BLACKFEET HOUSING v. USA
Filing
13
PUBLISHED OPINION - Granting Defendant's 7 Motion to Dismiss - Rule 12(b)(1), and (6). The Clerk of the Court is directed to enter judgment dismissing the complaint for lack of subject matter jurisdiction. No costs. Signed by Judge Christine O.C. Miller. (smg) Copy to parties.
In the United States Court of Federal Claims
No. 12-04C
(Filed August 2, 2012)
***********************
BLACKFEET HOUSING,
Plaintiff,
v.
THE UNITED STATES,
Defendant.
***********************
*
*
*
*
*
*
*
*
*
*
*
*
*
Contracts; breach of trust
relationship; motion to dismiss
for lack of subject matter
jurisdiction, RCFC 12(b)(1);
statute of limitations, 28 U.S.C.
§ 2501 (2006); accrual of claim
for breach of trust to Native
American tribal agency; motion
to dismiss for failure to state a
claim, RCFC 12(b)(6);
requirement of statute that states
a specific trust responsibility.
Terryl T. Matt, Cut Bank, MT, for plaintiff.
Kenneth D. Rooney, Washington, DC, with whom was Assistant Attorney General
Ignacia S. Moreno, for defendant. Ayako Sato, Environment & Natural Resources Division,
U.S. Department of Justice, and Kyra Olds, Office of General Counsel, U.S. Department of
Housing and Urban Development, of counsel.
MEMORANDUM OPINION AND ORDER
MILLER, Judge.
This case is before the court on defendant’s motion to dismiss pursuant to RCFC
12(b)(1) for lack of subject matter jurisdiction and 12(b)(6) for failure to state a claim. The
issue for decision on defendant’s jurisdictional motion is whether Blackfeet Housing
Authority (“plaintiff”) timely filed its complaint for breach of a trust responsibility owed to
the tribal authority by the United States, which implicates the merits issue. Defendant’s
substantive motion questions whether the breach pleaded rests on a specific statutory trust
responsibility. Argument is deemed unnecessary.
FACTS AND BACKGROUND
The following facts are taken from plaintiff’s complaint and, where necessary for
addressing defendant’s jurisdictional challenge, from defendant’s motion to dismiss and the
exhibits attached thereto. 1/ Plaintiff is a governmental entity wholly owned and operated
by the Blackfeet Tribe on the Blackfeet Indian Reservation in Montana. See Compl. filed
Jan. 3, 2012, at 1. Between 1977 and 1980, plaintiff constructed approximately 225 homes
on the Blackfeet Reservation using federal government funds allocated through the
Department of Housing and Urban Development (“HUD”). Id. ¶ 5; Def.’s Br. filed Apr. 5,
2012, at 1-2. 2/ Prior to construction plaintiff submitted the design plans for the homes to
HUD for approval; however, HUD representatives were of the opinion that the plans, as
submitted, would be too expensive to remain within plaintiff’s budget. Def.’s Br. filed Apr.
5, 2012, at Ex. 1-2 (Nov. 29, 1976 letter from Peter A. Downs, Director, Technical Services,
Office of Indian Programs to Edward Little Plume, Chairman, Blackfeet Indian Housing
Authority) (“We do not believe that you will receive a bid anywhere close to being within
the funds available if these plans are put out to bid as is.”). In order to remain within budget,
HUD advised plaintiff to redesign the housing units. Id.
It appears that plaintiff did not heed this advice initially and chose instead to solicit
bids for the project under the original design. As predicted, none of the bids initially
received by plaintiff were within the allocated budget. Id. at Ex. 1-3 (Mar. 18, 1977 letter
from Mr. Downs to Mr. Little Plume). HUD recorded: “It is clear that the bids exceed, by
a wide margin, the funds available for building the project. The primary reason for this is,
[sic] we are convinced that the housing units and site plans were not designed to achieve a
cost-effective result.” Id. Unable to proceed with the project as then designed, HUD
notified plaintiff that “[t]he only course available is to re-design.” Id. Plaintiff then altered
its design plans. Among numerous other revisions, plaintiff chose to forgo the use of any
concrete in the foundation of the homes and elected to use wood for the foundation. Id. at
Ex. 1-5 (Attachment to Apr. 11, 1977 Change Order executed by plaintiff) (“Delete all
concrete foundations on scattered sites, substitute wood foundations as specified and
detailed.”). Although this may have seemed an acceptable compromise prior to construction,
by 1998 the wood foundations were posing both health and safety issues to residents. Id.
