Government files first brief in Navajo trust case

Law | Trust

Wednesday, December 3, 2008

The outgoing Bush administration filed its first brief in the contentious Navajo Nation trust case last week, raising a new claim about the handling of a botched coal lease.

Solicitor General Gregory Garre, a Bush nominee, told the U.S. Supreme Court that the tribe engaged in the same type of behavior at the center of the long-running dispute. The government's brief said the tribe learned through ex parte, or one-sided, communications that the lease dispute was likely being resolved in its favor.

The tribe had accused Reagan administration officials of ex parte contacts with a lobbyist for Peabody Energy, the world's largest coal company. The tribe said it was forced into signing a bad deal with Peabody as a result of such behavior.

But now the Department of Justice says information developed more recently in the case shows the tribe spoke with government attorneys and officials and believed Peabody would have been ordered to pay a higher royalty rate on a valuable coal deposit in northeastern Arizona.

"The tribe's attorney learned from the Interior Department that Interior's internal legal review of the appeal had been completed and that a technical review would be finished within days, and he concluded from the tone of their conversation 'that [the tribe] will prevail on the legal issues' in Peabody's appeal," the government's November 26 brief stated.

The appeal never came out of Washington, D.C., because then-Interior secretary Donald P. Hodel suppressed it after meeting behind closed doors with a Peabody lobbyist who happened to be a close friend. The eventual discovery of the ex parte talks formed the basis of the tribe's claim that it was cheated out of $600 million.

Despite the conduct, the Supreme Court in March 2003 said the contacts weren't prohibited by law. By a 6-3 vote, the justices said the tribe failed to demonstrate how the government's actions violated the trust relationship.

But the Federal Circuit Court of Appeals revived the case, leading to a ruling in September 2007 that stated the tribe was owed damages for the botched lease. The decision was based on common trust law, as well as a "network" of laws and regulations that weren't considered by the Supreme Court back in March 2003.

"[I]t is undisputed that Secretary Hodel refused to make this royalty adjustment permanent after meeting with Peabody's representative, whom the government conceded was 'a former aide and friend of Secretary Hodel,'" the Federal Circuit said.

The Supreme Court -- with two new conservative-leaning justices on the bench -- will now tackle the issue all over again when it hears the Bush administration's appeal sometime next year. A hearing date hasn't been set for a case that's being closely watched throughout Indian Country.

The Navajo Nation's response to the government's brief is due January 9, 2009, shortly before president-elect Barack Obama is inaugurated. Among other nominees, Obama will get to choose a new Solicitor General, the official in charge of all Supreme Court litigation for the government.

"Barack Obama is committed to tribal nation building and enforcing the federal government’s obligations," the incoming president said in his campaign platform.

The new administration isn't likely to change course in the case, however. But a Supreme Court decision that goes against the tribe's favor could result in a potential settlement or other action. Navajo Nation President Joe Shirley Jr. and dozens of Navajo leaders endorsed Obama.

Supreme Court Documents:
Docket Sheet: No. 07-1410 | Brief for the U.S. | NCAI-NARF Tribal Supreme Court Project

Federal Circuit Decision:
Navajo Nation v. US (September 13, 2007)

March 2003 Supreme Court Decision in US v. Navajo Nation:
Syllabus | Opinion [Ginsburg] | Dissent [Souter]