Petitioners Brief — United States v. Navajo Nation

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No. 01-1375 i Wie

In the Supreme Court of the Gnited States

UNITED STATES OF AMERICA, PETITIONER

NAVAJO NATION

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES

THEODORE B. OLSON

Solicitor General

Counsel of Record

THOMAS L. SANSONETT!

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

JEFFREY BOSSERT CLARK

Deputy Assistant Attorney

General

GREGORY G. GARPE

Assistant to the Solicitor

General

Topp S. AAGAARD

R. ANTHONY ROGERS

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

The Indian Mineral Leasing Act of 1938 (IMLA), 25

U.S.C. 396a et seq., and regulations thereunder, author-

ize an Indian Tribe, with the approval of the Secretary

of the Interior (Secretary), to lease tribal lands for min-

ing purposes. The question presented is:

Whether the court of appeals properly held that the

United States is liable to the Navajo Nation for up to

$600 million in damages for breach of fiduciary duty in

connection with the Secretary's approval of an amend-

ment to an existing mineral lease, without finding that

the Secretary had violated any specific statutory or

regulatory duty established pursuant to the IMLA.

(I)

TABLE OF CONTENTS

Page

Opinions b. low ~_ 1

Jurisdiction - 1

Statutory provisions involved ..............00ssssseseeeeeeneneneneees ,

Statement = 2

RATT CE GRICE, ceccscscscnscscsstnccscsetscscsnnssesssssseesesesesnssemnnsnenane 16

Argument:

The United States has not violated any “Act of

Congress” or “regulation of an executive department”

that would subject it to money damages for the alleged

RD CE CIITS ccnczszeczseszsezsccesssssessnszccscsnsssensesesnsesnenenees 21

A. The United States is immune from suit

except as clearly authorized by Congress ................. 21

B. The Tribe has not shown the violation of any

statute or regulation that would mandate the

payment of damages by the government if

IG ccnsnsssasensszsnscsceseszszsnssensnssssessssensenssnsenssnsnesesnsnsneens 26

C. Federal involvement with respect to Indian

mineral leasing does not in itself subject the

United States to the Tribe’s damages claims .......... 40

D. The common law of trusts does not supply a

right to recover damages against the

United States under the Tucker Act ...................0. 46

IID ‘ccctsressnnnssentpesinennemnen 50

TABLE OF AUTHO.ITIES

Cases:

Alexander v. Sandoval, 532 U.S. 275 (2001) ..............c00 24

Army & Air Force Exch. Serv. v. Sheehan, 456

CED, TE CD ecensnsnssssessnszscscsnsesesessssnsserezsssssesssssnnssnsnsnensnsasnse 22, 23

Assiniboine & Sioux Tribes of the Fort Peck Indian

Reservation v. Board of Oil & Gas Conservation,

Ca 42

(IIT)

IV V

Klamath & Moadoc Tribes of Indians v. United States,

296 U.S. 244 (1935) 47

Cases—Continued: Page ~ Cases—Continued: Page

BHP Minerals Int'l Inc., 139 Interior Bd. Land Appeals Lane v. Petia, 518 U.S. 187 (1996) 36

269 (1997) 42 Mescalero Apache Tribe v. Jones, 411 U.S. 145

Bivens v. Six Unknown Named Agents of Federal (1973) 48

Bureau of Narcotics, 403 U.S. 388 (1971) 24 Montana v. Blackfeet Tribe of Indians, 471 U.S.

Blackfeather v. United States, 190 U.S. 368 (1908) ......... 47 759 (1985) 48

Bowen v. Massachusetts, 487 U.S. 879 (1988) ....ccccccceceooee 23, 36 Navajo Nation v. Peabody Holding Co., No. 99-469,

Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1 2002 WL 1457121 (D.D.C. June 24, 2002) “ 5

(1831) 47 Nevada v. United States, 463 U.S. 110 (1983) .......csssse- 46

College Sav. Bank v. Florida Prepaid Post- OPM v. Richmond, 496 U.S. 414 (1990) 23, 24

secondary Educ. Expense Bd., 527 U.S. 666 (1999) ....... 21 United States v. Alire, 73 U.S. (6 Wall.) 573 (1868) ......... 21

Correctional Servs. Corp. v. Malesko, 122 S. Ct. 515 United States v. Hopkins, 427 U.S. 123 (1976) ......vvecss+»-« 32

(2001) . 24 United States v. Kagama, 118 U.S. 375 (1886) .....-.-.-.--0--- 47, 49

Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 United States v. King, 395 U.S. 1 (1969) 21

(1989) .... 19, 38, 42 United States v. Mitchell: .

Crow Tribe of Indians v. Montana, 650 F 2d 1104 463 U.S. 206 (1983) —

(9th Cir. 1981), amended, 665 F 2d 1390, cert. 445 U.S. 535 (1980) ——

denied, 459 U.S. 916 (1982) 42 United States v . Mottaz, 476 U.S. 934 (1986) .....sovsossee 47

District No. 1, Pac. Coast Dist., Marine Eng’rs United States v. Nordic Village, Inc., 503 U.S. 30

Beneficial Ass'n v. Maritime Admin., 215 F.3d 37 (1992) 21

(D.C. Cir. 2000) 36 United States v. Sherwood, 312 U.S. 584 (1941) .-ccccsss- 21

Duquesne Light Co. v. Barasch, 488 U.S. 299 United States v. Testan, 424 U.S. 392 (1976) ............ 22, 23, 26,

(1989) 33 27, 31, 32

Eastern Transp. Co. v. United States, 272 U.S. 675 United States v. Vonn, 122 S. Ct. 1043 (2002) ....occcvsenee 48

(1927) 21 Urban Indian Council, Inc. v. Acting Deputy

Eastport S.S. Corp. v. United States, 372 F 2d 1002 Assistant Secretary, 11 Interior Bd. Indian Appeals

(Ct. Cl. 1967) 23 146 (1983) =

FDIC v. Meyer, 510 U.S. 471 (1994) 24 White Mountain Apache Tribe v. United States, 249

FPC v. Hope Natural Gas Co., 320 U.S. 591 F.3d 1364 (Fed. Cir. 2001), cert. granted, No. 01-1067

(1944) 33 (Apr. 22, 2002) 13, 21

Gonzaga Univ. v. Doe, 122 S. Ct. 2268 (2002) ......... 16, 24, 32 Vermont Yankee Nuclear Power Corp. v. Natural

Kerr-McGee Corp. v. Navajo Tribe, 471 U.S. 195 Res. Def. Council, Inc., 435 U.S. 519 (1978) 17, 31

(1985) 9-10

VI Vil

Statutes and regulations: Page Regulati Continued: Page

Administrative Procedure Act, 5 U.S.C. 551 et seg. .......... 30 : 27

5 US.C. 553(c) 36 —_— ony 98

whany~ame 36 Section 211.2 (1985) . 3, 6, 38, 39

General Allotment Act, 25 U.S.C. 348 24 Section 211.14(a) (1985) 3

Indian Mineral Leasing Act of 1938, 25 U.S.C. 396a Section 211.15(c) (1985) 3, 5, 34, 38

et seq.: ; 15(c) (1 38

25 U.S.C. 396a (§ 1) 2, 3, 18, 19, 37, 40, 41 a ae a 45

Sey 3 Section 211.17(c) (1987) 45

25 U.S.C. 396b 18, 37 Section 211.26 (1985) 3

25 U.S.C. 396d 3, 49 Section 211.43(aX2) (2001) 3, 34

= Cae 3 Section 211.43(b) (2001) 3, 18, 37, 38, 45

Indian Self-Determination and Education Assistance 43 C.F.R. (1985):

Act, 25 U.S.C. 450 48 Section 4.5(a\(1) 3

Indian Tucker Act, 28 U.S.C. 1505 2, 22, 23 Section 4.5(a)(2) 8, 31

Mineral Leasing Act, 30 U.S.C. 207(a) 5 Section 4.24 —

Tucker Act: Section 4.27(b)

ms A — 1491(a)(1) ......000e0000 2, 16, 17, 22, 23, 29, 46, 47-48 78 Cong. Ree. 11,125 (1934) 48

14, 44 56 Fed. Reg. (1991):

25 U.S.C. 406(a) 27, 45 ~ — _ia aaeae 46

25 U.S.C. 413 27 .. 58.736 46

25 U.S.C. 466 27 H.R. Rep. No. 1872, 75th Cong., 3d Sess. (1988) «0... 42, 44

42 U.S.C. 1983 32 H.R. Rep. No. 1466, 79th Cong., 1st Sess. (1945) .....--.- 22, 27

25 C.F.R.: Minerals Mgmt. Serv., U.S. Dep't of the Interior,

Pt. 2 (2001) 30 General Federal and American Indian Mineral Lease

Pt. 2 (1985) 30 Terms <http://www.mrm.mms.gov/Stats/pdfdocs/

Section 2.3 lse_term.

Section 2 Xa) ‘ = S. Rep. 4 T5th Cong., Ist Sess. (1987) ......eosessssssssse 42, 44

Section 2.11 6

Section 2.12 6

Section 2.19 -

Section 2.19(b) 35

Section 2.20 36

Pt. 163 (1985):

Section 163.4 27

In the Supreme Court of the United States

No. 01-1375

UNITED STATES OF AMERICA, PETITIONER

NAVAJO NATION

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FEDERAL CIRCUIT

BRIEF FOR THE UNITED STATES

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-30a)

is reported at 263 F.3d 1325. The opinion of the Court

of Federal Claims (Pet. App. 31a-79a) is reported at 46

Fed. Cl. 217.

JURISDICTION

The judgment of the court of appeals was entered on

August 10, 2001.’ A petition for rehearing was denied

1 The petition incorrectly states (at 1) that the judgment of

the court of appeals was entered on August 24, 2001, rather than

August 10, 2001 (see Pet. App. la). On September 24, 2001, the

government filed a request for an extension of time within which

to file a petition for rehearing. The court of appeals granted that

request on September 25, 2001, and extended the time for filing a

petition for rehearing until October 9, 2001. The government filed

a petition for rehearing on October 9, 2001.

(1)

on November 16, 2001. On February 4, 2002, the Chief

Justice extended the time within which to file a petition

for a writ of certiorari to and including March 15, 2002.

The petition for a writ of certiorari was filed on March

15, 2002, and was granted on June 3, 2002. The juris-

diction of this Court is invoked under 28 U.S.C. 1254(1).

STATUTORY PROVISIONS INVOLVED

1. Section 1 of the Indian Mineral Leasing Act of

1938, 25 U.S.C. 396a, states:

On and after May 11, 1938, unallotted lands with-

in any -Indian_reservation or lands owned by any

tribe, group, or band of Indians under Federal jur-

isdiction, except those specifically excepted from

the provisions of sections 396a to 396g of this title,

may, with the approval of the Secretary of the

Interior, be leased for mining purposes, by author-

ity of the tribal council or other authorized spokes-

men for such Indians, for terms not to exceed ten

years and as long thereafter as minerals are pro-

duced in paying quantities.

2. Other pertinent statutory provisions—the Tucker

Act, 28 U.S.C. 1491(a)(1), and Indian Tucker Act, 28

U.S.C. 1505—are set forth in the petition appendix (at

86a).

STATEMENT

This case concerns the potential liability of the

United States in money damages for alleged breach of

trust in connection with the government’s approval

under the Indian Mineral Leasing Act of 1988 (IMLA)

of amendments to a mineral lease agreed to by an

Indian Tribe and a private lessee.