1/ The court may consider information outside of the complaint in order to resolve
a jurisdictional challenge involving the underlying facts that are relied upon to establish
jurisdiction. See Ferreiro v. United States, 350 F.3d 1318, 1324 (Fed. Cir. 2003).
2/ Plaintiff alleges in the Complaint that “[m]ost of these homes have been
subsequently conveyed to . . . homeowners [, but] [s]ome homes are still owned by Blackfeet
Housing, and 55 of these homes are rentals.” Compl. ¶ 5.
2
at Ex. 1-6 (Feb. 9, 1998 letter from Vernon Haragara, Administrator, Northern Plains Office
of Native American Programs, HUD, to Tom Blackweasal, Executive Director, Blackfeet
Indian Housing Authority) (“Approximately 220 wood basements are in varying degrees of
decay. The [plaintiff] estimates that 55 basements are in very serious condition and another
55 basements are in serious condition.”).
On August 2, 2002, Blackfeet tribal members, consisting of individual home-buyers
and renters, filed suit in the United States District Court for the District of Montana against
both plaintiff and HUD. See id. at 3; see also Marceau v. Blackfeet Housing, Civ. No. 4:02cv-73-SEH (D. Mont. filed Aug. 2, 2002). The plaintiffs alleged, inter alia, that plaintiff
and HUD should be held liable for the damages resulting from the use of wooden
foundations in the homes. Def.’s Br. filed Apr. 5, 2012, at 3. Both HUD and plaintiff
responded with motions to dismiss certain claims: HUD’s was based on a lack of subject
matter jurisdiction and failure to state a claim, and plaintiff’s was based on tribal immunity.
See id. at 3-4. The district court granted both motions, and the case subsequently was
appealed to the United States Court of Appeals for the Ninth Circuit. In the final and
dispositive Ninth Circuit opinion, that court held, as follows: (1) neither the United States
Housing Act of 1937, 42 U.S.C. §§ 1437-1437j (1976), the Indian Housing Act of 1988, 42
U.S.C. §§ 1437aa-1437ee, nor the Native American Housing Assistance and SelfDetermination Act of 1996, 25 U.S.C. §§ 4101-4243 (the “NAHASDA”), created a trust
relationship that imposed fiduciary duties on HUD, see Marceau v. Blackfeet Housing
Auth., 540 F.3d 916, 921-28 (9th Cir. 2008) 3/; (2) the tribal members had alleged sufficient
facts to proceed against HUD under the Administrative Procedure Act, 5 U.S.C. §§ 702-706
(2006), Marceau, 540 F.3d at 928-29; and (3) it was inappropriate to consider the merits of
3/ The Ninth Circuit concluded, as follows:
In summary, under the Housing Act, Indian housing authorities (such
as [plaintiff]) applied to HUD for loans to enable the housing authority to
develop low-income public housing designed to be sold to eligible members
of the tribe. Under NAHASDA, block grants could be used by the tribe or its
designated housing entity to repair or replace housing. As with any grant of
federal funds, certain requirements had to be met to obtain and spend the
funds. But the federal government held no property—land, houses, money, or
anything else—in trust. The federal government did not exercise direct control
over Indian land, houses, or money by means of these funding mechanisms.
The federal government did not build, manage, or maintain any of the housing.
Marceau, 540 F.3d at 928.
3
the tribal members’ claims against plaintiff because they had yet to exhaust their tribal-court
remedies, id. at 920-21.
On remand the district court ruled that the tribal members’ APA claims stemming
from HUD’s alleged decision requiring the use of wooden foundations were barred by the
six-year statute of limitations set forth in 28 U.S.C. § 2401(a) (2006), because the decision
to use wooden foundations in the homes was made no later than November 15, 1977. See
Marceau v. Blackfeet Housing Auth., No. CV-02-73-GF-SEH, slip op. at 10-11 (D. Mont.
Mar. 24, 2011). On June 5, 2012, in an unpublished decision, the Ninth Circuit affirmed the
dismissal, ruling:
[The tribal members’] claim against HUD accrued in the late 1970s, when the
agency purportedly decided to require wooden foundations. At that time, [the
tribal members] knew about the decision [to construct the homes with wooden
foundations] and knew that it affected them. . . . That [the tribal members]
may not have immediately grasped the full impact that HUD’s decision might
eventually have on them does not mean they knew too little in 1980 to bring
an APA challenge.
Marceau v. Blackfeet Housing Auth., No. 11-35444, slip op. at 2-3 (9th Cir. June 5, 2012).
