Court awards $13.8M for breach of trust

WEDNESDAY, JULY 3, 2002

After a decade-long fight, the Confederated Warm Springs Tribes of Oregon are finally due money for the federal government's mismanagement of their trust assets.

In an unpublished opinion, U.S. District Judge Robert Hodges Jr. awarded the tribes $13.8 million in damages for an improperly handled timber sale. The decision was filed in the Court of Federal Claims on June 20.

The tribes almost missed out on the chance to collect at all. In 1999, Hodges ruled that the Bureau of Indian Affairs violated its trust duties but said money couldn't be awarded because the tribes were compensated at the time.

A federal appeals court in May 2001 disagreed and set aside the decision. A three-judge panel of the Federal Circuit Court applied common law trust standards and directed Hodges to determine how to correct the BIA's breach.

"Under trust law generally, a beneficiary is entitled to recover damages for the improper management of the trust's investment assets," Circuit Judge William Curtis Bryson wrote for the majority.

The dispute centers on 1990 sale on the Warm Springs Reservation. Logging was halted the year prior because the timber harvest exceeded the amount specified in a 20-year tribal management plan.

But a winter storm damaged some of the forest and both the tribes and the BIA agreed to a harvest. As soon as the sale went through, however, tribal officials questioned its integrity/

Among other issues, the tribes believed they weren't properly compensated for the amount of timber that was cut. Instead of an expected 3 million board feet, the BIA harvested 23 million board feet.

Also, since a moratorium on overseas exports was to be lifted in 1992, the tribes claimed the BIA cut down perfectly healthy trees that could have been sold later. At the time, the international rate was twice the domestic.

The Warm Springs case was one of several that tribes won in the Federal Circuit. But the Bush administration appealed victories to award the Navajo Nation at least $600 million and the White Mountain Apache Tribe about $14 million in breach of trust cases.

The Supreme Court will hear those two cases this winter. If a judgment is favorable to the government, Solicitor General Ted Olson could seek to reduce or vacate the Warm Springs award.

Deputy Interior Secretary J. Steven Griles said last week at a Senate hearing that the government is looking to the Court to define its trust law standards.

Relevant Decisions:
THE CONFED. TRIBES OF THE WARM SPRINGS RESERV. OF OREGON v. US, No 00-5002 (Fed Cir. May 10, 2001)

Related Stories:
Confederated Tribes of the Warm Springs Reservation - http://www.warmsprings.com