1. The United States, through the Secretary of

the Interior (Secretary), regulates certain aspects of

leasing on Indian tribal lands pursuant to the

rE USC. 396a-396g. The IMLA authorizes an

Indian Tribe, “with the approval of the Secretary, to

lease unallotted tribal lands for mining purposes for a

term not to exceed ten years and as long thereafter as

minerals are produced in paying quantities. 25 U.S.C.

396a. The IMLA also provides for the Secretary to

promulgate rules and regulations governing mineral

“operations,” 25 U.S.C. 396d, and to authorize other

officials in the Bureau of Indian Affairs (BIA) to ap-

prove Indian mineral leases, 25 U.S.C. 396e.

The Secretary has promulgated regulations imple-

menting the IMLA. The regulations in effect during

the events at issue in this case provided that “Indian

tribes * * * may, with the approval of the Secretary

* * * or his authorized representative, lease their

lands for mining purposes.” 25 C.F.R. 211.2 (1985). The

regulations established minimum royalty rates for

minerals subject to leasing, including, for coal, “not less

than 10 cents per ton of 2,000 pounds.” 25 C.F.R.

211.15(c) (1985).2. The regulations provided that an

annual rental payment of not less than $1 per acre was

required. 25 C.F.R. 211.14(a) (1985). And the regula-

tions provided that lessees could not assign or transfer

a lease without the Secretary’s approval, 25 C.F.R.

211.26 (1985), and established various other require-

ments concerning mineral leases.

2. The Navajo Nation, a federally recognized Indian

Tribe, occupies the largest Indian reservation in the

2 , the minimum royalty rate on new leases for coal was

wien ee 1/2 percent of the value of production produced

and sold from the lease.” 25 C.F.R. 211.43(a)(2) (2001). The regula-

tions further state, however, that “[a] lower royalty rate shall be

allowed if it is determined to be in the best interest of the Indian

mineral owner.” 25 C.F.R. 211.43(b) (2001).

United States. The Tribe’s reservation comprises more

than 25,000 square miles, and spans parts of northeast

Arizona, northwest New Mexico, and southeast Utah.

Over the past century, large deposits of minerals—

including coal, oil, and gas—have been discovered on

the Tribe’s reservation lands, which are held for the

Tribe in trust by the United States. Each year, the

Tribe receives tens of millions of dollars in royalty

— pursuant to mineral leases that it has entered

nto with private companies in accor

IMLA. See C.A. App. D256. A2262. sesidibiesad as

a. Peabody Coal Company (Peabody) mines coal

the Tribe’s lands pursuant to leases ptemnne by the

IMLA. Lease 8580 was executed by the Tribe and Pea-

body (through its predecessor in interest, the Sentry

Royalty Company), and was approved by the Secretary

in 1964. J.A. 188-244. The lease established a royalty

rate of 37.5 cents per ton of coal, but provided that “the

royalty provisions of this lease are subject to rea-

sonable adjustment by the Secretary of the Interior or

his authorized representative” on the 20-year anniver-

sary of the lease, and every ten years thereafter. J.A

194. In 1966, Peabody (through Sentry Royalty Com-

pany) entered into two other coal leases, Lease 9910

and Lease 5743. Those leases contained somewhat

higher royalty rates than Lease 8580, see C.A. App

A2678, but did not contain a provision subjecting the

rates to reasonable adjustment by the Secretary.’

3 Leases 9910 and 5743 cover coal located within a former joi

use area shared by the Navajo Nation and the Hopi Tribe. "The

Navajo Nation and Hopi Tribe split the revenues received from

those leases. See C.A. App. A1988, A2678. Leases 9910 and 5743

paid royalties of 6.67 percent for coal sold off the leases and 5.33

percent for coal sold on the leases. Jd. at A2678.

b. In the 1970s, the Tribe sought to renegotiate its

existing mineral leases with its private lessees, in-

cluding Peabody, to increase the royalty payments

generated by those leases. As the 20-year anniversary

of Lease 8580 approached, the royalty rate established

by that lease of 37.5 cents per ton was “equivalent to

about 2% of gross proceeds” on the lease. Pet. App. 2a.

That rate was considerably higher than the minimum

royalty rate (ten cents per ton) established by the

IMLA regulations for coal leases subject to approval by

the Secretary, 25 C.F.R. 211.15(c) (1985), but at the

same time it was less than the minimum rate (12 1/2

percent of gross proceeds) that was set by Congress in

1977 for coal mined on federal lands under the Mineral

Leasing Act. See 30 U.S.C. 207(a); Pet. App. 38a.‘

In March 1984, the Chairman of the Navajo Tribal

Council wrote to the Secretary and asked him to adjust

the royalty rate under Lease 8580, in accordance with

the term of that lease allowing a “reasonable adjust-

ment” by the Secretary after 20 years. C.A. App. A37 5-

A376. The Chairman claimed that an increase sub-

stantially in excess of 12 1/2 percent was warranted in

light of the quality of the coal, but that “simple equity”

indicated that the royalty rate should not be less than

the 12 1/2 percent provided for under federal coal

leases. Id. at A375. The Chairman also sought the

4 Twelve and one-half percent is the customary royalty rate

for coal leases on federal lands for leases issued or readjusted after

1976. See Minerals Mgmt. Serv., U.S. Dep’t of the Interior,

General Federal and American Indian Mineral Lease Terms

<http://www.mrm.mms.gov/Stats/pdfdocs/lse_term.pdf.>. All In-

dian coal leases that were executed or readjusted during the

period from 1985 to 1996 had a royalty rate at or below 12 1/2 per-

cent. Navajo Nation v. Peabody Holding Co., No. 99-469, 2002

WL 1457121, at *5 (D.D.C. June 24, 2002).

Secretary’s “assistance and support in securing the

voluntary adjustment” in the royalty rates under

mineral leases that did not contain an adjustment clause

protec vs but that, in the Chairman’s view

con rates that were “ 1 ” Id.

yy ere “unfair and inequitable.” Jd.

In June 1984, the Area Director of the Bureau of

Indian Affairs for the Navajo Area, Donald Dodge

acting pursuant to the Tribe’s request, unilaterally

adjusted the royalty on Lease 8580 from 37.5 cents per

ton to 20 percent of gross proceeds. The 20 percent

rate was well in excess of the royalty rate (12 1/2

percent of gross proceeds) governing federal coal

leases. The Area Director reached his decision on the

royalty adjustment in consultation with the Tribe. See

C.A. App. A2685. The Area Director then notified

Peabody of his adjustment. Pet. App. 2a-3a; J.A. 8-9.

c. Peabody appealed the Area Director’s decision

pursuant to 25 C.F.R. 211.2 (1985), challenging, inter

alia, the Area Director’s failure to consult Peabody

before reaching his decision (C.A. App. A2288-A2315).°

The appeal was taken under consideration by Acting

Assistant Secretary of the Interior for Indian Affairs

John Fritz. Shortly thereafter, the Tribe broke off

° The Department of the Interior’s regulations allowed “any

interested party adversely affected by a decision * * * of an Area

Director of the Bureau of Indian Affairs not approved by the

Secretary before the decision was made” to file an administrative

appeal. 25 C.F.R. 2.3(a) (1985). The appellant was required to

serve the notice of appeal on any other known interested parties

25 C.F.R. 2.11 (1985), who had the right to file a response 25

C.F.R. 2.12 (1985). In this case, Peabody (and the utility com-

panies that used coal produced under the lease) appealed the Area

Director’s royalty adjustment decision to the Commissioner of

Indian Affairs. The Tribe filed an answer brief in opposition to

those appeals. C.A. App. A477-A483.

negotiations with Peabody on the proposed amend-

ments. Pet. App. 39a-40a.

While its appeal was pending, Peabody wrote to

Department of the Interior (DOT) officials, asking them

to postpone a decision on its appeal to allow for a nego-

tiated settlement with respect to a full range of issues,

including the royalty rate adjustment to Lease 8580.

C.A. App. A2686. On July 5, 1985, a Peabody Vice

President wrote to Secretary of the Interior Donald

Hodel, reporting that following Peabody's appeal of the

Area Director’s decision, the Tribe continued to negoti-

ate with Peabody toward an agreement providing for

a royalty rate of 12 1/2 percent. The Peabody Vice

President stated, however, that the Tribe apparently

had received word of an imminent decision in the

Tribe’s favor in the pending appeal, and that the Tribe

was suspending negotiations until DOI ruled on the

appeal. The Peabody Vice President asked the

Secretary to assume jurisdiction of its appeal and either

postpone a decision in the appeal to allow a negotiated

resolution or rule in Peabody’s favor. J.A. 98-100. A

copy of that letter was sent to the Tribe. J.A. 100.

In response, the Chairman of the Tribe wrote to the

Secretary, stating that negotiations had become stalled

over such issues as Peabody’s request to mine addi-

tional coal and “very difficult” other matters, and

expressing the view that, contrary to Peabody’s asser-

tion, he was “not confident” that a voluntary agreement

could be reached on the royalty rate adjustment and

other lease terms. J.A. 119-121. The Chairman urged

the Secretary to reject Peabody’s request and see to it

that the Department issued a decision on the appeal in

the Tribe’s favor. J.A. 121; Pet. App. 40a.

Peabody retained Stanley Hulett, a former aide and

friend of Secretary Hodel, and sought a meeting with

the Secretary. The record indicates that Hulett and

Peabody representatives met with Secretary Hodel in

July 1985. J.A. 102. On July 17, 1985, Secretary Hodel

sent a memorandum to Acting Assistant Secretary

Fritz (J.A. 117-118), which had been provided to the

Secretary by Peabody, “suggest[ing]” that he inform

the parties “that a decision on th[e] appeal is not

imminent and urge them to continue with efforts to re-

solve this matter in a mutually agreeable fashion.” J.A

117. The Secretary’s memorandum explained that

[aJny royalty adjustment which is imposed on those

parties without their concurrence will almost certainly

be the subject of protracted and costly appeals,” and

could well impair the future of the contractual relation-

ship between the parties. Jbid. The Secretary assured

the Acting Assistant Secretary, however, “that this

memorandum is not intended as a determination of the

merits of the arguments of the parties with respect to

the issues which are subject to the appeal.” J.A. 118.°

d. The Tribe “has denied contemporaneous knowl-

edge of the Hodel-Hulett meeting or its results,” and at

most “admit[s] that ‘someone from Washington’ had

6 The court of appeals appears to have believed that Acti

. . =

——— Secretary Fritz had decided Peabody’s appeal in favor of

e Tribe, but then withdrew that decision in response to the

Secretary's July 1985 memorandum. Pet. App. 3a. Although a

draft decision in favor of the Tribe had been prepared, the record

does not establish that a final decision (which would have required

the signature of the Commissioner of Indian Affairs, 25 C.F.R. 2.3

2.19 (1985)) had been issued. See Pet. App. 40a; C.A. App. A2686-

A2687. In any event, even if the Acting Assistant Secretary had

issued sh ogee the Department’s regulations authorized the

Secre “to direct any [Departme

decision.” 43 C.F.R. 45¢aX2) prey ee

urged a return to the bargaining table.” Pet. App. 43a;

see C.A. App. A2370, A2589, A2690-A2691. In any

event, in late August 1985, the Tribe and Peabody re-

newed their negotiations. On September 23, 1985,

they reached a tentative agreement over a package of

amendments not only to Lease 8580 but also to Leases

9910 and 5743. Pet. App. 42a. The negotiated agree-

ment resolved a broad range of issues concerning the

existing leases between the parties. J.A. 277-311.

