Fort Berthold Reservation v. United States

• Decision Date: 16 February 1968
• Docket Number: Appeal No. 2-66.
• Citation: 390 F.2d 686
• Parties: The Three Affiliated Tribes of the FORT BERTHOLD RESERVATION et al. v. The UNITED STATES.
• Court: U.S. Claims Court

390 F.2d 686 (1968)

The Three Affiliated Tribes of the FORT BERTHOLD RESERVATION et al. v. The UNITED STATES.

Appeal No. 2-66.

United States Court of Claims.

February 16, 1968.

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Charles A. Hobbs, Washington, D. C., attorney of record, for appellant. Wilkinson, Cragun & Barker, Donald C. Gormley, Francis L. Horn, and Jerry C. Straus, Washington, D. C., of counsel.

Ralph A. Barney, Washington, D. C., with whom was Acting Asst. Atty. Gen., J. Edward Williams, for appellee. Walter J. Muir, Washington, D. C., of counsel.

Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON, and NICHOLS, Judges.

OPINION

COLLINS, Judge.

This is an appeal from an interlocutory order, findings of fact, and opinion of the Indian Claims Commission (hereinafter the "Commission"). Appellant claims that the United States, under the Act of June 1, 1910, 36 Stat. 455, deprived it of part of its reservation lands without the payment of just compensation and, in some instances, without the payment of any compensation. Under that act, to be discussed in more detail infra, the United States (1) sold part of the reservation to homesteaders and credited the proceeds of the sales to appellant; (2) purchased certain lands from the tribe, pursuant to an act of Congress, granting such lands to the State of North Dakota for school purposes; and (3) set aside certain small reserves on the reservation for public purposes.

The appeal also presents subsidiary questions concerning (1) the proper dates for valuing the lands in question and (2) whether compensation would be due for tracts set aside for the tribe by Executive orders.

Historical Background

The historical background of this case is fully set out by the Commission in its findings, 16 Ind.Cl.Comm. 341, 342-63. A short summary will suffice for our purposes. The Three Affiliated Tribes of the Fort Berthold Reservation (hereinafter "Fort Berthold Indians" or "appellant") constitute a corporate entity, which has succeeded to the interests of the Arikara, Gros Ventre, and Mandan Indian Tribes.

The lands disputed in this case are located in North Dakota and consist of a portion of Royce Area 713 and of Royce Area 716. Royce Area 713 was set aside for the Fort Berthold Indians pursuant to the Executive orders of April 12, 1870, I Kappler 883 (2d ed. 1904), and July 13, 1880, I Kappler 883 (2d ed. 1904); Royce Area 716 was set aside pursuant to the Executive order of June 17, 1892, I Kappler 883 (2d ed. 1904). On December 14, 1886, Government representatives entered into an agreement with the Fort Berthold Indians by which the Indians would cede part of their reservation lands for $800,000. As to the diminished portion of the reservation, the 1886 agreement provided that the members of the Fort Berthold Tribes would take individual allotments and the United States would hold the residue in trust for 25 years. At the end of the 25 years, the United States would convey the residue to the tribes in fee simple. This diminished portion of the Fort Berthold Reservation is within Royce Area 713.

However, when the 1886 agreement was finally ratified by Congress on March 3, 1891, an important amendment was made regarding the residue land. The amendment provided that, after all individual allotments had been made, the residue of the land "shall be held by the said tribes of Indians as a reservation." Ch. 543, § 23, Art. X, 26 Stat. 1032, 1035 (1891). Thus, instead of providing for eventual conveyance in fee simple, the amendment conferred upon the Fort Berthold Indians a reservation title to residue lands.

This was the status of the lands when the Act of June 1, 1910, 36 Stat. 455, was approved. This act directed the Secretary of the Interior to dispose of, for the benefit of the Fort Berthold Indians, certain surplus lands (i. e., lands not allotted or reserved) on part of the reservation in Royce Area 713. The act provided that, prior to sale, a Presidential commission would be appointed, which would have the responsibility of classifying and appraising the surplus lands in 160-acre tracts. Once the classifications and appraisals had been approved by the Secretary of the Interior, the lands would be opened for settlement by Presidential proclamation and disposed of, at the appraised value, under the general provisions of the homestead and townsite laws of the United States. The net proceeds of the sale were to be paid into the United States Treasury to the credit of the Fort Berthold Indians. Pursuant to the 1910 act and acts supplementary thereto, approximately 327,000 acres of surplus land were sold at the appraised prices and the proceeds placed in an interest-bearing Treasury fund to the credit of the Indians.

Another important provision of the 1910 act granted to the State of North Dakota, for school purposes, sections 16 and 36 in each township, or any lands which the state might select in lieu thereof (sometimes referred to as "lieu lands") if section 16 or section 36 or parts thereof had been allotted, reserved, or were otherwise unavailable to the state. The act specified that the United States would pay the Fort Berthold Indians the sum of $2.50 per acre for lands in sections 16 and 36 so granted, or for the lands within the reservation selected in lieu thereof. Under this provision, approximately 29,000 acres were ultimately granted to the state, for which the Indians were paid the stipulated $2.50 per acre price.

