F I L E D

United States Court of Appeals

Tenth Circuit

JUN 16 2004

PATRICK FISHER

Clerk

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

DON QUARLES, an individual;

OSAGE ENVIRONMENTAL

CONSERVATION FOUNDATION, on

behalf of themselves and all others

similarly situated,

Plaintiffs - Appellants,

v.

UNITED STATES OF AMERICA, ex

rel. BUREAU OF INDIAN AFFAIRS;

UNITED STATES OF AMERICA, ex

rel. UNITED STATES

ENVIRONMENTAL PROTECTION

AGENCY; TEXACO, INC.; GETTY

OIL CO.; PHILLIPS PETROLEUM

COMPANY; SUN OIL COMPANY;

LITTLE RIVER ENERGY CO.;

SPESS OIL COMPANY, INC.;

YARHOLA PRODUCTIONS CO.;

CHAMBERS & HENDRIX OIL &

GAS, INC.; JOHN DOE, 1–1000,

Defendants - Appellees.

No. 03-5035

Appeal from the United States District Court

for the Northern District of Oklahoma

(D.C. No. 00-CV-913-EA(C))

Gentner F. Drummond (Will K. Wright, Jr. with him on the briefs), The

Drummond Law Firm, Tulsa, Oklahoma, for the Plaintiffs-Appellants.
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Matthew J. Sanders (Thomas L. Sansonetti, Assistant Attorney General; Earl Salo,

Acting Associate General Counsel, Alan Carpien and James Harvard, United

States Environmental Protection Agency; Charles R. Babst, Jr., United States

Department of the Interior; Elizabeth A. Peterson and Natalia T. Sorgente, United

States Department of Justice, Environment & Natural Resources Division with

him on the brief), United States Department of Justice, Environment & Natural

Resources Division, Washington, D.C., for the Federal Defendants-Appellees.

Rick D. Westcott (James C. Daniel with him on the brief), Daniel, Baker &

Associates, Tulsa, Oklahoma, for the Defendants-Appellees with the exception of

the United States.

Before EBEL, McKAY, and LUCERO, Circuit Judges.

LUCERO, Circuit Judge.

At issue in this case is whether the district court erred in its blanket

determination that assorted claims by Appellant Quarles—alleging both statutory

and common law violations against various defendants—are all subject to an

administrative exhaustion requirement found in the Osage Allotment Act. We

take jurisdiction pursuant to 28 U.S.C. § 1291, and REVERSE and REMAND

for further proceedings.

I

Don Quarles, an owner and recreational user of property in Osage County,

Oklahoma, brought suit against the Bureau of Indian Affairs (“BIA”), the

Environmental Protection Agency (“EPA”), and several oil companies (“Oil
1

 The named Oil Company Defendants include Texaco Inc., Getty Oil Co.,

Phillips Petroleum Co., Sun Oil Co., Little River Energy Co., Yarhola Production

Co., Spess Oil Co., and Chambers & Hendrix Oil & Gas, Inc.. 

2

 Quarles’ amended complaint includes Osage Environmental Conservation

Foundation (“OECF”) as a named plaintiff and seeks certification as a class;

however, the district court noted in its order, inter alia, that the matter had not

been certified as a class action, and that there “is some issue as to whether

[OECF] has standing to sue.” Quarles v. United States, No. 00–CV–0913–EA

(C), at 4–5 (N. D. Okla. filed Jan. 31, 2003) (Dist. Ct. Order). 

3

 Quarles argues that the unlawful release and discharge of hazardous

substances violates OPA, 33 U.S.C. § 2702, CWA, 33 U.S.C. §1321, CERCLA 42

U.S.C. §§ 9603, 9604, 9607, as well as the common law doctrines of negligence

and nuisance.

4

 Quarles relies on the citizen suit provisions of CERCLA, 42 U.S.C.

§ 9659, the Safe Drinking Water Act, 42 U.S.C. § 300j-8, and CWA, 33 U.S.C.

