Red Lake Band votes 6-4 to accept proposed settlement by Enbridge - P3
$18.5 million for trespeassing and land exchange
RED LAKE, MN - A Special Tribal Council Meeting was held on Tuesday, December 22, 2015 at 1 PM in the Red Lake Casino Event Center.
There were five items on the agenda, and the main item aside from the General Fund Budget, was a proposed settlement between the Red Lake Tribe and Enbridge.
The proposal by Enbridge and the Red Lake Band would be to agree to exchange land, and Enbridge will pay $18.5 million for the trespass at the Four Legged Lake property.
The proposal stated that within a month, Enbridge will place $18.5 million in an interest building, escrow account. In exchange, the Band will designate one or more parcels of land within the 1863 treaty area/1889 agreement for Enbridge to purchase on behalf of the Band and will begin the fee to trust land exchange.
According to Nordhaus Law Firm, in 1889, the Red Lake Band agreed to provisionally "cede" roughly 3 million acres of its aboriginal lands.
The land cession was provisional because only those lands that were sold by the United States to a third party (like timber companies and homesteaders) and for which the Band was paid were in fact ceded.
Many of those parcels were in fact never sold, either because no one was interested or because the land was occupied for a short period and no patent was issues and no payment received by the Band.
One of those parcels that was never sold is located near Leonard at Four Legged Lake. When the land was first surveyed by the United States, it was labeled as Government Lot 8 in Township 136N, 48 W, Section 9. It was measured at .45 acres. Just to the southeast of Lot 8, an island was noted on the survey but the size of the island was not measured and no government lot number was assigned to the island.
Since 1892, the County constructed a road and the level of Four Legged Lake was lowered. In the process, solid land now connects Lot 8 and the Island, and in fact has split Four Legged Lake in half.
In 1945, by secretarial Order, the United States acknowledged that lands that had not been sold should be formally "restored" to the Band. These are known as the "Ceded Lands." Most of the Ceded Lands are north of the main Reservation.
Lot 8 was such a piece of land (as acknowledged by the United States when it was published on a list of restored lands in the Federal Register in 1999). The Island was never sold, but because it never had a government lot number assigned to it, it was also never "formally" restored. It is the Band's position that the Island has always belonged to the Band because it was not sold. The Band further asserts that all of the land exposed between and around Lot 8 and the Island belongs to the Band.
The Pipelines and the Trespass
Enbridge's predecessor, Lakehead Pipeline, installed four pipelines that cross Lot 8 and the Island on their way from Canada to Superior Wisconsin.
\In 1950, an 18" pipeline was installed. In1954, a 26" pipeline was installed. In 1963, a 34" pipeline was installed. In 1973 a 48" pipeline was installed.
In the 1980s, the BIA discovered that the pipelines appeared to be in trespass and exchanged correspondence with Lakehead.
From available documents, it appears that Lakehead thought that the Lot 8 Lands were actually owned by an adjoining landowner and got an easement from that landowner. Apparently, Lakehead hired someone to do a legal opinion regarding the potential trespass, which concluded that it was not in trespass.
The BIA did not take further action before the program (called "2415") looking at trespasses on Indian lands was shut down.
In 2007 or so, the BIA apparently "rediscovered" the trespass when Enbridge (which had since bought Lakehead) was planning to add two pipelines along the same route.
Enbridge and Red Lake began discussing the issue around that time.
Because the issue had not been resolved by 2009, two things happened: 1) The BIA issued a Notice of Trespass, which the Band requested that the BIA not act on because negotiations were underway, and 2) Enbridge installed the two new pipelines (Alberta Clipper and Southern Lights) on a slightly different route so that they would not pass across the Band's Lot 8 Lands.
Enbridge is now seeking permission to move Line 3 (the 34" pipeline) to a different route.
Discussions between Red Lake and Enbridge started out in late 2007 and into 2008 very informally, largely through emails and teleconferences between Red Lake Engineering and local Enbridge personnel.
During 2009 Enbridge gave their first brief presentation to the Council, and the BIA issued its letter to Enbridge stating that the BIA had "reason to believe" that Enbridge was in trespass on Lot 8.
The Red Lake Band asked the BIA to hold off to see if negotiations with Enbridge could produce a beneficial outcome for the Tribe.
Enbridge agreed to pay for an expert to value the trespass, but Red Lake got to control her work. (The expert had recently finished working for Fond du Lac on its settlement for the same pipelines crossing to trust and allotted lands.)