In particular, “[iJn consideration of the benefits

associated with these lease amendments,” the parties

agreed to move jointly to vacate the Area Director’s

July 1985 decision imposing a royalty rate adjustment

under Lease 8580 to 20 percent. J.A. 286-287. Instead,

the parties agreed to adjust the royalty rate under

Lease 8580 from 37.5 cents per ton to 12 1/2 percent of

the monthly gross proceeds. J.A. 287. Peabody further

agreed to pay royalties at the new 12 1/2 percent rate

on all coal mined under the lease since February 1,

1984, more than a year and a half earlier. Ibid.

Peabody also agreed to increase the royalty rates with

respect to Leases 9910 and 5743, even though those

leases, unlike Lease 8580, did not contain any provision

for the adjustment of the royalty rate during the lease.

C.A. App. A2678, A2692.

At the same time, Lease 8580 was amended to

acknowledge the validity of tribal taxation of coal pro-

duction, and recognize the Tribe’s agreement to waive

certain back tribal taxes. J.A. 295-296, 298-299. The

tax rate was to be capped at eight percent, which

“would thus permit the tribe to realize as much as 20.5

percent yield in royalties and taxes combined.” Pet.

App. 44a.’ Peabody further agreed to pay the Tribe

7 This Court had just upheld the right of the Navajo Nation to

impose taxes on lessees under tribal leases. See Kerr-McGee Corp.

$1.5 million when the amendments became effective,

and $7.5 million when it began mining additional coal

agreed to by the parties as part of the lease

amendments. J.A. 292-293. The agreement “also

addressed ancillary matters such as provisions for

future royalty adjustments, arbitration procedures,

rights of way, the establishment of a tribal scholarship

fund, and the payment by Peabody of back royalties,

bonuses, and water payments.” Pet. App. 43a.

e. In August 1987, the Navajo Tribal Council ap-

proved the lease amendments, finding that they were in

“the best interest of the [Tribe].” C.A. App. A2432-

A2433. A final agreement was signed by the parties in

November 1987. The parties then asked Secretary

Hodel to approve their agreement. The Secretary

formally approved the lease amendments on December

14, 1987. J.A. 337-339. Shortly thereafter, and in

accordance with the agreement between the Tribe and

Peabody, the Area Director’s June 1984 decision adopt-

ing a 20 percent royalty rate was vacated. Pet.

App. 45a.

3. In 1993, the Tribe brought suit against the United

States in the Court of Federal Claims, alleging, inter

alia, that the Secretary’s approval of the lease amend-

ments agreed to by the Tribe and Peabody adjusting

the royalty rate on Lease 8580 to 12 1/2 percent of gross

proceeds constituted a breach of trust. The Tribe did

not seek to invalidate the lease amendments approved

by the Secretary, but instead sought $600 million in

damages while keeping the amendments to all three

leases in effect. On cross-motions for summary judg-

v. Navajo Tribe, 471 U.S. 195 (1985); Pet. App. 39a-40a. The Area

Director’s decision imposing a 20 percent royalty rate was

rendered prior to Kerr-McGee.

ment, the Court of Federal Claims granted judgment

for the United States. Pet. App. 3la-79a. .

The Court of Federal Claims found that the United

States had entered into a general fiduciary relationship

with the Navajo Nation by virtue of its relationship

with Indian Tribes and the fact that the United States

holds tribal lands in trust. Pet. App. 48a. The court

noted that the relationship between Indians and the

United States “is not necessarily described by the

common law of trusts,” but the court nevertheless

first considered the government’s actions against the

duties that would be recognized by a court of equity as

governing the actions of a common law trustee. Ibid.

Applying the common law, the court concluded that the

Secretary had contravened fiduciary duties of care,

loyalty, and candor by meeting with Peabody while its

administrative appeal was pending and not disclosing

that meeting to the Tribe. /d. at 48a, 52a. The court

further observed that, “[wJere this a court of equitable

jurisdiction considering a private trust, [the Tribe]

might easily qualify for remedies typically afforded

wronged beneficiaries.” Jd. at 52a. But those circum-

stances, the court explained, “do not themselves confer

jurisdiction on this Court, nor entitle [the Tribe] to

money damages.” /bid. eo

es Me the court continued, “to succeed in litigation

in this Court, [the Tribe] must “pe that oe im-

ses specific fiduci duties on the government, as

anal to general duties, and that the United States

violated a specific fiduciary duty which Congress

intended to compensate with money damages. Pet.

App. 53a. In determining whether the Tribe had made

that showing, the court reviewed the IMLA and the

Secretary’s implementing regulations in the light of

this Court’s decisions in United States v. Mitchell, 445

= $$

U.S. 535 (1980) (Mitchell 1), and United States v.

Mitchell, 463 U.S. 206 (1983) (Mitchell IT. See Pet.

App. 54a, 59a-61a.

The court observed “that in enacting IMLA, the

United States assumed the responsibility to manage

minerals such as coal in a fiduciary capacity.” Pet. App.

50a. But after reviewing the IMLA and the Secretary’s

implementing regulations, the court concluded that the

United States’s “responsibility as it relates to coal

royalties does not rise above a generalized trust obli-

gation,” which, the court explained, is not sufficient

under the Mitchell decisions to create a duty that, if

breached, would require the government to pay

damages. Id. at 66a; see id. at 67a (“[NJeither IMLA

nor its implementing regulations, 25 C.F.R. Part 211,

impose specific duties regarding the Secretary’s

adjustment of royalty rates for coal.”). The court

further concluded that, although the Tribe’s complaint

“{a}lleg(ed] breaches of general fiduciary duties, [it]

ll i Se failed to link any breach to a specific money-

— statutory or regulatory provision.” Jd. at

The court emphasizeu that the Tribe “cites no pro-

vision with respect to royalty-setting that demonstrates

federal control over that process.” Pet. App. 67a.

Indeed, the court noted that in this case “the Secre-

tary’s rolc with respect to royalty adjustment, in

particular, derives solely from the terms of the lease”

between the Tribe and Peabody—i.e., the provision of

Lease 8580 allowing the Secretary to make a “rea-

sonable adjustment” in the royalty rate after 20 years,

ibid.—rather than from a statute or regulation. “Even

then,” the court continued, “the Secretary’s only guid-

ance was to be ‘reasonable’ in revising rates.” Jd. at

67a-68a. The court acknowledged that, “as a matter of

policy, DOI would not approve coal leases with royal-

ties less than those the [United States] would receive

for its own coal,” i.e., 12 1/2 percent. Jd. at 68a. But,

the court noted, “[nJowhere does that policy, nor any

other policy, impose an affirmative duty to interject

government-dictated royalty rates,” and the Tribe did

not in any event assert “that the 1987 approval of Lease

8580, with royalties of 12.5 percent, ran afoul of that

policy.” Ibid.

4. a. The Court of Appeals for the Federal Circuit

reversed. Pet. App. la-30a. The court began by

discussing this Court’s Mitchell decisions, see id. at 5a-

6a, and its own precedents involving breach of trust

claims by Indians, including its recent decision in White

Mountain Apache Tribe v. United States, 249 F.3d 1364

(2001), cert. granted, No. 01-1067 (Apr. 22, 2002). In

White Mountain Apache, the court noted, “Calithough

the statute [at issue] was silent on how the United

States was to administer the property,” the court

looked to the common law of trusts and found in the

common law a duty on the part of the United States

enforceable in a suit for damages, “despite the absence

of a specific statute and regulations.” Pet. App. 6a.

The court of appeals then analogized this case to

Mitchell II, where this Court held that the Tribe was

entitled to damages for the alleged breach of trust with

respect to Indian timber management. The court of

appeals believed that the degree of federal involvement

in this case with respect to mineral leasing on Indian

8 The Court of Federal Claims also rejected the Tribe’s inde-

pendent claim for breach of contract with respect to the Lease

8580, finding that the Secretary was not a party to that lease, and

that the Secretary’s authority under the lease to adjust the royalty

rate was not a binding contractual obligation on him to do so. Pet.

App. 69a-75a.

lands was comparable to the degree of federal involve-

ment in Indian timber management under the gov-

erning statutes and regulations in Mitchell II. Pet.

App. 8a; see id. at 8a-10a. Pointing to 25 U.S.C. 399

(which, as explained below, is not part of the IMLA),

the court also concluded that “the statute explicitly

requires that the Secretary must act in the best

interests of the Indian tribes.” Pet. App. 9a, lla. With

that understanding, the court concluded that the Court

of Federal Claims had erred in finding that there was

not a sufficient trust relationship between the United

States and the Tribe with respect to coal resources that

could give rise to a claim for money damages for breach

of trust here. /d. at 1la.

After finding the existence of such a trust relation-

ship, the court of appeals held that the Secretary’s

actions with respect to Peabody’s administrative appeal

concerning the adjustment of the royalty rate under

Lease 8580—which the court characterized as “sup-

pressing and concealing” the decision of the Acting

Assistant Secretary and “thereby favoring Peabody’s

interests to the detriment of Navajo interests,” Pet.

App. lla—violated both the common law duties on

which the Court of Federal Claims had relied, as well as

what the court of appeals described as a statutory duty

“to obtain for the Indians the maximum return for their

minerals.” Jd. at 12a. The court did not, however,

identify what specific provision of the IMLA or the

Secretary’s implementing regulations had imposed such

a duty upon or had been violated by the Secretary.

Nonetheless, citing Mitchell II, the court concluded

that the Tribe was entitled to damages for breach of the

fiduciary duties the court had described. /d. at 12a-13a;

see id. at 12a (“Breach by the federal government of its

fiduciary duty is subject to remedy by the assessment

of ‘damages resulting from a breach of the trust.’”).

The court remanded for further proceedings, including

a determination of damages. /d. at 13a.

b. Judge Schall concurred in part and dissented in

part. Pet. App. 13a-30a. Drawing on this Court’s

Mitchell decisions, he reasoned that it is not enough for

a Tribe to show a violation of a general fiduciary re-

lationship stemming from federal involvement in a

particular area of Indian affairs. Rather, “to state a

claim upon which relief can be granted,” J udge Schall

reasoned, a Tribe “must show the breach of a specific

fiduciary obligation that falls within the contours of the

statutes and regulations that create the general

fiduciary relationship at issue.” /d. at 29a-30a; see id. at

16a (“{[U]nder Mitchell II, the focus is on the statute

and regulations that create the fiduciary relationship.”).

Judge Schall agreed that the IMLA and imple-

menting regulations create a “general fiduciary Te-

lationship” between the United States and the Tribe,

but at “this point [he] part{ed] company with the

majority.” Pet. App. 25a. In his view, “the only

government action in this case that implicated a specific

fiduciary responsibility to the [Tribe] was DOI’s ap-

proval of the Agreement” in 1987. Id. at 26a. He

explained that, even if the government’s actions “may

demonstrate disloyalty to the [Tribe] in a vacuum,” the

Tribe was required to show that the government

breached a specific fiduciary obligation with respect

to the agreed package of lease amendments. Id. at

28a. Judge Schall concluded that the Secretary had

breached such a duty by failing to conduct an economic

analysis of the lease agreement, which, he found, citing

common law principles, was implicit in the Secretary's

authority to approve the lease amendments. Ibid.; see

id. at 26a-27a.

