Above: Wayne Moccasin points at where a strip coal mine proposed by Gillette-based Cloud Peak Energy would head through his family’s land. Together with four of his siblings, he has declined leasing offers from the coal company even as the Crow Tribe and the Bureau of Indian Affairs seek to move the development forward. (Andrew Graham/WyoFile)
A coal fight in Indian country turns ugly
This story was written by Andrew Graham and originally published in WyoFile.
Wayne Moccasin drove his white Ford Explorer up one hillock after another in search of the most panoramic view of his family’s 2,000 acres on the Crow Indian Reservation, just north of the Wyoming-Montana line.
The sun was sinking behind the Bighorn mountains through a smoky sky. Sagebrush crunched under the tires each time he turned off the bad two-track to try another hillock.
It’s rough country.
“Horseback it and you know how rough it is,” Moccasin said. Sharp hills, rock bands and steep draws covered in sage and grass stretch in all directions. Though rough, it’s “powerful good country” for grazing horses and cows, he said.
It’s also got some powerful good coal beneath it, a fact that’s made the Moccasins persons of interest to coal companies for more than 40 years. Wayne remembers dealing with four different energy companies over the decades, beginning with Shell Oil in 1973 during the OPEC oil embargo crisis.
The Moccasins are fully enrolled members of the Crow Tribe. The land is owned by nine siblings, each with an equal share, but managed as part of the Crow Indian Reservation and held in trust by the Bureau of Indian Affairs, which supervises and approves any lease.
Gillette-based Cloud Peak Energy is the latest would-be miner to come calling. In recent months, leasing negotiations have turned bitter.
After years of offers and counteroffers, five of nine Moccasin siblings are still holding out for a better deal, and say they believe the wealthy white ranchers next door have been offered better terms. The coal company argues that they’re being unreasonable and holding up a project that stands to benefit the entire Crow Tribe.
In May, the Bureau of Indian Affairs upped the ante on the Moccasins. Exercising the control trust responsibility gives the federal government over the land, BIA informed the Moccasin’s they had three months to reach an agreement before the agency inks a deal on their behalf.
The Moccasins aren’t opposed to coal mining, they say. They just want a good deal before giving up control of their inheritance. In many ways the years-long back-and-forth is a classic Western land and resource squabble. It includes fundamental questions about fairness, the appropriate role of the federal government, the impact of institutional discrimination and corporate vs. individual rights.
“They want to beat us”
Shell Oil never did mine on the Crow Reservation, but Wayne found the company’s representatives to be professional and enjoyable to negotiate with, he said. He doesn’t feel the same about Cloud Peak Energy, which is developing the reservation mine through a wholly-owned subsidiary company called Big Metal Coal.
“They’re too…” Wayne began before trailing off. “They want to beat us,” he said.
Wayne, four of his siblings, and their lawyers from the Sheridan law firm Davis & Cannon, LLP accuse the company of treating them differently than the wealthy white family who owns the massive Padlock Ranch abutting their land. The group says the coal company has offered their neighbors a better deal while manipulating the Bureau of Indian Affairs to force the Moccasins accept its terms.
A Davis & Cannon attorney brought the Moccasin’s story to WyoFile’s attention.
Coal mining revenue is critical to the Crow Tribe, which owns the mineral rights to all coal on the reservation but is economically isolated and has few other revenue sources.
In late May, acting BIA superintendent for the Crow Indian Reservation Michael Addy sent letters informing the nine Moccasins that unless the dissenting siblings reach a deal with Cloud Peak Energy within three months, “the BIA will make a best interests determination and consent on behalf of the non-consenting owners.”
“For a big coal company to negotiate one way with the Indians and one way with the non-Indians seems horribly inappropriate,” Cannon said. “To use the BIA to force the lease, if you will, of the Indian land whereas they could not do that with Padlock is to … use the agencies of the government to force a worse deal on the Indians than the non-Indians.”
At that time, five Moccasins had agreed to Cloud Peak Energy’s terms, a majority. But in June the majority shifted. In late June, Lana Moccasin revoked her agreement, Davis & Cannon informed the coal company. Cloud Peak Energy is refusing to recognize that reversal, according to their response letter, because Lana has not returned a $5,000 signing bonus. The company hasn’t formally requested the money back, the lawyers told WyoFile, but the family has indicated a willingness to pay it.
