United States v. Oneida Nation of New York

• Citation: 201 Ct. Cl. 546,477 F.2d 939
• Decision Date: 11 May 1973
• Docket Number: Appeal No. 13-71.
• Parties: The UNITED STATES v. The ONEIDA NATION OF NEW YORK et al.
• Court: Court of Federal Claims

201 Ct. Cl. 546, 477 F.2d 939 (1973)

The UNITED STATES v. The ONEIDA NATION OF NEW YORK et al.

Appeal No. 13-71.

United States Court of Claims.

May 11, 1973.

Marvin S. Chapman, Chicago, Ill., attorney of record, for appellees. Dean A. Dickie and Aaron, Aaron, Schimberg & Hess, Chicago, Ill., of counsel.

A. Donald Mileur, Washington, D. C., with whom was Asst. Atty. Gen. Kent Frizzel, for appellant. M. Edward Bander, Washington, D. C., of counsel.

Before DAVIS, Acting Chief Judge, and SKELTON, NICHOLS, KUNZIG, and BENNETT, Judges.

KUNZIG, Judge:

In issue in this government appeal from a decision¹ of the Indian Claims Commission (the Commission) is whether the government owed and subsequently breached a fiduciary duty to protect the Oneida Indians in land dealings with the State of New York when the United States Government did not participate in the transactions.

We hold that the federal government did owe a fiduciary duty to the Indians when, with knowledge of the transactions, the Government failed to protect the rights of the Indians. We do not hold that actual federal participation is a prerequisite to the imposition of this fiduciary obligation. To determine whether this duty was breached, the case must be remanded to the Indian Claims Commission for factual findings on the question of scienter on the part of the federal government.

The Oneida Nation seeks, by this action, additional compensation for land which was ceded to the state pursuant to treaties with the State of New York between 1795 and 1846.² These claims are based upon clauses 3 and 5 of the Indian Claims Commission Act, 25 U.S.C. § 70a (1970).³ Clause 3 is inapplicable here because it is expressly limited to transactions between the Indians and the United States Government. The federal government, however, might be liable under clause 5 (fair and honorable dealings) if a "special relationship" is established between the government and the claimant Indians affecting the controverted subject matter. Lipan Apache Tribe v. United States, 180 Ct.Cl. 487, 502 (1967). The Indians' contention is that the "special relationship" was established by the Trade and Intercourse Act of 1790 which imposed a fiduciary duty upon the federal government regarding Indian land transactions. Accordingly, the Indians now seek recovery under the Indian Claims Commission Act.

The Indian Claims Commission found for the Indians in all twenty-five (25) treaties. We have no difficulty affirming that decision as to the lands ceded pursuant to the Treaty of June 1, 1798 and the Treaty of June 4, 1802, because there were federal government representatives clearly in attendance at these treaty signings.⁴ We are faced with greater difficulty with the remaining twenty-three (23) treaties because there was no evidence at trial on the issue of knowledge by the federal government of the transactions transpiring pursuant to these treaties. The Government urges upon this court the position that although the knowledge or notice issue is important, it is unnecessary to reach the issue in this case because there is no "special relationship" or fiduciary duty imposed upon the United States by the Trade and Intercourse Acts arising from sales of New York land to the State of New York by resident Indians. This position we find untenable.

Since the Government seemingly concedes that the Oneidas are entitled to prosecute their claims before the Indian Claims Commission pursuant to 25 U.S.C. § 70a (1970), the sole issue is whether and to what extent a fiduciary relationship exists between the Oneida Nation and the United States pursuant to the Trade and Intercourse Acts.

Between 1785 and 1846 the Oneida Nation and the State of New York were signatories to twenty-seven (27) treaties in which the Indians ceded a vast majority of their land to the state. The Oneida Nation, as found by the Commission, was a tribal member of the Iroquoian Confederacy located along the shores of Oneida Lake in west-central New York. On June 28, 1785, the Oneida Nation joined with the Tuscarora Tribe to cede certain lands located in New York to the State of New York. Thereafter, by the terms of the Treaty of 1788, the Indians ceded all of their lands to the State of New York, except for an area of approximately 100 square miles that was reserved for their own use and was to be held by them and their posterity forever (hereinafter referred to as the Oneida Reservation). Between 1795 and 1846, the State of New York entered into a series of twenty-five (25) treaties with the Oneidas whereby the State of New York acquired virtually the entire Oneida Reservation.