SUMMARY OF ARGUMENT

The Tribe is not entitled to money damages for the

alleged breach of trust in this case, because it has failed

to show the violation of any statute or implementing

regulation that would mandate compensation by the

government if breached.

A. The United States is immune from suit for dam-

ages, except as clearly authorized by Congress. In the

Tucker Act and the Indian Tucker Act, Congress has

waived sovereign immunity from damages actions

against the United States with respect to claims based

on an “Act of Congress” or a “regulation of an executive

department.” 28 U.S.C. 1491(a)(1). This Court has

further emphasized that, to recover damages under one

of the Tucker Acts, a plaintiff must show the violation

of a statute or implementing regulation that “can

fairly be interpreted as mandating compensation by the

Federal Government for the damage sustained.”

Mitchell II, 463 U.S. at 217. In recent cases, this Court

has emphasized that it is unwilling to venture beyond

the terms of the governing Act of Congress when it

comes to determining whether Congress has in fact

authorized a private cause of action or private remedy

in such an action. E.g., Gonzaga Univ. v. Doe, 122 S. Ct.

2268 (2002). Such restraint is all the more necessary

when, as here, the question is whether Congress has

authorized a damages remedy against the sovereign

itself.

B. The court of appeals erred in holding that the

United States may be liable in damages for the alleged

breach of trust in this case, because the court failed

to identify the violation of any specific statutory or

regulatory duty, much less find that the government

violated a statute or regulation that would clearly

mandate the payment of damages. Instead, the court of

a simply reasoned at an abstract level that, under

pare ry ene were available against the United

States because, in the court’s view, the government had

breached a general trust relationship with the Tribe in

connection with the lease amendments at issue. Pet.

App. 12a. That reasoning finds no support in Mitchell |

II. There, each of the Indians’ breach-of-trust claims

was carefully grounded on the violation of specific

statutory or regulatory duties. In addition, the court of

appeals’ reasoning contradicts the terms of the Tucker

Act, which grant jurisdiction and waive the sovereign

immunity of the United States with respect to

claims based on the violation of an “Act of Congress” or

“regulation of an executive department,” 28 U.S.C.

1491(a)(1), and not claims based on breaches of general-

ized trust principles identified by a court.

In finding that the United States had breached a

trust duty triggering a damages remedy, the court of

appeals focused on what it called “(t]he action of the

Secretary in suppressing and concealing the decision

of the Deputy Assistant Secretary” with respect to

Peabody’s administrative appeal of the Area Director’s

decision unilaterally to increase the royalty rate on

Lease 8580 to 20 percent of the gross proceeds. Pet.

App. lla. But nothing in the IMLA or in the Secre-

tary’s regulations implementing the IMLA imposes any

specific duties on the handling of such appeals. Nor was

the court of appeals free to override or supplement the

general procedural rules governing such appeals.

Vermont Yankee Nuclear Power Corp. v. Natural Res.

Def. Council, Inc., 435 U.S. 519 (1978). Moreover,

procedural rules are not by their nature fairly-capable

of being interpreted as mandating the payment of

damages against the government if violated.

Although the court of appeals did not point to the

violation of any specific statute or regulation, the Tribe

has argued that the Secretary’s actions violated a re-

quirement in the IMLA and its implementing regu-

lations to act in the “best interests” of the Indians. The

statutory language on which the Tribe has relied,

however, comes from a provision (25 U.S.C. 396b) that

governs the rejection of oil and gas leases, and not the

approval of coal leases, which is governed by a dif-

ferent provision (25 U.S.C. 396a) that contains no “best

interests” language. The Tribe also points to a regu-

lation (25 C.F.R. 211.43(b) (2001)), but that provision

was not adopted until a decade after the events at issue.

In addition, that regulation requires the Secretary to

consider the “best interest of the Indian mineral owner”

only when the owner has agreed to a royalty rate that

is less than the minimum rate for leases of federal coal.

Ibid. The regulation in no way obligates the Secretary

to make such a finding before approving a lease—such

as the amendments in this case—with a rate equal to or

more than the minimum federal rate for coal.

The Tribe also argues that the Secretary was re-

quired to conduct an independent economic analysis

before approving the lease amendments in this case.

But no provision of the IMLA or regulation imple-

menting that Act obligates the Secretary to conduct

such an analysis. In the absence of such a specific

statutory or regulatory duty, the Tucker Act does not

subject the United States to money damages for any

claim that the Secretary inappropriately failed to con-

duct such an analysis. Furthermore, judicial impli-

cation of such an independent economic analysis re-

quirement would conflict with the IMLA’s focus on

permitting Indian mineral lease owners to negotiate

their own rates, subject to the backstop protection of

the minimum rate, which the lease amendments in this

case generously exceeded.

C. Relying on Mitchell II, the court of appeals rea-

soned that the federal involvement with respect to

Indian mineral leasing was itself sufficient to subject

the United States to damages for any alleged breach of

trust in connection with Indian mineral leases. That

analytical approach was mistaken. To begin with, the

level of federal involvement in Indian mineral leasing 1s

fundamentally different, and less encompassing, than

the federal involvement in Indian timber management.

Indeed, in Mitchell II, this Court emphasized that the

United States had assumed “pervasive” control over

Indian timber management, and had regulated “virtu-

ally every aspect of [Indian] forest management.” 463

U.S. at 220. By contrast, the key provision of the IMLA

transferred Indian mineral leasing authority from the

Secretary to the Tribes, 25 U.S.C. 396a, and one of the

central objectives of that Act is to foster Indian self-

determination. Cf. Cotton Petrolewm Corp. v. New

Mexico, 490 U.S. 163, 179 (1989).

Moreover, to the extent that the Court discussed the

federal control over Indian timber management in

Mitchell II, it explicitly focused on the “fiduciary man-

agement duties” that the government had assumed

over Indian timber. 463 U.S. at 218. As the Court

explained, the statutes and regulations at issue in

Mitchell II expressly provided that, inter alia, sales of

Indian timber made by the government on behalf of

Indians shall be based upon a consideration of “the

needs and hest interests of the Indian owner and his

heirs,” as well as the “present and future financial

needs of the owner and his heirs.” Jd. at 222 (quoting

statutes). Congress has not imposed, and the Secretary

has not assumed, any comparable fiduciary manage-

ment duties with respect to Indian mineral leasing. To

the contrary, the focus in the IMLA is on permitting

Indian mineral lease owners to negotiate their own

royalty rates. Furthermore, the Court in Mitchell II

did not focus simply on the existence of federal control;

it looked to whether the statutes and regulations on

which the plaintiffs relied could “fairly be interpreted

as mandating compensation for damages sustained as a

result of a breach of the duties they [2.e., the statutes

and regulations] impose[d].” Jd. at 219.

D. The court of appeals also erred in treating the

United States as if it were a simple private trustee,

liable in money damages to an Indian Tribe for breach

of duties that might be recognized at common law.

Neither the Tucker Act nor, even more tellingly, the

Indian Tucker Act, confers jurisdiction with respect

to claims based on the violation of the common law.

Instead, as pertinent here, those Acts confer juris-

_ diction only over claims based on the violation of an Act

of Congress or implementing regulation. Holding that

the United States may be liable in damages for breach

of duties drawn by a court from the common law not

only would greatly expand the potential liability of the

United States for breach of trust, but also would con-

flict with well-established principles of sovereign

immunity and the terms of the Tucker Acts, which

require claimants to point to the violation of a source of

positive law that clearly mandates the payment of

damages if violated. Because the court of appeals did

not identify the violation of any such source of law, and

none is available with respect to the alleged breach of

trust in this case, the Tribe’s damages claims should be

ARGUMENT

THE UNITED STATES HAS NOT VIOLATED ANY “ACT

OF CONGRESS” OR “REGULATION OF AN EXECU-

TIVE DEPARTMENT” THAT WOULD SUBJECT IT TO

MONEY DAMAGES FOR THE ALLEGED BREACH OF

TRUST

A. The United States Is Immune From Suit Except As

Clearly Authorized By Congress

This case, like United States v. White Mountain

Apache Tribe, No. 01-1067, turns on basic principles

governing the sovereign immunity of the United States _

from suit, and the limited statutory jurisdiction of the

Court of Federal Claims to entertain claims for dam-

ages against the United States.

ot “It is elementary that ‘(t]he United States, as

sovereign, is immune from suit save as it consents to be

sued . . . , and the terms of its consent to be sued in

any court define that court’s jurisdiction to entertain

the suit.” Mitchell I, 445 U.S. at 538 (quoting United

States v. Sherwood, 312 U.S. 584, 586 (1941)); see

Eastern Transp. v. United States, 272 U.S. 675, 686

(1927); United States v. Alire, 73 U.S. (6 Wall.) 573, 575

(1868). In determining whether such consent is pre-

sent, this Court has long held that “la] waiver of sover-

eign immunity ‘cannot be implied but must be

unequivocally expressed.’” Mitchell I, 445 U.S. at 538

(quoting United States v. King, 395 US. 1, 4 (1969));

accord College Savings Bank v. Florida Prepaid Post-

secondary Educ. Expense Bd., 527 U.S. 666, 682 (1999);

United States v. Nordic Village, Inc., 503 U.S. 30, 33

1992).

2. eieees has consented for the United States to

be sued on certain claims for money damages 1n the

Court of Federal Claims. The Tucker Act grants that

court jurisdiction with respect to

any claim against the United States founded either

upon the Constitution, or any Act of Congress or

any regulation of an executive department, or upon

any express or implied contract with the United

States, or for liquidated or unliquidated damages in

cases not sounding in tort.

28 U.S.C. 1491(a)(1).

The Indian Tucker Act grants jurisdiction to the

same court with respect to claims by an Indian Tribe

against the United States, “whenever such [a] claim is

one arising under the Constitution, laws or treaties

of the United States, or Executive orders of the

President, or is one which otherwise would be cogni-

zable in the Court of Federal Claims if the claimant

were not an Indian tribe.” 28 U.S.C. 1505. As this

Court has explained, the Indian Tucker Act was

enacted in 1946 to ensure that Indian or tribal claimants

would enjoy the “same” rights and remedies in suits

against the United States as non-Indians, but no more.

Mitchell I, 445 U.S. at 539; see Mitchell II, 463 U.S. at

212 n.8; H.R. Rep. No. 1466, 79th Cong., Ist Sess. 13

(1945) (Indian “claimants are to be entitled to recover in

the same manner, to the same extent, and subject to the

same conditions and limitations, and the United States

shall be entitled to the same defenses, both at law and

in equity, * * * asin cases brought [under The Tucker

Act] by non- Indians.”) (emphasis added).

The Tucker Acts themselves do “not create any sub-

stantive right enforceable against the United States for

money damages.” Mitchell II, 463 U.S. at 216; see

Army & Air Force Exch. Serv. v. Sheehan, 456 U.S.

728, 738 (1982); United States v. Testan, 424 U.S. 392,

398 (1976). Thus, in order to state a cause of action

under one of the Tucker Acts, a plaintiff suing other

than for breach of contract must point to an “Act of

Congress” or “regulation of an executive department,”

28 U.S.C. 1491(a)(1), that “can fairly be interpreted as

mandating compensation by the Federal Government

for the damage sustained.” Mitchell II, 463 U.S. at 217

(quoting Testan, 424 U.S. at 400, and Eastport S.S.

Corp. v. United States, 372 F.2d 1002, 1009 (Ct. Cl.