Cloud Peak Energy’s latest offer comes to $4.7 million in combined signing bonuses and leasing rates — more than $500,000 per sibling for use of their land for 50 years. But the dissenting Moccasin siblings, Wayne in particular, point out that the company is only offering coal leasing rates for the first 25 years. Cloud Peak would pay lower grazing lease prices for the second 25.
The family and their attorneys also take exception to not knowing what deal the neighboring Padlock Ranch has been offered. Davis & Cannon’s requests for disclosure of the terms of the Padlock deal were ignored in the communications reviewed by WyoFile. The Sheridan lawyers say that’s unusual in their experience, as coal companies often offer clauses that say all surface lessors will receive deals based on the best terms any single lessor gets.
“The fact that they won’t tell us what the deal is suggests that it’s substantially different than the deal thats being offered to the Indians,” said Kim Cannon, a partner at the law firm.
“For a big coal company to negotiate one way with the Indians and one way with the non-Indians seems horribly inappropriate,” Cannon said. “To use the BIA to force the lease, if you will, of the Indian land whereas they could not do that with Padlock is to … use the agencies of the government to force a worse deal on the Indians than the non-Indians.”
Cloud Peak Energy representatives maintain they’ve negotiated with the Moccasins in good faith and are key economic partners to the Crow Tribe. The company has paid the tribe almost $13 million in lease options and leasing bonus payments and created educational scholarships, a company spokesperson told WyoFile.
“We have been working in good faith with the Moccasin family for over five years and have reached an agreement with many of the family members,” Cloud Peak Energy spokesman Rick Curtsinger wrote in an emailed statement. He accused lawyers of fostering dissent in the family.
Curtsinger declined to respond specifically to allegations that the company was offering a better deal to Padlock Ranch than to the Crow landowners, or that the company was in some fashion manipulating the BIA to apply pressure on the Moccasins.
“Unfortunately, divisions within the family, exacerbated by a long line of attorneys representing some of the family members, stand in the way of a project critical to the economic well-being of the entire Crow Tribe,” Curtsinger wrote. “We have made countless offers over five years with the goal of ensuring that all members of the Crow Tribe can benefit from their coal resources and continue to engage with the family to that end.”
Curtsinger declined to respond specifically to allegations that the company was offering a better deal to Padlock Ranch than to the Crow landowners, or that the company was in some fashion manipulating the BIA to apply pressure on the Moccasins.
Cloud Peak and the BIA aren’t the only parties eager to see the deal done. A few weeks ago Loretta Moccasin — a sibling who has agreed to terms — told Davis & Cannon she wanted her siblings to take a deal “immediately” and urged Ben Reiter, a lawyer at the firm, to conclude negotiations, Reiter said. Loretta did not return voicemails from WyoFile seeking comment.
Curtsinger also provided WyoFile with a copy of a letter sent by the Crow tribal chairman Alvin Not Afraid to an assistant secretary at the Bureau of Indian Affairs in Washington D.C., expressing the tribes interest in the project and its desire for federal support in making it happen. The project has brought “significant support” to the tribe already, Not Afraid wrote, and that support only promises to increase if the mine is developed.
“Continued support by the U.S. Bureau of Indian Affairs for Big Metal is critical for the project to move forward and to provide future revenue streams and employment opportunities for the Crow Tribe,” Not Afraid wrote.
A tale of two families and a rich coal seam
Beneath the Moccasins’ grazing land is “high-quality, low-sulfur” coal, according to Big Metal Coal’s website. It will burn cleaner and with more electron punch than the Powder River Basin coal around Gillette.
The coal would be easy to mine, too.
“I heard the overburden is only about 20-30 feet deep and you’ve got the coal seam,” Wayne said when visiting the property, looking at the ground between his boots.
And there’s a lot to that seam. “Once they get going from there they’ll go for 50 years maybe,” Wayne said, pointing off towards a timber-lined ridge where he believes the surface-level mine would come from. The ridge is the property of the Padlock Ranch
The Padlock Ranch is owned by descendants of Homer Scott, a now deceased titan of the Western banking industry. Scott was born in poverty in Nebraska but found success in the construction industry before founding the ranch in 1943, according to its website. Twenty five years later Scott bought a small bank in Sheridan and over the next few decades transformed it into the regional powerhouse First Interstate Bank. Though publicly traded today, the Scott family continues to run the bank, according to Montana Public Radio.
