[00:00:00] Speaker 04:
case for argument this morning is 21-1625 Fletcher versus United State.

[00:00:08] Speaker 04:
Mr. Amand?

[00:00:10] Speaker 03:
Amit, like aw shucks, I forgot my baseball mitt, Judge.

[00:00:15] Speaker 03:
Sorry, let me take my mask off.

[00:00:18] Speaker 03:
Yes, Amit, like aw shucks, I forgot my baseball mitt.

[00:00:21] Speaker 04:
Oh, okay.

[00:00:26] Speaker 04:
Please proceed.

[00:00:28] Speaker 03:
may it please the court my name is jason omit and i'm here to represent my clients bill fletcher tamar red corn rick lonsinger and tara damron this is this is a long-standing case and it's truly an honor to be here before you it's an indian law case for federal claims after

[00:00:57] Speaker 03:
after an accounting was provided in the northern district of Oklahoma.

[00:01:02] Speaker 03:
And the summary of the case is pretty simple.

[00:01:05] Speaker 03:
This is a case where the United States acts as the accountant, the bank, and the financial manager for my clients pursuant to a federal statute.

[00:01:15] Speaker 03:
And the United States in that role failed to collect interest and overpaid the taxes.

[00:01:21] Speaker 03:
imagine if your tax accountant didn't take any of the deductions that were available to you.

[00:01:29] Speaker 04:
That's what happened.

[00:01:30] Speaker 04:
Let me just, we've got limited time and we're all very familiar with the details of this case.

[00:01:35] Speaker 04:
Let me just ask you a few questions.

[00:01:38] Speaker 04:
One is, assuming hypothetically we were to conclude that you are correct about your assumption about jurisdiction seeming under the Tucker Act,

[00:01:49] Speaker 04:
Do we even need to reach the question of the Indian Tucker Act jurisdiction?

[00:01:56] Speaker 03:
No, Your Honor.

[00:01:57] Speaker 03:
You don't.

[00:01:59] Speaker 03:
Under the Saasee case, Indians have the authority to proceed under the Tucker Act before the court of plans.

[00:02:06] Speaker 01:
And are there any procedural or other differences

[00:02:11] Speaker 01:
that would arise in the litigation depending on which of the two Tucker Acts we found jurisdiction under?

[00:02:21] Speaker 03:
Yes, Your Honor.

[00:02:21] Speaker 03:
There is a procedural difference.

[00:02:23] Speaker 03:
If you were to find jurisdiction under the Indian Tucker Act, then there would effectively be a de facto class.

[00:02:33] Speaker 03:
The group of Indians would be sued on behalf of as a group, whereas if we proceed under the Tucker Act only, then we would have to certify that class in order to establish group standing.

[00:02:47] Speaker 04:
But you are satisfied that that's sufficient for your purposes?

[00:02:51] Speaker 03:
Yes, Your Honor.

[00:02:51] Speaker 04:
To just decide the issue of Tucker Act jurisdiction?

[00:02:55] Speaker 03:
Yes, Your Honor, it is.

[00:02:56] Speaker 01:
Even though there's a possibility, it just would be extra clear that you might not get a certified class.

[00:03:02] Speaker 01:
Well.

[00:03:03] Speaker 01:
I mean, you don't have one right now.

[00:03:05] Speaker 03:
I don't have one right now.

[00:03:06] Speaker 03:
And you know, these are the thorns that practicing lawyers are thrown upon.

[00:03:14] Speaker 03:
we take those risks knowingly.

[00:03:16] Speaker 03:
This case has already been certified once before the Northern District of Oklahoma.

[00:03:23] Speaker 03:
In that matter, the United States did not object to class certification.

[00:03:31] Speaker 01:
Can I ask this question?

[00:03:32] Speaker 01:
I think I understand on the overpayment of taxes to the state of Oklahoma.

[00:03:43] Speaker 01:
a reasonable amount of specificity in what your complaint says.

[00:03:48] Speaker 01:
Is there any comparable specificity in your complaint's charge that interest, that inadequate interest was collected?

[00:03:59] Speaker 01:
I thought that that one was entirely, I don't know, generic.

[00:04:04] Speaker 01:
I'm not sure what the term.

[00:04:06] Speaker 03:
It was generic.

[00:04:07] Speaker 03:
And it's generic in part because the statutes that require the payment of interest, either 4% or 5%, change over time.

[00:04:16] Speaker 03:
If the court wishes that we be more specific with respect to the statutory authority that we're proceeding on with respect to the amount of interest, we would, of course, request the opportunity to amend, to plead the statutes.

[00:04:29] Speaker 03:
But it's 25 USC, 162A, and 162B.

[00:04:36] Speaker 03:
of the federal code, which provide for the collection of interest and the amounts that are to be collected upon the deposit of Indian funds.

[00:04:46] Speaker 04:
Jesse, this is a little bit in the weeds, but I just want to sort of... There's a lot going on in this case, so if we can clear the dust a little, maybe it'll help.

