Cobell v. Kempthorne

• Decision Date: 30 January 2008
• Docket Number: Civil Action No. 96-1285 (JR).
• Citation: 532 F.Supp.2d 37
• Court: U.S. District Court — District of Columbia
• Parties: Elouise Pepion COBELL, et al., Plaintiffs, v. Dirk KEMPTHORNE, Secretary of the Interior, et al., Defendants.

Page 37

532 F.Supp.2d 37

Elouise Pepion COBELL, et al., Plaintiffs, v. Dirk KEMPTHORNE, Secretary of the Interior, et al., Defendants.

Civil Action No. 96-1285 (JR).

United States District Court, District of Columbia.

January 30, 2008.

Elliott H. Levitas, Keith M. Harper, Justin Guilder, David C. Smith, William E. Dorris, Daniel R. Taylor, Kilpatrick Stockton, LLP, for Plaintiffs.

Earl Old Person, Browning, MT, pro se.

Dodge Wells, Gino D. Vissicchio, U.S. Department of Justice, Washington, DC, for Defendants.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

JAMES ROBERTSON, District Judge.

These findings and conclusions are the result of a 10-day bench trial in October 2007. The, central purpose of the trial was to determine whether the Department of Interior has remedied or is remedying what Judge Lamberth found in Cobell v. Babbitt, 91 F.Supp.2d 1, 58 (D.D.C.1999) (Cobell V), aff'd, Cobell v. Norton, 240 F.3d 1081 (D.C.Cir.2001) (Cobell VI), to be a breach of its duty under the Indian Trust Fund Management Reform Act of 1994 to produce an accounting for Individual Indian Money (IIM) account holders. In, setting the matter for trial, I said that, although the details of the trial remained to be worked out, it was both appropriate and prudent to review the Interior Department's historical accounting project in detail, and to do so in open court, where the government might present, and plaintiffs might test or challenge, its methodology and results up to the time of the hearing [Dkt. 3312]. The end product of such a proceeding was to include the answers to at least the following questions:

• Have the defendants cured (or are they curing) the breaches of their fiduciary duty that were found in Cobell V?

• Do the defendants' historical statements of account ... satisfy defendants' duties "rooted in and outlined by the relevant statutes and treaties ... [and] defined in traditional equitable. terms"? Cobell VI, 240 F.3d at 1099.

• Have the defendants unreasonably delayed the completion of the required accounting?

• What further relief, if any, should be ordered?

By the time the trial began, the issues for trial had been distilled to these four:

First, it's going to be about what you're doing and what you're not doing. ... It's going to be about both of those things. Second, what would it cost to do the things that they say that you should be doing and you're not doing?

Third, taking into account the cost, because that, I think, I'm required to do by the Court of Appeals, is what you're doing adequate? Is it an adequate accounting?

And fourth — and this is what you don't want to hear, but I think Mr. Gingold is entitled to at least a record on this point, fourth, what does it all add up to? Throughput versus what you can prove; what are the big numbers?

H'rg Tr. 76:23-77:10 (6/18/07). The question of what further relief, if any, should be ordered was left to another day.

These findings and conclusions, derived not only from the trial, but also from the extensive record that preceded it, support and explain my decision (i) that, although the defendants have attempted and continue to attempt to cure the breach of their fiduciary duty that was found in Cobell V and affirmed by Cobell VI, they, have not succeeded in doing so; (ii) that the historical statements of account contemplated by defendants' latest accounting plan will not Satisfy defendants' duties "rooted in and outlined by the relevant statutes and treaties ... [and] defined in traditional equitable terms," Cobell VI, 240 F.3d at 1099; and (iii) that the defendants have, unreasonably delayed the completion of the required accounting. Indeed, it is now clear that completion of the required accounting is an impossible task.

BACKGROUND

To say that the histories of the IIM trust and of this lawsuit have been exhaustively chronicled in district court and appellate opinions is to stretch the limits of understatement. See, e.g., Cobell v. Babbitt, 30 F.Supp.2d 24, 27-29 (D.D.C.1998); Cobell v. Babbitt, 91 F.Supp.2d 1, 6-12 (D.D.C.1999); Cobell v. Norton, 240 F.3d 1081, 1086-94 (D.C.Cir.2001); Cobell v. Norton, 226 F.Supp.2d 1, 11-20 (D.D.C. 2002); Cobell v. Norton, 283 F.Supp.2d 66, 72-86 (D.D.C.2003). Those seeking Cliffs-Notes can even consult the Cobell v. Kempthorne Wikipedia entry (though the Court, of course, cannot vouch for its accuracy). At this date, there are 3,504 entries on the Cobell v. Kempthorne docket. Appellate panels hearing Cobell arguments have engaged ten of our Circuit judges, some`of them more than once. Upon publication, this opinion will have the shorthand title Cobell XX. Nevertheless, those histories must be retold at least briefly in order to' provide context for today's opinion.

