Originally printed at http://www.indiancountrytoday.com/opinion/columnists/43030782.html
On April 6, the U.S. Supreme Court denied the Navajo Nation any compensation for government actions that allowed Peabody Coal to extract millions of tons of Navajo coal at low rates for 45 years. The decision raises deep issues about the meaning and continuing viability of what is known as the “trust doctrine” in federal Indian law.
The original 1964 lease established a maximum royalty rate of 37.5 cents per ton of coal. U.S. Department of Energy historical data show the average market price of coal of all kinds in 1963 was $4.55. Thus, the original royalty rate was 8.24 percent. The rate was “subject to reasonable adjustment” by the secretary of the interior on the 20th anniversary of the lease and every 10 years thereafter. DOE data show that by 1984 the 37.5 cents per ton rate yielded one to two percent of gross proceeds, far less than the original 8.24 percent.
In 1984, the area director of the BIA, pursuant to the presumed federal “trust” authority, raised the lease rate to 20 percent of gross proceeds, as requested by the Navajo Nation. Peabody filed an administrative appeal and requested the secretary of the interior to postpone decision or to rule in Peabody’s favor. Thereafter, the secretary and Peabody representatives met privately and the secretary postponed his decision. The Navajo resumed negotiations with Peabody and a rate of 12.5 percent was agreed to. The secretary approved the amended rate.
In 1993, the Navajo filed suit against the United States, alleging the secretary’s actions constituted a breach of trust. The Court of Federal Claims found the secretary had “violated the most basic common law fiduciary duties owed the Navajo Nation” by acting in Peabody’s best interests rather than those of the Navajo. That court nevertheless concluded the breach of trust did not require any compensation, because “the trust relationship necessary for our jurisdiction does not exist.”
The record of the case shows the entire leasing arrangement was premised on federal supervisory authority, the core of the so-called “trust doctrine.” Under this doctrine, the federal government asserts paramount ownership of and power over Indian lands. The Peabody lease and rates were negotiated in this framework and only became valid after the secretary’s approval.
Leaving aside, for the moment, the corruption of administrative process by the secretary’s private meeting with Peabody, the question that arises from this case is, “What does the federal trust relationship mean if it provides a presumption of authority over Indian nations but carries no responsibility to them?”
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