United States v. Osage Wind, LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF OKLAHOMA

UNITED STATES OF AMERICA,

Plaintiff,

and

OSAGE MINERALS COUNCIL,

Plaintiff-Intervenor, Court No. 4:14-cv-00704-JCG-JFJ

v.

OSAGE WIND, LLC, ENEL

KANSAS, LLC, AND ENEL

GREEN POWER NORTH

AMERICA, INC.,

Defendants.

OPINION AND ORDER

In this opinion, the Court addresses the final damages phase in a litigation

filed over 10 years ago by the United States and the Osage Nation against the

private developers of a wind turbine farm in Osage County, Oklahoma.

After years of litigation, including appeals to the U.S. Court of Appeals for

the Tenth Circuit and the U.S. Supreme Court, this Court found Defendants Osage

Wind, LLC (“Osage Wind”), Enel Kansas, LLC, and Enel Green Power North

America, Inc. (collectively, “Defendants”) liable on Plaintiff’s and Plaintiff-

Intervenor Osage Minerals Council’s claims of conversion, trespass, and

continuing trespass, and ordered declaratory relief, equitable relief, and monetary

damages. United States v. Osage Wind, LLC (“Osage Wind II”), 710 F. Supp. 3d

1018, 1042–43 (N.D. Okla. 2023); see also United States v. Osage Wind, LLC

(“Osage Wind I”), 871 F.3d 1078 (10th Cir. 2017). This Court held a damages

bench trial. Subsequently, the Parties spent several months attempting to reach a

settlement, which was unsuccessful.

For the reasons discussed below, the Court grants injunctive relief in the

form of ejectment of the wind towers by December 1, 2025 on the claim of

continuing trespass, with Defendants estimating that it will cost approximately

$259 million to remove the wind towers. The Court awards damages on the claim

of conversion in the amount of $242,652.28, and damages on the claim of trespass

in the amount of $66,780.00. The Court also awards to Plaintiff $1,943,666.17 for

attorneys’ fees and $32,554.08 for costs, and awards to Plaintiff-Intervenor

$1,822,575.85 for attorneys’ fees and $88,891.78 for costs. The Court denies

Plaintiff’s and Plaintiff-Intervenor’s requests for pre-judgment interest and treble

damages.

BACKGROUND

The Court presumes familiarity with the underlying facts and procedural

history of this case and recites the facts relevant to the Court’s damages analysis.

Osage Wind II, 710 F. Supp. 3d at 1025–29; Osage Wind I, 871 F.3d at 1082–84.

Osage County, Oklahoma incorporates the area designated by Congress as

the Indian reservation for the Osage Nation. Okla. Const. art. XVII, § 8; Act of

June 5, 1872, ch. 310, 17 Stat. 228 (1872). Congress severed the surface estate

from the mineral estate in Osage County (“Osage Mineral Estate”) in 1906. Act of

June 28, 1906 (“Osage Act”) §§ 2–3, ch. 3572, 34 Stat. 539, 540–44 (1906).

Under the Osage Act, the surface estate was allotted to members of the Osage

Nation. Id. § 2, 34 Stat. at 540–43. The Osage Mineral Estate was not allotted to

individuals but was reserved for the benefit of the Osage Nation. Id. § 3, 34 Stat.

at 543–44. The Osage Act authorized the Osage Nation, with the approval of the

Secretary of the Interior, to issue “leases for all oil, gas, and other minerals” in the

mineral estate. Id. Those wishing to engage in mining activities in the Osage

Mineral Estate must obtain a lease from the Secretary of the Interior. 25 C.F.R.

§ 214.

Beginning in 2010, Defendants leased approximately 8,400 acres of surface

rights in Osage County, Oklahoma on which to construct a commercial wind farm.

Osage Wind I, 871 F.3d at 1083. The wind farm involved the construction of 84

wind turbines, underground electrical lines, an overhead transmission line,

meteorological towers, and access roads. Id. The wind towers were secured into

the ground with reinforced concrete foundations. Id. In 2011, Plaintiff and

Plaintiff-Intervenor expressed concern that the project would block access to the

mineral estate and interfere with oil and gas production. Id.

The Osage Nation filed a lawsuit in October 2011 to halt the construction of

the proposed wind farm, alleging that the project unlawfully deprived the Osage

Nation of access to and the right to develop the mineral estate. Compl. [Doc. 2],

Osage Nation v. Wind Capital Grp., LLC, Case No. 4:11-cv-00643. The Osage

Nation’s claims were denied, and the case was dismissed on its merits. Osage

Nation v. Wind Capital Grp., LLC, 2011 U.S. Dist. LEXIS 146407 (N.D. Okla.

Dec. 20, 2011).

Defendants’ construction on the wind towers began in October 2013 with

site preparation, and excavation work began in September 2014. Osage Wind I,

871 F.3d at 1083. Defendants excavated holes to accommodate cement

foundations measuring ten feet by 60 feet for each tower. Id. Smaller excavated

rocks were crushed and used as backfill for the cement foundations. Id. Larger

rocks were positioned near the holes from which they were removed. Id.

Plaintiff commenced this action on November 21, 2014, seeking a

declaratory judgment that Defendants engaged in unauthorized mining and

excavation in the Osage Mineral Estate without first obtaining a lease, permanent

injunctive relief requiring the cessation of Defendants’ activities, and monetary

damages. Compl.; Summons [Doc. 3]. Plaintiff later amended its Complaint to

add claims of trespass, continuing trespass, and conversion based on Defendants’

extraction of minerals during the construction of the wind tower project. Am.

Compl. [Doc. 20]. Plaintiff moved for partial summary judgment on its claims for

declaratory relief, asking the Court to rule that Defendants’ excavation of minerals

during the construction of the wind towers required a lease for mining activities

under 25 C.F.R. §§ 211 and 214. Pl.’s Mot. Part. Summ. J. Counts I & II Am.

Compl. & Request Expedited Consideration [Doc. 24]. Defendants also moved for

summary judgment on Plaintiff’s claims. Defs.’ Mot. Dismiss Summ. J. Opening

Br. Supp. [Doc. 26]. The Court granted Defendants’ summary judgment motion,

holding that Defendants’ activities did not constitute mining under 25 C.F.R. § 214

and that a lease was not required. United States v. Osage Wind, LLC, 2015 U.S.

Dist. LEXIS 132480 (N.D. Okla. Sept. 30, 2015), rev’d, 871 F.3d 1078 (10th Cir.

2017).

Plaintiff-Intervenor appealed the district court’s opinion dismissing

Plaintiff’s claims. Pl.-Interv.’s Notice Appeal [Doc. 49]. The U.S. Court of

Appeals for the Tenth Circuit (“Tenth Circuit Court of Appeals”) reversed the

district court’s order, finding that Defendants’ activities constituted mining and

that a lease was required under 25 C.F.R. § 214.7. Osage Wind I, 871 F.3d at

1093. The U.S. Supreme Court denied Defendants’ petition for a writ of certiorari.

Osage Wind, LLC v. Osage Minerals Council, 586 U.S. 1096 (2017).

On remand, Plaintiff-Intervenor filed Plaintiff-Intervenor’s Motion for

Summary Judgment. Pl.-Interv.’s Mot. Summ. J [Doc. 294]. Defendants filed

Defendants’ Motion for Partial Summary Judgment and Opening Brief in Support.

Defs.’ Mot. Part. Summ. J. Opening Br. Supp. [Doc. 297]. Plaintiff filed

Plaintiff’s Motion for Summary Judgment. Pl.’s Mot. Summ. J. [Doc. 300]. This

Court granted summary judgment as to liability on Plaintiff’s claims of conversion,

trespass, and continuing trespass and held that Plaintiff and Plaintiff-Intervenor are

entitled to monetary damages on their conversion and trespass claims and equitable

relief in the form of ejectment on their continuing trespass claim. Osage Wind II,

710 F. Supp. 3d at 1042.

A damages bench trial began on May 21, 2024. Min. Orders [Docs. 456–

64]. Closing arguments took place on July 9, 2024. Min. Order [Doc. 491]. The

Parties submitted post-trial briefs. Pl.’s Resp. Defs.’ Br. Resp. July 10, 2024 Order

Concerning Trespass Damages [Doc. 501]; Pl.-Interv.’s Resp. Defs.’ Br. Resp. July

10, 2024 Order [Doc. 503]; Defs.’ Reply Supp. Br. Resp. July 10, 2024 Order

[Doc. 505]; see also Order (July 31, 2024) [Doc. 500].

The Court directed the Parties to provide briefing on attorneys’ fees and

costs. Order (July 10, 2024) [Doc. 492]. The Parties filed briefs addressing the

availability of awarding fees and costs. Pl.’s Br. Entitlement Att’ys’ Fees Cost

(“Pl.’s Att’ys’ Fee Br.”) [Doc. 495]; Defs.’ Br. Resp. July 10, 2024 Order [Doc.

496]; Pl.-Intervs.’ Br. Supp. Att’y Fees Costs (“Pl.-Interv.’s Fees and Costs Br.”)

[Doc. 498]; Defs.’ Resp. Pl.’s Br. Entitlement Att’ys’ Fees Costs (“Defs.’ Att’ys’

Fee Br.”) [Doc. 502]; Pl.’s Reply Br. Entitlement Att’ys’ Fees Costs (“Pl.’s Att’ys’

Fee Reply Br.”) [Doc. 504]; Pl.-Interv.’s Reply Entitlement Att’y Fees Costs [Doc.

506]. At the request of the Court, the Parties filed additional briefing on the

quantum of fees and costs that Plaintiff and Plaintiff-Intervenor seek to recover.

Letter (Dec. 4, 2024) [Doc. 511]; Pl.’s Quantum Att’ys’ Fees, Costs, & Expenses

(“Pl.’s Fees and Costs Br.”) [Doc. 513]; Defs.’ Resp. Pls.’ Br. Quantum Att’ys’

Fees & Costs (“Defs.’ Fees and Costs Resp.”) [Doc. 514].

At the conclusion of the damages trial, the Parties expressed a desire to

attempt to reach an amicable resolution of this case through mediation. Trial Tr.

vol. XV, 1719:17–1740:5 [Doc. 472]. The Court ordered the Parties to provide

regular updates on the status of their settlement efforts. Order (July 10, 2024).

The Parties advised the Court on September 27, 2024 that settlement efforts

reached an impasse. Pl.’s Final Status Report Settlement Efforts [Doc. 509];

Defs.’ Resp. Pl.’s Status Report [Doc. 510].

FINDINGS OF FACT

The Court makes the following findings of fact based on a review of the

documents admitted into evidence and the credible testimony of the witnesses

during the bench trial:

I. Osage Wind Farm

Defendants operate the Osage Wind Farm in Osage County, Oklahoma, a

150-megawatt wind project that includes 84 wind towers, a collector system, a

substation, and transmission poles and lines. Trial Tr. vol. I, 42:15–23 [Doc. 474];

Trial Tr. vol. XII, 1392:7–10 [Doc. 480]. The project was initially developed by

Osage Wind under the ownership of Wind Capital Group. See Defs.’ Ex. 22. In

August 2013, Tradewind Energy (“Tradewind”), which is partially owned by

Defendants, purchased the wind farm project from Osage Wind. Trial Tr. vol. I,

18:24–19:2; Trial Tr. vol. IV, 379:7–13, 409:3–7 [Doc. 467]; Defs.’ Sealed Elec.

Filing Supp. Tr. Submission Pursuant LCvR30-1(c) Ex. F at 56:10–13 [Doc. 448].

Defendants purchased the wind farm project from Tradewind in September 2014.

Defs.’ Ex. 20; Trial Tr. vol. VI, 613:25–614:14 [Doc. 468].

In 2010, Osage Wind entered into lease agreements with six surface rights

holders for the use of approximately 8,400 acres of land in Osage County. Trial

Tr. vol. I, 42:12–23; Trial Tr. vol. II, 176:24–177:13 [Doc. 466]; Trial Tr. vol. X,

1154:5–16 [Doc. 479]; Pl.’s Ex. 60 (“Freas Report”) at 3; Pl.’s Ex. 61 (“Hazel

Report”) at 2; Defs.’ Ex. 103 (“Pfahl Report”) at 10; Defs.’ Ex. 64 (“Surface

Lease”). Excavation work on the wind farm began in September 2014. See Trial

Tr. vol. VII, 790:14–16 [Doc. 477]. During construction, mineral material was

excavated from the Osage Mineral Estate, crushed, and used as backfill on the

surface. See Trial Tr. vol. I, 87:17–20. Blasting was used in the excavation of 82

of the 84 wind tower excavation sites. Pl.’s Ex. 31; Trial Tr. vol. II, 130:10–12;

Trial Tr. vol. V, 524:6–525:17 [Doc. 476]; Trial Tr. vol. IV, 461:5–19. In 2014,

Bill Moskaluk, the Site Coordinator for the wind farm, represented to the Court

that Defendants’ “contractor records the volume of rock crushed and the rock is

then stored at the site.” Defs.’ Resp. Pl.’s Mot. Prelim. Inj. [Doc. 17] at Ex. 1

[Doc. 17-1] ¶ 15(a)(ii). Defendants’ contractors and subcontractors failed to

maintain, however, a record of the volume of mineral material extracted from the

Osage Mineral Estate during the construction of the wind farm. See Trial Tr. vol.

IX, 988:25–990:2 [Doc. 478].

Prior to the start of construction, Barr Engineering prepared design drawings

(“Barr Drawings”) and RMT, Inc. prepared a Geothermal Investigation Report

(“RMT Report”). Freas Report at 5–7; Pfahl Report at 11, 24, 28; Pl.’s Ex. 65

(“RMT Report”), Defs.’ Ex. 16 (2014 Barr Drawings S-01 and S-02).1 The

diameter of the wind towers’ base foundations measured 52 feet. Defs.’ Ex. 16;

Trial Tr. vol. I, 45:24–46:2, 49:3–7. The depth of the excavation sites measured

nine feet, nine inches at the wind tower foundation and nine feet, three inches at

the edge of the excavation base. Defs.’ Ex. 16. The top of the foundation

extended two feet, six inches above ground level. See Pfahl Report at 29.

Each of the wind tower excavation sites utilized a side slope for access into

the foundation construction area and a work area around the spread footing for

rebar placement, concrete pours, and backfill and compaction requirements. Freas

Report at 7–8; see Pfahl Report at 29. The width of the work area measured

approximately eight feet. Trial Tr. vol. I, 49:17–50:5, 52:6–13. The side slopes of

the excavation areas needed to adhere to specific Occupational Safety and Health

Administration (“OSHA”) requirements. Trial Tr. vol. I, 52:14–22. The grade of

the side slope was dependent on the minerals in the ground, a shallower slope

being required with softer materials. Trial Tr. vol. I, 52:25–53:11; Trial Tr. vol. II,

129:8–130:24 [Doc. 466]. The soil at the excavation sites was generally

1 Plaintiff referenced post-construction Barr Drawings S-01 and S-03 in its cross-

examination of Pfahl. Trial Tr. vol. XII, 1360:6–1365:15. These drawings were

not admitted into evidence during trial. Barr Drawing S-03, which was produced

post-construction, is reproduced as Figure 5-2 in Pfahl’s Report. See Pfahl Report

at 25; Trial Tr. vol. XII, 1361:24–1362:18.

classifiable as Type B, which allowed for a one horizontal foot to one vertical foot

incline to a depth of 20 feet. RMT Report at 10; Trial Tr. vol. IX, 1059:22–

1060:12; 29 C.F.R. § 1926.652(b)(2), app. A. The Barr Drawings indicated that

the excavations would require a minimum of a one-to-one side slope incline. See

Pfahl Report at 29. Eleven of the wind tower excavation sites allowed for side

slopes with inclines of two horizontal feet for every one vertical foot, and the

remaining 73 sites allowed for side slopes with inclines of one horizontal foot for

every one vertical foot. Trial Tr. vol. I, 53:23–54:4; Trial Tr. vol. II, 128:15–

130:2.

The 11 wind tower excavation sites with side slopes of a two-to-one incline

had a depth of approximately ten feet. Trial Tr. vol. I, 54:9–11. The radius of the

base of the excavation area, including the wind tower and the eight-foot

surrounding work area, measured approximately 34 feet. See Trial Tr. vol. I, 56:6–

16. The radius of the excavation area at ground level was 54 feet. Trial Tr. vol. I,

57:7–8. The volume of mineral material excavated from each wind tower

foundation with a two-to-one side slope amounted to 61,868.43 cubic feet.

