Cobell v. Babbitt
1999 U.S. Dist. LEXIS 19492, 91 F.Supp. 2d 1, 1999 WL 1581470 (1999)
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Rule of Law:
Under the Indian Trust Fund Management Reform Act of 1994, the federal government has a mandatory, judicially enforceable fiduciary duty to provide an accurate accounting for all funds held in the Individual Indian Money (IIM) trust. This primary duty includes the derivative obligations to establish written plans for retrieving missing data, retaining necessary documents, defining systems architecture, and staffing trust management functions.
Facts:
- Starting in the late 1800s with the General Allotment Act, the United States government took control of millions of acres of Native American lands, allotting parcels to individuals.
- The government placed these lands and the income generated from them (e.g., from mineral or grazing leases) into the Individual Indian Money (IIM) trust, with the United States acting as the trustee.
- For over a century, the Departments of the Interior and Treasury mismanaged the IIM trust, failing to maintain adequate records, using flawed computer systems, and creating massive backlogs in processing transactions and probates.
- Due to this mismanagement, the government could not determine correct account balances, identify all beneficiaries, or provide an accurate accounting of the trust funds.
- The Department of the Treasury followed a policy of destroying IIM-related financial records, including canceled checks, after six years and seven months, regardless of whether the trust had been reconciled.
- In 1994, Congress passed the Indian Trust Fund Management Reform Act, codifying the government's duty to provide a full and accurate accounting of all IIM funds.
- Following the Act's passage, the Secretary of the Interior and the Secretary of the Treasury still failed to develop and finalize written plans for essential functions, such as retrieving missing data from third parties, retaining all necessary records, establishing an integrated systems architecture for new computers, or adequately staffing trust operations.
- Eloise Pepion Cobell and other IIM beneficiaries filed a lawsuit to compel the government to fulfill its duties.
Procedural Posture:
- Eloise Pepion Cobell and other IIM trust beneficiaries filed a class-action lawsuit against the Secretary of the Interior and the Secretary of the Treasury in the U.S. District Court for the District of Columbia.
- The plaintiffs sought declaratory and injunctive relief to compel the defendants to perform their statutory trust duties.
- The court denied the defendants' earlier motions to dismiss and for summary judgment.
- The litigation was bifurcated into two phases, with the first phase addressing whether defendants were in breach of their trust duties and whether prospective relief was warranted.
- The District Court conducted a six-week bench trial for the first phase of the case.
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Issue:
Does the federal government's failure to create comprehensive written plans for data retrieval, document retention, systems architecture, and staffing violate its statutory trust duties to Individual Indian Money (IIM) trust beneficiaries under the Indian Trust Fund Management Reform Act of 1994?
Opinions:
Majority - Lamberth, District Judge
Yes, the government's failure to establish written plans for these essential functions violates its statutory trust duties. The Indian Trust Fund Management Reform Act of 1994 imposes a mandatory and overdue duty on the government to account for 'all funds' in the IIM trust, and this duty requires the creation of consistent, written policies and procedures for all functions necessary to render that accounting. The court found that Interior has no written plan to gather missing data from outside sources, no finalized plan for retaining necessary documents, no written plan for its computer and business systems architecture, and no plan for staffing its trust management functions. These failures are not excused by budgetary constraints or the complexity of the task, especially given the government's century-long history of mismanagement and non-compliance with congressional directives. The court declared that the government is currently in breach of these four specific planning duties, which are arbitrary, capricious, and contrary to law under the Administrative Procedure Act (APA).
Analysis:
This decision solidifies the principle that the federal government's trust responsibility to Native Americans is not merely a moral obligation but a set of specific, legally enforceable statutory duties. The court established that these duties, codified in the 1994 Act, are not discretionary and can be enforced through judicial oversight. By retaining jurisdiction and requiring quarterly reports, the court signaled a new level of judicial intervention in cases of long-standing agency recalcitrance, setting a precedent for holding the government accountable for its fiduciary failures and ensuring that reform plans are more than just empty promises.
