federal trust breach – Page 6

This case is one of the myriad of breach of trust claims brought by Native Americans against various federal agencies.1 Paradoxically, the parties present very little in common. Like the proverbial two ships passing in the night,2 plaintiffs and defendant here present the court with two competing narratives that raise entirely different legal issues.

Plaintiffs Ramona Two Shields and Mary Louise Defender Wilson claim that the Bureau of Indian Affairs (“BIA”) breached its fiduciary duty to prudently manage their mineral rights, which are held in trust by the United States. Plaintiffs include a detailed narration of the depredations experienced by their tribes, and characterize the BIA’s alleged breach as “the latest chapter of United States mismanagement or outright abuse regarding the members of the Three Affiliated Tribes.” Compl. ¶ 24. Plaintiffs seek damages on behalf of themselves and their purported class.

Defendant presents an entirely different story. Defendant does not dispute plaintiffs’ characterization of the BIA’s actions; in fact, defendant barely mentions them at all. Rather, defendant argues that the BIA’s alleged misdeeds are immaterial because plaintiffs’ claims have already been litigated and settled. Specifically, defendant argues that plaintiffs’ claims were subsumed by the Cobell class action suit against the United States Department of the Interior (“DOI”), and that plaintiffs’ claims have already been settled pursuant to the $3.4 billion settlement (“Settlement Agreement”) that brought the Cobell suit to a close in 2011, after more than a decade of litigation. According to defendant, plaintiffs forfeited any right to pursue their claims by failing to opt out of the class action Settlement Agreement. Plaintiffs, in contrast, hardly mention Cobell at all in their complaint, and argue in their opposition brief that their claims are entirely unrelated to the Cobell litigation. It is the role of the court to determine which of these two narratives prevails.

This litigation has given rise to a myriad of claims and motions. Before the court are defendant’s motion for summary judgment as to plaintiffs’ breach of fiduciary claim (Count I), defendant’s motion to dismiss for lack of subject matter jurisdiction plaintiffs’ alternate breach of fiduciary duty claim (Count II), and defendant’s motion to dismiss for failure to state a claim plaintiffs’ legislative takings claim (Count III). Also before the court are plaintiffs’ motion for discovery, defendant’s motion for judicial notice and plaintiffs’ motion for a sur-reply concerning defendant’s motion for judicial notice.

For the following reasons, as fully explained below, the court shall grant defendant’s motion for summary judgment regarding Count I, as well as defendant’s motion to dismiss Counts II and III. Furthermore, the court will deny plaintiffs’ motion for discovery, yet will grant their motion for sur-reply. Finally, defendant’s motion for judicial notice will be granted-in-part.

Federal Court Rebuffs Feds’ Effort to Modify Phase 1 Judgment in Jicarilla Trust Breach Case

October 16, 2014Matthew L.M. Fletcher

Here are the materials in Jicarilla Apache Nation v. United States (Fed. Cl.):

405 Govt Motion to Modify Phase 1 Ruling

406 JAN Response

407 Govt Reply

408 DCT Order Denying Govt Motion

An excerpt:

In the guise of a motion under RCFC 54(b) and 59(a)(1), defendant would have the court consider issues that were not raised during the trial in this case – issues that defendant could have raised, but did not. As plaintiff makes perfectly clear, defendant is seeking to litigate in this tranche issues involving intra-pooling of funds, when the issues before this first stage of the case involved the inter-pooling of funds. Compare Jicarilla Apache Nation, 112 Fed. Cl at 301-02. Defendant could have raised these issues in discovery or even during the pretrial filings in this case, but did not. Nor does defendant rely upon any newly-discovered evidence. The court will not allow defendant to raise these issues at this late stage.

And:

Because of the complexity of this case, the court dealt with this case in stages – and plaintiff and defendant clearly understood this. The court will not allow defendant to alter the stages in this case, as defendant deems fit. Therefore, defendant’s motion is DENIED. Further violations by defendant of this court’s orders, both for discovery and pretrial filings purposes, may lead to the imposition of sanctions.

A technical ruling to be sure. Here is a quick primer:

The boldface reference to “inter-pooling of funds” concerns pooling of trust accounts among tribes for better investment returns, as has been done with IIM accounts since their inception. On cross-motions for summary judgment before trial, the Court held that the intertribal pooling claim fell within Indian Tucker Act jurisdiction even though there was no statutory reference to such a duty, and notwithstanding the then-recent Supreme Court decision in the same case, but that fact issues precluded summary judgment as to whether there was such a duty here. Jicarilla Apache Nation v. United States, 100 Fed. Cl. 726, 739-40 (2011). After trial, the Court held that Jicarilla did not prove such a duty. See the reference in today’s order to the post-trial decision.

In the motion for modification, the US sought to have the phase 1 trial ruling also preclude intra-tribal pooling of trust accounts, when concerns pooling of Jicarilla’s multiple trust accounts (as above, to obtain better returns). At trial, Jicarilla basically presented its damage calculations based on that, without objection by the US. Not surprisingly, the Court rejected the recent motion as seeking to challenge something that the US had failed to address in discovery or before (or during) trial.