II. Procedural History
Plaintiff filed its complaint on January 3, 2012, seeking $30 million in damages
resulting from HUD’s alleged breach of “its trust responsibility to plaintiff.” Compl. ¶ 16.
On April 5, 2012, defendant moved to dismiss under both RCFC 12(b)(1) and 12(b)(6).
Plaintiff responded on May 7, 2012, and defendant replied on May 31, 2012.
DISCUSSION
I. Standards
1. Subject matter jurisdiction pursuant to RCFC 12(b)(1)
Defendant levies the objection that plaintiff’s asserted claims are outside the court’s
jurisdiction. Jurisdiction must be established before the court may proceed to the merits of
a case. Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 88-89 (1998). Courts are
presumed to lack subject matter jurisdiction unless it is affirmatively indicated by the record;
therefore, it is a plaintiff’s responsibility to allege facts sufficient to establish the court’s
subject matter jurisdiction. Renne v. Geary, 501 U.S. 312, 316 (1991); DaimlerChrysler
4
Corp. v. United States, 442 F.3d 1313, 1318 (Fed. Cir. 2006) (“[I]t is settled that a party
invoking federal court jurisdiction must, in the initial pleading, allege sufficient facts to
establish the court’s jurisdiction.” (citations omitted)). Once the court’s subject matter
jurisdiction is put into question, it is “incumbent upon [the plaintiff] to come forward with
evidence establishing the court’s jurisdiction. . . . [The plaintiff] bears the burden of
establishing subject matter jurisdiction by a preponderance of the evidence.” Reynolds v.
Army & Air Force Exch. Serv., 846 F.2d 746, 748 (Fed. Cir. 1988) (citation omitted);
accord M. Maropakis Carpentry, Inc. v. United States, 609 F.3d 1323, 1327 (Fed. Cir.
2010). However, when a federal court hears a jurisdictional challenge, “its task is
necessarily a limited one.” Scheuer v. Rhodes, 416 U.S. 232, 236 (1974), abrogated on other
grounds by Harlow v. Fitzgerald, 457 U.S. 800 (1982). “The issue is not whether a plaintiff
will ultimately prevail but whether the claimant is entitled to offer evidence to support the
claims.” Id.
2. Statute of Limitations
The applicable statute of limitations is 28 U.S.C. § 2501 (2006), which states, “Every
claim of which the United States Court of Federal Claims has jurisdiction shall be barred
unless the petition thereon is filed within six years after such claim first accrues.” 28 U.S.C.
§ 2501. “Claims by individual Indians or tribes for breach of trust are subject to the same
six-year statute of limitations under 28 U.S.C. § 2501 that applies to other litigation against
the United States under the Tucker Act.” Oenga v. United States, 83 Fed. Cl. 594, 609
(2008) (citing Hopland Band of Pomo Indians v. United States, 855 F.2d 1573, 1576 (Fed.
Cir. 1988)). Generally, “[a] claim first accrues when all the events have occurred that fix the
alleged liability of the government and entitle the claimant to institute an action.” Ingrum
v. United States, 560 F.3d 1311, 1314 (Fed. Cir. 2009). When seeking to determine when
a claim accrues, a court must decide when the plaintiff “was or should have been aware” of
the material facts that would establish the government’s liability. See San Carlos Apache
Tribe v. United States, 639 F.3d 1346, 1350 (Fed. Cir. 2011) (citation omitted) (internal
quotation marks omitted). This means that “the ‘proper focus’ must be ‘upon the time of the
[defendant’s] acts, not upon the time at which the consequences of the acts [become] most
painful.’” Navajo Nation v. United States, 631 F.3d 1268, 1277 (Fed. Cir. 2011) (alterations
in original) (quoting Delaware State Coll. v. Ricks, 449 U.S. 250, 258 (1980)). Thus, a
plaintiff must file a complaint with the Court of Federal Claims within six years of the
occurrence of the events fixing its claim or else risk dismissal for lack of jurisdiction. See
John R. Sand & Gravel Co. v. United States, 552 U.S. 130, 133-34 (2008) (recognizing that
compliance with the statute of limitations is a jurisdictional requirement); see also FloorPro,
Inc. v. United States, 680 F.3d 1377, 1380-81 (Fed. Cir. 2012). Plaintiff bears the burden
of showing that its claim was timely filed and may discharge this burden with a showing by
5
a preponderance of the evidence. See Taylor v. United States, 303 F.3d 1357, 1359 (Fed.
Cir. 2002).
