A federal appeals court on Tuesday refused to take the federal judge overseeing the Indian trust fund off a contentious contempt proceeding involving dozens of government officials and attorneys.

In a unanimous opinion, the D.C. Circuit Court of Appeals said there was no reason to suggest that Judge Royce Lamberth acted improperly in his handling of the landmark Cobell case. Nor has he shown an "appearance of partiality" in the ongoing contempt matter, the court concluded.

Those seeking Lamberth's recusal "have not shown a 'clear and indisputable right' to the extraordinary relief they request," wrote Judge Douglas Ginsburg for the majority.

But in a victory to a group including former Interior secretary Bruce Babbitt, his former chief of staff Anne Shields and a slew of past and present Department of Justice attorneys, the court blocked the release of potentially damaging reports that had been prepared for the contempt proceedings. Alan Balaran, who resigned as the special master in the case earlier this year, was going to submit the reports to Lamberth for further action.

The court, however, said Balaran, a Washington, D.C., attorney, developed the reports by relying on communications that occurred outside the normal channels of the litigation. These ex parte contacts with government and third-party sources were cited as evidence of his potential bias against the officials he was investigating.

"Because Special Master Balaran had ex parte contacts that may have given him personal knowledge of disputed evidentiary facts relevant to the contempt proceedings, those proceedings should never have been referred to him," the appeals court said.

The decision to suppress the reports does little to resolve the underlying dispute, though. The court yesterday noted that the contempt proceedings are still "pending" before Lamberth, who could take them up at any time.

At issue is whether the officials destroyed trust documents against court orders. The plaintiffs in the case, led by Elouise Cobell, a banker from the Blackfeet Nation of Montana, had named 37 people at Interior and Justice whom they said disobeyed the court.

Attorneys for Interior Secretary Gale Norton admit the information, in the form of e-mails traded among government attorneys, was erased. "[I]t was a mistake not to retain newly created backup tapes," they wrote back in April 2002.

But they had argued that no one should be punished for the incident because it occurred during the Clinton administration. And, they added, no one can bring the missing data back.

Earl E. Devaney, Inspector General for the Interior Department, conducted his own investigation into the matter but couldn't find anyone to blame either. He noted that Babbitt, Shield and Justice attorneys "who were "were in the middle of this" refused to cooperate.

"So long as these persons remain silent, important questions concerning their actions and decisions remain unanswered," he wrote in an August 2002 report.

The ruling yesterday comes at the D.C. Circuit Court takes on another contentious aspect of the Cobell case. A panel of three judges is holding oral arguments at 2 p.m. today over a structural injunction issued by Lamberth that calls upon the Interior Department and the Bureau of Indian Affairs to reform the trust.

On Tuesday, the same court heard an appeal on the state of information technology at the department. Lamberth imposed a preliminary injunction barring the agencies from reconnecting their computer systems to the Internet without adequate security protections. Balaran, through an investigation, had discovered that hackers could break into the trust fund without a trace.

In both appeals, Norton's attorneys argue that Lamberth has exceeded his jurisdiction. In addition to removing the injunction, they are seeking to end the Cobell case entirely, citing efforts to improve the delivery of services to individual Indians and tribal governments.

Get the Decision:
In Re: Brooks (September 14, 2004)

Relevant Links:
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust