Cobell, Elouise v. Norton, Gale

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 15, 2004 Decided December 10, 2004

No. 03-5314

ELOUISE PEPION COBELL, ET AL.,

APPELLEES

v.

GALE A. NORTON, SECRETARY OF THE INTERIOR, ET AL.,

APPELLANTS

Appeal from the United States District Court

for the District of Columbia

(No. 96cv01285)

Mark B. Stern, Attorney, U.S. Department of Justice,

argued the cause for appellants. With him on the briefs were

Peter D. Keisler, Assistant Attorney General, Kenneth L.

Wainstein, U.S. Attorney, Gregory G. Katsas, Deputy Assistant

Attorney General, Robert E. Kopp, Thomas M. Bondy, Charles

W. Scarborough, Alisa B. Klein, Lewis S. Yelin, and Tara L.

Grove, Attorneys.

Elliott H. Levitas argued the cause for appellees Elouise

Pepion Cobell, et al. With him on the brief were G. William

Austin, III, Mark I. Levy, Dennis M. Gingold, and Keith M.

Harper. Jamin B. Raskin entered an appearance.

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Before: SENTELLE, TATEL , Circuit Judges and

WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS.

WILL I A M S, Senior Circuit Judge: Five named plaintiffs,

members of Indian tribes and present or past beneficiaries of

Individual Indian Money (“IIM”) accounts, filed a class action

in district court in 1996, alleging that the defendants--the

Secretaries of the Interior and the Treasury, and the Assistant

Secretary of the Interior for Indian Affairs--had “grossly

mismanaged” those accounts. The bulk of the funds in the

accounts are the proceeds of various transactions in land allotted

to individual Indians under the General Allotment Act of 1887,

known as the “Dawes Act,” ch. 119, 24 Stat. 388 (codified as

amended at 25 U.S.C. § 331 et seq. (§§ 331-333 repealed

2000)). The money-producing transactions in question evidently

involved such matters as sales of timber and leases of rights to

grazing, farming, or extraction of oil, gas, or other minerals.

Complaint, ¶¶ 2, 3, 5, 7-11, 17. See also Cobell v. Babbitt, 91

F. Supp. 2d 1, 9-12 (D.D.C. 1999) (“Cobell V”). (The accounts

also contain funds from a variety of other sources, see 25 C.F.R.

§ 115.702, but the allotment land transactions apparently

predominate.)

Plaintiffs’ suit draws significantly on Congress’s

findings of hopelessly inept management of the IIM accounts

and its action to remedy the resulting chaos. A 1992

Congressional report, Misplaced Trust: The Bureau of Indian

Affairs’ Mismanagement of the Indian Trust Fund, H.R. Rep.

No. 102-499 (1992), catalogued Interior’s “dismal history of

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inaction and incompetence,” id. at 5, and concluded that the

agency had “repeatedly failed to take resolute corrective action

to reform its longstanding financial management problems,” id.

at 3. In 1994 Congress moved from findings to legislation,

passing the Indian Trust Fund Management Reform Act, Pub. L.

No. 103-412, 108 Stat. 4239 (codified as amended at 25 U.S.C.

§ 162a et seq. & § 4001 et seq.) (the “1994 Act”). The 1994 Act

imposed a variety of duties on the Secretary of the Interior, most

of them relating directly to trust funds such as the IIM accounts.

See, e.g., 25 U.S.C. § 162a(d).

Even apart from the 1994 Act, the IIM funds have quite

a different legal status from the allotment land itself. Section 5

of the Dawes Act nominally made the United States trustee of

those lands, but did so solely in order to limit alienation by

Indians and to assure immunity of the lands from state taxation.

See United States v. Mitchell, 445 U.S. 535, 540-44 (1980)

(“Mitchell I”). It gave the Indian beneficiaries the right to

possess and manage the lands except insofar as alienation was

involved. Id. at 542-46. See also United States v. Navajo

Nation, 537 U.S. 488, 504 (2003) (describing Mitchell I and

applying its principles to certain unallotted lands). Accordingly,

the Supreme Court held in Mitchell I that the Dawes Act did not,

alone, establish a fiduciary duty on the part of the United States

to manage the allotted lands. 445 U.S. at 544, 546. In contrast,

the IIM funds are by statute under the full control of the United

States, to be invested for the benefit of individual Indians in

public debt of the United States or deposited in banks. See 25

U.S.C. §§ 161a(b), 162a(a).

As the label Cobell V suggests, this litigation has

generated many legal opinions, including three of this court. In

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Cobell v. Norton, 240 F.3d 1081 (D.C. Cir. 2001) (“Cobell VI”),

we affirmed the district court’s holding that the officials had

breached their fiduciary duties and remanded for further

proceedings. In Cobell v. Norton, 334 F.3d 1128 (D.C. Cir.

2003) (“Cobell VIII”), we vacated a contempt citation of

successor defendants Interior Secretary Gale Norton and

Assistant Secretary of Indian Affairs Neal McCaleb, and

reversed the district court’s appointment of a court monitor.

And finally, in Cobell v. Norton, No. 03-5262, 2004 WL

2753197 (D.C. Cir. Dec. 3, 2004), we vacated an order of the

district court directing Interior to disconnect its computers from

the Internet pending a security determination, excepting only

certain essential systems and ones that would not provide access

to Indian trust data. Those opinions, as well as the many

opinions of the district court, provide an array of background

data.

Here we address a district court injunction issued

September 25, 2003. Cobell v. Norton, 283 F. Supp. 2d 66

(D.D.C. 2003) (“Cobell X”). The decree, see id. at 287-95,

imposes obligations on the defendants in two main categories.

Duties related to “Historical Accounting” are intended to

unravel the tangle resulting from past accounting failures, see id.

at 70-211; those related to “Fixing the System” are intended to

compel the issuance of a plan for future trust administration as

a whole, see id. at 239-87. To assure fulfillment of both sets of

duties, the court appointed a court monitor to oversee

compliance and said it would retain jurisdiction until December

31, 2009. These two different sets of commands raise quite

different issues.

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“Historical Accounting,” we find, is governed by Pub. L.

