EBEL, Circuit Judge.
This case presents the question whether a large-scale excavation project — which involved the excavation, modification, and use of rock and soil during the installation of wind turbines — constituted "mining" under the pertinent federal regulations that address mineral development on Indian land. When an entity engages in "mining" of minerals owned by the Osage Nation, a federally approved lease must be obtained from the tribe. 25 C.F.R. § 214.7. The Bureau of Indian Affairs (BIA) has defined "mining" as the "science, technique, and business of mineral development[.]" 25 C.F.R. § 211.3. We hold that the term "mineral development" has a broad meaning. While it includes commercial mineral extractions and offsite relocations, which are not at issue here, it also encompasses action upon the extracted minerals for the purpose of exploiting the minerals themselves on site.
The Osage Mineral Council (OMC), acting on behalf of the Osage Nation, appeals from the award of summary judgment to Defendant Osage Wind, LLC (Osage Wind),
Congress established an Indian reservation for the Osage Nation in 1872, Act of June 5, 1872, ch. 310, 17 Stat. 228, and Oklahoma thereafter incorporated the Osage-occupied territory as Osage County, Okla. Const., art. XVII, § 8. In 1906, Congress severed the Osage mineral estate in Osage County from the surface estate. Act of June 28, 1906 (Osage Act), ch. 3572, 34 Stat. 539, §§ 2-3. The Osage Act parceled out the surface estate to individual tribe members — a distribution practice known as "allotment" — and made these allotted lands freely alienable.
The mineral estate beneath those lands, however, was not allotted to individual members of the tribe.
The DOI promulgated several regulations pertinent to this case. First, 25 C.F.R. Part 211 governs the development of Indian mineral resources generally, and it provides the applicable definition of "mining" in this case:
Second, 25 C.F.R. Parts 226 and 214 implement the Osage Allotment Act and thus apply specifically to the Osage mineral estate. While Part 226 regulates the leasing of oil and gas resources, Part 214 governs all other resources in the mineral estate, including solid mineral resources. At issue here is 25 C.F.R. § 214.7, which provides that "[n]o mining or work of any nature will be permitted upon any tract of land until a lease covering such tract shall have been approved by the Secretary of the Interior and delivered to the lessee."
In 2010, Osage Wind leased surface rights to approximately 8,400 acres of private fee land in Osage County, Oklahoma, for the purpose of building a commercial wind farm — a facility that collects and stores wind-generated electricity. The planned wind-farm involved the installation of eighty-four wind turbines secured in the ground by reinforced concrete foundations, underground electrical lines running between the turbines and a substation, an overhead transmission line, meteorological towers, and access roads. These structures would occupy around 1.5 percent of the total acreage of leased surface land. In September 2011, OMC and the United States expressed concern that the planned project would interfere with oil and gas production by blocking access to the mineral estate.
Acting on that concern, OMC filed a lawsuit in October 2011 to prevent Osage Wind from constructing the proposed wind farm.
Nearly two years later, in October 2013, Osage Wind initiated site preparation and road construction, and by September 2014, excavation work for the planned wind turbines began. Each turbine required the support of a cement foundation measuring 10 feet deep and up to 60 feet in diameter. To accommodate these foundations, Osage Wind dug large holes in the ground. This process involved the extraction of soil, sand, and rock of varying sizes — all of which was of a common mineral variety, including limestone and dolomite. Rock pieces smaller than 3 feet were crushed into even smaller sizes and then, after each foundation was poured and cured, the crushed rocks were pushed back over the hole and compacted into the excavated site. Larger rock pieces were then positioned next to the holes from which they came.
In November 2014, the United States — rather than OMC — filed suit to halt this excavation work on the basis that such sand, soil, and rock extraction by Osage Wind was "mining" under 25 C.F.R. § 211.3 and thus required a mineral lease under 25 C.F.R. § 214.7. After discovering that Osage Wind had completed excavation in late November 2014, the United States withdrew its request for an injunction and filed an amended complaint for damages
After the summary judgment order, the United States had 60 days to appeal.
