Ex-leader of North Dakota tribe ordered to return nearly $3 million in royalties

Thursday, August 3, 2017  

A former chairman of the Mandan, Hidatsa and Arikara Nation is giving up nearly $3 million in royalties after being mistakenly overpaid by an energy developer on his tribe's reservation.

An alleged "clerical error" resulted in Wilbur Wilkinson receiving the excess funds, according to a federal appeals court decision issued on Wednesday. He was owed $29,914.10 in oil and gas royalties but instead received $2,991,425.25, resulting in a whopping overpayment of $2,961,511.15.

But Wilkinson wasn't ready to return the funds and sued Enerplus Resources Corporation in tribal court. He claimed the energy firm breached a settlement agreement that addressed his ownership interests in certain oil and gas leases on the reservation in North Dakota.

The 8th Circuit Court of Appeals, however, pointed out that the settlement agreement requires disputes to be settled in the federal system. So the tribe's judicial system can't hear the matter.

"The contracting parties here agreed that 'any disputes arising under [the Settlement] Agreement ... shall be resolved in the United States District Court for the District of North Dakota Northwest Division and such court shall have exclusive jurisdiction hereunder and no party shall have the right to contest such jurisdiction or venue,'" Judge D. Brooks Smith wrote for the court.

The unanimous decision leaves Wilkinson with little hold on the $2,961,511.15. He had already deposited the overpayment with the federal court in North Dakota after Enerplus countered his tribal lawsuit with a federal one. As part of that case, a judge concluded that Enerplus is entitled to the excess funds.

"Wilkinson and [his attorney and agent] have no legal right to retain the excess money and it must be returned to Enerplus," Judge Daniel L. Hovland, wrote in the February 23 decision.

Wilkinson served as chairman of his tribe between 1990 and 1994, before the energy boom brought millions of dollars in development and new economic opportunities to the reservation. His tenure was marred by a federal court conviction of theft.

Enerplus is a Canadian-based corporation with operations in the United States. Energy production has steadily increased on the Fort Berthold Reservation since 2012, according to the firm's website. Earlier this year, it sold some of its undeveloped assets in North Dakota for $292 million and said it would use the proceeds to increase operations on the reservation.

Turtle Talk has posted documents from the energy royalties case, Enerplus Resources (USA) Corporation v. Wilkinson.

8th Circuit Court of Appeals Decision:
Enerplus Resources (USA) Corporation v. Wilkinson (August 2, 2017)