The remaining 73 wind tower excavation sites with side slopes of a one-to-

one incline had a depth of ten feet. Trial Tr. vol. I, 54:9–11. The base of each

excavation area, including the wind tower and the eight-foot surrounding work

area, had a radius of approximately 34 feet. See Trial Tr. vol. I, 56:6–16. The

radius of the excavation area at ground level stretched 44 feet. Trial Tr. vol. I,

57:5–7.

Trenches of at least 177,277 linear feet in length were excavated in the

construction of the collector system. Freas Report at 9; Trial Tr. vol. I, 59:5–18.

The typical conduit trench was three feet deep and six inches wide, yielding a

cross-sectional area of 1.5 square feet. Freas Report at 9; Trial Tr. vol. I, 59:23–

25. Defendants excavated approximately 265,915.5 cubic feet of mineral material

during the construction of the collector system. Freas Report at 9; Trial Tr. vol. I,

61:1–7.

The mineral material excavated during construction of the wind farm

contained limestone, shale, and clay. Freas Report at 3, 7, 9–11; Pfahl Report at 8,

17, 18–19; Trial Tr. vol. IX, 1034:24–1035:19. Each of these minerals had

commercial value and was sold at Burbank Materials, a quarry located adjacent to

the wind farm. See Pl.’s Ex. 39. The mineral material excavated for the wind

towers was 54.18 percent limestone, 25.56 percent shale, and 20.26 percent clay.

Freas Report at 7; Trial Tr. vol. I, 73:23–74:3. The mineral material excavated for

the collector system trenches was 28.5 percent limestone, 1.3 percent shale, and

70.2 percent clay. Freas Report at 9; Trial Tr. vol. I, 79:3–12. The excavated

limestone had an approximate density of 155 pounds per cubic foot (“pcf”), the

shale had an approximate density of 130 pcf, and the clay had an approximate

density of 115 pcf. RMT Report at 8.

Burbank Materials was the “nearest shipping point” to the wind farm. Trial

Tr. vol. I, 63:19–22; Trial Tr. vol. XI, 1309:25–1311:4 [Doc. 470]; 25 C.F.R.

§ 214.10. During the construction period, Burbank Materials sold limestone for

$8.90 per ton and shale and clay for $6.00 per ton. Freas Report at 11; Pl.’s Ex.

39; Defs.’ Ex. 63.

In October 2013, the Osage Minerals Council solicited information from

Wind Capital Group and Tradewind “to determine the federal permitting, leasing

and other regulatory requirements that could apply to the Osage Wind Project.”

Defs.’ Ex. 18 at 4. This letter referenced that “[i]n addition to oil and gas, the

Osage Mineral Estate consists of solid materials, including limestone, dolomite,

sandstone, sand, gravel, clay, and shale” and that activities within the mineral

estate “may be subject to a range of federal regulatory requirements, including the

need to secure a federal permit or lease to undertake such activities, pursuant to 25

C.F.R. §§ 411 and 414.” Id. The Bureau of Indian Affairs contacted Defendants

on October 9, 2014, advising that an inspector had observed a large pit with piles

of crushed limestone around a wind turbine foundation. Defs.’ Ex. 23. The letter

directed Defendants to cease further excavation until the necessary permits were

obtained and threatened legal action for non-compliance. Id. Acting Principal

Chief Raymond Red Corn of the Osage Nation asked Defendants in November

2014 to suspend construction of the wind energy facilities, noting that Defendants

“have taken Osage minerals for use in construction of wind turbines without

permits or approval of the Osage Minerals Council.” Defs.’ Ex. 26. Defendants

did not cease work in response to these mandates. See Trial Tr. vol. V, 533:24–

534:6, 536:20–537:14; Trial Tr. vol. XIII, 1569:12–18, 1572:25–1573:11 [Doc.

471]; Pl.’s Ex. 29.

Wind Capital Group and Tradewind retained the law firm Modrall, Sperling,

Roehl, Harris & Sisk, P.A. (“Modrall Sperling”) in October 2013, after receiving

the Osage Minerals Council’s letter soliciting information needed to determine if a

lease was required for the wind farm project. Trial Tr. vol. VI, 601:25–602:4,

603:7–11; Defs.’ Ex. 18 at 4. Modrall Sperling produced a memorandum on

October 31, 2013 with the subject line “[r]ights of surface owners to use soil,”

discussing “[w]hether a surface owner who excavates land for the purpose of

construction consistent with its surface rights—and does not remove the land

excavated from the property—is engaged in ‘mining’ of the mineral estate and

requires a mining permit.” Defs.’ Ex. 48 (“October 2013 Modrall Sperling

Memo”) at 1; see also Trial Tr. vol. VI, 603:9–11. The October 2013 Modrall

Sperling Memo described the wind farm construction as “[t]o the extent any soil or

other subsurface material is (touched) by [Tradewind], it is merely incidental to

[Tradewinds’] construction of its approved wind farm. No soil is removed from

the site, or processed on site for a commercial use.” October 2013 Modrall

Sperling Memo at 2. The memorandum reasoned that no mining permit was

required for the project and concluded that “[Tradewind was] not engaged in

mining or other use of the mineral estate, but [was] taking actions consistent only

with its [Surface Leases].” Id. (emphasis in original).

Modrall Sperling produced a second memorandum on May 19, 2014 in

response to their clients’ request that the memorandum be directed to them. Defs.’

Ex. 49 (“May 2014 Modrall Sperling Memo”); Trial Tr. vol. VII, 806:3–9. The

May 2014 Modrall Sperling Memo largely reiterated the prior findings and

analysis from the October 2013 Modrall Sperling Memo. Compare October 2013

Modrall Sperling Memo at 2 with May 2014 Modrall Sperling Memo at 2. A

paragraph in the October 2013 Modrall Sperling Memo acknowledging that 25

C.F.R. § 214 “contains the regulations for the ‘Leasing of Osage Reservations

Lands, Oklahoma, for mining except oil and gas,’” was removed from the May

2014 Modrall Sperling Memo. Compare October 2013 Modrall Sperling Memo at

2 with May 2014 Modrall Sperling Memo at 2. The May 2014 Modrall Sperling

Memo also added to its analysis the qualifying language “as we understand its

plans” when discussing Tradewind’s construction of the wind farm. Compare

October 2013 Modrall Sperling Memo at 2 (“[Tradewind’s] construction of the

wind farm does not require a permit from the [Bureau of Indian Affairs] or the

Osage Nation”) with May 2014 Modrall Sperling Memo at 2 (“[Tradewind’s]

construction of the wind farm, as we understand its plans, will not require a permit

from the [Bureau of Indian Affairs] or the Osage Nation.” (emphasis added)). In

describing Tradewind’s interaction with the mineral estate during construction, the

May 2014 Modrall Sperling Memo replaced the word “touched” with “moved.”

Compare October 2013 Modrall Sperling Memo at 2 (“To the extent any soil or

other subsurface material is (touched) by [Tradewinds], it is merely incidental to

[Tradewind’s] construction of its approved wind farm.” (emphasis added)) with

May 2014 Modrall Sperling Memo at 2 (“To the extent any soil or other subsurface

material would be moved by [Tradewind], it would be merely incidental to

[Tradewind’s] construction of its approved wind farm.” (emphasis added)).

In August 2014, Defendants requested that Modrall Sperling prepare a

scaled-back memorandum without legal conclusions to provide to General Electric.

Defs.’ Ex. 47 (“August 2014 Modrall Sperling Memo”); Pl.’s Ex. 7; Trial Tr. vol.

VII, 816:5–817:3. The August 2014 Modrall Sperling Memo included multiple

changes from the prior versions. Compare August 2014 Modrall Sperling Memo

with October 2013 Modrall Sperling Memo and May 2014 Modrall Sperling

Memo. The subject line of the August 2014 Modrall Sperling Memo was changed

to expressly reference excavation. Compare August 2014 Modrall Sperling Memo

at 1 (“Rights of surface owners or their lessees in Osage County, Oklahoma to

excavate or utilize soil”) with October 2013 Modrall Sperling Memo at 1 (“Rights

of surface owners to use soil”) and May 2014 Modrall Sperling Memo at 1 (same).

The “Question Presented” was revised to change “excavates land” to “excavates

soil and related materials” and to change “does not remove the land excavated

from the property” to “does not remove the materials excavated from the property

subject to a mineral reservation.” Compare August 2014 Modrall Sperling Memo

at 1 with October 2013 Modrall Sperling Memo at 1 and May 2014 Modrall

Sperling Memo at 1. The August 2014 Modrall Sperling Memo removed

references to the Osage Minerals Council’s contention that a lease or permit was

necessary, which had been included in prior versions of the memorandum.

Compare August 2014 Modrall Sperling Memo with October 2013 Modrall

Sperling Memo at 2 and May 2014 Modrall Sperling Memo at 2; see also Trial Tr.

vol. VII, 819:16–820:10. A finalized version of the May 2014 Modrall Sperling

Memo was prepared in September 2014. Defs.’ Ex. 50 (“September 2014 Modrall

Sperling Memo”); Defs.’ Ex. 46.

II. Party Experts

The Parties offered three expert witnesses during trial: Robert C. Freas, John

Pfahl, and Stephen Hazel. Trial Tr. vol. I, 33:22–Trial Tr. vol. II, 151:7; Trial Tr.

vol. II, 162:24–Trial Tr. vol. III, 355:24; Trial Tr. vol. IX, 992:23–Trial Tr. vol

XII, 1386:13.

“The district courts have broad discretion to determine the admission of

expert testimony.” Taylor v. Cooper Tire & Rubber Co., 130 F.3d 1395, 1397

(10th Cir. 1997). The court’s review of a proposed expert’s testimony is governed

by Federal Rule of Evidence 702 and the U.S. Supreme Court’s opinions in

Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and Kumho

Tire Co., Ltd. v. Carmichael (“Kumho Tire”), 526 U.S. 137 (1999). Federal Rule

of Evidence 702 provides that:

[a] witness who is qualified as an expert by knowledge, skill,

experience, training, or education may testify in the form of an opinion

or otherwise if the proponent demonstrates to the court that it is more

likely than not that:

(a) the expert’s scientific, technical, or other specialized knowledge

will help the trier of fact to understand the evidence or to determine a

fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert’s opinion reflects a reliable application of the principles

and methods to the facts of the case.

Fed. R. Evid. 702. Under Rule 702, the trial judge is tasked with “ensuring that an

expert’s testimony both rests on a reliable foundation and is relevant to the task at

hand.” Daubert, 509 U.S. at 597. The objective of this “gatekeeping

requirement . . . is to make certain that an expert, whether basing testimony upon

professional studies or personal experience, employs in the courtroom the same

level of intellectual rigor that characterizes the practice of an expert in the relevant

field.” Kumho Tire, 526 U.S. at 152. Rule 702 applies to all experts, including

those offered in non-scientific fields. See United States v. Kamahele, 748 F.3d

984, 998 (10th Cir. 2014).

Admissibility of an expert’s opinion is determined through a two-step

analysis. Mathis v. Huff & Puff Trucking, Inc., 787 F.3d 1297, 1307 (10th Cir.

2015) (citing United States v. Nacchio, 555 F.3d 1234, 1241 (10th Cir. 2009)).

The Court must first “determine whether the expert is qualified by knowledge,

skill, experience, training, or education to render an opinion.” Id. (internal

quotation omitted). If the expert is deemed qualified, “the [C]ourt must determine

whether the expert’s opinion is reliable by assessing the underlying reasoning and

methodology, as set forth in Daubert.” Id. (citation omitted). In Daubert, the U.S.

Supreme Court identified four non-exclusive factors that may be considered in

judging the reliability of an expert’s opinion: (1) whether a “theory or scientific

technique . . . can be (and has been) tested;” (2) whether the “theory or technique

has been subjected to peer review and publication;” (3) whether there exists a

“known or potential rate of error and the existence and maintenance of standards

controlling the technique’s operation;” and (4) the degree of acceptance of a

technique within a relevant community. Daubert, 509 U.S. at 593–94. The U.S.

Supreme Court has explained that these factors “may or may not be pertinent in

assessing reliability, depending on the nature of the issue, the expert’s particular

expertise, and the subject of his testimony.” Kumho Tire, 526 U.S. at 150.

A. Robert C. Freas

Plaintiff offered Robert C. Freas as an expert witness on the value of the

extracted minerals. Freas is the President of Industrial Minerals Resource

Consultants Inc. Freas Report at 1. He holds a Bachelor of Science degree in

Geology and Biology and Masters level degrees in Geology and Business and is a

registered professional geologist with the American Institute of Professional

Geologists and the states of Tennessee and Indiana. Id. at 2; Trial Tr. vol. I, 34:8–

20. He has more than “45 years’ experience in the mining and industrial minerals

industry with specific experience in the areas of developing and mining crushed

stone and other construction raw materials including limestone, dolomite, sand,

and gravel, as well as a host of other materials.” Freas Report at 1–2; Trial Tr. vol.

I, 34:21–38:12. Freas has authored more than 40 publications and has served as

the President of the Society for Mining, Metallurgy, and Exploration, the American

Institute of Mining, Metallurgical, and Petroleum Engineers, and the United

Engineering Foundation. Freas Report at 2. Freas was admitted as an expert in the

field of industrial mineral geology, industrial mineral valuation, industrial mineral

development, and industrial mineral mining operations. Trial Tr. vol. I, 42:4–11.

The Court finds that Freas is qualified by knowledge, skill, experience, training, or

education to render an opinion.

In calculating the quantity of mineral material extracted in the construction

of the wind towers, Freas relied on the Barr Drawings, RMT Report, construction

notes, and photographs. Freas Report at 5–7; see also Defs.’ Ex. 16; Pfahl Report

at 29. Based on these sources, Freas determined that each of the wind tower

excavation sites required an access ramp into the foundation construction area and

a work area around the spread footing for rebar placement, concrete pours, and

backfill and compaction requirements. Freas Report at 7–8. Freas determined the

approximate width of the work area using people in photographs for scale. Trial

Tr. vol. I, 49:17–50:5, 52:6–13; see Pl.’s Ex. 35. Freas considered drill logs, cores,

and photographs in the geologic report in determining the necessary incline of side

slopes for each of the 84 wind tower sites. Trial Tr. vol. I, 53:23–54:4; Trial Tr.

vol. II, 128:15–130:2.

In his calculation, Freas used a standard depth of ten feet for each of the

wind tower excavation sites. Trial Tr. vol. I, 54:9–11. He also used a radius of 34

feet for the base of the work sites, based on the foundation and surrounding work

area. Trial Tr. vol. I, 56:6–16. Using these values, Freas calculated the area in

common to all the wind tower sites—a cylinder extending from the circumference

of the base to the ground level, not including the side slope—to have a volume of

36,316.9 cubic feet.2 Trial Tr. vol. I, 56:18–22. Freas next calculated the volume

of the mineral material excavated from the space above the side slopes. Trial Tr.

vol. I, 56:24–57:8. In doing so, he treated the space as a truncated hollow cone and

calculated its volume with the formula πh (R2 − r2), where “h” is height, “R” is

2

the radius of the larger base, and “r” is the radius of the smaller base. Trial Tr. vol.

I, 56:24–57:8. For the wind tower sites with a one-to-one side slope, Freas

calculated the volume of the mineral material removed from the side slope areas to

be 12,252.2 cubic feet.3 Trial Tr. vol. I, 57:10–16. For the wind tower sites with a

two-to-one side slope, Freas calculated the volume of the mineral material

removed from the side slope areas to be 27,646.1 cubic feet.4 Trial Tr. vol. I,

57:17–21. These volumes were added together to derive the total volume of

mineral material extracted from each wind tower excavation site. Trial Tr. vol. I,

57:23–58:7. Freas calculated that the total volume of mineral material excavated

from each wind tower excavation site with a one-to-one side slope was 48,569.1

cubic feet.5 Trial Tr. vol. I, 57:23–58:3. He calculated that the total volume of

2 To calculate the volume of a cylinder, Freas used the formula V=πr2h, where “V”

is volume, “r” is the radius of the base, and “h” is the height of the cylinder. Trial

Tr. vol. I 56:14–16. π × 342 × 10 = 36,316.9.

3 π10 (442 − 342) = 12,252.2.

2

4 π10 (542 − 342) = 27,646.1.

2

5 36,316.9 + 12,252.2 = 48,569.1.

mineral material excavated from each wind tower excavation site with a two-to-

one side slope was 63,963 cubic feet.6 Trial Tr. vol. I, 58:3–7. Using these

figures, Freas determined that the total volume of mineral material excavated from

the 84 wind tower excavation sites was 4,249,137 cubic feet.7 Trial Tr. vol. I,

58:9–15.