Before we reach the principal question in this case, we address two threshold issues. We first hold that OMC has adequately appealed the underlying merits decision, even though it did not formally join the proceedings below. As a result of that holding, there is no need to address whether OMC properly intervened in the district court. We then conclude that Osage Wind has not established its res judicata burden of showing that OMC could have raised the instant claim in its earlier 2011 lawsuit regarding oil-and-gas interference. Finally, on the merits, we determine that Osage Wind's excavation activities constituted "mining" under § 211.3, so a federally approved lease was required under § 214.7.
The instant action was initially brought by the United States as trustee for the Osage mineral estate. OMC was not a party to the proceeding below, yet it seeks to appeal. When the government informed OMC on the final day of the appeal deadline that it would not appeal, OMC acted quickly: it immediately submitted an intervention motion and then, minutes later, filed a notice of appeal from the underlying lawsuit. As a strictly procedural matter, because the district court did not rule on the intervention motion before OMC filed the appeal notice, OMC was not formally a party to this lawsuit when it appealed. It is black-letter law generally that "only parties to a lawsuit, or those that properly become parties, may appeal an adverse judgment."
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Although we hold that OMC has a unique interest in this case entitling it to appeal without having intervened below, we emphasize the limited nature of our decision. A generalized interest in vindicating a legal right is not enough to trigger our unique-interest exception. An interested person must have a particularized and significant stake in the appeal, and must further demonstrate cause for why he did not or could not intervene in the proceedings below. OMC's interest here is particularized and significant because the Osage Nation owns the beneficial interest in the mineral estate at issue. Further, OMC did not intervene below because the United States was adequately representing its interests all along, and OMC could not have intervened as of right earlier because it only discovered in the very last moments that the United States was not going to appeal. In these unique circumstances, we permit OMC to go forward with this appeal.
As a result of this holding, it is not necessary to decide whether OMC properly intervened in the district court below, i.e., whether OMC satisfied the requirements of Fed. R. Civ. P. 24. That is the subject of Appeal No. 16-5022. Having concluded that OMC is properly a party to the merits appeal, we dismiss Appeal No. 16-5022 as moot.
In October 2011, OMC filed a lawsuit to prevent interference with oil-and-gas production under 25 C.F.R. § 226.19, which resulted in a final judgment on the merits against OMC. In that prior litigation, OMC did not raise the instant claim of a lease requirement for solid mineral extraction under 25 C.F.R. § 214.7. Relying on the res judicata doctrine, Osage Wind now seeks to preclude OMC from appealing the judgment below on the theory that OMC could have asserted the instant claim in the earlier litigation.
Osage Wind does not explain how the instant claim would have been ripe for adjudication in 2011, almost three years before turbine excavation work began. At that early stage, the magnitude of the planned excavation work was not known to OMC or the United States, so it was not apparent that Osage Wind's proposed wind farm would violate 25 C.F.R. § 214.7. More to the point, if OMC had sought relief under § 214.7 in the prior lawsuit, Osage Wind might have rejoined that it had ample time to secure the approved lease, rendering the claim unripe for judicial review.
This is a plausible basis to defeat the application of res judicata, yet Osage Wind offers no response.
Osage Wind engaged in large-scale mineral excavation work to install wind turbines. It first removed rock sediment and soil from the ground, creating large holes into which it could pour a cement foundation for each turbine. Next, it sorted the extracted rock material into small and large pieces, and then crushed the smaller pieces so they would be the proper size for backfilling the holes. Finally, it positioned the bigger rock pieces adjacent to the backfilled excavation sites. All of this was done to add structural support to the large wind turbines installed deep in the ground. The question here is whether this excavation work — digging, sorting, crushing, and backfilling — constitutes "mining" under 25 C.F.R § 211.3.
We first explain that our analysis does not depend on administrative deference to agency materials. The BIA (an agency within DOI) has recently taken the informal position in one instance that a so-called "Sandy Soil Lease" is required for roadwork that disrupts the mineral estate. Further, the Bureau of Land Management (BLM) (also within DOI) has suggested that large-scale excavations require authorization by permit or contract.
