Trust

Appeals court revives mixed-blood Ute lawsuit

Monday, January 22, 2007

A group of mixed-blood Utes who were terminated in the 1950s rejoiced on Friday after a federal appeals court gave them an opening to pursue their termination and trust accounting case.

The 600-plus plaintiffs filed suit in November 2002, nearly 50 years after Congress ended their status as federally recognized Indians. Due to the passage of time, a federal judge dismissed the case, citing a six-year statute of limitations in actions against the government.

But the D.C. Circuit Court of Appeals reversed. In a unanimous decision, a three-judge panel ordered another look at the case based on widely-used provision in federal law that has helped a number of tribes pursue their trust claims.

The move doesn't necessarily mean the mixed-blood Utes will prevail. They are trying to prove the Interior Department wrongfully terminated their status and failed to manage a $32 million trust fund.

The lawyer for the plaintiffs, however, said the decision was well received. "We're very ecstatic that the panel of judges clearly showed some compassion and it's our belief that they know that there's an inherent justice here and they were looking for some way to let us keep a toehold, if not a foothold, to keep this battle going," said Dennis G. Chappabitty.

The injustice refers to the Ute Partition Act of 1954, which divided the Ute Tribe of Utah into "mixed-bloods" and "full-bloods." Those with less than one-half Ute or Indian blood were kicked out of the tribe, denying them access to the $32 million judgment fund that had been awarded four years earlier.

Pursuant to the law, Interior was supposed to divide up tribal assets between the mixed-bloods and the full-bloods, who now make up the Northern Ute Tribe. The department then published a list of the 490 mixed-blood Utes in 1961 in the Federal Register to announce the termination of federal supervision.

Although the termination policy was later repudiated by former President Richard Nixon and Congress, the mixed-blood Utes faced an uphill battle because their suit was filed long after the 1961 notice. The D.C. Circuit said Judge Richard Roberts correctly analyzed the law regarding the six-year statute of limitations.

But the court cited a provision in Interior's 2003 appropriations act -- passed one month after the plaintiffs filed their case -- that stops the clock on trust mismanagement cases until an accounting is provided. Interior has never provided one for the $32 million Ute judgment fund at issue.

The provision has helped several tribes keep their trust cases alive. Dozens more tribes have filed similar claims, alleging the mishandling of billions of dollars.

In other legislation, Congress has extended the deadline for trust accounting suits based on "reconciliation reports" prepared by the former Arthur Andersen firm. But lawmakers let it expire in December 31, 2006, amid opposition from the Bush administration.

"The United States' potential exposure in these cases is more than $200 billion," Attorney General Alberto Gonzales once told Congress.

To beat the December 31 deadline, the Native American Right Fund filed a class action lawsuit on behalf of more than 250 tribes whose trust funds have not been accounted. But even if the $32 million Ute fund were accounted, the mixed-bloods would be denied a share because they are considered to be terminated.

As part of the case, the plaintiffs -- led by Oranna Felter, who still lives on the Uintah and Ouray Reservation in Utah -- allege Interior violated its trust duties prior to termination. "The task isn't over," said Chappabitty. "We've got to go to back to Judge Roberts and do some heavy legal briefing and heavy arguments there."

"We feel very confident that we'll come out on top and we'll be able to beat the statute of limitations problem that's kept these people from getting their day in court," said Chappabitty.

D.C. Circuit Decision:
Felter v. Kempthorne (January 19, 2007)