## Facts

- The Shoshone Indian Tribe owned oil and gas resources on the Wind River Reservation; the United States acted as trustee in approving leases and collecting and distributing royalties.
- The Department of the Interior, through MMS and BIA, administered regulations governing mineral valuation and royalty collection for tribal leases.
- The Tribe alleged breaches of trust based on (a) a purported duty to maximize royalty income, (b) misvaluation and under-collection of gas royalties under the regulatory scheme, and (c) failure to collect royalties on “take-or-pay” payments made under gas purchase contracts.
- “Take-or-pay” clauses required a buyer to take a minimum quantity of gas or pay for that quantity even if not taken; the Tribe claimed such payments should be royalty-bearing.
- The United States moved to dismiss the maximization theory and certain valuation theories, and sought summary judgment on the take-or-pay royalty claim.
- The Tribe conceded it could not proceed on a stand-alone maximization claim and focused on specific valuation-related breaches and the take-or-pay theory.

## Issues

1. Whether a tribe may recover money damages for breach of trust based on a free-standing federal duty to “maximize” oil and gas royalties.
2. Whether valuation-based breach-of-trust claims are cognizable when tied to specific, mandatory statutes, regulations, or lease terms governing valuation and royalty collection.
3. Whether royalties are owed on take-or-pay payments made for gas not actually produced under the governing leases and federal royalty regime.

## Decision

- The court dismissed the Tribe’s stand-alone “maximization” claim, treating the Tribe’s concession as dispositive and finding no independent, enforceable duty to maximize royalties beyond governing legal requirements.
- The court allowed certain valuation-based breach claims to proceed to the extent they alleged noncompliance with specific, mandatory valuation and collection requirements; it rejected theories that effectively challenged discretionary policy choices or sought higher-return standards not found in controlling text.
- The court granted summary judgment to the United States on the take-or-pay claim, holding that royalties were owed only on gas actually produced (and valued under the applicable framework), not on payments for gas not produced.

## Legal Principles

- In tribal trust money-damages cases, liability depends on specific, rights-creating or duty-imposing statutory, regulatory, or contractual provisions that can fairly be read as mandating compensation for breach.
- Generalized fiduciary concepts, standing alone, do not supply a money-mandating standard; the trustee’s enforceable duties are defined and limited by the governing statutes, regulations, and lease terms.
- Valuation and royalty-collection regulations and lease provisions may be money-mandating when they impose mandatory standards; a claim may proceed when the government allegedly failed to apply or enforce those standards.
- Royalties under federal oil and gas leasing and royalty regulations attach to the value of actual production; take-or-pay payments for unproduced gas are contractual payments not treated as royalty-bearing production absent express governing language to the contrary.

## Conclusion

The Court of Federal Claims rejected a free-standing duty to maximize tribal royalties, permitted valuation-based breach claims only where grounded in specific mandatory valuation and collection requirements, and held as a matter of law that take-or-pay payments for unproduced gas are not subject to royalties.


Shoshone Indian Tribe of the Wind River Reservation, Wyo. v. United States, 56 Fed. Cl. 639 (2003)