Freas relied on the RMT Report in determining that the mineral material

excavated during construction of the wind farm contained limestone, shale, and

clay. Freas Report at 3, 7, 9–11. Freas reviewed individual drill logs to determine

that the upper ten feet of the mineral estate for the wind tower excavation sites was

composed of 54.18 percent limestone, 25.56 percent shale, and 20.26 percent clay.

Freas Report at 7; Trial Tr. vol. I, 73:23–74:3. He applied the calculated mineral

concentrations to the bulk densities for each mineral provided in the RMT Report

and the calculated volumes of extracted mineral material to determine the tonnage

of each specific mineral extracted during construction of the wind towers. Freas

Report at 7. For limestone, Freas calculated a total tonnage of 178,419 tons.8 Trial

Tr. vol. I, 74:7–16; 77:18–78:8. For shale, Freas calculated a total tonnage of

6 36,316.9 + 27,646.1 = 63,963.

7 (73 × 48,569.1) + (11 × 63,963) = 4,249,137.3.

8 4,249,137 ft3 × 0.5418 = 2,302,182.43 ft3

2,302,182.43 ft3 × 155 pcf = 356,838,276.12 lbs

356,838,276.12 lbs ÷ 2000 lbs⁄ ton = 178,419.14 tons

70,595.16 tons.9 Trial Tr. vol. I, 74:16–19; 78:9–12. For clay, Freas calculated a

total tonnage of 49,500 tons.10 Trial Tr. vol. I, 74:19–21; 78:12–16.

Values for the extracted limestone, shale, and clay were determined by

applying the rates available at the closest quarry to the wind farm project, Burbank

Materials, and by calculating the applicable royalty rate based on 25 C.F.R.

§ 214.10(d), as referenced in Osage Wind I. Freas Report at 11; see also 25 C.F.R.

§ 214.10(d); Osage Wind I, 871 F.3d at 1089. Based on a purchase order issued

less than one year before construction began, Freas determined the value of the

minerals at Burbank Materials to be $8.90 per ton for limestone and $6.00 per ton

for both shale and clay.11 Trial Tr. vol. I, 65:19–70:14, 73:1–14; Freas Report at

11; see Defs.’ Ex. 63. Freas determined the royalty rate to be ten percent of the

value of the minerals at Burbank Materials. Trial Tr. vol. I, 61:25–62:22, 76:6–11.

9 4,249,137 ft3 × 0.2556 = 1,086,079.42 ft3

1,086,079.42 ft3 × 130 pcf = 141,190,324.6 lbs

141,190,324.6 lbs ÷ 2000 lbs⁄ ton = 70,595.16 tons

10 4,249,137 ft3 × 0.2026 = 860,875.16 ft3

860,875.16 ft3 × 115 pcf = 99,000,643.4 lbs

99,000,643.4 lbs ÷ 2000 lbs⁄ ton = 49,500.32 tons

11 A purchase order from September 2014 reflecting the same rates was admitted

into evidence at trial. Pl.’s Ex. 39.

For the minerals extracted from the wind tower sites, Freas calculated the

royalty value of the limestone to be $158,792.91.12 Trial Tr. vol. I, 76:14–15. He

calculated the royalty value of the shale to be $42,357.13 Trial Tr. vol. I, 76:16–18.

He calculated the royalty value of the clay to be $29,700.14 Trial Tr. vol. I, 76:19–

22. Freas calculated the total royalty value of the minerals extracted in

construction of the wind towers to be $230,849.91. Trial Tr. vol. I, 76:23–77:1;

77:16–78:23.

In determining the volume of materials extracted in the construction of

trenches for the electrical collector system, Freas reviewed a “layout of the

collector system, the cross-section drawings of the collector system, . . . [and] the

RMT [R]eport.” Trial Tr. vol. I, 58:25–59:5; Freas Report at 9. Freas calculated

that 177,277 linear feet were excavated for the collector system trenches. Trial Tr.

vol. I, 59:2–18; Freas Report at 9. Freas acknowledged that this amount was less

than the 194,400 linear feet of collector system path recorded in Defendants’

weekly report, but opted to use the lesser amount, which he deemed more accurate

based on a review of the drawings and changes made during construction. Freas

12 178,419 × 8.90 × 0.1 = $158,792.91

The Court observes that Freas testified that the value of the limestone was

$158,792.81. Trial Tr. vol. I, 76:14–15. His calculations appear to use the correct

value of $158,792.91.

13 70,595 × 6.00 × 0.1 = $42,357

14 49,500 × 6.00 × 0.1 = $29,700

Report at 9; Trial Tr. vol. I, 59:5–18. Based on engineering drawings, Freas

determined the typical conduit trench to be three feet deep and six inches wide,

yielding a cross-sectional area of 1.5 square feet. Freas Report at 9; Trial Tr. vol. I,

59:23–25. The cross-sectional area was multiplied by the total length of the

trenches to determine the quantity of mineral material excavated during the

construction of the collector system. Freas Report at 9; Trial Tr. vol. I, 61:1–7.

Freas calculated that a total of 265,915.5 cubic feet of mineral material was

excavated during construction of the collector system trenches.15 Trial Tr. vol. I,

61:1–12.

Freas reviewed the upper three feet of the nearest drill holes to the collector

system and determined that the mineral estate in that area was composed of 28.5

percent limestone, 1.3 percent shale, and 70.2 percent clay. Freas Report at 9;

Trial Tr. vol. I, 79:3–12. Using these percentages, Freas calculated that 5,873 tons

of limestone were excavated during construction of the collector system.16 Trial

Tr. vol. I, 79:18–23, 81:15–82:3. He calculated the tonnage of shale excavated to

15 1.5 × 177,277 = 265,915.5

16 265,915.5 ft3 × 0.285 = 75,785.92 ft3

75,785.92 ft3 × 155 pcf = 11,746,817.6 lbs

11,746,817.6 lbs ÷ 2000 lbs⁄ ton = 5,873.41 tons

be 225 tons.17 Trial Tr. vol. I, 79:18–23, 81:15–82:3. He calculated the tonnage of

excavated clay to be 10,734 tons.18 Trial Tr. vol. I, 79:18–23, 81:15–82:3.

Applying the same method as was used with the wind towers, Freas determined the

royalty value of the excavated limestone to be $5,226.97.19 Trial Tr. vol. I, 80:10–

15,82:3–10. He calculated the royalty value of the shale to be $135.20 Trial Tr.

vol. I, 80:16–18, 82:3–10. He calculated the royalty value of the clay to be

$6,440.40.21 Trial Tr. vol. I, 80:19–21, 82:3–10. Freas calculated the total value of

the mineral material excavated in the construction of the collector system to be

$11,802.37.22 Trial Tr. vol. I, 80:22–25, 82:8–10. Freas calculated the total

royalty value of the minerals excavated during construction of the wind towers and

collector system to be $242,652.28.23 Trial Tr. vol. I, 82:16–19.

The Court finds that Freas’ testimony is relevant to the issue of determining

the quantity and value of the mineral material extracted by Defendants. In arriving

17 265,915.5 ft3 × 0.013 = 3,456.90 ft3

3,456.90 ft3 × 130 pcf = 449,397.2 lbs

449,397.2 lbs ÷ 2000 lbs⁄ ton = 224.7 tons

18 265,915.5 ft3 × 0.702 = 186,672.68 ft3

186,672.68 ft3 × 115 pcf = 21,467,358.2 lbs

21,467,358.2 lbs ÷ 2000 lbs⁄ ton = 10,733.68 tons

19 5,873 × 8.90 × 0.1 = $5,226.97

20 225 × 6.00 × 0.1 = $135.00

21 10,733.68 × 6.00 × 0.1 = $6,440.40

22 $5,226.97 + $135.00 + 6,440.40 = $11,802.37

23 $230,849.91+$11,802.37 = $242,652.28

at his opinion, Freas relied on sufficient facts and data derived from the Barr

Drawings, RMT Report, and other contemporaneous recordings. The Court finds

Freas’ method of calculating the approximate volume of minerals extracted to be

based on reliable principles and methods. The Court further finds that Freas’

methods of determining the quantity and value of limestone, shale, and clay

included in the extracted mineral material are based on reliable principles and

methods. Therefore, the Court finds that Freas’ expert testimony is sufficiently

reliable and is admissible.

B. John Pfahl

Defendants offered John Pfahl as an expert on the valuation of the excavated

minerals. Pfahl is currently employed as Practice Lead, Portfolio Strategy and

Development with BHP, a diversified mining company. Trial Tr. vol. IX, 993:5–

10. At the time of preparing his report, Pfahl was employed by SRK Consulting, a

consulting firm in the mining industry. Trial Tr. vol. IX, 994:5–20; Pfahl Report at

6. Pfahl holds a Master of Engineering, Engineer of Mines, and a Bachelor of

Science in Engineering. Pfahl Report at 6; Trial Tr. vol. IX, 999:24–1000:4. He

has worked in the mining and mineral industry for more than 20 years. Pfahl

Report at 6. The primary component of his current position is “evaluat[ing]

mining projects for investment and acquisition.” Trial Tr. vol. IX, 993:11–16.

Pfahl is a registered member of the Society of Miners. Trial Tr. vol. IX, 998:13–

25. Through the Society of Miners, Pfahl is a “Qualified Person under the

disciplines of Valuation, Market and Financial Analysis and Engineering, Mine

Design, Infrastructure, Metallurgy and Processing under the guidelines of the

Canadian National Instrument 43-101, as well as a Competent Person in

accordance with the Australasian JORC Code.” Pfahl Report at 6; see Trial Tr.

vol. IX, 999:1–14. Pfahl was admitted as an expert at trial. Trial Tr. vol. IX,

1017:14–17. The Court finds that Pfahl is qualified by knowledge, skill,

experience, training, or education to render an opinion.

In calculating the quantity of mineral material extracted in the construction

of the wind towers, Pfahl calculated the average diameter of a wind tower

excavation site by averaging the diameter at the base of a wind tower and the

diameter of the excavation site at ground level, resulting in an average diameter of

59.5 feet. Pfahl Report at 26; Trial Tr. vol. IX, 1053:24–1055:5. He then

calculated the depth of the excavation site by subtracting two feet, six inches, the

portion of the foundation extending above the surface, from nine feet, three inches,

the total height of the foundation, resulting in an average depth of six feet, nine

inches. Pfahl Report at 30. Though Pfahl considered this calculation to be

consistent with Moskaluk’s declaration, he acknowledged that it likely did not

account for the total volume blasted. Id. at 30–31. Pfahl also acknowledged that

the Barr Drawings did not account for the possibility of over-excavation or

allowances for a working space or side slope. Id. at 31–32. Pfahl assumed a

working space of five feet, though he noted that some photos suggested little or no

working space for certain towers. Trial Tr. vol. IX, 1057:17–1058:20. He also

testified that he assumed a one foot to one foot side slope for all of the sites

because it was referenced in the Barr drawings. Trial Tr. vol. IX, 1059:4–20.

Pfahl explained that the soil type identified in the RMT Report for all of the sites

allowed for a one-to-one slope up to a depth of 20 feet. Trial Tr. vol. IX, 1059:4–

16. To account for these additional factors, Pfahl calculated his volume estimate

based on an average diameter of 70 feet and an average depth of ten feet. Pfahl

Report at 32; Trial Tr. vol. IX, 1054:1–1055:5. This allowed for the average

volume to be approximated by a cylinder with a volume of 1,425 cubic yards.

Pfahl Report at 32. Pfahl limited his calculations to only 82 wind tower sites,

concluding that mining did not occur at the other two sites. Id. at 34. Pfahl

concluded that approximately 117,000 cubic yards of mineral material was

excavated. Id. at 34–35.

Pfahl did not include the mineral material excavated from two of the wind

tower sites or the collector system because he determined that they did not require

the crushing of extracted minerals. Id. at 64. Significantly, Pfahl did not include

shale and clay in determining the quantities and values of specific minerals

because he considered shale and clay unlikely to have been crushed for backfill.

Id. at 26. Pfahl reasoned that under the Tenth Circuit Court of Appeals’ decision in

Osage Wind I, crushing of the extracted mineral material was a required element to

constitute mining. Id. at 28, 60; Trial Tr. vol. IX, 1037:17–1039:1. The Court has

previously rejected such a narrow interpretation and held that the mining of the

Osage Mineral Estate involved multiple actions, including excavation, sorting,

crushing, and the “use of crushed rocks as backfill for support.” Osage Wind II,

710 F. Supp. 3d at 1036–38. Despite considering only the value of the extracted

limestone, Pfahl relied on the geotechnical drill borings in the RMT Report to

determine that the top ten feet of the mineral estate for the average excavation site

was composed of 54 percent limestone, 34 percent clay, and 10 percent shale.

Pfahl Report at 28.

In his assessment of the value of the extracted mineral material, Pfahl

considered a mineral lease between the Osage Minerals Council and Candy Creek

Crusher, LLC, a quarry in Osage County, and a resolution passed by the Osage

Minerals Council concerning another lease with APAC Central to mine at a quarry

in Osage County. Id. at 35–36; Trial Tr. vol. IX, 1068:12–1069:14, 1073:29–

1074:2; see Defs.’ Exs. 21, 85. Based on these documents, Pfahl determined that

the royalty rate for limestone, as determined by the market, was $0.52 per ton in

2014. Pfahl Report at 35–36.

Pfahl’s calculation is inconsistent with 25 C.F.R. § 214.10(d), which

provides that “[f]or substances other than gold, silver, copper, lead, zinc, coal, and

asphaltum the lessee shall pay quarterly a royalty of [ten] percent of the value at

the nearest shipping point of all ores, metals, or minerals marketed.” 25 C.F.R.

§ 214.10(d). Neither of the quarries considered by Pfahl qualify as the “nearest

shipping point” for the minerals extracted and both apply a rate different than that

mandated by regulation 25 C.F.R. § 214.10(d).

Because Pfahl’s opinion is heavily reliant on averaging, inconsistent with the

holdings of Osage Wind I and Osage Wind II, and fails to apply the requirements

of 25 C.F.R. § 214.10, the Court finds Pfahl’s expert testimony to be unreliable and

inadmissible.

C. Stephen Hazel

Plaintiff offered Stephen Hazel as an expert witness on the value of mineral

leases. Hazel is a certified public account with FTI Consulting. Trial Tr. vol. II,

163:3–12, 164:19–22; see also Trial Tr. vol. II, 176:3–5. Hazel holds a degree in

accounting from the University of Denver and has various credentials in valuation

and financial forensics. Trial Tr. vol. II, 164:19–165:15. Between 1982 and 1999,

Hazel was employed in “traditional accounting.” Trial Tr. vol. II, 165:16–166:4.

Since 1999, he has focused on forensic accounting. Trial Tr. vol. II, 166:5–167:20.

Hazel has experience working on valuations involving Indian tribal interests and

mining operations. Trial Tr. vol. II, 172:13–173:6, 174:4–175:21. Hazel was

designated as an expert at trial. Trial Tr. vol. III, 240:15–242:3 [Doc. 475]. The

Court finds that Hazel is qualified by knowledge, skill, experience, training, or

education to render an opinion.

In attempting to assign a value to the lease that Defendants failed to obtain

before extracting mineral material from the Osage Mineral Estate, Hazel

determined that the surface rights leases between surface rights holders and

Defendants were the “most reasonable and comparable proxy for the mineral lease

that Osage Wind was federally obligated to obtain in order to construct its [w]ind

[f]arm.” Hazel Report at 7, 20–22. Hazel considered six Surface Leases between

Defendants and surface rights owners, with six identifiable income streams:

(1) signing bonuses; (2) development period rents; (3) exercise of option payments;

(4) fees during the construction period; (5) construction payments; and

(6) compensation for pasture damages. Id. at 4–5, 7–12. Based on these income

streams, Hazel calculated the amount paid by Defendants to surface rights owners

during the period in which the wind farm was under construction. Id. at 4–5, 7–12;

Trial Tr. vol. II, 180:13–183:1, 195:17–198:10; Surface Lease ¶¶ 3.1, 3.2, 5.1, 5.2,

5.6, 14.7. Hazel also calculated the damages based on the cash flows that would be

paid to the surface rights owners during the commercial operation of the towers.

Hazel Report at 12–22. The Surface Leases have an initial term of 25 years and an

option to renew for an additional 20 years. Hazel’s Report at 14; Trial Tr. vol. II,

183:6–13; Surface Lease ¶¶ 3–4. During the period of commercial operation,

Defendants pay the surface rights owners an annual “Turbine Operating Fee”

determined by the greater of the (1) turbine capacity in megawatts; (2) applicable

royalty amount; and (3) total number of acres included in the project. Hazel

Report at 5–7; Trial Tr. vol. II, 200:2–15; Surface Lease ¶ 5.3. Hazel applied a

discounted cash flow method to calculate the anticipated present value of the

payments that would be made over both the initial 25 years of the surface leases

and the additional 20-year renewal period. Hazel Report at 13–14; Trial Tr. vol. II,

200:16–202:20.

At trial, Hazel was unable to identify another similar situation in which the

value of a mineral estate was based on the lease of an accompanying surface estate.

Trial Tr. vol. III, 244:6–246:25. Hazel acknowledged that the “most important

thing” to his analysis was the “understanding that the Osage [N]ation, the [Osage

Minerals Council] didn’t want the turbines there at all.” Trial Tr. vol. II, 185:3–16,

216:17–217:7; see also Trial Tr. vol. III, 269:15–22. This perspective is reflected

in Hazel’s Report, which assumes “that the [Osage] Mineral Estate is at least as

integral as the [s]urface [e]state to the construction of the [w]ind [f]arm by

[Defendants]” and concludes that “the damages suffered by the Osage Nation due

to Defendants’ failure to enter into the appropriate leases are at least equal to the

present value of the amount paid by, or willing to be paid by the Defendants to the

owners of the [s]urface [e]state.” Hazel’s Report at 6 (emphasis in original); Trial

Tr. vol. II, 185:21–187:2, 189:23–190:9.

Hazel’s reasoning that Defendants would have been forced to accept a

mineral rights lease with terms at least equal to the terms of the surface rights

leases is at odds with both accepted valuation standards and common sense. At

trial, Hazel conceded that “a market valuation looks at what a willing buyer and a

willing seller would pay in an arm’s length transaction.” Trial Tr. vol. III, 269:25–

270:5. In order to define “willing seller” and “willing buyer,” Defendants offered

the International Valuation Standards published by the International Valuation

Standards Council as representative of best practices for valuing assets. Defs.’ Ex.

95 (International Valuation Standards); see also Defs.’ Ex. 1 (IVS 105: Valuation

Approaches and Methods: Exposure Draft). At trial, Hazel acknowledged the

International Valuation Standards Council to be reputable and its standards

credible. Trial Tr. vol. III, 273:4–14. The International Valuation Standards

defines a “willing seller” as:

neither an over-eager nor a forced seller prepared to sell at any price,

nor one prepared to hold out for a price not considered reasonable in

the current market. The willing seller is motivated to sell the asset at

market terms for the best price attainable in the open market after

proper marketing, whatever that price may be. The factual

circumstances of the actual owner are not a part of this consideration

because the willing seller is a hypothetical owner.

Defs.’ Ex. 95 § 30.2(e). A “willing buyer” is defined as:

one who is motivated, but not compelled to buy. This buyer is neither

over-eager nor determined to buy at any price. This buyer is also one

who purchases in accordance with the realities of the current market

and with current market expectations, rather than in relation to an

imaginary or hypothetical market that cannot be demonstrated or

anticipated to exist. The assumed buyer would not pay a higher price

than the market requires. The present owner is included among those

who constitute “the market.”

Id. § 30.2(d). Hazel testified that he did not disagree with these definitions. Trial

Tr. vol. III, 273:15–275:25.

Hazel’s valuation is premised on the Osage Minerals Council not acting as a

willing seller in an arm’s length transaction and, instead, imposing an exorbitant

price on an unwanted transaction. The valuation also presumes Defendants to be

compelled purchasers, required to accept the terms offered to secure necessary

permissions to complete the wind farm project. This assumption ignores that

Defendants could have secured minerals for backfill from local quarries,

potentially avoiding the need for the mineral lease in its entirety. It would have

been unreasonable for Defendants to have accepted a lease imposing tens of

millions of dollars in obligations when a significantly cheaper alternative was

available. Because there is no evidence that Hazel’s valuation methodology is

based on industry practice, the Court strikes Hazel’s testimony with respect to his

valuation of the leases. The Court finds that Hazel’s valuation is not a reasonable

or reliable fair rental rate and Hazel’s testimony is inadmissible.

CONCLUSIONS OF LAW

I. Conversion

The Court granted summary judgment on Plaintiff’s claims of conversion.

Osage Wind II, 710 F. Supp. 3d at 1030–32. Conversion is an “act of dominion

wrongfully exerted over another’s personal property in denial of or inconsistent

with his rights therein.” Welty v. Martinaire of Okla., Inc., 867 P.2d 1273, 1275

(Okla. 1994). Defendants’ extraction of minerals from the mineral estate and

subsequent use of the minerals as backfill during construction of the wind farm

constituted an act of conversion. Osage Wind II, 710 F. Supp. 3d at 1031–32.

Plaintiff is entitled to recovery of the market value, or replacement cost, of the

converted property. See United States v. Hatahley, 257 F.2d 920, 923 (10th Cir.

1958) (recognizing that plaintiffs were entitled to the market value, or replacement

cost, of horses and burros unlawfully taken by the United States).

In order to determine the appropriate royalty amount for the minerals

extracted, the Court must determine: (1) the volume of the extracted mineral

material; (2) the specific minerals composing the excavated materials; and (3) the

applicable royalty rate and market value for those specific minerals.

A. Volume

The volume of the extracted minerals is in question because Defendants’

contractors and subcontractors did not maintain records of such information during

construction of the wind farm. See Trial Tr. vol. IX, 988:25–990:2. As an initial

matter, Plaintiff urges the Court to draw adverse inferences against Defendants,

alleging that “[a]ny uncertainty that exists is due to Enel’s flagrant

misrepresentation to the Court while blasting was ongoing.” Pl.’s Post-Trial Br. at

5. In a 2014 declaration in support of Defendants’ response to a motion for

preliminary injunction, Moskaluk represented to the Court that Defendants’

“contractor records the volume of rock crushed and the rock is then stored at the

site,” Defs.’ Resp. Pl.’s Mot. Prelim. Inj. at Ex. 1 ¶ 15(a)(ii), which was later

revealed to be untrue. Judge Frizzell previously considered Plaintiff’s request for

sanctions against Defendants for Moskaluk’s inaccurate representation, ruling that

Defendants were not required by statute or regulation to create records of extracted

mineral volumes and that sanctions were not warranted. Order (Oct. 18, 2022) at

10 [Doc. 364]; see also Pl.’s Mot. Determine Sanctions Spoilation Evid. [Doc.

293]. This Court is not inclined to relitigate the same issue at this stage of the

litigation and will not order sanctions in the form of adverse inferences based on

Defendants’ failure to maintain records of extracted mineral volumes or

Moskaluk’s misrepresentation.

At trial, Plaintiff confirmed that it is no longer seeking damages related to

mineral material excavated in the construction of the collector substation

foundation and transmission towers, leaving only the wind tower excavation sites

and the trenches dug for the collector system. Trial Tr. vol. II, 122:12–123:6. In

calculating the volume of minerals extracted from each wind tower site, Freas and

Pfahl both relied on the Barr Drawings and the RMT Report. Freas Report at 5–7;

Pl.’s Ex. 65; Defs.’ Ex. 16; Pfahl Report at 29; see also Defs.’ Ex. 14 (email

directing that foundations be built to the Barr Drawings). In relevant part, the Barr

Drawings reflect that each wind tower had a 52-foot diameter foundation ring.

Defs.’ Ex. 16; Pfahl Report at 29; Trial Tr. vol. I, 45:24–46:2, 49:3–7. The depth

of the excavation sites was nine feet, nine inches at the wind tower foundation and

nine feet, three inches at the edge of the excavation base. Pfahl Report at 29. The

top of the foundation extended two feet, six inches above ground level. Id.

Freas observed that two of the three design drawings, S-01 and S-02,

referenced the need for a three-inch mud mat of lean concrete below the spread

footing of the towers. Freas Report at 6. He also noted that construction notes and

photographs identified the need for an access ramp into the foundation construction

area and a work area around the spread footing for rebar placement, concrete

pours, and backfill and compaction requirements. Id. at 7–8. Freas estimated the

width of the work area to be approximately eight feet. Trial Tr. vol. I, 49:17–50:5,

52:6–13. He also explained that the slopes on the sides of the excavation area were

required to adhere to specific OSHA requirements. Trial Tr. vol. I, 52:14–22.

Freas explained that the grade of the side slope is dependent on the minerals in the

ground, a shallower slope being required with softer materials. Trial Tr. vol. I,

52:25–53:11; Trial Tr. vol. II, 129:8–130:24. Based on a review of the available

drill logs, cores, and photographs in the primary geologic report, Freas determined

that 11 sites would have required side slopes with a two-to-one incline and the

remaining 73 sites would have allowed for side slopes with a one-to-one incline.

Trial Tr. vol. I, 53:23–54:4; Trial Tr. vol. II, 128:15–130:2.

The Court finds Freas’ conclusion that 11 of the wind tower excavation sites

had side slopes with a two-to-one incline to be reasonable. The Barr Drawings

reference the need for a side slope and show a “min[imum] compaction limit” of

one-to-one and note that “excavation [is] to meet all OSHA requirements.” See

Pfahl Report at 29. The RMT Report states that “the overburden soil at the site

may generally be inferred to be a Type B soil.” RMT Report at 10. Soil Type B

allows for a one-to-one side slope to a depth of 20 feet. See 29 C.F.R.

§ 1926.652(b)(2), app. A, Table B-1. This is the maximum permissible incline,

however, and can be reduced based on the conditions present. See 29 C.F.R.

§ 1926.652(b)(2), app. A. Freas reviewed the available drill logs, photographs,

cores, and materials logs in determining that some of the sites required a shallower

incline. Trial Tr. vol. I, 53:23–54:4. The Court finds this to be reasonable and

accepts that 73 wind tower sites had side slopes with a one-to-one incline and the

remaining 11 wind tower sites had side slopes with a two-to-one incline.

The Court also adopts Freas’ method of calculating volume for the wind

towers and collector system. Freas calculated the area in common to all the wind

tower sites, a cylinder extending from the circumference of the base to the ground

level, to have a volume of 36,316.9 cubic feet. Trial Tr. vol. I, 56:18–22. For the

wind tower sites with a one-to-one side slope, Freas calculated the volume of the

mineral material removed from the side slope areas to be 12,252.2 cubic feet. Trial

Tr. vol. I, 57:10–16. He calculated the total volume of mineral material excavated

from each wind tower excavation site with a one-to-one side slope as 48,569.1

cubic feet. Trial Tr. vol. I, 57:23–58:3. For the wind tower sites with a two-to-one

side slope, Freas calculated the volume of the mineral material removed from the

side slope areas to be 27,646.1 cubic feet. Trial Tr. vol. I, 57:17–21. He calculated

the total volume of mineral material excavated from each wind tower excavation

site with a two-to-one side slope as 63,963 cubic feet. Trial Tr. vol. I, 58:3–7.

Using these figures, Freas determined that the total volume of mineral material

excavated from the 84 wind tower excavation sites was 4,249,137 cubic feet. Trial

Tr. vol. I, 58:9–15.

Freas calculated that 177,277 linear feet were excavated for the collector

system trenches. Trial Tr. vol. I, 59:2–18; Freas Report at 9. Based on

engineering drawings, Freas determined the typical conduit trench to be three feet

deep and six inches wide, yielding a cross-sectional area of 1.5 square feet. Freas

Report at 9; Trial Tr. vol. I, 59:23–25. The cross-sectional area was multiplied by

the total length of the trenches to determine the quantity of mineral material

excavated during the construction of the collector system. Freas Report at 9; Trial

Tr. vol. I, 61:1–7. Freas calculated that a total of 265,915.5 cubic feet of mineral

material was excavated during construction of the collector system trenches. Trial

Tr. vol. I, 61:1–12.

B. Composition

The Osage Act provides that “the oil, gas, coal, or other minerals” of the

Osage Mineral Estate are to be reserved to the Osage Nation. Osage Act § 2–3, 34

Stat. at 543 (emphasis added). The act further provides for “leases for all oil, gas,

and other minerals” to be issued. Id. In Millsap v. Andrus, 717 F.2d 1326 (10th

Cir. 1983), the Tenth Circuit Court of Appeals held that the phrase “other

minerals” should be interpreted broadly. Millsap v. Andrus, 717 F.2d 1326, 1328–

29 (10th Cir. 1983). The mineral material extracted during the construction of the

wind farm was composed, in relevant part, of limestone, shale, and clay. Freas

Report at 3, 7, 9–11.

In determining the composition of the mineral material excavated during

construction of the wind towers, Freas reviewed individual drill logs to determine

that the upper ten feet of the mineral estate for the wind tower excavation sites was

composed of 54.18 percent limestone, 25.56 percent shale, and 20.26 percent clay.

Freas Report at 7; Trial Tr. vol. I, 73:23–74:3. The RMT Report provides the

average density determined for the minerals composing the Osage Mineral Estate.

RMT Report at 8. The approximate density of limestone was determined to be 155

pcf, the approximate density of shale was determined to be 130 pcf, and the

approximate density of clay was determined to be 115 pcf. Id. Applying these

values to the 4,249,137 cubic feet of mineral material excavated during

construction of the wind towers results in 178,419 tons of limestone, 70,595.16

tons of shale, and 49,500 tons of clay. Trial Tr. vol. I, 74:7–21; 78:8–16.

In calculating the composition of the mineral material excavated during

construction of the collector system trenches, Freas reviewed the upper three feet

of the nearest drill holes to the collector system and determined that the mineral

estate in that area was composed of 28.5 percent limestone, 1.3 percent shale, and

70.2 percent clay. Freas Report at 9; Trial Tr. vol. I, 79:3–12. Applying these

proportions to the 265,915.5 cubic feet of mineral material excavated for the

collector system trenches results in 5,873 tons of limestone, 225 tons of shale, and

10,734 tons of clay. Trial Tr. vol. I, 79:3–23, 81:15–82:3.

C. Value

Under the applicable regulation, “[f]or substances other than gold, silver,

copper, lead, zinc, coal, and asphaltum the lessee shall pay quarterly a royalty of

[ten] percent of the value at the nearest shipping point of all ores, metals, or

minerals marketed.” 25 C.F.R. § 214.10. Freas adopted this method of valuation

in his report and identified Burbank Materials, located adjacent to the wind farm,

as the nearest shipping point. Freas Report at 11. Based on a purchase order

issued less than one year before construction began, Freas determined the value of

the minerals to be $8.90 per ton for limestone and $6.00 per ton for both shale and

clay.24 Id.; see Defs.’ Ex. 63. For each of these, the royalty rate would be $0.89

per ton for limestone and $0.60 per ton for shale and clay. Applying these rates to

the quantities calculated for the respective minerals results in values of

$164,019.88 for limestone, $42,492.00 for shale, and $36,140.40 for clay. This

equates to a royalty of $242,652.28.

Therefore, Plaintiff is entitled to a damages award of $242,652.28 in

royalties for the mineral material excavated during construction of the wind farm

on the claim of conversion.

24 A purchase order from September 2014 reflecting the same rates was admitted

into evidence at trial. Pl.’s Ex. 39.

D. Pre-Judgment Interest

Plaintiff asks the Court to award pre-judgment interest on its conversion

damages to address the unfair benefit experienced by Defendants during the

prolonged life of this dispute and to dissuade others that might be tempted to

unlawfully invade the Osage Mineral Estate. Pl.’s Pre-Trial Br. at 6–7; Pl.’s Post-

Trial Br. at 9–10. Oklahoma law permits “[a]ny person who is entitled to recover

damages certain, or capable of being made certain by calculation, and the right to

recover which is vested in him upon a particular day, is entitled also to recover

interest thereon from that day.” 23 Okla. St. Ann. § 6. Pre-judgment interest may

only be awarded for “damages that are ‘liquidated or capable of ascertainment

before judgment.’” MCC Mgmt. of Naples, Inc. v. Int’l Bancshares Corp., 468

Fed. App’x 816, 829 (10th Cir. 2012) (quoting Taylor v. State Farm Fire & Cas.

Co., 981 P.2d 1253, 1261 (Okla. 1999)). “[I]f the fact-finder must weigh

conflicting evidence in order to determine the precise amount of damages due to

the plaintiff, then a court cannot grant prejudgment interest.” Strickland Tower

Maint., Inc. v. AT&T Comms., Inc., 128 F.3d 1422, 1429 (10th Cir. 1997) (citing

Withrow v. Red Eagle Oil Co., 755 P.2d 622, 625 (Okla. 1988); Liberty Nat’l

Bank & Trust Co. v. Acme Tool Div., 540 F.2d 1375, 1383 (10th Cir. 1976)). In

this case, multiple factual elements of the damages calculation were unresolved

before trial, including the nature and quantity of the mineral material extracted.

