JICARILLA v. USA
Filing
330
PUBLISHED OPINION(redacted)re: 327 Sealed Opinion. Signed by Judge Francis M. Allegra. (si) Copy to parties.
In The United States Court of Federal Claims
No. 02-25L
(Filed Under Seal: August 18, 2011)
Reissued: August 26, 2011 1
__________
JICARILLA APACHE NATION,
formerly JICARILLA APACHE TRIBE,
Plaintiff,
v.
THE UNITED STATES,
Defendant.
* Tribal trust case; Motions for partial
* summary judgment; Indian Tucker Act – 28
* U.S.C. § 1505; Navajo Nation – when
* statutes give rise to claims under the Indian
* Tucker Act; Statutes governing accounting
* and management of tribal trust funds – 25
* U.S.C. §§ 161, 161a, 162a; Cheyenne* Arapaho – statutes give rise to fiduciary
* obligation to maximize trust income by
* prudent investment; Cheyenne-Arapaho still
* binding precedent; Court has jurisdiction
* over pooling claim; Court lacks jurisdiction
* over disbursement lag claim.
*
___________
OPINION
___________
Steven D. Gordon, Holland & Knight, Washington, D.C., for plaintiff.
Stephen R. Terrell, Environmental and Natural Resources Division, United States
Department of Justice, Washington, D.C., with whom was Assistant Attorney General Ignacia S.
Moreno, for defendant.
Alan R. Taradash and Daniel I.S.J. Rey-Bear, the Nordhaus Law Firm, Albuquerque,
New Mexico, for the Pueblo of Laguna and the Navajo Nation, amici.
1
An unredacted version of this opinion was issued under seal on August 18, 2011. The
parties were given an opportunity to propose redactions, but no such proposals were made.
Nonetheless, the court has incorporated some minor changes into this opinion.
ALLEGRA, Judge:
Pending before the court, in this tribal trust case, are two motions for partial summary
judgment under RCFC 56, raising important issues regarding the reach of this court’s jurisdiction
under the Indian Tucker Act, 28 U.S.C. § 1505.
I.
A brief recitation of the underlying facts sets the context for this decision.
In this case, the Jicarilla Apache Nation (Jicarilla, the Nation, or plaintiff) seeks an
accounting and to recover for monetary loss and damages relating to the government’s breach of
fiduciary duties in allegedly mismanaging the Nation’s trust assets and other funds. Plaintiff,
inter alia, avers that defendant failed to maximize returns on its trust funds. For trial purposes,
the court has broken this case into several phases, the first of which involves the alleged
mismanagement of plaintiff’s trust funds for the period from February 22, 1974, through
September 30, 1992. Among the claims of mismanagement that plaintiff makes as to this period
are that the United States breached its fiduciary obligations by: (i) failing to pool the Nation’s
trust funds with those of other tribes for investment purposes (the pooling claim); and
(ii) immediately removing funds from the Nation’s trust fund to cover a disbursement check,
thereby creating a lag between when such funds were removed and the check was negotiated,
during which time no income was earned on the subject funds (the disbursement lag claim).
Through its experts, plaintiff has developed investment models that calculate the hypothetical
earnings associated with these claims. Via that model, plaintiff estimates that, in what it terms
“2011” dollars, it is owed approximately $90 million on its pooling claim, and $810,789.90 on
its disbursement lag claim.
On March 18, 2011, and May 20, 2011, defendant filed motions for partial summary
judgment on plaintiff’s pooling and disbursement lag claims, respectively. Defendant’s
argument in both motions is essentially the same: it asserts that the United States has not waived
its sovereign immunity as to these claims. In response, plaintiff, inter alia, filed a cross-motion
for partial summary judgment as to the disbursement lag claim. After the briefing on these
motions was completed, the court, on July 22, 2011, conducted oral argument on the motions.
Following that argument, the parties filed supplemental memoranda on August 12, 2011.
II.
Summary judgment is appropriate when there is no genuine dispute as to any material
fact and the moving party is entitled to judgment as a matter of law. See RCFC 56; Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Disputes over facts that are not outcomedeterminative will not preclude the entry of summary judgment. Id. at 248. However, summary
judgment will not be granted if “the dispute about a material fact is ‘genuine,’ that is, if the
evidence is such that a reasonable [trier of fact] could return a verdict for the nonmoving party.”
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Id.; see also Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986);
Becho, Inc. v. United States, 47 Fed. Cl. 595, 599 (2000).
When making a summary judgment determination, the court is not to weigh the evidence,
but to “determine whether there is a genuine issue for trial.” Anderson, 477 U.S. at 249; see also
Agosto v. Immigration & Naturalization Serv., 436 U.S. 748, 756 (1978) (“a [trial] court
generally cannot grant summary judgment based on its assessment of the credibility of the
evidence presented”); Am. Ins. Co. v. United States, 62 Fed. Cl. 151, 154 (2004). The court must
determine whether the evidence presents a disagreement sufficient to require fact finding, or,
conversely, is so one-sided that one party must prevail as a matter of law. Anderson, 477 U.S. at
250-52; see also Ricci v. DeStefano, 129 S. Ct. 2658, 2677 (2009) (“‘Where the record taken as a
whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine
issue for trial.’” (quoting Matsushita, 475 U.S. at 587)). Where there is a genuine dispute, all
facts must be construed, and all inferences drawn from the evidence must be viewed, in the light
most favorable to the party opposing the motion. Matsushita, 475 U.S. at 587-88 (citing United
States v. Diebold, Inc., 369 U.S. 654, 655 (1962)); see also Stovall v. United States, 94 Fed. Cl.
336, 344 (2010); L.P. Consulting Grp., Inc. v. United States, 66 Fed. Cl. 238, 240 (2005).
A.
“It is axiomatic that the United States may not be sued without its consent and that the
existence of consent is a prerequisite for jurisdiction.” United States v. Mitchell, 463 U.S. 206,
212 (1983) (Mitchell II). The Nation asserts federal subject-matter jurisdiction under the Indian
Tucker Act (as it is colloquially known), 28 U.S.C. § 1505. That Act provides:
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 . . .
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. The reference in this provision to “which otherwise would be cognizable in
the Court of Federal Claims” incorporates the Tucker Act, 28 U.S.C. § 1491. The latter
provision, in turn, grants this court “jurisdiction to render judgment upon 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 . . . .”
28 U.S.C. § 1491(a)(1). “If a claim falls within the terms of the [Indian] Tucker Act,” the
Supreme Court has held, “the United States has presumptively consented to suit.” Mitchell II,
463 U.S. at 216; see also United States v. Navajo Nation, 537 U.S. 488, 503 (2003) (Navajo I);
Gregory C. Sisk, “Yesterday and Today: Of Indians, Breach of Trust, Money, and Sovereign
Immunity,” 39 Tulsa L. Rev. 313, 316-17 (2003) (hereinafter “Sisk”).