[00:04:54] Speaker 04:
Thank you.

[00:04:55] Speaker 04:
On Comp 2 of your complaint, which is page 40th, Appendix 43,

[00:05:01] Speaker 04:
you've got this thing about written policies, procedures.

[00:05:06] Speaker 04:
It doesn't sound like a sort of a Tucker Act claim.

[00:05:08] Speaker 04:
And the government argues in red that you forfeited your challenge to the dismissal of this claim.

[00:05:15] Speaker 04:
And I didn't see in gray your countering that.

[00:05:19] Speaker 04:
So can we assume that this counter is gone?

[00:05:23] Speaker 02:
Yes.

[00:05:24] Speaker ?:
Thank you.

[00:05:26] Speaker 02:
Here's another housekeeping question.

[00:05:31] Speaker 02:
The tribe settled for a very large amount of money with the government, right?

[00:05:35] Speaker 02:
380 million?

[00:05:37] Speaker 03:
Yep.

[00:05:37] Speaker 03:
380 million.

[00:05:38] Speaker 03:
What happened to that money?

[00:05:40] Speaker 03:
It was distributed to the handwriting holders.

[00:05:42] Speaker 02:
OK.

[00:05:43] Speaker 02:
So Mr. Fletcher and the other named plaintiffs already received a disbursement from that $380 million settlement.

[00:05:51] Speaker 03:
They did.

[00:05:52] Speaker 03:
They did.

[00:05:52] Speaker 03:
And Judge Chen, you bring up exactly, I think, the heart of the issue that folks really are kind of concerned about in this case.

[00:06:02] Speaker 03:
And so if I can, I'd like to kind of address that.

[00:06:07] Speaker 03:
The question is, have these folks already been paid?

[00:06:10] Speaker 03:
Right?

[00:06:12] Speaker 03:
And the answer to that question is no, because ... Or maybe partially yes?

[00:06:18] Speaker 03:
Perhaps.

[00:06:19] Speaker 03:
Well, they were paid for the claims that were made by the United States.

[00:06:23] Speaker 03:
They were made by the tribe.

[00:06:26] Speaker 03:
I'm sorry, made by the tribe, yes.

[00:06:28] Speaker 03:
This is ... Thank you.

[00:06:29] Speaker 03:
This is one of the largest oil fields in the entire world.

[00:06:33] Speaker 03:
And this was a claim that went back for all time, essentially, for the United States failing to require the oil companies to pay for all of the oil that they had taken.

[00:06:45] Speaker 03:
That's the tribal case that the $380 million was all about.

[00:06:49] Speaker 03:
This case is different.

[00:06:51] Speaker 03:
Once that money is collected into the account, then certain things have to happen to it.

[00:06:57] Speaker 03:
the interest under section for the nineteen six act has to be paid to the members of the trial and under the nineteen forty act the gross production taxes at the rate that they're charged by the state of oklahoma has to be deducted from the account

[00:07:12] Speaker 03:
But what we know from the accounting that was ordered by the Northern District is the right amount of interest wasn't ever, ever collected and paid to these members.

[00:07:22] Speaker 03:
And worse than that, the federal government always just paid five percent on gross production taxes, even though the applicable gross production tax that should have been charged under the 1940 Act was at times zero.

[00:07:37] Speaker 03:
And so this is a position where those issues of the gross production tax and the interest, they were never part of the $380 million Osage Tribe case that was before Judge Hewitt.

[00:07:52] Speaker 01:
So $380 million by settlement comes into the trust, is that what happened?

[00:07:57] Speaker 01:
And that presumably is for under recovery of the license fees or something from the oil

[00:08:07] Speaker 01:
producers was an amount on that 380.

[00:08:13] Speaker 01:
than paid in taxes to the state of Oklahoma, up to 5%.

[00:08:16] Speaker 03:
Oh, the $380 million, Your Honor, is just the tip of the iceberg.

[00:08:21] Speaker 03:
This is a multi-billion dollar fund.

[00:08:24] Speaker 03:
The fund of money that has passed.

[00:08:27] Speaker 01:
I realize what I was asking about is only part of the question.

[00:08:29] Speaker 01:
And you may have a point that, put aside the 380, there was a lot of money in the account, and too much was paid to the state of tax.

[00:08:37] Speaker 01:
I'm just trying to understand, on the 380,

[00:08:40] Speaker 01:
Were taxes then paid to the Oklahoma when the 380 came in?

[00:08:46] Speaker 03:
I hesitate to say yes or no because I don't exactly know the answer, but my recollection is no.

[00:08:52] Speaker 03:
But still just the tip of the iceberg, you said.

[00:08:54] Speaker 03:
The tip of the iceberg.

[00:08:55] Speaker 04:
So I guess maybe this is just a very fundamental question that I missed.

[00:08:59] Speaker 04:
But the settlement agreement exists.

[00:09:03] Speaker 04:
It's out there.

[00:09:05] Speaker 04:
And there still, I guess, would be an open question on remand, even if it's been ruled for you, as to what the effect of that settlement agreement has on your client's rights going forward and backwards, right?