Therefore, the Court cannot award pre-judgment interest.

II. Trespass

Plaintiff contends that the proper valuation of damages for trespass is the

reasonable rental value of the property. Pl.’s Pre-Trial Br. at 9–11; Pl.’s Post-Trial

Br. at 12–13. Conversely, Defendants contend that the proper value of Plaintiff’s

damages for trespass is the royalty value of the minerals excavated, because both

Plaintiff’s conversion and trespass claims derived from the same conduct of

“entering the mineral estate, extracting minerals, and using the extracted minerals

without first obtaining the necessary lease.” Defs.’ Post-Trial Br. at 20–21

(quoting Osage Wind II, 710 F. Supp. 3d at 1031). Because these damages are the

same as those recoverable for conversion, Defendants argue that double recovery

should not be permitted. Id. at 33–34.

At the outset, the Court disagrees with Defendants’ position that because

Plaintiff’s trespass and conversion claims arose from common facts, the two claims

resulted in the same injury. Conversion is an “act of dominion wrongfully exerted

over another’s personal property in denial of or inconsistent with his rights

therein.” Welty, 867 P.2d at 1275. “The State of Oklahoma recognizes a right of

action in trespass where one person ‘actual[ly] physical[ly] inva[des] . . . the real

estate of another without the permission of the person lawfully entitled to

possession.’” Davilla v. Enable Midstream Partners L.P., 913 F.3d 959, 966 (10th

Cir. 2019) (quoting Williamson v. Fowler Toyota, Inc., 956 P.2d 858, 862 (Okla.

1998)). In this case, conversion occurred through limited discrete acts of removing

and acting upon extracted minerals. Trespass was a prolonged occupation of the

mineral estate, preventing its use by other parties. These were distinct offenses

that resulted in distinct injuries.

Though the specific facts of this case are unique, the Court finds persuasive

prior cases involving trespass against Indian surface property. In Oneida County v.

Oneida Indian Nation of New York State (“Oneida”), 470 U.S. 226 (1985), the

U.S. Supreme Court affirmed the decision of the lower courts awarding damages

for trespass against Indian land based on the “fair rental value of the land in

question.” Oneida Cnty. v. Oneida Indian Nation of New York State, 470 U.S.

226, 229–33 (1985); see also Cayuga Indian Nation of New York v. Pataki, 413

F.3d 266, 273–74 (2d Cir. 2005) (recognizing that Oneida “allowed Indian Tribes

to seek fair rental value damages for violation of their possessory rights following

an ancient dispossession”); Hammond v. Cnty. of Madera, 859 F.2d 797, 804 (9th

Cir. 1988), rev’d on other grounds, Woods v. Ostrander, 851 F.2d 1212 (9th Cir.

1988); Watson v. United States, 263 F. 700, 702 (8th Cir. 1920) (“We think they

show wrongful entry and unlawful holding of [Osage] possession, which are the

elements of an action of trespass for mesne profits, in which reasonable rental

value may measure the damages to be recovered.”).

The Court concludes that the fair rental value of the mineral estate occupied

by Defendants is a reasonable and appropriate method for valuing the damages

caused by Defendants’ trespass. However, determining a reasonable fair market

rental value for the mineral estate is challenging.

Plaintiff and the Osage Minerals Council urge the Court to calculate a

reasonable rental rate, based on the expert testimony of Stephen Hazel. Pl.-

Interv.’s Br. Supp. Pl.-Interv.’s Mot. Summ. J. at 21–22 [Dkt. 294-1]; Pl.’s Mot.

Summ. J. at 11–13 [Dkt. 300]. As discussed above, the Court does not find

Hazel’s testimony to be reliable or consistent with industry practice and strikes

Hazel’s testimony. In contrast to Hazel’s proposed methodology, the regulations

applicable to the management of the Osage Mineral Estate provide a more

reasonable method of calculating a fair rental value. Pursuant to 25 C.F.R.

§ 214.9, lessees are required to pay as advance rental “15 cents per acre for the first

year; 30 cents per acre for the second year; 50 cents per acre for the third year; and

$1 per acre per annum for the fourth and each succeeding year during the life of

any lease.” 25 C.F.R. § 214.9 The rate represents the value of the mineral estate

prior to development and mineral extraction. See id. In the instant case, the

trespass claim concerns the unlawful occupancy of the mineral estate and the

conversion claim concerns the unlawful development. For this reason, the Court

adopts the rental rates described in 25 C.F.R. § 214.9 for purposes of calculating

trespass damages.

Defendants began excavation and first entered the mineral estate in

September 2014. See Trial Tr. vol. VII, 790:14–16. For the first year, September

2014 through September 2015, Defendants incurred $1,260.00 in advance rental

fees. The following year, September 2015 through September 2016, that amount

increased to $2,520.00. In the third year, September 2016 through September

2017, Defendants incurred $4,200.00. Defendants incurred an additional

$8,400.00 in each of the seven years between September 2017 and this opinion.

The total value of advance rentals between September 2014 and September 2024 is

$66,780.00.

Therefore, the Court awards $66,780.00 in damages for trespass, with an

additional $8,400 to accrue on the first day of September of each subsequent year

until the wind towers are removed and the mineral estate is returned to Plaintiff.

III. Treble Damages

Plaintiff contends that Defendants’ conduct warrants the trebling of

damages. Pl.’s Pre-Trial Br. at 12–25; Pl.’s Post-Trial Br. at 20–22. Defendants

counter that the facts of the case do not justify treble damages. Defs.’ Pre-Trial Br.

at 20–25; Defs.’ Post-Trial Br. at 34–40.

Oklahoma law recognizes that “[f]or forcibly ejecting or excluding a person

from the possession of real property, the measure of damages is three times such a

sum as would compensate for the detriment caused to him by the act complained

of.” 23 Okla. Stat. Ann. § 71. This statute is penal in nature and must be

construed strictly. Ansay v. Boecking-Berry Equip. Co., 450 F.2d 433, 436 (10th

Cir. 1971); Autumn Wood Farms, LLC v. Bynum, 361 P.3d 540, 542–43 (Ct. Civ.

App. Okla. 2015). To establish an entitlement to treble damages, a Plaintiff must

demonstrate ejectment through an active force by the trespasser. Ansay, 450 F.2d

at 436. This Court has previously held that Section 71 also requires some degree

of wrongful intent. Order (Apr. 23, 2024) at 5–6 [Doc. 408] (citing Main v.

Levine, 118 P.2d 252, 255 (Okla. 1941); Maxwell v. Samson Res. Co., 848 P.2d

1166, 1173 (Okla. 1993); Crow v. Davidson, 96 P.2d 70, 72–73 (Okla. 1939)).

Plaintiff argues that the use of blasting in the construction of the wind towers

and the scale of the wind farm’s construction demonstrate the use of active force

and oppressive intent. Pl.’s Pre-Trial Br. at 13; Pl.’s Post-Trial Br. at 20.

Defendants counter that they did not attempt to remove Plaintiff from the Osage

Mineral Estate by force, as required for treble damages under the statute. Defs.’

Pre-Trial Br. at 22–24. A review of case law applying the Oklahoma statute

supports Defendants’ position.

In Crow v. Davidson, 96 P.2d 70 (Okla. 1939), the Oklahoma Supreme

Court explained that not every ejection from property is forcible. Crow, 96 P.2d at

72. In considering the statute, the court noted that:

[t]he term forcibly ejected or excluded has been construed in similar

statutes to mean force of an unusual kind which tends to bring about a

breach of the peace, such as an injury with a strong arm, or a multitude

of people, or in a riotous manner, or with personal violence, or with

threat or menace to life or limb, or under circumstances which would

naturally inspire fear.

Id. In the view of the Crow court, the purpose of allowing treble damages in the

case of forcible ejection is to dissuade competing uses of force that would breach

the public peace at the cost of a public disturbance or injuries to the parties. Id.

The Oklahoma Supreme Court provided further clarification of the type of

force required for an award of treble damages in Main v. Levine, 118 P.2d 252

(Okla. 1941), two years after the Crow decision. Main concerned plaintiffs who

rented a dwelling from the defendants. Main, 118 P.2d at 254. The defendants

terminated the plaintiffs’ rental agreement and notified the plaintiffs that they must

vacate the property. Id. When the plaintiffs refused to vacate, the defendants sent

a moving crew to the property that jacked up the house and disconnected utilities

in preparation to move the house to another location. Id. In affirming the award of

treble damages, the Oklahoma Supreme Court found that the “[d]efendants ignored

the legal methods provided for securing possession of the premises, and in

disregard of the rights of plaintiffs and their claim of rightful possession, attempted

by force to remove them from the premises, and were about to do so when

plaintiffs, to avoid further conflict, removed therefrom.” Id. at 255. The court

further held that “[w]hile the force was not applied to the persons of plaintiffs, it

was nevertheless a forcible and unlawful ejection from the premises, in disregard

of their right of occupancy.” Id. (citing Crow, 96 P.2d 70; Sanders v. Cline, 101 P.

267 (Okla. 1908)).

The Tenth Circuit Court of Appeals later considered the meaning of

“forcibly ejecting or excluding” in Ansay v. Boecking-Berry Equipment Co., 450

F.2d 433 (10th Cir. 1971). In Ansay, a trespasser erected a chain link fence topped

with barbed wire around a disputed property. Ansay, 450 F.2d at 435. The trial

court believed that the erection of the fence constituted forcible exclusion within

the meaning of Section 71, but denied treble damages because the court found that

the defendant honestly believed that it was legally within its rights to occupy the

property. Id. at 436. On appeal, the Tenth Circuit Court of Appeals affirmed the

denial of treble damages, but deviated from the findings of the trial court by

holding that “[t]he building of the fence was a clear symbol of an assertion of a

right and of exclusion, but it was not an active force as contemplated by [Section

71].” Id.

In considering these cases, it is clear to the Court that forcible ejection or

exclusion requires more than a simple act of impairing access to property. See

Ansay, 450 F.2d at 436; see also Wiley v. Safeway Stores, Inc., 400 F. Supp. 653,

655 (N.D. Okla. 1975) (holding that a notice to remove an amusement ride from

property did not constitute force as required under Section 71). To warrant an

award of treble damages, a trespasser must exert an unusual degree of force or

violence such that the owner or possessor of a property feels threatened and

compelled to abandon the property. See Main, 118 P.2d at 254.

Defendants’ use of blasting to disturb the Osage Mineral Estate while

excavating for the wind tower foundations, though an inherently violent act, was

not the type of force contemplated by Section 71. The blasting was conducted as a

normal part of the construction process based on the composition of the ground. It

was not done for the purpose of excluding Plaintiff or the Osage Minerals Council

from accessing the mineral estate. It was also not the type of force that risked

disturbing the peace, invoking retaliatory force, or causing injury or harm to

another party. See Crow, 96 P.2d at 72. Therefore, the Court holds that Plaintiff is

not entitled to treble damages.

Plaintiff urges the Court to interpret the force element of Section 71

differently in light of federal policies protecting the rights of Indians to peacefully

occupy land. Pre-Trial Br. at 23–25; Pl.’s Post-Trial Br. at 20–21. The Court is

not convinced that its reading of Section 71 frustrates any specific objectives of a

federal policy. See Kamen v. Kemper Fin. Servs., Inc., 500 U.S. 90, 98 (1991)

(“[F]ederal courts should ‘incorporat[e] [state law] as the federal rule of decision,’

unless ‘application of [the particular] state law [in question] would frustrate

specific objectives of the federal programs.’” (quoting United States v. Kimbell

Foods, Inc., 440 U.S. 715, 728 (1979))). Section 71 does not set a bar so high that

it would foreclose exemplary damages in all cases but those involving heinous or

violent acts. It does set, however, a threshold high enough to exclude acts of a

symbolic nature or that are not intended to induce concern or apprehension in the

property holder. This is necessary to limit treble damages to only those cases in

which they are warranted by a defendant’s actions. Ultimately, in this case, federal

Indian policies cannot alter the fact that the type of force applied by Defendants in

blasting the ground during construction is not the type of force contemplated by

Section 71.

Though Plaintiff has not demonstrated the requisite forcible ejection or

exclusion under Section 71, the Court finds it appropriate to address the remaining

element of Defendants’ alleged wrongful intent. Defendants maintain the position

that they “‘honestly believed’ that construction of the Osage Wind project did not

require a mining lease or permit” in reliance on the advice of counsel. Defs.’ Pre-

Trial Br. at 21; Defs.’ Post-Trial Br. at 35–36. Plaintiff argues that Defendants’

reliance on the advice of outside counsel is disingenuous because Defendants did

not provide their counsel with all the pertinent information and made decisions for

a financial benefit. Pl.’s Pre-Trial Br. at 16–23.

Defendants and their predecessors in the wind farm project were told by

officials of the United States and Osage Nation governments on multiple occasions

of the need to secure permits and leases, and the governments issued cease-and-

desist requests until such authorization was obtained. As early as October 2013,

the Osage Minerals Council solicited information from Wind Capital Group and

Tradewind “to determine the federal permitting, leasing and other regulatory

requirement that could apply to the Osage Wind Project.” Defs.’ Ex. 18 at 4. The

October 2013 letter referenced that “[i]n addition to oil and gas, the Osage Mineral

Estate consists of solid materials, including limestone, dolomite, sandstone, sand,

gravel, clay, and shale,” and that activities within the mineral estate “may be

subject to a range of federal regulatory requirements, including the need to secure a

federal permit or lease to undertake such activities, pursuant to 25 C.F.R. §§ 411

and 414.” Id.

The Bureau of Indian Affairs contacted Defendants on October 9, 2014,

advising that an inspector had observed a large pit with piles of crushed limestone

around a wind turbine foundation. Defs.’ Ex. 23. The letter directed Defendants to

cease further excavation until the necessary permits were obtained, and legal action

was threatened for non-compliance. Id. The following month, in response to a

request by Defendants to arrange a meeting, Acting Principal Chief Raymond Red

Corn of the Osage Nation asked Defendants to suspend construction of the wind

energy facilities, noting that Defendants “have taken Osage minerals for use in

construction of wind turbines without permits or approval of the Osage Minerals

Council.” Defs.’ Ex. 26.

Defendants disregarded these governmental mandates and continued with

construction. It is apparent that this decision was the product of a desire to

maximize financial gains by Defendants’ representatives, while recklessly

disregarding the risks of infringing upon the mineral rights of the Osage Nation.

When asked to explain the decision to disregard the Bureau of Indian Affairs’

cease-and-desist instruction, multiple representatives for Defendants indicated that

they simply believed that the Bureau of Indian Affairs and Osage Minerals

Council, the organizations responsible for administering the Osage Mineral Estate,

were wrong to require a permit and needed to be better educated on the topic.

Michael Storch, a former Enel Green Power executive, testified that:

[w]e had several factors, you know, involved. The question of authority

to stop the project was one. The fact that we didn’t believe we needed

a permit and that it was more about, as you’ve seen in other e-mails and

so forth, communication with the Bureau of Indian Affairs to help have

them understand the basis for our conclusion that no permit was

required and so forth.

Trial Tr. vol. V, 536:20–537:10. William Price, Head of Engineering Construction

for Enel North America, testified that Defendants’ plan to address the Bureau of

Indian Affairs’ cease-and-desist letter was to “execute the project as originally

planned” and to educate the Bureau of Indian Affairs on the matter. Trial Tr. vol.

XIII, 1562:15–24. He testified further that “the request to cease activity was not

valid” because Defendants determined that they did not need a permit. Trial Tr.

vol. XIII, 1569:12–18, 1572:25–1573:11.

It is also clear that financial considerations, in large part, drove the decision

to ignore the cease-and-desist instructions. In October 2014, Defendants’ counsel,

Lynn Slade, informed a representative of the Department of the Interior’s Regional

Solicitor’s Office that Defendants were “continuing operations notwithstanding the

[Bureau of Indian Affairs’] letter due to extreme costs.” Pl.’s Ex. 29; see also Trial

Tr. vol. V, 533:24–534:6. This sentiment was reflected in the witness testimony at

trial. Stephen Pike, President and CEO of Enel Green Power North America,

testified that the decision to not cease construction was the result of “the high cost

to stop a construction project of that magnitude with hundreds of workers.” Trial

Tr. vol. XIV, 1610:14–16 [Doc. 481]. Storch also noted the “extreme cost” among

his reasons for continuing work. Trial Tr. vol. V, 537:10–14.

Defendants attempt to justify their decision to ignore the Bureau of Indian

Affairs and Osage Minerals Council by claiming that they relied on the advice of

outside counsel. Good faith reliance on the advice of counsel is not a complete

defense, but may be considered when determining if a defendant acted willfully.