3. Failure to state a claim
Defendant alternatively moves pursuant to RCFC 12(b)(6) to dismiss plaintiff’s
complaint for failure to state a claim upon which relief can be granted. See RCFC 12(b)(6).
“The purpose of [RCFC 12(b)(6)] is to allow the court to eliminate actions that are fatally
flawed in their legal premises and destined to fail . . . .” Advanced Cardiovascular Sys., Inc.
v. Scimed Life Sys., Inc., 988 F.2d 1157, 1160 (Fed. Cir. 1993); see also Neitzke v.
Williams, 490 U.S. 319, 326-27 (1989). The court’s task in considering a motion to dismiss
for failure to state a claim is to “determine ‘whether the claimant is entitled to offer evidence
to support the claims,’ not whether the claimant will ultimately prevail.” Chapman Law Firm
Co. v. Greenleaf Constr. Co., 490 F.3d 934, 938 (Fed. Cir. 2007) (quoting Scheuer, 416 U.S.
at 236). “A dismissal for failure to state a claim . . . is a decision on the merits which focuses
on whether the complaint contains allegations, that, if proven, are sufficient to entitle a party
to relief.” Gould, Inc. v. United States, 67 F.3d 925, 929 (Fed. Cir. 1995) (citation omitted).
In resolving a RCFC 12(b)(6) motion, the court must assess whether plaintiff’s
complaint adequately states a claim for relief under the implicated statute and regulations and
whether plaintiff has made “allegations plausibly suggesting (not merely consistent with)”
entitlement to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557 (2007); see also
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (rephrasing Twombly standard as requiring “a
claim to relief that is plausible on its face”); accord Cambridge v. United States, 558 F.3d
1331, 1335 (Fed. Cir. 2009); McZeal v. Sprint Nextel Corp., 501 F.3d 1354, 1356-57 (Fed.
Cir. 2007). Although plaintiff’s factual allegations need not be “detailed,” they “must be
enough to raise a right to relief above the speculative level on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).” Twombly, 550 U.S. at 555
(citations omitted). Plaintiff “must provide ‘a short and plain statement of the claim showing
that the pleader is entitled to relief, in order to give the defendant fair notice of what the . .
. claim is and the grounds upon which it rests.’” Totes-Isotoner Corp. v. United States, 594
F.3d 1346, 1354 (Fed. Cir. 2010) (quoting Twombly, 550 U.S. at 555 (alteration in original)
(citation omitted) (internal quotation marks omitted)). “At the same time, a court is ‘not
bound to accept as true a legal conclusion couched as a factual allegation.’” Acceptance Ins.
Cos. v. United States, 583 F.3d 849, 853 (Fed. Cir. 2009) (quoting Twombly, 550 U.S. at
555). The court thus “‘accept[s] as true all factual allegations in the complaint, and . . .
indulge[s] all reasonable inferences in favor of the non-movant’” to evaluate whether
plaintiff has stated a claim upon which relief can be granted. Chapman Law Firm, 490 F.3d
at 938 (alterations in original) (quoting Sommers Oil Co. v. United States, 241 F.3d 1375,
1378 (Fed. Cir. 2001)).
6
II. Whether plaintiff’s claim is time-barred
Plaintiff’s complaint pleaded only one claim—essentially that the United States,
acting through HUD, “negligently constructed, managed, and maintained these homes,
resulting in the failure of its trust obligation to provide decent, safe, and sanitary housing.”
Compl. ¶ 13. Plaintiff lists five actions whereby HUD “materially breached its trust
responsibility to plaintiff”: (1) “In failing to implement effective housing policies and
regulations or provide a solution to the ongoing problem of the unsafe and unsanitary shelter
conditions”; (2) “In failing to ensure the 225 homes that were built to shelter the members[]
were properly constructed in a safe and reasonable manner”; (3) “[By] otherwise failing to
act as a prudent fiduciary by failing to protect [plaintiff] and limit the damage to [plaintiff]’s
property that occurred as a result of faulty design and construction”; (4) “In failing to
provide safe and sanitary housing as mandated by [f]ederal law”; and (5) “In failing in its
responsibility to maintain and conserve the trust property in the statutory common-law duty
of a trustee to preserve and maintain trust assets.” Id. ¶ 16.
Defendant’s first argument is that plaintiff has not shown and, indeed, cannot show,
that it has timely filed its claim within six years of its accrual as required by 28
U.S.C. § 2501. See Def.’s Br. filed Apr. 5, 2012, at 11-17. Defendant puts forth that three
possible dates exist on which plaintiff’s breach of trust claim may have accrued, and all three
of those dates occurred outside the six-year statute of limitations. Defendant first argues that
plaintiff’s claim accrued between 1977 and 1980 when the homes initially were constructed.
