Cobell v. Norton

• Decision Date: 23 February 2001
• Docket Number: 00-5084,Nos. 00-5081,s. 00-5081
• Citation: 240 F.3d 1081
• Parties: (D.C. Cir. 2001) Elouise Pepion Cobell, et al., Appellees v. Gale A. Norton, Secretary of the Interior, et al., Appellants
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1081

240 F.3d 1081 (D.C. Cir. 2001)

Elouise Pepion Cobell, et al., Appellees v. Gale A. Norton, Secretary of the Interior, et al., Appellants

Nos. 00-5081, 00-5084

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 5, 2000

Decided February 23, 2001

[Copyrighted Material Omitted]

[Copyrighted Material Omitted]

[Copyrighted Material Omitted] Appeals from the United States District Court for the District of Columbia (No. 96cv01285)

David C. Shilton, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Lois J. Schiffer, Assistant Attorney General, John A. Bryson, and Charles W. Findlay, Attorneys.

Thaddeus Holt argued the case for appellees. With him on the brief were Dennis Gingold, Keith Harper and Lorna K. Babby.

Before: Williams, Sentelle and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge:

This case involves a class action suit by beneficiaries of Individual Indian Money ("IIM") trust accounts against Interior Secretary Gale A. Norton and other federal officials who serve, in their official capacities, as trustee-delegates on behalf of the federal government. IIM trust beneficiaries filed suit alleging breach of fiduciary duties. Specifically, plaintiffs sought a declaratory judgment delineating appellants' trust obligations to IIM trust beneficiaries and injunctive relief to ensure that such trust obligations are carried out. After a lengthy trial, the district court concluded that the federal government and its officers have been derelict in their duties, and issued a remand to the Interior and Treasury Departments so that appellants could discharge their fiduciary obligations. The district court further retained jurisdiction and ordered appellants to file quarterly reports detailing steps taken in fulfillment of their duties. Although the decision did not resolve every issue raised by plaintiffs, the district court certified the order for interlocutory appeal.

Appellants challenge the district court's delineation of their trust obligations and assert that the district court exceeded its authority in ordering equitable relief for plaintiffs. We find that the district court had before it ample evidence to support its finding of ongoing material breaches of appellants' fiduciary obligations. Notwithstanding the fact that appellants have taken significant steps towards the discharge of the federal government's fiduciary obligations, appellants clearly have yet to fulfill their trust duties. The relief ordered was well within the district court's equitable powers. While we order the district court to modify the characterization of some of its findings, we generally affirm its judgment and order.

I. Background

The federal government has substantial trust responsibilities toward Native Americans. This is undeniable. Such duties are grounded in the very nature of the government Indian relationship. "[A] fiduciary relationship necessarily arises when the Government assumes ... elaborate control over forests and property belonging to Indians." United States v. Mitchell ("Mitchell II"), 463 U.S. 206, 225 (1983). It is equally clear that the federal government has failed time and again to discharge its fiduciary duties. Here, there is no dispute that appellants, as trustee-delegates of the federal government, have failed to discharge fully their fiduciary obligations. The issue we confront is whether the district court properly delineated the contours of the obligations owed by the Interior Secretary, Treasury Secretary and other officials, and whether such officials have been so derelict in their obligations to justify the relief ordered by the district court.

A. The Government-Indian Trust Relationship

The federal government-Indian trust relationship dates back over a century. The trusts at issue here were created over one hundred years ago through an act of Congress, and have been mismanaged nearly as long. To appreciate truly the nature and extent of the government's responsibilities, and appellants' failure to discharge them, it is necessary to review the history of the government-Indian trust relationship.

Since the founding of this nation, the United States' relationship with the Indian tribes has been contentious and tragic. America's expansionist impulse in its formative years led to the removal and relocation of many tribes, often by treaty but also by force. See, e.g., Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1 (1831). Official policy sought to encourage westward migration of Indian tribes by offering to exchange unsettled lands in the West for Indian land in the East. See, e.g., The Indian Removal Act of 1830, ch. CXLVIII, 4 Stat. 411. Unofficial policy encouraged the forcible dislocation of Indian tribes.