1967)); see Bowen v. Massachusetts, 487 U.S. 879, 905-

906 n.42 (1988); Sheehan, 456 U.S. at 739.° The requi-

site waiver of sovereign immunity is present under the

Tucker Acts only if “a claim falls within th[at) cate-

gory.” Mitchell II, 463 U.S. at 218; see OPI. v. Rich-

mond, 496 U.S. 414, 431 (1990).

This Court has observed that “the substantive source

of law may grant the claimant a right to recover

damages either ‘expressly or by implication.’” Mitchell

II, 463 U.S. at 217 n.16; but cf. Sheehan, 456 U.S. at

739-740 (“Testan [held] that the Tucker Act provides a

remedy only where damages claims against the United

States have been authorized explicitly.”). But the

Court is reluctant to recognize a damages remedy

against the United States under the Tucker Acts when

a statute does not clearly sanction one. See Testan, 424

U.S. at 400 (“We are not ready to tamper with these

established principles [concerning the reach of the

Tucker Act] because it might be thought that they

should be responsive to a particular conception of en-

lightened governmental policy.”); see also Mitchell II,

463 U.S. at 218 (“Of course, in determining the general

scope of the Tucker Act, this Court has not lightly

® The Indian Tucker Act also permits claims by an Indian

Tribe based on a Treaty of the United States or an Executive

Order of the President. 28 U.S.C. 1505. No such claim is at issue

here.

inferred the United States’ consent to suit.”) (citing

cases). That restraint reflects the general rule that

waivers of sovereign immunity must be unequivocally

expressed. See Mitchell I, 445 U.S. at 538; OPM v.

Richmond, 496 U.S. 414, 432 (* 990).

The requirement of such restraint is reinforced by

the Court’s repeated refusal in more recent decisions to

recognize implied private causes of action or remedies

outside of the Tucker Act context, even in suits against

parties other than the United States. See, e.g., Gon-

zaga Univ. v. Doe, 122 S. Ct. 2268, 2275 (2002) (federal

statute must contain “unambiguously conferred right”

for suit to lie under Section 1983); Correctional Servs.

Corp. v. Malesko, 122 S. Ct. 515 (2001) (declining to ex-

tend implied cause of action established by Bivens v.

Six Unknown Named Agents of Federal Bureau of

Narcotics, 403 U.S. 388 (1971), to new context); Alezx-

ander v. Sandoval, 532 U.S. 275 (2001) (no implied right

of action to enforce disparate-impact regulations under

Title VI); FDIC v. Meyer, 510 U.S. 471, 483-486 (1994)

(declining to recognize implied right of action under

Bivens against federal government).

3. This Court’s Mitchell decisions involved actions

that were brought by Indian claimants under the

Tucker Acts and were governed by the general

principles outlined above. In the Mitchell litigation, the

Quinault Tribe and individual Indians sought damages

from the United States for alleged breach of fiduciary

duties with respect to timberlands on the Quinault

Indian Reservation that had been allotted in trust to

individual Indians. In Mitchell I, the Court held that

the General Allotment Act—under which the United

States holds allotted lands “in trust for the sole use and

benefit of the Indian [allottees],” 445 U.S. at 541

(quoting 25 U.S.C. 348)—did not authorize a damages

action against the United States for alleged

mismanagement of timber resources on allotted lands.

The Court explained that the General Allotment Act

created “only a limited trust relationship between the

United States and the [Tribe],” and that it did “not un-

ambiguously provide that the United States has under-

taken full fiduciary responsibilities as to the

ment of allotted lands.” Jd. at 542 (emphasis added).”

Thus, the Court held, the General Allotment Act did

not support “[aJny right of the [Indians] to recover

money damages for Government mismanagement of

timber resources.” Jd. at 546.

In Mitchell IT, the Court considered a different set of

statutes and regulations and held that those provisions,

unlike the General Allotment Act, could “fairly be

interpreted as mandating compensation for damages

sustained as a result of a breach of the duties they

impose[d].” 463 U.S. at 219. In so holding, however,

the Court emphasized that the provisions established

“comprehensive responsibilities of the Federal Govern-

ment in managing the harvesting of Indian timber,” id.

at 222; see id. at 221 (regulations “required the pre-

servation of Indian forest lands in a perpetually pro-

ductive state”), and that “the statutes and regulations

at issue in this case clearly establish fiduciary obli-

gations of the Government in the management and

operation of Indian lands and resources.” Id. at 226."

10 The Court explained that Congress provided for allotted

lands to be held “in trust” simply because it wanted to prevent

alienation of the land and to ensure that allottees would be immune

from state taxation. Mitchell I, 445 U.S. at 544.

1! Justice Powell, joined by then-Justice Rehnquist and Justice

O’Connor, dissented in Mitchell II]. 463 U.S. at 228-238. In their

view, even the statutes and regulations in that case failed to confer

“the necessary legislative authorization of a damages remedy”

As explained below, a proper understanding of

the Mitchell decisions—and application of the basic

principles governing suits against the United States

and limitations on implied rights to recover money

damages—compels the conclusion in this case that the

Tribe has failed to state a claim for damages.

B. The Tribe Has Not Shown The Violation Of Any

Statute Or Regulation That Would Mandate The

Payment Of Damages By The Government If Breached

The court of appeals’ decision in this case founders on

one central and inescapable conclusion: it holds that the

United States may be liable in damages for alleged

breach of trust without finding the violation of any

particular statute or regulation that, even if breached,

would mandate the payment of damages. in his sepa-

rate opinion, Judge Schall recognized that shortcoming.

See Pet. App. 26a (The “majority errs” by “fail[ing] to

find a breach of a specific fiduciary responsibility that

falls within the scope of the statutes and regulations [at

issue].”); see also id. at 28a, 29a-30a. The Court of

Federal Claims similarly recognized that fatal juris-

dictional defect in the Tribe’s claim. Jd. at 66a

(“Alleging breaches of general fiduciary duties, the

Navajo have failed to link any breach to a specific

against the United States, because “[nJone of [those provisions]

contains any ‘provision - . . that expressly makes the United

States liable’ for its alleged mismanagement of Indian forest

resources and their proceeds or grants a right of action ‘with

specificity."” Jd. at 230 (quoting Testan, 424 U.S. at 399, 400).

They emphasized that “courts are not free to dispense with

‘established principles’ requiring explicit congressional authori-

zation for maintenance of suits against the United States simply

‘because it might be thought that they should be responsive to a

particular conception of enlightened governmental policy.’” [d. at

232 (quoting Testan, 424 U.S. at 400).

money-mandating statutory or regulatory provision.”);

see id. at 53a, 57a, 68a.

1. The Tucker Act, in clear and unmistakable terms,

confers jurisdiction with respect to claims that are

founded upon an “Act of Congress” or a “regulation of

an executive department.” 28 U.S.C. 1491. That re-

quirement is just as applicable in a case brought by

an Indian Tribe alleging breach of trust as it is, for

example, in a case brought by a federal employee seek-

ing back pay for allegedly improper job classification in

federal employment. Cf. United States v. Testan,

supra. Indeed, as discussed above, the Indian Tucker

Act was enacted to ensure that Indian claimants would

be able to recover damages against the United States

“in the same manner,” but also “subject to the same

conditions and limitations,” as non-Indian claimants.

H.R. Rep. No. 1466, supra, at 13; see p. 22, supra.

Mitchell I illustrates the point. Although the Indian

plaintiffs in that case “alleged breaches of trust in con-

nection with [the government’s] management of forest

resources on allotted [Indian] lands,” 463 U.S. at 207,

their claims tracked specific duties set forth in the

statutes or regulations governing federal Indian timber

management. See id. at 210 (describing claims); id. at

211, 219-224 (discussing statutes and regulations on

which the damages claims were predicated); see also,

e.g., 25 U.S.C. 406(a) (proceeds from timber sales “shall

be paid to the owner or owners or disposed of for their

benefit”); 25 U.S.C. 413 (administrative fees must be

“reasonable”); 25 U.S.C. 466 (Secretary must manage

Indian forestry units “on the principle of sustained-

yield management”); 25 C.F.R. 163.4 (1985) (requiring

sustained-yield management); 25 C.F.R. 163.7(c) (1985)

(timber “shall be appraised” and sold at not less than

appraised value, except as authorized); 25 C.F.R. 163.18

(1985) (administrative fees must be “reasonable”).

More to the point, in analyzing “whether the United

States [was] accountable in money damages for alleged

breaches of trust in connection with its management

of [Indian] forest resources,” Mitchell II, 463 U.S. at

207, the Court first examined the “various Acts of

Congress and executive department regulations” on

which the Indian plaintiffs “based their money claims

against the United States.” Jd. at 219; see id. at

219-223. Then, after examining those sources of “sub-

stantive law,” it looked to “whether they [i.e., the

statutes or regulations on which the plaintiffs relied]

can fairly be interpreted as mandating compensation

for damages sustained as a result of a breach of the

duties they impose.” Jd. at 219 (emphasis added).

Mitchell II thus t2aches that, even when the United

States might be said to have assumed a general trust

relationship with an Indian Tribe or with respect to

certain Indian resources, a damages claim for breach of

trust must be grounded on the violation of a specific

statute or regulation that gives content to that

relationship. See id. at 224 (The statutes and regu-

lations governing Indian timber management “establish

a fiduciary relationship and define the contours of the

United States’ fiduciary responsibilities.”) (emphasis

added).

The court of appeals in this case, however, analyzed

the breach of trust issue almost entirely at a higher

level of abstraction, focusing on whether “a trust re-

lationship indeed existed and exists with the Nation.”

Pet. App. 2a; see id. at lla (“The Court of Federal

Claims erred in holding that there was no authorization

for a trust relationship between the United States and

the Navajo Nation as to coal resources.”). Even if the

IMLA and the Secretary’s implementing regulations

established a generalized trust relationship similar to

that which this Court found in Mitchell IJ with respect

to Indian timber resources, the court of appeals did not

find—and the Tribe has not shown—the violation of any

specific duty imposed by the statutes or regulations

giving content to that relationship, much less the

violation of a specific statutory or regulatory duty that

could fairly be interpreted as mandating compensation

by the government if breached. See Pet. App. 26a

(Schall, J., concurring in part and dissenting in part); id.

at 66a (Court of Federal Claims). Instead, the court of

appeals simply stated that “mouetary damages are an

available remedy [against the United States] for breach

of th{e] trust.” Jd. at 2a; see id. at 12a (“Breach by the

federal government of its fiduciary duty is subject to

remedy by the assessment of ‘damages resulting from a

breach of the trust.’”).

That mode of analysis cannot be squared with this

Court’s focus in Mitchell I] on the specific statutes and

regulations on which the damages claims in that case

were based. Nor can it be squared with explicit juris-

dictional requirements of the Tucker Act. The court of

appeals’ failure to identify the violation of any specific

“Act of Congress” or “any regulation of an executive

department” (28 U.S.C. 1491(a)(1)) that would mandate

the payment of damages by the government if breached

was clear error. And that error alone compels reversal

of the judgment below.

