Federal Judge Orders Wyoming Tribes To Pay $13.1 Million To Energy Company

A federal judge in Wyoming has confirmed an arbitration panel's April order for the Northern Arapaho and Eastern Shoshone tribes to pay nearly $13.1 million to an oil company after the tribes cut the company's lease to work on their land. 

Clair McFarland

September 25, 20233 min read

Federal courthouse cheyenne 1 9 13 23
(Greg Johnson, Cowboy State Daily)

A federal judge in Wyoming has confirmed an arbitration panel’s order for the state’s two tribes to pay $13.1 million to an energy company that formerly operated an oil field on tribal land.  

U.S. District Court Judge Scott Skavdahl on Friday ordered the Northern Arapaho and Eastern Shoshone tribes to pay $13,086,555 to Merit Energy Operations for equipment and infrastructure Merit left behind when the tribes took over operations on Circle Ridge Field.  

Skavdahl’s confirmation order is in addition to an already-binding arbitration award, but Skavdahl’s order can be enforced like other court orders.  

The Dispute 

The tribes had leased out the oil and gas field to Merit until the latter’s lease expired in 2021. Then the tribes took over operations of the field.  

Merit disputed this move, asking the federal court to uphold its ability to continue the lease, but the court instead allowed the lease to end.  

Then Merit and the two tribes argued over the price of the company’s infrastructure and equipment still on the field.  

The Northern Arapaho Tribe said the equipment was worth about $3.6 million while an early panel of appraisers valued it at $23.1 million.  

Merit and the tribes went into arbitration. The arbitration panel decided on the $13.1 million price tag April 7.  

Just a few days later, Merit petitioned the U.S. District Court for Wyoming to confirm the arbitration panel’s decision.  

Which Court? 

But the tribes countered, saying the federal court couldn’t confirm the award because the dispute didn’t have an overt “federal (legal) question” to resolve, which is a requirement for many cases filed in federal court.  

Skavdahl disagreed.  

The judge pointed to the lease between Merit and the tribes, which guaranteed that “non-tribal courts may have jurisdiction” over questions stemming from the lease or related to it. The lease also says that it’s subject to tribal laws, and federal laws.  

Also, the tribes had petitioned the same court system months earlier when they wanted the court to confirm an arbitration panel’s decision that Merit’s lease was terminated, Skavdahl noted.  

Lastly, he wrote, the lease was not governed by state law at all.  

“This was not a typical matter that could be submitted to state court, but rather it (arose) under the … laws or treatises of the United States,” wrote Skavdahl.  

The Northern Arapaho Business Council is reviewing the decision and considering its options, a spokesperson told Cowboy State Daily.

The Eastern Shoshone Business Council did not immediately comment to Cowboy State Daily on Monday morning.

Clair McFarland can be reached at clair@cowboystatedaily.com.

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Clair McFarland

Crime and Courts Reporter