United States v. Wenger, 427 F.3d 840, 853 (10th Cir. 2005) (citing United States

v. Custer Channel Wing Corp., 376 F.2d 675, 683 (4th Cir. 1967)). A defendant

must demonstrate “(1) a request for advice of counsel on the legality of a proposed

action, (2) full disclosure of the relevant facts to counsel, (3) receipt of advice from

counsel that the action to be taken will be legal, and (4) reliance in good faith on

counsel’s advice.” Id. (quoting C.E. Carlson, Inc. v. S.E.C., 859 F.2d 1429, 1436

(10th Cir. 1988)).

Defendants point to the series of memoranda produced by Modrall Sperling

in 2013 and 2014. See August 2014 Modrall Sperling Memo; October 2013

Modrall Sperling Memo; May 2014 Modrall Sperling Memo; September 2014

Modrall Sperling Memo. Wind Capital Group and Tradewind retained Modrall

Sperling in October 2013, after receiving the Osage Minerals Council’s letter

soliciting information needed to determine if a lease was required for the wind

farm project. Trial Tr. vol. VI, 601:25–602:4, 603:7–11; Defs.’ Ex. 18 at 4.

Modrall Sperling produced its first memorandum on October 31, 2013.

October 2013 Modrall Sperling Memo. The subject line of the memorandum reads

“[r]ights of surface owners to use soil” and the content of the memorandum

addresses the question of “[w]hether a surface owner who excavates land for the

purpose of construction consistent with its surface rights—and does not remove the

land excavated from the property—is engaged in ‘mining’ of the mineral estate and

requires a mining permit.” Id. at 1; see also Trial Tr. vol. VI, 603:9–11. In

reaching the ultimate conclusion that a mining permit was not required for the

project, the October 2013 Modrall Sperling Memo described the construction as

“[t]o the extent any soil or other subsurface material is (touched) by [Tradewind],

it is merely incidental to [Tradewind’s] construction of its approved wind farm.

No soil is removed from the site, or processed on site for a commercial use.”

October 2013 Modrall Sperling Memo at 2. It concluded that “[Tradewind was]

not engaged in mining or other use of the mineral estate, but [was] taking actions

consistent only with its lease.” Id. (emphasis in original).

Modrall Sperling produced a second memorandum on May 19, 2014 in

response to their clients’ request that the memorandum be directed to them. Trial

Tr. vol. VII, 806:3–9. The May 2014 Modrall Sperling Memo largely reiterated its

prior findings and analysis, with a few notable differences. May 2014 Modrall

Sperling Memo. A paragraph acknowledging that 25 C.F.R. § 214 “contains the

regulations for the ‘Leasing of Osage Reservations Lands, Oklahoma, for mining

except oil and gas,’” was removed from the May 2014 Modrall Sperling Memo.

Compare October 2013 Modrall Sperling Memo at 2 with May 2014 Modrall

Sperling Memo at 2. The May 2014 Modrall Sperling Memo also added to its

analysis the qualifying language “as we understand its plans” when discussing

Tradewind’s construction of the wind farm. Compare October 2013 Modrall

Sperling Memo at 2 (“[Tradewind’s] construction of the wind farm does not

require a permit from the [Bureau of Indian Affairs] or the Osage Nation”) with

May 2014 Modrall Sperling Memo at 2 (“[Tradewind’s] construction of the wind

farm, as we understand its plans, will not require a permit from the [Bureau of

Indian Affairs] or the Osage Nation.” (emphasis added)). In describing

Tradewind’s interaction with the mineral estate during construction, the May 2014

Modrall Sperling Memo replaced the word “touched” with “moved.” Compare

October 2013 Modrall Sperling Memo at 2 with May 2014 Modrall Sperling

Memo at 2. At trial, Slade testified that he did not recall any additional material

information on the construction plans being provided between the October 2013

Modrall Sperling Memo and the May 2014 Modrall Sperling Memo. Trial Tr. vol.

VII, 807:21–808:23.

In August 2014, Defendants requested that Modrall Sperling prepare a

scaled-back memorandum that did not include legal conclusions. Pl.’s Ex. 7.

Slade testified that Defendants requested the change because the memorandum

would be shared with an investor, identified as General Electric. Trial Tr. vol. VII,

816:5–817:3. The August 2014 Modrall Sperling Memo included multiple

changes from the prior versions. For example, the subject line of the memorandum

was changed to expressly reference excavation. Compare August 2014 Modrall

Sperling Memo at 1 (“Rights of surface owners or their lessees in Osage County,

Oklahoma to excavate or utilize soil”) with October 2013 Modrall Sperling Memo

at 1 (“Rights of surface owners to use soil”) and May 2014 Modrall Sperling

Memo at 1 (same). The “Question Presented” was also changed from “excavates

land” to “excavates soil and related materials” and from “does not remove the land

excavated from the property” to “does not remove the materials excavated from the

property subject to a mineral reservation.” Compare August 2014 Modrall

Sperling Memo at 1 with October 2013 Modrall Sperling Memo at 1 and May

2014 Modrall Sperling Memo at 1. The August 2014 Modrall Sperling Memo also

removed references to the Osage Minerals Council’s contention that a lease or

permit was necessary, which had been included in prior versions of the

memorandum. Compare August 2014 Modrall Sperling Memo with October 2013

Modrall Sperling Memo at 2 and May 2014 Modrall Sperling Memo at 2; see also

Trial Tr. vol. VII, 819:16–820:10. A finalized version of the May 2014 Modrall

Sperling Memo was prepared in September 2014. September 2014 Modrall

Sperling Memo; Defs.’ Ex. 46.

As an initial matter, Defendants’ reliance on the Modrall Sperling

memoranda to justify their decision to ignore the directions of the Bureau of Indian

Affairs and the Osage Minerals Council is severely weakened by the fact that none

of the memoranda expressly recommended that Defendants disregard the cease-

and-desist instructions and continue with construction of the wind farm. The

content of the memoranda was limited to whether a permit or lease was required

for certain activities related to construction. Counsel did not suggest that

Defendants were legally authorized to disregard directives from governmental

authorities. It is unreasonable to conclude that counsel were authorizing

Defendants to disregard the clear instructions of the Bureau of Indian Affairs and

Osage Minerals Council.

In addition to this serious flaw, it is clear to the Court that Defendants failed

to fully disclose all of the relevant facts to counsel when requesting Modrall

Sperling’s opinion. Changes between the October 2013 Modrall Sperling Memo

and the May 2014 Modrall Sperling Memo suggest that at the time of the May

2014 Modrall Sperling Memo, Defendants’ outside counsel had a different

understanding of the situation than it had a few months prior. The Court also notes

that the Modrall Sperling memoranda do not expressly describe the nature of the

construction project, such as the use of blasting, or the intended use of excavated

materials as backfill. This ambiguity demonstrates that Defendants failed to

provide all the specific details of the construction project to Modrall Sperling.

Defendants have also failed to convincingly demonstrate that they relied on

Modrall Sperling’s legal advice. At trial, Storch described the October 2013

Modrall Sperling memorandum as “quite strong,” “conclusive,” “no room for

doubt,” and lacking “any kind of qualifiers of concern in describing the work that

had been done to reach the conclusion that they had reached.” Trial Tr. vol. IV,

390:4–18 [Doc. 461]; Trial Tr. vol. V, 604:3–8. The Court finds this

characterization to be inconsistent with the express language of the October 2013

Modrall Sperling Memo, which conceded that “there is no controlling authority

on” whether a mining lease was required and that only “some weak authority was

found on” whether excavation incident to construction on the surface qualified as

mining. October 2013 Modrall Sperling Memo at 1, 7. The memorandum also

noted that “no federal cases interpreting [the] regulatory definition of ‘mining’

were located, or the rights of mineral estate owners in Osage County.” Id. at 1–2.

Additionally, the Court finds troubling Defendants’ request for an altered

memorandum excluding legal conclusions that was provided to a potential

investor. This conduct strongly suggests that the memoranda were drafted in the

interest of Defendants’ business goals, rather than to provide accurate legal

information.

Defendants cannot now assert that they relied on the advice of counsel in

good faith to negate their willful decision to disregard the cease-and-desist

instructions. See Mumby v. Pure Energy Servs. (USA), Inc., 636 F.3d 1266, 1270

(10th Cir. 2011) (holding that, in the context of employment, “[a]lthough

consultation with an attorney may help prove that an employer lacked willfulness,

such a consultation is, by itself, insufficient to require a finding in favor of the

employer”); Wenger, 427 F.3d at 853 (holding that, in the context of securities

fraud, “[g]ood faith reliance on counsel . . . is merely one factor a jury may

consider when determining whether a defendant acted willfully”); Takecare Corp.

v. Takecare of Okla., Inc., 889 F.2d 955, 957 (10th Cir. 1989) (holding that, in the

context of trademark infringement, “[a]bsent [a showing of other factors],

counsel’s advice alone will not shield the actor from the consequences of his act”

(internal quotation omitted)). Modrall Sperling advised Defendants that it believed

that a lease was not required for the construction of the wind farm. It did not

instruct Defendants to disregard the cease-and-desist instructions. Based on the

testimony of Defendants’ representative and the evidence presented at trial, it is

clear that Defendants’ decision to move forward with construction of the wind

farm was motivated by financial interests and not a legitimate belief in the legality

of their actions. Defendants viewed the Modrall Sperling memoranda not as

statements of law, but as tools to entice investors and as a potential shield against

the consequences of Defendants’ actions. Defendants’ bad-faith reliance on the

advice of counsel cannot excuse its willful and wrongful intent; however, because

Plaintiff has not demonstrated the requisite forcible ejection, the Court cannot

award treble damages based on the facts of this case.

IV. Continuing Trespass

The Court held Defendants liable for continuing trespass and ordered

ejectment of the wind towers. Osage Wind II, 710 F. Supp. 3d at 1038, 1039–42.

The Parties were directed to file briefs proposing a plan and schedule for removal

of the wind turbines and rehabilitation of the impacted mineral estate. Order (Feb.

8, 2024) [Doc. 393].

As an initial matter, Defendants argued for the first time that the Court

should alter its prior ruling and require only the removal and replacement of the

backfill used for support of the wind towers. Defs.’ Br. Resp. Feb. 8, 2024 Order

at 2–3, 7–10 [Doc. 396]. Defendants argue that removal of the backfill and

replacement with substitute materials would be a more narrowly-tailored remedy

than total removal of the wind towers. Id. at 2–3 (citing Garrison v. Baker Hughes

Oilfield Operations, Inc., 287 F.3d 955, 962 (10th Cir. 2002)). The Court

disagrees. As explained in Osage Wind II, the harm resulting from Defendants’

continuing trespass is not only the continued use of the wrongfully obtained

backfill, but also the interference with the Osage Nation’s sovereignty. Osage

Wind II, 710 F. Supp. at 1041–42. Defendants reiterate many of the same

arguments previously weighed by the Court regarding the claimed benefits of the

wind farm continuing to operate. These arguments are not more impactful now

than they were at the summary judgment stage of this litigation. The Court is not

persuaded by Defendants’ backdoor attempt to seek reconsideration of the prior

grant of injunctive relief and the Court does not alter its award of “injunctive relief

in the form of ejectment of the wind towers.” Id.

In addressing the Court’s request for a removal plan, Defendants represented

that “the removal of all 84 wind turbines—via either controlled demolition, more

targeted decommissioning and dismantling, or a combination of both—is expected

to take 18 months.” Defs.’ Br. Resp. Feb. 8, 2024 Order at 2. Defendants propose

that the first six months of this period would be spent obtaining necessary permits

and engaging external specialists. Id. at 4–5. During this time, Defendants would

also “develop and distribute a detailed plan for the project such that the qualified

specialists needed to do the work could evaluate and bid on it.” Id. at 5.

Defendants anticipate that the physical removal of the wind turbines and

restoration of the surrounding land will take 12 months. Id. at 6. Defendants have

estimated that removal of the wind towers would result in Osage Wind suffering a

negative economic impact of $258,729,611.70. Defs.’ Resp. Pl.’s Mot. Summ. J.

at 5–6 [Doc. 321].

The Osage Minerals Council argues that removal should be limited to 12

months. Pl.-Interv.’s Resp. Defs.’ Br. Regarding Feb. 8, 2024 Order at 7–8 [Doc.

404]. In support of this argument, the Osage Minerals Council relies on a

provision of the Surface Leases that requires Defendants to “remove all

[w]indpower [f]acilities” within 12 months of the expiration or termination of the

Surface Lease. Id.; Surface Lease ¶ 14.6.

The Court is convinced that 12 months is an adequate period of time for the

removal of the wind farm. At the time of negotiating the Surface Leases,

Defendants clearly believed that the wind farm could be removed from the surface

estate within 12 months. There has been nothing presented to the Court suggesting

that conditions have changed to require a longer period. Furthermore, Defendants

have had nearly one year (while the damages phase of this trial continued) since

the Court ordered ejectment of the wind farm to obtain necessary permits, contact

specialists, and make other initial arrangements. Therefore, the Court holds that

Defendants shall remove the wind farm from the Osage Mineral Estate and return

the Osage Mineral Estate to its pre-trespass condition on or before December 1,

2025.

Defendants contend that the Court should not award both injunctive and

monetary damages for continuing trespass. Defs.’ Br. Resp. July 10, 2024 Order.

The Court agrees. Injunctive relief is appropriate only to prevent irreparable harm

that cannot be satisfied through a monetary award. See Schrier v. Univ. of Colo.,

427 F.3d 1253, 1267 (10th Cir. 2005). In this case, the injury caused by

Defendants’ continuing trespass was the interference to the Osage Nation’s

sovereignty, which a monetary award cannot cure. Osage Wind II, 710 F. Supp.

3d. at 1041. The Court hereby incorporates by reference its prior analysis on

ejectment and sovereignty in Osage Wind II. Id. at 1039–42. The injury suffered

as a result of Defendants’ continuing trespass should not be conflated with the

injury suffered as a result Defendants’ trespass against the mineral estate, which

can be cured through a monetary award and will continue to accrue until the

ejectment of the wind towers is complete. The Court’s grant of injunctive relief for

continuing trespass does not bar or limit Plaintiff’s ability to recover damages in

trespass.

V. Attorneys’ Fees and Costs

Plaintiff and the Osage Minerals Council seek recovery of attorneys’ fees

and costs related to this litigation. Pl.’s Att’ys’ Fee Br.; Pl-Interv.’s Att’ys’ Fee Br.

Their theories of recovery are based on 23 Okla. St. Ann. § 64(3), which allows for

recovery of “fair compensation for the time and money properly expended in

pursuit” of recovering property; 12 Okla. St. Ann. § 940(A), which allows for

recovery of fees for negligent or willful injury to property, principles of equity and

federal Indian policy; and the Declaratory Judgment Act, 28 U.S.C. § 2202. Pl.’s

Att’ys’ Fee Br.; Pl-Interv.’s Att’ys’ Fee Br. Defendants contend that the Court has

already ruled on Plaintiff’s and Plaintiff-Intervenor’s Sections 64(3) and 940(A)

theories and that no misconduct during the life of this case warrants an award of

costs and fees in equity. Defs.’ Att’ys’ Fee Br.

A. Availability of Fees and Costs

Section 64(3) of Title 23 provides that “[t]he detriment caused by the

wrongful conversion of personal property is presumed to be [a] fair compensation

for the time and money properly expended in pursuit of the property.” 23 Okla. St.

Ann. § 64(3). In advance of trial, Defendants moved to exclude evidence related to

the recovery of litigation fees and costs. Defs.’ Mot. Exclude Certain Evid. Trial at

4–6 [Doc. 413]. In ruling on Defendants’ pre-trial motion, the Court relied on U.S.

Supply Co. v. Gillespie, 166 P. 139 (1917), in which the Oklahoma Supreme Court

held that attorneys’ fees “paid in connection with the prosecution of [an] action for

damages [. . .] are not recoverable as compensation for money properly expended

in pursuit of the property.” Order (Apr. 23, 2024) at 9 [Doc. 423]; Gillespie, 166

P. at 140. This Court held that Section 64(3) does not allow for the recovery of

attorneys’ fees incurred in pursuit of litigation. Order (Apr. 23, 2024) at 9.