We posted on the Phase 1 judgment here.

Federal Claims Court Dismisses Winnemucca Trust Breach Claim arising from Alleged Failure to Recognize Proper Tribal Council

July 10, 2014Matthew L.M. Fletcher

Here are the materials in Winnemucca Indian Colony v. United States (Fed. Cl.):

1 Complaint

9-1 US Motion to Dismiss

15 Opposition

21 US Reply

23 DCT Order Granting Motion to Dismiss

An excerpt:

The government argues that Counts One, Two, and Three of the pending case must be dismissed under § 1500 because those Counts raise claims that are the same as the claims pending in the Nevada litigation. Plaintiffs contend that the claims in both lawsuits are not the same and therefore Counts One, Two, and Three need not be dismissed. In addition, the government argues that Counts Three and Four must be dismissed for lack of jurisdiction because they seek equitable relief and a declaratory judgment that are outside the jurisdiction of this court. Plaintiffs did not respond to the government’s arguments regarding this court’s lack of jurisdiction over Counts Three and Four.³ For the reasons discussed below, the court agrees with the government that § 1500 bars the court from considering Counts One, Two, and Three of plaintiffs’ complaint and that Counts Three and Four also must be dismissed as seeking relief outside the jurisdiction of the court. The government’s motion to dismiss the complaint is therefore GRANTED.

CFC Dismisses Wyandot Nation’s Section 1500 Claims

April 14, 2014Matthew L.M. Fletcher

Here are the materials in Wyandot Nation of Kansas v. United States (Fed. Cl.):

34-1 US Motion to Dismiss

37 Wyandot Nation Response

38 US Reply

61 DCT Order Granting Motion to Dismiss

D.C. Circuit Rules against Navajo Trust Breach Claims in Uranium Mining Contamination Case

April 7, 2014April 5, 2014Matthew L.M. Fletcher1 Comment

Here is the opinion in El Paso Natural Gas Co. v. United States:

CADC Opinion

Briefs are here.

Federal Court Dismisses Challenge to Cheyenne River Sioux Equitable Compensation Act

September 10, 2013Matthew L.M. Fletcher1 Comment

Here are the materials in LeBeau v. United States (D. S.D.):

1 Complaint

17 US Motion to Dismiss

20 Opposition

25 US Reply

32 DCT Order Dismissing Complaint

An excerpt:

Plaintiffs brought suit against the United States alleging claims for breach of trust obligations, breach of fiduciary duty, and accounting. The relief sought by plaintiffs is limited to declaratory and equitable relief. The United States moves to dismiss plaintiffs’ complaint in its entirety, arguing plaintiffs lack standing, among other things. Plaintiffs resist the motion. For the following reasons, the motion is granted, and plaintiffs’ claims are dismissed without prejudice.

Miccosukee Sues United States, Claiming Illegal Tax Audits and Trust Breach

August 15, 2013Matthew L.M. Fletcher1 Comment

Here is the complaint in Miccosukee Tribe v. United States (S.D. Fla.):

Miccosukee Complaint

Here is an excerpt:

1. The MICCOSUKEE TRIBE brings this suit to redress intentional and gross breaches of trust by the United States, by and through the Defendants, with respect to the money and property of the MICCOSUKEE TRIBE and its People.

2. This suit involves willful, purposeful, and malicious actions by the United States, by and through the Defendants, by selectively targeting the MICCOSUKEE TRIBE and its People for federal tax audits.

3. The procedures utilized to target the MICCOSUKEE TRIBE and its People were improper, secret, and conflict ridden.

4. These procedures were conflict ridden and improper because they involved dealings with persons acting outside the established scope of employment with the MICCOSUKEE TRIBE and whose legal interests were clearly and substantially adverse to the legal interests of the MICCOSUKEE TRIBE and its People.

5. Although the United States, acting by and through the Defendants, clearly knew that the individuals they were dealing with were acting to the detriment of the MICCOSUKEE TRIBE and its People, it allowed, encouraged, perpetrated, and protected them in order to improperly obtain tax assessments, penalties, and interest against the MICCOSUKEE TRIBE and its People amounting to millions of dollars.

6. Although the United States, acting by and through the Defendants, clearly knew that some of the individuals they were dealing with were actively engaged in violation of the criminal laws of the United States while purporting to represent the interests of the MICCOSUKEE TRIBE, the United States allowed, encouraged, perpetrated, and protected these individuals in order to improperly obtain tax assessments, penalties, and interest against the MICCOSUKEE TRIBE and its People amounting to millions of dollars.

7. These losses to the MICCOSUKEE TRIBE and its People are permanent and of a continuing nature, as interest continues to accrue on the tax assessments instituted by the United States, acting by and through the Defendants.

8. As a direct and proximate cause of the intentional and wrongful actions, as well as the gross breach of trust by the United States, acting by and through the Defendants, the MICCOSUKEE TRIBE and its People have suffered irreparable harm by losing millions of dollars through the Defendants’ arbitrary and indiscriminate imposition of tax liabilities, penalties and interest.