Cobell, Elouise v. Norton, Gale A.
240 F.3d 1081, 31 Envtl. L. Rep. (Envtl. Law Inst.) 20502, 345 U.S. App. D.C. 141 (2001)
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Rule of Law:
The U.S. government has a legally enforceable fiduciary duty, derived from common law trust principles and not limited by statute, to provide a complete historical accounting for Indian trust funds. An unreasonable delay in fulfilling this fundamental duty constitutes a breach that empowers a federal court to grant equitable relief, including ordering the government to develop a remedial plan and retaining jurisdiction to oversee its compliance.
Facts:
- Through the General Allotment Act of 1887 (Dawes Act), the U.S. government took control of lands allotted to individual Native Americans, placing the U.S. in the role of trustee.
- The government was responsible for managing these lands and the income generated from them, such as from leases, for the benefit of individual Indian beneficiaries through Individual Indian Money (IIM) accounts.
- For over a century, the Departments of the Interior and Treasury profoundly mismanaged these IIM accounts.
- Government records were so inadequate that officials did not know the exact number of IIM accounts, the correct balances for existing accounts, or the whereabouts of many beneficiaries.
- The Treasury Department, in accordance with its general document retention policies, regularly destroyed financial records that were necessary to conduct a full historical accounting of the IIM trust funds.
- In 1994, Congress passed the Indian Trust Fund Management Reform Act to address the chronic mismanagement, reaffirming the government's pre-existing trust responsibilities and identifying some of the duties required for their proper discharge.
- Despite the 1994 Act and numerous government reports acknowledging the problem, the government remained unable to render an accurate accounting for a majority of IIM trust beneficiaries.
Procedural Posture:
- Beneficiaries of Individual Indian Money (IIM) trust accounts filed a class-action lawsuit against the Secretary of the Interior and other federal officials in the U.S. District Court for the District of Columbia.
- The district court certified the class action and bifurcated the case into two phases: Phase I for systemic reforms and Phase II for historical accounting.
- The district court denied the government's motion to dismiss, holding that the Administrative Procedure Act waived sovereign immunity for the plaintiffs' claims for equitable relief.
- During discovery, the district court held the Secretaries of Interior and Treasury in civil contempt for failing to comply with production orders.
- After a six-week bench trial for Phase I, the district court found that the defendants had breached their fiduciary duties to the plaintiffs.
- The district court issued an order remanding the matter to the agencies to come into compliance with their duties, retained jurisdiction for five years, and ordered the defendants to file quarterly progress reports.
- The district court certified its order for interlocutory appeal, and the federal officials, as appellants, appealed to the U.S. Court of Appeals for the D.C. Circuit.
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Issue:
Does the federal government's long-standing failure to provide a complete and accurate historical accounting of Individual Indian Money (IIM) trust accounts, and its delay in implementing the necessary systems to do so, constitute a breach of its fiduciary duties that justifies judicial intervention and equitable relief under the Administrative Procedure Act?
Opinions:
Majority - Sentelle
Yes, the government's failure to provide a complete and accurate historical accounting constitutes a breach of its fiduciary duties justifying equitable relief. The fiduciary obligations owed to the IIM trust beneficiaries are not created by or limited to the 1994 Indian Trust Fund Management Reform Act; rather, they are long-standing duties rooted in the government's extensive control over Indian property and are defined by traditional common law trust principles. The most fundamental of these duties is the duty to account. The government's failure to maintain adequate records, implement necessary systems, and prevent the destruction of essential documents has resulted in an unreasonable delay in providing this accounting, which constitutes a breach of trust that is reviewable under the Administrative Procedure Act (APA). This egregious and prolonged delay empowers the district court to fashion appropriate equitable remedies, including remanding the matter to the agencies, ordering them to develop a plan for compliance, and retaining jurisdiction to ensure that the government diligently rectifies its continuing breach.
Analysis:
This decision powerfully affirms that the U.S. government's trust responsibility to Native Americans is a legally enforceable fiduciary duty of the highest order, interpreted through the lens of common law, not just a limited set of statutory commands. It establishes a significant precedent that federal courts can and will intervene under the Administrative Procedure Act to remedy unreasonable agency delay in fulfilling these fundamental trust obligations. By upholding the district court's authority to oversee the government's remedial actions, the ruling provides a potent tool for beneficiaries to hold the government accountable for historical mismanagement and ensures that remedial statutes are viewed as supplementing, rather than supplanting, the government's core, pre-existing duties.
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