[00:09:23] Speaker 03:
Absolutely.

[00:09:23] Speaker 03:
I think Judge Hewitt, though, in the Osage 5 case in 2008 created the safe harbor that the United States fails to address in its briefing, and we believe has waved on.

[00:09:35] Speaker 03:
And that is, Judge Hewitt wrote, the proposed interveners in that case, the head right holders in that case, may still have recourse to an appropriate court to compel distribution in accordance with applicable law.

[00:09:48] Speaker 03:
That's 85 Fed claim 162 at 173.

[00:09:52] Speaker 03:
And then Jesuit went on to say, this case is limited to a determination of whether defendant breached its fiduciary duties to plaintiff and whether plaintiff is entitled to compensation.

[00:10:02] Speaker 03:
The doctrine of stare decisis does not operate to preclude proposed interveners from protecting their individual rights to a pro rata share.

[00:10:13] Speaker 04:
so that was the law of the case in this age in the asean strike case at the time it is your view is that is your clients you that the settlement was entirely inadequate compensate for past wrongs or that the implementation to the settlement and and the the implementation of the whole trust agreement is not being carried out in the way it's contemplated unnecessary under its terms and therefore that we need this accounting and they've been under payments and all that stuff

[00:10:42] Speaker 03:
The answer to that is yes, both.

[00:10:48] Speaker 03:
I'm sorry to say.

[00:10:52] Speaker 03:
But if you think, kind of dissect these two cases with me for a moment, we have the situation where

[00:11:02] Speaker 03:
The tribe would have never been interested in the amount of gross production taxes that were being paid.

[00:11:08] Speaker 03:
In the tribal case, it had no interest in that because the tribe never paid the gross production taxes, right?

[00:11:15] Speaker 03:
Money comes into the account from the production of oil and gas.

[00:11:18] Speaker 03:
The tribe says, we need $5 million for operation this year.

[00:11:21] Speaker 03:
The tribe gets $5 million.

[00:11:23] Speaker 03:
Then the rest of the money gets distributed.

[00:11:26] Speaker 03:
The gross production tax gets charged against each one of the head right holders.

[00:11:30] Speaker 03:
The tribe never pays the gross production tax.

[00:11:33] Speaker 03:
The tribe also never gets the interest.

[00:11:36] Speaker 03:
in money comes into the account the interest is collected the tribe takes its piece that's just its travel operations piece and the interest is distributed over here to these folks in fact there's antagonism between the head right holders and the tribe over who is to collect money the tribe could never represent the head right holders interest with respect to either of these two issues apart part of what it was time understood

[00:12:03] Speaker 01:
Judge Prost's question to be, but in any event, I have this question.

[00:12:07] Speaker 01:
Is there an open issue, or does either side think that there is an open issue in this case, either before us or still in the district court where we descend the case back, about whether the tribe was sufficiently a representative of your clients here that the settlement

[00:12:32] Speaker 01:
has some limiting effect on what your clients can get in this case.

[00:12:39] Speaker 03:
Certainly my clients would concede and agree that we cannot make a claim that the right amount of money wasn't collected, right?

[00:12:50] Speaker 03:
That was resolved in the OCH tribe case from the mineral estate.

[00:12:57] Speaker 03:
There's no question that the tribe owns the mineral estate.

[00:13:00] Speaker 03:
That's section three of the 1906 act.

[00:13:05] Speaker 01:
I guess my question is, is there any kind of live dispute about questions of the sort that you just started talking about?

[00:13:15] Speaker 03:
We don't think so.

[00:13:17] Speaker 01:
The other side might disagree.

[00:13:19] Speaker 03:
The United States relitigates these issues continuously.

[00:13:24] Speaker 03:
And it relitigates these issues at nauseam such that they kind of never end.

[00:13:31] Speaker 03:
And it's become so famous that Daniel Raybear and Matt Fletcher wrote in the Michigan Journal of Environmental and Administrative Law.

[00:13:38] Speaker 03:
In fact, Dan sent me the law review article when he saw this case was up on the docket.

[00:13:43] Speaker 03:
And he said, you need to read my article.

[00:13:45] Speaker 03:
And it's in the Michigan Journal of Environmental and Administrative Law in 2017, volume six.

[00:13:51] Speaker 03:
starting at page three ninety seven and he said and it's it's an article all about how the united states across the country is in these indian claims cases just relitigating issues that it's already lost.

[00:14:05] Speaker 04:
Well it seems to me though in this case that's not the real issue i think the government has a settlement in hand and thinks that the settlement cleared it up and it's the end of the story uh... you may have the right to challenge that but it's not the government that's relitigating the issues

[00:14:20] Speaker 04:
really coming from your end in this circumstance.

[00:14:24] Speaker 04:
But anyway, let me move on.

[00:14:26] Speaker 04:
There's nothing wrong with that.

[00:14:28] Speaker 04:
I just was pushing back.

