Amicus Curiae Brief — United States v. Navajo Nation

No. 01-1375

IN THE a

Supreme Court of the Gnited States

aku eee eee

UNITED STATES OF AMERICA,

Petitioner,

Vv.

NAVAJO NATION,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

BRIEF FOR THE NATIONAL CONGRESS OF

AMERICAN INDIANS AS AMICUS CURIAE IN

SUPPORT OF RESPONDENT

JOHN E. ECHOHAWK JEFFREY S. SUTTON

NATIVE AMERICAN RIGHTS FUND (Counsel of Record)

1506 Broadway MARY BETH YOUNG

Boulder, Colorado 80302 BRIAN E. RAY

(303) 447-8760 JONES, DAY, REAVIS & POGUE

41 South High Street, Suite 1900

Columbus, Ohio 43215

(614) 469-3855

Counsel for the National

Congress of American Indians

TABLE OF CONTENTS

TABLE OF AUTHORITIES ........---++ee+eeeees iil

STATEMENT OF AMICUS INTEREST ......------- l

STATEMENT .........--ceceeceeeeeeeeseeeeeeee 2

SUMMARY OF ARGUMENT ........-----+eeee08 5

ARGUMENT ........--- cece cece eee eereeeeeeeee 7

I. CONTRARY TO THE GOVERNMENT’S

POSITION, THE PLAIN TERMS OF THE

INDIAN TUCKER ACT DO NOT DEFEAT

THIS CAUSE OF ACTION. .......---++eeeeeee 8

Il. PRECEDENT CONFIRMS THAT A CAUSE OF

ACTION FOR BREACH OF TRUST EXISTS IN

THIS CASE. ......... ec ee cece eee eeeeercees 11

A. Customary Principles Of Statutory Construction,

Not Strict Construction, Determine Whether The

Navajo Have A Cognizable Cause Of Action ... 12

B. The Government Has Extensive Trust Duties

With Regard To Indian Mineral Leases ........ 13

C. The Government’s Actions Here Violate Even

The Most Minimal Fiduciary Standards ....... 18

D. A Damages Remedy Is Available For Breach Of

Trust Claims .......... cee ee ee ee reece ceeee 21

ii.

TABLE OF CONTENTS (cont.)

E. The Government’s Foundational Trust

Responsibility To Indian Tribes Reinforces

The Navajo’s Claims ...................... 23

Ill. THE GOVERNMENT’S REMAINING

ARGUMENTS ARE UNPERSUASIVE .......... 25

A. The Court’s Private Right Of Action Cases

Shed Little Light On The Proper Indian Tucker

AG RGD oo oc caveccccevsinenmnaieeee 25

B. The Government Cannot Avoid Damages Liability

By Relegating The Tribe To APA Relief Or By

Focusing on the Appeal Regulations.. ........ 28

CONCLUSION 30

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TABLE OF AUTHORITIES

Page

Cases

Alexander v. Sandoval, 532 U.S. 275 (2001) ......... 27

Atlantic Richfield Co. v. USA Petroleum Co.,

iE Scho ceecbaccesssceccccccece 2

Bd. of County Comm'rs v. Seber,

i occcackcésaeccencececes 23,24

Cherokee Nation v. Georgia, 30 U.S. (5 Pet.) 1 (1831) .. 23

Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992) ... 9

Clapp v. United States,

117 F. Supp. 576 (Ct. Cl. 1954) .. 2.2... e eee 23

Corr. Servs. Corp. v Malesko,

ee oe ek eccceccescececc‘ce 27

Delaware Tribal Bus. Comm. v. Weeks,

i peer ech escesecececcccccees 24

Dep't of Interior v. Klamath Water Users

Protective Ass'n, 532 U.S. 1 (2001) .............. 18

Duncan v. United States, 667 F.2d 36 (1981) ......... 19

Eastport S.S. Corp. v. United States,

372 F.2d 1002 (Ct. Cl. 1967)... 2... cece 22, 26

Fellows v. Blacksmith, 60 U.S. (19 How.) 366 (1856) .. 23

Gonzaga Univ. v. Doe, 122 S. Ct. 2268 (2002) ........ 27

Illinois v. City f Milwaukee, Wis., 406 U.S. 91 (1972) .. 9

Indian Towing Co. v. United States,

SED cctbaccccecocccescccccccces 13

Kerr-McGee Corp. v. Navajo Tribe,

DED bcccesceséeccesccccceccces 14

Lane v. Pueblo of Santa Rosa, 249 U.S. 110 (1919) .... 24

-iv-

TABLE OF AUTHORITIES (cont.)

Page

Menominee Tribe v. United States,

ey ey cn.sd Pehcdetécentubeooesec 10

Minnesota v. Mille Lacs Baia « “Chippewa Indians,

Seay DEED iedcas éndinn b6bkmneeenibeds< 24

Mitchell v. United States, 664 F.2d 265 (Ct. Cl. 1981),

aff'd, 463 U.S. 206 (1983)... ee ec c eee 15

Montana v. Blackfeet Tribe,

Gen SEED Behecsndccdakacds 13, 14, 17, 24

Morton v. Ruiz, 415 U.S. 199 (1974)... 2... 0... ee 25

NLRB v. Amax Coal Co., 453 U.S. 322 (1981) ........ 19

NRG Co. v. United States, 24 Cl. Ct. 51 (1991) ....... 16

Navajo Nation v. United States,

SP as ncn cdicccdinssees 2, 4, 20

Navajo Nation v. United States, 263 F.3d 1325

Se unccksdadcensacbdbutcdbidec 4, 20

Navajo Tribe v. United States,

624 F.2d 981 (Ct. Cl. 1980)... 2.2.2.0... 14, 15, 19

Nevada v. United States, 463 U.S. 110 (1983) ........ 30

Northwest Airlines, Inc. v. County of Kent,

Pe aD: co cbhacdndekobackoli coceace 12

Pennhurst State Sch. & Hosp. v. Halderman,

ae CED nds cukccdbtsecedinconcés 26, 27

Preseault v. Interstate Commerce Comm'n,

GOCE BONED widate dustin cciendckccescecss 22

Schweiker v. Chilicky, 487 U.S. 412 (1988) .......... 27

Seminole Nation v. United States,

ES See 10, 18, 24

Timpangos Tribe v. Conway,

286 F.3d 1195 (10th Cir. 2002) .................. 25

United States v. Aetna Cas. & Surety Co.,

ERE Eo ee 12

United States v. Causby, 328 U.S. 256 (1946) ........ 22

-V-

TABLE OF AUTHORITIES (cont.)

Page

United States v. Cherokee Nation,

480 U.S. 700 (1987) .... 0... e cece cece eee eeee 7,23

United States v. Creek Nation, 295 U.S. 103 (1935) .... 10

United States v. Dann, 470 U.S. 39 (1985) .....------ 18

United States v. Emery, Bird, Thayer Realty Co.,

237 U.S. 28 (1915) «1... cece eee eee eee eee eeeee 22

United States v. Mason, 412 U.S. 391 (1973) .....---- 18

United States v. Mitchell, 445 U.S. 535 (1980) ...... 6, 16

United States v. Mitchell, 463 U.S. 206 (1983) ..... passim

United States v. Sioux Nation,

448 U.S. 371 (1980) ... 2... eee cece eee eee eee 24

26

United States v. Testan, 424 U.S. 392 (1976) . 6, 13, 21,

United States v. Winstar Corp., 518 U.S. 839 (1996) ... 22

Will v. Mich. Dep't of State Police, “

491 U.S. 58 (1989) .. 2... cece eee eee eeee

Federal Statutes

25 U.S.C. § 396 nee e eee eeeeeeeeeeneeeeeeee sees i. 2

25 U.S.C. § 3968 2... eee e eee eee eeeeeeees =

25 U.S.C. § 39GD 2.2.6 eee eee eee eee een eeeeees ~

25 U.S.C. § 399 2... cece cece eee eee eee eeneeeees a

28 U.S.C. § 1491 (a) .....- eee eee eee eee eee eees > :

28 U.S.C. § 1505 ..... se eeeeeeeeneeeeseeeeseees ‘

~ Indian Claims Commission Act,

60 Stat. 1049 (1946) .... 2... cece ee eee eres 5, 10

Regulations

25 CFR. § 2.2 (1985) ....--- eee cece eee ee eeees ~

25 CFR. § 2.3(b) (1985) . ..... eee eee eee eens

25 CF.R. § 2.4 (1985) .. 2... eee cece renee eeeeeees 29

-vi-

TABLE OF AUTHORITIES (cont.)