No. 108-108, a provision adopted after the district court opinion

issued, which radically changes the underlying substantive law

and removes the legal basis for the historical accounting

elements of the injunction. We therefore vacate those elements.

The core of “Fixing the System,” by contrast, requires

the Interior defendants to produce a “plan” that would fix the

IIM trust management system, and requires the Interior

defendants to explain how the Department will comply with

various constraints or objectives identified by the court, such as

sixteen specific common law trust duties and tribal law.

Although we agree that Interior is subject to many of the

common law trust duties identified by the court, we find that

much of the “Fixing the System” injunction exceeds the court’s

remedial discretion because the court failed to ground it in the

defendants’ statutory trust duties and in specific findings that

Interior breached those duties. Aside from the requirement that

Interior complete its so-called “To-Be Plan,” as promised in its

Comprehensive Plan, we thus vacate the district court’s

injunction and remand for further proceedings consistent with

this opinion.

Historical Accounting

In Cobell VI we ruled that the 1994 Act, 25 U.S.C.

§ 4011(a), conferred a right on IIM beneficiaries to “a complete

historical accounting of trust fund assets,” explaining that “‘[a]ll

funds’ [as used in that provision] means all funds, irrespective

of when they were deposited (or at least so long as they were

deposited after the Act of June 24, 1938).” 240 F.3d at 1102. In

Cobell X the district court ruled that Interior must account for all

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funds deposited since 1887 and issued rules permitting some

accounting methods and prohibiting others--e.g., rejecting any

use of statistical sampling. Cobell X, 283 F. Supp. 2d at 288-90.

Defendants raise a variety of objections to the district

court’s historical accounting order, but the objection based on

Pub. L. No. 108-108 trumps the others. Adopted November 10,

2003, less than two months after the issuance of Cobell X, Pub.

L. No. 108-108 appropriates funds and provides as follows:

For the operation of trust programs for

Indians by direct expenditure, contracts,

cooperative agreements, compacts, and grants,

$189,641,000, to remain available until

expended: Provided, That of the amounts

available under this heading not to exceed

$45,000,000 shall be available for records

collection and indexing, imaging and coding,

accounting for per capita and judgment accounts,

accounting for tribal accounts, reviewing and

distributing funds from special deposit accounts,

and program management of the Office of

Historical Trust Accounting, including litigation

support: Provided further, That nothing in the

American Indian Trust Management Reform Act

of 1994, Public Law 103-412, or in any other

statute, and no principle of common law, shall

be construed or applied to require the

Department of the Interior to commence or

continue historical accounting activities with

respect to the Individual Indian Money Trust

until the earlier of the following shall have

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occurred: (a) Congress shall have amended the

American Indian Trust Management Reform Act

of 1994 to delineate the specific historical

accounting obligations of the Department of the

Interior with respect to the Individual Indian

Money Trust; or (b) December 31, 2004.

Pub. L. No. 108-108. A later sentence of the same section

provides that the statute of limitations will not begin to run on

any claim for losses or mismanagement of trust funds “until the

affected tribe or individual Indian has been furnished with an

accounting of such funds from which the beneficiary can

determine whether there has been a loss.” Id.

Thus Pub. L. No. 108-108 appears to give Interior

temporary relief from any common law or statutory duty to

engage in historical accounting for the IIM accounts. The

provision’s legislative history makes clear that Congress passed

it in response to Cobell X, to clarify Congress’s determination

that Interior should not be obliged to perform the kind of

historical accounting the district court required. The conference

committee explained that “[i]nitial estimates indicate that the

accounting ordered by the Court would cost between $6 billion

and $12 billion . . . .” H.R. Conf. Rep. 108-330, at 117. The

committee “reject[ed] the notion that in passing the American

Indian Trust Management Reform Act of 1994 Congress had

any intention of ordering an accounting on the scale of that

which has now been ordered by the Court. Such an expansive

and expensive undertaking would certainly have been judged to

be a poor use of Federal and trust resources.” Id. at 118.

“Indian country would be better served by a settlement of this

litigation than the expenditure of billions of dollars on an

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accounting.” Id. at 117. Congress thus gave itself until the end

of 2004 to come up with a legislative solution. See id. at 118.

In addition, individual legislators said in effect that the

disparity between the costs of the judicially ordered accounting,

and the value of the funds to be accounted for, rendered the

ordered accounting, as one senator put it, “nuts”: “If this is a

$13 billion fund, or somewhere in the neighborhood of $13

billion, would the Native Americans want us to begin a process

in which we spend up to $9 billion to hire accountants and

financial folks and others to sift through these accounts? I think

that is just nuts. That doesn’t make any sense at all to anybody.”

149 Cong. Rec. at S13,786 (2003) (statement of Sen. Dorgan).

See also id. at S13,785 (statement of Sen. Burns) (“If there is

one thing with which everybody involved in this issue seems to

agree, it is that we should not spend that kind of money on an

incredibly cumbersome accounting that will do almost nothing

to benefit the Indian people.”).

Plaintiffs make a vague claim that we should simply

disregard Pub. L. No. 108-108, allowing the district court to

address its effect in the first instance. But apart from an allusion

to the possibility of considering it in conjunction with post-

decree developments, they offer no reason overcoming the usual

principle that a court is to apply the law in effect at the time the

court rules. See Landgraf v. USI Film Products, 511 U.S. 244,

264 (1994). As the provision deprives the decree’s “historical

accounting” mandates of any legal basis, it is hard to see how

post-decree developments could affect the matter. As a fallback

position, plaintiffs argue that the law violates separation of

powers principles and the takings and due process provisions of

the Fifth Amendment. We reject both claims.

