Cobell v. Norton

Decision Date17 September 2002
Docket NumberNo. CIV.A. 96-1285(RCL).,CIV.A. 96-1285(RCL).
Citation226 F.Supp.2d 1
PartiesElouise Pepion COBELL, et al., Plaintiffs, v. Gale A. NORTON, Secretary of the Interior, et al., Defendants.
CourtU.S. District Court — District of Columbia

Keith M. Harper, Lorna K. Babby, Native American Rights Fund, Dennis Marc Gingold, Elliott H. Levitas, Kilpatrick Stockton, LLP, Washington, DC, for plaintiffs.

Robert D. Luskin, Patton Boggs LLP, Tom C. Clark, Brian L. Ferrell, Andrew M. Eschen, Charles Walter Findlay, III, Sarah D. Himmelhoch, Sandra Marguerite Schraibman, U.S. Dept. of Justice, Edith R. Blackwell, Washington, DC, John Charles Cruden, U.S. Dept. of Justice, ENR Division, Annandale, VA, Lewis Steven Wiener, Sutherland, Asbill & Brennan LLP, Mark E. Nagle, Robert Craig Lawrence, Scott Sutherland Harris, U.S. Attorney's Office, J. Christopher Kohn, Jo-Ann Shyloski, Barry Weiner, Henry A. Azar, Jr., U.S. Dept. of Justice, Washington, DC, Terry M. Petrie, U.S. Dept. of Justice, Denver, CO, Seth Brandon Shapiro, Jonathan Brian New, Jennifer R. Rivera, Sandra Peavler Spooner, David J. Gottesman, Peter Blaze Miller, Cynthia L. Alexander, Mathew J. Fader, Amalia D. Kessler, John S. Most, Michael John Quinn, John J. Siemietkowski, Tracy Lyle Hilmer, Dodge Wells, U.S. Dept. of Justice, Washington, DC, for defendants.

MEMORANDUM OPINION

LAMBERTH, District Judge.

This matter comes before the Court after a twenty-nine day bench trial to determine whether defendants Gale Norton, Secretary of the Interior, and Neal McCaleb, Assistant Secretary of Interior for Indian Affairs, should be held in civil contempt of court. After carefully reviewing of all the evidence presented and representations made at trial, the record in this case, and the applicable law, the Court finds that these defendants are in civil contempt of court. The Court's findings of fact and conclusions of law are detailed below.

I. INTRODUCTION

The Department of Interior's administration of the Individual Indian Money ("IIM") trust has served as the gold standard for mismanagement by the federal government for more than a century. As the trustee-delegate of the United States, the Secretary of Interior does not know the precise number of IIM trust accounts that she is to administer and protect, how much money is or should be in the trust, or even the proper balance for each individual account. Because of the Secretary's systemic failure as a trustee-delegate, the federal government regularly issues payments to beneficiaries-of their own money-in erroneous amounts. In fact, the Interior Department cannot provide an accurate accounting to the majority of the estimated 300,000 trust beneficiaries, despite a clear statutory mandate and the century-old obligation to do so. As the Court observed more than two years ago, "[i]t is fiscal and governmental irresponsibility in its purest form." Cobell v. Babbitt ("Cobell V"), 91 F.Supp.2d 1, 6 (D.D.C.1999).

Equally troubling is the manner in which the Department of Interior has conducted itself during the course of this litigation. In February of 1999, the Court held Bruce Babbitt, then-Secretary of the Interior, and Kevin Gover, then-Assistant Secretary of Interior for Indian Affairs, in civil contempt for violating two of this Court's discovery orders. Among other things, the Court found that almost immediately after proposing a clear and unambiguous order which the Court signed, "the defendants disobeyed that order and successfully covered up their disobedience through semantics and strained, unilateral, self-serving interpretations of their own duties." Cobell v. Babbitt ("Cobell IV"), 188 F.R.D. 122, 140 (D.D.C.1999). The defendants' misconduct did not end there. Since holding then-Secretary Babbitt and then-Assistant Secretary Gover in contempt, the Court has had to sanction the Department of Interior for filing frivolous motions, enter several temporary restraining orders to prevent the Department from taking potentially adverse actions, and appoint both a Special Master (to oversee discovery) and a Court Monitor (to review the defendants' trust related activities). Moreover, there are several motions currently pending before the Court regarding alleged misconduct by the Interior Department. In short, the Department of Interior has handled this litigation the same way that it has managed the IIM trust-disgracefully.