Structured as a nonprofit, family members sit on a board that governs the ranch. It’s no hobby ranch: Padlock Ranch raises over 10,000 calves a year on land stretching from Ranchester to Hardin, Montana, according to the ranches’ website.
An employee at the ranch office and a board member both directed WyoFile inquiries to ranch CEO Trey Patterson, who did not respond to requests for comment.
In 2016, the Padlock Ranch had its own scuffle with a coal company. The episode offers a contrast between the negotiating power of a private ranch and a tribal family whose land is held for them by the federal government.
Ramaco Carbon was and remains interested in mining non-federal coal under a section of the ranch. In 2016, Padlock filed complaints with state regulators, saying the ranch wasn’t being offered fair compensation for the use of its land.
The ranchers allegedly had a high asking price — their attorneys asked for lease payments “20 times greater than what Ramaco had agreed to pay other area landowners,” Ramaco Carbon CEO Randy Atkins told the Casper Star-Tribune at the time.
The ranch’s attorneys countered that Ramaco Carbon wasn’t negotiating fairly.
“Padlock is reluctant to enter into agreements with a company that has been unwilling to show good faith in working with the landowner,” the attorneys wrote in court documents cited by the newspaper.
Though Atkins argued otherwise, the Wyoming Department of Environmental Quality told the company its project couldn’t proceed without the surface owners’ consent.
As the mine permit came under continued scrutiny from Wyoming’s Environmental Quality Council, which helps resolve such disputes, the coal company apparently found a way to come to terms with the ranch. The resulting agreement was kept confidential, according to an Associated Press report.
Ultimately the council rejected the company’s mine permit on different grounds.
In Ramaco Carbon’s case, the mineral rights to the coal were privately owned. In Wyoming it’s very difficult, though not impossible, to force a surface owner to consent to a mining lease, even to mine privately owned minerals, if they don’t like the terms.
“That was about 150 years ago the government kicked us out of there,” he said. As one of the last Crow families to come to the reservation, Wayne said, the Moccasins ended up with rocky grazing land, not river bottom farmland.
“Now, today, 150 years later they want to kick us out of there now too,” he said.
Montana law prohibits the state from exercising eminent domain for coal mining.
Federally-owned coal can’t be leased to mining companies without the consent of those who own the surface above it. Such has been the case since the Surface Mining Control and Reclamation Act of 1977.
“They can come in and buy you out,” said Shannon Anderson, an attorney with the Powder River Basin Resource Council who often represents landowners in disputes with energy companies. “But if you don’t want to be bought out you don’t have to be.”
As private, non-tribal landowners the Padlock’s stakeholders had the ultimate bargaining chip: the right to walk away.
The rules on an Indian reservation are more complex. So is the history.
Fool me twice…
Nellie Moccasin, Wayne’s diminutive but uproarious older sister, remembers a trip with her grandfather Top of Moccasin to see the family’s ancestral land somewhere west of Red Lodge, Montana. She recounted the story when the family gathered in a wood-paneled conference room at the downtown Sheridan office of Davis & Cannon.
“We had a picnic on this little crick and then on that little crick there were some …” she searched with her siblings — native Crow speakers for whom English is a second language — for the right word translation.
“Tea,” Wayne offered.
“Ah tea,” Nellie said. “Indian tea. My mother picks them and says we’ll take this home and we’ll make tea. I remember that well.”
Once considered Crow country, tribal members traded land along and in the Absaroka Mountain Range as white settlers pushed into the region. Top of Moccasin was one of those who traded land.
The trades didn’t happen equitably, Wayne said.
“That was about 150 years ago the government kicked us out of there,” he said. As one of the last Crow families to come to the reservation, Wayne said, the Moccasins ended up with rocky grazing land, not river bottom farmland.
“Now, today, 150 years later they want to kick us out of there now too,” he said.
The company, however, argues that it’s done all it could to offer all the Moccasins and the tribe a fair deal. According to Big Metal Coal, representatives of the company have traveled from Gillette to Crow Agency, the reservation’s principle town, to meet with the Moccasins more than 30 times.