Page

ee ED a concocesdcecéovcetaveseds 29

Gs et ED oscccdccedvecceccdbesscse 14

ee ED cccocescoceccescoosess 16, 17

Pe ED cénddcoccedsctsecesoeases 14

Gs EEE cecocccccccecepecoeceses 17

Sey ED cc cecccccccegtbocessece 17

Ps ED ococcecccestéeccdeoeecess 17

Pes EE occddccocccteseeseéosess 17

PR PEED ocacedecdeccostoeneeese 17

Ps ED cécccceccoccboosssoveses 17

PD cGednds cccdésdvecseececeutss 16

Congressional History

H.R. Rep. No. 1466 (1945) ...........050005- 5, 10, 27

BR Se SEED cccccccccccccccccesseuss 6, 14

92 Cong. Rec. 5312 (1946) .......... ccc cece weeees 28

U.S. Code, Titles 18 and 28-Amendments,

SG CED 6dr ccecceccéccdatetovendes 10

Miscellaneous Authorities

3 Scott on Trusts 205 (4th ed. 1988) ................ 21

Restatement (Second) of Trusts (1959) .......... 20, 21

1849 Treaty, 9 Stat. 974... 2... cece eee ee we eees 24

1868 Treaty, 15 Stat. 667 .......... ccc eccsccceees 24

STATEMENT OF AMICUS INTEREST

The National Congress of American Indians (“NCAI”)

writes to urge the Court to affirm the decision below and to

explain why this case matters not just to the Navajo Nation but

to her sister Tribes as well. At stake is a principle that is as

time-honored as it is widely applicable: When an entity

exercises such control over property as to take on trust

responsibilities with respect to it, may the beneficiary of that

trust relationship obtain monetary relief to remedy a fiduciary

breach? To the end of reaffirming that the answer to that

question is “yes,” NCAI respectfully offers this brief amicus

curiae for the Court’s consideration.*

Established in 1944, NCAI is the oldest and largest national

representing more than 250 American Indian Tribes and

Alaska Native villages and Native American citizens. NCAI

has long been, and continues to be, dedicated to protecting the

rights and improving the welfare of American Indians.

Like the Navajo Nation, many NCAI members hold land

that is subject to the Indian Mineral Leasing Act (“IMLA”)

and that is subject to the trust relationship that predates the

Act and was reinforced by it. NCAI therefore has a fervent

interest in ensuring that Tribes may rely on the Government to

honor its fiduciary responsibilities when it supervises mineral

leases on Indian lands under the Act. And it likewise has a

keen interest in ensuring that Tribes may obtain satisfactory

relief when the Government fails to honor those

‘biliti

* Pursuant to Rule 37, amicus states that no counsel for a party authored

this brief in whole or in part and no person other than amicus provided

financial assistance in the preparation or submission of this brief. The

parties have consented to the filing of this brief, and their consents

have been filed with the clerk’s office.

2

STATEMENT

As this case comes to the Court, there is little room for

debate that the United States committed a serious breach of its

trust duties to the Navajo Nation in the course of reviewing,

approving, and supervising the mineral lease that is the subject

of this case. Nonetheless, the United States maintains that the

Navajo lack a cognizable claim. Success in this argument

would necessarily result in summary judgment for the

Government. Accordingly, in assessing whether a cause of

action does in fact exist here, the Court must assume that a

violation of the claimed duties has occurred and must view the

underlying facts through the lens of the familiar summary

judgment standard. That of course means the Navajo Nation

receives the benefit of all favorable inferences. See Atlantic

Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 332, n.2

(1990).

Under these circumstances, the extensive factual claims

made by the Government and its amicus, many of them

without any proper foundation in the record, are beside the

point and indeed serve only to muddy the waters. Properly

viewed in the light most favorable to the Navajo, these are the

relevant facts:

* In 1964 the Secretary of the Interior, ostensibly acting

on behalf of the Navajo Nation, negotiated a lease for

Navajo coal deposits with an affiliate of the Peabody

Coal Company. The lease contained a low royalty rate

of not more than 37.5 cents per ton, but reserved for the

Secretary the authority to adjust the royalty rate to a

reasonable level after 20 years. See Navajo Nation v.

United States, 46 Fed. Cl. 217, 221 (2000).

* Beginning in 1979 the Tribe and Peabody unsuccessfully

attempted to renegotiate the lease. The Tribe then asked

the Secretary to exercise his reserved authority to adjust

the rate. J.A. 139-41. In response, the Bureau of Indian

3

Affairs (“BIA”) commissioned two studies: each

supported an adjustment of the royalty to at least a 20%

rate. In light of these studies, the Area Director adjusted

the royalty rate to 20%. J.A. 141.

Peabody appealed to the Commissioner of Indian A ffairs

who stayed the royalty adjustment pending appeal. The

parties submitted briefs in early 1985, and the Tribe

requested that the Department approve the 20% rate or

terminate the lease due to violations of its provisions by

Peabody. J.A. 142, 144.

Relying on additional, more detailed studies supporting

the 20% rate, the Commissioner finalized a decision

document recommending approval of that rate. J.A.

151-54.

After the pending decision was leaked to Peabody, the

company hired Stanley Hulett, a close personal friend of

Secretary Hodel, to seek the Secretary’s assistance in the

appeal. Shortly after an ex parte meeting with

Mr. Hulett, the Secretary signed a memorandum

prepared by Peabody instructing the Commissioner not

to issue the decision approving the 20% rate. J.A. 157,

162-63.

The Department sent the Tribe a letter in August, 1985,

informing it that a decision had not been finalized in the

appeal, but declining to explain why. Unaware of the

meeting between Secretary Hodel and Hulett, or of the

additional studies supporting the 20% rate, the Navajo

assumed that the delay in approval was due to

substantive concerns by the Department. In the face of

a continuing loss of revenue caused by the still-

controlling 1964 rate, the Navajo resumed negotiations

with Peabody. J.A. 168-70.

4

* The Navajo eventually reached an agreement with

Peabody that contained significant concessions. Among

them were the following: a royalty rate of 12.5%, loss

of the right to seek $89 million in back royalties and

taxes, confirmation of existing tax waivers, and loss of

the Secretarial review provision. J.A. 178-79.

* The Secretary approved the renegotiated lease despite

numerous deficiencies in the review process. For

example: A traditional economic analysis was not

performed, J.A. 170, 175-76; the review found that the

lease violated at least three regulations, J.A. 174; and the

technical review was based on incomplete information

and incorrect assumptions, J.A. 176-79.