-3-
Like the Tucker Act, the Indian Tucker Act “is not itself a source of substantive rights.”
Navajo I, 537 U.S. at 503; see also Mitchell II, 463 U.S. at 216. Accordingly, to state a claim
under the Act, “a tribal plaintiff must invoke a rights-creating source of substantive law that ‘can
fairly be interpreted as mandating compensation by the Federal Government for damages
sustained.’” Navajo I, 537 U.S. at 503 (quoting Mitchell II, 463 U.S. at 218). In Navajo I,
Justice Ginsburg, writing on behalf of the Court’s majority, bifurcated this analysis into two
discrete steps. “To state a claim cognizable under the Indian Tucker Act,” she first wrote, “a
tribe must identify a substantive source of law that establishes specific fiduciary or other duties,
and allege that the Government has failed faithfully to perform those duties.” Navajo I, 537 U.S.
at 506 (citing Mitchell II, 463 U.S. at 216-17). “If that threshold is passed,” she further opined,
“the court must then determine whether the relevant source of substantive law” is moneymandating. Id. In this regard, the opinion went on to explain that “[a]though ‘the undisputed
existence of a general trust relationship between the United States and the Indian people’ can
‘reinforc[e]’ the conclusion that the relevant statute or regulation imposes fiduciary duties, that
relationship alone is insufficient to support jurisdiction under the Indian Tucker Act.” Navajo I,
537 U.S. at 506 (quoting Mitchell II, 463 U.S. at 225). Rather, “the analysis must train on
specific rights-creating or duty-imposing statutory or regulatory prescriptions,” albeit
prescriptions that “need not . . . expressly provide for money damages” as “the availability of
such damages may be inferred.” Navajo I, 537 U.S. at 506; see also United States v. Jicarilla
Apache Nation, 131 S. Ct. 2313, 2325 (2011); United States v. Navajo Nation, 129 S. Ct. 1547,
1551-52, 1558 (2009) (Navajo II).
Seizing on the Supreme Court’s reference to “specific rights-creating or duty-imposing
statutory . . . prescriptions,” Navajo I, 537 U.S. at 506, defendant asseverates that plaintiff’s
pooling and disbursement lag claims are deficient because they are not based upon a substantive
source of law that establishes fiduciary or other duties. As such, according to defendant, this
court lacks jurisdiction over these claims. Not so, argues plaintiff (and, as to the pooling claim,
the amici), asserting that various Federal statutes and regulations establish fiduciary obligations
that underlie the claims in question.
B.
The United States’ trust relationship with American Indian tribes includes a spectrum of
obligations and responsibilities. While the general trust relationship between the United States
and Indian tribes “reinforce[es]” the United States’ fiduciary obligations, see Navajo I, 537 U.S.
at 506, the United States’ “specific fiduciary or other duties” to a tribe determine the precise
consequences which flow from the United States’ legal responsibilities. Id.
As noted, this phase of the litigation between the United States and the Jicarilla involves
the United States’ accounting, management, and investment of the Jicarilla’s trust funds from
1972 to 1992. 2 Those claims principally arise under 25 U.S.C. §§ 161 (“Deposit in Treasury of
2
“The system of trusteeship and Federal management of Indian funds is deeply rooted in
Indian-U.S. history.” Misplaced Trust: The Bureau of Indian Affairs’ Mismanagement of the
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trust funds”), 161a (“Trust funds in trust in Treasury Department; investment by Secretary of the
Treasury”), 162a (“Deposit of tribal funds in banks; . . . investments”), and, to a lesser extent, the
American Indian Trust Fund Management Reform Act of 1994, 25 U.S.C. §§ 4001 et seq. (the
1994 Trust Fund Act), which recognizes and codifies the existing trust relationship. These
statutes expressly refer to the United States as “trustee of the various Indian tribes,” id. § 161,
and to the accounts at issue as “tribal trust funds,” see, e.g., id. § 162a. They confer control and
discretion upon the United States with respect to the management and investment of the funds.
Thus, section 161 requires the United States to deposit in the Treasury and pay interest on such
funds when “the best interests of the Indians will be promoted by such deposits, in lieu of
investments.” And, section 162a acknowledges “[t]rust responsibilities of the Secretary of the
Interior,” stating that they “shall include (but are not limited to)” providing “adequate systems
for accounting for and reporting trust fund balances.” Id. § 162a(d); see also Misplaced Trust,
supra, at 6-7 (discussing these statutes).
These statutory “prescription[s] . . . bear[] the hallmarks of a ‘conventional fiduciary
relationship.’” Navajo II, 129 S. Ct. at 1558 (quoting United States v. White Mountain Apache
Tribe, 537 U.S. 465, 473 (2003)). They vest the United States with management control over the
trust funds, discretion with respect to their investment, and detailed responsibilities to account to
the tribal beneficiaries. See also White Mountain Apache, 537 U.S. at 480 (the statute “expressly
and without qualification employs a term of art (‘trust’) commonly understood to entail certain
fiduciary obligations, and ‘invests the United States with discretionary authority to make direct
use of portions of the trust corpus’”) (citation and alteration omitted) (Ginsburg, J., concurring).
As stated somewhat differently by the Supreme Court in Mitchell II, these statutes give the
Secretary of the Interior “authority to invest tribal . . . funds held in trust in banks, bonds, notes
or other public debt obligations of the United States if deemed advisable and for the best interest
of the Indians.” 463 U.S. at 223 n.24 (citing 25 U.S.C. § 162a). 3
Indian Trust Fund, H.R. Rep. No. 102-499, at 6 (1992) (Misplaced Trust). The United States
first adopted the policy of holding tribal funds in trust in 1820. Id.
