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Supreme Court deals a win and a lesson

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The trust obligation of the federal government toward American Indian tribes was substantially upheld in a couple of Indian cases decided recently by the U.S. Supreme Court.

Brought by the White Mountain Apache and the Navajo Nation, respectively, the two cases each carried their dose of danger. Nevertheless, given the arguably unsympathetic climate on the High Court toward Indian tribal rights, the two decisions, even one which was unfavorable, were cause for moderate rejoicing.

In the winning case, involving the White Mountain Apache, a lawsuit by the tribe charged the U.S. Department of Interior with not properly maintaining old Fort Apache, a historical icon and an important tourism marker on their reservation. The Fort had been turned over to the tribe in 1960, with the stipulation that Interior would keep it "in trust." However, Interior had let the facility run down. In a particularly strong decision, based on a narrow 5-4 vote, the high court cited the government's trust obligation to upkeep such facilities that it keeps in trust for the tribes. It agreed with the White Mountain contention to the right to sue and let the case, which seeks $14 million for the repairs, proceed. The decision tends to reaffirm the right of tribes to hold the federal government accountable for conditions of land and facilities it holds in trust.

Justice Clarence Thomas, in dissent, argued that as a result of the decision the government, apprehensive of its liability for money damages, "might refrain from creating trust relationships." The decision, he asserts, will ultimately work "to the detriment of the Tribe(s)."

In the Navajo case, the tribe is suing over some $600 million in lost revenues in what it charged was undue influence upon then Secretary of Interior Don Hodel by the Peabody Coal Company. The High Court, voting 6 to 3, disallowed the lawsuit.

Although true for all tribes, at some time or another, the treatment of the Navajo by Secretary Hodel was clearly objectionable. The nation had sought to upgrade the royalty rate paid by Peabody Coal Company from coal mining on Navajo land. Operating at a 2 percent of gross rate, the tribe sought to upgrade its rate to 20 percent, encouraged by a recommendation in that direction in an internal 1984 memorandum. Peabody lobbied Hodel, who in turn suggested to his assistants that the department should withhold a decision to recommend the 20 percent rate and instead urge the tribe to negotiate with Peabody. Hodel later approved a much-reduced 12 1/2 percent rate negotiated by the tribe, under what the tribe calls "severe economic duress." The tribe charged that that approval by the Secretary, after the heavy Peabody lobbying (the company actually drafted the Secretary's memorandum), constituted, "breach of trust."

While the Court of Federal Claims found against the government, charging the Secretary with "flagrantly dishonoring the Government's general fiduciary duties to the Tribe by acting in Peabody's best interest rather than those of the Tribe ?," yet it found that the tribe had "failed to link that breach of trust" to a statutory or regulatory obligation which could be fairly interpreted as mandating compensation for the government's actions.

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However, the Federal Circuit Court, citing that the "measure of control ? the Secretary exercised over the leasing of Indian lands ? sufficed to warrant a money judgment," reversed that decision and ruled for the Tribe. The Federal Claims Court agreed, and remanded the case for further proceedings, including determination of damages.

But, no, said the High Court: "The analysis must train on specific rights-creating or duty-imposing statutory or regulatory prescriptions." The court focused on the regulations of the 1938 Indian Mineral Leasing Act, which it found non-specific in regards to such compensation.

No one seems to doubt that the Navajo Nation was disadvantaged at the negotiating table in this case by the actions of the Secretary. While Navajo Nation lost its case, still, the court did not directly decide the matter based on trust law obligations but rather on precedents it ruled were set under two cases that adjudicated the 1938 Indian Mineral Leasing Act. That Act, the Court said, granted broad powers to the Secretary of Interior to authorize terms of mineral leases on Indian lands, while it does "not impose any concrete substantive obligations, fiduciary or otherwise, on the Government." The Court also cited other income derived by the Tribe under other tribal taxation arrangements over coal production.

Forced to draw lessons from these decisions by the Supremes, we would have to assert that, on the good side, questions of trust relationship got decent hearings; while the Navajo lost a case that clearly showed some degree of collusion between the Secretary of Interior and a major company doing business on Indian land, the Tribe, in fact, later accepted terms to which, even under duress, it could have disagreed.

Perhaps this might be the important lesson of these cases, the need for tribes to conduct full diligence on business transactions, striving as much as possible to negotiate from positions of strength.

From the Court's opinion in the Navajo case: "The IMLA aims to enhance tribal self-determination by giving Tribes, not the Government, the lead role in negotiating mining leases with third parties. ? As the Court of Federal Claims recognized, '[t]he ideal of Indian self-determination is directly at odds with Secretarial control over leasing.'"

In addition "to provid[ing] Indian tribes with a profitable source of revenue," the IMLA aimed to foster tribal self-determination by "giv[ing] Indians a greater say in the use and disposition of the resources found on Indian lands."

Unavoidably and increasingly, the onus of prosperous operations falls within the context of tribal self-determination. Collusion among powers that be when dealing with tribes is as old as the original colonies. What is new, and what must grow, is the ability and impetus of tribes to dominate and prevail over their fields of action.