In the second half of the nineteenth century, the policy of relocation was replaced with one of assimilation. At that time the federal government began to divide Indian lands into individual parcels, taking lands that had been set aside for Indian tribes and allotting them to individual tribe members. See Felix S. Cohen, Handbook of Federal Indian Law 98 (1982 ed.). "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." Yakima v. Yakima Indian Nation, 502 U.S. 251, 254 (1992); see also Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439, 1441 (D.C. Cir. 1988) ("Allotment was justified as a means of accomplishing the then current policy of assimilation."). Once tribal lands were allotted in fee to individual Indians, white settlers could purchase the lands for settlement. Allottees, by divorcing themselves from the tribal estate, also became subject to federal and state jurisdiction on the same terms as other citizens.

This assimilationist policy began with individually negotiated treaties and was eventually enacted into federal law with passage of the General Allotment Act of 1887, also known as the "Dawes Act," ch. 119, 24 Stat. 388 (as amended at 25 U.S.C. § 331 et seq.). Under the General Allotment Act, beneficial title of the allotted lands vested in the United States as trustee for individual Indians. The trust was to last for 25 years or more, at which point a fee patent would issue to the individual Indian allottee. During the trust period, individual accounts were to be set up for each Indian with a stake in the allotted lands, and the lands would be managed for the benefit of the individual allottees. Indians could not sell, lease, or otherwise burden their allotted lands without government approval. Where tribes resisted allotment, it could be imposed. See Act of June 28, 1898, ch. 517, 30 Stat. 495 ("Curtis Act"). While the Dawes Act may not have achieved assimilation, it did result in the widespread transfer of land from Indians to white settlers. As the district court found, from 1887 to 1934, an estimated 90 million acres, accounting for approximately two-thirds of all Indian lands, left Indian ownership. Cobell v. Babbitt, 91 F. Supp. 2d 1, 8 (D.D.C. 1999) ("Cobell V").

Allotment of tribal lands ceased with enactment of the Indian Reorganization Act of 1934 ("IRA"), 48 Stat. 984 (codified as amended at 25 U.S.C. § 461 et seq.). Lands already allotted remained so, but the IRA provided that unallotted surplus Indian lands would be returned to tribal ownership. 25 U.S.C. § 463. Rather than undo the assimilationist allotment polices, the 1934 Act extended the trust period for allotted lands indefinitely. Id. § 462. The federal government retained control of lands already allotted but not yet fee-patented, and thereby retained its fiduciary obligations to administer the trust lands and funds arising therefrom for the benefit of individual Indian beneficiaries. These lands form the basis for the Individual Indian Money ("IIM") accounts that are at the heart of this case.

After passage of the IRA, federal Indian policy changed yet again. In the 1950s, Congress adopted a "termination policy," whereby it sought to release Indian tribes from federal supervision and terminate the government-Indian relationship. As Assistant Interior Secretary Gover testified at trial, the policy was "specifically" aimed at "severing ... the trust relationship." Cobell V, 91 F. Supp. 2d at 8. In some cases, the U.S. withdrew recognition of Indian tribes altogether. Id. at 9.

The termination policy was no more successful than earlier assimilation efforts, and was soon replaced with the current policy of "self-determination and self-governance." Id. at 9. In 1975 Congress enacted the Indian Self-Determination and Education Assistance Act, Pub. L. No. 93-638, 88 Stat. 2203 (1975), which, among other things, authorizes tribes to assume some of the management functions currently imposed on the Bureau of Indian Affairs ("BIA") and Office of Trust Fund Management. In particular, a tribe may contract with BIA to manage trust accounts, including IIM accounts, for the tribe or its members. Such contracts must be approved unless BIA determines that the tribe lacks the accounting or management capabilities to fulfill the contract. See Cobell V, 91 F. Supp. 2d at 9. Where such capacity is lacking, BIA is to assist tribes in developing the necessary capabilities to manage IIM accounts themselves. See id. In sum, because of BIA's own fiduciary obligations to IIM trust beneficiaries, it must ensure that a tribe can fulfill the fiduciary obligations attendant to trust management before transferring control.

B. Federal IIM Trust Responsibilities

Because the United States holds IIM lands in trust for individual Indian beneficiaries, it assumes the fiduciary obligations of a trustee. " '[W]here the Federal Government takes on or has control or supervision over tribal monies or properties, the fiduciary relationship normally exists with respect to...