Not surprisingly, both courts below concluded that the

Government’s conduct during this sequence of events fell far

short of satisfying even the most basic standards of fiduciary

care. As the Court of Federal Claims put it, “the Secretary . . .

engaged in ex parte communications with private industry at

the expense of the Navajo, the beneficiary of the trust

relationship,” then “approved lease amendments with royalty

rates well below the rate that had previously been determined

appropriate by those agencies responsible for monitoring the

federal government’s relations with Native Americans.”

Navajo Nation, 46 Fed. Cl. at 226-27. These actions “violated

the most fundamental fiduciary duties of care, loyalty and

candor.” Jd. at 227. The Federal Circuit concurred,

concluding that “[i]t can not be reasonably disputed that the

Secretary’s actions were in Peabody’s interest and contrary to

the Navajo’s interest.” Navajo Nation v. United States, 263

F.3d 1325, 1328 (Fed. Cir. 2001).

5

SUMMARY OF ARGUMENT

1. The Government rests its argument on a flawed

foundation by claiming that the plain language of the Tucker

and Indian Tucker Acts requires dismissal of this claim. By its

terms, the Indian Tucker Act authorizes suits against the

Government involving (1) “any claim,” (2) “in favor of any

tribe,” (3) “whenever” the claim “aris[es] under the

Constitution, laws, or treaties of the United States, or

Executive orders.” 28 U.S.C. § 1505. That broad

authorization applies to any and all claims premised on federal

positive law (and even common law), and readily extends to

the present action, which finds its basis in statutes and

“regulations governing Indian mineral leasing, the

Government's established trust responsibility toward Indians,

and the Government’s treaty obligations to the Navajo Nation.

History confirms that Congress intended the courts to

honor the broad language of the Indian Tucker Act and

specifically to apply it to breach-of-trust claims. The Act

replaced an awkward and archaic system for bringing claims

against the Government, one that forced Tribes to obtain

authorization for suit through special jurisdictional acts on a

claim-by-claim basis. As enacted, moreover, the Act cautioned

that it should not be construed as altering “the fiduciary or

other relations” between the United States and Indian Tribes,

60 Stat. 1049 (1946), and Congress determined that

facilitating enforcement of the Government’s trust

responsibilities was an essential function of the Act. See H.R.

Rep. No. 1466, at 5 (1945).

2. The Government fares no better under this Court’s

precedents, which light the path for this claim. In United

States v. Mitchell, 463 U.S. 206, 218 (1983) (“Mitchell IT’),

the Court confirmed that the broad language of the Indian

Tucker Act waives the United States’ sovereign immunity and

does so for breach-of-trust claims. The strict construction that

6

applies to claimed waivers of sovereign immunity therefore

plays no role in this case. The Court need only fairly interpret

the cited laws, statutes and regulations to determine whether

they establish an actionable trust relationship. See United

States v. Testan, 424 U.S. 392, 400 (1976).

3. The statutory and regulatory provisions that govern the

mineral lease at issue satisfy the tests set forth in United States

v. Mitchell, 445 U.S. 535 (1980) (“Mitchell I”) and Mitchell

II for identifying the existence of a fiduciary relationship.

First, the Indian mineral leasing framework itself “directly

supports the existence of a fiduciary relationship,” Mitchell II,

463 US. at 224, as the core purpose of that

framework—evidenced by the statutes, regulations, and

legislative history—is to protect Indian resources and to

ensure Indians “the greatest return on their property,” S. Rep.

No. 985, at 2 (1937). Second, the Secretary’s comprehensive

authority over all aspects of mineral leasing amply

demonstrates the kind of “control or supervision” that gives

rise to trust duties under Mitchell II. 463 U.S. at 225.

Once it is established that the applicable statutes and

regulations create a fiduciary relationship under IMLA, the

general law of trusts informs the content of the attendant

duties. The Government’s contrary assertion that the statutes

and regulations themselves must enumerate each and every

fiduciary duty that applies has no foundation in precedent, to

say nothing of common sense. In this case, moreover, there is

no need to establish the outer boundaries of the Secretary’s

trust duties, as the conduct here—involving not just failure to

act in the Navajo’s interests, but affirmative action contrary to

fiduciary standards. A damages remedy under the Indian

Tucker Act naturally follows from a breach of these trust

duties—as Mitchell II itself establishes, 463 U.S. at 226, and

as a wider body of Tucker Act precedent (e.g., contract and

takings claims) confirms.

7

4. The Navajo’s claim is reinforced by nearly two

centuries of precedent, which “establish[es] that the

Government in its dealings with Indian tribal property acts in

a fiduciary capacity.” United States v. Cherokee Nation, 480

U.S. 700, 707 (1987). This underlying trust relationship lends

context to and illuminates the Mitchell II “control or

supervision” test. For when the Government controls or

supervises Indian property, it operates at the core of this

historical trust relationship, and this Court has appropriately

recognized that the Government is required to carry out its

responsibilities in a manner befitting a trustee.

ARGUMENT

It does not take a law degree to appreciate that a most

fundamental breach of trust occurred in this case. It does not

take much common sense to reach the same conclusion. And

it cannot be doubted that most Americans—and certainly

anyone who has ever negotiated a contract—would recoil at

the sequence of events that occurred here.

What, then, is it about the law and a well-developed

common sense that, in the eyes of the Federal Government,

makes this case anything but an easy affirmance? According

to the Government, the plain language of the Indian Tucker

Act and this Court’s precedents defeat the Navajo’s claim as

a matter of law. Yet that is not true. The most observant

attention to the terms of the Indian Tucker Act and the most

ardent respect for stare decisis fully support the Navajo’s

breach-of-trust claim. And the check of common sense does

no less. The Court should affirm.

I. CONTRARY TO THE GOVERNMENT’S

POSITION, THE PLAIN TERMS OF THE INDIAN

TUCKER ACT DO NOT DEFEAT THIS CAUSE OF

ACTION.

In arguing that the Navajo should be denied their day in

court, the Government initially makes a series of plain-

language arguments. It thus contends that the Tribe’s claim

“conflict[s] with . . . the terms of the Tucker Acts,” (U.S. 20)

and that a reversal “is compelled by the text of the Tucker

Act.” Id. 46. It then adds that “the court of appeals’ reasoning

contradicts the terms of the Tucker Act”( id. 17) and cannot

“be squared with the explicit jurisdictional requirements of the

Tucker Act.” Jd. 29. Through it all, the Government

repeatedly invokes the language of the Tucker Act to point out

that the Tribe’s claim “must be squarely grounded on an ‘Act

of Congress’ or ‘regulation of an executive department.”

Id. 29, 46, 47 (quoting 28 U.S.C. § 1491(a)).

But this drumbeat of textual criticism not only fails under

the language of the Tucker Act itself but, importantly, cannot

be squared with the text and history of the statute most directly

implicated by this case—the Indian Tucker Act. Indeed,

conspicuously missing from the Government’s brief is any

meaningful discussion of the language and history of that Act.

As it turns out, whether one considers the literal meaning of

the terms of that Act or looks to the circumstances that

prompted its passage, there is nothing in the Act that defeats

this cause of action. The Government’s efforts to dispose of

this case on “plain language” grounds should be swiftly

rejected.

According to the Indian Tucker Act:

The United States Court of Federal Claims shall have

jurisdiction of any claim against the United States

accruing after August 13, 1946, in favor of any tribe, band,

or other identifiable group of American Indians residing

9

within the territorial limits of the United States or Alaska

whenever such 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

cognizable in the Court of Federal Claims if the claimant

were not an Indian tribe, band or group.