Consider first the Sandy Soil Lease. The record reveals a single instance where a contractor for Oklahoma Department of Transportation (ODOT) requested and received a Sandy Soil Lease before building a highway through Osage County — an endeavor that involved digging and backfilling incident to surface construction work. Even if this evidence demonstrated a DOI policy of requiring such a lease (rather than ODOT voluntarily seeking one out),
OMC also directs us to BLM guidance materials that require a mineral lease for large-scale excavation work. In a preamble to the final rule adopting 43 C.F.R. § 3601.71 — a separate and unrelated regulation to the one at issue in this case — the BLM explained that "a contract or permit" is required when a surface-estate owner engages in more than "minimal personal use of federally reserved mineral materials...." 66 Fed. Reg. at 58894. Further, an internal BLM instruction memorandum, published in April 2014, explains:
Bureau of Land Management,
We do not defer to these BLM documents because they explain the effect of a separate regulation, 43 C.F.R. § 3601.71.
"Mining means the science, technique, and business of mineral development, including, but not limited to: opencast work, underground work, and in-situ leaching directed to severance and treatment of minerals[.]" 25 C.F.R § 211.3 (emphasis added). After this threshold definition, the regulation then offers a caveat known as the de minimis exception for common-variety minerals: "Provided, when [common minerals] [are] the subject mineral, an enterprise is considered `mining' only if the extraction of such a mineral exceeds 5,000 cubic yards in any given year."
At the outset, the significance of the de minimis exception must be clarified. OMC contends that this proviso establishes a separate definition specifically for common-variety minerals — any extraction of such minerals exceeding 5,000 cubic yards constitutes mining, regardless of whether the activity can be classified as "the science, technique, [or] business of mineral development."
With that understanding we turn to the district court's interpretation of the regulation. The district court held that the definition of mining necessarily involves the commercialization of mineral materials, i.e., the sale of minerals. While the definition of mining certainly includes commercial mineral extractions and even offsite relocation of minerals, the district court's limitation of "mineral development" to those contexts is overly restrictive. The text of § 211.3 does not indicate that mining is confined to commercializing extracted minerals or relocating them offsite — instead it refers merely to the "science, technique, and business of mineral development." § 211.3. Finding no support in the § 211.3's text itself, Osage Wind attempts to buttress its preferred narrowing construction by reference to other provisions that contemplate the sale of minerals. We are not persuaded.
Osage Wind first points to 25 C.F.R. § 214.10, which governs royalty rates on Osage mineral leases. That rule provides that, for certain minerals, "the lessee shall pay quarterly a royalty of 10 percent of the value at the nearest shipping point of all ores, metals, or minerals marketed."
To be sure, although we hold that § 211.3's mining definition is not limited to commercial extraction of minerals, we leave undisturbed the well-settled notion that mining includes the removal of minerals to make commercial use of them or to relocate them offsite. To hold otherwise would collide with the traditional and commonly shared understanding of mining. But more to the point, the phrase "mineral development" in § 211.3 undoubtedly encompasses traditional mining activities. In the context of natural resources, the term develop can mean "to make actually available or usable (something previously only potentially available or usable)" such as "[develop]ing the natural resources of the region[.]" Webster's Third New Int'l Dictionary 618 (1986). Thus, commercial extractions or offsite relocations of minerals are included within § 211.3's ambit.
But that is not what Osage Wind did here. Osage Wind did not remove minerals and then transport them offsite or otherwise commercialize the minerals themselves. Instead, Osage Wind sorted and then crushed the minerals and used them as backfill to support its wind turbine structures. The question is whether these excavation activities can be characterized as "mineral development" under § 211.3.
In analyzing this issue, we are cognizant of the long-established principle that ambiguity in laws designed to favor the Indians ought "to be liberally construed" in the Indians' favor.
