High court ruling makes 'passive' trustee of U.S.
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Pitting tribal self-determination against the federal trust responsibility, the Supreme Court on Tuesday put a dramatic halt to the Navajo Nation's landmark $600 million lawsuit.

In a 6-3 decision, the justices said the largest tribe in the country failed to make a showing under Supreme Court precedents used in breach of trust cases. The majority opinion, authored by Justice Ruth Bader Ginsburg, cited a lack of "substantive law" to give rise to a full fiduciary relationship that mandates money damages if violated.

The Indian Mineral Leasing Act (IMLA), the court determined, imposes no specific trust duties on the Department of Interior. On the contrary, Ginsburg noted, it puts control in the hands of the tribes and relegates the government to a mere advisory role.

"The Secretary is neither assigned a comprehensive managerial role nor, at the time relevant here, expressly invested with responsibility to secure 'the needs and best interests of the Indian owner and his heirs,'" Ginsburg wrote.

The ruling adds a chapter to one of the longest-running and most well-known cases in Indian Country. Indian legal scholars and tribal leaders were convinced that the Reagan administration's behavior in approving a trust asset lease that was more favorable to the world's largest coal mining company than to the tribe would survive muster at the high court.

Three members of the court, in fact, said the tribe made a "powerful showing" that former Secretary Don Hodel "derailed" the approval process by instructing a Bureau of Indian Affairs subordinate to suppress an administrative decision that upheld a 20 percent royalty rate for what is considered a highly-valuable coal deposit. On behalf of the minority, Justice David Souter argued that the tribe should have been given a chance to continue.

"The purpose and predictable effect of these actions was to induce the tribe to take a deep discount in the royalty rate in the face of what the tribe feared would otherwise be prolonged revenue loss and uncertainty," he wrote in a dissent joined by Justices John Paul Stevens and Sandra Day O'Connor.

The tribe eventually accepted a 12 1/2 percent rate. The damages claimed were $600 million.

Louis Denetsosie, who awaits confirmation as Navajo Nation attorney general, said the decision was "narrow" in terms of the federal government's general trust obligations to tribes. Many had feared the court would limit or somehow change long-standing Indian law principles.

But he argued that it was "broad" with respect to the leasing act, enacted in 1938 to correct for federal misuse of tribal trust assets. "We're all very disappointed in the decision and we think that this is a situation where the Supreme Court could very well have found a trust responsibility but chose not to do so," he said in an interview from Arizona.

"We're told that the United States is just a passive trustee and won't be liable," he added. "All we have is approval authority of those leases."

Navajo Nation President Joe Shirley Jr. and Vice President Frank Dayish Jr. are in Washington, D.C., all week to lobby on tribal issues. Neither could be reached for comment. Denetsosie handled questions about the case.

Separately, the Navajo Nation has a conspiracy lawsuit against Peabody Energy and other power companies that have used coal from mines on tribal land in northeastern Arizona since the 1960s. The court yesterday did not consider whether this dispute has merit.

Department officials had no immediate comment on the ruling. Ross Swimmer, who headed the BIA at the time the lease was approved, works at the Interior in an expanded trust capacity and is nominated to oversee all trust reform activities. The Navajo Nation opposes his confirmation as Special Trustee.

Get the Decision:
Syllabus | Opinion [Ginsburg] | Dissent [Souter]

Relevant Documents:
Supreme Court Docket Sheet No. 01-1375 | Petition: United States | Reply: United States | Merits: United States | Merits: Navajo Nation | Reply Brief: United States | Joint Appendix Vol. I | Joint Appendix Vol. II

Decisions Below:
NAVAJO NATION v. US, No 00-5086 (Fed Cir. August 10, 2001)

Related Decisions:
Mitchell I: UNITED STATES v. MITCHELL, 445 U.S. 535 (1980)
Mitchell II: UNITED STATES v. MITCHELL, 463 U.S. 206 (1983)

Relevant Links:
U.S. Supreme Court -
Navajo Nation -

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