§ 1365. 

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Company Defendants”)1 for alleged waste water leaks in 1998 and 1999 from oil

production. Specifically, Quarles claims that the Oil Company Defendants

unlawfully released oil, oil products, hazardous substances, and pollutants,

damaging his property by causing salt scarring and advanced soil erosion, and

contaminating the soil and water with radioactive materials. The waste water

leaks also allegedly migrated or will migrate to Skiatook Lake, the Arkansas

River, and other nearby waters, contaminating them. 

These alleged releases prompted Quarles2 to file suit against the Oil

Company Defendants, the BIA, and the EPA. Quarles alleges various statutory

and common law violations3 in addition to citizen suit claims4 under the
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Comprehensive Environmental Response, Compensation, and Liability Act

(CERCLA), 42 U.S.C. § 9601 et seq., the Oil Pollution Act of 1990 (OPA), 33

U.S.C.A. §§ 2702, 2706, and the Clean Water Act (CWA), 33 U.S.C. § 1251, et

seq., for loss of enjoyment of natural resources and the BIA and EPA’s alleged

failure to remediate the pollution. Quarles also brings negligence claims under

the Federal Tort Claim Act (FTCA), 28 U.S.C. § 1346(b), asserting that the EPA

and BIA violated their nondiscretionary duties to assess natural resource damage

to Quarles’ and other class members’ property, and that the BIA violated the

“Indian Trust Doctrine” through its historic failure to administer federal

environmental statutes. In addition, Quarles alleges state and common law

nuisance and negligence claims against the Oil Company Defendants. 

The district court concluded that the Osage Allotment Act of June 28, 1906,

34 Stat. 539, as amended by Act of March 2, 1929, ch. 493, § 1, 45 Stat. 1478–79,

required Quarles to submit to arbitration before filing suit for damages resulting

from oil and gas operations on the Osage Reservation. Because Quarles had not

made a request for arbitration, the district court dismissed without prejudice

Quarles’ complaint for failure to exhaust administrative remedies. Quarles

appeals.
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II

We review a district court’s dismissal on exhaustion grounds for an abuse

of discretion. United States v. Tsosie, 92 F.3d 1037, 1041 (10th Cir. 1996).

Erroneous conclusions of law or clearly erroneous findings of fact constitute an

abuse of discretion. Kiowa Indian Tribe of Okla. v. Hoover, 150 F.3d 1163, 1165

(10th Cir. 1998). Questions regarding the applicability and construction of

federal law are reviewed de novo. United States v. Davis, 339 F.3d 1223, 1226

(10th Cir. 2003); Foutz v. United States, 72 F.3d 802, 804 (10th Cir. 1995);

United States v. Diaz, 989 F.2d 391, 392 (10th Cir. 1993). 

Congress passed the Osage Allotment Act (“Act”), 34 Stat. 539, in 1906 in

part for the purpose of dividing the land in the Osage Reservation among the

members of the Osage Tribe. Coincidentally, the Act established a subsurface

mineral estate trust, held by the United States, on behalf of the Osage Tribe. Id.

at § 2.7. The Secretary of the Interior is directed to manage oil and gas extraction

leases, with the royalties earned from the leases reserved to the Osage Tribe. Id.

In 1929 the Act was amended, establishing a mandatory administrative

procedure for surface owners or lessees of Osage Reservation lands in order to

address claims under the Act for damages caused by oil or gas extraction on the

Osage Reservation. Act of March 2, 1929, ch. 493, § 1, 45 Stat. 1478–79. 

Surface owners or lessees must submit to arbitration claims under the Act
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resulting from oil or gas extraction, id., and the Secretary of the Interior has

promulgated a detailed arbitration procedure in order to recover damages. See 25

C.F.R. § 226.21 (2003). 