3
Congress further addressed the United States’ administration of tribal and individual
Indian trust funds in the 1994 Trust Fund Act. See Pub. L. No. 103-412, 108 Stat. 4239 (codified
at 25 U.S.C. §§ 161a(b), 162a, 4001, et seq.). In that Act, Congress acknowledged both the
existence and the fiduciary nature of the United States statutory responsibilities and sought to
address serious deficiencies in the government’s management of Indian trust funds. See, e.g.,
H.R. Rep. No. 103-778, at 8 (1994); Misplaced Trust, supra, at 1-8. Indeed, the 1994 Trust Fund
Act described its provisions as a “ recognition” of the existing trust responsibility with respect to
tribal and individual Indian trust funds. See 1994 Trust Fund Act, 108 Stat at 4240
(capitalization omitted; emphasis supplied). It provided that “[t]he Secretary shall account for
the daily and annual balance of all funds held in trust” for a tribe or an individual Indian “which
are deposited or invested pursuant to [25 U.S.C. § 162a].” 25 U.S.C. § 4011(a). It further
required the Secretary to conduct an “annual audit” of all funds held in trust for the benefit of a
tribe or individual Indian “which are deposited or invested pursuant to section 162a.” Id. §
4011(c). The 1994 Trust Fund Act also amended 25 U.S.C. § 162a, adding a subsection (d),
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The Court of Claims examined this network of statutes in Cheyenne-Arapaho Tribes of
Indians of Oklahoma v. United States, 512 F.2d 1390 (Ct. Cl. 1975). In that consolidated case,
several Tribes alleged that “defendant breached its fiduciary duties in the care of plaintiffs’ funds
by not making the funds productive (by not investing moneys ready for investment and also by
delay in making funds available for investment), by not maximizing the productivity of funds,
and by using the funds to its own benefit and to the detriment of the tribes.” Id. at 1392. In
laying a foundation for considering these claims, this court’s predecessor observed that “[w]hen
Congress, in the exercise of its power over the Indians, determined by statute and by treaty to
hold funds due the tribes in trust rather than immediately distributing them to the Indians, it also
developed a series of investment policies for those funds.” Id. at 1393. The court noted that its
focus was on the statutes embodying those policies, as the plaintiffs were not claiming that
“Congress breached its trust duties under the Constitution or treaties,” but rather that “the Bureau
of Indian Affairs has not properly used the tools Congress provided in order to meet the
Government’s fiduciary obligation.” Id. The court proceeded to review the statutory investment
scheme, tracing the history and language of statutes like 25 U.S.C. §§ 161a, 161b, and 162a back
into the 1880s. Id. Based on its review of this history and the statutory language, the court
concluded that “[t]he fiduciary duty which the United States undertook with respect to these
funds includes the ‘obligation to maximize the trust income by prudent investment,’” adding that
“[t]his is the general law governing the Government’s duty and responsibility toward the Indian
funds involved in this case.” 512 F.2d at 1394 (quoting Blankenship v. Boyle, 329 F. Supp.
1089, 1096 (D.D.C. 1971)).
Cheyenne-Arapaho recognizes that the Indian Tucker Act combined with the investment
statutes – 25 U.S.C. §§ 161a, 161b and 162a – provide jurisdiction over claims predicated upon
the assertion that defendant has not maximized the income of a tribal trust by prudent
investment. 4 This holding was cited, with approval, in the 1992 Congressional report, Misplaced
which specified that the Secretary of the Interior’s “proper discharge of the trust responsibilities
of the United States shall include (but are not limited to)” a series of accounting, auditing,
management, and disclosure obligations with respect to tribal and individual Indian trust funds.
See id. § 162a(d).
4
See also Osage Tribe of Indians of Okla. v. United States, 72 Fed. Cl. 629, 668 (2006)
(“The Court of Claims has addressed the statutory obligations under 25 U.S.C. §§ 161a, 161b,
and 162a on a number of occasions and has uniformly held the United States responsible for
investing Indian trust funds in the highest yielding investment vehicles available to the funds in
question.”); id. (“The requirement to invest Indian trust funds in the highest yielding investments
available is a legal requirement mandated by the applicable statutes – here, 25 U.S.C. §§ 161a
and 162a – and not solely a prudential one.”). If more were needed to support this conclusion,
one might look to the Bureau of Indian Affairs Manual, as in effect for the years in question.
The Manual listed, in detail, the types of investments that could be made of “[f]unds held in trust
for the benefit of the tribes,” and described the policy guiding those investments as “selecting
securities that will yield the best possible return.” Bureau of Indian Affairs, Financial
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Trust, supra, that forms part of the legislative history for the 1994 Trust Fund Act. See Cobell v.
Norton, 392 F.3d 461, 464 (D.C. Cir. 2004) (noting that “[i]n 1994 Congress moved from [the
report’s] findings to legislation”). Quoting from the opinion, the report iterated:
Apart from the duty to account, the Federal Government has a fiduciary duty to
“maximize the trust income by prudent investment,” and the burden to justify less
than a maximum return. This responsibility requires the Government to stay wellinformed about the rates of return and investment opportunities and to
intelligently choose from among authorized investment opportunities to obtain the
highest rate of return to make the trust funds productive.
Misplaced Trust, supra, at 6 (quoting Cheyenne-Arapaho, 512 F.2d at 1394). 5 Despite
Congress’ reliance on this statement, defendant claims that Cheyenne-Arapaho was wrongly
decided because it employs a common law trust analysis that has been overruled by more recent
Supreme Court cases such as Mitchell II, Navajo I, and the recent decision in this very case,
United States v. Jicarilla Apache Nation, 131 S. Ct. 2313. But, there are a number of holes in
this argument.
For one thing, defendant presumes that this court can disregard otherwise binding circuit
precedent based on the mere belief that a prior decision of the Court of Claims or Federal Circuit
is inconsistent with the rationale of a subsequent Supreme Court precedent. 6 The Federal
Circuit, however, seems to have a more restrictive view of stare decisis, as illustrated by its
decision in El-Shifa Pharmaceutical Industries Co. v. United States, 378 F.3d 1346 (Fed. Cir.
2004), cert. denied, 545 U.S. 1139 (2005). In that case, the Federal Circuit was faced with a
scenario essentially identical to that presented here – the United States urged it to overrule
Management Accounting Procedures Handbook, 42 BIAM Supplement No. 3. 11.A, 11.D. (June
5, 1972).
5
At a later point, the same report provides that –
The challenge for the Bureau is to provide competent and reliable trust services.
To fulfill these important obligations it is necessary for the agency to fully
understand both its fiduciary duties and the financial marketplace. Stated simply
these fundamental assignments are: To accurately account to the beneficiary; to
make accounts productive for the beneficiaries; and to maximize the trust income
through prudent investment. To successfully perform these tasks, the Bureau of
Indian Affairs, as any fiduciary, must conduct itself as a sophisticated investor, a
smart shopper, and a highly diligent and resourceful manner.
Misplaced Trust, supra, at 8.
6
In S. Corp. v. United States, 690 F.2d 1368, 1369 (Fed. Cir. 1982) (en banc), the
Federal Circuit adopted the precedent of the Court of Claims as its own.
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Turney v. United States, 115 F. Supp. 457 (Ct. Cl. 1953), on the basis of the Supreme Court’s
intervening decision in United States v. Verdugo-Urquidez, 494 U.S. 259 (1990). While Turney
had applied the Fifth Amendment to an alien claiming a takings in a foreign land, 115 F. Supp. at
464, Verdugo-Urquidez construed prior Supreme Court cases as having “rejected the claim that
aliens are entitled to Fifth Amendment rights outside the sovereign territory of the United
States.” 494 U.S. at 269. Although it could not reconcile these holdings, the panel in El-Shifa
refused to declare Turney no longer the law, stating, “‘[w]e cannot simply overrule the [Turney]
decision, even if we were persuaded . . . that it is appropriate; to overrule a precedent, the court
must rule en banc.’” El-Shifa, 378 F.3d at 1352 (quoting George E. Warren Corp. v. United
States, 341 F.3d 1348, 1351 (Fed. Cir. 2003), cert. denied, 543 U.S. 808 (2004)).