See id. at 13. Defendant reads plaintiff’s breach claim as “premised on the theory that HUD
required [plaintiff] to use wood foundations for the housing units, and it was the use of
wooden foundations that allegedly made the homes unsafe and created health risks for
occupants.” Id. Thus, defendant correctly observes that plaintiff would have known of the
use of wooden foundations as early as the initial construction period, particularly in light of
the fact that plaintiff was an “active participant in the formulation of the housing plans.” Id.
It was plaintiff that modified the original plans to include the use of wooden
foundations—which HUD eventually would approve—in order to lower the price of the
construction project to come within the allotted budget. Id. at 13-14. Therefore, plaintiff
“was or should have been aware” of the material facts—the use of wooden
foundations—during the initial construction period of 1977-1980. See id. at 15.
Second, defendant argues that the court could also find that plaintiff’s claim accrued
in 1998 when plaintiff had actual knowledge and notice of the problems that the wooden
foundations were causing in the houses. Id. Plaintiff received a letter from HUD dated
February 9, 1998, which recounted the details of a January 28, 1998 meeting between HUD
7
and plaintiff. See id. at Ex. 1-6. 4/ This letter reveals that, during that meeting, HUD
officials and plaintiff discussed the “serious condition” resulting from the use of wooden
foundations and concluded that “[a]pproximately 220 wood basements are in varying
degrees of decay.” Id. Given the severity of the deterioration in the houses, it was apparent
to plaintiff by that time that the houses would need significant repair work, and plaintiff
even listed this repair work as a matter of discussion during the Secretary of HUD’s visit in
1999. Id. at Ex. 1-7 (Mar. 22, 1999 letter from S. Miller to Mike Boyd) (listing
$9,945,000.00 for “HUD Units, Wood Foundations” in order to “rehab/replace 152 units @
$65K ea[ch]”). According to defendant, plaintiff’s acknowledgment of the needed repairs
illustrates actual notice of the problems upon which plaintiff now bases its complaint and
demonstrates that, as of 1998, plaintiff was aware of the relevant facts underlying its present
cause of action. Id. at 16.
Finally, defendant argues that plaintiff’s claim must have accrued by August 2, 2002,
when the class of tribal members filed suit against both plaintiff and HUD, primarily
alleging harm from the decision to use wooden foundations. See id. By that point in time,
plaintiff had full knowledge of the circumstances of the construction of the homes, the harm
that the wooden foundations were causing, and its own potential liability in the matter.
Thus, defendant concludes that by August 2002, plaintiff had full knowledge and notice of
all material facts underlying the breach of trust claim asserted in the present suit. Id.
One difficulty presented by the structure of plaintiff’s complaint is that the inquiry
into the existence of subject matter jurisdiction is entangled with the merits determination
as to whether the United States has a trust relationship in furtherance of which it must act
as a fiduciary. Normally, jurisdiction must be established before the court may proceed to
the merits of a case, Steel Co., 523 U.S. at 88-89, which, in cases such as this one, means
that a court must rule on the pending RCFC 12(b)(1) motion prior to examining the
alternative RCFC 12(b)(6) motion. That proves difficult in this case as evidenced by
plaintiff’s attempts to muster an argument as to why its claim should not be dismissed as
time-barred.
4/ Plaintiff also concedes that between 1998 and 2002 “the homes in question were
the subject of many letters and meetings between HUD representatives and Blackfeet
Housing.” Pl.’s Br. filed May 7, 2012, at 3. Plaintiff proceeds to summarize four additional
letters, all dated from 2002, that detail the poor condition of the houses. Id. at 3-4. This
acknowledgment effectively establishes that plaintiff had actual knowledge of the condition
of the homes as of, at the latest, 2002.