[00:14:30] Speaker 02:
Can I just try one more time?

[00:14:33] Speaker 02:
How much money, for example, did Mr. Fletcher get from the $380 million?

[00:14:37] Speaker 02:
I don't know.

[00:14:38] Speaker 02:
You don't know.

[00:14:39] Speaker 02:
Okay.

[00:14:40] Speaker 02:
But just to confirm, this lawsuit by Mr. Fletcher and the others

[00:14:49] Speaker 02:
Is he asking for different money than the money that he collected?

[00:14:56] Speaker 02:
Or is it basically almost looking like a double recovery?

[00:15:01] Speaker 03:
no it's not a double recovery and your honor i think that to the extent and why not be insured in the reasons that a double recovery is because they're interests that should have been paid and the gross production taxes were never a part of the underlying claim that the asage tried to make because the asage tried never could have made those claims because it never impacted the amount of money that reached the account it only impacted the amount of money that was distributed to the shareholders

[00:15:33] Speaker 04:
Well, if we were to send this case back, though, I mean, those are issues that have to be litigated.

[00:15:40] Speaker 04:
I mean, the question of what the impact of any is of the settlement agreement, the extent to which any of the claims that you're alleging now may have been waived under the settlement agreement, those issues have never been resolved.

[00:15:57] Speaker 03:
They have not fully been resolved by the Court of Claims.

[00:16:00] Speaker 03:
And they are not really, I think, here before the Court now, because they weren't resolved by the Court of Claims before.

[00:16:06] Speaker 04:
Let me ask you, though, about an issue that was resolved, which is this issue preclusion.

[00:16:11] Speaker 04:
So what is the effect of the accounting?

[00:16:15] Speaker 04:
What's the term that we use for this?

[00:16:18] Speaker 04:
He gave you a limited period for the accounting, right?

[00:16:22] Speaker 04:
And if we were to agree that there is issue preclusion on that claim, doesn't that severely constrain or restrict the nature of the relief you can seek in this context?

[00:16:40] Speaker 03:
the united states would like that to be the case very clearly uh... we're seeking damages we have an accounting for this fifteen-year period united states position in its reply brief that took for the very first time was that now the planets need to be confined not only in the past two thousand two but moving into the present two twenty seventeen that they can make no claims after twenty seventeen as well that that's stated in the reply brief we have an accounting for fifteen-year period

[00:17:10] Speaker 03:
And we believe that the evidence in the case below, should we be permitted to show it, will demonstrate that the plaintiffs in this case do have valid damages claims beyond the $380 million settlement that the tribe made.

[00:17:25] Speaker 03:
And the question will have to arise then, do those claims for damages extend back and into the future or not?

[00:17:36] Speaker 03:
We don't believe that the appropriate time to decide that is on a motion to dismiss when there's absolutely no factual evidence before the court below right at the outset of this case.

[00:17:51] Speaker 04:
And you would agree also, I assume, that if we were to remand this case, you point out in gray and maybe a fair comment, which is the government doesn't seem to join the issues necessarily.

[00:18:05] Speaker 04:
A lot of its red brief deals with Iqbal Twombly and the insufficiency of the pleading.

[00:18:11] Speaker 04:
But those issues have not yet been resolved.

[00:18:14] Speaker 04:
by the Court of Claims.

[00:18:16] Speaker 04:
In other words, we're not going to, unless we decide, I guess we can do what we want, sort of more or less, but that in the absence of our resolving those issues, they would remain for the Court of Claims as kind of a preliminary matter, a threshold matter on dismissal motion, right?

[00:18:33] Speaker 03:
Yes, Your Honor.

[00:18:37] Speaker 03:
I see that I've exceeded my time, and I thank you very much for the opportunity to have done that.

[00:18:42] Speaker 03:
If you have any other questions for me,

[00:18:44] Speaker 03:
Thank you.

[00:18:45] Speaker 04:
Will we store some rebuttal time?

[00:18:49] Speaker ?:
Thank you.

[00:18:49] Speaker 04:
Let's hear from the government.

[00:18:52] Speaker 04:
Mr. Taff, good morning.

[00:18:54] Speaker 00:
Good morning, and may it please the Court.

[00:18:57] Speaker 00:
After spending 15 years obtaining a limited accounting in the Federal District Court, plaintiffs filed a claim here for $100 million without referencing a single entry in that accounting to support their allegations that the United States owed them breach of trust damages.

[00:19:14] Speaker 00:
We'd submit that there were two large paths by which the court may affirm the trial court's decision in its entirety.

[00:19:21] Speaker 00:
First, the claims court correctly held that there was a lack of Tucker Act jurisdiction because applying the standards of it all in Twombly.

[00:19:32] Speaker 00:
plaintiffs have failed to identify sufficiently a specific rights-creating or duty-imposing statutory prescription that supports their allegations that the government breached fiduciary duties to the head right holders.

[00:19:47] Speaker 00:
And second, the claims court correctly held that plaintiffs lack standing because the injuries they allege, which concern the diminishment of the total value of the tribe's trust account,

[00:19:59] Speaker 00:
are more approximately suffered by the tribe itself, not by the head right holders as the end distributees.

