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Ute Lawsuit Has Deep Roots

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The past isn’t dead—it isn’t even past, according to an adage that may mirror issues aired November 17 in oral argument before a three-judge panel of the U.S. 10th Circuit Court of Appeals.

The Ute Indian Tribe of the Uintah and Ouray Reservation, Utah, is challenging the Ute Distribution Corporation (UDC) over the UDC’s attempt to keep the tribe from nominating tribal candidates for election to the UDC board. It’s part of a lengthy conflict that may pit the interests of those considered historically to be of full Ute descent against those of partial descent.

The tribe’s petition notes “the more than 50-year history of interaction between the tribe and the UDC, including controversies that preceded and possibly precipitated” the current dispute.

The UDC amendments in the current litigation are, the tribe says, unfavorable to the tribe, but they were upheld by District Court in Utah. The tribe is asking the appeals court to invalidate the amendments.

The two separate groups—Utes federally determined to be of full descent and federally terminated Utes of partial descent—were created under the 1954 Ute Partition Act, which in general said tribal assets were to be determined and divided by the Tribal business committee for those of full descent, by a predecessor of the UDC for the others, and by joint management by both for indivisible resources.

In intervening years, most of the terminated Utes sold their shares of UDC stock to non-Indians, including banks and trusts, according to the tribe, which states it is the single largest shareholder, owning approximately 20 percent of shares. The UDC asserts that a minimum of 51 percent of UDC shares are still owned by those terminated in 1954 or their families.

The current issue centers on UDC board members who formerly were required only to be U.S. citizens over age 21 and UDC shareholders. Under the contested amendments, no enrolled members of the Ute Indian Tribe or those employed by the tribe in a consulting/advisory role, paid or unpaid, could serve on the board of directors, according to the tribe’s petition. The tribe also contends that adoption of the amendments would empower and entrench the UDC board of directors.

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The tribe filed the lawsuit in 2006 after the UDC board adopted the amendments to UDC’s articles of incorporation, asserting that voting on the amendments should be by both classes created by the amendments—those who could vote and enrolled Utes or Ute-affiliated, who could not.

The UDC contends the amendments did not create a new class of shareholders because there is no evidence an enrolled member of the tribe or tribal employee owns UDC shares and says the UDC and Department of the Interior never assumed or intended the tribe would own UDC shares, according to court records.

The UDC assumed the tribe was trying to gain controlling interest in the UDC because it mistakenly believed a financial consultant to the tribe was acting for the tribe, rather than himself, and “to defend themselves against this presumed threat, the directors developed and proposed the amended articles that are the subject of this lawsuit,” the tribe says.

Other disagreements over oil and gas exploration and development as well as fishing and hunting issues were largely resolved, the tribe asserts, but a water dispute required adjudication and there have been concerns among UDC members over conveyance to the tribe of 84,000 acres of land that had been appropriated by the military.

The UDC believes that the tribe wants to control it and has attempted to deprive it of oil and gas rights and that there is animosity and mistrust between the two groups. The UDC also thinks the tribe does not want terminated Utes to be reinstated to tribal membership, and has other disagreements. The conflict is attributed to the Ute Partition Act, which “was forced on the tribe by the government,” according to a UDC brief.

Tribal attorney Frances Bassett, of Frederick Peebles & Morgan, also noted the government’s termination policy of the 1950s “has been roundly condemned for its many tragic consequences” and “the reverberations from that ill-conceived policy continue to this day.”

Bassett said she expects the court to issue a decision in the case sometime next year.