The claim of a “trust doctrine” in relation to Native nations is the most widely cited concept in federal Indian law. It is also widely misunderstood, leading to confusion about the fundamental structure of U.S. – Indian relations. The recent Supreme Court decision denying compensation to the Navajo Nation for decades of underpayment by Peabody Coal under federally approved leases is a case in point.
The case started in the Court of Federal Claims, which found “overwhelming evidence” that the federal government “violated the most basic common law fiduciary duties owed the Navajo Nation” under principles of common law trust. However, the Claims Court concluded that the government’s violation of trust was irrelevant because trust duties were not specifically stated in the coal leasing laws.
The claim of a “trust doctrine” in relation to Native nations is the most widely cited concept in federal Indian law. It is also widely misunderstood.
The case went through extended appeals. The Court of Appeals for the Federal Circuit twice ruled for the Navajo Nation, reversing the Claims Court for failing to find specific trust duties in the coal laws. The Supreme Court reversed the Appeals Court both times and agreed with the Claims Court. According to Justice Scalia in the latest decision, the case is “at an end.”
The question arises: What does the federal Indian “trust doctrine” mean in comparison to ordinary trust law? The Court of Federal Claims suggested this comparison in its first decision in the case when it said, “we find it useful first to measure the government’s actions against [the] familiar standard” of the common law of trusts.
A trust involves three elements: property that is subject to the trust, a trustee who administers the property, and a beneficiary in whose interests the trustee acts. A trust creates a relationship between a fiduciary (one in whom faith or trust is placed) who controls a property, and another who is the ultimate owner of that property. This relationship may be defined in a specific document, such as a will, or by certain general principles, such as when an adult has care of a child (which is known as the guardian-ward relation).
Ordinary trust law is rooted in centuries of common law decisions about fiduciary responsibility in a broad range of situations. The law is almost poetic in describing the high standards of fiduciary responsibility in a situation of trust. It has been said, “The duties of a trustee are the highest known to the law.”
Benjamin Cardozo, the famous chief justice of the Court of Appeals of New York, wrote that a “trustee is held to something stricter than the morals of the market place.” He further said that “not honesty alone, but. … an honor. … most sensitive. … is the standard of behavior.” On that basis, Cardozo pointed out, “there has developed a tradition that is unbending and inveterate.” A high level of conduct for fiduciaries “will not consciously be lowered by any judgment of this court.” [Meinhard v. Salmon (1928)].
We can now understand why the Court of Federal Claims said of the Navajo case, “Were this a court of equitable jurisdiction considering a private trust, plaintiffs might easily qualify for remedies typically afforded wronged beneficiaries.” The fact that the court denied relief for the Navajo Nation says that the federal Indian “trust doctrine” is not a true trust.
The decision in the Navajo coal case demonstrates how far federal Indian “trust doctrine” is from ordinary trust law.
The “trust doctrine” started in 1831, when Chief Justice John Marshall compared the relationship between the U.S. and the Native nations to “that of a ward to his guardian” (Cherokee Nation v. Georgia). Since the guardian-ward relation is a form of trust law, Marshall’s suggestion became the federal Indian “trust doctrine:” Indian lands are the trust property, the federal government is the trustee, and the Indians are the beneficiaries (the ones who are supposed to benefit).
Notice there is no specific trust document in federal Indian “trust doctrine.” This means that for the trust to exist it must be premised on general legal principles. The principle on which Marshall based his analogy was “Christian title and supremacy,” a unique aspect of colonialism and not a general principle of trust law.
The federal Indian “trust doctrine” differs from ordinary trust law in another profound way: An ordinary trustee is subject to judicial supervision and the court and trustee are independent from each other. In federal Indian law, the courts have created both the “trust” and the “trustee.”
The decision in the Navajo coal case demonstrates how far federal Indian “trust doctrine” is from ordinary trust law. The Claims Court acknowledged that in enacting the coal leasing law, the United States “assumed the responsibility to manage minerals such as coal in a fiduciary capacity.” However, the court said, “The general trust relationship in itself does not impose such duties as are erected in a complete trust with fully accountable fiduciary obligations.” The court concluded, under “the general, or bare, trust relationship [in relation to Indians], fiduciary obligations applicable to private trustees are not imposed on the United States.”
The U.S. has created powers to control Indian lands by means of a “trust doctrine” that cannot be supervised by ordinary trust principles.
The “bare trust” is a new twist on “the emperor has no clothes.” The U.S. creates a “trust” for Indian lands, making itself trustee, subject to its own supervision, based on a religious supremacy notion. It then takes steps to control the property of the beneficiary, including enacting a law for coal leasing on Indian lands. When the supposed beneficiary, the Navajo Nation, challenges the acts of the trustee, the trustee says there is only a general (and unenforceable) trust – a “bare trust” – and no specific trust obligation regarding the coal leasing.
To rub salt into the wound, the “trustee” says the lack of fiduciary responsibility benefits the beneficiary (the Navajo Nation), by forcing it to fend for itself, in the name of “self-determination.” “Implicated in every instance is the delicate balance struck between exercising fiduciary responsibilities and respecting tribal sovereignty and self-determination.”
United States has created powers to control Indian lands by means of a “trust doctrine” that cannot be supervised by ordinary trust principles. The Navajo case stands for the proposition that the U.S. trustee only has trust responsibilities if and when it says it has trust responsibilities. That is no trust. It is a rip-off and a fraud.
Peter d’Errico is a consulting attorney on Indigenous issues. He was a staff attorney in Dinebeiina Nahiilna Be Agaditahe Navajo Legal Services from 1968 to1970 and taught legal studies at University of Massachusetts-Amherst for three decades.