[00:20:07] Speaker 04:
Can I ask you just on your narrow point about what the court, the court of federal claims held and what it didn't held?

[00:20:14] Speaker 04:
I was a little confused.

[00:20:16] Speaker 04:
At page 14, at their opinion, they say,

[00:20:22] Speaker 04:
that after they're going through the whole Tucker Act and all of the standing stuff, they say, nonetheless, the court need not delve into this issue further as plaintiffs cannot, claims cannot survive issue preclusion.

[00:20:41] Speaker 04:
What did the Court of Federal Claims mean by that?

[00:20:43] Speaker 04:
I mean, that statement read on its own suggests that he's really not finally deciding these issues.

[00:20:50] Speaker 04:
because he thinks the issue preclusion sort of resolves everything in this case.

[00:20:57] Speaker 04:
That can't be right.

[00:20:58] Speaker 04:
And do you have anything to say about how you read that statement?

[00:21:06] Speaker 00:
Perhaps I should have said that the case may be affirmed on the two larger paths that I mentioned without saying that the court below correctly held those on those specific points.

[00:21:15] Speaker 04:
Well, you don't think this entire case can be confirmed on issue preclusion.

[00:21:19] Speaker 00:
No, I agree with you on that.

[00:21:22] Speaker 04:
We'll assume that the court of federal claims didn't really mean that.

[00:21:27] Speaker 00:
Yes, we would agree with you that the judgment can't be affirmed entirely on issue preclusion grounds.

[00:21:34] Speaker 00:
What was the second path?

[00:21:35] Speaker 00:
It's lack of standing.

[00:21:39] Speaker 00:
And let me start with that.

[00:21:42] Speaker 00:
And I think Judge Chen's concern about double recovery is really what's driving the inquiry here, which is there's a need to separate the line of case law from the 10th Circuit, allowing the head right holders to make claims for distribution.

[00:22:00] Speaker 00:
They receive the money at the end of the day.

[00:22:02] Speaker 00:
And so they were found to have a limited right to an accounting for that distribution.

[00:22:08] Speaker 00:
You have to reconcile that with the Osage cases.

[00:22:12] Speaker 00:
Granted, they're only from the court of federal claims.

[00:22:15] Speaker 00:
There was not a decision by this court.

[00:22:17] Speaker 01:
I mean, we don't really have to reconcile them, do we?

[00:22:19] Speaker 01:
We just have to decide what the scope is of the head right holders.

[00:22:24] Speaker 01:
Right.

[00:22:24] Speaker 01:
We could think that the Osage, the CFC opinions in Osage were wrong about denying the head right owners

[00:22:37] Speaker 01:
the things that the CFC said they didn't have.

[00:22:41] Speaker 00:
You could disagree with the CFC.

[00:22:43] Speaker 01:
The issue is the United States acquiesced in that judgment and went on to settle that matter, including claims for breach of... Right, but absent resolution of a question whether the tribe represents Mr. Fletcher and company, which we don't have a resolution of, Mr. Fletcher and company are not bound by that, by those CFC rulings.

[00:23:07] Speaker 01:
They weren't parties and they weren't even among the proposed intervenors.

[00:23:11] Speaker 00:
I agree that they weren't parties.

[00:23:13] Speaker 00:
There is an open question to answer your question to my friend.

[00:23:16] Speaker 00:
There is an open question about whether the 2011 settlement agreement waived the rights or could waive the rights of the head right holders.

[00:23:24] Speaker 00:
And that agreement is in the appendix and you can see.

[00:23:27] Speaker 00:
where that provision is.

[00:23:29] Speaker 00:
It's a very broad waiver, and so we would have that issue to litigate on remand.

[00:23:34] Speaker 00:
What I'm suggesting is that in order to allow both the tribe to make claims and to allow head right holders to make claims for breaches of fiduciary duties,

[00:23:45] Speaker 00:
think the courts need to draw a line about who has standing to make what claims.

[00:23:49] Speaker 00:
Otherwise you step into this problem of potential overlap and recovery that we're concerned about.

[00:23:56] Speaker 01:
And so you, you were about, before I interrupted you, you were about to, um, I think try to explain why, um, the tensor, the first 10 circuit opinion in particular, um, about head, right owner, yeah, head, right owners, um, having certain kinds of trust claims against

[00:24:15] Speaker 01:
the United States, why that doesn't cover the kind of trust claim that's at issue here.

[00:24:21] Speaker 00:
Yes.

[00:24:21] Speaker 00:
And that was the 2013 decision from the 10th circuit that held that head right holders had a right to a limited accounting.

[00:24:28] Speaker 00:
It based that conclusion on.

[00:24:30] Speaker 00:
A different statute than what's at issue here is 25 USC 4011A, which provides the right to an accounting.

[00:24:37] Speaker 00:
The 10th Circuit didn't go beyond that to hold that there were specific duty imposing or rights creating obligations in the statutes.