The issue now before the Court is whether the Secretary of the Interior and the Assistant Secretary of Interior for Indian Affairs should again be held in civil contempt of court. Specifically, the Court ordered these two government officials to show cause why they should not be held in civil contempt for: (1) failing to comply with the Court's Order of December 21, 1999, to initiate a Historical Accounting Project; (2) committing a fraud on the Court by concealing the Department's true actions regarding the Historical Accounting Project during the period from March 2000, until January 2001; (3) committing a fraud on the Court by failing to disclose the true status of the TAAMS project between September 1999 and December 21, 1999; (4) committing a fraud on the Court by filing false and misleading quarterly status reports starting in March 2000, regarding TAAMS and BIA Data Cleanup; and (5) committing a fraud on the Court by making false and misleading representations starting in March 2000, regarding computer security of IIM trust data. The Court will address each of these specifications below in turn.

II. BACKGROUND
A. FACTUAL BACKGROUND1
1. History

During the early 1800s, the United States' policy towards Native Americans-which included entering into (and frequently violating) treaties as well as the use of force-led to the removal and relocation of many tribes from the East and Midwest to unsettled lands in the West. In the late 19th century, the United States' policy of relocation was replaced with a policy of assimilation. Under this new policy, the federal government allotted land that had been set aside for tribes to individual tribe members instead. The policy of assimilation was designed "to extinguish tribal sovereignty, erase reservation boundaries, and force assimilation of Indians into society at large." Yakima v. Yakima Indian Nation, 502 U.S. 251, 254, 112 S.Ct. 683, 116 L.Ed.2d 687 (1992).

The assimilationist policy, which began with individually negotiated treaties, became federal law when Congress passed the General Allotment Act of 1887, also known as the "Dawes Act." Under the Dawes 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.

Cobell VI, 240 F.3d at 1087.

The United States' policy of assimilation and its allotment of tribal lands ended with the enactment of the Indian Reorganization Act of 1934 ("IRA"). Although the IRA provided that unallotted surplus Indian lands would be returned to tribal ownership, the statute did not disturb lands already allotted to individual Indians, and actually extended the trust period for allotted lands indefinitely. Thus, under the IRA the federal government maintained control of lands already allotted but not yet fee-patented, and accordingly 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 of the IIM trust accounts that are at the core of this lawsuit.2

2. Federal IIM Trust Responsibilities

There is no question that as a result of the allotments made from 1887-1934 and the IRA's indefinite extension of the trust period, the United States has assumed the fiduciary obligations of a trustee. United States v. Mitchell ("Mitchell II"), 463 U.S. 206, 225, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) (noting that "a fiduciary relationship necessarily arises when the Government assumes . . . elaborate control over forests and property belonging to Indians."). Although the United States itself is the trustee of the IIM trust, under current law the Secretary of the Interior and the Secretary of the Treasury are the designated trustee-delegates. The failure of either Secretary to perform his or her particular fiduciary responsibilities results in the United States breaching its fiduciary obligations to the IIM trust beneficiaries. Cobell VI, 240 F.3d at 1088.

Within the Department of Interior, several agencies have specific trust obligations. These agencies include, among others, Bureau of Indian Affairs ("BIA"), Office of Trust Fund Management ("OTFM"), and Office of the Special Trustee ("OST").3 BIA is primarily responsible for trust land management, including the approval of leases and land transfers, and income collection. The vast majority of transactions involving IIM trust lands must be approved by BIA. OTFM, in conjunction with the Treasury Department, deposits IIM land revenues, maintains the individual IIM accounts, and ensures that money is distributed to IIM account holders. OST, which was created in 1994, oversees the IIM trust reform efforts.4

The Department of Interior and its subagencies have utterly failed to manage the IIM trust in a manner consistent with the fiduciary obligations of a trustee-delegate. The D.C. Circuit succinctly noted this failure in February of last year when it...

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20 cases
  • Cobell v. Norton
    • United States
    • U.S. District Court — District of Columbia
    • September 25, 2003
    ...Court by making false and misleading representations starting in March 2000, regarding the computer security of IIM trust data. Cobell VII, 226 F.Supp.2d at 161. The opinion also explained the necessity for considering further injunctive relief, beyond that imposed at the end of the Phase I......
  • Cobell v. Kempthorne
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    • United States
    • U.S. District Court — District of Columbia
    • September 25, 2003
    ...Court by making false and misleading representations starting in March 2000, regarding the computer security of IIM trust data. Cobell VII, 226 F. Supp.2d at 161. The opinion also explained the necessity for considering further injunctive relief, beyond that imposed at the end of the Phase ......
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