Landowners reject Tesoro settlement offer for pipeline trespass on Fort Berthold

Corporate leaders of Marathon Petroleum’s Tesoro High Plains Pipeline continue their ninth year of trespass on allotted lands on the Fort Berthold Indian Reservation in North Dakota. The company does not have a right of way on these lands, yet has financially enriched its shareholders while transporting oil through the pipeline between 2013 and 2020.

The latest trespass settlement was mailed to allottees on July 5 from the Fort Berthold Agency’s Bureau of Indian Affairs. In a July 22 letter to Acting BIA Superintendent, Rick Clifford, the largest landowner group with legal representation rejected the Tesoro offer. “We demand for the withdrawal of the settlement and rights-of-way offer letter,” wrote Tex Hall, chairman of the Fort Berthold Allottee Land and Mineral Owners Association.

Landowners did not consent nor were they involved in the negotiations of the settlement, said Hall. (attach letter). If the offer was not withdrawn by July 26, Hall said landowners were prepared to take legal action to protect their interests.

The most recent Tesoro settlement offer outlines a $35 million settlement with only $4.4 million earmarked for unspecified damages. Any further damages, such as unjust enrichment, are specifically excluded. A previous damage award – awarded by the BIA and later stripped away by the Interior Department – gave landowners $187 million for trespass damages.

Meanwhile, Tesoro’s unjust enrichment happened under the watch of the Interior Department and its Bureau of Indian Affairs. After seven years of continually transporting oil without a valid right of way, the regional BIA office, under the direction of Tim LaPointe, ordered a cease-and-desist order in 2020. In December of the same year, Tesoro finally ended years of financial gain at the expense of about 350 individual Indian landowners.

In 2020, corporate outlaws dropped money bags at the feet of their beneficiaries. Marathon, Tesoro’s parent company, paid out more than $1.5 billion in dividends to shareholders.

As each year passes, Interior, Bureau officials and now Department of Justice lawyers, have allowed Marathon-Tesoro repeated extensions to gather signatures and time to send out new settlement offers to American Indians who own title to 34 tracts of land involved in the pipeline trespass. Justice Department lawyers are involved because, of all things, Tesoro, the trespasser, sued the Interior Department.

That’s because the July 2020 BIA award of $187,158,636 million in trespass damages – an award that rightly separated new right-of-way costs — was reduced to less than $4 million. Tesoro wanted the lower offer to stand. That case is still in court, but would go away if they can get landowners to agree to a new settlement.

The Fort Berthold Allottee Land and Mineral Owners Association, in this advisory notice, calls for landowners to reject the Tesoro offer. The settlement offer was mailed from the Bureau of Indian Affairs Fort Berthold Agency to reject Tesoro’s proposed settlement and demand fair and equitable terms.

Landowners have been given a deadline of Thursday, July 29 to accept or reject the Tesoro offer. The Fort Berthold land association outlines the following reasons to reject the offer:

Marathon-Tesoro’s current offer of $35 million calls for a “global settlement,” meaning they want their new offer to include about $25.6 million for a 20-year right of way. This leaves $4.4 million to be paid for trespass damages. The settlement does not address years of unjust enrichment. Restitution for unjust enrichment would impose liability on Marathon’s Tesoro High Plains Pipeline based on the corporation’s gain. Remember, they paid shareholders $1.5 billion in dividends in 2020.

The offer also calls for allottees to pay $4.9 million to lawyers who had to be hired by allottees. Lawyers would receive more in fees than allottees would receive in trespass damages. Two separate costs are at stake, renewed right-of-way fees and trespass damages.

In addition, the Mandan, Hidatsa and Arikara Nation – which has title to about 30 percent of the tracts being trespassed upon – would be compensated with $35 million. They are the minority landowner but would receive an amount equal to the allottee majority. MHA tribal leaders have been complicit in trampling on allottee rights.

Finally, the proposed settlement guarantees a paid right of way for only 10 years. More so, this offer should only address damages, not a right of way deal. When the BIA first awarded $187 million, it did not address a right of way as that is a separate issue.

I’m a landowner who has an undivided interest in two land tracts that are part of this trespass. As a journalist, I witnessed a legion of Department of Justice lawyers defend the Interior Department during the Cobell vs. Salazar lawsuit. The Interior Department and Justice lawyers waged a full-scale war against allotted landowners.

Not much has changed for allottees. That’s what it felt like when Fort Berthold allottees met with Justice Department attorney, Sam Gollis, during an April meeting https://www.buffalosfire.com/doj-native-landowners-invited-to-discuss-pipeline-trespass-expired-right-of-way-in-federal-suit/in Minot, N.D.  In a June 15 letter to Attorney General Merrick B. Garland, Hall raised many concerns regarding the landowner meeting with Gollis.

“Over our objections, Mr. Gollis has been spearheading a settlement negotiation with Tesoro that flies in the face of the United States’ trust responsibility to uphold and protect the interest of us as Indian landowners,” wrote Hall. Gollis also threatened condemnation of allottee lands, an issue addressed in a letter to Interior Secretary Deb Haaland.

DOJ is working against landowners. We’ve been told Tesoro can bypass the reservation if we don’t agree to their terms. If they don’t care and want to bypass, why does the bulk of the $35 million offer include $25 million for a renewed right of way?

Gollis repeatedly told landowners in Minot the DOJ had no right to negotiate a ROW for us yet, he continues to include it in a settlement. “Tesoro’s longstanding trespass must not be contingent upon our consent to a new ROW,” said Hall.

The settlement offer on the table condones and accommodates Tesoro’s continued unjust enrichment from the unauthorized use and occupation of allotted lands, he wrote to the U.S. attorney general. In a GAO report from March, the agency outlines myriad problems in managing energy and mineral production on tribal lands. In 2021, mineral and energy production generated more than $1 billion in revenue for tribes and Native individual mineral owners, according to the report.

Marathon’s 2021 annual report touts integrity as a core value when working in communities where company workers live and work. This is not a value they extend to American Indian communities.

Sourcing & Methodology Statement:

The Indigenous Media Freedom Alliance organized the first meeting to provide information to landowners of the pipeline trespass in January 2017 at a conference room in Teddy's Hotel in New Town, N.D. The organization and Buffalo's Fire have been following the story since then.

Jodi Rave Spotted Bear is a member of the Fort Berthold Allottee Land and Mineral Owners Association as landowners rely on the organization to provide information. Otherwise, the Bureau of Indian Affairs typically does not keep allottees informed on land issues.

References:

GAO Report to Interior Secretary Deb Haaland, March 2022, https://www.documentcloud.org/documents/22123449-gao-review-indian-energy-service-center-3-14-22

Marathon Petroleum 2021 Annual Report, https://www.documentcloud.org/documents/22123382-2021_marathn_annual_report_and_10k

Certified Letter to Attorney General Merrick Garland, June 15, 2022, https://www.documentcloud.org/documents/22123463-22615-letter-to-ag-on-tesoro-trespass-settlement1

Tesoro Pipeline Settlement offer, July 5, https://www.documentcloud.org/documents/22123388-tesoro-pipeline-trespass-settlement-offer

Fact sheet for Fort Berthold Allotted Land Owners, https://www.documentcloud.org/documents/22123358-220727-fact-sheet_proposed-tesoro-settlement

Certified Letter to Interior Secretary Deb Haaland from mineral owners, May 27, 2022, https://www.documentcloud.org/documents/22123353-220526-fort-berthold-landowner-association-letter-to-secretary-haaland

Dateline:

Twin Buttes, N.D.