[00:24:47] Speaker 00:
that would extend further rights to head right holders.

[00:24:50] Speaker 00:
That's a novel question.

[00:24:51] Speaker 00:
And that's what we submit would deprive the court below of jurisdiction.

[00:24:57] Speaker 00:
And we think there's also a question in interpreting the rights of head right holders as compared to the rights of the tribe, a question that is relevant to standing as well.

[00:25:07] Speaker 00:
And I think that it's not a controversial premise that the head right holders, that the tribe, first of all, would have claims about the mismanagement of the fund itself.

[00:25:19] Speaker 00:
So claims in the Osage case, for example, they raised about the investment of the fund and the money that was generated as revenues from the money in the fund.

[00:25:31] Speaker 00:
And they own the fund.

[00:25:34] Speaker 00:
The 1906 act in section four, it starts off that all funds belonging to the Osage tribe, dot, dot, dot, shall be held in trust by the United States.

[00:25:43] Speaker 00:
So it's, it's uncontroversial that the tribe owns the fund.

[00:25:48] Speaker 00:
It's also uncontroversial that the head right holders have a right to distribution of the fund.

[00:25:53] Speaker 01:
So the question for standing purposes is- Might there be a difference between the interest claim and the overpayment of taxes claim?

[00:26:01] Speaker 01:
Because the overpayment of taxes is, after all, about money going out of the fund, not about insufficient money coming into the fund.

[00:26:11] Speaker 00:
Right.

[00:26:12] Speaker 00:
I mean, I think the line that I would propose, I'm trying to figure out a line about how to divide the claims that are properly belonging to the head right holders from those properly belonging to the tribe.

[00:26:22] Speaker 00:
The line that the government would propose is if the claims relate to diminishment of the total value of the fund.

[00:26:28] Speaker 01:
Yeah, but that covers two different things.

[00:26:30] Speaker 01:
The fund can be diminished from what it would otherwise be either by not enough coming in or by

[00:26:36] Speaker 01:
stuff going out that shouldn't have gone out.

[00:26:39] Speaker 00:
That's, that's another way to look at it.

[00:26:41] Speaker 00:
But I would, I would urge you to look at the context of what, of the claims to the head right holders have been pressing for nearly two decades in these two different forums in the federal district court, APA litigation.

[00:26:53] Speaker 00:
They originally were claiming a variety of claims, but they claimed misdistribution to people who were not eligible for the fund.

[00:27:02] Speaker 00:
And they largely premised that on a notion that non-OSIGs were not permitted legally to receive the funds.

[00:27:13] Speaker 00:
Those claims went away.

[00:27:14] Speaker 00:
You can read these decisions.

[00:27:16] Speaker 00:
And the 2020 10th Circuit unpublished decision on attorney's fees summarizes their claims very nicely and talks about how these claims

[00:27:24] Speaker 00:
were raised and then they kind of lost on them in the district court and they went away.

[00:27:29] Speaker 00:
They're not bringing those claims anymore.

[00:27:31] Speaker 00:
They have an accounting in hand.

[00:27:33] Speaker 00:
And our contention is, you know, if they ought to look at the accounting and point to some, something in the accounting that indicates the funds were distributed to individuals who should not have been distributed to.

[00:27:46] Speaker 01:
Well, like the, I don't know, tax commission of Oklahoma, they did.

[00:27:50] Speaker 01:
Well, they got too much money.

[00:27:52] Speaker 00:
No, I don't, I don't think that's with enough specificity to identify the duty there.

[00:27:57] Speaker 01:
I mean, they, I guess maybe I haven't looked at this in quite enough, but I thought there was a statute that said up to 5%, but not 5% if the applicable tax rate is lower than 5%.

[00:28:10] Speaker 01:
And I thought they have a fairly specific claim that says during non-trivial periods here.

[00:28:17] Speaker 01:
Quite a number of the wells that we're producing were subject to a less than 5% tax and yet 5% was paid and that's real money.

[00:28:27] Speaker 01:
It shouldn't have been paid and it was mistakenly paid out of the trust.

[00:28:31] Speaker 01:
Am I misunderstanding what their claim is?

[00:28:33] Speaker 00:
I think you're filling in a lot of details that were in their complaint.

[00:28:36] Speaker 00:
They certainly tried to flush out that argument at the oral argument, that allegation at the oral argument in the court of federal claims.

[00:28:44] Speaker 00:
They tried to flush that out in their reply brief.

[00:28:47] Speaker 00:
You know, they continue to do so.

[00:28:48] Speaker 04:
Well, and that's what, I mean, a lot of your red brief, as I mentioned to your friend, deals with these issues of the insufficiency or lack of specificity in the claims.

[00:28:57] Speaker 04:
But that seems to me to be a different case than the one that's before us.

[00:29:01] Speaker 04:
And if we were to remand this case, then the government doesn't lose its ability to make those arguments with respect to the insufficiency of the allegations to withstand the motion to dismiss, right?

