Appeals court won't hold back Lamberth on trust reform

The federal government has an obligation to fix the broken Indian trust and not just provide an historical accounting, an appeals court ruled on Friday.

In a 33-page decision, the D.C. Circuit Court of Appeals delivered benefits to both sides in the Cobell v. Norton case. A three-judge panel freed the Bush administration from a lengthy and complex structural injunction that required the accounting to be completed by December 2008 and imposed dozens of requirements on the Interior Department.

At the same time, the court rejected the government's attempt to limit the scope of the class action, now its in seventh year of litigation. Attorneys for Interior Secretary Gale Norton, who will stay on the job for President Bush's second term, have repeatedly accused U.S. District Judge Royce Lamberth of exceeding his authority.

In September 2003, Lamberth issued a 270-page opinion that was divided into two sections. The "historical accounting" dealt with Interior's plan to account for at least $13 billion in Indian funds and the "fixing the system" part covered reform of the broken trust.

Relying on a controversial appropriations rider that delayed the accounting for a year or until Congress changed the law, the D.C. Circuit set aside the accounting section as "without legal basis." The judges said the provision appears to give Interior "temporary relief from any common law or statutory duty to engage in historical accounting" of the Individual Indian Money (IIM) trust.

But the court noted that the rider expires on December 31. "Absent Congressional action by that date, obviously [the rider] will cease to bar the historical accounting provisions of the injunction," wrote Judge Stephen F. Williams for the majority. Lamberth could then "reissue[] those provisions" in the future, the court added.

Regarding the "fixing the system" portion of the injunction, the D.C. Circuit agreed that Lamberth ordered Interior to perform too many tasks without determining whether the department has breached those specific duties. Until that happens, Lamberth "may not micromanage court-ordered reform efforts," Williams wrote in the decision.

The court, however, did not agree that Lamberth has gone too far in seeking to reform the trust. Norton and other Bush administration officials contend they only have a duty to account for the funds in the IIM trust but the judges on the D.C. Circuit said "we are puzzled by the idea that the 'fixing' issues represent an expansion of the lawsuit."

Contrary to the Bush administration's position, the American Indian Trust Reform Act of 1994 does not limit the government to just an accounting. Quoting a decision they issued shortly after Norton took office in February 2001, they said the act only affirmed long-standing trust duties.

The act "recognized and reaffirmed what should be beyond dispute -- that the government has longstanding and substantial trust obligations to Indians, particularly to IIM trust beneficiaries, not the least of which is a duty to account," the decision stated.

Friday's ruling is the second in two weeks in the Cobell case. On December 3, the D.C. Circuit lifted a preliminary injunction disconnecting Interior from the Internet. Much like the latest decision, the court said Lamberth acted prematurely.

But both rulings affirmed that Cobell is a trust case, not an ordinary lawsuit against the government. The judges also rejected the Bush administration's contention that Lamberth is expanding the case beyond its original intent.

Still, both sides in the case have claimed victory. "The Interior Department has invested hundreds of millions of dollars on this issue since this lawsuit was filed back in 1996," outgoing Deputy Secretary J. Steven Griles said in a statement following Friday's decision.

Keith Harper, a Native American Rights Fund attorney representing the plaintiffs, sees it differently. Rather than fix the system, he said Norton and other top officials are "trying to do everything in their power to undermine and shed those responsibilities." Over the objections of Indian Country and several key lawmakers, the Bush administration backed the appropriations rider, which was inserted in Interior's 2004 budget bill.

It was five years ago this month that Lamberth issued the first landmark decision in the case. "It would be difficult to find a more historically mismanaged federal program than the Individual Indian Money Trust," he wrote on December 21, 1999.

At the time, Lamberth envisioned retaining jurisdiction for five years but since then he has complained about the lack of progress in the case. Three Cabinet secretaries and two assistant secretaries have been held in contempt and hundreds of millions of dollars have been spent over the past eight years with little to show, the Cobell plaintiffs and other critics say.

Get the Decision:
Cobell v. Norton (December 10, 2004)

Lower Court Decisions:
Historical Accounting | Fixing the System | Structural Injunction

Relevant Links:
Indian Trust: Cobell v. Norton -
Cobell v. Norton, Department of Justice -
Indian Trust, Department of Interior -