Plaintiffs are a certified class of present and former IIM account holders numbering in excess of 300,000. Some account holders have more than one IIM account. Hundreds of thousands of IIM accounts exist, managed for the United States by its trustee-delegates, the Department of Interior and the Department of Treasury. Most of these IIM accounts exist to receive income the government collects for leasing or selling Indian-owned lands and then to distribute it to account holders when account balances reach certain thresholds (usually fifteen dollars). A small percentage of the funds flowing through the IIM trust are in "Judgment" and "Per Capita" accounts, which were created to hold funds derived from litigation settlements (Judgment accounts) and tribal revenues allocable to individual Native Americans (Per Capita accounts). By far the largest amount of trust funds flow through the "land-based" IIM accounts that contain lease, royalty, and land sale payments tied to individual land allotments.

Individual Indian land allotments date to a period between the late 1800's and 1934 when the federal government attempted to dismantle tribes and instill the Anglo-American concept of private ownership in Native Americans by carving reservation land into individually owned parcels of up to 160 acres (now known as "tracts" or "allotments"). See, e.g., County of Yakima v. Yakima Indian Nation, 502 U.S. 251, 254, 112 S.Ct. 683, 116 L.Ed.2d 687 (1992) ("The objectives of allotment were simple and clear cut: to extinguish tribal sovereignty, erase reservation boundaries, and force assimilation of Indians into the society at large."), quoted in Cobell v. Norton, 240 F.3d 1081, 1087 (D.C.Cir.2001). The government's pursuit, of the allotment policy occurred alongside its official abandonment of treaty-driven relationships with tribes in favor of "govern[ing] [tribes] by acts of Congress," United States v. Kagama, 118 U.S. 375, 382, 6 S.Ct. 1109, 30 L.Ed. 228 (1886); see Act of March 3, 1871, ch. 120, § 1, 16 Stat. 566 (1871) (codified as amended at 25 U.S.C. § 71). This policy shift and its corollary acts — such as coercive assimilation — were carried out without so much as the pretense of tribal consent. See, e.g., Lone Wolf v. Hitchcock, 187 U.S. 553, 565-68, 23 S.Ct. 216, 47 L.Ed. 299 (1903).

The allotment policy was first codified in the Indian General Allotment Act (Dawes Act), ch. 119, 24 Stat. 388 (1887) (codified as amended at 25 U.S.C. § 331 et seq.), and was reflected in several subsequent allotment acts. In the Dawes Act, Congress granted unilateral authority to the executive branch to divide reservation land west of the Mississippi into plots for individual tribal members and families. It also allowed non-Indian settlement upon and exploitation of some reservation land, resulting in the alienation of millions of acres from tribal ownership. The statute required the federal government to hold the allotted land in trust for the individual allottees and their heirs for a period of 25 years — a period subject to extension at the government's discretion — after which fee patents would issue to the allottees. See Cobell VI, 240 F.3d at 1087; Cobell v. Norton, 283 F.Supp.2d 66, 74 (D.D.C. 2003). While held in trust, allotted lands were to be immune from state taxation. The expectation was that, during that time, Indians would establish self-sufficient farms and earn enough money to pay their own taxes. At the close of the 19th Century, Congress passed several acts allowing the government to lease allotments that had not been successfully cultivated. See, e.g., An Act Making Appropriations for Current and Contingent Expenses of the Indian Department and Fulfilling. Treaty Stipulations with Various Indian Tribes for the Fiscal Year Ending June Thirtieth, Eighteen Hundred and Ninety-Five, and for Other Purposes, ch. 290, 28 Stat. 286 (1894).¹ Any income generated from the land was to flow into IIM accounts established by the government. Native American landowners could not (and today still cannot), sell or, lease allotted land without the government's consent.

Congress soon realized that the allotment policy was responsible for innumerable problems, see, e.g., 1915 Congressional Report to the Joint Commission of the Congress of the United States, PX-681, not least of which was the phenomenon known as `fractionation'. Fractionation occurs when Indian allotments are divided and divided again by inheritance through succeeding generations, diluting the ownership interests of allottees and causing enormous administrative difficulties for the BIA. The Indian Reorganization Act (Wheeler-Howard Act), ch. 576, 48 Stat. 984 (1934), (codified as amended at 25 U.S.C. § 461 et seq.), was supposed to reconsolidate Indian lands and reverse the allotment process, but the land reclamation effort prescribed by that statute was never properly funded and never materialized. Instead, the Act succeeded only in ending the creation of new allotments and, for allotted lands already held in trust, extending the trust period indefinitely. Cobell v. Norton, 283 F.Supp.2d 66, 75 (D.D.C.2003). As of 1990, some eleven million acres were held in trust for the heirs of allottees, by now...