8
The basis of plaintiff’s argument follows. A “general trust relationship” exists
between the federal government and the Indian tribes, which allows for a common law trust
relationship to be the basis of a claim. See Pl.’s Br. filed May 7, 2012, at 5. In these types
of claims, the tribe may invoke “[p]rivate trust law principles,” which render the
Government in a role “akin to that of a private fiduciary” whose duties have been established
comprehensively within the common law. Id. Invoking those common law duties in this
case, plaintiff then posits that an action for breach of fiduciary duty “‘does not accrue until
the trustee repudiates the trust and the beneficiary has actual knowledge of that
repudiation.’” Id. at 6 (quoting Demoulas v. Demoulas Super Mkts., Inc.,677 N.E.2d 159,
173 (Mass. 1997)). 5/ Plaintiff stresses that, even despite the open communication between
HUD and plaintiff regarding the condition of the houses, “there is no record that reflects
[that] HUD ever told [plaintiff] that it was not responsible and that they would not help
remedy the situation.” Pl.’s Br. filed May 7, 2012, at 4. This leads to plaintiff’s following
conclusion:
Because HUD did not repudiate the trust, it is not unreasonable for [plaintiff]
to expect HUD to replace the wooden foundation homes that are in such poor
physical condition that repair is likely going to exceed the cost of replacement.
Finally, as of the date of the filing of this cause of action, there has been no
repudiation from HUD of it[s] trust responsibility, so the [plaintiff]’s claim
has not accrued.
Id. at 7. Therefore, assuming the existence of a trust relationship, plaintiff argues that its
claim is not time-barred because, in fact, its claim has yet to accrue.
These logical contortions by plaintiff not only fail to respond effectively to
defendant’s argument, but actually raise issues of ripeness. If plaintiff is correct regarding
both the existence of a trust relationship and the timing of the accrual of a claim against a
trustee, it has in effect conceded that no live “case or controversy” is before the court, and
5/ Plaintiff does not acknowledge that case law from courts other than the United
States Court of Appeals for the Federal Circuit or the United States Supreme Court is merely
persuasive. See Coltec Indus. v. United States, 454 F.3d 1340, 1353 (Fed. Cir. 2006) (“There
can be no question that the Court of Federal Claims is required to follow the precedent of the
Supreme Court, our court [the Federal Circuit], and our predecessor court, the Court of
Claims.”); Bank of Guam v. United States, 80 Fed. Cl. 739, 751 (2008) (“While the holdings
of the regional circuits are not binding authority on the Court of Federal Claims, the Federal
Circuit considers them persuasive authority that can be instructive or helpful.” (citing
Summit Tech. Inc. v. Nidek Co., 435 F.3d 1371, 1376 (Fed. Cir. 2006))).
9
thus this issue is not yet ripe for adjudication and should be dismissed for lack of subject
matter jurisdiction. See Abbott Labs. v. Gardner, 387 U.S. 136, 148-49 (1967) (“[T]he
ripeness doctrine . . . prevent[s] . . . courts, through avoidance of premature adjudication,
from entangling themselves in abstract disagreements over administrative policies[.]”),
overruled on other grounds by Califano v. Sanders, 430 U.S. 99 (1977). Given that this
court also concludes that plaintiff has not pleaded an applicable trust relationship, not only
has plaintiff’s breach of fiduciary duty claim not yet arisen, but it never will. See infra
section III.
However, even if the court overlooks this concession (and assumes the presence of
a trust relationship), the statute of limitations has run. First, as defendant notes, the binding
precedent of this circuit does not require actual knowledge; rather, the standard is whether
plaintiff “was or should have been” aware of the material facts underlying the claim. See
San Carlos Apache Tribe, 639 F.3d at 1350 (emphasis added) (citation omitted) (internal
quotation marks omitted). Moreover, the Federal Circuit already has rejected similar
arguments regarding a lack of repudiation as tolling the statute of limitations for a claim that
has accrued against the government. See id. at 1354-55. In the case at bar, the court finds
that, at the very least, plaintiff had full knowledge of all material facts underlying the present
complaint by 2002, rendering this date the appropriate benchmark for statute of limitations
purposes.
The court can infer that plaintiff might have been laboring under a mistake as to who
should bear the fiscal responsibility for the degraded houses. The ongoing dialogue with
HUD officials, who appear to have been trying to help plaintiff remedy the housing problem,
perhaps led plaintiff to believe that it was HUD’s responsibility to repair the houses. This
mistaken perception, however, does not toll the statute of limitations. By 2002 plaintiff had
actual knowledge of the facts that would underlie its potential legal claim because plaintiff
was aware that the wooden foundations in the houses were causing both safety and health
hazards to residents. It was at this point that any potential claim might have accrued, and,
even if plaintiff believed that HUD was financially responsible for the repair, that
misapprehension does not excuse the twelve-year delay that followed. See Cherokee Nation
of Okla. v. United States, 26 Cl. Ct. 798, 802 (1992) (“Merely because defendant did not
take the initiative to clarify plaintiff’s misconceptions does not mean that the illuminating
information was ‘inherently unknowable.’”).