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First, plaintiffs assert that Pub. L. No. 108-108 amounts

to a “legislative stay” of a final judicial judgment. They cite

language in Hayburn’s Case, 2 U.S. (2 Dall.) 409 (1792), to the

effect that Article III judicial decisions cannot “be liable to a

revision, or even suspension, by the legislature.” Id. at 413

(emphasis added) (quoting decision of the circuit court for the

district of North Carolina, consisting of Iredell, Justice, and

Sitgreaves, district judge). In Plaut v. Spendthrift Farm, Inc.,

514 U.S. 211 (1995), the Court explained that Hayburn’s Case

“stands for the principle that Congress cannot vest review of the

decisions of Article III courts in officials of the Executive

Branch,” id. at 218, and held that Congress could not require a

federal court to reopen a completed case for money damages, id.

at 240. But the Court also said that an appellate court must

apply any law enacted after the judgment under review and

clearly intended to have retroactive effect. See id. at 226.

Even more critical is the distinction between statutes that

in effect reverse final judgments in suits for money damages, as

in Plaut, and ones that alter the substantive obligations of parties

subject to ongoing duties under an injunction, as in

Pennsylvania v. Wheeling & Belmont Bridge Co., 59 U.S. 421

(1855). Indeed, Plaut explicitly distinguished the latter. See

514 U.S. at 232. In Wheeling Bridge a court had entered a

decree requiring removal of a bridge pursuant to a statute

rendering it unlawful. Congress then amended the law to

legalize the bridge. The Court held that because the act of

Congress modified the law “so that the bridge is no longer an

unlawful obstruction, it is quite plain the decree of the court

cannot be enforced.” 59 U.S. at 432. For purposes of the rule

limiting congressional reversal of final judgments, an injunction

is not “final.” As we said in National Coalition To Save Our

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Mall v. Norton, 269 F.3d 1092 (D.C. Cir. 2001), applying

Wheeling Bridge, “[A]lthough an injunction may be a final

judgment for purposes of appeal, it is not the last word of the

judicial department because any provision of prospective relief

is subject to the continuing supervisory jurisdiction of the court,

and therefore may be altered according to subsequent changes

in the law.” Id. at 1096-97 (quoting Miller v. French, 530 U.S.

327, 347 (2000)) (internal quotation marks omitted).

At oral argument plaintiffs seemed more to stress the

idea that Pub. L. No. 108-108, rather than changing the

substantive law, directed the courts how to interpret or apply

pre-existing law. In Save Our Mall we assumed that under

United States v. Klein, 80 U.S. (13 Wall.) 128 (1871), such an

interpretive direction would invade the powers of the judicial

branch. 269 F.3d at 1097. Here as there, however, we do not

read the statutory language as such a directive. Some of the

phrasing--especially the statement that nothing in the 1994 Act

or any statute or the common law “shall be construed or applied

to require the Department of the Interior to commence or

continue historical accounting activities” (emphasis added)--

might be said to support such a reading. But “as between two

possible interpretations of a statute, by one of which it would be

unconstitutional and by the other valid, our plain duty is to adopt

that which will save the act.” NLRB v. Jones & Laughlin Steel

Corp., 301 U.S. 1, 30 (1937).

We believe Pub. L. No. 108-108 is most plausibly read

simply to say that the Department of Interior shall not, under any

statute or common law principle, be required to engage in

historical accounting in the specified period, i.e., all statutes and

common law rules requiring any such accounting are

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temporarily and partially repealed or modified. Compare

Robertson v. Seattle Audubon Soc., 503 U.S. 429 (1992)

(rejecting claim that statute should be construed as mandate of

judicial findings under unchanged substantive law rather than as

a change in the law). Indeed, the Supreme Court has interpreted

very similar wording--that “nothing . . . shall be construed” to

allow--as simply repealing prior legislation to the contrary. See

Carroll v. United States, 354 U.S. 394, 408-415 (1957); see also

Total TV v. Palmer Communications, Inc., 69 F.3d 298, 302-03

(9th Cir. 1995).

Finding neither an effort to mandate a particular

interpretation of the substantive law nor an impermissible

legislative modification of a final judgment, we reject plaintiffs’

separation of powers theories.

Second, plaintiffs say that Pub. L. No. 108-108 is an

unconstitutional deprivation of property, in violation of the due

process and takings clauses of the Fifth Amendment. The claim

is obscure, as plaintiffs do not explicitly identify the property

right that they believe enforcement of Pub. L. No. 108-108

would take. They do, however, mention the right to “interest

earned on trust accounts,” if only in a parenthetical to a case

citation. Plaintiffs’ Brief at 53.

But we see no reason to think Pub. L. No. 108-108 will

affect plaintiffs’ entitlement to interest. As trust income

beneficiaries are typically entitled to income from trust assets

for the entire period of their entitlement to income, and for

imputed yields for any period of delay in paying over income or

principal, see G. G. BOGERT & G.T. BOGERT , LAW OF TRUSTS

AND TRUSTEES § 814, pp. 321-25 (rev. 2d ed. 1981), we do not

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see--and plaintiffs make no effort to explain--how the

accounting delay allowed by Pub. L. No. 108-108 could deprive

them of interest or any comparable returns.

Plaintiffs’ references to temporary takings suggest that

they regard a delay in the accounting itself as a taking. But the

accounting is a purely instrumental right--a way of finding out

the size of their claims. If the moratorium imposed by Pub. L.

No. 108-108 actually delays conclusion of the accounting

(which it may not, as Congress may provide a simpler scheme

than the district court’s, while nonetheless assuring that each

individual receives his due or more), the ordinary trust principles

referred to above will automatically give the plaintiffs

compensation for the delay.

Accordingly we find no constitutional obstacle to

enforcement of Pub. L. No. 108-108 as written.

* * *

In Pub. L. No. 108-108 Congress in effect gave itself

until December 31, 2004 “to develop a comprehensive

legislative solution to what has become an intractable problem.”

H.R. Conf. Rep. 108-330, at 118. Absent Congressional action

by that date, obviously Pub. L. No. 108-108 will cease to bar the

historical accounting provisions of the injunction. We do not

address the issues that would be relevant if the district court then

reissued those provisions. At the present time, however, they

are without legal basis.

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Fixing the System

Although the defendants argue that Pub. L. No. 108-108

“deprives the injunction of any arguable legal basis”

(Defendants’ Br. at 40), the statute suspends only “historical

accounting activities.” Because certain portions of the district

court’s injunction are at least conceptually separable from the

historical accounting duty, we must address these aspects of the

order on the merits.