28 U.S.C. §1505.

One can scarcely imagine broader language. The statute

extends to (1) “any claim” against the United States, (2) “in

favor of any tribe,” (3) “whenever” the claim “aris|es] under

the Constitution, laws, or treaties of the United States, or

Executive orders.” 28 U.S.C. § 1505. The waiver of

immunity thus applies to any and all claims premised on

federal positive law, to say nothing of federal common law.

Cf. Cipollone v. Liggett Group, Inc., 505 U.S. 504, 522-23

(1992) (construing federal statute preempting state “law” as

applying to state common law); /llinois v. City of Milwaukee,

Wis., 406 U.S. 91, 99 (1972) (construing “laws” in 28 U.S.C.

§ 1331 to include federal common law). Not only does this

language establish a broad grant of power to bring claims

against the United States, but it also is markedly broader than

the terms of the Tucker Act itself. The Indian Tucker Act

specifically mentions claims under “treaties” and “Executive

orders”; it specifically refers to “laws” rather than Acts of

Congress; and on top of these specifics it sweeps in claims that

“otherwise would be cognizable in the Court of Federal

Claims” under the Tucker Act. Cf. 28 U.S.C. § 1491(a).

Unless the additional language is mere sound and surplusage,

the Indian Tucker Act surely extends even further than the

Tucker Act—at least to the extent plain language, as the

United States suggests (U.S. 17), is the proper guide.

The historical circumstances that prompted passage of the

Indian Tucker Act confirm that Congress meant what it said

and evidence its clear understanding that the Act would apply

10

to trust-obligation claims. In enacting the law, Congress

legislated against the backdrop of a ruthlessly inefficient

system for obtaining relief, one that historically had been

viewed as excluding Tribes from proceeding under the Tucker

Act and had thus forced Tribes to obtain special congressional

authorization to gain relief from the Government. Inefficient

though it was, this claim-by-claim method of authorization

was frequently invoked by the Tribes to enforce the

Government’s trust obligations to them. See, e.g., Seminole

Nation v. United States, 316 U.S. 286 (1942); United States v.

Creek Nation, 295 U.S. 103 (1935); Menominee Tribe v.

United States, 101 Ct. Cl. 10 (1944).

In an effort to minimize these inefficiencies and to end the

unfairness that flowed from this form of claim authorization,

the Indian Tucker Act created a permanent vehicle for Tribes

to enforce the Government’s obligations— including trust

obligations. As passed, the Act made clear that “[njothing

contained in this section shall be construed as altering the

fiduciary or other relations between the United States and the

several Indian Tribes, bands or groups,” 60 Stat. 1049 (1946),

a provision omitted in a later codification as surplusage, see

U.S. Code, Titles 18 and 28-Amendments, ch. 139, § 89(a),

63 Stat. 102 (1949). Clearly, then, while the Indian Tucker

Act may have given the Tribes the “same rights and remedies”

as non-Indians (U.S. 22), it did not limit them to those rights.

Recognizing that trust duties without -violation-of-trust

remedies undermined the animating objectives of the trust

relationship between the Tribes and the Nation, Congress

determined that facilitating enforcement of the Government’s

trust responsibilities to Tribes was an essential function of the

Act. See H.R. Rep. No. 1466, at 5 (1945) (“If we fail to meet

these obligations by denying access to the courts when trust

funds have been improperly dissipated or other fiduciary

duties have been violated, we compromise the national honor

of the United States.”)

—_

11

In facilitating this transition from a retail to a wholesale

system of claim authorization, the Indian Tucker Act brought

to an end a regime in which permission to sue one branch of

the Federal Government remained a claim-by-claim

prerogative of another branch of the Government. At the same

time, the Act ended a regime in which Tribes had few

assurances that Congress would permit their claim, no matter

how egregious the violation of federal law was. The Tribe’s

claim in this case stems from precisely the type of breach of

trust that Congress intended to address—and permit—under

the Act.

Notwithstanding all of this, the Government argues (U.S.

26) that there is a “fatal jurisdictional defect” in the Navajo’s

claim, namely that it does not arise from a cognizable source

of law recognized by the Indian Tucker Act. Not so. The

Navajo’s claim arises from at least three “laws” and two

“treaties” that literally fall within the Act’s scope and that

were breached in this instance: (1) the Indian Mining Leasing

Act (“IMLA”); (2) the IMLA regulations; (3) the common-law

Indian trust doctrine; and (4) the 1849 and 1868 Treaties

between the United States and the Navajo. Whatever else the

United States’ position rests upon, it assuredly does not rest

upon the plain language of the Indian Tucker Act.

Il, PRECEDENT CONFIRMS THAT A CAUSE OF

ACTION FOR BREACH OF TRUST EXISTS IN

THIS CASE.

The United States fares no better in seeking refuge in this

Court’s precedents. As the bookend requirements of Mitchell

I and Mitchell II establish, breach-of-trust claims like this one

have indeed been authorized by Congress and by this Court

under both the Tucker and Indian Tucker Acts.

12

A. Customary Principles Of Statutory Construction,

Not Strict Construction, Determine Whether The

Navajo Have A Cognizable Cause Of Action.

The Mitchell decisions set the initial terms of debate. And

contrary to the Government’s repeated suggestions (U.S. 16,

21, 24, 49), that debate does not center on, or even involve, the

question whether a waiver of sovereign immunity has occurred

with respect to tribal breach-of-trust claims.

Mitchell II gives force to what the terms of the Indian

Tucker Act so plainly say. Namely, the Act waives the United

States’ sovereign immunity from applicable suits at law and

related suits at equity, and does so with respect to breach-of-

trust claims. Mitchell II, 463 U.S. at 219. That means the

only question at issue in this case is whether a breach-of-trust

action exists under the applicable law and whether a breach of

trust in fact occurred. The strict construction that greets

claimed waivers of sovereign immunity plays no role in this

“analytically distinct” inquiry. /d. at 218. Cf Northwest

Airlines, Inc. v. County of Kent, 510 U.S. 355, 365 (1994)

(“The question whether a federal statute creates a claim for

relief is not jurisdictional.”).

Nor at any rate would it be appropriate to add this second

impediment to a tribal claim. Having cleared the high hurdle

for obtaining a waiver of immunity in the first instance, the

Navajo were not required to clear yet another hurdle before

they could have their day in court. No such double

presumption against a cause of action exists. To the contrary:

‘““The exemption of the sovereign from suit involves hardship

enough, where consent has been withheld. We are not to add

to its rigor by refinement of construction, where consent has

been announced.”” United States v. Aetna Cas. & Surety Co.,

338 U.S. 366, 383 (1949) (quotation omitted). Once immunity

has been waived, the Court has put Congress and the

Executive Branch on notice that it will net act as “a self-

Seer-35

13

constituted guardian of the Treasury” and thereby “import

immunity back into a statute designed to limit it.” Indian

Towing Co. v. United States, 350 U.S. 61, 69 (1955).

More than just common sense and tradition support this

truth; logic does so as well. If the Government were correct

that the same degree of clarity must appear in the law that

creates the cause of action as in the law that generally waives

the Sovereign’s immunity from suit, the general waiver would

be superfluous. Why broadly waive a government’s immunity

from suit if the surrender only applies to statutes that

otherwise contain an ample waiver?

Accordingly, in assessing whether a breach-of-trust action

exists in this instance, the Court need only fairly interpret the

cited laws, statutes and regulations. See Testan, 424 U.S. at

400. The Government is not entitled to an additional thumb

on the scales. Indeed, if any presumptions exist at this stage

in the case, they run in favor of the Navajo Nation, see, e.g.,

Montana v. Blackfeet Tribe, 471 U.S. 759, 766 (1985).

B. The Government Has Extensive Trust Duties With

Regard To Indian Mineral Leases.

