Bush seeks review of long-running Navajo trust case

Monday, May 19, 2008

Six years after taking two trust cases to the U.S. Supreme Court, the Bush administration is again asking the high court to limit the federal government's fiduciary responsibilities.

In a petition filed last Tuesday, the Department of Justice sought review of one of the longest-running and most controversial breach of trust cases. The Navajo Nation says it was cheated out of at least $600 million in royalties for one of the most valuable coal deposits in the U.S.

The facts behind the case are well known. During the Reagan administration, the Bureau of Indian Affairs approved a lease with a lower royalty rate for the tribe after a lobbyist for Peabody Coal, the world's largest coal company, convinced then-Interior Department secretary Don Hodel to intervene.

Hodel was a personal friend of the lobbyist. Ross Swimmer, who now serves as head of the Office of the Special Trustee for American Indians, ran the BIA when the lease was approved.

After a lengthy battle, the tribe won a favorable ruling before the Federal Circuit Court of Appeals in August 2001. A three-judge panel ruled that Interior violated the "most basic common law fiduciary duties owned to the Navajo Nation," by approving the lease.

But the Bush administration appealed the ruling, along with another one that favored the White Mountain Apache Tribe of Arizona. Both cases were heard by the Supreme Court in December 2002, though the outcomes were different.

In the Navajo case, the justices ruled by a 6-3 vote that the tribe failed to prove Interior's actions violated federal law. The court, by a slim 5-4 margin, ruled that the Apache tribe was owed money for trust property that fell into disrepair.

Despite the negative ruling in the Navajo case, the dispute didn't end there. The March 2003 opinion only affected the tribe's case under the Indian Mineral Leasing Act and the Indian Mineral Development Act.

On remand, the Federal Circuit ruled that the tribe's case survived under a "network" of other federal laws. The September 2007 decision also said Interior's approval violated common law trust duties.

"Accordingly, this court holds that the nation has a cognizable money-mandating claim against the United States for the alleged breaches of trust and that the government breached its trust duties," Judge Arthur J. Gajarsa, a Clinton nominee, wrote in the 39-page ruling.

In its petition for review, government lawyers say the Federal Circuit got it wrong. The May 13 brief, which was signed by outgoing Solicitor General Paul D. Clement, says the court relied on laws "that have nothing to do with royalty rates for mineral leases and common law trust principles not embodied in any statute or regulation."

The brief argues that the Supreme Court's ruling foreclosed the tribe's victory in the case. For that reason alone, the government says the Federal Circuit decision should be overturned.

But the brief also says the Federal Circuit engaged in a "vast expansion" of the favorable White Mountain Apache ruling. Unless the Supreme Court addresses the dispute, the Bush administration claims Interior employees will have a cloud over their shoulder every time they make trust-related decisions.

"Beyond its impact on damage claims that are already pending, the decision below introduces grave uncertainty into the Interior Department's day-to-day activities carried out by thousands of Departmental employees nationwide," Clement wrote. "The decision improperly superimposes on the substantive and procedural framework established under applicable statutes and regulations a broad and amorphous set of trust principles whose precise content cannot be known in any particular context in advance."

The government has made similar arguments in a slew of trust cases but the courts so far have rejected that line of defense. When the Navajo and Apache cases were being reviewed, the Mississippi Band of Choctaw Indians commissioned a study that showed the dollar value of most successful breach of trust cases was actually very low.

The Navajo case, though, is considered one of the largest potential claims. With interest and damages, the tribe could be awarded over a billion dollars.

The tribe's response to the petition is due by June 12.

Supreme Court Documents:
Docket Sheet: No. 07-1410 | Petition for Certiorari

Federal Circuit Decision:
Navajo Nation v. US (September 13, 2007)

Supreme Court Decision in US v. Navajo Nation:
Syllabus | Opinion [Ginsburg] | Dissent [Souter]

Related Supreme Court Decision in US v. White Mountain Apache Tribe:
Syllabus | Opinion [Souter] | Concurrence [Ginsburg] | Dissent [Thomas]