What we will call Part III(IV) of the injunction

(mislabeled Part III by the district court because there is already

a Part III), “Compliance with Fiduciary Obligations,” is

primarily an order that Interior complete its To-Be Plan within

90 days. Cobell X, 283 F. Supp. 2d at 290-91. The To-Be Plan,

which Interior sketched out broadly in its Comprehensive Plan,

is intended “to provide a comprehensive statement of the

manner in which trust management will be conducted after

Interior’s proposed internal changes.” Id. at 250. Given that the

Comprehensive Plan only described Interior’s intention to create

the To-Be Plan, the court said that the Comprehensive Plan was

“really only a plan to make a plan.” Id. at 284. Part III(IV) also

orders the Interior defendants to implement the Comprehensive

Plan (including the To-Be Plan). Id. at 290.

Part III(IV) of the injunction goes on to direct that

Interior’s To-Be Plan identify any portions of the plan that might

be deemed inconsistent with the common law trust duties

previously identified by the district court, and explain why the

identified portion or portions should not be considered

inconsistent with these duties. Id. at 291.

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Additionally, the court’s injunction required Interior to

file with the Court, within 120 days, a “list of tribal laws and

ordinances that the Interior defendants deem applicable to the

administration of the Trust,” including “a full statement of the

manner in which the Interior defendants consider these laws and

ordinances to affect such administration.” Id. The court also

ordered Interior to file within 90 days a detailed plan of

measures it will take to correct certain “problems with the

leasing, title, and accounting systems of the Trust,” and a plan

identifying how Interior will “distinguish principal from income

during [its] historical accounting of the Trust.” Id.

In Part IV(V) the court set forth a detailed timetable for

implementing its order. The timetable not only covers

requirements set forth elsewhere in the injunction, but also

imposes several additional requirements on Interior, including

several steps outlined in Interior’s Fiduciary Obligations

Compliance Plan of January 6, 2003. Id. at 292-93. (The

Compliance Plan was an early version of Interior’s plan to fulfill

its fiduciary obligations and was subsequently replaced by the

Comprehensive Plan. See id. at 243-44.) The court ordered that

all of these requirements be completed within roughly three to

six months. Id. at 292-93.

In Part V(VI) the court appointed a Judicial Monitor,

endowed with “all authority bestowed on special masters

pursuant to Rule 53” of the Federal Rules of Civil Procedure, “to

report on the Interior defendants’ compliance with the

provisions of this Order.” Id. at 294. According to the court,

the monitor must have “unlimited access to the Interior

defendants’ facilities and to all information relevant to the

implementation of this Order.” Id. Finally, in Part VI(VII) the

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district court retained jurisdiction over the case until December

31, 2009. Id. at 295.

The government offers a number of reasons why we

should vacate these provisions in their entirety (even to the

extent that they are completely separate from “historical

accounting”), as well as targeted arguments for vacating

individual elements. We first reject two government arguments

that, if sound, would call for vacating all “Fixing the System”

aspects of the injunction. We then address the government’s

argument that those elements violate the Supreme Court’s

holdings in Lujan v. National Wildlife Federation, 497 U.S. 871

(1990), and Norton v. Southern Utah Wilderness Alliance, 124

S. Ct. 2373 (2004), which read the Administrative Procedure

Act as limiting APA review to attacks on specific “agency

action[s]” (or the unlawful withholding of such an action), and

precluding its use for claims of broad programmatic failure. In

light of this last argument, we reverse and remand for further

action consistent with this opinion.

Government contentions applying to all elements of the

injunction apart from historical accounting. Against the

“Fixing the System” elements of the injunction, the government

argues that (1) any consideration of trust deficiencies outside the

realm of historical accounting represents an improper expansion

of the lawsuit; and (2) under Mitchell I the government is not

subject to any trust duties other than the statutorily created duty

to account. We reject both contentions.

1. Expansion of the lawsuit. Interior claims that the

district court cannot “expand[] its jurisdiction to include the

entire field of trust management” because our decision in Cobell

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VI held “that the only actionable duty was the duty to perform

an accounting.” Defendants’ Brief at 77. We made no such

ruling.

First, we are puzzled by the idea that the “fixing” issues

represent an expansion of the lawsuit. The complaint’s prayer

for relief asked for an order “construing the trust obligations of

defendants to the members of the class, declaring that

defendants have breached, and are in continuing breach of, their

trust obligations to such class members, and directing the

institution of accounting and other practices in conformity [with

the defendants’ trust] obligations.” Complaint at 26. It also

claimed a wide range of past trust violations independent of

accounting failures, e.g., that the government “[f]ailed to

exercise prudence and observe the requirements of law with

respect to investment and deposit of IIM funds, and to maximize

the return on investments within the constraints of law and

prudence,” and “[e]ngag[ed] in self-dealing and benefiting from

the management of the trust funds.” Complaint at 10. And at

an early stage the district court responded to this range of attacks

by bifurcating the case into the parts now before us--“fixing the

system” and “correcting the accounts.” Scheduling Order at 2

(May 4, 1998).

Interior misconstrues Cobell VI in arguing that our

holding there limited the issue in this case to the provision of a

historical accounting. We held that the duties identified by the

district court, such as the duty to create specific written policies

and procedures pursuant to the 1994 Act, 25 U.S.C. 162a(d)(6),

were “subsidiary” to the duty to account, Cobell VI, 240 F.3d at

1105, not that the duty to account was the only fiduciary

obligation in this case. “The 1994 Act did not create those

17

obligations any more than it created the IIM accounts. . . . [The

Act] . . . recognized and reaffirmed what should be beyond

dispute--that the government has longstanding and substantial

trust obligations to Indians, particularly to IIM trust

beneficiaries, not the least of which is a duty to account.” Id. at

1098 (emphasis added).

2. Statutory basis for fiduciary obligations. The

government quotes United States v. Navajo Nation, 537 U.S.

488 (2003), for the proposition that a purported trust beneficiary

must “identify a substantive source of law that establishes

specific fiduciary or other duties.” Id. at 506. The difficulty

facing the government, however, is that, for the IIM accounts,

such a duty is not far to seek.