A fair, even-handed reading of the applicable laws

establishes that the Navajo’s breach of trust claim is firmly

grounded in the statutory and regulatory framework for

mineral leasing on Indian lands. As this Court has recognized,

these kinds of applicable laws may be relevant both to

“establish a fiduciary relationship” and to “define the contours

of the United States’ fiduciary responsibilities.” Mitchell II,

463 U.S. at 224. In other words, the statutes and regulations

shed light both on the nature of the Government’s substantive

responsibilities and on whether the Government must act as a

trustee in undertaking them. |

A Tribe may demonstrate trust duties in at least two

distinct ways: (1) by identifying statutes, regulations, or

14

treaties that “directly support the existence of a fiduciary

relationship,” Mitchell II, 463 U.S. at 224, or (2) by

establishing that the Government exercises “control or

supervision over tribal monies or properties,” Jd. at 225

(quoting Navajo Tribe v. United States, 624 F.2d 981, 987 (Ct.

Cl. 1980)). The Navajo have satisfied both criteria here.

First, as discussed in greater detail in the Navajo Nation’s

brief, there are numerous affirmative indications that both

Congress and the Secretary have created and recognized trust

duties in the mineral leasing context. The text of IMLA

requires Secretarial approval of all leases, 25 U.S.C. § 396a,

and directs the Secretary to reject a lease bid if it is “unwise in

the interest of the Indians” to accept it, 25 U.S.C. § 396b. The

history of the statute demonstrates that these provisions were

intended “to give the Indians the greatest return on their

property,” and emphasizes Congress’ intent that the Secretary

would have increased control over whether to approve mineral

leases. S. Rep. No. 985, at 2 (1937). The 1985 regulations

stress that this control is exercised in the “interests of the

Indians”. 25 C.F.R. § 211.3 (1985). And the current

regulations confirm that the Department’s role is to

“maximize[] [the] best economic interests” of the Indian

Tribes. 25 C.F.R. § 211.1 (2002).

In respecting these manifestations of congressional intent,

the Court has noted that the uniform leasing procedures

created by the IMLA were “designed to protect the Indians,”

Montana v. Blackfeet Tribe, 471 U.S. 759, 763-64 (1985), and

that the “basic purpose” of the Act is “to maximize tribal

revenues from reservation lands,” Kerr-McGee Corp. v.

Navajo Tribe, 471 U.S. 195, 200 (1985). In short, the

language, history, and purposes of the statutory and regulatory

provisions all establish the Government’s fiduciary role.

Second, the extensive control and supervision exercised by

the Government over mineral leasing on Indians lands

-_—, —_— ao ~_

—_

15

establishes actionable trust duties as well. Even apart from

direct statutory and regulatory manifestations of trust duty, the

existence of a trust relationship “can be inferred from the

nature of the transaction or activity.” Navajo Tribe v. United

States, 624 F.2d at 987. In particular, this Court has

recognized that ‘“[wJhere the Federal Government takes on or

has control or supervision over tribal monies or properties, the

fiduciary relationship normally exists with respect to such

monies or properties (unless Congress has provided otherwise)

even though nothing is said expressly in the authorizing or

underlying statute (or other fundamental document) about a

trust fund, or a trust or fiduciary connection.”” Mitchell II,

463 U.S. at 225 (quoting Navajo Tribe, 624 F.2d at 987). That

is because when Congress authorizes the Government to exert

supervision or control over Indian lands or property, it places

the Government in a capacity that implicates both a central

component of its unique relationship with the Indian people

and a core role of private trustees. Thus “it cannot be said that

the Congress [is] merely ‘regulating’ Indian affairs, as it does

many other facets of our national life.” Mitchell v. United

States, 664 F.2d 265, 273 (Ct. Cl. 1981), aff'd, 463 U.S. 206

(1983). Rather, if the relied-upon statutory or regulatory

provisions set forth Government responsibilities in a context

involving Government “control or supervision” of Indian

money or property, Mitchell II, 463 U.S. at 224, it is

presumed, absent contrary evidence, that Congress intended

that the responsibilities set forth by statute be carried out in

the role of trustee.

itchell I and Mitchell II applied these principles and

Tamed it wor whee on In Mitchell I, the Court

concluded that, by itself, the General Allotment Act failed to

establish that the Government had a fiduciary duty with

respect to timber management on allotted reservation land.

This conclusion was reached on the basis of clear affirmative

evidence that Congress specifically intended to limit the

16

Government’s control and supervision of allotted land. Under

the Act, “the Indian allottee, and not a representative of the

United States, is responsible for using the land . . .” 445 U.S.

at 542-43. Likewise, the legislative history “plainly

indicate[d]” that the trust was of limited scope. Jd. at 543.

The drafting history pointed in the same direction: It made

“plain” that the Government intended that the land be held in

trust for the limited purposes of preventing alienation and of

ensuring immunity from state taxation. /d. at 543-44.

In Mitchell IT, by contrast, the Court held that “control or

supervision” over timber management on allotted lands was

demonstrated by other statutes. Having found “control or

supervision,” the Court concluded that the Government’s role

with regard to Indian timber demonstrated “all of the

necessary elements of a common-law trust.” 463 U.S. at 225.

Measured by the same “control or supervision” test, the

Navajo’s claim clearly passes. From start to finish, the

Secretary exercises extensive control and supervision over

mineral leasing on Indian lands. 25 U.S.C. §§ 396, 396a, 399.

The Secretary decides whether Tribes may negotiate a lease

and imposes strict constraints on the length of the

negotiations. 25 C.F.R. § 211.2 (1985). The Secretary has the

right to force bidding of a lease even where the Tribe has

already completed negotiations. /d. And no negotiated lease

is valid unless the Secretary has reviewed and approved it. 25

U.S.C. § 396a; 25 C.F.R. § 211.2 (1985). In point of fact, the

Secretary’s authority over leases exceeds that of the Indians

themselves in many respects. See, e.g., 25 C.F.R. § 211.27(a)

(Secretary has authority to cancel or rescind a lease for breach

without Tribe approval); NRG Co. v. United States, 24 Cl. Ct.

51, 56 (1991) (Secretary has authority to permit lease

assignments and to cancel lease development permits without

tribal consent).

17

Once the Government approves a lease, its control

becomes even more complete. Among other things, the

Government controls whether and when operations begin, 25

C.F.R. § 211.2 (1985), lease duration, 25 C.F.R. § 211.10

(1985), lease assignment, 25 C.F.R. § 211.26 (1985), lease

fees and inspections, 25 C.F.R. §§ 211.18, 211.25 (1985), and

suspension of lease operations and surrender of the leased

property, 25 C.F.R. §§ 211.14a, 211.24 (1985). In the face of

these regulatory truths, the Court has recognized that the

IMLA is indeed “comprehensive legislation.” Montana v.

Blackfeet Tribe, 471 U.S. 759, 763 (1985).

Nor does it change things that the Tribes as well as the

Government have a role to play in the initial leasing decision.

Under any sensible understanding of “control or supervision,”

it cannot be an all-or-nothing concept. Cf Mitchell II, 463

U.S. at 223 (finding “control” over grants of right-of-way on

Indian lands even while acknowledging that the Secretary’s

power to grant rights-of-way was conditioned on “the consent

of the tribal or individual indian landowner”). To find a lack

of any Government fiduciary responsibility in this case simply

because the Tribes are not utterly deprived of control would

mean that any incremental gain in Tribal power would come

at the cost of absolving the Government of its fiduciary duties -

with respect to the authority it retains. The law does not put

Congress to such a choice.

