection,” Jayne rejected the OMC’s attempt to obtain financial records from another Enel subsidiary, Enel Kansas, for the simple reason that OMC attorneys had directed their discovery requests only to Enel Green Power North America.

There are several other pending motions in the case, including motions for summary or partial summary judgment by the United States, the Minerals Council and Enel.


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Louise Red Corn
Louise Red Corn has suffered from wanderlust for decades: She has lived and worked as a journalist and photographer in Rome, Italy, New York City, Detroit, Kentucky, Mississippi and Oklahoma, where she published The Bigheart Times for 12 years. She loves diving in-depth into just about any topic but is especially fond of covering legal issues, perhaps because her parents were both lawyers. She is married to Assistant Principal Chief Raymond Red Corn, who enticed her to move to the Osage Reservation in 2004. She and her husband live south of Pawhuska with one extremely large dog named Max, one extremely energetic dog named Pepper, and, if he bothers to make an appearance, a surly cat named Stinky.

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