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Appeals court: Indian trust accounting needed

WASHINGTON – The D.C. Circuit Court of Appeals ruled July 24 that the Department of the Interior must account for billions of dollars in mismanaged Indian trust funds.

The ruling upends a previous district court decision, which said a full accounting could not be performed due to lack of funds from Congress and constraints within the department.

“The statute [the American Indian Trust Fund Management Reform Act of 1994 target="_blank"] gives the plaintiff class a right to an accounting,” according to the unanimous appellate decision.

The court’s ruling said the accounting, which has long been called for by approximately 500,000 Indian plaintiffs in what’s widely known as the Cobell litigation, does not have to be perfect and does not have to include accounts that were closed as of 1994. It also said the accounting can include statistical sampling.

“The purpose of an equitable accounting, as we have tried to articulate, is for Interior to concentrate on picking the low-hanging fruit,” the decision said. “We must not allow the theoretically perfect to render impossible the achievable good.”

The case centers on the argument that the federal government mismanaged billions of dollars in oil, gas, grazing, timber and other royalties overseen by Interior for Indian trustees since 1887.

Interior officials had begun an accounting during the George W. Bush administration, but did not complete the effort due to cost issues and continuing legal battles.

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U.S. District Judge James Robertson will now be charged with the “equitable power to enforce the best accounting that Interior can provide, with the resources it receives, or expects to receive, from Congress,” the ruling said.

Robertson, who began overseeing the case in 2006, ruled in January 2008 that a full accounting was “impossible.” Then, last August, he ruled that the plaintiffs deserved $455.6 million – a number that fell far short of expectations. Lawyers for the plaintiffs argued they were entitled to $47 billion.

The appellate ruling vacates Robertson’s previous decision, saying he “erred” in his judgment. A settlement amount is therefore off the table for now.

The lead tribal plaintiff, Elouise Cobell, a member of the Blackfeet Nation, expressed concern with the court’s decision to relax the rules that will dictate the accounting. She said the ruling effectively calls for the government to only account for funds that it can identify easily – a development that she believes is not fair to Indians.

In a statement issued by Cobell’s spokesman, the plaintiff "expressed appreciation for the court not freeing the government from its burden to render an accounting."

Cobell said the plaintiffs would “continue to seek justice in this case,” no matter how long it will take.

In the spring, Cobell said she was disappointed that the Obama administration had not moved to settle the case.

Interior officials said they are reviewing the decision.