10
Accordingly, the court finds that any cause of action against the United States based
on HUD’s actions or inactions would have accrued no later than 2002, thereby rendering
plaintiff’s present suit time-barred. 6/
III. Whether plaintiff has stated a claim upon which relief can be granted
Defendant asserts that plaintiff’s “reliance on the general trust duty and notions of
governmental control” is not sufficient to state a cognizable claim. See Def.’s Br. filed Apr.
5, 2012, at 17. As a result, defendant concludes, plaintiff has failed to allege a breach of a
specific statutory trust responsibility, and its complaint should be dismissed.
As stated by the Supreme Court, “[t]he Government . . . is not a private trustee.
Though the relevant statutes denominate the relationship between the Government and the
Indians a ‘trust,’ . . . that trust is defined and governed by statutes rather than the common
law.” United States v. Jicarilla Apache Nation, 131 S. Ct. 2313, 2323 (2011) (citations
omitted). Thus, “[t]he Government assumes Indian trust responsibilities only to the extent
it expressly accepts those responsibilities by statute.” Id. at 2325. Because of this limitation
on the Government’s possible fiduciary duties, the Supreme Court has mandated that, as the
first of “two hurdles that must be cleared before a tribe can invoke jurisdiction . . .[,] [a
plaintiff] 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.” United
States v. Navajo Nation, 556 U.S. 287, 290 (2009) (citations omitted) (internal quotation
marks omitted). Absent that statutory duty, “neither the Government’s ‘control’ . . . nor
common-law trust principles matter.” Id. at 302.
In both its complaint and response brief, plaintiff points this court to only one
provision of the NAHASDA as statutory support for its present claim. 7/ Plaintiff argues
that 25 U.S.C. § 4101(2)-(5) establish “the federal government’s trust relationship with the
6/ It is arguable that the claim did accrue earlier. The court finds it unnecessary to
decide specifically which of the three possible dates offered by defendant represents the
actual claim accrual because all three, including the 2002 date, are beyond the six-year statute
of limitations.
7/ The court commends defendant on its thorough review and explanation of the
statutory framework underlying this case. However, although defendant explains the
applicability of the United States Housing Act—the statute in force at the time the houses
were built—plaintiff does not present any arguments thereunder. Thus, the court similarly
constrains itself to a discussion of only the NAHASDA in connection with plaintiff’s claims
on the merits.
11
tribes creat[ing] a responsibility for the federal government to remedy the deplorable
housing conditions on Indian reservations.” Pl.’s Br. filed May 7, 2012, at 10-11.
The relevant provision of 25 U.S.C. § 4101 states, as follows:
The Congress finds that—
....
(2) there exists a unique relationship between the Government of the United
States and the governments of Indian tribes and a unique Federal
responsibility to Indian people;
(3) the Constitution of the United States invests the Congress with plenary
power over the field of Indian affairs, and through treaties, statutes, and
historical relations with Indian tribes, the United States has undertaken a
unique trust responsibility to protect and support Indian tribes and Indian
people;
(4) the Congress, through treaties, statutes, and the general course of dealing
with Indian tribes, has assumed a trust responsibility for the protection and
preservation of Indian tribes and for working with tribes and their members
to improve their housing conditions and socioeconomic status so that they are
able to take greater responsibility for their own economic condition;
(5) providing affordable homes in safe and healthy environments is an
essential element in the special role of the United States in helping tribes and
their members to improve their housing conditions and socioeconomic
status . . . .
25 U.S.C. § 4101(2)-(5). Based on these congressional findings in the NAHASDA, which
plaintiff asserts is “a duty[-]imposing statute,” plaintiff argues that this statute, coupled with
“[HUD’s] assumption of the obligations and duties of a trustee by establishing and
maintaining comprehensive, pervasive regulatory control of tribal trust lands and housing
resources, and actual control of decisions of [plaintiff], the [United States] has created a trust
obligation to protect and maintain the Tribe’s trust property,” which thus implicates common
law trust duties. Pl.’s Br. filed May 7, 2012, at 11.