I Fiduciary Duty

There can be no doubt that a fiduciary relationship does exist between the Indians and the United States Government. This was first established by the Trade and Intercourse Act of 1790 which required governmental consent prior to any sale or conveyance of Indian lands.⁵ Although there have been revisions of this Act throughout the years, the basic requirement of federal consent in any disposition of Indian lands remains unchanged.⁶ Shortly after the enactment of the first Trade and Intercourse Act, President Washington, in a speech to a tribe of New York Indians, clearly defined the intended relationship between the federal government and the Indians:

No State, no person, can purchase your lands, unless at some public treaty, held under the authority of the United States. The General Government will never consent to your being defrauded, but it will protect you in all your just rights. . . . But your great object seems to be, the security of your remaining lands; and I have, therefore, upon this point, meant to be sufficiently strong and clear, that, in future, you cannot be defrauded of your lands; that you possess the right to sell and the right of refusing to sell, your lands; that, therefore, the sale of your lands, in future, will depend entirely upon yourselves. But that, when you may find it for your interest to sell any part of your lands, the United States must be present, by their agent, and will be your security that you shall not be defrauded in the bargain you may make. . . . That, besides the before mentioned security for your land, you will perceive, by the law of Congress for regulating trade and intercourse with the Indian tribes, the fatherly care the United States intend to take of the Indians. (Emphasis added.)

American State Papers (Indian Affairs, Vol. I, 1832), p. 142.

Judicial interpretation of the relationship between the Indians and the federal government has been consistent with President Washington's statement. The Supreme Court has stated that the purpose of the Trade and Intercourse Act was to avoid improper and unfair disposition of Indian lands and to allow the federal government to act as parens patriae to effectuate this purpose. F.P.C. v. Tuscarora Indian Nation, 362 U.S. 99, 119, 80 S.Ct. 543, 4 L.Ed.2d 584 (1960). The Court of Claims has similarly not been shy in holding that the relationship is more than that of a nonparticipating bystander, or of a sovereign toward its ordinary citizens. It is a special relationship necessitating a special responsibility. Oneida Tribe of Indians of Wisconsin v. United States, 165 Ct.Cl. 487, 493, cert. denied, 379 U.S. 946, 85 S.Ct. 441, 13 L.Ed.2d 544 (1964). In Seneca Nation of Indians v. United States, 173 Ct.Cl. 917 (1965) (hereinafter referred to as the second Seneca case⁷) this court went further and stated that:

this responsibility i. e. that imposed by the Trade and Intercourse Act was not merely to be present at the negotiations or to prevent actual fraud, deception, or duress alone; improvidence, unfairness, the receipt of an unconscionable consideration would likewise be of federal concern. (Emphasis added.)

Id. at 925.

Therefore we re-affirm previous decisions that held that the Trade and Intercourse Act establishes a fiduciary relationship between the Indians and the United States Government.

II Applicability of Fiduciary Duty to State Transactions

Despite the foregoing, the Government contends that this fiduciary relationship does not extend to transactions between resident Indians and the State of New York. It is urged that the second Seneca case is distinguishable from the instant case because there, the land transactions did not involve a state, but, rather, were between the Indians and private parties. Accordingly, the appellant argues that the special relationship described in the second Seneca case is limited to dealings between Indians and private parties. We cannot adopt such a narrow reading of the statutory and judicial basis of the fiduciary relationship described by Judge Davis.

Sales to states were expressly prohibited in the original Trade and Intercourse Act itself.⁸ Although this language referring to the states was dropped in subsequent Trade and Intercourse Acts, it was replaced by language which forbids any and all purchases from the Indians absent federal governmental consent regardless of the parties. Judicial interpretation reinforces this position. Mr. Justice Whittaker in F.P.C. v. Tuscarora Indian Nation, supra, clearly did not limit the Trade and Intercourse Act to dealings between Indians and private parties. He only excluded dealings with the United States Government itself.⁹

Although Judge Davis did not deem it necessary to reach this issue of the applicability of the Trade and Intercourse Act to transfers to the State of New York in either of the Seneca cases (Seneca Nation of Indians v. United States, 173 Ct.Cl. 912, 915 (1965) and Seneca Nation of Indians v. United States, 173 Ct.Cl. 917 (1965)), his pithy opinions do not preclude a decision favorable to the Indians in this case.¹⁰ There is no compelling reason to draw a distinction between dealings by the Indians with private parties and dealings with the State of New York. President Washington drew no such distinction. The United States...