While El-Shifa is perhaps the Federal Circuit decision that most closely parallels this
case, it is, by no means, an isolated precedent. The Federal Circuit, in fact, has often given
similar admonitions regarding the binding nature of its decisions. 7 Logic and common sense
suggest that if a panel of that court lacks the authority to overrule a prior circuit decision, then
this court also must lack that authority. To conclude otherwise would be folly. On the basis of
this line of authority, and, particularly, El-Shifa, this court declines defendant’s invitation to
“underrule” the Court of Claims’ decision in Cheyenne-Arapaho. See generally, Consol. Edison
Co. of N.Y., Inc. v. U.S. Dep’t of Energy, 247 F.3d 1378, 1386 (Fed. Cir. 2001) (Plager, J.,
concurring).
Even if El Shifa leaves some wiggle room for this court to consider whether CheyenneArapaho has been undermined by subsequent precedent, 8 the essential premise for defendant’s
7
See Atamirzayeva v. United States, 524 F.3d 1320, 1327 (Fed. Cir. 2008); Fed. Nat’l
Mortgage Ass’n v. United States, 469 F.3d 968, 972 (Fed. Cir. 2006); Barclay v. United States,
443 F.3d 1368, 1373 (Fed. Cir. 2006), cert. denied, 549 U.S. 1209 (2007) (“Panels of this court
are bound by previous precedential decisions until overturned by the Supreme Court or by this
court en banc.”); Medimmune, Inc. v. Genentech, Inc., 427 F.3d 958, 963 n.2 (Fed. Cir. 2005),
rev’d on other grounds, 549 U.S. 118 (2007); Sacco v. Dep’t of Justice, 317 F.3d 1384, 1386
(Fed. Cir. 2003) (“A panel of this court is bound by prior precedential decisions unless and until
overturned en banc.”); Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757, 765 (Fed. Cir. 1988), cert.
denied, 493 U.S. 814 (1989); Kimberly-Clark Corp. v. Fort Howard Paper Co., 772 F.2d 860,
863 (Fed. Cir. 1985); see also 13 Charles Alan Wright, Arthur R. Miller, Edward H. Cooper, et
al., Fed. Prac. & Proc. § 3506 (3d ed. 2010).
8
In one decision cited by defendant, the Federal Circuit suggested that the rule is
different if a Supreme Court decision is “directly at odds” with an earlier Federal Circuit
precedent. Doe v. United States, 372 F. 3d 1347, 1356-57 (Fed, Cir. 2004). But, even assuming
that this case can be reconciled with the dozen or so precedents cited above, the circumstance
described in Doe is not the case here. In arguing that this court may disregard prior precedent,
defendant also quotes from Texas American Oil Corp. v. United States Department of Energy, 44
F.3d 1557, 1561 (Fed. Cir. 1995) (en banc), seemingly ignoring that the statements it invokes
were made by an en banc court describing its own authority to overrule prior precedents. That
decision, therefore, is inapposite.
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argument – that Cheyenne-Arapaho is at odds with intervening Supreme Court decisions – is
simply wrong. In fact, in many ways, the reasoning employed by the Court of Claims in
Cheyenne-Arapaho presaged the analysis later prescribed by the Supreme Court. Thus, as would
later be dictated by Navajo I, the Court of Claims initially focused on the network of statutory
provisions dealing with the investment of tribal funds – for the most part, the same statutes at
issue here. 9 Cheyenne-Arapaho, 512 F.2d at 1392-94. Examining the language and history of
those statutes, the court found that they collectively imposed a fiduciary duty on the United
States to make prudent investments. Id. at 1394. The court went on to flesh-out this skeletal
duty in holding that defendant was liable to the plaintiffs for the difference between what had
been earned on the funds and the maximum the funds could have legally and practically earned if
properly invested. Id. at 1396. Toward this end, the Court of Claims outlined a series of
government obligations that stemmed from that duty, none of which were itemized in the
statutes. 10 As would later be dictated by the Supreme Court, the court thus used common law
principles not to establish the fiduciary obligations, but rather “to inform [its] interpretation of
statutes and to determine the scope of liability that Congress has imposed.” Jicarilla, 131 S. Ct.
at 2325; see also White Mountain Apache, 537 U.S. at 475-76; Sisk, supra, at 339 (“In the case
of a Native American claimant, where the government has assumed pervasive control over
Indian assets, the trust doctrine unavoidably overlays and infuses the legal analysis.”).
Reinforcing the view that Cheyenne-Arapaho was correctly decided are the striking
similarities among that case, Mitchell II and White Mountain Apache. In Mitchell II, the
Supreme Court focused on a statute which mandated that sales of timber from Indian trust lands
9
To be sure, there is not a perfect overlap between the statutes discussed in CheyenneArapaho and those discussed here. Thus, Cheyenne-Arapaho discusses 25 U.S.C. § 161b, a
statute that plaintiff does not invoke, while plaintiff invokes 25 U.S.C. § 161, a statute that
Cheyenne-Arapaho does not discuss. In the court’s view, these differences have minimal impact,
as it is this group of statutes that collectively establishes the investment obligations from which
the fiduciary duties at issue spring.
10
Accordingly, the court in Cheyenne-Arapaho found, inter alia, that defendant: (i) was
obliged to consider specific public-debt obligations of the United States and securities
guaranteed by the United States that had specifically been listed as eligible investments by the
Associate Solicitor of the Interior Department; (ii) could not deflect liability based upon “its
policy of consulting the Indians before investing and the plaintiffs’ failure to respond to its
request for advice,” but instead was “duty bound to make the maximum productive investment
unless and until specifically told not to do so by a tribe and until defendant also made an
independent judgment that the tribe’s request was in its own best interest;” (iii) should, as to
funds held in the Treasury, be held “to a strict standard of fiduciary duty – if eligible investments
were available at higher, yields, defendant will be liable to plaintiffs for the difference between
what interest defendant paid for the funds and the maximum the funds could have legally and
practically earned if properly invested outside;” and (iv) was liable for income lost as to various
funds that could have been invested at more productive returns during various periods at suit.
