Preliminary Thoughts on Jicarilla Oral Argument

Today, the Court heard arguments in United States v. Jicarilla Apache Nation (transcript here). Pratik Shah (6 prior arguments before the Court) argued for the government, and Steven Gordon (1 prior oral argument) argued for the Nation.

Justice Sotomayor throughout the argument challenged the government on its claims. Early on she asked the government’s advocate on whether the government had a “competing sovereign interest” in not disclosing the relevant documents (tr. at 4). She also asked:

Just explain to me what’s the rationale that would permit a trustee of a trust fund to withhold from the beneficiary the kinds of documents that relate to the management of the trust fund? If the fund exist for the benefit of the Indian tribe, why aren’t they entitled to management documents? (tr. at 5)

At another point, when the government advocate noted that “when Congress uses the term ‘trust’ in the Indian context, that there must be specific statutory regulatory duties that the Court sets out.” (tr. at 7. To which Justice Sotomayot responded, :

You’re not seriously suggesting that if you’re a trustee of an Indian fund that you can breach your fiduciary duty by simply not exercising care in your investment strategies. (tr. at 7-8)

The government’s advocate then reiterated a key position of the government:

The two statutes you’re talking about, 161a and 162a, set forth specific investment duties. They don’t say anything about disclosure. … The United States must provide an account statement, a quarterly account statement; and the United States must provide the Indian tribes and individual Indians an annual audit. That is the extent of disclosure that Congress has set forth and that the Interior Department by regulation has implemented. (tr. at 8-9)

Justice Alito at one point asked for clarification from the government’s advocate on the competing interests point:

But when you’re just talking about managing funds, what competing interests can there be in practical terms? If you assume arguendo that this exception applies to a private trustee, why should it not apply to the government in practical terms? (tr. at 12)

The government’s advocate noted repeatedly throughout that the government funded the request for legal advice not using the trust fund corpus, as private trustees often do. In answering Justice Alito’s question, he stated:

For example, the D.C. Circuit in the Cobell case when it talked about the accounting obligation that it imposed on the government, it made clear that it’s not the same accounting obligation that would apply at common law. And the reason the D.C. Circuit gave was because the United States would be taking that -­ performing that obligation at the expense of taxpayers. There are budgetary constraints that the United States must take into consideration as a sovereign. Maybe that’s not a specific competing obligation in the formal sense, but I think it’s — it’s a factor that distinguishes the United States from a private fiduciary. (tr. at 13)

Justice Sotomayor shortly thereafter noted (possibly a bit sarcastically) that “there’s no need to use the word ‘trust’ because it wouldn’t be a trust.” (tr. at 15)

At one point the government’s advocate made one the more strident assertions of the argument:

As this Court made clear [in Heckman and Candelaria and other cases], the government is acting not out of the beneficiary’s interests, it is acting out of its own sovereign interest in managing the statutes and regulations that govern the administration of Indian property. (tr. at 17)

Justice Kennedy asked about the government’s alleged harm in being forced to produce documents:

Other than the time and expense of going through voluminous records, which is obvious, is there any other harm to the government in being required to show that there’s a competing interest that makes disclosure unnecessary or improper? (tr. at 19)

That prompted the government’s advocate to rely upon a third key reason to rule in favor of the government:

Well, Your Honor, I think it could be more nebulous — but — but there — I think there is a real chilling concern. And I think this dovetails into Justice Kennedy’s question, that the Interior Department, in order to properly administer, to carry out the statutory and regulatory duties, it often needs to seek the legal advice of — of the lawyers in the Interior office or in the Department of Justice. In order to avoid the chilling the full and frank seeking of rendering of legal advice…. (tr. at 20)

Chief Justice Roberts tipped his position in asking the Nation’s advocate:

Counsel, the attorney-client privilege is policy-based and I’m concerned about the policy implications of your position. Our system has concluded that it works best if people have candid advice from their lawyers, and my concern here is if you’re a lawyer — you are a lawyer  — and — and you’re asked for your advice by a trustee -­ … — and if you know that that is going to be shared with the beneficiary, you’re going to give bland, mushy, hedging advice rather than direct and candid advice to the trustee, because it’s going to be shared more widely beyond the trustee. And that’s — that hurts not only the trustee, but also the beneficiaries, whose trustee does not have candid legal advice. (tr. at 28-29)

Justice Scalia did note that the Indian trust beneficiaries are not legally entitled to hire their own lawyer (tr. at 31), an odd question but perfectly placed, given that the Indian trust context is riddled (in this specific case and historically) with the government and the tribal interests acting in unusually adversarial ways. The elephant in the room, one could suppose, is that there simply is no “trust” in this trust relationship.

And so the Nation’s advocate could be forgiven for this exchange:

JUSTICE KENNEDY: Is this true regardless of the fact that the government may have a very powerful interest in seeking neutral, independent advice from an attorney, and that were you to prevail that advice would become watered down?

MR. GORDON: Yes, Your Honor. I don’t — I submit that the ultimate balancing of interests here is the same as it is for a private fiduciary. There is no — the Court — we urge the Court to affirm that under Rule 501 Indian tribes are entitled to the same evidence as other trust beneficiaries about how their money was managed. That is our request of this Court. (tr. at 47)

In the end, the government likely will be rewarded for continuing its very unusual antagonistic posture toward its purported trust beneficiary. It’s not entirely clear why the government is making this policy choice, except I note that the government brings up Cobell in every trust case now…

One more thing — if the Court’s choice comes down to what the Chief Justice termed “policy” choices (chilling of frank government legal counsel) and a more bright-line rule suggested by Justice Kennedy,  whether a “competing sovereign interest” exists, then maybe the Nation has a decent shot at this one.