“Every time we believe we have addressed the concerns of all the Moccasin landowners and ‘have a deal,’ one or more family members or their counsel raises new issues and demands,” Big Metal Coal Vice-President Bruce Jones complained in a letter to Davis & Cannon.
The company made its first offer in June, 2014 — $2.5 million for a 25-year lease that would also allow the company access for an additional 25 years for mine reclamation work. The amount came to around $278,100 per sibling. There would also be a $90,000 cash bonus split among the family at signing.
The Moccasins told the company they’d been offered more money by Shell Oil in the past, who wanted to buy the land, not lease it. The negotiations went back and forth over the next three years, with the Moccasins extracting various concessions, according to Big Metal Coal’s summary. In mid-2015 the company increased the signing bonus to $30,000 per sibling. In October, when Nellie asked the company to write terms for the second 25-year period of reclaiming the proposed strip mine, the company offered the family an agricultural grazing rate.
In late 2016, Wayne told the company he wanted royalty payments on the coal to be mined, not a lease agreement. That arrangement would have netted the family more than $7.7 million if all the coal under their land is mined, according to the company. At that point “all of the Moccasin family members told us we ‘had a deal’” Jones wrote. But the agreement fell through when the BIA said it wouldn’t approve a lease with a royalty payment. The payment mechanism was too “speculative,” the agency said, according to the coal company.
Next the company offered $4.78 million. Five members signed the deal. On May 25, the parties gathered in the Davis & Cannon conference room for a mediation session supervised by a third-party lawyer. The Moccasins and their attorneys call that meeting a farce.
The coal company asked the Moccasins to waive confidentiality, something Reiter called highly unusual for such a session. They did not come to negotiate, he said, but instead offered the family a take it or leave it offer.
“Big Metal’s approach is to present an ultimatum and refuse to budge,” is how Cannon and Reiter characterized the company’s negotiating strategy at the mediation meeting and previously in a June 26 letter.
“We do not consider the meetings and meals in which you presented [the Moccasins] with take it or leave it offers to be a negotiation,” the lawyers wrote in another letter.
The coal company asked the Moccasins to waive confidentiality, something Reiter called highly unusual for such a session. They did not come to negotiate, he said, but instead offered the family a take it or leave it offer.
The family also sees the timing of the mediation meeting as evidence of the company’s preference to use the government to do its “dirty work,” as Wayne characterizes it. Two days before the mediation session, the BIA had sent its letters giving the Moccasins a deadline to reach a deal.
The Moccasins and their attorneys say the mediation session was just pretend negotiations — the coal company putting on a show so it can continue to tell the BIA it is trying but finding the dissenting siblings intractable.
On June 6, some of the dissenting Moccasins received letters from Jones requesting another meeting to conclude “our longstanding negotiations.” The letters referenced the BIA’s notice that it would soon consent on the dissenting Moccasins’ behalf.
“Now that the U.S. Bureau of Indian Affairs has initiated a negotiation process … it is my sincere desire that we can reach final agreement in the coming weeks,” Jones wrote.
In late July, and after Lana Moccasin withdrew her consent, the coal company made another offer. They raised the total payments to $5,178,093. The Moccasins counter offered and asked for a much bigger deal — one that totaled $18 million over 25 years.
In response, Big Metal Coal offered to pay an additional $200,000 upon signing the second 25-year lease. The company did not offer to change its $5.17 million base deal.
The second half of the 50-year lease continued to irk the Moccasin side.
“Nellie Moccasin merely requested that Big Metal actually pay the Moccasin family for the second twenty-five year lease term,” Cannon and Reiter wrote on Aug. 30. “Simply requesting that Big Metal actually pay the family to lease its property should hardly be a negotiating point and Big Metal should be embarrassed that they even proposed such a term.”
Again, the lawyers said they believed Padlock Ranch was being treated better. They asked the company to offer the Moccasins a “most-favored-nations clause” that will ensure they get the same deal as the ranch.
“The best determination of the fair market value of the Moccasin Family’s property is undoubtedly the price Big Metal Coal … is willing to pay for their northern neighbor’s nearly identical property,” Cannon and Reiter wrote. They noted the relevant plots are similar in size and face similar fates — being “turned into open pit coal mines by Big Metal for 50 years.”