512 F.2d at 1395-96.
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be based upon the Secretary’s consideration of “the needs and best interests of the Indian owner
and his heirs” and that proceeds from such sales be paid to owners “or disposed of for their
benefit.” Mitchell II, 463 U.S. at 224 (citing 25 U.S.C. § 406(a)). And from this statute and the
control it afforded to the Secretary, the Supreme Court deduced that this court had jurisdiction
over the tribal damage claims not only for breaches of fiduciary duties that immediately sprang
from the statute, such as the failure to obtain a fair market value for timber sold, but also for
breaches of obligations that seemingly had no direct tie to the statutory language. Among the
latter were the government’s: (i) failure to manage timber on a sustained-yield basis; (ii) failure
to develop a proper system of roads and easements for timber operations; (iii) exaction of
improper charges from allottees for maintenance of roads; and (iv) exaction of excessive
administrative fees from the allottees. 463 U.S. at 210, 228. 11
A generation later, in White Mountain Apache, the Supreme Court heavily relied on
Mitchell II in again finding that the United States had a fiduciary obligation to perform duties
that were not specifically described by a statute. The Court there predicated the existence of a
fiduciary relationship on a 1960 statute that stated that the “‘former Fort Apache Military
Reservation’ would be ‘held by the United States in trust for the White Mountain Apache Tribe,
subject to the right of the Secretary of the Interior to use any part of the land and improvements
for administrative or school purposes for as long as they are needed for the purpose.’” 537 U.S.
at 469 (quoting Act of March 8, 1960, Pub. L. No. 86-392, 74 Stat. 8). From this statute, the
Court made a “fair inference” that the United States was required to maintain and conserve the
buildings on the reservation. The Court so held even while readily admitting that “the 1960 Act
11
Notably, the dissenters in Mitchell II took the majority to task for not requiring greater
evidence of congressional intent to authorize a suit for money damages. In this regard, Justice
Powell, writing on behalf of the dissenters, stated –
The Court does not – and clearly cannot – contend that any of the statutes
standing alone reflects the necessary legislative authorization of a damages
remedy. None of the statutes 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.” Testan, 424 U.S.,
at 399, 400, 96 S.Ct., at 954. Indeed, nothing in the timber-sales statutes, 25
U.S.C. §§ 406, 407, 466, the road and right-of-way statutes, §§ 318a, 323- 325, or
the interest statute, § 162a, addresses in any respect the institution of damages
actions against the United States. Nor is there any indication in the legislative
history of the statutes that Congress intended to consent to damages actions for
mismanagement of Indian assets by enacting these provisions. The Court does
not suggest otherwise.
463 U.S. at 230 (Powell, J., dissenting). Of course, it is telling that the argument that Justice
Powell criticized the majority for rejecting is essentially the same argument that defendant makes
here.
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does not . . . expressly subject the Government to duties of management and conservation.” Id.
at 475. 12
More importantly, in reaching the latter conclusion, the White Mountain Apache Court
thoroughly repudiated defendant’s cramped view of its fiduciary obligations. As recounted by
the Supreme Court, defendant had contended below “that jurisdiction was lacking . . . because no
statute or regulation cited by the Tribe could fairly be read as imposing a legal obligation on the
Government to maintain or restore the trust property, let alone authorizing compensation for
breach.” Id. at 470; see White Mountain Apache Tribe v. United States, 46 Fed. Cl. 20, 27-28
(1999)). Persuaded by this argument, this court dismissed the complaint for lack of jurisdiction,
finding that “[a]lthough the cited statutes and regulations may give the government complete
control over the Fort Apache site, they do not require that the government manage the Fort
Apache site for the purpose of protecting the tribe’s financial interests.” Id. at 28. The Federal
Circuit, however, reversed, rebuffing defendant’s argument that “the Mitchell cases, read
together, impose a fiduciary obligation only when the pertinent statute . . . . creating the trust
relationship also directs the United States to manage the trust corpus for the benefit of the
beneficiaries, i.e., the Native Americans.” White Mountain Apache Tribe v. United States, 249
F.3d 1364, 1375 (Fed. Cir. 2001). Once this duty was found, the Federal Circuit held, a court
could look to the common law of trusts “for assistance in defining the nature of that obligation.”
Id. at 1377. After granting certiorari, 535 U.S. 1016 (2002), the Supreme Court affirmed.
In so holding, the Supreme Court, like the Federal Circuit before it, rejected defendant’s
banner defense – akin to the one it offers here: “that no intent to provide a damages remedy is
fairly inferable, for the reason that ‘[t]here is not a word in the 1960 Act – the only substantive
source of law on which the Tribe relies – that suggests the existence of such a mandate.’” White
Mountain Apache, 537 U.S. at 476-77 (quoting Brief for the United States 28). The Court made
short shrift of this claim in a passage that bears repeating in its entirety –
To the extent that the Government would demand an explicit provision for money
damages to support every claim that might be brought under the Tucker Act, it
would substitute a plain and explicit statement standard for the less demanding
requirement of fair inference that the law was meant to provide a damages remedy
for breach of a duty. To begin with, this would leave Mitchell II a wrongly
decided case, for one would look in vain for a statute explicitly providing that
inadequate timber management would be compensated through a suit for
damages. But the more fundamental objection to the Government’s position is
12
Again, the dissenters in White Mountain Apache would have adopted defendant’s
position that the text of the 1960 Act did not create a fiduciary responsibility to maintain and
conserve the buildings on the reservation. See White Mountain Apache, 537 U.S. at 484
(Thomas, J., dissenting) (“If Congress intended to create a compensable trust relationship
between the United States and the Tribe with respect to the Fort Apache property, it provided no
indication to this effect in the text of the 1960 Act.”).
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that, if carried to its conclusion, it would read the trust relation out of Indian
Tucker Act analysis; if a specific provision for damages is needed, a trust
obligation and trust law are not. And this likewise would ignore Mitchell I, where
the trust relationship was considered when inferring that the trust obligation was
enforceable by damages. To be sure, the fact of the trust alone in Mitchell I did
not imply a remedy in damages or even the duty claimed, since the Allotment Act
failed to place the United States in a position to discharge the management
responsibility asserted. To find a specific duty, a further source of law was
needed to provide focus for the trust relationship. But once that focus was
provided, general trust law was considered in drawing the inference that Congress
intended damages to remedy a breach of obligation.
Id. at 477; see also Sisk, supra, at 336. Summing up, the Court concluded that “[w]hile it is true
that the 1960 Act does not, like the statutes cited in [Mitchell II], expressly subject the
Government to duties of management and conservation, the fact that the property occupied by
the United States is expressly subject to a trust supports a fair inference that an obligation to
preserve the property improvements was incumbent on the United States as trustee.” 537 U.S. at
475. 13 Accordingly, despite the fact that no statute or regulation imposed a duty to restore and
maintain the buildings at issue, the Court determined that this court had jurisdiction over a claim
alleging the breach of that duty. Id. at 479. 14
While White Mountain Apache may be the sockdolager here, it is neither the first nor the
only case to reject defendant’s theory. Prior to the Supreme Court’s decision, the Court of
Claims had repeatedly dismissed the notion that defendant’s fiduciary duties must be specifically
enumerated by statute. See Duncan v. United States, 667 F.2d 36, 42-43 (Ct. Cl. 1981), cert.
denied, 463 U.S. 1228 (1983) (applying Mitchell I while rejecting defendant’s claim that “a
13
Twenty years earlier, in Mitchell II, Justice Marshall rejected the notion that the
contours of the government’s trust obligations were mapped solely by statutory language,
stating: “[w]here the Federal Government takes on or has control or supervision over trial
monies or properties, the fiduciary relationship normally exits 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 of Indians v. United
States, 624 F.2d 981, 987 (Ct. Cl. 1980) (internal quotations omitted)).
