December 1, 2021
A Landman’s Primer

A Landman’s Primer

Earlier in the year, when the Biden administration issued a moratorium on drilling on federal land (which has since been lifted), it opened up the possibility that there might be increased activity from individuals and companies interested in leasing Indian land. While held in trust by the federal government, Native lands, which the Department of the Interior estimates at 56 million acres, were not affected by the ban.

Oklahoma lawyer Stephanie Moser Goins, who practices in the area of federal Indian law and oil and gas, and has worked with tribes, including the Five Tribes and the Osage Nation, discusses the intricacies of leasing Native lands.

Rebecca Ponton: Please explain how and why Native American Tribes are treated differently by the government.

Stephanie Moser Goins: It’s hard to understand the differences without understanding the historical context and background. Each tribe has a separate government-to-government relationship with the federal government. The unique legal relationship has been repeatedly described by the U.S. Supreme Court as akin to a guardian/ward relationship: The federal government has a trust responsibility to tribes and tribal members.

[Of the 574 federally recognized Indian Nations in the United States], thirty-nine tribes are located within the geographical boundaries of the state of Oklahoma. The majority of those tribes were forcibly removed here from their aboriginal homelands by the federal government. The Five Tribes (now known as the Muscogee Nation, the Chickasaw Nation, the Choctaw Nation, the Cherokee Nation and the Seminole Nation of Oklahoma) were moved to what became known as “Indian Territory” in the 1830s, prior to Oklahoma statehood [in November of 1907].

In negotiating the terms of their removal, some tribes had more bargaining power than others. Although the term “bargaining” implies a transaction on a level playing field, the tribes were not, in fact, bargaining with the federal government on equal footing. Congress holds plenary authority over Indian affairs, and tribes have always been at a legal disadvantage due to their unique legal status described by Supreme Court Justice John Marshall as “domestic dependent nations.” The Five Tribes and the Osage Nation are prime examples of tribes that were able to negotiate unique provisions into their treaties and allotment acts that affect the legal status of their lands to this day. As history shows, these unique legal provisions also resulted in tragic consequences for the tribes and their members.

In McGirt v. Oklahoma, Justice Gorsuch begins his opinion by stating, “On the far end of the Trail of Tears was a promise.” The promise to which he was referring was included in terms of the removal treaties (in that case, the 1832 treaty between the U.S. and the Creeks). Under the removal treaties, the tribes were promised their own permanent reservations upon which they could govern themselves, free from outside intervention. For the Five Tribes, their treaties included language providing that their lands were to be set aside for them, with title to be held by the tribes in fee simple, instead of just a right of occupancy. By contrast, title to other tribal reservations was held in trust by the United States for the benefit of the tribe. Collectively, the Five Tribes held about 20 million acres of real property in fee simple.

However, in the late 19th century, federal policy toward tribes shifted. Specifically, westward expansion and a demand for acquisition of tribal lands for non-Indian settlement drove the Congressional policy of allotment and assimilation. Allotment was basically an attempt to assimilate tribes and tribal governments by taking lands from communal tribal ownership and transferring them to individuals, to be held in trust for their benefit by the federal government. The surplus lands were then sold to non-Indian settlers.

In Oklahoma, the majority of tribes in Oklahoma were allotted under the Dawes Act of 1887. However, the Five Tribes, and the Osage, Miami, Peoria, and Sac and Fox tribes were specifically exempted from the Dawes Act. The Five Tribes were able to fend off allotment until 1898, when the Curtis Act was enacted. Part of the delay was because title to Five Tribes lands was held in fee instead of in trust, which posed a unique legal problem for Congress in allotting those lands. This is why patents to allotted Five Tribes lands were issued by the tribes themselves.

Although legal title to the Five Tribes’ allotments was conveyed in fee simple, Congress included provisions in their allotment acts restricting alienation of allotted lands. Although these restrictions were initially limited to a set term of years, subsequent amendments to the allotment acts changed the terms upon which restrictions could be removed. One of the most significant differences in the way the Five Tribes were treated was that Congress amended the allotment scheme for the Five Tribes to provide for automatic removal of restrictions based upon the blood quantum of the allottee or the heirs of the allottee who inherited the allotment. Because the blood quantum requirements were frequently amended, title examiners will often rely on the Fitzpatrick charts as a tool to quickly identify what the blood quantum requirements were in effect at any given point in time prior to 1947. The analysis gets a little bit easier in 1947, when Congress enacted the Stigler Act. The Act set the blood quantum requirement for automatic removal of the restrictions at less than half-blood. That was the requirement in effect until the end of 2018, when the amendments to the Stigler Act were signed into law. The 2018 amendments removed the provisions of the Act providing for automatic removal of restrictions upon inheritance of an allotment by an allottee’s descendants.

A Landman’s Primer

Another significant legal difference is that Congress conveyed Oklahoma state courts with jurisdiction over certain matters involving Five Tribes lands, including guardianship and probate, partition actions, and approvals of sales and leases of restricted allotments. The federal government’s delegation of authority over guardianships of the property of Five Tribes allottees had particularly tragic consequences, as many individuals were swindled out of their lands by unscrupulous court-appointed guardians. Those of us who examine a lot of Indian title can see the sad history play out right in the chain of title. It’s not uncommon to see a conveyance of a restricted allotment in which the guardian of an allottee conveys the allottee’s land to a third party, who would turn around and convey it right back to the guardian in his individual capacity.