Plaintiff contends that it is entitled to recover the costs of its experts and

specialists retained for purposes of this litigation. Pl.’s Att’ys’ Fee Br. at 5–6; Pl.’s

Att’ys’ Fee Reply Br. at 5. In support of this argument, Plaintiff cites to two cases

from the Oklahoma appellate courts: W.P. Bistro Tulsa v. Henry Real Estate, 514

P.3d 1091 (Okla. Ct. App. 2022) and First National Bank & Trust Co. v. Exchange

National Bank & Trust Co., 517 P.2d 805 (Okla. Ct. App. 1973). Pl.’s Att’ys’ Fee

Br. at 5–6. These cases are distinguishable from the facts of the instant case

because they each involve recovery of fees related to experts tasked with pursuing

property, not with litigation. W.P. Bistro Tulsa, LLC, 514 P.3d at 1098 (fee for an

asset recovery specialist retained to determine if appellee’s assets could be

gathered and collateral sold); First Nat’l Bank & Trust, 517 P.2d at 807

(“accountants’ fees necessary in pursuit of the property”). In contrast, the experts

retained by Plaintiff and Plaintiff-Intervenor in this case provided valuations and

other functions specifically within the scope of the litigation. These are not the

type of fees recoverable under Section 64(3).

Section 940(A) of Title 12 provides that:

[i]n any civil action to recover damages for the negligent or willful

injury to property and any other incidental costs related to such action,

the prevailing party shall be allowed reasonable attorney’s fees, court

costs and interest to be set by the court and to be taxed and collected as

other costs of the action.

12 Okla. St. Ann. § 940(A). In ruling on Defendant’s pre-trial motion to exclude,

the Court held that Section 940(A) “does not provide an avenue for recovery of

attorneys’ fees in this case because Plaintiff and Plaintiff-Intervenor have not

claimed damages based on physical injury to the mineral estate.” Order (Apr. 23,

2024) at 9 (citing Weyerhaeuser Co. v. Brantley, 510 F.3d 1256, 1268 (10th Cir.

2007)).

Plaintiff now contends that it raised the issue of physical injury to the Osage

Mineral Estate in the Amended Complaint. Pl.’s Att’ys’ Fee Reply Br. at 2; Am.

Compl. In the Amended Complaint, Plaintiff makes general reference to damages

resulting from Defendants’ trespass and conversion:

50. By conducting unauthorized and unapproved mining or

work related to minerals, as contemplated by 25 C.F.R. § 211 or 25

C.F.R. § 214, Defendants trespassed on the Osage [M]ineral [E]state,

in violation of law and, in doing so, caused damages.

51. Defendants are co-trespassers and are jointly and severally

liable for all damages that resulted from the trespass.

* * *

64. By conducting unauthorized and unapproved mining or

work related to minerals, as contemplated by 25 C.F.R. § 211 or 25

C.F.R. § 214, Defendants converted property belonging to the Osage

mineral estate and, in doing so, caused damages.

65. Defendants are jointly and severally liable for all damages

that resulted from the conversion.

* * *

Prayer for Relief

* * *

3. Enter a judgment assessing damages, as determined, to the

Osage [M]ineral [E]state for unlawful or unauthorized mining,

excavation or other work, as set out in the federal regulations.

4. Enter a judgment finding Defendants jointly and severally

liable for damages, in an amount to be proven, resulting from the

trespass and conversion.

Am. Compl. ¶¶ 50–51, 64–65, 3–4. In light of the evidence presented at trial, the

Court views these general references to damages related to trespass as allegations

of injury to the Osage Mineral Estate and considers the Section 940(A) arguments

presented by Plaintiff and Plaintiff-Intervenor.

In considering Section 940(A), the Tenth Circuit Court of Appeals has held

that “[t]he use of the word ‘shall’ renders the award of attorney’s fees mandatory

when an action falls under the purview of § 940(A).” Sundance Energy Okla.,

LLC v. Dan D. Drilling Corp., 836 F.3d 1271, 1280 (10th Cir. 2016) (citing

Schaeffer v. Shaeffer, 743 P.2d 1038, 1040 (Okla. 1987)). The statute only applies

when a prevailing party recovers actual damages for physical injury to property.

Weyerhaeuser, 510 F.3d at 1268. With regard to Plaintiff’s trespass claims,

Plaintiff has only recovered damages related to Defendants’ occupancy of the

Osage Mineral Estate equivalent to fair rental value. Supra § II. Alternatively, the

Court has awarded damages on Plaintiff’s conversion claims based on the value of

minerals removed from the mineral estate through blasting and excavation. Supra

§ I. The Court concludes that the damages award for Plaintiff’s conversion claim

is sufficient under Section 940(A). Because the statute makes the awarding of

attorneys’ fees mandatory, the Court grants Plaintiff’s and Plaintiff-Intervenor’s

requests for attorneys’ fees and costs incurred in litigating this case.

Plaintiff also seeks recovery of fees and costs in equity, alleging that

Defendants’ actions impeded Plaintiff’s ability to enforce its rights. Pl.’s Att’ys’

Fee Br. at 7–8; Pl.’s Att’ys’ Fee Reply Br. at 6–9. Defendants contend that

Plaintiff has not identified any specific litigation misconduct warranting a shifting

of fees. Defs.’ Att’ys’ Fee Br. at 7–10.

As the U.S. Supreme Court has recognized, “it is unquestioned that a federal

court may award counsel fees to a successful party when his opponent has acted in

bad faith, vexatiously, wantonly, or for oppressive reasons.” Hall v. Cole, 412

U.S. 1, 5 (1973) (internal quotation omitted). In the Tenth Circuit, “the bad faith

exception is drawn very narrowly, and may be resorted to ‘only in exceptional

cases and for dominating reasons of justice.’” Sterling Energy, Ltd. v. Friendly

Nat’l Bank, 744 F.2d 1433, 1437 (10th Cir. 1984) (quoting Cornwell v. Robinson,

654 F.2d 685, 687 (10th Cir. 1981)). As the U.S. Supreme Court has explained:

if a court finds that fraud has been practiced upon it, or that the very

temple of justice has been defiled, it may assess attorney’s fees against

the responsible party as it may when a party shows bad faith by delaying

or disrupting the litigation or by hampering enforcement of a court

order.

Chambers v. NASCO, Inc., 501 U.S. 32, 46 (1991).

Plaintiff points to multiple examples in which it contends that Defendants

“at least acted in a manner oppressive to the rights of Plaintiffs.” Pl.’s Att’ys’ Fee

Br. at 8. For example, Plaintiff raises Defendants’ failure to obtain a lease

following Osage Wind I, despite the Tenth Circuit Court of Appeals finding that

the lease was required for Defendants’ mining activities. Pl.’s Att’ys’ Fee Br. at 8;

Pl.’s Att’ys’ Fee Reply Br. at 6–7. Though it would have been advisable following

the Tenth Circuit Court of Appeals’ decision for Defendants to make efforts to

obtain the needed lease, their failure to do so has not amounted to a fraud upon the

Court nor hampered this litigation. If anything, Defendants’ failure to obtain a

lease has contributed to increased damages owed to Plaintiffs.

Plaintiff also argues that Moskaluk’s misrepresentation that a “record [of]

the volume of crushed” materials was maintained during construction warrants fee

shifting. Pl.’s Att’ys’ Fee Br. at 8; Pl.’s Att’ys’ Fee Reply Br. at 7. This

representation was made in the context of a motion for injunctive relief and the

accompanying filing was signed by counsel. Pl.’s Ex. 57 at 22–23, 25–26; Pl.’s

Ex. 58 ¶ 15(a)(ii). Though it has been established that Moskaluk’s statement was

inaccurate, it has not been demonstrated that it was made in bad faith, rather than

innocent error. See Autorama Corp. v. Stewart, 802 F.2d 1284, 1288 (10th Cir.

1986) (“[I]t is not surprising that attorneys’ fees are awarded only when there is

‘clear evidence’ that challenged actions are taken entirely without color and are

pursued for reasons of harassment or delay.”). In fact, as discussed above, Judge

Frizzell previously considered and denied a request for sanctions based on

Moskaluk’s misstatement. Order (Oct. 18, 2022) at 10. The fact that Defendants’

counsel signed the accompanying submission might reflect on the quality of

representation, but it does not amount to a fraud on the Court.

Plaintiff alleges that Defendants made other misrepresentations during the

litigation. Pl.’s Att’ys’ Fee Br. at 8 n.6. Plaintiff points to inconsistencies between

some witnesses who claimed that roughly 25% of the material excavated was not

returned to the ground and others who testified that all the material was returned.

Id.; see also Pl.’s Ex. 58 ¶ 15(a)(i); Trial Tr. vol. I, 20:10–13; Trial Tr. vol. XII,

1406:1–7, 1418:22–25, 1423:5–18, 1426:2–4; Trial Tr. vol. XIII, 1537:15–

1540:23, 1541:3–1545:23, 1546:7–25. Plaintiff argues that these inconsistencies

are significant because the location of the minerals was considered relevant to

Pfahl’s valuation calculation. Pl.’s Att’ys’ Fee Reply Br. at 7–8. As with

Moskaluk’s statement discussed above, there is no indication that these

inconsistencies between witnesses were acts of bad faith, rather than

misremembrances of events that occurred a decade prior to the trial.

Plaintiff next argues that Defendants’ continuation of construction after the

filing of this action was an oppressive act. Pl.’s Att’ys’ Fee Br. at 8. Again, this

behavior does not warrant fee shifting because it did not impact the litigation.

Defendants’ decision to continue an action that was later held to be unlawful might

impact damages, but it did not hamper Plaintiff’s ability to prosecute this case.

Finally, Plaintiff takes issue with Defendants’ reliance on statements of a

Bureau of Indian Affairs inspector, Ray Whiteshield, who did not testify at the

trial. Pl.’s Att’ys’ Fee Br. at 8 n.6; Pl.’s Att’ys’ Fee Reply Br. at 8–9.

Whiteshield’s visit to the wind farm is described in an internal email. Defs.’ Ex

35. At trial, Defendants’ counsel asked Storch to give his impressions of

Whiteshield’s site visit, which Storch did not attend, based on the email. Trial Tr.

vol. VI, 635:14–21. The Court sustained an objection to the testimony as hearsay,

and Defendants’ counsel represented to the Court that the evidence was not being

offered for the truth of the matter. Trial Tr. vol. VI, 635:22–636:14. In their

Proposed Findings of Fact and Conclusions of Law, Defendants state that “[t]he

inspector expressed concern that Enel was ‘crushing rock for sale.’” Defs.’ Post-

Trial Br. at 10. This statement directly quotes language from the internal email

and cites the email as support. Id.; Defs.’ Ex. 35. The Court notes that the email

was admitted into evidence without objection. Trial Tr. vol. XII, 1425:16–22. The

Court does not consider one sentence improperly based on inadmissible evidence

to amount to fraud or an attempt to hinder the proceedings.

Even viewed in their totality, Plaintiff’s complaints do not amount to the

type of bad faith or vexatious conduct needed to warrant equitable fee shifting. It

is without question that Plaintiff has identified examples of imperfect lawyering

and imperfect witnesses, but Plaintiff’s allegations do not reach the level of fraud

or disruption to the proceedings required to reallocate fees and costs based on

equity.

Plaintiff’s final theory for recovery of attorneys’ fees and costs is through

the Declaratory Judgments Act. Pl.’s Att’ys’ Fee Br. at 9–10; Pl.’s Att’ys’ Fee

Reply Br. at 9–10. 28 U.S.C. § 2202 provides that “[f]urther necessary or proper

relief based on a declaratory judgment or decree may be granted, after reasonable

notice and hearing, against any adverse party whose rights have been determined

by such judgment.” 28 U.S.C. § 2202. “Further necessary or proper relief” can

include an award of attorneys’ fees and costs. See Sec. Ins. Co. v. White, 236 F.2d

215, 220 (10th Cir. 1956). The statute is not an independent basis for such an

award and does not authorize the Court to grant attorney’s fees and costs that are

“not otherwise authorized by statute, contract, or state law.” Schell v. OXY USA

Inc., 814 F.3d 1107, 1127 (10th Cir. 2016).

It is uncontroverted that Plaintiff prevailed on its claim for declaratory relief.

Osage Wind II, 710 F. Supp. 3d at 1030. In this case, an independent statutory

ground exists under 12 Okla. St. Ann. § 940(A) for an award of attorneys’ fees and

costs related to Defendants’ failure to obtain the necessary lease for their mining

activities. Therefore, an award of attorneys’ fees and costs for Plaintiff’s

declaratory claims is appropriate.

Plaintiff and Plaintiff-Intervenor are not required to succeed on each of their

theories for recovery. Typically, the Court is required to apportion attorneys’ fees

and costs between claims for which there is a statutory authorization to shift fees

and claims for which there is not an independent authorization. See Travelers

Indem. Co. v. Hans Lingl Anlagenbau und Verfahrenstechnik GMBH & Co KG,

189 Fed. App’x 782, 788 (10th Cir. 2006). “[W]here non-authorized claims

contain common components of a claim for which attorney fees are authorized, it

may be proper to award fees without apportionment.” Id. (citing Green Bay

Packaging, Inc. v. Preferred Packaging, Inc., 932 P.2d 1091, 1098 (Okla. 1996)).

Plaintiff and Plaintiff-Intervenor are entitled to recover attorneys’ fees and cost

related to their successful trespass, conversion, and declaratory judgment claims.

Because those claims are intrinsically connected to the remaining claims in this

case based on their common facts and allegations, the Court finds it appropriate to

award Plaintiff and Plaintiff-Intervenor attorneys’ fees and costs related to all

claims in this case.

B. Attorneys’ Fees

In determining a reasonable attorneys’ fee amount, the Court begins with

“the number of hours reasonably expended on the litigation multiplied by a

reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). This is

commonly referred to as the “lodestar” figure and there is a “strong presumption”

of its reasonableness. Perdue v. Kenny A. ex rel. Winn., 559 U.S. 542, 553–54

(2010). “[T]hat presumption may be overcome in those rare circumstances in

which the lodestar does not adequately take into account a factor that may properly

be considered in determining a reasonable fee.” Id.

In order to determine a reasonable hourly rate, the Court looks to “what

lawyers of comparable skill and experience practicing in the area in which the

litigation occurs would charge for their time.” Case v. Unified School Dist. No.

233, 157 F.3d 1243, 1256 (10th Cir. 1998). The burden is on the requesting party

to “provide evidence of the prevailing market rate for similar services by lawyers

of reasonably comparable skill, experience, and reputation in the relevant

community.” Lippoldt v. Cole, 468 F.3d 1204, 1224–25 (10th Cir. 2006) (internal

quotation omitted). This evidence may include “affidavits submitted by the parties

and other reliable evidence of local market rates for [similar] litigation at the time

fees are awarded.” Case, 157 F.3d at 1256. A judge may also rely on her own

“knowledge of prevailing market rates as well as other indicia of a reasonable

market rate.” Metz v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 39 F.3d 1482,

1493 (10th Cir. 1994).

1. Plaintiff United States

Plaintiff claims that it incurred legal fees totaling $1,943,666.17 in litigating

this case. Pl.’s Fees and Costs Br. at 2–9. Plaintiff seeks to recover fees for two

attorneys, Cathy McClanahan and Nolan Fields. Id. at 3. McClanahan recorded

4,989.70 hours at a rate of $204.51 per hour, totaling $1,001,842.22. Id. Fields

recorded 4,498.31 hours at a rate of $158.43 per hour, totaling $712,658.93. Id.

Plaintiff also submitted that two paralegals assisted with this case, Michelle

Hammock and Sarah Coffey. Id. Hammock recorded 1,119.16 hours at a rate of

$127.36 per hour, totaling $142,536.86. Id. Coffey recorded 591.70 hours at a rate

of $146.41 per hour, totaling $86,628.16. Id. Plaintiff is not seeking to recover

fees for the work performed by four other federal employees who contributed work

on this matter. Id. at 7–9.

Plaintiff’s fees request is supported by the written declaration of Emma

Werlein, the Resource Management Officer for the U.S. Attorney’s Office for the

Northern District of Oklahoma. Id. at Ex. 1 (“Werlein Decl.”) [Doc. 513-1]. In

preparing Plaintiff’s submission, Werlein reviewed employee time records that

were submitted weekly into an internal record keeping and tracking computer

application. Id. ¶¶ 3–4. She also reviewed employee compensation information.

Id. ¶ 6. For each of the four relevant attorneys and paralegals, an hourly salary was

calculated by dividing the employee’s annual salary by 2,080 hours. Id. ¶ 11. An

hourly benefit rate was calculated by multiplying the hourly salary rate by 30%.

Id. Using these amounts, an hourly fee rate was calculated as the sum of the

hourly salary rate, the hourly benefit rate, and a standard overhead rate of $93.64.

Id. The Court finds this method of calculating hourly fee rates to be reasonable.

