U.S. Gets a Small Break in Damages Award to Osage

WASHINGTON (CN) - After failing to collect on oil leases in Oklahoma, the U.S. government must pay an Indian tribe more than $330.7 million for incorrectly managing its trust, the Court of Federal Claims ruled. The final damages award is about $200,000 more than the government conceded it should have to pay.

Under the Osage Allotment Act of 1906, the Osage Nation was granted a percentage of all mineral revenues for the land that they once occupied, which was to be held in a trust by the United States.

The tribe commenced a decade-long legal battle in 1999 for lost oil profits dating to the 1970s, accusing the United States of not upholding its duty as trustee. The Osage claimed the government failed to collect all payments due from the tribe's oil leases and failed to deposit and invest the money it did collect.

Chief Judge Emily Hewitt ruled for the tribe in September 2006, and the two parties have spent the intervening years bitterly contesting the total damages award.

Citing Koch Industries' crude oil database and the expert opinion of former Texaco executive Ronnie Martin Jr., the government argued that the tribe's oil and gas expert, Daniel Reineke, had inflated proposed damage estimates by about $1.6 million. When the Osage countered that the total damages amount should only be reduced by $1.4 million, the government claimed there was a "fundamental difference in the gravity adjustment methodologies" between each parties' experts.

In a ruling on Feb. 24, Chief Judge Hewitt said that the tribe's call for a $1.4 million reduction seems appropriate and ordered the government to pay about $330.7 million in total final damages.

Earlier this year, the 10th Circuit ruled that Osage County, Okla., is not an Indian reservation and hasn't been for more than 100 years, dismissing the tribe's bid to stop the state from collecting income tax from tribal members who live there.

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