Properly framed, the question is whether the Government

exercises “control or supervision” over Indian land or property

with respect to the conduct as to which a breach is claimed.

Control or supervision over timber management was necessary

in the Mitchell litigation because that was the subject of the

claimed breach. In this instance, the conduct at issue is the

Government’s review and approval of a mineral lease. The

Government’s complete veto power over Indian mineral leases

in itself qualifies as control or supervision over this process.

The Government, accordingly, must be presumed to act in a

18

fiduciary capacity when it decides whether or not to approve

a mineral lease. This, of course, does not mean that the

Secretary invariably must “substitute her own judgment for

that of the Indian mineral owner.” U.S. 39. It does mean,

however, that the approval decision should attend to Indian

interests and be undertaken in a manner that respects and

honors the Government’s fiduciary duties.

C. The Government’s Actions Here Violate Even The

Most Minimal Fiduciary Standards.

Once it is established that the applicable statutes and

regulations give rise to trust duties with regard to the

Secretary’s review and approval of mineral leases, the general

law of trusts provides the appropriate framework for supplying

content to those duties. Time and again, the Court has looked

to private trust law in assessing the Government’s duties to

Indian Tribes. See, e.g., Dep't of Interior v. Klamath Water

Users Protective Ass'n, 532 U.S. 1, 14 (2001); United States

v. Dann, 470 U.S. 39, 48-49 (1985); United States v. Mason,

412 U.S. 391, 398 (1973). Indeed, the Court has suggested

that the Government’s obligations toward the Tribes are, if

anything, even more stringent than the duties of private

trustees. See Seminole Nation v. United States, 316 U.S. 286,

297 (1942) (the Government is subject to the “most exacting

fiduciary standards”).

In spite of these precedents and the common-sense

principles that inform them, the Government argues (U.S. 28)

that it does not suffice simply to demonstrate the existence of

a trust relationship. Rather, it adds (id.), the applicable

statutes and regulations must enumerate each and every

fiduciary duty that applies to the Government. Besides being

unsupported by precedent, this innovation would impose an

enormous drafting burden on Congress, to say nothing of

uncommon foresight. In this instance, for example, it is

doubtful that it would have occurred to even the most

19

experienced legislators that they should itemize the

Secretary’s duty not to pull the rug out from under the Tribe’s

effort to obtain a favorable rate. Neither is the Government’s

position consistent with normal principles of statutory

construction, which presume that Congress legislates against

the backdrop of common law and intends statutes to be read in

light of it. See, e.g., NLRB v. Amax Coal Co., 453 U.S. 322

(1981) (Congress acts in light of accumulated meaning when

establishing a trust); Navajo Tribe, 624 F.2d at 988 (court is

not “required to find all the fiduciary obligations it may

enforce within the express terms of an authorizing statute”);

Duncan v. United States, 667 F.2d 36, 42-43 (Ct. Cl. 1981)

(deeming Government’s position that statute “must spell out

specifically all the trust duties of the Government” “certainly

unnecessary for Indian property with its long and established

history”).

In this case, the Government’s conduct failed to satisfy the

most elementary fiduciary duties. First, notwithstanding the

fact that the 20% royalty rate was supported by all of the

Government’s studies, Secretary Hodel placed a hold on the

decision affirming that rate in direct response to lobbying by

a close personal friend hired as Peabody’s representative. The

Department then stonewalled the Tribe in the face of repeated

requests for information on the status of the appeal and the

reasons for delaying a decision. Faced with a continuing loss

of income due to the delay, and understandably interpreting

the delay as related to substantive concerns with the rate, the

Tribe returned to the bargaining table. The Tribe re-entered

these “negotiations” at a marked disadvantage, since Peabody

(but not the Tribe) knew that the Secretary had placed the

appeal on indefinite hold at Peabody’s request. The Secretary

then approved the lease reached by these imbalanced

negotiations. a lease that ultimately contained significant

concessions to Peabody, not least of which was the new rate.

Moreover, the Secretary approved the lease without the

20

normal economic analysis and on the basis of an incomplete

review.

As both the Court of Federal Claims and the Federal

Circuit recognized, Navajo Nation, 263 F.3d at 1332 (quoting

46 Fed. Cl. at 227), this kind of conduct does not comport with

basic fiduciary requirements of loyalty, care, and candor. See,

e.g., Restatement (Second) of Trusts §§ 170, 173, 174. By any

standard, a trustee has “a duty to communicate to the

beneficiary material facts affecting the interest of the

beneficiary which he knows the beneficiary does not know

and which the beneficiary needs to know for his protection in

dealing with a third person with respect to his interest.”

Restatement (Second) of Trusts § 173 cmt. d. As the Court of

Federal Claims noted, “[t]here is no plausible defense for a

fiduciary to meet secretly with parties having interests adverse

to those of the trust beneficiary, adopt the third parties’ desired

course of action in lieu of action favorable to the beneficiary,

and then mislead the beneficiary concerning these events.”

Navajo Nation, 46 Fed. Cl. at 226.

Under these circumstances, this case does not even require

the Court to articulate the precise nature and scope of the

fiduciary standards applicable to the Government’s review and

approval of the Navajo lease. For the Government’s conduct

violated bedrock fiduciary duties, no matter how narrowly or

broadly defined. The Government did not merely fail to act

loyally in serving the Indians’ interests; it affirmatively

undermined them. The Government did not me~ely fail to

maintain candor with the Navajo; it affirmatively misled them.

The Government did not merely approve a lease with

economically unfair terms; it did so without engaging in its

normal review process and with knowledge that the Navajo

had negotiated the lease based on incomplete information. If

the Government’s control over Indian mineral leasing is

subject to any fiduciary standard whatever—even a mere duty

—

21

of impartiality—this conduct falls considerably, and

disappointingly, short of meeting it.

D. A Damages Remedy Is Available For Breach Of

Trust Claims.

Once the Navajo establish a breach of trust by the

Government, a damages remedy under the Indian Tucker Act

invariably follows. “Given the existence of a trust

relationship,” Mitchell II makes clear, “it naturally follows

that the Government should be liable in damages for the

breach of its fiduciary duties.” 463 U.S. at 226. The

Government’s repeated suggestion that some reference to

money damages must appear in the applicable statutes, (U.S.

26, 29, 31), simply contradicts Mitchell II.

Nor is Mitchell IT alone in this respect. Not only does the

decision rest upon a long-established tradition of requiring

trustees to pay money damages for fiduciary breaches, see,

e.g., Restatement (Second) of Trusts §§ 205-212 (1959); 3

Scott on Trusts § 205 (4th ed. 1988), and an equivalent

practice under earlier Indian jurisdictional statutes, see supra

at 9-10, it also builds upon a wider body of precedent.

Outside the tribal context, Tucker Act decisions con tn

ired an ision for money damages in to

ies ieee Teondiicun available. Rather, the substantive

source of law may grant the claimant a right to recover

damages either “expressly or by implication.” Eastport S.S.

Corp. v. United States, 372 F.2d 1002, 1007 (Ct. Cl. 1967)

(quoted in Mitchell II, 463 U.S. at 217 n.16). The relevant

analysis asks whether the source of substantive law relied

upon “can fairly be interpreted as mandating compensation by

the Federal Government for the damage[s] sustained.” United

States v. Testan, 424 U.S. 392, 400 (1976) (quotation omitted).

In undertaking this assessment, proper consideration is given

to “the text of the section . . . its context, legislative

22

background, [and] past-enactment history.” Eastport, 372

F.2d at 1011.