14
In her concurring opinion, Justice Ginsburg indicated that she believed that the
majority’s opinion was consistent with the analysis prescribed in Navajo I. 537 U.S. at 479
(Ginsburg, J., concurring). In this regard, she posited that “[t]he dispositive question . . . is
whether the 1960 measure, in placing property in trust and simultaneously providing for the
Government-trustee’s use and occupancy, is fairly interpreted to mandate compensation for the
harm caused by maladministration of the property.” Id. Justice Ginsburg answered this question
affirmatively, holding that the 1960 Act imposed concrete and substantive obligations on the
United States. Id. at 480-81.
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federal trust must spell out specifically all the trust duties of the Government”); Navajo Tribe,
624 F.2d at 988 (“Nor is the court required to find all the fiduciary obligations it may enforce
within the express terms of an authorizing statute . . . .”). 15 And cases decided in the wake of
White Mountain Apache reflect a similar view. 16 Subsequent decisions of the Supreme Court,
moreover, confirm that Mitchell II and White Mountain Apache remain good law. In Navajo I,
decided the same day as White Mountain Apache, the Supreme Court referred to the Mitchell II
decision as “pathmarking.” 537 U.S. at 503. A half a dozen years later, in Navajo II, the Court
again relied upon both decisions. Navajo II, 129 S. Ct. at 1552; see also Sisk, supra, at 336
(“both Navajo Nation and White Mountain Apache echo the teaching of Mitchell II”). Most
recently, in Jicarilla, the Supreme Court reaffirmed the analysis in Mitchell II and White
Mountain Apache. See Jicarilla, 131 S. Ct. at 2325 (“we have found that particular ‘statutes and
regulations . . . clearly establish fiduciary obligations of the Government’ in some areas”) (citing
Mitchell II, 463 U.S. at 226; White Mountain Apache, 537 U.S. at 475). The Court in Jicarilla,
moreover, reemphasized that while a Tribe needs to point, at the outset, to a specific, trustcreating statute, the language of such a statute ultimately does not cabin defendant’s fiduciary
obligations. Jicarilla, 131 S. Ct. at 2325. Rather, the Court concluded, “once federal law
imposes such duties, the common law ‘could play a role.’” Id. (quoting Navajo II, 129 S. Ct. at
1558). In this regard, it added that “[w]e have looked to common-law principles to inform our
interpretation of statutes and to determine the scope of liability that Congress has imposed.” Id.
(citing White Mountain Apache, 537 U.S. at 475-76). 17
Defendant would have this court blithely accept what so many courts have rejected – that
for the breach of a fiduciary duty to be actionable in this court, that duty must be spelled out, in
15
The Court of Claims plainly did not think that Mitchell I overruled CheyenneArapaho as it relied upon the latter opinion in deciding the remand of the first Mitchell case. See
Mitchell v. United States, 664 F.2d 265, 274 (Ct. Cl. 1981) (Mitchell I on remand). Indeed, in
that remand decision, the Court of Claims specifically rejected the notion that its en banc
decision in United States v. Mescalero Apache Tribe, 518 F.2d 1309 (Ct. Cl. 1975), cert. denied,
425 U.S. 911 (1976), had overruled Cheyenne-Arapaho. Mitchell I on remand, 664 F.2d at 274.
In so concluding, the court noted that “the controlling standards for determining breaches of the
fiduciary obligations” remained the same in its cases. 664 F.2d at 274 n.17.
16
See Cobell, 392 F.3d at 472 (under White Mountain Apache, “once a statutory
obligation is identified, the court may look to common law trust principals to particularize that
obligation”); Sisk, supra, at 339 (“In the case of a Native American claimant, where the
government has assumed pervasive control over Indian assets, the trust doctrine unavoidably
overlays and infuses the legal analysis.”).
17
Notably, the Federal Circuit has applied Cheyenne-Arapaho in several cases following
the Mitchell II decision. See Short v. United States, 50 F.3d 994, 999 (Fed. Cir. 1995); see also
Shoshone Indian Tribe of Wind River Reservation v. United States, 364 F.3d 1339, 1353 (Fed.
Cir. 2004), cert. denied, 544 U.S. 973 (2005) (finding that 25 U.S.C. §§ 161a, 161b, and 162a
require defendant to earn interest on trust funds).
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no uncertain terms, in a statute or regulation. But to conclude this, this court would have to
perform a logic-defying feat of legal gymnastics.
That routine would commence with a full jurisprudential gainer – a twisting, backwards
maneuver that would allow the court to ignore cases like White Mountain Apache and Mitchell II
that have relied upon the common law to map the scope of enforceable fiduciary duties
established by statutes and regulations. The court would then need to vault over CheyenneArapaho and a soaring pyramid of other precedents, all of which have found defendant’s
argument wanting. Next, the court would be called upon to handspring to the conclusion that
Congress’ repeated legislative efforts to ensure the safe investment of tribal funds were mostly
for naught – because, if defendant is correct, the provisions enacted were generally not
perspicuous enough to create enforceable duties and, even where specific enough to do so, left
interstices in which defendant could range freely. Indeed, while egging the court on, defendant
never quite comes to grip with the fact that if the government’s fiduciary duties are limited to the
plain dictates of the statutes themselves, such duties are not really “fiduciary” duties at all. See
Varity Corp. v. Howe, 516 U.S. 489, 504 (1996) (“[i]f the fiduciary duty applied to nothing more
than activities already controlled by other specific legal duties, it would serve no purpose”).
Taken to its logical dismount, defendant’s view of the controlling statutes would not only defeat
the twin claims at issue, but virtually all the investment claims found in the tribal trust cases, few
of which invoke haec verba specific language in a statute or regulation. Were the court
convinced even to attempt this tumbling run, it almost certainly would end up flat on its back
and thereby garner from the three judges reviewing its efforts a combined score of “zero” – not
coincidentally, precisely the number of decisions that have adopted defendant’s position.
This court will not be the first to blunder down this path. Like the courts before it, it can
accept neither defendant’s assertion that Cheyenne-Arapaho has, sub silentio, been overruled,
nor the wooden interpretation of the United States’ statutory duties upon which that claim is
based. A phalanx of contrary precedent requires this court instead to honor the Court of Claim’s
holding that the trust investment statutes in question establish defendant’s “obligation to
maximize the trust income by prudent investment.” Cheyenne-Arapaho, 512 F.2d at 1394. It
remains to apply this principle to the claims at issue.
C.
Based on the foregoing, the court concludes that it has jurisdiction, under the Indian
Tucker Act, over claims predicated upon defendant’s violation of its obligation to maximize trust
income by prudent investment. The latter duty, in accordance with prior precedent, derives from
the various statutory provisions in Title 25 cited by Jicarilla – provisions that are undoubtedly
money-mandating. See Navajo I, 537 U.S. at 506 (citing Mitchell II, 463 U.S. at 216-17).
Accordingly, the United States has waived its sovereign immunity as to such claims.
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1.