The Court observes that the rates billed by McClanahan, Fields, Hammock,

and Coffey are comparable, and generally less than, those charged by private

counsel for Plaintiff-Intervenors. Compare Pl.’s Fees and Costs Br. at 3 with Pl.-

Interv.’s Fees and Costs Br. at Exs. A (“Fredericks Peebles & Morgan Invoices”)

[Doc. 498-1], B (“Pipestem Law Invoices”) [Doc. 498-2], C (“Patterson Earnhart

Invoices”) [Doc. 498-3]. Plaintiff has also not sought to enhance a fee award or

recovery for some members of its legal team. Pl.’s Fees and Costs Br. at 7–9. The

Court finds the hourly rates claimed of $204.51 for McClanahan, $158.43 for

Fields, $127.36 for Hammock, and $146.41 for Coffey to be reasonable.

The tracking system used by the Department of Justice allows for hours to

be recorded in quarter-hour increments. Id. ¶ 14. It does not maintain detailed

descriptions of work performed on an hourly basis. Pl.’s Fees and Costs Br. at 4.

Recognizing that this case was filed more than a decade ago and has included

multiple motions, an appeal, and a trial, and upon review of Plaintiff’s

submissions, the Court finds reasonable the 4,898.70 hours claimed for

McClanahan, 4,498.31 hours claimed for Fields, 1,119.16 hours claimed for

Hammock, and 591.70 hours claimed for Coffey.

Defendants raise multiple objections to Plaintiff’s fee request and the

supporting documentation. Defendants argue that Plaintiff has not met its burden

to provide the Court information necessary to distinguish between fee-bearing and

non-fee bearing claims. Pl.-Interv.’s Fees and Costs Resp. at 3–5. As discussed

above, because all of the claims in this case are interrelated, all claims are fee-

bearing. There is no need for Plaintiff or the Court to distinguish between fee-

bearing and non-fee-bearing claims in apportioning fees and costs.

Defendants also argue that Plaintiff’s recovery should be denied or reduced

because it is not supported by contemporaneous, meticulous documentation. Id. at

5–7. The party requesting that fees be awarded “has the burden of proving hours

to the district court by submitting meticulous, contemporaneous time records that

reveal, for each lawyer for whom fees are sought, all hours for which

compensation is requested and how those hours were allotted to specific tasks.”

Case, 157 F.3d at 1250. A court may deny a claim for fees when contemporaneous

records were not maintained. See Anderson v. Sec’y Health and Hum. Servs., 80

F.3d 1500, 1506 (10th Cir. 1996). In this case, Plaintiff is represented by the

Department of Justice, which does not operate in the same manner as a private law

firm with the need to track billable hours. Plaintiff has explained that in the

normal course of business, “[the Department of Justice] does not maintain records

containing detailed descriptions of task performed on an hourly or sub-hourly

basis.” Pl.’s Fees and Costs Br. at 4; Werlein Decl. ¶ 4. Because Plaintiff’s

submission is based on data collected in the normal practice of the Department of

Justice, the Court does not find it necessary to deny or reduce recovery. Therefore,

Plaintiff is awarded $1,943,666.17 as reasonable attorneys’ fees.

2. Plaintiff-Intervenor Osage Minerals Council

Plaintiff-Intervenor claims that it incurred legal fees totaling $2,297,044 in

litigating this case. Pl.-Interv.’s Fees and Costs Br. at 4–7. Plaintiff-Intervenor

was initially represented in this case by the law firm Fredericks Peebles & Morgan

during the appeal to the Tenth Circuit Court of Appeals and in the response to the

petition for a writ of certiorari before the U.S. Supreme Court. Id. at 4. During

discovery, Plaintiff-Intervenor was represented by Pipestem Law, P.C. Id.

Patterson Earnhart Real Bird & Wilson LLP (“Patterson Earnhart”) represented

Plaintiff-Intervenor for summary judgment, trial, and post-trial work. Id. For

Fredericks Peebles & Morgan and Pipestem Law, Plaintiff-Intervenor provides

figures based on records maintained by Plaintiff-Intervenor in the normal course of

business. Id. at 4–5. For Patterson Earnhart, Plaintiff-Intervenor provides records

obtained from invoices sent to Plaintiff-Intervenor and Patterson Earnhart’s billing

software. Id. at 5.

The records submitted to the Court reflect that seven professionals worked

on this case on behalf of Fredericks Peebles & Morgan, LLP between September

2016 and December 2019: Chloe Bourne, Peter J. Breuer, Katie D. Frayer, Jeffrey

Rasmussen, Rebecca Sher, Kamran Zafar, and TWF. Fredericks Peebles &

Morgan Invoices. Rasmussen and TWF billed at a rate of $300 per hour and the

other individuals billed at a rate of $200 per hour. Id. Rasmussen recorded 121.5

hours, Bourne recorded 36.1 hours, Breuer recorded 24.3 hours, Frayer recorded

13.4 hours, Sher recorded 39.7 hours, Zafar recorded 3.7 hours, and TWF recorded

2 hours. Id. The Court finds these hourly rates and the amount of work performed

reasonable. Plaintiff-Intervenor is awarded $60,490 as reasonable attorneys’ fees

for work performed by Fredericks Peebles & Morgan.

The invoices submitted by Plaintiff-Intervenor covering work performed by

Pipestem Law reflect that at least 11 individuals performed work on this case.

Pipestem Law Invoices. Each of those individuals billed at a rate of either $100

per hour or $300 per hour. Id. The Court finds these rates to be reasonable.

Plaintiff-Intervenor has not provided the number of hours worked by each

individual or the total number of hours worked by Pipestem Law. It is not the

Court’s job to sort through 359 pages of invoices, covering a period of more than

three years, to determine how many hours were recorded and at what rate those

hours were billed. It is possible for the Court to make a reasonable estimate of the

billed hours using the information provided by Plaintiff-Intervenor. Of the 11

individuals reflected on the provided invoices, six billed at a rate of $300 per hour

(AF, JH, MN, RH, SB, and ST) and five billed at a rate of $100 per hour (Ashleigh

Fixico, AS, JC, WW, and ZL). See id. The average rate for this group of

individuals is $209.09 per hour.

Plaintiff-Intervenor contends that Pipestem Law’s billing totaled $2,049,799.

Pl.-Interv.’s Fees and Costs Br. at 5–6. In reviewing the invoices provided in

support of Plaintiff-Intervenor’s request, the Court observes three discrepancies.

First, in its billing summary, Plaintiff-Intervenor represents that Pipestem Law

billed $17,420 for the month of April 2020. Id. at 5. Multiple pages of the

corresponding invoice were not provided to the Court for review. Pipestem Law

Invoices at 11–13. The invoice lines included on the pages provided to the Court

total $8,030. Id. Because only $8,030 is supported by the evidence before the

Court, the total amount recoverable is reduced by $9,390. Second, for the month

of May 2020, Plaintiff-Intervenor represents that $81,010 was billed. Pl.-Interv.’s

Fees and Costs Br. at 5. The items invoiced in support of this billing total only

$79,680. Pipestem Law Invoices at 15–22. The total amount recoverable is

reduced by the difference of $1,330. Third, the amount invoiced for March 2021 is

$127,250. Pl.-Interv.’s Fees and Costs Br. at 6. The items invoiced in support of

this billing total only $119,150. Pipestem Law Invoices at 120–37. The total

amount recoverable is reduced by the difference of $8,100. With these

adjustments, the total recoverable amount for work performed by Pipestem Law is

$2,030,979. This total divided by the average hourly rate of $209.09 per hour

results in 9,713.4 hours. The Court finds this to be a reasonable approximation of

the hours worked by Pipestem Law. The Court finds that Plaintiff-Intervenor is

entitled to recover $2,030,974.81 as reasonable attorneys’ fees for the work

performed by Pipestem Law.

The records submitted to the Court reflect that six professionals worked on

this case on behalf of Patterson Earnhart since September 2022: Jeffrey

Rasmussen, Rollie Wilson, Michelle Long, Celene Olguin, Logan Big Eagle, and

RTL. Patterson Earnhart Invoices. Jeffrey Rasmussen and Rollie Wilson billed at

a rate of $300 per hour. Id. Long, Big Eagle, and RTL billed at a rate of $250 per

hour. Id. Olguin billed at a rate of $100 per hour. Id. The Court finds these rates

to be reasonable.

As with the records provided for Pipestem Law, Plaintiff-Intervenor has not

provided a statement of the total hours worked by each attorney and paralegal or

the total hours worked by Patterson Earnhart. The provided invoices reflect that

Patterson Earnhart billed 173.6 hours for the period of September 2022 through

February 2024. Patterson Earnhart Invoices at 1–22. They also reflect 416.8 hours

for the period of March 1, 2024 through July 12, 2024.25 Patterson Earnhart

25 The invoice indicates 456.7 total billable hours. Patterson Earnhart Invoices at

60. This includes 39.9 hours marked as “unbilled.” Id. at 59–60. The Court

considers only the billed hours.

Invoices at 36–60. The Court finds this to be a reasonable number of hours for the

four-month period prior to and including trial. The Court finds 590.4 hours to be a

reasonable amount of time billed for the period of September 2022 through trial.

The Court finds further that Plaintiff-Intervenor is entitled to recovery of $186,755

as reasonable attorneys’ fees for the work performed by Patterson Earnhart.

The adjusted total amount billed by the three law firms is $2,278,219.81.

Defendants contend that this amount should be reduced because the supporting

invoices group multiple actions together as block bills, making it difficult to

determine if specific billing lines are reasonable or duplicative. Defs.’ Fees and

Costs Resp. at 8–9. In determining reasonableness, a court considers “whether the

attorney’s hours were ‘necessary’ under the circumstances.” Robinson v. City of

Edmond, 160 F.3d 1275, 1281 (10th Cir. 1998). This task is frustrated when an

invoice groups multiple discrete actions into a single billed item without

delineating the amount of time spent on each specific task. Okla. Nat. Gas. Co. v.

Apache Corp., 355 F. Supp. 2d 1246, 1264 (N.D. Okla. 2004) (“[W]here block

billing makes it difficult, if not impossible, for the Court to determine the amount

of time spent on specific tasks, a general reduction in attorney fees may be

warranted.”) Each of Plaintiff-Intervenor’s law firms used block billing to a

degree. For example:

Research panel of judges assigned to the Tenth Circuit [Court of

Appeals] oral arguments hearing next week and review Indian law

cases they have authored opinion[s] in. Draft summary of finding[s]

for J. Rasmussen. Research and read several Interion Board of Indian

Appeals cases related to the prosecution of trespassers of mineral and

forest resources on Indian lands. Review Osage Wind case file . . . .

Fredericks Peebles & Morgan Invoices at 3.

Conference call with Osage Minerals Council to prepare for upcoming

settlement conference in Osage Wind litigation. Review newly

released discovery documents from Defendants. Phone call with

[a]ssociate regarding discovery and Osage Minerals Council’s Fourt

[sic] Privilege Log. Review correspondence from U.S. Attorney’s

Office to Settlement Judge in Osage Wind Litigation. Review

documents sought by Defendants in January 20 letter regarding Osage

Wind litigation. Begin drafting letter responding to Defendants’

January 20 letter. Review privileged documents sought by Defendants

and letter from Defendants requesting discovery supplementation.

Draft response letter to Defendants’ counsel.

Pipestem Law Invoices at 100.

Exchange numerous emails regarding Enel’s further edits to draft

pretrial order. Through emails and call, coordinate responses to same

with the United States. Prepare and review emails regarding exchange

of exhibits listed by parties in the pretrial order. Review and redact

attorney billings and compute amount for firm billing. Prepare follow-

up emails with Chief of staff regarding obtaining attorney billings for

other firms from the Osage Minerals Council.

Patterson Earnhart Invoices at 21. The Court does not agree with Defendants that

it is necessary to exclude all items from the invoices that might qualify as block

billing. Defs.’ Fees and Costs Resp. at 8–9. The Court does find that a reduction

is appropriate to address any potentially unnecessary or redundant work grouped

with otherwise permissible billing. Case, 157 F.3d at 1250 (“[A] general reduction

of hours claimed in order to achieve what the court determines to be a reasonable

number is not an erroneous method, so long as there is sufficient reason for its

use.”). Therefore, the Court applies a 20% reduction to Plaintiff-Intervenor’s

recoverable fees. Upon consideration of the documents submitted, the Court

awards Plaintiff-Intervenor $1,822,575.85 in attorneys’ fee.

C. Costs and Expenses

1. Plaintiff United States

Plaintiff seeks to recover $32,554.08 in costs incurred in litigating this case

and $591,595.78 in expenses related to experts. Pl.’s Fees and Costs Br. at 9–10.

Plaintiff’s costs are associated with the preparation of transcripts and the

preparation of video evidence. Id. at 9. Plaintiff is not seeking to recover costs

associated with document production. Id. at 10. The Court has reviewed the

summary and invoices provided by Plaintiff and finds $32,554.08 to be a

reasonable amount for costs incurred in this prolonged litigation.

Plaintiff seeks to recover expert expenses in the amount of $591,595.78. Id.

at 10. Defendants contend that Plaintiff is not entitled to the recovery of expert

fees under any identified authority. Defs.’ Fees and Costs Resp. at 9–10. As

discussed above, the Court concludes that recovery of expert expenses is not

permitted in this case because the experts were retained for the purpose of trial, not

for the recovery of the converted property. The Court awards Plaintiff $32,554.08

in costs and expenses related to this litigation.

2. Plaintiff-Intervenor Osage Minerals Council

Plaintiff-Intervenor seeks to recover $90,263.30 for costs incurred in this

litigation. Pl.-Interv.’s Fees and Costs Resp. at 4–7. Upon review of the

supporting invoices, the Court observes discrepancies in Plaintiff-Intervenor’s

summary. Plaintiff-Intervenor identifies $1,171.52 in expenses for April 2020. Id.

at 5. No expense invoice for this amount or this date is included among the

documents submitted to the Court. Plaintiff-Intervenor claims $828.00 in expenses

for the month of October 2020. Id. The accompanying invoice includes only

$628.00 in expenses. Pipestem Law Invoices at 66. To account for these

discrepancies, the Court will decrease the amount of available expenses by

$1,371.52. The Court also observes that an invoice dated July 9, 2020 in the

amount of $333.50 and an invoice dated July 12, 2021 in the amount of $5,553.30

were included in Plaintiff-Intervenor’s supporting documents but were not

included in the summary of expenses Plaintiff-Intervenor seeks to recover. Pl.-

Interv.’s Fees and Costs Br. at 5–6; Pipestem Law Invoices at 14, 139. Because

Plaintiff-Intervenor did not include the expenses in its summary, the Court will

exclude them from consideration. Upon consideration of the invoices provided by

Plaintiff-Intervenor, the Court awards Plaintiff-Intervenor $88,891.78 in costs and

expenses related to this litigation.

CONCLUSION

For the reasons discussed above, the Court holds that Plaintiff and Plaintiff-

Intervenor are entitled to damages on their conversion claim in the amount of

$242,652.28 and on their trespass claim in the amount of $66,780.00. The Court

also grants injunctive relief in the form of ejectment of the wind towers on the

claim of continuing trespass. Plaintiff is awarded attorneys’ fees in the amount of

$1,943,666.17 and costs in the amount on $32,554.08. Plaintiff-Intervenor is

awarded attorneys’ fees in the amount of $1,822,575.85 and costs in the amount on

$88,891.78. Plaintiff’s and Plaintiff-Intervenor’s requests for pre-judgment

interest and the trebling of damages are denied.

ORDER

ACCORDINGLY, IT IS HEREBY ORDERED THAT:

(1) Defendants shall pay to Plaintiff and Plaintiff-Intervenor damages in

the amount of $242,652.28 on the claim of conversion.

(2) Defendants shall pay to Plaintiff and Plaintiff-Intervenor damages in

the amount of $66,780.00 on the claim of trespass.

(3) The Osage Wind Farm Defendants shall remove the wind farm from

the Osage Mineral Estate and return the Osage Mineral Estate to its

pre-trespass condition on or before December 1, 2025.

(4) Defendants shall reimburse Plaintiff $1,943,666.17 for attorneys’ fees

and $32,554.08 for costs incurred in this litigation.

(5) Defendants shall reimburse Plaintiff-Intervenor $1,822,575.85 for

attorneys’ fees and $88,891.78 for cost incurred with this litigation.

IT IS SO ORDERED this 18th day of December, 2024.

/s/ Jennifer Choe-Groves

Jennifer Choe-Groves

U.S. District Court Judge*

* Judge Jennifer Choe-Groves, of the United States Court of International Trade,

sitting by designation.