With that in mind, we look to the text of § 211.3 which defines mining as "the science, technique, and business of mineral development[.]"
The list of examples in § 211.3 offers some interpretive assistance. Section 211.3
It might be reasonable to adopt the construction favored by Osage Wind, which sets as the definitional boundary the commercialization of the minerals. But because the phrase "mineral development" is ambiguous in this regulation, the Indian canon of interpretation tilts our hand toward a construction more favorable to Osage Nation, so we adopt the broader definition of "mineral development" when construing § 211.3: "mineral development" includes acting upon the minerals to exploit the minerals themselves.
We agree with Osage Wind, however, that merely encountering or incidentally disrupting mineral materials would not trigger § 211.3's definition. In other words, "the simple removal of dirt does not constitute mining." 53A Am. Jur. 2d Mines and Minerals § 14. There is simply no sense in which the word "mineral development" means only the removal of dirt without some further manipulation, commercialization, or offsite relocation of it. The problem here is that Osage Wind did not merely dig holes in the ground — it went further. It sorted the rocks, crushed the rocks into smaller pieces, and then exploited the crushed rocks as structural support for each wind turbine. The ultimate question is whether this operation constitutes "mineral development" as we have conceptualized the term. We hold that it does.
After Osage Wind removed the rock materials from each hole, it acted upon the minerals by altering their natural
To be sure, the sorting and crushing of rocks to provide structural support does not fit nicely with traditional notions of "mining" as that term is commonly understood. Indeed, surface construction for a wind farm is a far cry from a typical mining operation, complete with canaries and sink shafts. But as we discussed, the text of § 211.3 refers to "mineral development," which is not cabined or confined by the regulation or statute itself. Because there is ambiguity in the scope of "mineral development" and the extent to which that phrase includes the sorting and crushing of minerals for the purpose of backfilling and stabilization, we adopt the interpretation that favors the Osage Nation. Accordingly, Osage Wind's excavation work here constituted "mining" under § 211.3, thereby requiring Osage Wind to secure a federally approved lease from OMC under § 214.7. Summary judgment for Osage Wind was therefore improper.
Osage Wind argues this result contradicts the Osage Act itself. We disagree. It is true that the Osage Act provides that surface lands overlying the mineral estate should be freely usable for activities such as "farming, grazing, or any other purpose not otherwise" prohibited by the Act. Osage Act, § 7. It goes further to say that surface fee owners "shall have the right to manage, control, and dispose of his or her lands the same as any citizen of the United States[.]"
The expansive authority granted to surface-estate owners to use and develop their land is necessarily limited by the Act's reservation of the mineral estate to the Osage Nation, which itself has the right to demand a lease for certain uses of its minerals. Admittedly, surface construction activities may often implicate and disrupt the mineral estate — building a basement or swimming pool necessarily involves digging a hole in the ground, displacing rock and soil in the process. But as we have held, merely encountering or disrupting the mineral estate does not trigger the definition of "mining" under 25 C.F.R. § 211.3. If the minerals are not being shipped offsite or commercialized, then they must be acted upon for the purpose of exploiting the minerals themselves.
Moreover, to the extent there is a conflict between free use of the surface estate and exploitation of the mineral estate, the BIA has implemented a reasonable solution to that problem. As explained earlier, under § 211.3, any use of common-variety minerals that is less than 5,000 cubic yards will not trigger the OMC's right to demand a lease because the BIA has exempted such activities from the definition of mining.
Thus, our interpretation does not impermissibly conflict with the Osage Act's references to free use of the surface estate.
Our dispositions of these consolidated appeals are as follows. First, because OMC is an appropriate party to the merits appeal, thereby making it unnecessary to decide whether it properly intervened below, we DISMISS as moot OMC's appeal from the denial of intervention, Appeal No. 16-5022. Second, because Osage Wind was required to procure a lease under 25 C.F.R. § 214.7, we REVERSE the district court's order granting summary judgment, Appeal No. 15-5121, and REMAND for further proceedings consistent with this opinion.