In two matched pairs of cases the Supreme Court has

stated what is needed to infer creation of conventional fiduciary

duties with respect to Indian interests, sufficient to sustain

claims for monetary damages under the Indian Tucker Act, 28

U.S.C. § 1505. (The modifier “conventional” is critical, to

distinguish such duties from the concept that a trust relationship

between the government and the Indians requires that statutory

ambiguities be resolved in favor of Indians. See, e.g., Montana

v. Blackfeet Tribe of Indians, 471 U.S. 759, 766 (1985).) We

described at the outset how in Mitchell I the Court found no

enforceable fiduciary duty in the “trust” established for

allotment lands themselves, given the limited purposes of the

authority retained by the government. Conversely, in United

States v. Mitchell, 463 U.S. 206 (1983) (Mitchell II), the Court

found that where allotment land was subject to “elaborate

[government] control” over property belonging to Indians, “a

fiduciary relationship necessarily arises.” Id. at 225. Instead of

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the “bare” trust arising from the operation of the Dawes Act

alone, id. at 224, the land involved in Mitchell II was subject to

statutes and regulations asserting government control and

responsibility, and compelling the inference of a genuine trust

over the resources so controlled. A similar pair of cases applies

the same principle to non-allotment land: see Navajo Nation,

537 U.S. at 507 (rejecting inference of enforceable fiduciary

relationship because the statutes and regulations failed to give

the government full responsibility to manage the resources in

question for the benefit of the Indians), and United States v.

White Mountain Apache Tribe, 537 U.S. 465 (2003) (finding

such a responsibility in the government).

The IIM accounts fall emphatically on the “full

responsibility” side. Section 161a(b) directs that “[a]ll funds

held in trust by the United States and carried in principal

accounts on the books of the United States Treasury to the credit

of individual Indians shall be invested by the Secretary of the

Treasury, at the request of the Secretary of the Interior, in public

debt securities with maturities suitable to the needs of the fund

. . . .” 25 U.S.C. § 161a(b). The statutory mandate, added in the

1994 Act, appears in large part to codify Interior’s prior practice,

which involved the exercise of complete control over the IIM

funds. See H.R. Rep. No. 103-778, at 11-12 (1994). Thus the

statute assumes a set of funds “held” by the United States and

directs its officials’ investment of these funds.

Another provision, 25 U.S.C. § 162a(a), authorizes an

alternative investment for funds held in trust for the benefit of

individual Indians--namely, deposits in banks selected by the

Secretary of the Interior. And at the request of an individual

Indian for whom funds are held, investments may also be made

19

in obligations unconditionally guaranteed by the United States,

or in mutual funds holding only such obligations. 25 U.S.C.

§ 162a(c). Although this extremely narrow band of permissible

investments takes off the table many potential disputes over

prudent investment, it plainly assigns the government full

managerial responsibility.

Under the four cases just discussed, these statutory

mandates compel an inference of enforceable fiduciary duties.

Indeed, the district court so held early in this litigation, see

Cobell v. Babbitt, 52 F. Supp. 2d 11, 22 (D.D.C. 1999) (“Cobell

III”) (“The basic contours of defendants’ fiduciary duties under

this trust are established by the statutes [applicable to the IIM

trust] and, as in Mitchell II, construed in light of the common

law of trusts.”). Thus the trust duties that in Cobell VI we said

the 1994 Act reaffirmed, 240 F.3d at 1100, see also id. at 1098,

are the fully enforceable variety found in Mitchell II and White

Mountain Apache Tribe.

That does not mean, however, that the district court may

simply copy a list of common law trust duties from the

Restatement and then order Interior to explain how it will satisfy

them. Putting aside the litigation innovation (requiring

defendants to explain how they will cure a long list of defaults

as to which the court has made no evidence-based finding), the

court has abstracted the common law duties from any statutory

basis. Though the district court cites White Mountain Apache

Tribe to support this incorporation of common law trust duties,

see Cobell X, 283 F. Supp. 2d at 265-67, it ignores the Supreme

Court’s actual approach, which was to look to trust law to find

that a particular common law duty--“to preserve and maintain

trust assets”--was implied in a 1960 statute that, by permitting

20

government occupation, made property “expressly subject to a

trust,” White Mountain Apache Tribe, 537 U.S. at 475. Thus,

once a statutory obligation is identified, the court may look to

common law trust principles to particularize that obligation.

The district court itself so held in Cobell V, 91 F. Supp.

2d at 38, finding that it could not grant plaintiffs’ prayer for a

declaration of all trust duties arising from the IIM trust solely on

the basis of plaintiffs’ common law trust claims. The court

subsequently reversed itself on the point, saying that our

decision in Cobell VI “supercedes” the district court’s prior

observation that plaintiffs were wrong to think that once a trust

relationship was established they could automatically “invoke

all the rights that a common law trust entails.” Cobell X, 283 F.

Supp. 2d at 260 n.12. Insofar as plaintiffs may have said that,

they were wrong. In Cobell VI we actually held that the

government’s duties must be “rooted in and outlined by the

relevant statutes and treaties,” 240 F.3d at 1099, although those

obligations may then be “defined in traditional equitable terms,”

id.

Programmatic review under the APA. Plaintiffs invoke

the APA as the basis for securing review of defendants’ conduct.

Complaint at 26 (“Plaintiffs are entitled to review [of

defendants’ various breaches of trust] under 5 U.S.C. § 702.”).

Defendants argue that the district court’s “fixing the system”

orders exceed the court’s jurisdiction because they are

insufficiently pinned to discrete agency action (or inaction).

As Southern Utah notes, §§ 702, 704 and 706 of the

APA “all insist upon an ‘agency action.’” 124 S. Ct. at 2378.