2. The alleged breach of trust on which the court of

appeals did focus in its decision underscores how

far the court strayed from the terms of any specific

statutes or regulations that conceivably could be impli-

cated in this case. In finding that the United States had

breached a duty to the Tribe that would entitle the

Tribe to damages, the court of appeals did not object to

the Secretary’s approval of the lease amendments in

1987, or to the fairness of the lease package that the

Tribe negotiated with Peabody and asked the Secretary

to approve in 1987. Instead, the court pointed to what

it characterized as the “[t]he action of the Secretary in

suppressing and concealing the decision of the Deputy

Assistant Secretary” on Peabody’s administrative ap-

peal concerning the adjustment of the royalty rate pur-

suant to a provision in Lease 8580 that was superseded

by those amendments. Pet. App. 11a; see id. at 1la-

12a. But even accepting the court of appeals’ charac-

terization of events, the Secretary’s actions did not

violate any statutory or regulatory duty, much less one

that would mandate the payment of damages for a

violation.

a. Nothing in the IMLA or its implementing regula-

tions imposes any specific duties on the Secretary with

respect to the handling of administrative appeals.

Rather, it is Interior Department regulations of general

applicability that establish a process for appeals from

administrative actions by various Department officials,

see 25 C.F.R. Pt. 2 (1985 & 2001), and the procedural

standards governing that process are defined by the

Administrative Procedure Act (APA), 5 U.S.C. 551

et seq., and the Interior Department regulations, not by

the IMLA. The court of appeals did not find that the

Secretary’s actions violated any provision of the

Department’s procedural rules-or the APA. And, in

fact, the Department rules in effect at the time the

Secretary acted provided that nothing in the regu-

lations governing hearings and appeals “shall be

construed to deprive the Secretary of any power

conferred upon him by law,” including, but not limited

to, the authority to take jurisdiction of any case

pending before any employee and to render a final

decision on it, and the authority to review any decision

of any employee or to direct any such employee to re-

consider a decision. 43 C.F.R. 4.5(a)(1) and (2) (1985).

Nor was the court of appeals free to override or

supplement the procedural rules adopted by the Secre-

tary with its own view of the proper relationship

between the Secretary and a subordinate official con-

cerning an internal agency appeal. See Vermont

Yankee Nuclear Power Corp. v. Natural Res. Def.

Council, Inc., 435 U.S. 519 (1978). Indeed, the court of

appeals seriously misapprehended the constitutional

structure of our government in characterizing the.

decision by the Head of an Executive Department not

to allow a draft of a decision of a subordinate officer to

go into effect as the improper “suppressing and con-

cealing” (Pet. App. 11a) of the action of one of his sub-

ordinates. And it seriously misapprehended Mitchell II

and the general Tucker Act principles discussed above

in finding that such action, even if it had violated some

procedural rule, entitled the Tribe to money damages.

b. Even if the Secretary had violated some pro-

cedural rule in handling Peabody’s administrative ap-

peal, that would not entitle the Tribe to damages under

the Tucker Act. As discussed above, only a statute or

regulation that “can fairly be interpreted as mandating

compensation” may support a claim for damages under

the Tucker Act. Mitchell II, 463 U.S. at 216-217; p. 23,

supra. None of the procedural regulations referred to

by the court of appeals, or relied upon by the Tribe,

creates a right to be paid a sum certain, speaks in terms

of money damages or claims, or has any other monetary

character at all. See Testan, 424 U.S. at 400; Mitchell

IT, 463 U.S. at 232 n.6 (Powell, J., joined by Rehnquist

and O’Connor, JJ., dissenting) (“Although not disposi-

tive, the monetary character of a statutory right is a

strong indication that a statute ‘in itself . . . can fairly

be interpreted as mandating compensation.’”); cf.

Gonzaga Univ., 122 S. Ct. at 2274 (right of action has

been recognized under 42 U.S.C. 1983 when a statute

“conferred specific monetary entitlements” or required

payment of “‘objective’ monetary entitlement”).

Procedural duties are in the nature of due process

protections, and even constitutional procedural due

process violations do not give rise to a damages claim

under the Tucker Act. See, e.g., Testan, 424 U.S. at 403;

United States v. Hopkins, 427 U.S. 123, 130 (1976).

Accordingly, instead of a suit for money damages, any

recourse that the Tribe might have had for an alleged

violation of a procedural rule in the course of the Secre-

tary’s approval of the lease amendments would have

been available, if at all, only in an action under the APA

to set aside the Secretary’s 1987 decision approving the

lease amendments, or to challenge the suspension of (or

seek the reinstatement of) the administrative appeal

proceedings concerning the Area Director’s decision to

increase the royalty rate under the adjustment clause

of Lease 8580. The Tribe has never brought such an

action, however; instead, it has brought this action

seeking damages for breach of trust while seeking to

retain all the benefits of the entire package of lease

amendments negotiated by the parties and approved by

the Secretary in 1987.

The court of appeals’ reliance on the Secretary’s

actions with respect to Peabody’s administrative appeal

was misplaced for another reason as well. As the Court

of Federal Claims noted, the Secretary’s authority to

adjust the royalty rate at issue in this case was

“derive[d] solely from the terms of the lease” that the

Tribe had executed in 1964, not from the IMLA. Pet.

App. 67a. A breach predicated on the Secretary’s

actions provided for under the Lease would not be

based on a violation of an Act of Congress or regulation,

as the Tucker Acts require. Moreover, the lease simply

authorized, but did not require, the Secretary to make a

“reasonable adjustment” in the royalty rate, and what

would be a reasonable adjustment under a lease en-

tered into by both the Tribe and Peabody could

properly take into account the interests of both parties,

not those of the Tribe alone. Accordingly, even if

(contrary to our submission, see pp. 37-39, infra) the

IMLA or implementing regulations required the Secre-

tary to disapprove a lease or lease amendment if she

concluded that it would not maximize revenue to the

Tribe concerned, the lease provision that authorized the

Secretary’s actions here imposed no such duty.

Finally, to the extent that the court of appeals be-

lieved that the Secretary’s actions in 1985 in connection

with the administrative appeal of the royalty rate

adjustment under the provisions of the then-existing

lease rendered his subsequent approval of the lease

amendments a breach of fiduciary duty, it was mis-

taken. To establish a breach of fiduciary duty in

approving the lease amendments, the Tribe at a mini-

mum would be required to establish that the Secretary

could not reasonably have believed that the overall

outcome of the negotiated package—the lease amend-

ments themselves—was in the Indian mineral owner’s

best interest. The Tribe has made no such claim. Cf.

Duquesne Light Co. v. Barasch, 488 U.S. 299, 312-313

(1989); FPC v. Hope Natural Gas Co., 320 U.S. 591, 602

(1944) (“If the total effect of the rate order cannot

be said to be unjust and unreasonable, judicial inquiry

* * * is at an end. The fact that the method employed

to reach that result may contain infirmities is not then

important.”).

The only provision of law governing mineral leases

that arguably could be interpreted as requiring com-

pensation for its breach is the regulation that set the

minimum royalty rates for minerals subject to leasing,

including coal. 25 C.F.R. 211.15(c) (1985). But the

Tribe understandably has not alleged a violation of that

provision. The lease amendments negotiated by the

Tribe and approved by the Secretary in 1987 contained

a royalty rate (12 1/2 percent of gross proceeds) well in

excess of the minimum rate at that time for coal leases

under IMLA—10 cents per ton, or less than one percent

of gross proceeds. Ibid. Even the original royalty rate

on Lease 8580 (37.5 cents per ton) was considerably

higher than that standard. Following their amendment

in 1987, the royalty rate under the three leases (z.e.,

Leases 8580, 9910, and 5743, see p. 9, supra)—each of

which provides for a total royalty rate of 12 1/2

percent—was well above the minimum rate. Indeed, all

three leases would have satisfied the new standard that

was subsequently adopted by the Secretary in 1996,

nine years after the lease amendments in this case were

approved. 25 C.F.R. 211.43(a)(2) (2001) (minimum

royalty rate for open-pit or strip coal leases is 12 1/2

percent of the value of coal sold from lease).

ce. The court of appeals did not specifically focus on

the meeting in July 1985 between Secretary Hodel and

representatives of Peabody, while Peabody’s admini-

strative appeal was pending, see Pet. App. 1la-12a, and

the Tribe did not rely on that meeting as the act that

allegedly gave rise to a right to recover money dam-

ages, see id. at 32a. But even assuming that the Tribe

had no knowledge of that meeting, it would not have

violated any statute or regulation mandating compensa-

tion if breached and, indeed, it would not have violated

any substantive law at all.

The Interior Department’s regulations governing

appeals from a decision of an Area Director, such as

Donald Dodge, allowed for an appeal to the Com-

missioner of Indian Affairs (Commissioner), and then to

the Interior Board of Indian Appeals (IBIA or Board).

25 C.F.R. 2.3(a) (1985). In addition, the regulations

allowed a party to transfer an appeal from the Com-

missioner to the Board if the appeal had been fully

briefed and pending before the Commissioner for at

least 30 days. 25 C.F.R. 2.19(b) (1985). If no party

requested a transfer to the Board, the parties were

deemed to have acquiesced in the Commissioner’s

jurisdiction after expiration of the thirty-day period.

See Urban Indian Council, Inc. v. Acting Deputy As-

sistant Secretary, 11 Interior Bd. Indian Appeals 146,

153 (1983).

The general regulations governing appeals to the

Department’s various appeals boards established a

formal appellate process. In particular, the regulations

expressly barred ex parte contacts with the Board

during the pendency of an appeal. 43 C.F.R. 4.27(b)

(1985) (“There shall be no communication between any

party and a member of the Office of Hearings and Ap-

peals concerning the merits of a proceeding, or an

appeal, unless such communication (if written) is also

furnished to the other party, or (if oral) is made in the

presence of the other party.”). In addition, the regu-

lations limited the Board’s appellate review to mate-

rials that were formally part of the record of appeal or

subject to official notice. 43 C.F.R. 4.24 (1985).

By contrast, the regulations governing appeals to the

Commissioner contained no prohibition against ex parte

contacts and expressly provided that the Commissioner

— 36

could rely on “any information available to [him] * * *

whether formally part of the record or not.” 25 C.F.R.

2.20 (1985) (emphasis added). In other words, unlike

the regulations governing appeals to the IBIA, “the

agency has not granted anyone the right to be free of ex

parte communications.” District No. 1, Pac. Coast

Dist., Marine Eng’rs Beneficial Ass’n v. Maritime

Admin., 215 F.3d 37, 43 (D.C. Cir. 2000).

The Tribe acknowledged that it was aware of the

regulation allowing transfer from the Commissioner to

the Board after 30 days. J.A. 12. The Tribe, however,

never exercised its option to transfer the appeal from

the Commissioner to the Board, and it thereby fore-

went the more formal procedures—including the

explicit prohibition on ex parte contacts—that would

have applied to proceedings before the Board. In any

event, as in the case of the other procedural rules dis-

cussed above, a rule barring ex parte contacts during an

administrative appeal cannot fairly be interpreted as

2 The APA bars ex parte contacts in formal administrative

proceedings “required by statute to be made on the record after

opportunity for an agency hearing.” 5 U.S.C. 553(c) (emphasis

added); see also 5 U.S.C. 554(a). Commissioner appeals are, as dis-

cussed, not required only to be “on the record.” In any event, the

APA’s ban on ex parte contacts in formal administrative pro-

ceedings is scarcely the type of duty that may be fairly interpreted

to mandate the payment of damages if breached. Rather, it is just

the sort of procedural duty that, consistent with the APA’s care-

fully limited remedial scheme, does not trigger any damages

remedy. See Lane v. Pena, 518 U.S. 187, 196 (1996) (“Under the

provisions of the APA, ‘{a] person suffering legal wrong because of

agency action, or adversely affected or aggrieved by agency action

within the meaning of a relevant statute,’ is expressly authorized

to bring ‘{a}n action in a court of the United States seeking relief

other than money damages.’”) (quoting 5 U.S.C. 702)) (emphasis

added by this Court); ef. Bowen v. Massachusetts, 487 U.S. 879

(1988).

mandating the payment of money damages if breached.