In its decision, the district court did not distinguish between the claims

against the Oil Company Defendants and the Federal Agency Defendants; nor did

the court separately analyze the claims Quarles raised under various federal

environmental statutes, the FTCA, the Indian Trust Doctrine, and the assorted

common law claims. Instead the court reasoned that the Act is “a special law for

Osage land, and that law blankets [Quarles’] claims.” Thus it concluded, because

the specific controls the general, the Act’s mandates and the regulations

promulgated thereunder applied to all of Quarles’ numerous claims. Quarles v.

United States, No. 00–CV–0913–EA (C), at 4, 5 (N. D. Okla. filed Jan. 31, 2003). 

Accordingly, the district court granted the Little River Energy Co. and Yarhola

Production Co.’s joint motion to dismiss the complaint for failure to exhaust

administrative remedies. As a result of the dismissal, the pending motions to

dismiss filed by the remaining Oil Company Defendants and the Federal

Defendants were deemed by the district court to be moot. 

In order to determine if the district court erred in its dismissal of Quarles’

complaint, we must interpret § 2 of the Osage Allotment Act. As with all

statutory interpretation cases, we begin with the plain language of the Act. New
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Mexico Cattle Growers Assoc. v. United States Fish and Wildlife Service, 248

F.3d 1277, 1281 (10th Cir. 2001). In analyzing the language of the statute, we

attempt to “give effect to its meaning,” Schusterman v. United States, 63 F.3d

986, 989 (10th Cir. 1995), and construe the words of the statute in their ordinary

sense, Chickasaw Nation v. United States, 208 F.3d 871, 876 (10th Cir. 2000). 

When the statute’s language is clear, only rarely is that language not controlling. 

Ramah Navajo Chapter v. Lujan, 112 F.3d 1455, 1460 (10th Cir. 1997). 

Moreover, we give effect, if possible, to every word of the statute. Lamb v.

Thompson, 265 F.3d 1038, 1051 (10th Cir. 2001) (quoting Bennett v. Spear, 520

U.S. 154, 173 (1997)); Finley v. United States, 123 F.3d 1342, 1347 (10th Cir.

1997) (noting that we must construe statutes “in such a manner that every word

has some operative effect”); United States v. Wicklund, 114 F.3d 151, 154 (10th

Cir. 1997) (citing Moskal v. United States, 498 U.S. 103, 109–10 (1990).)

Section 2 of the Act as pertinent to the instant matter states:

The bona fide owner or lessee of the surface of the land shall be

compensated, under rules and regulations prescribed by the Secretary of the

Interior in connection with oil and gas mining operations, for any damage

that shall accrue after the passage of this Act as a result of the use of such

land for oil or gas mining purposes, or out of damages to the land or crops

thereon, occasioned thereby . . . . All claims for damages arising under this

section shall be settled by arbitration under rules and regulations to be

prescribed by the Secretary of the Interior . . . . Arbitration, or a bona fide

offer in writing to arbitrate, shall constitute conditions precedent to the

right to sue for such damages . . . .
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Osage Allotment Act of June 28, 1906, 34 Stat. 539, as amended by Act of March

2, 1929, ch. 493, § 2, 41 Stat. 1249.

Our reading of the Act differs from that of the district court. Under § 2 of

the Act, it is clear that claims by owners or lessees of surface land for damages

resulting from oil and gas mining operations “arising under this section” are to be

submitted to arbitration; given the plain language, however, it appears likewise

clear that this requirement is limited to claims “arising under” § 2 of the Act. In

the instant case, Quarles raised many claims, none under § 2 of the Act, and in

dismissing his complaint, the district court did not explain how or why any of the

numerous claims “ar[ose] under” the Act. 

We cannot agree with the district court’s finding that the Osage Allotment

Act blankets all of Quarles’ varied claims. Accordingly, we REVERSE the

district court’s dismissal of Quarles’ amended complaint for failure to exhaust his

administrative remedies under the Act, and REMAND to the district court for

further proceedings.