Between the automatic removal of restrictions, and the loss of land due to fraud, the Five Tribes and their members lost a tremendous amount of acreage. For example, out of roughly 6.5 million acres of land that was allotted to Choctaw Nation allottees, less than 140,000 acres remained in Choctaw hands as of 2016.

The Osage Nation is another example of a tribe with unique legal provisions; they weren’t allotted until 1906 when the Osage Allotment Act was enacted. The Osage Allotment Act was particularly unique in that the surface of their lands was allotted to individual members, but the tribe reserved its mineral estate, which continues to be held in trust for the tribe by the United States. Enrolled Osage members held valuable headrights in the proceeds of production from the Tribe’s mineral estate. Many of them were murdered for their headrights.

RP: How do individuals (such as landmen) or companies become aware of Native lands available for lease? Once they do, how do they approach the land/mineral owners, as some land is held individually and some tribally?

SMG: First, they have to be working from a solid title opinion or ownership report prepared by someone with experience working with Indian land titles. It’s a very specialized area of law, and the stakes are high. Transactions involving lands held in trust by the United States for the benefit of a tribe or tribal member, and lands held by a tribal member that are subject to restrictions upon alienation, are void without the requisite approvals or removal of the restrictions.

For restricted lands, you need an expert who can run title from inception and identify whether, when and how the restrictions were removed. You need a landman who knows how to work with the applicable Bureau of Indian Affairs (BIA) or tribal realty office to get Title Status Reports and other title documents that haven’t been recorded with the county clerk.

Once you’ve identified trust or restricted lands, then it’s a matter of negotiating the lease with the lessor and going through the process to get approval of the lease through the BIA, in accordance with federal regulations. Under the Stigler Act, leases of Five Tribes restricted lands can be negotiated directly with the landowner and then approved in the applicable Oklahoma state court in lieu of the BIA approval process.

For trust lands, lessees have to go through the BIA process.

RP: Is all Native land leased through a bidding process whether it is held individually or tribally?

SMG: Generally, most leases require approval of the U.S. Secretary of the Interior [currently, Deb Haaland, the first Native American to hold a cabinet-level position] through the BIA. The process is governed by federal regulations. Tribes that want more control over energy projects on their lands have the option to enter a Tribal Energy Resource Agreement (TERA) with the federal government. The process of approval of a TERA is set forth in 25 CFR Part 224. Under an approved TERA, a tribe can enter leases without BIA approval. However, as a practical matter, few, if any, tribes have opted to enter TERAs.

For most tribes, applications for leases are made through the BIA, in accordance with the regulations at 25 C.F.R. Part 211 (tribal lands); 25 C.F.R. Part 212 (individual allotments, except for Five Tribes and Osage Nation members); 25 C.F.R. Part 213 (restricted Five Tribes lands); and 25 C.F.R. Part 226 (Osage Nation lands). For leases taken from tribal lands under the Indian Mineral Development Act of 1982 (the IMDA), the process is governed by 25 C.F.R. Part 225. Generally, the BIA will publish notice that it is offering leases on specific tracts, and then prospective lessees submit bids for the lease.

Osage Nation leases are a completely different process because those have to go through the Osage Minerals Council. The Osage Mineral Estate is managed by the Osage Minerals Council, and the leasing process is governed by 25 C.F.R. Part 226. Leases conveyed by Council are approved by the Osage Agency Superintendent.

As I mentioned earlier, Five Tribes leases can also be approved through the applicable Oklahoma state court in the county in which the land is located instead of the BIA. In those circumstances, a Department of the Interior field solicitor will enter an appearance in the proceeding to ensure that the interests of the tribal member are protected.

RP: Is there a “standard” lease term for Native lands in Oklahoma? Do tribes have their own special lease form(s)?

SMG: Generally, the lease form is negotiated directly with the lessor, but there are some limitations; the primary term should be limited to three years; warranty clauses and options to renew are generally rejected by the field solicitor. The lessee usually initiates the petition for approval, and then notice of hearing date has to be served to the applicable parties and published in advance of the hearing. Anyone who wants to bid on the lease can show up to the hearing. The winning bidder pays the attorney fees and costs of the hearing.

As to leases of trust lands, lessees have to go through the BIA process and the BIA does provide standard lease forms. The regulations include certain baseline requirements for lease terms (for example, the primary term cannot exceed ten years) and certain provisions that must be addressed in a lease in order to be approved.

Complex Labyrinth

Native Americans are not one homogenous group; as Stephanie Moser Goins has indicated, they have different thoughts and feelings about how best to use the natural resources on their lands. They are also governed by different rules and regulations pertaining to those lands. If you are in a position to lease or operate on Native lands, educate yourself regarding the complex labyrinth surrounding the process, do your due diligence and, above all, show cultural sensitivity when dealing with Native Americans, who are the original stewards of the land on which we live.

Reprinted by permission. The original version of this article appeared in the July 2021 issue of NAPE Magazine. It has been updated to reflect new material.

Author profile

Rebecca Ponton has been a journalist for 25+ years and is also a petroleum landman. Her book, Breaking the GAS Ceiling: Women in the Offshore Oil and Gas Industry (Modern History Press), was released in May 2019. For more info, go to www.breakingthegasceiling.com.

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