At most, the violation of such a rule could entitle a

party who timely objected to such contacts to a remedy

under the APA, such as vacatur of administrative

action that was preceded by such contacts, but not to

money damages.

3. Although the court of appeals did not believe it

was necessary to link the Tribe’s damages claims to a

violation of a specific statutory or regulatory duty that,

if breached, would mandate the payment of damages

(an error which, in itself, warrants reversal), the Tribe

now attempts to do so. But its effort fails. The Tribe

asserts (Br. in Opp. 17) that “both IMLA and its imple-

menting regulations expressly require the Government

to act in the best interest of the Indians.” The statu-

tory language in 25 U.S.C. 396b on which the Tribe

relies, however, governs the circumstances in which the

Secretary may reject the highest bid for oil and gas

leases; the statute governing the approval of coal

leases (25 U.S.C. 396a) does not contain any comparable

The regulation cited by the Tribe (25 C.F.R. Pt. 211

(2001)) was not promulgated until 1996, almost a decade

after the events at issue in this case. Moreover, where-

as that regulation now obligates the Secretary to find

that a lease is “in the best interest of the Indian mineral

owner” when it provides for a royalty rate less than the

minimum rate for leases of federal coal, the regulation

notably does not require the Secretary to make such

a finding before approving a lease—like the lease

amendments at issue here—that has a royalty rate

equal to or more than the minimum rate. 25 C.F.R.

211.43(b) (2001). The governing regulations thus refute

the notion that the Secretary is obligated by the IMLA

to ensure that every proposed lease agreed to by a

Tribe will maximize the return to the Tribe. See Cotton

Petroleum Corp. v. New Mezico, 490 U.S. 163, 179

(1989).

Indeed, in stark contrast to the particular statutory

and regulatory provisions at issue in Mitchell IT, see

463 U.S. at 222, neither the IMLA nor the regulations

that the Secretary has promulgated to give content to

her powers and duties under that Act establish any

specific duties governing the Secretary’s approval of a

lease or lease amendment, except to the extent that

they establish a minimum royalty rate for coal leases

(now set at the minimum rate for federal coal leases).

25 C.F.R. 211.15(c) (1985 & 1987); 25 C.F.R. 211.43(b)

(2001); see Pet. 3 & n.1. The lease amendments at issue

in this case met, and exceeded, the applicable minimum

rate at the time that the amendments were approved in

1987. There is no further requirement in the IMLA or

the regulations that the Secretary insist that parties to

a proposed Indian mineral lease agree to a higher rate

under particular circumstances, and such a requirement

would be inconsistent with the central aim of the IMLA

—to allow Indian mineral owners to negotiate their

own lease terms, subject only to a backstop protection

of approval by the Secretary. See Pet. App. 68a.

3 Even if the IMLA did impose a duty on the Secretary to act

in the best interests of Indian mineral lease owners, that would not

automatically lead to the conclusion that a breach of such a vague

and generalized duty would give rise to a claim for money dam-

ages. In Mitchell I, this Court held that the Indian plaintiffs failed

to state a claim for money damages even though the statute in that

case, the General Allotment Act, expressly obligated the United

States to hold allotments “in trust for the sole use and benefit of

[Indian allotees].” 445 U.S. at 541.

M The Tribe asserts (Br. in Opp. 20) that the Secretary also

violated 25 C.F.R. 211.2 (1985). In pertinent part, that provision

authorizes the negotiation of Indian mineral leases, and reserves to

The Tribe asserts (Br. in Opp. 6) that “{tJhe process

required by IMLA for Secretarial approval * * * re-

quires an economic analysis [of a mineral lease] to

determine if it were in the Tribe’s best interest.” But

the Tribe does not cite any statute or regulation re-

quiring such an analysis. Moreover, while the Secre-

tary may choose to conduct her own economic analysis

in deciding whether to approve a lease, judicial imposi-

tion of an economic-analysis requirement would be

inconsistent with the statute’s focus on permitting

Indian mineral owners to negotiate their own rates,

subject to the minimum rate. Requiring the

to conduct her own economic analysis of every Indian

mineral lease submitted for her approval would always

require the Secretary to substitute her own judgment

for that of the Indian mineral owner, and all but render

the lease negotiations between the Indian mineral

owner and private parties a technical formality.

4. The court of appeals made no effort to tie the

alleged breaches of trust even to generalized duties

imposed by the IMLA and the Secretary’s regulations

under that Act. In finding the breach of a fiduciary

duty mandating damages, the court of appeals focused

on the Secretary’s actions in 1985 in connection with

Peabody’s administrative appeal of a decision that the

parties later agreed to vacate (see Pet. App. 1la-12a),

rather than the reasonableness of the royalty rate and

the Secretary the right “to direct that negotiated leases be re-

jected.” Ibid. It also provides that negotiated leases shall be filed

with the Indian agency after 30 days, unless that time is extended

by the Area Director. The court of appeals did not rely on, much

less find a violation of, Section 211.2. In any event, nothing about

Section 211.2 lends itself to an interpretation that would mandate

the payment of compensation for a violation. See also Pet. App.

26a-27a n.5 (Schall, J., concurring in part and dissenting in part).

full package of lease amendments that were actually

pore to by the parties and approved by the Secretary

in 1987. The Secretary’s actions with respect to the

pending administrative appeal were governed by the

Department’s general procedural rules and the APA,

which plainly do not authorize the payment of damages

for a violation, and not by the IMLA provision

(25 U.S.C. 396a) governing approval of Indian mineral

leases or amendments. See pp. 29-31, supra. Moreover,

the Tribe itself does not seek to set aside the lease

amendments to which it agreed in 1987 because, as the

Tribe recognized below, “there are many aspects of the

renegotiated lease package that are favorable to the

Navajo Nation.” Pet. App. 50a.

Cc. Federal Involvement With Respect To Indian Mineral

Leasing Does Not In Itself Subject The United States

To The Tribe’s Damages Claims .

Instead of determining whether there was a violation

of a specific statutory or regulatory provision that

mandated the payment of damages for a violation, the

court of appeals reasoned that the IMLA and the Secre-

tary’s implementing regulations gave the Secretary

“eontrol” over the management of the Indian resources

at issue, and that the existence of such control gave rise

to a duty on the part of the United States to manage

those resources, which, if breached, would give rise to

a claim for damages. See Pet. App. 5a; see also id. at 8a

(“The [IMLA] and its regulations are similar to those

governing timber resources that were the subject of

Mitchell II, insofar as federal authority 1s retained.”).

That understanding of Mitchell II is fundamentally

flawed and, if adopted, would vitiate the fundamental

principles of sovereign immunity that govern this case.

1. To begin with, the degree of federal control pre-

sent in Mitchell II with respect to timber management

on Indian lands was much greater than the degree of

any control exercised by the Secretary with respect to

coal leases. In Mitchell II, this Court went to great

lengths to describe the “pervasive” control that the

United States had expressly assumed with respect to

Indian timber sales. 463 U.S. at 219; see id. at 220

(“regulations address[] virtually every aspect of forest

management”); id. at 222 (statutes establish “compre-

hensive’ responsibilities of the Federal Government in

managing the harvesting of Indian timber”); id. at 225

(government has “assume[d] such elaborate control

over forests and property belonging to Indians”); id. at

225 n.29 (discussing “pervasive federal control” in

Indian timber management). As the Court of Federal

Claims explained, “the level of management and control

that the government has assumed over coal leases

under IMLA” does not come close to the level of federal

control that this Court identified in Mitchell II. See

Pet. App. 54a; see also id. at 55a-59a.

In the IMLA, the United States has assumed certain

fiduciary responsibilities with respect to the leasing of

minerals on Indian lands, but that Act “does not unam-

biguously provide that the United States has under-

taken full fiduciary responsibilities as to the

ment of [leased] lands.” Mitchell I, 445 U.S. at 542

(emphasis added). To the contrary, the key provision of

that Act transferred leasing authority from the Secre-

tary to the Tribes. It provides that tribal lands “may,

with the approval of the Secretary * * * , be leased

for mining purposes, by authority of the tribal council

or other authorized spokesmen.” 25 U.S.C. 396a (em-

phasis added). Moreover, as the Court of Federal

Claims explained, that provision squares with an

important purpose of the IMLA—“to foster Indian self-

determination,” an “ideal” that is “directly at odds”

with the notion that the Secretary has full “control

over leasing.” Pet. App. 58a-59a; see Crow Tribe of

Indians v. Montana, 650 F.2d 1104, 1112 (9th Cir.

1981), amended, 665 F.2d 1390 (The IMLA gave “tribal

governments control over decisions to lease their lands

and over lease conditions, subject to approval of the

Secretary of Interior, where before the responsibility

for such decisions was lodged in large part only with the

Secretary.”), cert. denied, 459 U.S. 916 (1982).

To be sure, another purpose of the IMLA is to see

that Indian Tribes receive “a profitable source of re-

venue” from the leasing of mineral resources on their

lands. Cotton Petroleum Corp., 490 U.S. at 179. That

conclusion is supported by the legisiative history of the

IMLA, which states in part: “It is not believed that the

present law is adequate to give the Indians the greatest

return from their property.” S. Rep. No. 985, 75th

Cong., Ist Sess. 2 (1937); H.R. Rep. No. 1872, 75th

Cong., 3d Sess. 2 (1938). But as this Court admonished

in Cotton Petroleum Corp., 490 U.S. at 179, that state-

ment cannot be given “talismanic effect.” Even when

165 See Assiniboine & Sioux Tribes of the Fort Peck Indian

Reservation v. Board of Oil & Gas Conservation, 792 F.2d 782, 796

(9th Cir. 1986) (noting that one of the purposes of IMLA was “to

increase Indian authority in granting leases”); BHP Minerals

Int'l Inc., 139 Interior Bd. Land Appeals 269, 311 (1997) (“[W jhile

maximization of tribal revenues was clearly one purpose behind

* * * the IMLA * * * [e]qually important was the desire to give

Indians a greater say in the use and disposition of the resources

found on Indian lands.”) (citing Cotton Petroleum Corp. v. New

Mexico, 490 U.S. 163, 177-180 (1989)). That purpose is promoted

by the IMLA. As this Court recognized in Cotton Petroleum Corp.,

the legislative history of the IMLA makes clear that the statute

was intended to make it easier for Tribes to engage in—and profit

from—mineral leasing by eliminating obstacles placed on such

leasing that did not apply to non-Indians. See id. at 179.

“[rjead in the broadest terms possible,” the relevant

paragraph in the committee report merely “suggests

that Congress sought to remove ‘disadvantages in

[leasing mineral rights] on Indian lands that are not

present in applying for a claim on the public domain.’”

Ibid. (quoting committee report).