This of course includes § 706(1)’s provision of authority to

21

“compel agency action . . . unreasonably delayed.” See id. at

2379 n.1. Because of the requirement of specific agency action,

the Court held initially in Lujan and again in Southern Utah that

APA review was not available--even in the face of allegations

of “rampant” violations of law--for claims seeking “wholesale

improvement of [a] program by court decree, rather than in the

offices of the Department or the halls of Congress, where

programmatic improvements are normally made.” Lujan, 497

U.S. at 891; see also Southern Utah, 124 S. Ct. at 2380. The

APA’s requirement of “discrete agency action,” Southern Utah

explained, was

to protect agencies from undue judicial

interference with their lawful discretion, and to

avoid judicial entanglement in abstract policy

disagreements which courts lack both expertise

and information to resolve. If courts were

empowered to enter general orders compelling

compliance with broad statutory mandates, they

would necessarily be empowered, as well, to

determine whether compliance was achieved--

which would mean that it would ultimately

become the task of the supervising court, rather

than the agency, to work out compliance with the

broad statutory mandate, injecting the judge into

day-to-day agency management . . . . The

prospect of pervasive oversight by federal courts

over the manner and pace of agency compliance

with such [broad] congressional directives is not

contemplated by the APA.

Id. at 2381.

22

The district court itself, earlier in this litigation,

acknowledged the risk of taking on what were really legislative

or executive functions: “The court has no present intention to

entertain a request to sit as a pseudo-congressional oversight

body that tells defendants everything that they must do to meet

their obligations programmatically. That is a role that only

Congress can fulfill.” Cobell III, 52 F. Supp. 2d at 31.

The application of Lujan and Southern Utah is

complicated here by the availability of common law trust

precepts to flesh out the statutory mandates, and, indeed, as we

said in Cobell VI, at least partially to limit the deference that we

would normally owe the defendants as interpreters of the

statutes they are charged with administering. See Cobell VI, 240

F.3d at 1101. See also id. at 1104 (noting defendants’ obligation

to “pass scrutiny under the more stringent standards demanded

of a fiduciary”) (internal citation and quotation marks omitted).

The government accepts and even endorses our

observation that interpretation of statutory terms is informed by

common law trust principles, see Defendants’ Reply Brief at 26-

27 (citing Cobell VI, 240 F.3d at 1099), but makes two key

points as to why those precepts do not eliminate the risks that

Lujan and Southern Utah saw in broad programmatic remedies.

First, it notes that while the expenditures that plaintiffs seek are

to be made out of appropriated funds, trust expenses for private

trusts are normally met out of the trust funds themselves.

Defendants’ Reply Brief at 27. Thus plaintiffs here are free of

private beneficiaries’ incentive not to urge judicial compulsion

of wasteful expenditures. Second, private trustees, even though

held to high fiduciary standards, are generally free of direct

judicial control over their methods of implementing these duties,

23

and trustee choices of methods are reviewable only “to prevent

an abuse by the trustee of his discretion.” Id. at 28 (citing

Restatement (Second) of Trusts §§ 186-87 (1959)).

While a court might certainly act to prevent or remedy

a trustee’s wrongful intermingling of trust accounts, this does

not imply that the normal remedy would be an order specifying

how the trustee should program its computers to avoid

intermingling, as opposed to, for example, barring the use of a

program that had caused forbidden intermingling or was clearly

likely to do so. See BO G E R T & BOGERT , LAW OF TRUSTS AND

TRUSTEES § 861, p. 22 (“If the trustee has been given discretion

with respect to the act in question, . . . the court will not interfere

by ordering him to take a certain line of conduct unless there is

proof of an abuse of the discretion . . . .”). “[A] court of equity

will not interfere to control [trustees] in the exercise of a

discretion vested in them by the instrument under which they

act.” Firestone Tire and Rubber Co. v. Bruch, 489 U.S. 101,

111 (1989) (internal quotation marks and citation omitted). The

availability of the common law of trusts cannot fully neutralize

the limits placed by the APA and the Court’s Lujan and

Southern Utah decisions. Compare Cobell VI, 240 F.3d at 1104

(approving district court’s expression of intent to leave issue of

choice of accounting methods, including statistical sampling, to

administrative agencies), with Cobell X, 283 F. Supp. 2d at 289

(forbidding use of statistical sampling).

That said, the question remains what specific elements

of the “Fixing the System” decree run afoul of those decisions

or are otherwise ill-founded. For the reasons explained below,

we uphold the requirement to submit a plan and otherwise

vacate and remand the case for further proceedings.

24

Plan. The core of Part III(IV) of the district court’s

injunction is its order that Interior complete a detailed plan to

fulfill its fiduciary obligations--specifically to fill in the as-yet

inchoate To-Be Plan promised in the Comprehensive Plan. This

command rests on the court’s prior order to file a

Comprehensive Plan (issued in Cobell v. Norton, 226 F. Supp.

2d 1, 162 (D.D.C. 2002) (“Cobell VII”), and on the district

court’s finding here that the incompleteness of the To-Be Plan

rendered the Comprehensive Plan only an interim step, see

Cobell X, 283 F. Supp. 2d at 284. The order thus in some

respects continues or logically extends the original order to file

the Comprehensive Plan. In Cobell VIII we upheld that order as

a device to gather information for the court, “akin to an order . . .

relat[ing] only to the conduct or progress of litigation.” 334

F.3d at 1138 (internal citation and quotation marks omitted).

Thus, standing alone, the order to file the To-Be Plan simply

enforces the prior order, which in effect required discovery of

Interior’s plans consistent with the district court’s broad case

management authority. To that extent we uphold it.

But Part III(IV) frames the plan by reference to the

Interior defendants’ bringing themselves “into compliance with

the fiduciary duties imposed upon trustees at common law, as

identified by this Court in its memorandum opinions issued this

date,” Cobell X, 283 F. Supp. 2d at 291 (referring to sixteen

specific common law trust duties enumerated by the court, id. at

267-71). And it requires Interior to “identify any portion of the

To-Be Plan that might be deemed to be inconsistent with any of

these fiduciary duties, and include a full explanation of why the

identified portion or portions should not [be] considered to be

inconsistent with any of these fiduciary duties.” Id. at 291.

25

Finally, the district court ordered Interior to implement its plan.

Id. at 290.

