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Indian plaintiffs lose trust fund ruling despite DOI delay

A group of Indian beneficiaries who waited more than 30 years for their trust fund payments aren't entitled to additional money, a federal appeals court ruled on Wednesday.

In a unanimous decision, the Federal Circuit Court of Appeals agreed the Interior Department breached its trust duties by "unreasonably" delaying the distribution of a judgment fund to 1,900 Sioux descendants. The beneficiaries, under a 1972 act of Congress, were entitled to 25 percent of a $5.9 million trust.

But a three-judge panel noted that Congress modified the trust fund distribution formula in 1988 -- while the plaintiffs were still waiting for their share. As a result, the court let Interior off the hook for failing to release the money before it was reduced.

"Congress, acting within its proper authority before any distribution to the lineal descendants occurred, reallocated the lineal descendants' share of the judgment fund," Judge Alvin A. Schall wrote in the 16-page ruling.

The decision means the plaintiffs -- led by Barry LeBeau of South Dakota -- aren't entitled to $1.9 million in damages. That figure was based on the amount the beneficiaries would have received had Interior fully distributed the trust fund before Congress changed the formula in 1988.

However, the Sioux descendants are still entitled to $1.7 million in damages based on another case involving Casimir LeBeau, a former Bureau of Indian Affairs employee. That amount was based on Interior's failure to make a partial distribution in 1982.

For reasons unknown, former Interior Secretary James Watt ignored two requests from the BIA to make the partial distribution. That was a breach of trust, according to the final judgment in the Casimir LeBeau case that was also applied to the Barry LeBeau case.

Barry LeBeau tried to go further by arguing that the plaintiffs in his class action lawsuit were owed additional money based on Interior's failure to act before Congress changed the distribution formula.

"The cause of the loss to the class was made possible by the failure of the Secretary to pay out the fund in 1982 and thereafter," LeBeau's attorney wrote in a brief to the Federal Circuit. "But for the breach of trust, the 1998 legislation would not have occurred. But for the breach of trust in 1982 and continuing, no corpus of money would have been available to raid by use of influence."

The "raid" referred to political pressure exerted by three tribes -- the Spirit Lake Nation of North Dakota, the Sisseton-Wahpeton Sioux Tribe of South Dakota and the Assiniboine and Sioux Tribes of Montana. In 1988, they convinced Congress to award them an extra share of the $5.9 million judgment fund..

"Simply put, the delay in distributing the funds gave the tribes time to lobby Congress to reallocate the funds," LeBeau's attorney wrote.

Long before the LeBeau lawsuits, the tribes had received 75 percent of the judgment fund, which was created to compensate for 26 million acres of stolen land. The individual Indian beneficiaries should have been entitled to the remaining 25 percent but the 1998 law reduced their share even further.

In the Casimir LeBeau case, Judge Lawrence L. Piersol of South Dakota ruled that the political pressure exerted by the tribes wasn't an excuse for failing to distribute the money to the individual Indians. The Bush administration sought to appeal but dropped the case after losing two major trust lawsuits before the U.S. Supreme Court.

"While the court recognizes that governmental agencies are not free from political pressure and are subject to budgetary restrictions, the BIA's lack of diligence in preparing the roll and distributing the judgment fund because of a lack of political pressure from any tribe violated the defendant's duties to the lineal descendants as trustee of the fund," Piersol wrote in 2002.

The individual Indian share of the trust fund has since grown to more than $14 million.

Court Decision:
Barry LeBeau v. US (January 24, 2007)

Court Documents:
Barry LeBeau Brief | DOJ Brief

Related Court Decision:
Casimir LeBeau v. US (October 16, 2002)

Relevant Links:
LeBeau Class Action -