The Indian trust fund lawsuit took another dramatic turn on Tuesday with the removal of Judge Royce Lamberth from the case.

In a unanimous decision, the D.C. Circuit Court of Appeals ordered the case to be assigned to another judge. The court said Lamberth called into question his impartiality with his harsh rulings against the government, several of which have been overturned.

"Given these seemingly unique circumstances, and given that 'justice must satisfy the appearance of justice,'" Judge David Tatel wrote, "we conclude, reluctantly, that this is one of those rare cases in which reassignment is necessary."

At the same time, the decision underscored the failure of the federal government to live up to its obligations to Native Americans. An accounting of at least $13 billion has never been provided to the 500,000-plus account holders affected by the case.

"As the litigation proceeds, the government must remember that although it regularly prevails on appeal, our many decisions in no way change the fact that it remains in breach of its trust responsibilities," the court wrote. "In its capacity as trustee and as representative of all Americans, the government has an obligation to rise above its deplorable record and help fashion an effective remedy."

But the panel had strong words for the Cobell plaintiffs as well. "For their part, counsel for plaintiff-beneficiaries, as counsel to a large class of Indians and as officers of the court, would more ably advance their worthy cause by focusing their energies on legal issues rather than on attacking the government and its lawyers," Tatel wrote for the three-judge panel.

In hopes of drawing both sides closer, the court said the reassignment of the case "presents an opportunity for a fresh start." "We expect both parties to work with the new judge to resolve this case expeditiously and fairly," the decision stated.

Elouise Cobell, the lead plaintiff in the 10-year-old class action lawsuit, said she was "disappointed" by Lamberth's removal. She called his work on the case "truly heroic."

She said the plaintiffs will continue to prevail under a new judge but also hoped for a quick resolution to the case. "We agree with the court's suggestion that this litigation has gone on too long," she said. "We have attempted to resolve the case out of court and we are continuing to do so."

Leaders in the House and Senate are working on legislation to settle the case. But the key figures -- a dollar amount for the failed accounting -- remains in limbo as both sides diverge wildly on a settlement.

Based on a $13 billion figure that both sides agree has passed through the system since the early 1900s, the Cobell plaintiffs proposed a $27.5 billion settlement. The Bush administration contends the amount is far lower, in the million-dollar range.

Congressional leaders and experts tend to agree a proper figure is in the billions. Sen. John McCain (R-Arizona) is close to putting an amount in the bill while Rep. Richard Pombo (R-California) is still studying the issue, according to a recent story in Indian Country Today.

If put into legislation, the settlement would resolve the historical accounting portion of the Cobell case. Other issues, such as an information technology security, would not appear to be covered.

IT security has been a major controversy after court reports and the Interior Department's own reviews uncovered vulnerabilities. The potential to hack into Indian trust accounts led Lamberth to order a system-wide disconnect from the Internet.

In a second decision issued yesterday, the D.C. Circuit agreed that Interior's network is prone to attack. The court cited the lengthy record and findings of fact -- unchallenged by the administration -- that documented the risks to sensitive financial, personal and other data.

But the court said the disconnect order was unjustified because the Cobell plaintiffs didn't show how they would be directly harmed by any computer attacks. The injunction poses more harm to the public and to Interior, the court said as it set aside the ruling.

Both decisions are a belated victory for former Interior secretary Gale Norton, whose five-year tenure was marked by major battles over the trust fund. At one point, Lamberth held her in contempt, only to reversed at the appeals court.

The case now bears new Interior Secretary Dirk Kempthorne's name but he has only been minimally involved in the case since taking over last month. He has told tribal leader he is interested in settling the case.

The litigation will now be placed in the hands of another judge on the District Court in Washington, D.C. Besides Lamberth, there are 14 other active judges on the court, plus two senior judges.

Court Decisions:
Lamberth Removal | IT Injunction

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