Thus the court evidently proposes to use the “plan” as a

device for indefinitely extended all-purpose supervision of the

defendants’ compliance with the sixteen general fiduciary duties

listed. There are three difficulties with this approach.

First, the sole findings of unlawful behavior (other than

accounting defaults) are stipulations acknowledging specific

failures measurable against specific statutory mandates. See

Cobell V, 91 F. Supp. 2d at 32-34. See also Cobell VII, 226 F.

Supp. 2d at 66 (relying on the stipulations). The various plan

filings can serve as the jumping-off point for judicial monitoring

of Interior only to the extent that the monitoring is anchored

either in these specific stipulations or in some future adjudicated

findings. While in Cobell VI we upheld a requirement that the

government produce periodic reports, we relied on specific

findings by the district court “that appellants had unreasonably

delayed the discharge of the[ir] duties by failing to ensure the

provision of a complete historical accounting.” Cobell VI, 240

F.3d at 1107; see also Cobell V, 91 F. Supp. 2d at 40 (finding

commission of four specific accounting-related breaches of the

1994 Act). The district court cannot issue enforcement

remedies--by any means--for trust breaches that it has not found

to have occurred. The sixteen common law trust duties are

pertinent only to the extent that they illuminate breaches already

found (i.e., those named in the stipulations) or adjudicated in the

future.

Second, the court’s innovation of requiring defendants

to file a plan and then to say what “might” be wrong with it

26

turns the litigation process on its head. However broad the

government’s failures as trustee, which go back over many

decades and many administrations, we can see no basis for

reversing the usual roles in litigation and assigning to defendants

a task that is normally the plaintiffs’--to identify flaws in the

defendants’ filings.

Third, in the absence of specific findings of unreasonable

delay in Interior’s performance of its fiduciary duties, the

court’s order that the defendants implement the entire

Comprehensive Plan, including the full To-Be Plan, amounts to

an order to obey the law in managing the trusts. Under this

implementation order defendants would be subject to contempt

charges for every legal failing, rather than simply to the civil

remedies provided in the APA. See, e.g., NLRB v. Express Pub.

Co., 312 U.S. 426, 435-36 (1941) (“[T]he mere fact that a court

has found that a defendant has committed an act in violation of

a statute does not justify an injunction broadly to obey the

statute and thus subject the defendant to contempt proceedings

if he shall at any time in the future commit some new violation

unlike and unrelated to that with which he was originally

charged.”).

Finally, we note that the district court used language

suggesting an intent to take complete charge of the details of

whatever plan Interior might submit: “If the court [concludes

that the plan will not satisfy defendants’ legal obligation], it may

decide to modify the institutional defendant’s plan, adopt a plan

submitted by another entity, or formulate a plan of its own that

will satisfy the defendant’s liability.” Cobell X, 283 F. Supp. 2d

at 142. This is in sharp contrast with Southern Utah’s point that

Ҥ 706(1) empowers a court only to compel an agency . . . to

27

take action upon a matter, without directing how it shall act.”

124 S. Ct. at 2379 (internal citation and quotation marks

omitted).

In sum, while we uphold the district court’s order that

Interior complete the To-Be Plan, we vacate the injunction

insofar as it directs Interior, rather than the plaintiffs, to identify

defects in its proposal and requires the agency to comply with

the Comprehensive Plan.

Tribal laws and ordinances. The district court issued

two directions about the trusts’ relations to such laws. In its

“General Provisions,” it ordered the Interior defendants to

“administer the Trust in compliance with applicable tribal law

and ordinances.” Cobell X, Part II.D., 283 F. Supp. 2d at 287.

In a later section, it ordered them to compile a list of tribal laws

and ordinances that they deemed applicable, with “a full

statement of the manner in which the Interior defendants

consider these laws and ordinances to affect such

administration.” Part III(IV).C., id. at 291.

The first of these edicts--to apply tribal law to the extent

applicable--appears meaningless, except as a general mandate to

obey the law. It gains meaning, of course, because it is

embodied in an injunction. Thus any violation is punishable by

contempt, and the mandate is impermissible on the grounds

stated above.

The instruction to list tribal laws deemed applicable

poses a different issue. On its face it seems a specification not

of Interior’s trust duties but of the court’s preferred

methodology for assuring Interior’s fulfillment of those duties.

28

As such it collides with the APA, Lujan, and Southern Utah. It

may be helpful for defendants in fulfillment of their trust duties

to compile such a list (perhaps including tribal provisions on

title, ownership, leasing, and contract for the purposes identified

by the district court, Cobell X, 283 F. Supp. 2d at 275, or

provisions on inheritance, see FELIX S. COHEN , HANDBOOK OF

FEDERAL INDI A N LAW 634 (1982 ed.)). But a list of applicable

tribal laws is no more essential to ensure that Interior

“accelerate[s]” rather than “delay[s]” fulfillment of its fiduciary

obligations, see Cobell X, 283 F. Supp. 2d at 275, than would be

a list of all federal and state laws with which Interior must

comply in administration of the IIM trusts. Although the district

court may declare the government’s legal obligations--whether

rooted in federal or tribal law--pursuant to the Declaratory

Judgment Act, 28 U.S.C. § 2201, see Cobell V, 91 F. Supp. 2d

at 38, it may not prescribe the specific steps the government

must take to comply with these obligations unless it has found

that government actions (or inactions) breached a legal duty and

that the steps ordered by the court constituted an essential

remedy.

Appointment of a court monitor. In Part V(VI), the court

“appoint[ed] a Judicial Monitor to report on the Interior

defendants’ compliance with the provisions of this Order.”

Cobell X, 283 F. Supp. 2d at 294. “The Judicial Monitor shall

be appointed pursuant to Rule 53 of the Federal Rules of Civil

Procedure, and shall possess all authority bestowed on special

masters pursuant to Rule 53.” Id. (emphasis added). Thus the

label “Monitor” is inaccurate; the authority purportedly

bestowed is really that of a “Master.” Whereas a monitor’s

“primary function is to monitor compliance,” a master’s role is

broader: to “report[] to the court and, if required, make[]

29

findings of facts and conclusions of law.” Special Project, The

Remedial Process in Institutional Reform Litigation, 78 Colum.