The legislative history thus does not suggest that a

Tribe has a right to renegotiate a lease—or to sue the

United States—any time that it believes in retrospect

that it did not receive the greatest possible return for

its resources. Nor does it obligate the Secretary to

second guess or disapprove leases that already have

been negotiated and agreed to by a Tribe and a lessee

on the ground that, in the Secretary’s view, the royalty

rate and other conditions agreed to by the parties

would not maximize the Tribe’s profits, or that an

alternative set of lease terms would be more in the

interest of the Tribe. The IMLA authorizes the Tribes

to negotiate mineral leases with others. The Act’s

requirement of approval by the Secretary furnishes a

general backstop protection, not a duty on the part of

the Secretary independently to determine and impose

on the parties the terms that she believes will maximize

the return for one side of the negotiated transaction.

As discussed above, in Mitchell I, the General Allot-

ment Act explicitly obligated the United States to act

fov the “sole * * * benefit” of the Indians, but the

Court nonetheless concluded that it did not give rise to

an obligation on the part of the United States that, if

breached, would mandate the payment of damages.

445 U.S. at 541 (emphasis added). In the same vein, to

the extent that the IMLA generally implies or contem-

plates that the Secretary will act for the benefit of

Indian Tribes, or in the interests of Tribes, the exis-

tence of such a generalized duty does not in itself

authorize a damages action against the United States

under the Tucker Act based on a claim that the Secre-

tary erred in some particular way in implementing the

IMLA.”*

2. In any event, in Mitchell II this Court did not

focus on the existence of federal control with respect to

Indian resources vel non. Instead, in addition to point-

ing to the existence of a “pervasive” regulatory scheme,

the Court emphasized that the government had specifi-

cally assumed “fiduciary management duties” with

respect to Indian timber resources. 463 U.S. at 218

(emphasis added); see id. at 222 (“emphasizing the

Secretary of the Interior’s management duties” with

respect to timber on Indian trust lands). For example,

one statute in Mitchell II expressly provided that

“s]ales of timber ‘shall be based upon a consideration of

the needs and best interests of the Indian owner and his

heirs.” Jd. at 209 (citation omitted); see id. at 224. In

addition, Congress mandated that, “{iJn performing this

duty, the Secretary was specifically required to take

16 The court of appeals relied on “the interests of the Indians”

language in 25 U.S.C. 399 as evidence that IMLA “place[s] on the

federal official a clear and unqualified fiduciary responsibility to

manage the mineral resources for the benefit of the Indians.” Pet.

App. lla. But Section 399 is not a part of the IMLA. Section 399

was enacted almost 20 years before the IMLA, and authorized the

Secretary to lease certain unallotted Indian lands for mining pur-

under terms set by the Secretary, without input from the

Indian tribes. The legislative history of the IMLA specifically

notes that the Act was intended to correct Section 399’s defi-

ciencies, including with respect to the lack of control by Indian

Tribes over the leasing of their mineral resources. S. Rep. No. 985,

supra, ai 2; H.R. Rep. No. 1872, supra, at 2. In any event, even if

Section 399 were a part of the IMLA, its reference to the interests

of the Indians would not compel the conclusion here, any more than

in Mitchell I, that the United States has breached a money-man-

dating duty owed to the plaintiff Tribe.

into account” several different factors, including “the

highest and best use of the land” and the “present and

future financial needs of the owner and his heirs.” /d.

at 222 (quoting 25 U.S.C. 406(a)); see id. at 220-221

(Congress imposed “strict{] duties upon the Govern-

ment with respect to Indian timber management,”

including by “expressly direct[ing] that the Interior

Department manage Indian forest resources ‘on the

principle of sustained-yield management.’”).

Congress has not imposed any comparable “fiduciary

management duties” on the Secretary with respect to

Indian coal leases. When the Secretary approves a

lease (or an amendment to an existing lease), the IMLA

and implementing regulations neither mandate that she

establish a particular royalty rate or other terms, nor

impose any specific standards that the Secretary must

assure are satisfied before giving her approval. For

example, the regulations that applied when Peabody

filed its appeal in 1985 and the Secretary approved the

lease amendments in 1987 provided only that the Secre-

tary could not approve a lease with a minimum royalty

rate of less than “10 cents per ton.” 25 C.F.R. 211.17(c)

(1985 & 1987).

The current regulations have increased the minimum

royalty rate to 12 1/2 percent of gross proceeds—the

rate that applies to coal leases on federal lands—and

state that “[a] lower royalty rate shall be allowed if it is

determined to be in the best interest of the Indian

mineral owner.” 25 C.F.R. 211.43(b) (emphasis added).

The regulations do not refer to the Secretary’s approval

of a rate that is at least equal to the minimum 12 1/2

percent rate, much less require the Secretary to insist

that the parties to a negotiation agree to a higher rate

under particular circumstances. In other words, the

structure of even the current regulations underscores

that the United States has not assumed any specific

management duties with respect to the approval of a

lease that contains a royalty rate at least equal to the

minimum rate. See 56 Fed. Reg. 58,734, 58,736 (1991)

(minimum royalty rate regulation provides “reasonable

royalty rates”).

D. The Common Law Of Trusts Does Not Supply A Right

To Recover Damages Against The United States Under

The Tucker Act

The court of appeals also erred in treating the United

States as if it on a private trustee that may be liable

in money damages to an Indian Tribe for breach of any

of the common law duties cited by the court that might

be applicable to a »rivate trustee. See Pet. App.

lla-13a. As the Court of Federal Claims explained, the

violations of the common law duties that it found “do

not themselves confer jurisdiction on this Court, nor

entitle [the Tribe] to money damages.” Jd. at 52a. That

conclusion is compelled by the text of the Tucker Act,

which, as explained above, requires a plaintiff to point

to the violation of an “Act of Congress,” or a “regulation

of an executive department.” 28 U.S.C. 1491(a)(1).

Likewise, the court of appeals’ reliance on the common

law conflicts with this Court’s focus in Mitchell II on

whether the statutes or regulations at issue could

“fairly be interpreted as mandating compensation for

damages sustained as a result of a breach of the duties

they impose.” 463 U.S. at 219 (emphasis added).

This Court has recognized that the federal govern-

ment performs a role in its relations with the Indian

Tribes that is different from that of a simple private

trustee who is governing by common law standards.

See, e.g., Nevada v. United States, 463 U.S. 110, 127-128

(1983). The United States indeed occupies a unique

relationship with the Indian Tribes, which has been

characterized as one of “guardianship” or “trust.” See

United States v. Kagama, 118 U.S. 375, 382-384 (1886);

Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17

(1831). The United States fully accepts the implications

of that relationship and the undertakings that go with

it. Not all those undertakings, however, give rise to

legally enforceable duties on the part of the United

States, much less duties that are enforceable in a suit

for damages against the United States.

In determining whether an alleged error by the

Secretary under a statute or regulation involving

Indian affairs may give rise to a suit for money dam-

ages, this Court has invoked the same principles that

govern the determination whether the United States is

immune from money-damages actions in other contexts.

See Mitchell II, 463 U.S. at 218-219; Mitchell I, 445 U.S.

at 538; see also United States v. Mottaz, 476 U.S. 834,

851 (1986); Klamath & Moadoc Tribes of Indians v.

United States, 296 U.S. 244, 250, 255 (1985); Black-

feather v. United States, 190 U.S. 368, 376 (1903). The

Indian Tucker Act, moreover, requires that the claims

of Indian plaintiffs be placed on the same footing as the

claims of non-Indian plaintiffs. See p. 22, supra. To the

extent that the court of appeals held that the United

States may be liable for damages based on application

of common law trust principles, its decision puts the

damages claims of Indian plaintiffs in a considerably

different position than the damages claims of non-

Indian plaintiffs, which must be squarely grounded on

an “Act of Congress” or “regulation of an executive

department.” 28 U.S.C. 1491(a)(1)."

7 The Tucker Act states that, inter alia, the Court of Federal

Claims has jurisdiction to entertain claims against the United

States based on the Constitution, an Act of Congress or imple-

menting regulation, or a contract with the United States. See 28

At the same time, the court of appeals’ decision

would impose a regime that is at odds with the central

goal of tribal self-determination. That goal is embodied

in the text of the IMLA itself, which assigns to the

Tribe, not the Secretary, the power and responsibility

to lease tribal lands, subject only to the approval of the

Secretary and compliance with specific standards set

forth in the IMLA and the Secretary’s implementing

regulations. That goal also is reflected in one of the

basic purposes of the IMLA, which was to “bring all

mineral-leasing matters in harmony with the Indian

Reorganization Act,” Montana v. Blackfeet Tribe of

Indians, 471 U.S. 759, 767 n.5 (1985), the cornerstone of

modern Indian policy designed to facilitate tribal self-

determination by “giv[ing] the Indians the control of

their own affairs and of their own property,” Mescalero

Apache Tribe v. Jones, 411 U.S. 145, 152 (1973) (quoting

78 Cong. Rec. 11,125 (1934) (Rep. Howard)). And the

tribal self-determination goal is confirmed by more re-

cent legislation, such as the Indian Self-Determination

and Education Assistance Act, 25 U.S.C. 450.

The court of appeals’ decision, however, in effect

would require the Secretary to look behind and second-

guess the wisdom of virtually any minerals agreement

negotiated by an Indian Tribe and a private party, ap-

plying vague and even conflicting concepts of the

common law that might be enforced by a court of equity

against a private trustee. Not only would such a

practice undermine the independence and sovereignty

U.S.C. 1491(a)(1). Congress could have added to the list a pro-

vision for claims based on a trust relationship with the United

States. But it did not do so in either the Tucker Act or the Indian

Tucker Act. See United States v. Vonn, 122 S. Ct. 1043, 1049

(2002) (“expressing one item of [an] associated group or series ex-

cludes another left unmentioned”).

of Tribes. It also would interfere with the role of

Congress, which has plenary power to legislate in the

field of Indian affairs, United States v. Kagama, 118

U.S. 375 (1886), and thereby to prescribe the powers

and duties of the Secretary with respect to tribal re-

sources. In the circumstances presented here, Con-

gress clearly has spoken, giving tribal governments

control over their mineral leasing decisions, with the

Secretary furnishing a general backstop protection to

assure that the minimum standards prescribed by the

IMLA or the Secretary’s implementing regulations are

met, rather than serving as an independent negotiator

of lease terms that she believes would be more favor-

able, or more in the Tribe’s interests. And Congress

has assigned to the Secretary, rather than to courts

considering damages claims, the authority to flesh out

the manner in which the Secretary will perform func-

tions that Congress has retained for her. See 25 U.S.C.

396d (authority to issue regulations).

Finally, to hold that the United States may be liable

in damages for the violation of any duty discoverable in

the interstices of the law of trusts would vastly expand

the potential liability of the United States for breach of

trust, not to mention conflict with bedrock principles of

sovereign immunity discussed above. And it would

leave federal officials without any clear principles to

follow—which specific statutory and regulatory duties

supply—in seeking to avoid the imposition of damages

claims. Nothing in this Court’s sovereign immunity

jurisprudence in general or its Mitchell decisions in

particular supports the court of appeals’ decision to go

down that path, and thus transform the Court of

Federal Claims into a court of equity, in which the

United States may be found liable in damages for

alleged violations of common law duties that have not

been assumed by the government in any statute or

implementing regulation.

CONCLUSION

The judgment of the court of appeals should be

reversed.

Respectfully submitted.

THEODORE B. OLSON

Solicitor

THOMAS L. SANSONETTI

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

JEFFREY BOSSERT CLARK

Deputy Assistant Attorney

General

GREGORY G. GARRE

Assistant to the Solicitor

General

Topp S. AAGAARD

R. ANTHONY ROGERS

Attorneys

AuGuST 2002

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