Cobell v. Norton

• Decision Date: 15 November 2005
• Docket Number: No. 05-5068.,05-5068.
• Citation: 428 F.3d 1070
• Parties: Elouise Pepion COBELL, et al., Appellees v. Gale A. NORTON, Secretary, Department of the Interior, et al., Appellants.
• Court: U.S. Court of Appeals — District of Columbia Circuit

428 F.3d 1070

Elouise Pepion COBELL, et al., Appellees v. Gale A. NORTON, Secretary, Department of the Interior, et al., Appellants.

No. 05-5068.

United States Court of Appeals, District of Columbia Circuit.

Argued September 16, 2005.

Decided November 15, 2005.

Appeal from the United States District Court for the District of Columbia (No. 96cv01285).

Mark B. Stern, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Peter D. Keisler, Assistant Attorney General, Kenneth L. Wainstein, U.S. Attorney, Gregory G. Katsas, Deputy Assistant Attorney General, Robert E. Kopp, Thomas M. Bondy, Alisa B. Klein, Mark R. Freeman, and I. Glenn Cohen, Attorneys.

G. William Austin III argued the cause for appellees. With him on the brief were Dennis M. Gingold, Elliott H. Levitas, Mark I. Levy, and Keith M. Harper.

Before: GARLAND, Circuit Judge, and SILBERMAN and WILLIAMS, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge WILLIAMS.

STEPHEN F. WILLIAMS, Senior Circuit Judge.

In 1994 Congress passed legislation that acknowledged the fiduciary duties that the Secretaries of the Departments of the Interior and Treasury — the defendants in this case — owed to beneficiaries of Individual Indian Money ("IIM") accounts. Frustrated by delay in the fulfillment of these duties, plaintiffs filed a class action in 1996 on behalf of present and past beneficiaries of the accounts. Since that time, the district court has drawn on a range of its powers in an effort to ensure that defendants live up to their duties as the accounts' trustees. One such duty required defendants to complete a historical accounting of all trust fund assets. This past February, the district court reissued an injunction that set out, in great detail, the means by which they were to fulfill this duty. The defendants argue that reissuance of the injunction was an abuse of discretion. Even the plaintiffs agree that the injunction should not stand because they believe it to be impossible to perform. In short, neither party thinks that the injunction should survive in its present form. We agree.

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The trust relationship at issue here dates back to the passage of the General Allotment Act of 1887, ch. 119, 24 Stat. 388. The Act allotted land to individual Indians and provided that the government would "hold the land thus allotted, for the period of twenty-five years [subject to discretionary extension by the President], in trust for the sole use and benefit of the Indian to whom such allotment shall have been made." Id. Whenever the government authorized money-producing transactions, such as leasing allotted lands or selling timber rights, it was supposed to hold the revenue in individual accounts for the Indian owners of the beneficial interests in the lands. See Cobell v. Norton, 392 F.3d 461 (D.C.Cir.2004) ("Cobell XIII"); Cobell v. Norton, 240 F.3d 1081, 1087 (D.C.Cir.2001) ("Cobell VI"). Legislation passed in 1934 halted the process of allotting additional land but indefinitely extended the trust period for the lands that had already been allotted. Indian Reorganization Act of 1934, 48 Stat. 984 (codified as amended at 25 U.S.C. § 461 et seq.). A separate statute enacted in 1938 authorized the Secretary of the Interior to transfer trust funds from the United States Treasury to banks or to invest them in government (or government-guaranteed) securities. An Act to Authorize the Deposit and Investment of Indian Funds, 52 Stat. 1037 (codified as amended at 25 U.S.C. § 162a). The Department of the Interior estimates that approximately $13 billion has flowed into IIM accounts since 1887, and about $12.6 billion has been distributed from them, leaving an overall balance of $416.2 million as of December 31, 2000. Declaration of James E. Cason, Associate Deputy Secretary, U.S. Department of the Interior, in Support of Motion for Emergency Stay Pending Appeal, at 3 (filed Mar. 9, 2005) ("March 2005 Cason Declaration").

The legislative enactments that initially made the federal government a trustee and then extended the trusteeship said little as to how the government was to fulfill its fiduciary obligations except to indicate the range of permissible investments. But it is not disputed that the government failed to be a diligent trustee. In the two decades leading up to plaintiffs' initiation of their lawsuit, report after report excoriated the government's management of the IIM trust funds. See Cobell VI, 240 F.3d at 1089 (describing reports by the General Accounting Office, the Interior Department Inspector General, and the Office of Management and Budget, among others). Embarrassed by this record, Congress in 1994 passed legislation reaffirming the government's obligation to "account for the daily and annual balance of all funds held in trust by the United States for the benefit of an Indian tribe or an individual Indian which are deposited or invested pursuant to the [1938 Act to Authorize the Deposit and Investment of Indian Funds]." American Indian Trust Fund Management Reform Act of 1994, Pub.L. No. 103-412 § 102, 108 Stat. 4239 (codified as amended at 25 U.S.C. § 161a-162a & § 4001 et seq.) ("1994 Act").