There is little doubt that plaintiff’s pooling claim falls within this jurisdictional grant, as
it directly involves the alleged breach of the aforementioned investment obligation. Thus, this
court has jurisdiction to determine whether, in choosing among the alternative investments
authorized by 25 U.S.C. §§ 161, 161a, and 162a, and the regulations thereunder, defendant was
obligated to consider whether pooling the funds of more than one Tribe would maximize the
income derived from particular investments. Consistent with this view, there is strong indication
in the common law of trusts that, at least in some instances, a fiduciary charged with maximizing
trust income by prudent investment would be expected to pool investments. See Restatement
(Third) of Trusts § 90 cmt. m (2007); see also Manchester Band of Pomo Indians, Inc. v. United
States, 363 F. Supp. 1238, 1248 n.3 (N.D. Cal. 1973) (citing an earlier version of this
Restatement provision and concluding that “the Secretary must consider whether funds from one
Indian trust fund should be combined with funds from another Indian trust to purchase a single
instrument of indebtedness, and thereby extending to small trusts the benefits of larger returns
from larger and longer term investments”).
But, this is to say neither that pooling was actually required here nor that defendant acted
with less than the requisite care in failing to implement it. 18 The court is precluded from so
18
Defendant argues that Interior’s decision not to employ pooling here is subject to
traditional arbitrary and capricious review, like that applied under the Administrative Procedures
Act, 5 U.S.C. § 702. This court, however, has already ruled to the contrary once in this case,
describing, in a portion of its discovery ruling unaffected by the Supreme Court’s subsequent
opinion, the “many cases involving the alleged misappropriation or mismanagement of tribal
trusts, in which it is often observed that the duty of care owed by the United States ‘is not mere
reasonableness, but the highest fiduciary standards.’” Jicarilla Apache Nation, 88 Fed. Cl. 1, 20
(2009), mandamus denied, 2011 WL 3022400 (Fed. Cir. July 25, 2011) (quoting Am. Indians
Residing on the Maricopa-Ak Chin Reservation v. United States, 667 F.2d 980, 990 (1981) and
citing United States v. Mason, 412 U.S. 391, 398 (1973); Seminole Nation v. United States, 316
U.S. 286, 296-97 (1942); Shoshone Indian Tribe, 364 F.3d at 1348; Short, 50 F.3d at 999;
Yankton Sioux Tribe v. United States, 623 F.2d 159, 163 (Ct. Cl. 1980); Red Lake Band, 17 Cl.
Ct. 362, 373 (1989)); see also Duncan, 667 F.2d at 45. Indeed, in Yankton Sioux, the Court of
Claims specifically rejected the application of the arbitrary and capricious standard in the tribal
trust context, stating “[a] breach of that obligation by the Government may obviously involve
conduct less than arbitrary, capricious, or fraudulent by an official charged with the position of
trust.” 623 F.2d at 163; see also Sac & Fox Tribe of Indians v. United States, 340 F.2d 368, 375
(Ct. Cl. 1964); Osage Tribe, 72 Fed. Cl. at 643; Cheyenne-Arapaho Tribes of Okla. v. United
States, 33 Fed. Cl. 464, 469 (1995) (quoting Jicarilla Apache Tribe v. Supron Energy Corp., 728
F.2d 1555, 1563 (10th Cir. 1984) (Seymour, J., concurring in part and dissenting in part), adopted
as majority opinion, 782 F.2d 855 (10th Cir. 1986) (en banc) (in this context, defendant’s
“‘actions must not merely meet the minimal requirements of administrative law, but must also
pass scrutiny under the more stringent standards demanded of a fiduciary.’”)); Minn. Chippewa
Tribe v. United States, 14 Cl. Ct. 116, 130 (1987); see also Cobell, 240 F.3d at 1104.
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ruling based upon the existence of numerous material questions of fact. Those same questions of
fact also preclude this court from ruling that the United States did not have this duty, as
defendant argues. Among the questions presented are whether countervailing obligations,
founded in, or springing from, other statutory and regulatory provisions, precluded the pooling of
investments in the circumstances presented. Evidence as to these questions includes defendant’s
past practices in pooling the investments of individual Native Americans, their tribes, and tribal
organizations. 19 Still other factual questions center on the prior interactions between Jicarilla
and defendant regarding this issue and focus, inter alia, on whether duly authorized officials of
the Nation previously rejected the use of investment pooling on its behalf. These and other
related questions will be answered in short order, as trial in this case is already scheduled.
2.
The situation as to plaintiff’s disbursement lag claim is different. Recall, that claim
hinges on the theory that defendant should not have removed funds from Jicarilla’s trust account
until the disbursement check was negotiated. Relying on its experts, plaintiff asserts that if the
funds had not been withdrawn until the check was cashed, it would have received an additional
10.2 days of potential investment income as to each of the thirty-seven disbursement transactions
that plaintiff claims occurred during the phase-one period.
Defendant would have this court disregard this whole line of authority based on the Court
of Claims’ statement, in Mitchell I on remand, that: “the standard by which Interior’s actions are
to be judicially tested is, not the court’s or plaintiff’s own view of the preferable conduct, but the
normal standard for government fiduciaries – were their actions in good faith and within the
realm of their acceptable discretion, or were they arbitrary, capricious, an abuse of discretion, or
contrary to law?” 664 F.2d at 274. But, as has been observed elsewhere, see Osage Tribe, 68
Fed. Cl. at 335, this statement is obiter dicta, and at all events dealt with a fiduciary matter (the
management of lands) quite distinct from those involved here. See Minn. Chippewa Tribe, 14
Cl. Ct. at 129-30 (distinguishing Mitchell I on remand on this basis). Indeed, in its remand
decision, the Court of Claims noted that “‘[i]n each situation, the precise scope of the fiduciary
obligation of the United States and any liability for breach of that obligation must be determined
in light of the relationships between the Government and the Indians.’” 664 F.2d at 274 (quoting
Navajo Tribe, 624 F.2d at 988).
19
On this point, plaintiff relies upon a finding made by the district court in Manchester
Band of Pomo Indians, to the effect that “[d]efendants have made investments of Indian trust
funds by purchasing a single instrument of indebtedness with the funds of more than one Indian,
Indian tribe, or other Indian organization.” 363 F. Supp. at 1251. However, this finding was
made as a discovery sanction under then Rule 37(b)(2)(A) of the Federal Rules of Civil
Procedure. Id. at 1250. While plaintiff and the amici have cited to various other documents that
indicate that the United States has previously engaged in pooling, those documents do not
establish that pooling was authorized under the law as it existed during the period in question.
- 16 -
The practice at issue apparently emanates from a government memorandum dated
January 10, 1973, in which the Chief Division of Financial Management of the Interior
Department informed all BIA Area Directors that “funds will stop earning interest the day they
are disbursed by the Regional Disbursing Office” in light of Treasury Department General
Accounting Office’s Joint Regulation No. 3. Under this practice, when Interior submitted a
Standard Form (SF) 1166 requesting that Treasury issue a check to disburse tribal trust funds,
Interior immediately debited that amount from the combined trust account. Treasury recognized
the disbursement as a liability and recorded it as a “Check Outstanding” on its general ledger.