[00:29:13] Speaker 04:
But that seems like that's a different case than the one we are being asked to decide about the absence of jurisdiction or standing to look at any of this.

[00:29:24] Speaker 00:
I mean, we did not make the arguments in terms of 12b6 failure to state a claim.

[00:29:30] Speaker 00:
So I would agree that we would still have those, that option available to us.

[00:29:35] Speaker 00:
I think it also seems like the court could affirm on that ground for the failure... Which our court could affirm on that ground.

[00:29:43] Speaker 00:
I think on the 12b6 ground, applying the Iqbal Twombly standards, which the court has applied... Well, there are a couple different ways.

[00:29:52] Speaker 00:
I understand what you're saying.

[00:29:53] Speaker 00:
You could affirm on the alternative ground that they failed to state a claim.

[00:29:57] Speaker 04:
as to the... Well, that's not an alternative ground that was offered up by the district, by the Court of Federal Claims, right?

[00:30:03] Speaker 04:
That's your alternative.

[00:30:04] Speaker 00:
That's our alternative grounds.

[00:30:05] Speaker 00:
But I mean, it would be available as an argument to us in the claims court on remand.

[00:30:12] Speaker 00:
If the court isn't willing to go there, then I would ask that it specifically note that that argument's reserved for us to make.

[00:30:20] Speaker 00:
But I think the

[00:30:23] Speaker 00:
point I would also make is that you have to look to the complaint, not to what was said at the oral argument in the claims court or what was said in the reply brief.

[00:30:32] Speaker 00:
You have to look at their allegations.

[00:30:34] Speaker 00:
A number of these allegations are made upon information and belief.

[00:30:38] Speaker 00:
They don't reference any entries in the accounting that they spent so much time litigating 15 years to obtain.

[00:30:45] Speaker 00:
And so they don't really point to any fact-based

[00:30:50] Speaker 00:
and a factual matter to support even their jurisdictional allegations.

[00:30:55] Speaker 00:
You can look at the 1940 Act and it talks about, for example, the interest.

[00:31:01] Speaker 00:
I'll speak to the interest point.

[00:31:05] Speaker 00:
It says,

[00:31:06] Speaker 00:
It will draw interest as now authorized by law, but they don't specify what other laws require a different interest rate.

[00:31:14] Speaker 00:
They don't allege what interest rate was paid or what interest rate ought to have been paid.

[00:31:20] Speaker 00:
So we don't think that they've met that.

[00:31:23] Speaker 01:
Does there a complaint with respect to the

[00:31:27] Speaker 01:
what the gross receipts tax, the taxes paid to Oklahoma refer at least to the statute.

[00:31:32] Speaker 00:
It refers to the statute.

[00:31:34] Speaker 00:
And that's essentially it.

[00:31:35] Speaker 00:
It doesn't say, it says at times upon information or belief, the government paid more than what the state levied.

[00:31:42] Speaker 00:
But it never says what the state levied.

[00:31:45] Speaker 00:
And you've seen from the briefing going back and forth, the red brief.

[00:31:47] Speaker 01:
And if it refers to the statute, then the statute is a matter of

[00:31:51] Speaker 01:
public record and one can take traditional notice, right?

[00:31:54] Speaker 01:
That there were different rates, like 2% for the first three years of the new wells or something during certain periods.

[00:32:02] Speaker 01:
And then, you know, what they don't know is obviously how many wells there were and how much production there was.

[00:32:07] Speaker 01:
That doesn't seem like it's particularly close to the Twombly line.

[00:32:14] Speaker 00:
Well, there are a couple of things here.

[00:32:17] Speaker 00:
There's the translation of the problem that they have not translated.

[00:32:21] Speaker 00:
Well, they haven't pointed to the rates that were in place.

[00:32:23] Speaker 00:
And yes, you could take judicial notice, but those statutes, they speak in terms of wells and they don't translate in their complaint.

[00:32:32] Speaker 00:
what the rate would be for the mineral estate here.

[00:32:37] Speaker 00:
And you're facing regulations from the Department of the Interior that require reporting of oil and gas production on a total basis, not on a well-by-well basis.

[00:32:47] Speaker 04:
Well, Mr. Charles, the problem I'm having is I don't feel like I'm in a position to assess the correctness of what you're saying or the merits of what you're saying, and we don't have an opinion before us in which we can review the Court of Federal Claims analysis of the issues that we're debating here.

[00:33:08] Speaker 04:
So maybe you're right.

[00:33:11] Speaker 04:
I don't know, but certainly what you're suggesting does not compel me to say that we should affirm what the district court, what the court of federal claims did on standing in jurisdiction.

[00:33:23] Speaker 04:
It goes to another matter, a matter that hasn't been fulsomely litigated yet on the sufficiency of the claims.

[00:33:31] Speaker 00:
You understand my- Yeah, I understand that.

[00:33:34] Speaker 00:
I understand your concern.