In 2010, Enbridge agreed to make one of its engineers available to the Red Lake Band to provide the cost data necessary to calculate the costs of moving the pipelines to go around Red Lake land.
The Red Lake analysis of that date concluded that it would cost Enbridge between $10-12 million to move the lines, not including remediation and administrative costs, and not including past trespass damages to Red Lake.
Enbridge also hired a so-called survey expert to analyze its position on the size (and location) of Red Lake's lands at Four-legged Lake. Red Lake soundly refused the surveyor's analysis.
In 2011, Enbridge made its first formal settlement offer of $350,000. It claimed that this offer was generous because the value of the land itself was only roughly $10,000. The Tribal Council rejected that offer, instead demanding $10 million.
Enbridge rejected the Tribe's counteroffer, stating they would never pay $10 million.
In January 2012, the Tribal Council enacted certai provisions from federal regulations regarding trespass as tribal law. Under the Indian Agricultural Lands Trespass Act, Tribes can take over enforcement authority from the BIG regarding agricultural trespass on tribal lands. This meant that Red Lake could issue notices of trespass under federal law and any judgment of the Tribal Court would be entitled to full faith and credit in state and federal courts.
Red Lake continued to stand strong. At an August 2012 meeting, the Tribal Council reiterated Red Lake's demand for $10 million, which Enbridge had already rejected. The Red Lake representative left this meeting after only a few minutes.
In early 2013, protests began on Lot 8. Negotiations resumed.
At a meeting on July 12, 2013 Enbridge's lawyer said they could come up to $2 million if Red Lake's representative could come down to $3 million. The Tribal Council refused to authorize settlement at that level.
In 2014, with new administration at Red Lake, negotiations resumed in November. The Red Lake delegation of officers and others, informed Enbridge that any settlement would have to include substantial and long-term benefits for Red Lake.
Negotiations stalled in 2015. On July 22, Red Lake issued a Notice of Trespass using its inherent tribal sovereign authority and under the authority of the Indian Agricultural Lands Trespass Act. Enbridge had 90 days to respond to the notice, for which they asked to resume negotiations.
During two meetings in September, the Tribal Council members participating in the meetings stated that in order to have a profound and lasting effect, any settlement would have to exceed the previous demand by the Tribe substantially. Red Lake put an offer of $20 million plus $1 million for the land exchange on the table.
Enbridge also sent representatives to tour Red Lake to get some understanding of the needs of the tribe and its members. During one session, Chairman Seki became frustrated with the apparent lack of progress and stated something to the effect of, "Get your pipelines off our land, and turn off the oil while you're doing it."
On November 6, Red Lake and Enbridge convened again. Enbridge offered $5 million, a substantial increase from its earlier position. But again, the Tribal Council stood strong, reiterating the Red Lake offer of $21 million both during the meeting and in a letter that followed. The letter also stated that Enbridge should be willing to pay at least $15 million, the cost it would incur if it had to move the lines from Red Lake lands. It also insisted that high-level Enbridge officials with authority to settle the dispute come to Red Lake to meet with the Council.
On December 18, 2015, Enbridge officials came to meet with the Council. After several rounds of negotiation, Enbridge agreed to pay $18.5 million, more than three and a half times its previous officer in November, and only $2.5 million less than Red Lake demanded.
According to Red Lake's attorneys handing this matter, the settlement for $18.5 million is the best agreement that any tribe, anywhere, has received from a pipeline or energy company, and the land exchange and land acquisition provide tremendous benefit to Red Lake. The Tribe will choose the land it gets in exchange for the Four-Legged Lake land.
There were three things that could have happened at the Special Meeting involving the Enbridge offer. 1) The Tribe could have tabled the matter until the next Regular Meeting. 2) The Tribe cold have put out a referendum vote for the people to decide. And 3) a vote to accept or reject the offer.
"You can get more than that," one lady who was opposed to the offer said. "And if you're going to start with a little partial of our land, that's the beginning of selling our land-that'/s where it all starts."
Another lady wanted to know why they were meeting at the Casino when they had a new Council Chamber in Red Lake.
"This is only a part of what's yet to come, if we accept this deal," that lady added.
She said that past Red Lake leaders who were here during the teepee days would not accept this deal.
"Our Chiefs back then did not hire lawyers back then to speak for us," she said. "We spoke on our own behalf of the Red Lake Nation. We stood grounds amongst the white people many years ago, many moons ago. And today could be the beginning, or the end, of this reservation."
She had also once labeled the proposal as a "deal with the devil."
