United States v. Mitchell

Mr. Justice White,

with whom Mr. Justice Brennan and Mr. Justice Stevens join, dissenting.

In United States v. Testan, 424 U. S. 392 (1976), we held that a statute creates a substantive right enforceable against the United States in money damages only if it “ ‘can fairly be *547 interpreted as mandating compensation by the Federal Government for the damage sustained.’ ” Id., at 400 , quoting Eastport S. S. Corp. v. United States, 178 Ct. Cl. 599, 607 , 372 F. 2d 1002, 1009 (1967). The Court today holds that Testan bars a damages suit against the Government by Indian allottees, their Tribe, and their association for breach of fiduciary duties in the management of timber lands allotted under the General Allotment Act of 1887 (Act), 24 Stat. 388 , as amended, 25 U. S. C. § 331 et seq. Because I believe that the Act can fairly be interpreted as mandating compensation, I dissent.

The Act could hardly be more explicit as to the status of allotted lands. They are to be held by the United States “in trust for the sole use and benefit of the Indian,” § 5 of the Act, 24 Stat. 389 , as amended, 25 U. S. C. § 348 (emphasis added). The United States has here unmistakably assumed the obligation to act as trustee of these lands with the Indian allottees as beneficiaries. The Court holds, however, that the “trust” established by § 5 is not a trust as that term is commonly understood, and that Congress had no intention of imposing full fiduciary obligations on the United States. Congress’ purposes, it is said, were narrower: to impose a restraint on alienation by Indian allottees while ensuring immunity from state taxation during the period of the restraint.

I do not find this argument convincing. The language of the Act, which is the starting point for all statutory interpretation, Group Life & Health Ins. Co. v. Royal Drug Co., 440 U. S. 205, 210 (1979); Teamsters v. Daniel, 439 U. S. 551, 558 (1979), explicitly creates a “trust.” This language would surely be a sufficient manifestation of intent to create a trust if the settlor were other than the United States. See Restatement (Second) of Trusts §§ 23, 24 (1959) (hereinafter Restatement) ; G. Bogert, The Law of Trusts and Trustees § 45 (2d ed. 1965) (hereinafter Bogert); 1 A. Scott, The Law of Trusts § 23 (3d ed. 1967) (hereinafter Scott). The structure *548 created by the Act has all the necessary elements of a common-law trust — a trustee (the United States), a beneficiary (the Indian allottees), and a trust corpus (the designated allotment lands). See Restatement § 2, Comment h, p. 10. The United States has capacity to take and hold property in trust. Id., § 95; 2 Scott § 95 (discussing the Act). And an essential distinguishing feature of any trust, at common law, was that it entailed a

“fiduciary relationship with respect to property, subjecting the person by whom the title to the property is held to equitable duties to deal with the property for the benefit of another person. . . .” Restatement § 2 (emphasis added).

See 1 Scott § 2.5. Hence, if we are to give the words of the statute their ordinary meaning, as we commonly do when the. law does not define a statutory phrase precisely, Group Life & Health Ins. Co. v. Royal Drug Co., supra, at 211, we should find that the trust established by the Act imposes fiduciary obligations on the United States as trustee.

The legislative history of the Act does not convince me that any narrower reading is required. This statute was enacted against the backdrop of a relationship between the United States and the Indian tribes that had long been considered to “resembl[e] that of a ward to his guardian.” Cherokee Nation v. Georgia, 5 Pet. 1, 17 (1831); see also Morton v. Mancan, 417 U. S. 535, 541-542 (1974); United States v. Mason, 412 U. S. 391, 398 (1973); Squire v. Capoeman, 351 U. S. 1, 2 (1956); United States v. Payne, 264 U. S. 446, 448 (1924); United States v. Kagama, 118 U. S. 375, 382 (1886). When Congress established a “trust” for the Indian allottees it is not sensible to assume an intent to depart from these well-known fiduciary principles. Rather, as we noted in Mattz v. Arnett, 412 U. S. 481, 496 (1973), the policy of the Act was to "continue the reservation system and the trust status of Indian lands.” (Emphasis added.)

*549 The Court acknowledges that the Act did create a trust relationship between the United States and the allottee. Ante, at 542. It holds, however, that the fiduciary obligations imposed on the United States as trustee are very narrow and do not extend to the proper management of Indian timber lands. The lands covered by the Act were mostly agricultural or grazing lands, as to which it was expected that the Indian himself would reside on and manage the allotments. Not until United States v. Payne, supra, was it established that forested lands such as those of the Quinault Reservation were subject to allotment under the Act. Hence, it is said, if the Government has fiduciary duties they are solely to ensure nonalienation and immunity from state taxation.

This argument takes too narrow a view of the fiduciary duty established by the Act and of the subsequent statutory and administrative developments which clarified and fleshed out that duty. The timberlands of the Quinault Reservation cannot, as a practical matter, be managed by the Indian allottees. In such a case, where management functions must necessarily be performed by the Government, it seems most consistent with the scheme of the Act that the United States was to assume fiduciary obligations in the performance of its management functions. Subsequent Congresses have implicitly acknowledged the existence of such obligations. See 25 U. S. C. § 466 (instructing the Secretary of the Interior to manage Indian forests on a sustained-yield basis); §§ 323-325 (authorizing the Secretary to grant rights-of-way over Indian trust lands upon payment of just compensation); § 162a (authorizing the Secretary to manage tribal funds held in trust). The Secretary has promulgated detailed regulations governing the exercise of his powers under these statutes. While I do not say that the Government’s fiduciary responsibility necessarily conforms to the exact terms of these statutes and regulations, their existence at least points to the inference that as a matter of statute and administrative prac *550 tice the Government has accepted some obligations in the management of allotted timberlands.

The remaining question is whether the Government has consented to liability in damages for the breach of these obligations. Such liability, in my view, follows naturally from the existence of a trust and of fiduciary duties. It is horn-book law that the trustee is accountable in damages for breaches of trust. See Restatement §§ 205-212; Bogert § 862; 3 Scott § 205. Moreover, it would interfere with, if not defeat, the purposes of the Act if the allottees were to be remitted to a suit for prospective, equitable relief in the protection of their rights. Absent a retrospective damages remedy, . there would be little to deter federal officials from violating their trust duties, at least until the allottees managed to obtain a judicial decree against future breaches of trust. Finally, it is noteworthy that the Department of the Interior, which as the agency charged with administering the Act is entitled to considerable deference in its interpretation of the statute, e. g., Zenith Radio Corp. v. United States, 437 U. S. 443, 450 (1978); Udall v. Tollman, 380 U. S. 1, 16 (1965), apparently disagrees with the position taken by the Solicitor General in this litigation and believes that a money damages remedy should be permitted. See Letter from Departmental Solicitor Krulitz to Assistant Attorney General Moorman, Nov. 21, 1978, reprinted in App. to Brief for Respondents la-21a.

In sum, I would find that the Act creates a bona fide trust, imposes fiduciary obligations on the United States as trustee in the management of allotted timberlands, and provides a damages remedy against the United States for breach of these obligations. The Act “ ‘can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.’ ” United States v. Testan, 424 U. S., at 400 , quoting Eastport S. S. Corp. v. United States, 178 Ct. Cl., at 607 , 372 F. 2d, at 1009 . In my view, therefore, the *551 Court of Claims had jurisdiction over this action as one founded on an “Act of Congress,” 28 U. S. C. § 1491 , and as one brought by an identifiable group of Indians and “otherwise . . . cognizable in the Court of Claims,” 28 U. S. C. § 1505 . Accordingly, I respectfully dissent.