L. Rev. 784, 827-28 (1978) [hereinafter “Special Project”]; see

also id. at 829 (“[A] monitor’s activities are so unlike those of

a rule 53 master that the court should not [designate a monitor

a master]. . . . Monitoring rarely, if ever, proceeds by the quasi-

judicial hearings envisaged by rule 53.”). The district court also

specified that “Interior defendants shall provide the Judicial

Monitor and his or her agents with unlimited access to the

Interior defendants’ facilities and to all information relevant to

the implementation of this Order, in order that the Judicial

Monitor and his or her agents may be made cognizant of any

failures to comply with the provisions of this Order.” Cobell X,

283 F. Supp. 2d at 294.

According to the Interior defendants, the appointment of

a monitor exceeds the scope of the district court’s authority. We

agree.

In April 2001 the government consented to the

appointment of a court monitor for one year. In April 2002,

notwithstanding the government’s objection, the district court

reappointed the court monitor, a decision we reversed in Cobell

VIII. In rejecting the monitor, we wrote: “The Monitor’s

portfolio was truly extraordinary; instead of resolving disputes

brought to him by the parties, he became something like a party

himself. The Monitor was charged with an investigative, quasi-

inquisitorial, quasi-prosecutorial role that is unknown to our

adversarial legal system.” Cobell VIII, 334 F.3d at 1142. We

distinguished the monitor in this case from the permissible

appointment of a master in Ruiz v. Estelle, 679 F.2d 1115, 1161-

62 (5th Cir.) (prison reform), amended in part, reh’g denied in

30

part on other grounds, 688 F.2d 266 (5th Cir. 1982). We

explained:

The role of the special master in Ruiz was

not nearly as broad as the role of the Monitor in

this case. There the master was specifically

instructed “not to intervene in the administrative

management of [the department] and . . . not to

direct the defendants or any of their

subordinates to take or to refrain from taking

any specific action to achieve compliance.” [679

F.2d] at 1162. Most important, the court of

appeals clarified that the special master and the

monitors were “not to consider matters that go

beyond superintending compliance with the

district court’s decree,” thereby assuring the

special master would not be an “advocate” for

the plaintiffs or a “roving federal district court.”

Id.

334 F.3d at 1143 (emphasis added).

Unlike the monitor in Ruiz, we said, the monitor

appointed in 2002 could not “have been limited to enforcing a

decree, for there was no decree to enforce, let alone the sort of

specific and detailed decree issued in Ruiz and typical of such

cases.” Id.

In appointing a monitor in Cobell X, the district court

adopted almost verbatim the language we used to explain that

the court monitor in Ruiz was permissible because of its

circumscribed role. According to the district court:

31

The Judicial Monitor and his or her

agents shall not intervene in the administrative

management of the Interior defendants. The

Judicial Monitor and his or her agents shall not

direct the Interior defendants or any of their

subordinates to take or to refrain from taking

any specific action to achieve compliance with

this Order. The Judicial Monitor and his or her

agents shall not consider matters that go beyond

superintending or reporting upon compliance

with this Order.

283 F. Supp. 2d at 295 (emphasis added).

Despite the similarity of the language we used to

distinguish Ruiz and the language used by the district court to

limit the monitor’s authority, there is a significant difference

between the two cases. The “Fixing the System” part of the

present injunction (especially given the excisions already

discussed) is not nearly as complex as the specific relief ordered

in Ruiz (embodied partly in two consent decrees appearing at

Ruiz, 679 F. 2d at 1127-28, 1165-68, 1174-84, partly in a hotly

contested order summarized id. at 1164). If at some future time

the non-accounting aspects of the case culminate in a true

remedial injunction with specific duties tied to specific legal

violations cognizable under the APA, the usual latitude for

masters to oversee compliance would come into play. See

United States v. Microsoft, 147 F.3d 935, 954 (D.C. Cir. 1998).

Alternatively, appointment of a true judicial monitor, with duties

focused on determining just how defendants’ management of

their trust duties is proceeding, might become appropriate.

“Monitors are appropriate if the remedy is complex, if

32

compliance is difficult to measure, or if observation of the

defendant’s conduct is restricted.” Special Project, 78 Colum.

L. Rev. at 828. Compare Cobell X, 283 F. Supp. 2d at 218

(observing that Interior’s quarterly reports have given an overly

optimistic and inaccurate portrait of their reform efforts).

Additional provisions. The injunction imposes several

additional duties on defendants. For example, the court revived

elements of Interior’s Compliance Plan, which was replaced by

its Comprehensive Plan, Cobell X, 283 F. Supp. 2d at 244, to

require Interior to “request legislation from Congress to satisfy

part of its imbalance of Trust fund balances with” Treasury. Id.

at 292. The court also ordered Interior to “request an expansion

of the fiscal year 2004 annual audit to include all funds held in

trust by the United States for the benefit of an individual Indian”

and invested pursuant to 25 U.S.C. § 162a, id., among numerous

other requirements. Thus, rather than acting to assure that

“agency action” conforms to law, the court has sought to make

the law conform to the court’s views as to how the trusts may

best be run. The limits on the court’s remedial authority,

discussed at length above, apply equally to these additional

requirements in the injunction. The court’s authority is limited

to considering specific claims that Interior breached particular

statutory trust duties, understood in light of the common law of

trusts, and to ordering specific relief for those breaches. To the

extent Interior’s malfeasance is demonstrated to be prolonged

and ongoing, more intrusive relief may be appropriate, as we

held was the case in Cobell VI for the government’s failure to

provide a statutorily required accounting. Yet the court may not

micromanage court-ordered reform efforts undertaken to comply

with general trust duties enumerated by the court, and then

33

subject defendants to findings of contempt for failure to

implement such reforms.

* * *

The “historical accounting” elements of the injunction

are vacated because of the mandate of Pub. L. No. 108-108, and

the remainder of the injunction, aside from the requirement that

Interior complete its To-Be Plan, is vacated and remanded to the

district court for revisions not inconsistent with this opinion.

So ordered.