That an express statutory authorization of damages claims

is not required is illustrated by three of the most well-

established aspects of Tucker Act jurisdiction: contract claims,

takings claims, and claims for refund of money improperly

exacted. The Court for example has never held that a contract

with the Government must explicitly authorize monetary relief

in order to obtain the normal remedies for breach. See United

States v. Winstar Corp., 518 U.S. 839, 885-86 (1996) (Souter,

J. concurring) (“most Government contractors would be quite

surprised by the dissent’s conclusion that, where they have

failed to require an express provision that damages will be

available for breach, that remedy must be ‘implied in law’ and

therefore unavailable under the Tucker Act”). And although

the Fifth Amendment does not provide an express cause of

action for damages caused by a taking, this Court has long

recognized that “[i]f there is a taking, the claim is ‘founded

upon the Constitution’ and within the jurisdiction of the

[Claims Court] to hear and determine.” Preseault v. Interstate

Commerce Commission, 494 U.S. 1, 12 (1990) (quoting

United States v. Causby, 328 U.S. 256, 267 (1946)).

Similarly, even absent an express provision for them,

actions for reimbursement of money improperly exacted under

a statute likewise are “founded upon an act of Congress.” See,

e.g., Clapp v. United States, 117 F. Supp. 576 (1954)

(explaining basis for such claims); United States v. Emery,

Bird, Thayer Realty Co., 237 U.S. 28, 32 (1915) (noting that

the denial of such an action would “rest[] on the inadmissible

premise that the great act of justice embodied in the

jurisdiction of the court of claims is to be construed strictly

and read with an adverse eye”). These cases properly

recognize that to require the statute itself to provide for

damages “would allow recovery only in cases where laws

23

other than the Tucker Act already created a right of recovery.”

Clapp, at 580 (quotation omitted).

In the i , practice and general principles of trust

law tc rere II makes clear. “[T]Jhe existence of

a trust relationship between the United States and an Indian or

Indian tribe includes as a fundamental incident the right of an

injured beneficiary to sue the trustee for damages resulting

from a breach of the trust.” 463 U.S. at 226.

E. The Government’s Foundational Trust

Responsibility To Indian Tribes Reinforces The

Navajo’s Claims.

Each of these conclusions is reinforced by “the undisputed

existence of a general trust relationship between the United

States and the Indian people.” Mitchell II, 463 U.S. at 225.

Just as that relationship informed and supported the Tribe’s _

claims in Mitchell II, so it does here.

For nearly two centuries, it has been “well established that

the Government in its dealings with Indian tribal property acts

in a fiduciary capacity.” United States v. Cherokee Nation,

480 U.S. 700, 707 (1987); see also, e.g., Cherokee Nation v.

Georgia, 30 U.S. (5 Pet.) 1 (1831); Fellows v. Blacksmith, 60

U.S. (19 How.) 366 (1856). This predominant feature of the

relationship between the Federal Government and the Indian

Tribes stems from the most basic of Sovereiimn acts—a

realpolitik decision by the Tribes to cede title to their territory

through treaties to the Federal Government in return for

protection of that territory and the Tribes by the Government.

See Board of County Comm'rs v. Seber, 318 U.S. 705, 715

(1943). The 1849 Treaty between the Navajo and the United

States illustrates this. In return for the sovereignty-infringing

promise to be “placed under the exclusive jurisdiction and

ion of” the Federal Government, the Navajo were

assured that they could “[rJely[] confidently on the justice and

24

liberality” of the Government. 1849 Treaty, 9 Stat. 974, §§ I,

IX; see also, 1868 Treaty, 15 Stat. 667.

In keeping with these foundations, the trust relationship,

while serving as a source of federal authority, has at the same

time placed a critical limit on that authority. See, e.g., United

States v. Sioux Nation, 448 U.S. at 421 (trust relationship

allows federal action with regard to Indian land without

takings analysis but only if action geared to “protecting and

advancing the tribe”); Board of County Commissioners v.

Seber, 318 U.S. 705, 715 (1943) (“the United States assumed

the duty of furnishing [] protection, and with it the

authority. . .”). In fact, the Court has described the trust

relationship as requiring governmental compliance with the

“most exacting fiduciary standards.” Seminole Nation v.

United States, 316 U.S. 286, 297 (1942).

This trust responsibility serves numerous objectives. First,

it sets an overarching check on congressional action in the

field of Indian affairs. See Delaware Tribal Business

Committee v. Weeks, 430 U.S. 73, 85 (1977) (legislation must

be “tied rationally to the fulfillment of Congress’ unique

obligation toward the Indians”). Second, it informs federal

legislation that is enacted, providing a background principle

that guides the interpretation of federal statutes that do, or

may, impact tribes. See, e.g., Minnesota v. Mille Lacs Band of

Chippewa Indians, 526 U.S. 172, 202 (1999) (“Congress may

abrogate Indian treaty rights, but it must clearly express its

intent to do so.”); Montana v. Blackfeet Tribe, 471 U.S. 759,

766 (1985) (statutes “are to be construed liberally in favor of

the Indians, with ambiguous provisions interpreted to their

benefit”). Finally, it establishes general duties of the Federal

Government with respect to tribal land separate and apart from

the express provisions of a treaty, statute, executive order or

regulation. See, e.g., Lane v. Pueblo of Santa Rosa 249 U.S.

110, 113 (1919) (using trust relationship as basis to enjoin the

—

25

Secretary’s proposed disposal of tribal lands despite lack of

claimed violation of any treaty or statute).

Properly understood, then, the federal trust relationship

underpins all actions of the Federal Government relating to

Indian interests. It works as both a promise by the Federal

Government about its conduct toward Indians and as a

measure of that conduct. In the last analysis, the trust

relationship ensures that the Government’s actions toward

Indians correspond to the “overriding duty of our Federal

Government to deal fairly with Indians wherever located,”

Morton v. Ruiz, 415 U.S. 199, 236 (1974).

In this case, the trust relationship illuminates and lends

context to Mitchell IT’s “control or supervision” test. When the

Government controls or supervises Indian land or property, it

of course is acting in a capacity that is at the heart of its

historical trust relationship with the Indians and that parallels

roles frequently served by private trustees. It thus is

particularly appropriate to presume that Congress intends the

Government to carry out its statutory responsibilities in a

manner befitting the underlying trust relationship.

Ill. THE GOVERNMENT’S REMAINING ARGUMENTS

ARE UNPERSUASIVE.

A. The Court’s Private Right Of Action Cases Shed

Little Light On The Proper Indian Tucker Act

Inquiry.

The Government suggests (U.S. 24) that the Court’s

decisions concerning implied private rights of action inform

the inquiry here. That is mistaken. Those cases and the

concerns that underlie them have little bearing on this action.

As an initial matter, the Court has never looked to its

private right of action cases to determine whether a cause of

action exists in this setting. Cf Timpangos Tribe v. Conway,

286 F.3d 1195, 1204 (10th Cir. 2002) (“[T]he legion of cases

26

in which tribes have sued to enforce Indian rights . . . have

proceeded without undertaking [the private right of action]

analysis.”). In view of the unique context of the Tucker Act

and Indian Tucker Act, the Court has properly tailored the

inquiry to this setting—which is to say, it has asked whether

the statute at issue “‘can fairly be interpreted as mandating

compensation... .”” Testan, 424 U.S. at 400 (quoting

Eastport, 372 F.2d at 1008-09).

No less importantly, Tucker Act and Indian Tucker Act

cases involve a federal statute specifically authorizing suits to

enforce the obligations of the Federal Government itself. As

such, they do not implicate many of the concerns that animate

the Court’s private right of action decisions. Federalism

concerns, for example, are one of the guideposts in the private

right of action analysis because those cases generally involve

suits against state officials and because the Court presumes

that Congress would not casually disrupt the constitutional

balance between the States and the Federal Government. See

Pennhurst State School and Hospital v. Halderman, 451 U.S.