"66 years of trespassing doesn't equal 18.5 million," another lady said.
Money should not be the determining factor, she also said. And our people should be involved in every decision.
"Listen! Listen! Don't let our words here today fall on deaf ears," she added. "Please, don't go for this deal, otherwise we'll stand together as warriors or we'll perish as fools."
An elderly lady spoke in both Ojibwe and English. She said where are we going to go from here?
"We're just going to be just like a checkerboard," she said. "A lot of other businesses are going to come in here. Let's keep the reservation closed the way it's been."
She said she was sad and disappointed, and a lot of others were sad, too. The money sounded good, but it was our reservation.
Another lady said it broke her heart that we were allowing Enbridge to come in and take what they wanted.
One lady asked the Council why they were here today. She spoke about cancers from contaminated lands and water.
Representative Roman Stately stated he wanted everyone to voice their opinions and be heard, and he liked what he was hearing. He also stated he would be voting "no" on the proposal.
"We voted for youse to keep our reservation closed," an elderly lady stated.
A younger girl said she was disappointed in giving up that small parcel of land. She said our ancestors fought for all the land.
Secretary Don Cook thanked the people for being there. He talked about the land swap, that it was for the people. He said the proposal was a very good deal, and he said it wasn't a land sale at all, but a land swap-an exchange of land.
There were others making comments, some about the selling of the land, one stating the Council was selling our Grandmother with the action, and that they could have gotten more out of the deal.
There were also a few that wanted the Council to pass the proposal saying that the Tribal Council was elected by the people and anything they did on the membership's behalf, they trusted.
If Red Lake were to litigate the trespass, it would enforce the existing Notice of Trespass in Tribal Court. It would have two options: Insist that Enbridge move its lines or litigate with the pipelines remaining in place.
The attorneys stated they would likely succeed in forcing Enbridge to move its lines if it chose not to do so voluntarily. But if Enbridge moved the lines, the only other thing Red Lake could pursue in court is damages for trespass up until Enbridge moved the lines.
Based on the expert analysis done in 2009, damages for past trespass would be limited, probably less than $1 million and certainly less than $2 million. This is for two reasons. First, the Lot 8 Lands are small, so the length of the pipeline in trespass is also small. Second, until the 1980s, right-of-way values across Indian lands were very low. Only in the 1980s did some tribes start to insist on "throughput valuation," a percentage of the value of the oil passing through the pipeline.
It would cost a substantial amount to litigate, starting with an estimated $400,000 to survey the Lot 8 Lands (including the Island) and to hire experts to establish the extent of Red Lake's land.
Attorney's fees would also be substantial, especially since challenges to the Tribal Court's rulings in federal court would almost certainly follow if the Red Lake Band won in Tribal Court.
There is always litigation risk-the risk of losing, or getting less than you want-in any case. In this case, the attorneys are saying there is significant litigation risk.
If Red Lake took the position that the pipelines could remain in place and that Red Lake should be compensated for both past and future value.
Under this scenario, Red Lake could win substantially more in court. There is a reasonable likelihood of a recovery of $4 million to $5 million. But the high end would be very hard, and espensive, to fedend, and would require an ongoing relationship tween Enridge and Red Lake.
The attorney's for the Tribe are saying that z"there is essentially no way that Red Lake could do as well in litigation as it has in the proposed settlement, and it would involve far more risk and great expense."
The Nordhaus Law Firm is saying, the proposed settlement is a very substantial amount of money and can produce lasting and growing benefits for the tribe.
With the settlement, the Tribe can invest in the health, safety and welfare of Red Lake members, they can invest in the restoration of tribal lands taken from them long ago, and obtain land through the land exchange that are of more cultural and/or economic value to Red Lake.
While the Red Lake Revised Constitution prohibits the sale of Reservation land, it does not prohibit exchanges of land. Red Lake will choose the land that it will get in exchange for the Lot 8 Lands.
Red Lake also avoids the uncertainty and cost of figuring out the extent of its lands at Four Legged Lake, and avoids the possibility of having to deal with an environmental disaster and contamination at Four Legged Lake in the future.
After no more comments were made, Chairman Seki asked for a motion on the proposal. Representative Al Pemberton made the motion, seconded by Secretary Don Cook, and a vote was taken with 6 voting for the proposal, (Cook, Pemberton, Thunder, Nelson, Reynolds and Barrett), and 4 opposing, (Johnson, Stately, Smith and Kingbird). The motion carried and the proposal from Enbridge passed.