Addressing plaintiffs' claim under the Administrative Procedure Act, 5 U.S.C. §§ 702 & 706, and the Declaratory Judgment Act, 28 U.S.C. § 2201, the district court found that the defendants had unlawfully delayed the congressionally mandated accounting and remanded the case to the defendants with instructions to bring themselves into compliance with their trust duties. Cobell v. Babbitt, 91 F.Supp.2d 1, 45-48, 57-59 (D.D.C.1999). We affirmed the district court's order. Cobell VI, 240 F.3d at 1106.

Following our affirmance and a 29-day trial, the district court issued an opinion holding Interior Secretary Gale Norton and Assistant Secretary of Interior for Indian Affairs Neal McCaleb in contempt of court. Cobell v. Norton, 226 F.Supp.2d 1, 161 (D.D.C.2002). On appeal from the contempt citations, we overturned each of the five separate specifications articulated by the district court for charging the individuals with contempt. Cobell v. Norton, 334 F.3d 1128, 1147-50 (D.C.Cir.2003) ("Cobell VIII").

In spite of our decision reversing the district court's contempt citations, the court made clear that it considered its findings of facts undisturbed. Cobell v. Norton, 283 F.Supp.2d 66, 85 (D.D.C.2003) ("Cobell X"). Without making any additional findings of fact on the need for broader injunctive relief, it initiated another bench trial to evaluate the parties' competing plans for bringing the defendants into compliance with their fiduciary obligations. See id. At the trial's conclusion the court issued a comprehensive and detailed injunction specifying how the defendants were to go about the accounting. See id. at 287-95.

The district court's injunction expanded the scope of the accounting well beyond that of the plan submitted by the defendants. Among other differences, the injunction required coverage of the accounts of deceased beneficiaries and accounting for transactions prior to 1938, and it completely precluded the use of statistical sampling. The defendants had proposed to use such sampling for verification of the accuracy of the transactions underlying entries for individual accounts. In an exhibit attached to their motion to stay the injunction pending appeal, the defendants estimated that the ultimate cost of complying with the injunction would range from $6-$14 billion, as opposed to the $335 million estimated cost of the defendants' plan. Declaration of James E. Cason, Associate Deputy Secretary, U.S. Department of the Interior, in Support of Motion for Stay Pending Appeal, at 3-5 (filed Nov. 10, 2003) ("November 2003 Cason Declaration"). A more recent submission identified Interior's current best estimate as $12-$13 billion. March 2005 Cason Declaration, at 1.

On appeal, defendants raised a number of specific objections to the injunction, as well as a challenge based on a fiscal year 2004 appropriations bill passed in November 2003. The bill stated that "nothing in the [1994 Act], or in any other statute, and no principle of common law, shall be construed to require the Department of the Interior to commence or continue historical accounting activities with respect to the Individual Indian Money Trust" until either Congress passed legislation amending the 1994 Act to delineate the defendants' specific historical accounting obligations or the date December 31, 2004, had passed. Pub.L. No. 108-108, 117 Stat. 1241 (2003). We did not reach any of the specific objections because this last challenge trumped the others; we held that by enacting that provision, Congress provided Interior temporary relief and bought itself some time to come up with a legislative solution. Cobell XIII, 392 F.3d at 465-66. As it turned out, Congress passed no amending legislation before its self-imposed deadline. On December 8, 2004, however, the President signed into law an appropriations bill that limited the funds available for historical-accounting purposes in fiscal year 2005 to $58 million. Pub.L. No. 108-447, 118 Stat. 2809 (2004).

The district court, and not any of the parties to this litigation, made the next move. On February 23, 2005, without holding a hearing and without making any modifications to the prior injunction's content, the district court reissued its historical-accounting injunction:

Of course, December 31, 2004 has come and gone, and no legislative solution to the issues in this litigation is available or in the offing. Therefore, the Court is bound, by its findings of fact and conclusions of law set forth in its September 25, 2003 Memorandum Opinion, to reissue without modification the "historical accounting" provisions of its structural injunction.

Cobell v. Norton, 357 F.Supp.2d 298, 300 (D.D.C.2005) (citation omitted) ("Cobell XIV").

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We review the district...