ANOTHER JUDGE EXCORIATES DEPARTMENT OF THE INTERIOR OVER INDIAN LANDS TRUST CASE

By Ronald A. Goodbread, Legal Editor

In a 165-page opinion, issued on January 30th, Judge James Robertson of the U.S. District Court here took up where his controversial colleague, Judge Royce Lamberth, left off two years ago in excoriating the Interior Department over its handling of billions of dollars in Native-American land claims stemming from a long-standing class-action lawsuit against it.

The suit, sounding in equity, sought an accounting for billions of dollars in revenues from timber, oil, and gas revenues deriving from lands held in trust for the various Indian tribes since the implementation of the Dawes Act of 1887, a brazen enactment designed “to erase reservation boundaries and force assimilation of Indians into society at large” via a policy of “coercive assimilation.” The Government retained title to the lands and administered the concessions for their natural resources, the proceeds of which were supposed to be distributed among over 300,000 trust beneficiaries. In 1996, Elouise Cobell, a member of the Blackfoot tribe of Montana, filed suit to require the Government, which waived sovereign immunity, to conduct an accounting and report the results. After 11 years of litigation, simply put, there are no results.

Judge Lamberth, the original judge in the case, once termed the DOI’s handling of the matter “the gold standard for federal government mismanagement for more than a century.” The acrimony between Judge Lamberth and representatives of the Interior Department became so intense, prompting numerous citations for contempt, that the U.S. Court of Appeals reversed several of his findings and ordered the case re-assigned in December 2006. Taking up what he termed his predecessor’s “heroic stewardship” of this mammoth litigation, Judge Robertson’s issued a written opinion — the 20th in the case so far— which not only found that the DOI had committed “an irreparable breach of fiduciary duty,” but also concluded that it had made such a mess of things, whether purposely or through incompetence, that “it is now clear that completion of the required accounting is an impossible task.”

In an agonizing recounting of DOI’s repeated attempts and failures to locate, organize, and catalog the records, the Court related that innumerable volumes of those records had been routinely destroyed over the years as a matter of the Government’s storage policy, other transactions had not even been recorded since the early 1930’s, and still others were impossible to trace because there had been so much “fractionation” of the lands due to multiple inheritances and escheatments. Interior’s own estimates are that over 775,000 fractionalized land interests escheated to the detriment of trust beneficiaries as of 1997.

Even so, the massive accumulation of records that were discovered is daunting, consisting of over 10,000 cubic feet of documents which, if shelved end-to-end, would reach an estimated 43 miles. In attempting to organize these records DOI has been through minimum of seven “electronic organization programs” since 1992, all of which have been resounding failures. One inspector termed them large “islands of information without a ferry in between.” It is estimated that the latest program, started in 2003, alone would cost $2.71 million to complete, with no guarantee of success. To bring the entire project to any kind of meaningful fruition would take nearly $3 billion, according to another estimate. Judge Robertson frankly concluded that “[t]aking cost into account, Interior’s 2007 Historical Accounting Plan will not result in an adequate accounting that is compliant with the … [law], prior Cobell opinions, and other precedent.”

In March of last year, the Federal Government offered $7 billion dollars to settle the suit, which claims $100 billion in losses. Senator Byron Dorgan, D-N.D., Chairman of the Senate Committee on Indian Affairs (which includes current Republican presidential front-runner Senator John McCain of Arizona) vowed to conduct hearings on the matter. Thus far, however, with a full knowledge of the conduct of this litigation and the morass of claims attendant to the issue, Congress has repeatedly refused to appropriate additional funds to resolve the problem. Judge Robertson’s ruling has been the only progress made since.

On this record, Judge Robertson found that the DOI “has an abysmal record of failing to prioritize the maintenance and preservation of trust documents.” At the same time, however, he bluntly stated that “it would indeed be ‘nuts’ to spend several billion dollars to account for a trust fund worth around the same amount,” given the limits that Congress has already placed on the project. Nevertheless, the Judge expressly declined to rule that “such an accounting is hopeless” but concluded instead “that a remedy must be found for the Department’s unrepaired, and irreparable, breach of its fiduciary duty over the last century.” A further hearing on the matter has been scheduled for early March.

The case is Cobell v. Norton/Kempthorne, C.A. No. 96-1285 (Jan. 30, 2008) and may be located and downloaded from the Court’s web site at https://ecf.dcd.uscourts.gov/cgi-bin/Opinions.pl?2008.

Printed in the February 20, 2008 edition of the DWLR.