[00:33:36] Speaker 00:
I think the only thing that I would urge the court to do, if that's the path the court's going to take, is to expressly note that the Iqbal Twombly 12b6 arguments are reserved for the United States to make on remand.

[00:33:48] Speaker 01:
That's the course you want to follow.

[00:33:50] Speaker 01:
Can you clarify for me, in what way is your standing argument different from your first Tucker Act argument?

[00:34:00] Speaker 01:
I thought, I mean, it sounds to me like both of them have to do with trying to identify exactly what legal right the other side has.

[00:34:07] Speaker 00:
I think that's fair.

[00:34:08] Speaker 00:
I mean, it's a question of the injury they suffer and trying to parse out.

[00:34:13] Speaker 00:
Well, I mean, the United States spent 15 years with the head right holders litigating whether they ought to produce an accounting and they spent

[00:34:21] Speaker 00:
roughly a decade with the Osage tribe, leading to a settlement of a substantial sum of money.

[00:34:28] Speaker 00:
And it's in the government's interest, and I think it's the interest of the head right holders and the tribe as well, to separate out who has what rights, who has the ability, the standing to bring what types of claims.

[00:34:42] Speaker 00:
And we think it would be useful for the court to draw a line along the lines that we've suggested, reconciling the

[00:34:49] Speaker 00:
observations from the CFC judge and the Osage litigation that held head right holders were not proper challengers to the tribal trust fund management.

[00:34:59] Speaker 00:
And on the other hand, the litigation from the 10th Circuit and Oklahoma holding that they had a right to a limited accounting.

[00:35:07] Speaker 00:
I think that would be useful for the court to opine on.

[00:35:11] Speaker 00:
But I see that I'm over my time.

[00:35:14] Speaker 04:
Thank you very much.

[00:35:16] Speaker 04:
We have some rebuttal time, sir.

[00:35:18] Speaker 03:
Thank you very much for that opportunity.

[00:35:21] Speaker 03:
The 10th Circuit didn't hold that there's a right to an accounting.

[00:35:25] Speaker 03:
The 10th Circuit held that a trust responsibility exists.

[00:35:29] Speaker 03:
Judge Gorsuch didn't write that the plaintiffs were, Justice Gorsuch didn't write that the plaintiffs were entitled to an accounting.

[00:35:35] Speaker 03:
He said that there's a trust responsibility owed to the plaintiffs under Section 4.

[00:35:41] Speaker 03:
And I think to the extent that the US argues that that's what that case holds, its argument

[00:35:46] Speaker 03:
Just can't make any sense.

[00:35:50] Speaker 04:
On the question that we're not bound by that case either.

[00:35:55] Speaker 03:
It's res judicata.

[00:35:56] Speaker 03:
It's not a question of whether or not it's binding precedent.

[00:35:59] Speaker 03:
As we argued in our brief to the Court of Claims, and we argued again here, the 10th Circuit's determination that trust responsibility exists under Section 4 was fully and fairly litigated between the parties.

[00:36:11] Speaker 03:
It was necessary.

[00:36:12] Speaker 01:
When you say res judicata, you mean issue preclusion?

[00:36:15] Speaker 03:
Issue preclusion, yeah.

[00:36:16] Speaker 03:
Yeah, it can't be, it can't be re-argued.

[00:36:19] Speaker 03:
It would create an odd split between the circuits with a circuit that rarely has a split, right?

[00:36:26] Speaker 03:
So that would be, and it's already been decided, it's been decided twice actually.

[00:36:33] Speaker 03:
And in the court of claims below, Judge Hewitt's opinion in Osage 5, in the 2008 case,

[00:36:41] Speaker 03:
clearly creates a safe harbor for the claims that the plaintiffs are making here, which is also an issue that the Court of Claims ignored.

[00:36:48] Speaker 03:
Which I think, you know, looking at the judge's opinion in the Court of Claims, his biggest error comes on page nine where he says that the plaintiffs do not have a legally protected interest in the dispute.

[00:37:01] Speaker 03:
And then he goes on and he says at the end of the next paragraph,

[00:37:05] Speaker 03:
It, the plaintiff's claims regarding trust fund mismanagement are not appropriately asserted against the government because the government's responsibility to correctly distribute and manage the funds is fiduciary duty out to the tribe.

[00:37:16] Speaker 03:
Section four of the 1906 act says the funds are to be distributed to the head right holders, not to the tribe.

[00:37:22] Speaker 03:
It just clearly misreads the statute.

[00:37:26] Speaker 03:
Straight up.

[00:37:28] Speaker 03:
So I could go on all day.

[00:37:32] Speaker 03:
I have, as defense counsel has said, been arguing this case for 20 years.

[00:37:36] Speaker 03:
So if you'd like 20 more years of this, I'd give it to you.

[00:37:39] Speaker 03:
But I'm sure you don't want it.

[00:37:40] Speaker 04:
Unless my colleagues have further questions.

[00:37:44] Speaker 04:
Thank you, Your Honor.

[00:37:46] Speaker 04:
We thank both parties for a helpful argument on the cases submitted.