In November 2008, Vungarala began working as an in-house investment manager for a sovereign Native American Tribe (the “Tribe”). The Tribe operates a resort and several casinos.
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Vungarala was responsible for managing, evaluating, and monitoring the Tribe’s investment portfolio. He worked in the Tribe’s Treasury Department and reported to Angela Osterman, who was appointed the Tribe’s Treasury Administrator less than a month before Vungarala was hired. Osterman did not analyze or select investments or read prospectuses. She focused on managing the Tribe’s budget, authorizing leave for department employees, and ensuring that policies and procedures were followed. Her prior investment experience was limited to her personal retirement account. The Treasury Department also had two research analysts with little investment experience and no professional certifications. Vungarala gave the research analysts assignments and taught them how to put information together for presentations to the Investment Committee. Osterman and the research analysts did little independent research and viewed Vungarala as the expert on investments.
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At some point, Vungarala learned that the Tribe’s previous outside financial adviser earned more than $1 million a year. In comparison, Vungarala believed his salary amounted to him working “pro bono.” Vungarala also believed that the Tribe treated him poorly because he was not a tribal member, and felt that his office was too small and that his colleagues treated him as an underling.
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Vungarala first presented non-traded REITs and BDCs to the Investment Committee in June 2011. Meeting minutes read into the record reflect that Osterman told the committee that, because Schwab did not offer non-traded REITs and BDCs, the Tribe could “utilize PKS, Gopi’s brokerage firm.” Osterman said that “the Tribe will not have to sign any agreements with them, PKS has agreed to allow the Tribe to use them with no strings attached.” She added that “[t]here will be no conflict of interest on Gopi’s behalf since he is not getting paid by with [sic] the company.” Although Vungarala was present, he did not correct Osterman’s statements.
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After the Investment Committee approved a recommendation from Vungarala, the recommendation went to the Legal Department for review. Although the Legal Department did not raise any concerns about fees, the Legal Department opposed each investment based upon its concern that purchasing REITs and BDCs would jeopardize the Tribe’s sovereign immunity by subjecting it to arbitration in connection with any dispute. Notwithstanding the Legal Department’s opposition, over the three-and-a-half years that Vungarala recommended that the Tribe invest in non-traded REITS and BDCs, the Tribal Council rejected only two out of more than 200 recommendations.
From 2011 through 2014, the portion of the Tribe’s portfolio devoted to non-traded REITs and BDCs increased from 0% to almost 23%—amounting to nearly $200 million. The REIT and BDC statements that PKS generated did not itemize commissions. Vungarala received $9,682,629 in commissions from PKS as a result of the sales of non-traded REITs and BDCs to the Tribe.
As I noted earlier in our announcement of his imminent retirement, Justice Breyer was no tribal sovereignty warrior ala Sotomayor, but he was no Indian fighter, either. He was part of the Rehnquist Court Nine that stayed together more than a decade. And, as such, he was also a part of a Rehnquist Court that showed nothing but contempt for tribal interests in the 1990s and 2000s. Justice Breyer’s voting patters are striking for one reason only — he rarely dissented from the Court’s majority in the Indian law docket. He seems to have gone with the flow.
Let’s start with the overall period of time starting with Oklahoma Tax Commission v. Chickasaw Nation in 1995 up ’til now. Justice Breyer voted with tribal interests in 19 out of 48 cases I counted (I excluded a few, like South Florida v. Miccosukee, because it wasn’t an Indian law case; Amoco v. Southern Ute, because Breyer recused; Yellen v. Chehalis, because both sides had tribal interests), or 39.6 percent. Tribes won 19 out of those 48 cases (see what I mean about going with the flow?). Breyer was in the majority in 43 out 48 cases, an 89.6 percent clip. Justice Breyer authored five majority (or plurality) opinions, four of them supporting tribal interests. He wrote a pair of short concurrences in cases tribes lost.
Since 2014, when the Court decided Bay Mills Indian Community v. Michigan, Breyer’s voting pattern changed dramatically to favor tribal interests, again, in tune with the direction of the overall Court. Starting with Bay Mills, Breyer voted for tribal interests 9 out of 11 times. The Court, during that same period, was exactly the same for cases with votes (tribes won two cases 4-4 and we don’t know those votes, but it would be fair to say Breyer was very likely to have favored tribes in those cases, and, again, Yellen, which we don’t count).
In Breyer’s early years, he rarely wrote for the Court. His first Indian law majority opinion (or any opinion, for that matter) was Chickasaw v. US, a loss for tribes, and which came 7 years after he joined the Court (which pushes back on the notion that junior justices get assigned the “chickenshit” Indian law cases).
President Barack Obama reads from his book, “Of Thee I Sing: A Letter to My Daughters,” during a visit by Supreme Court Justice Stephen Breyer and his family to the Oval Office, March 2, 2011. Joining them, from left, are Justice Breyer’s wife Joanna Breyer, grandson Eli Essiam Breyer and daughter Nell Breyer. (Official White House Photo by Pete Souza)
In the good stuff, Breyer wrote the majority opinion in United States v. Lara, certainly a critically important case supporting the notion that Congress can exercise its plenary Indian affairs power to reaffirm tribal inherent sovereignty as in VAWA 2013. Breyer also wrote majority opinions in Cherokee v. Leavitt, the first ISDEAA contract support costs case, and United States v. Cooley, the first SCOTUS decision affirming tribal inherent powers over nonmembers under the Montana rubric. Breyer also wrote for a three-justice plurality in Washington v. Cougar Den.
Justice Breyer also wrote a critically important concurring opinion in Carcieri v. Salazarthat articulated the bones of a conceptual framework later fleshed out by Interior allowing Indian tribes not federally acknowledged in 1934 to show that they might still have been under federal jurisdiction then, and therefore eligible to benefit from the fee-to-trust process. He cited the example of the Grand Traverse Band, which has paid dividends to the tribe.
In the bad stuff — and I do mean BAD — Breyer voted with the 5-4 majority in Adoptive Couple v. Baby Girl, swapping places with Justice Scalia, who dissented in favor of a Cherokee birth father. Breyer’s concurrence tries at least to limit the scope of the majority’s incredibly vicious attack on the Cherokee father, but offers absolutely no reason for the vote. Brackeen and all the attacks on ICWA are happening right now because of that vote. Period.
The Guardian. They don’t hide behind paywalls . . . much.
Riding bus to A2 but will post on Breyer’s Indian law record in a bit. It’s incomplete since the Court has decided to take many, many cases this Term.
Sneak preview . . . He voted with tribal interests about 40 percent of the time, but up through his abomination of a vote in Baby Girl, he voted favorably for tribal interests only 20 percent of the time. This isn’t going to be pretty.
Not sure we’re buying it. . .Not sure they are, either.
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