1, 17 (1981); Will v. Michigan Dep't of State Police, 491 U.S.

58, 65 (1989). That concern does not apply here, however.

Unlike parties seeking to collect money from a State (or state

official) under a statute enacted by the Federal Government,

Indian Tucker Act plaintiffs seek to enforce obligations

against the Federal Government that the Federal Government

itself has created.

For like reasons, Bivens-action cases do not offer a useful

parallel. While they involve suits against federal rather than

state actors, they deal with the unusual situation in which the

Court acts in a common-law-type capacity to infer full tort

remedies against federal actors despite the complete absence

of affirmative action by Congress either authorizing such suits

or defining the scope of liability. The Court, as a result, has

hesitated to extend Bivens remedies to new contexts in view

of the significant separation-of-powers concerns implicated by

27

such claims. See, e.g., Correctional Services Corp. v Malesko,

122 S. Ct. 515, 521 (2001). Indeed, because Bivens actions

not respond by amendment as it may where the claim derives

from a statute, those separation-of-powers concems are

particularly acute. See id., 122 S. Ct. at 524 (Scalia, J.

concurring). No such problem arises with Tucker Act and

Indian Tucker Act cases. They stem from a specific

jurisdictional statute and arise out of obligations assumed by

Congress.

In addition to these fundamental differences between

Indian Tucker Act cases and private right of action cases, the

nature of claims to enforce the Federal Government’s

inquiry in cases claiming a private right of action under a

specific statute begins with consideration of whether the

statute focuses on “a class of beneficiaries.” Gonzaga Univ.

v. Doe, 122 S. Ct. 2268, 2276 (2002). But in Indian Tucker

Act cases pertaining to the Government’s obligations

regarding Indian lands and property, it is clear from the very

nature of the relationship that Indians are the benefitted class.

Similarly, a core concern in the private right of action

cases is whether Congress intended the rights at issue to be

enforceable by the individuals they benefit or whether it

intended enforcement by some other means. See, e.g.,

Alexander v. Sandoval, 532 U.S. 275, 289 (2001); Pennhurst

State School and Hospital v. Halderman, 451 U.S. at 28. This

same concern is important in Bivens cases as well, and is often

critical to the decision whether to extend Bivens to a new

context. See, e.g., Schweiker v. Chilicky, 487 U.S. 412, 489

(1988). In Indian Tucker Act cases, however, there is no

concern that Congress may have intended enforcement by

some other mechanism. In fact, the Indian Tucker Act was

ifically passed to provide a means for ensuring

secountability with respect to the Government’s obligations to

28

the Tribes. See H.R. Rep. No. 1466, at 5 (1945) (the lack of

redressability for most Indian claims “encourages bureaucratic

disregard of the rights of Indian citizens . . . .”); 92 Cong. Rec.

5312 (1946) (statement of Rep. Jackson) (“let us see that the

Indians have their fair day in court so that they can call

various government agencies to account on the obligations

that the Federal Government assumed.”).

Further, the question whether a breach of trust action

exists in the Indian Tucker Act context is inextricably linked

to the historical trust relationship between Indians and the

Federal Government and turns on whether the statute gives

rise to trust duties in light of that relationship. These

— play no role in private right of action

stots stieih itnainiatiaiileni delta

cases, the Court has not drawn a parallel between them—and

notably did not do so in Mitchell I] when the Federal

Government relied on priyate right of action decisions to

advance its position there. See Brief for United States at

21-22 No. 81-1748 (Sept. 3, 1982). Rather, the Court based its

analysis on traditional Tucker-Act principles and the trust

relationship between the Tribes and the United States.

Mitchell IT, 463 U.S. at 218, 225. The Government’s continued

reliance on the private right of action cases here is simply

incompatible with Mitchell II.

B. The Government Cannot Avoid Damages Liability

By Relegating The Tribe To APA Relief Or By

Focusing on the Appeal Regulations.

The Government next argues (U.S. 37) that the Navajo

should be limited to seeking declaratory or injunctive relief

under the Administrative Procedure Act (“APA”). Such relief,

however, is clearly insufficient to remedy the damages caused

by the Secretary’s violations in this case. As this Court

recognized in Mitchell II, “prospective equitable remedies are

29

totally inadequate” to cure violations of the Department’s

duties in overseeing Indian lands. 463 U.S. at 227. “[B]y the

time government mismanagement becomes apparent,” the

Court noted, “the damage to Indian resources may be so

severe that a prospective remedy may be next to worthless.”

Id. That concern is all the more true when the Government

acts in a deliberately secretive way, as it did here, making the

possibility of meaningful injunctive relief all but impossible.

Nor does it change matters that much of the Secretary’s

egregious conduct took place during the pendency of

Peabody’s appeal from the Department’s decision to impose

the 20% royalty rate. The Government suggests (U.S. 37) that

no relief is available under the Tucker Act for that conduct

mandate compensation for their breach. This narrow-minded

conception of the Secretary’s role is unsupported by the appeal

regulations, and it fails to recognize the direct connection

between the Secretary’s actions in the appeal process and his

later review and approval of the renegotiated lease.

As an initial matter, it is evident from the regulations

governing appeals that, contrary to the Government's

suggestions, the Department is required to protect Indian

interests during that process. For example, these regulations

require the Department to render assistance to Indians in the

appeal process if requested, 25 C.F.R. § 2.10 (1985), to notify

Indians of their right to appeal a decision, 25 C.F.R. § 2.4

(1985), and to require the posting of a bond to protect the

interests of any Indians affected by an appeal, 25 C.F.R.

§ 2.3(b) (1985). At the same time, an appeal is available only

to “correct” a decision by the Department where it conflicts

with rights established by the Constitution, other federal laws

or Departmental regulations. 25 C.F.R. § 2.2 (1985).

Thus, during the appeal, the Department does not assume

the role of neutral arbiter. Indeed, it would make little sense

30

for the Department to make decisions in its fiduc‘ary capacity

concerning Tribal resources, then purport to 1eview those

decisions from a neutral perspective on appeal. Instead, the

appeal is appropriately limited to determining whether a given

decision directly violates some other law or regulation. These

review responsibilities are consistent with, and in no way

eliminate, the Government’s duties toward the Tribe. C7/.

Nevada v. United States, 463 U.S. 110, 128, 144 n.16 (1983);

id. at 145 (Brennan, J., concurring).

Further, although these regulations clearly indicate that the

Department acts in its fiduciary capacity when conducting an

appeal, the Navajo’s claim in this case looks far beyond the

appeal procedures. In addition to the shortcomings in the

appeal itself, the Secretary breached his fiduciary duties in

ultimately approving the lease with full knowledge that the

negotiations of that lease had been skewed in Peabody’s favor

by the Secretary's own actions. The Government’s effort to

focus on the earlier appeal process cannot alter the fact that the

Secretary’s approval of the renegotiated lease under these

circumstances constituted a clear breach of trust that is

remediable by money damages.

CONCLUSION

The decision of the Court of Appeals should be affirmed. |

31

Respectfully submitted,

JEFFREY S. SUTTON JOHN E. ECHOHAWK

(Counsel of Record) NATIVE AMERICAN RIGHTS FUND

MARY BETH YOUNG 1506 Broadway

BRIAN E. RAY Boulder, Colorado 80302

Jones, DAY, REA 's & POGUE

41 South High Street

Suite 1900

Columbus, Ohio 43215

(614) 469-3855

Counsel for the National Congress

of American Indians

October 2002