Finally, the 1910 act also authorized the Secretary of the Interior to set aside other reservation lands for designated public purposes. The appellant complains that three small parcels (identified as St. Edward Mission, Shell Creek Reservoir, and Verendrye National Monument) were taken by the Government for public purposes.

The 1910 act was passed by Congress without any treaty or agreement on the part of the Indians.

The appellant filed suit in 1951 under the Indian Claims Commission Act, seeking just compensation for its land, under the theory that its land was taken within the meaning of the Fifth Amendment of the Constitution.

Taking of Indian Land Under the Fifth Amendment

Two important subsidiary issues hinge upon the resolution of the issue of whether the Indians' land was taken from them under the Fifth Amendment. The first concerns the criteria for determining liability. If a taking under the Fifth Amendment has occurred, then appellant is, of course, entitled to "just compensation." United States v. Klamath and Moadoc Tribes, 304 U.S. 119, 58 S.Ct. 799, 82 L.Ed. 1219 (1938); Yankton Sioux Tribe of Indians v. United States, 272 U.S. 351, 47 S.Ct. 142, 71 L.Ed. 294 (1926); Miami Tribe of Oklahoma v. United States, 281 F.2d 202, 150 Ct.Cl. 725 (1960), cert. denied, 366 U.S. 924, 81 S.Ct. 1350, 6 L.Ed.2d 383 (1961). Excluding for the moment the question of interest, "just compensation" has been uniformly held to mean value at the time of taking. United States v. Klamath and Moadoc Tribes, supra. Therefore, if a taking under the Fifth Amendment has occurred, appellant need only prove that it received a sum for its lands less (no matter how much less) than the fair market value thereof to be entitled to recover the difference.

On the other hand, if there has been no Fifth Amendment taking, appellant can recover, pursuant to the Indian Claims Commission Act,¹ only if it shows that moneys received from the sale of the lands were so far below the then fair market value thereof as to amount to fraudulent conduct, gross negligence, or some other breach of its fiduciary obligations on the part of the Government. A mere disparity is not sufficient. Creek Nation v. United States, 97 Ct.Cl. 602, 612 (1942), cert. denied, 318 U.S. 787, 63 S.Ct. 980, 87 L.Ed. 1154 (1943); Seminole Nation v. United States, 92 Ct.Cl. 210, 216 (1940), cert. denied, 313 U.S. 563, 61 S.Ct. 841, 85 L.Ed. 1523 (1941).

A second difference in result is that appellant would be entitled to recover interest on any claim arising under the Fifth Amendment to the Constitution. Interest from the time of taking is automatically included in order to satisfy the demands of the Fifth Amendment. Shoshone Tribe of Indians v. United States, 299 U.S. 476, 57 S.Ct. 244, 81 L.Ed. 360 (1937); Uintah & White River Bands of Ute Indians v. United States, 152 F.Supp. 953, 139 Ct.Cl. 1 (1957).

However, if no taking under the Fifth Amendment has occurred, then any recovery appellant might gain under the Indian Claims Commission Act would not bear interest. Osage Nation of Indians v. United States, 119 Ct.Cl. 592, 97 F. Supp. 381, cert. denied, 342 U.S. 896, 72 S.Ct. 230, 96 L.Ed. 672 (1951); Loyal Band or Group of Creek Indians, ex rel. Bruner v. United States, 97 F.Supp. 426, 118 Ct.Cl. 373, cert. denied, 342 U.S. 813, 72 S.Ct. 27, 96 L.Ed. 615 (1951).

In deciding whether a particular transaction involved a taking under the Fifth Amendment, we are called upon to resolve a seeming conflict between two well-established lines of cases.

One line emphatically asserts the plenary power of Congress to manage and control tribal Indian affairs, including their lands and funds. "Congress possesses the exclusive and plenary authority to deal with tribal Indian lands and funds as in its wisdom it deems just." Chippewa Indians of Minnesota v. United States, 88 Ct.Cl. 1 (1938), supplemental opinion, 88 Ct.Cl. 43, 47, aff'd, 307 U.S. 1, 59 S.Ct. 687, 83 L.Ed. 1067 (1939). "* * * Congress possesses a paramount power over the property of the Indians, by reason of its exercise of guardianship over their interests * * *. * * * Plenary authority over the tribal relations of the Indians has been exercised by Congress from the beginning, and the power has always been deemed a political one, not subject to be controlled by the judicial department of the government." Lone Wolf v. Hitchcock, 187 U.S. 553, 565, 23 S.Ct. 216, 221, 47 L.Ed. 299 (1903).

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