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Cobell v. Norton

ELR Citation: 31 ELR 20502
Nos. No. 00-5081, 240 F.3d 1081/(D.C. Cir., 02/23/2001)

The court affirms a district court holding that the U.S. Department of the Interior (DOI) breached its fiduciary duties to Individual Indian Money (IIM) trust account beneficiaries and, therefore, must conduct an accurate accounting. The Indian Reorganization Act of 1934 returned to tribal ownership unallotted lands, but the federal government retained fiduciary obligations to administer trusts and funds arising from allotted, but not yet fee-patented, lands for the benefit of Native American beneficiaries. These lands form the basis for the IIM trust accounts at issue in this case. In 1994, Congress passed the Indian Trust Fund Management Reform Act, which recognized the government's preexisting trust responsibilities and identified DOI duties with regard to IIM accounts administration. DOI chose to administer portions of a strategic plan to implement the Act's requirements. In 1996, IIM trust account beneficiaries brought suit in district court claiming that DOI and the U.S. Department of Treasury had breached their fiduciary duties by mismanaging the IIM trust accounts. The district court found in favor of the beneficiaries, ordered the departments to conduct an accurate accounting, and outlined certain types of policies and plans necessary to discharge the government's fiduciary obligations.

The court first holds that, although the beneficiaries object to an ongoing plan, which is not final agency action, the district court had jurisdiction to review the claim because the government has held an obligation to discharge the fiduciary duties owed to IIM trust beneficiaries for decades, and the inaction of DOI represents unreasonable delay. Additionally, refusing to hear the beneficiaries' claims could unduly prejudice their rights. The court next holds that the district court did not err in finding that the government breached its fiduciary duties to the beneficiaries. Contrary to the government's argument, the 1994 Act does not define or alter the nature or scope of the government's duties to the beneficiaries. Rather, the Act identified a portion of the government's specific obligations and created additional means to ensure that the obligations would be carried out. Further, even if the Act was ambiguous, the government would not be afforded deference of their interpretation of the Act because ambiguous statutes are interpreted in favor of Native Americans. The court further holds that the district court correctly found that the government is required to conduct an accurate accounting of IIM trust accounts. The 1994 Act reaffirms the government's preexisting fiduciary duty to perform a complete and historical accounting of trust fund assets. The court finally holds that the district court properly left open the choice of how the accounting would be conducted and whether certain accounting methods would be appropriate.

The full text of this decision is available from ELR (25 pp., ELR Order No. L-348).

Counsel for Appellees
Thaddeus Holt
Law Offices of Thaddeus Holt
1201 Pennsylvania Ave. NW, Washington DC 20004
unlisted
Thaddeus Holt
Law Offices of Thaddeus Holt
Point Clear AL 36564
(334) 990-8750

Counsel for Appellants
David C. Shilton
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000