Defendant responds that, while plaintiff makes summary assertions as to the existence
of a statutory duty, it “utterly fail[s] to identify any specific statutory or regulatory duty that
the Federal Government violated, much less one that can fairly be read to mandate monetary
compensation in the event of a violation.” Def.’s Br. filed May 31, 2012, at 7. Defendant
12
first assails plaintiff’s conclusion that common law trust principles alone can create
judicially enforceable obligations on the federal government. Defendant points out that the
Supreme Court rejected exactly this argument in Navajo, 556 U.S. at 301-02. Def.’s Br.
filed May 31, 2012, at 8-9. Instead, a statutory duty must be identified. Only once a
statutory duty has been identified can common law trust principles potentially have
relevance in defining the scope of that duty, a fact that defendant uses to distinguish the
cases cited by plaintiff. See Navajo, 556 U.S. at 302 (“[T]rust principles (including any such
principles premised on ‘control’) could play a role in ‘inferring that the trust obligation [is]
enforceable by damages,’ . . . [b]ut that must be the second step of the analysis, not (as the
Federal Circuit made it) the starting point.” (citation omitted)). In short, without an
obligation “rooted in positive law,” the Government cannot be held liable for a breach of
duty. See Def.’s Br. filed May 31, 2012, at 10.
Although the language to which plaintiff cites does announce a unique trust
relationship between the federal government and the tribes, plaintiff neglects to heed the
relevant interpretation of the effect of such language by the Supreme Court. “Congress may
style its relations with the Indians a ‘trust’ without assuming all the fiduciary duties of a
private trustee, creating a trust relationship that is ‘limited’ or ‘bare’ compared to a trust
relationship between private parties at common law.” Jicarilla, 131 S. Ct. at 2323 (citations
omitted). Plaintiff has cited only to congressional findings, which, as legislative history, do
not displace otherwise clear, unambiguous language of a statute. See United States v. Mo.
Pac. R.R. Co., 278 U.S. 269, 278 (1929) (“[W]here the language of an enactment is clear,
and construction according to its terms does not lead to absurd or impracticable
consequences, the words employed are to be taken as the final expression of the meaning
intended.”); accord Leighton v. OPM, 529 F.3d 1071, 1074-75 (Fed. Cir. 2008). Further,
although plaintiff makes broad statements, such as “HUD’s comprehensive regulatory
scheme actually delineated the government’s obligations with specificity,” Pl.’s Br. filed
May 7, 2012, at 9, plaintiff has offered no statutory or regulatory provision to support this
statement. Thus, plaintiff has made no showing that provisions of the NAHASDA imposed
on the United States the duties that plaintiff now claims HUD has breached.
Indeed, as developed by defendant, it appears as though the NAHASDA actively
seeks to empower entities such as plaintiff with the responsibilities for the care of tribal
property. The same findings cited by plaintiff also recite that the federal government “shall
work . . . to achieve the goals of economic self-sufficiency and self-determination for tribes
and their members; and [that] [f]ederal assistance . . . shall be provided in a manner that
recognizes the right of Indian self-determination and tribal self-governance.” 25 U.S.C. §
4101(6)-(7). As such, the statutory scheme created under NAHASDA is one that favors
mere federal oversight of the distribution of annual block grants to entities such as plaintiff,
not direct control of day-to-day operations. HUD is empowered to provide funds that have
13
been allocated by Congress for the purpose, and its only action is to review housing plans
submitted by tribal authorities and, if they meet certain requirements, to authorize the block
grant for the housing authority to use toward affordable housing activities. See 25 U.S.C.
§ 4111(b)(1) (2006); 24 C.F.R. § 1000.201 (2012). Generally, however, the housing plan
is to be “locally driven,” 24 C.F.R. § 1000.220 (2012), and it is the responsibility of the
recipient of those funds to provide for the maintenance and operation of the housing, 25
U.S.C. § 4133 (2006). This statutory and regulatory scheme does not impose the trust duties
that plaintiff broadly invokes.
Because plaintiff cannot provide a specific statutory provision that establishes trust
duties on the United States, it has not succeeded in pleading that the federal government has
assumed any trust duties under the NAHASDA. See Lummi Tribe of Lummi Reservation
v. United States, 99 Fed. Cl. 584, 598 n.12 (2011) (reciting as dictum that HUD has not
assumed any trust duties under the NAHASDA). Thus, plaintiff has failed to plead a cause
of action on which it can recover. 8/
CONCLUSION
Plaintiff has not met its burden to establish subject matter jurisdiction. Even if that
ruling were not dispositive, the complaint fails to state a claim upon which this court could
grant relief. Accordingly, based on the foregoing, the Clerk of the Court shall dismiss the
complaint for lack of subject matter jurisdiction.
IT IS SO ORDERED.
No costs.
/s/ Christine O.C. Miller
________________________________
Christine Odell Cook Miller
Judge
8/ Because plaintiff’s complaint fails to plead an actionable trust duty on the part of
the United States, it is not necessary to address defendant’s arguments on collateral estoppel.
14
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?