“The only significant difference we can find between the two properties is who owns them,” the lawyers wrote.
In a response, Jones said the company’s most recent offer would remain open to the family until Sept. 30. He did not address the questions about what terms have been offered to the Padlock Ranch.
Since then, the negotiations appear to have broken down. “The Moccasin Family will not simply be bullied into taking a worse deal than their white neighbors,” Cannon and Reiter wrote on Aug. 30. “Please let us know if you want to make a deal or if Big Metal is going to continue to manipulate the U.S. Bureau of Indian Affairs into taking a majority of the Moccasin Family members’ property.”
Since then, the lawyers have been waiting for action from the company or the federal agency, they say. The BIA has not responded to various attempts to meet with agents on the family’s behalf, Reiter said.
“To me it’s such a clear breach of their duties as a trustee,” Reiter said.
BIA consent — necessary for development, open to exploitation?
The authority of the BIA to consent to a lease on behalf of an allotment’s owners can be critical to advancing any kind of sale or development of land. As families grow, the ownership interests of an allotment can become more and more fractured, making it at times difficult to even find all the interest holders and seek their consent, said Monte Mills, a professor at the University of Montana law school who specializes in Indian law.
“I don’t think it’s unusual for people to be concerned about the BIA doing the industry’s bidding,” Mills said. “But [fractional ownership] is also a real conflict that can hurt economic development.”
The law allows the BIA to consent on behalf of interest holders who can’t be located or are legally disabled or incapacitated. But it also allows the agency to consent for individual landowners in a fractioned allotment, provided the agency gives notice of its intent to consent on their behalf and gives them a three month period to reach agreement on their own.
“Obviously that puts a lot of leverage on those trying to get the deal done and that cuts against the landowners,” Mills said.
“You would think the majority dissenting would be enough to stop the BIA,” Mills said. It would raise “real questions” about the appropriateness of forced consent if its done against the will of a majority of the members, he said.
Regulations establish a percentage for how many individual family members and landowners have to agree for consent to move forward, Mills said. The letter from the BIA to the Moccasin siblings said that eight of the nine siblings had to reach an agreement with the coal company to stave off its forced consent.
WyoFile reached out to Barbara Jefferson, who was named as the BIA contact in the agency’s notice of its intent to force consent. Reached by phone, she said she didn’t “know anything about,” the letters. The letters had come from the regional BIA headquarters in Billings, she said, and directed WyoFile to Clifford Serawop, the new Crow Agency Superintendent. Michael Addy, who signed the letters, has since moved to become the Wind River Indian Reservation Superintendent.
Serawop did not return a request for comment left with his office on Monday morning.
Though at the time of the letters being sent to the Moccasins a majority of landowners had agreed to the deal, that majority shifted with Lana’s withdrawal. It’s unclear how that shift has affected the BIA’s intentions. Because consent is required of eight of nine members under the BIA’s rules, Reiter said he does not believe Lana’s shift will influence the agency.
Mills said it should have some consideration.
“You would think the majority dissenting would be enough to stop the BIA,” Mills said. It would raise “real questions” about the appropriateness of forced consent if its done against the will of a majority of the members, he said.
This land is whose land?
The dissenting Moccasin siblings are a boisterous bunch. They mocked some of Cloud Peak Energy’s efforts to persuade them. Those meetings often involved good meals on the coal company’s dime, according to Wayne and Nellie.
“They’re like ‘here’s the paper, sign it,’” Nellie recalled of an offer extended to her at one such meeting. “And I’m like ‘I’m still eating.’”
Wayne made a similar joke about the failed mediation attempt. “Oh that meeting,” he said. “They had a lot of good dinner over here but then we didn’t like [Cloud Peak Energy’s] gravy so we didn’t sign.”
“They made that gravy with too much salt,” he said as his family members laughed. “We could have signed if that gravy was better.”
But when speaking about their land and the rights they believe they have to it, the tone becomes edgier.
“That land I inherited from my father’s parents,” Nellie said. “I own it from them. They gave it to me. BIA didn’t give it to me. Crow Tribe didn’t give it to me.”
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