Disbursing funds from the Treasury has been a basic function of the Department of the
Treasury since it was first established in 1789. See Act of September 2, 1789, 1 Stat. 65 (1789)
(establishing the Department and authorizing the Secretary to disburse funds from the Treasury).
Not surprisingly, various policies and procedures have been prescribed for such disbursements.
Congress has defined the features of a Treasury check as “an order for the payment of money:
payable on demand; that does not bear interest; drawn by an authorized disbursing official or
agent of the United States Government; and the amount of which is deposited with the Treasury
or another account available for payment.” 31 U.S.C. § 3331(a). By law, funds represented by
Treasury checks have next-day availability. 12 U.S.C. § 4002(a)(2)(A); 12 C.F.R. §
229.10(c)(1)(i). Under these provisions, once a Treasury check is issued, a government liability
is immediately recognized. 20 Contrasting this process with the disbursement process employed
by private companies, a 1956 report by the Joint Program to Improve Accounting in the Federal
Government 21 explained –
In business, such disbursements serve to reduce an asset (cash in bank) for the
corresponding reduction of liabilities. The situation in the Federal Government,
however, is different because most of its cash is held by the Treasurer of the
United States – not by commercial banks. Therefore, the action of drawing
checks on the Treasurer creates new liabilities, which should be on the Treasury
Department’s books, in place of those on the books of the administrative agencies
which were extinguished by the payment of vouchers. One of the several
20
Historically, Treasury checks had no temporal limits on when they could be cashed.
That changed during the midst of the period at issue when Congress passed the Competitive
Equality Banking Act of 1987, Pub. L. No. 100-86, Title X, § 1003, 101 Stat. 552, 658, which
provided that, as of October 1, 1989, Treasury checks could be cashed for only one year from the
date of issuance.
21
The Joint Program was established by Congress in 1947 to provide guidance to
federal agencies regarding accounting, budgeting and financial reporting. The Program was run
by the Comptroller General of the General Accounting Office (now the General Accountability
Office), the Secretary of the Treasury, and the Director of the Bureau of the Budget (now the
Office of Management and Budget). The Joint Program was later given the authority to “conduct
a continuous program for the improvement of accounting and financial reporting in the
Government. Accounting and Auditing Act of 1950, Pub. L. No. 81-784, 64 Stat. 835.
- 17 -
objectives in the development of appropriate accounting for cash operations has
been to provide for disclosure of the foregoing type of liability along with certain
other types of liabilities and assets which are germane to cash operations and
essential factors in the bridge between receipts and expenditures overall and the
changes in the Treasury’s cash position.
Joint Program to Improve Accounting in the Federal Government, Seventh Annual Progress
Report 131 (Feb. 7, 1956). It thus appears that a Treasury check functions much like a cashier’s
check – each represents a liability not of the depositor from whose account the moneys are
drawn, but rather of the issuer of the check. And, it is for this reason that Treasury debits an
account, like the trust fund here, when it issues a Treasury check.
Now, of course, this does not answer the question whether defendant should have used
such checks to effectuate disbursement or whether it should have somehow modified the
procedures applicable to disbursements. But, those questions must remain unanswered as none
of the statutes cited by Jicarilla – neither section 161, 161a, nor 162a – provides a jurisdictional
foundation for this court to consider whether defendant’s application of the normal rules
governing Treasury checks to Jicarilla’s disbursement checks somehow violated a fiduciary
obligation. As discussed above, Cheyenne-Arapaho and other precedents focus on statutes that
outline the types of decisions that defendant is required to make in investing tribal trust funds
and imply from those statutory obligations a fiduciary duty to make those decisions prudently.
While, as described above, the latter obligation requires defendant to decide whether pooling
would enhance the income of the trust, that same obligation is not implicated by defendant’s
decision to use Treasury checks, and the features ordinarily associated therewith, to effectuate
disbursements from the trust fund. Though this practice likely impacts the yield of the trust
funds, it is not an investment decision, but rather, at bottom, a managerial one. And, plaintiff has
pointed to no statutory provision that would give rise to a money-mandating obligation in this
latter regard, at least for the period in question.
In arguing otherwise, plaintiff asserts that its disbursement lag claim mirrors its claim that
defendant violated its fiduciary duty by failing more promptly to deposit into the trust fund
moneys owed the Nation. It notes that defendant has not challenged the court’s jurisdiction to
consider the latter claim, even though there is little to distinguish its economic impact from that
of the disbursement lag claim at issue here. Both practices, plaintiff contends, affect the amount
of investment income produced by the trust. To buttress this argument, plaintiff cites Osage
Tribe, in which this court found that defendant’s failure to deposit tribal funds promptly
constituted a breach of the government’s fiduciary duties. 72 Fed. Cl. at 662-65. But, Osage
Tribe did not rely on the investments statutes at issue here, but rather upon a different set of
provisions dealing with deposits to trust funds, specifically those found in the Act of June 28,
1906, 34 Stat. 539, and 25 C.F.R. § 226.13. 72 Fed. Cl. at 662-65. The latter provisions do not
establish any duties with respect to disbursements. Accordingly, plaintiff’s reliance on Osage
Tribe comes up short. This court cannot establish jurisdiction over claims for which there is no
statutory support by analogizing them to claims for which there is such support. That is not the
way that waivers of sovereign immunity work. Orlando Food Corp. v. United States, 423 F.3d
- 18 -
1318, 1320 (Fed. Cir. 2005) (“[c]ourts are not free to infer waivers of sovereign immunity”);
Coflexip Servs., Inc. v. United States, 20 Cl. Ct. 412, 416 (1990) (an “[a]nalogy” cannot
“override the lack of an express waiver to sovereign immunity”); see also Library of Congress v.
Shaw, 478 U.S. 310, 318 (1986). For good or naught, Congress can, and sometimes does, make
distinctions between categories of claims that cannot easily be distinguished. Sovereign
immunity gives it that prerogative.
Accordingly, the court concludes that it lacks jurisdiction over plaintiff’s disbursement
lag claim.
III.
CONCLUSION
Based on the foregoing, defendant’s motion for partial summary judgment on the pooling
claim is hereby DENIED and plaintiff’s cross-motion for partial summary judgment on the
pooling claim is hereby DENIED. In addition, defendant’s motion for partial summary
judgment on the disbursement lag claim is hereby GRANTED. That portion of plaintiff’s
complaint is hereby dismissed for lack of jurisdiction. 22
IT IS SO ORDERED.
s/ Francis M. Allegra
Francis M. Allegra
Judge
22
It is the court’s intention to unseal and publish this opinion after September 1, 2011.
On or before September 1, 2011, each party shall file proposed redactions to this opinion, with
specific reasons therefore.
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