United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 5, 2000 Decided February 23, 2001
No. 00-5081
Elouise Pepion Cobell, et al.,
Appellees
v.
Gale A. Norton, Secretary of the Interior, et al.,
Appellants
Consolidated with
00-5084
Appeals from the United States District Court
for the District of Columbia
(No. 96cv01285)
David C. Shilton, Attorney, U.S. Department of Justice,
argued the cause for appellants. With him on the briefs were
Lois J. Schiffer, Assistant Attorney General, John A. Bryson,
and Charles W. Findlay, Attorneys.
Thaddeus Holt argued the case for appellees. With him on
the brief were Dennis Gingold, Keith Harper and Lorna K.
Babby.
Before: Williams, Sentelle and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge: This case involves a class action
suit by beneficiaries of Individual Indian Money ("IIM") trust
accounts against Interior Secretary Gale A. Norton and other
federal officials who serve, in their official capacities, as
trustee-delegates on behalf of the federal government. IIM
trust beneficiaries filed suit alleging breach of fiduciary
duties. Specifically, plaintiffs sought a declaratory judgment
delineating appellants' trust obligations to IIM trust benefi-
ciaries and injunctive relief to ensure that such trust obli-
gations are carried out. After a lengthy trial, the district
court concluded that the federal government and its officers
have been derelict in their duties, and issued a remand to the
Interior and Treasury Departments so that appellants could
discharge their fiduciary obligations. The district court fur-
ther retained jurisdiction and ordered appellants to file quar-
terly reports detailing steps taken in fulfillment of their
duties. Although the decision did not resolve every issue
raised by plaintiffs, the district court certified the order for
interlocutory appeal.
Appellants challenge the district court's delineation of their
trust obligations and assert that the district court exceeded
its authority in ordering equitable relief for plaintiffs. We
find that the district court had before it ample evidence to
support its finding of ongoing material breaches of appellants'
fiduciary obligations. Notwithstanding the fact that appel-
lants have taken significant steps towards the discharge of
the federal government's fiduciary obligations, appellants
clearly have yet to fulfill their trust duties. The relief
ordered was well within the district court's equitable powers.
While we order the district court to modify the characteriza-
tion of some of its findings, we generally affirm its judgment
and order.
I. Background
The federal government has substantial trust responsibili-
ties toward Native Americans. This is undeniable. Such
duties are grounded in the very nature of the government-
Indian relationship. "[A] fiduciary relationship necessarily
arises when the Government assumes ... elaborate control
over forests and property belonging to Indians." United
States v. Mitchell ("Mitchell II"), 463 U.S. 206, 225 (1983). It
is equally clear that the federal government has failed time
and again to discharge its fiduciary duties. Here, there is no
dispute that appellants, as trustee-delegates of the federal
government, have failed to discharge fully their fiduciary
obligations. The issue we confront is whether the district
court properly delineated the contours of the obligations owed
by the Interior Secretary, Treasury Secretary and other
officials, and whether such officials have been so derelict in
their obligations to justify the relief ordered by the district
court.
A. The Government-Indian Trust Relationship
The federal government-Indian trust relationship dates
back over a century. The trusts at issue here were created
over one hundred years ago through an act of Congress, and
have been mismanaged nearly as long. To appreciate truly
the nature and extent of the government's responsibilities,
and appellants' failure to discharge them, it is necessary to
review the history of the government-Indian trust relation-
ship.
Since the founding of this nation, the United States' rela-
tionship with the Indian tribes has been contentious and
tragic. America's expansionist impulse in its formative years
led to the removal and relocation of many tribes, often by
treaty but also by force. See, e.g., Cherokee Nation v.
Georgia, 30 U.S. (5 Pet.) 1 (1831). Official policy sought to
encourage westward migration of Indian tribes by offering to
exchange unsettled lands in the West for Indian land in the
East. See, e.g., The Indian Removal Act of 1830, ch.
CXLVIII, 4 Stat. 411. Unofficial policy encouraged the forc-
ible dislocation of Indian tribes.
In the second half of the nineteenth century, the policy of
relocation was replaced with one of assimilation. At that time
the federal government began to divide Indian lands into
individual parcels, taking lands that had been set aside for
Indian tribes and allotting them to individual tribe members.
See Felix S. Cohen, Handbook of Federal Indian Law 98
(1982 ed.). "The objectives of allotment were simple and
clear cut: to extinguish tribal sovereignty, erase reservation
boundaries, and force assimilation of Indians into the society
at large." Yakima v. Yakima Indian Nation, 502 U.S. 251,
254 (1992); see also Muscogee (Creek) Nation v. Hodel, 851
F.2d 1439, 1441 (D.C. Cir. 1988) ("Allotment was justified as a
means of accomplishing the then current policy of assimila-
tion."). Once tribal lands were allotted in fee to individual
Indians, white settlers could purchase the lands for settle-
ment. Allottees, by divorcing themselves from the tribal
estate, also became subject to federal and state jurisdiction on
the same terms as other citizens.
This assimilationist policy began with individually negotiat-
ed treaties and was eventually enacted into federal law with
passage of the General Allotment Act of 1887, also known as
the "Dawes Act," ch. 119, 24 Stat. 388 (as amended at 25
U.S.C. s 331 et seq.). Under the General Allotment Act,
beneficial title of the allotted lands vested in the United
States as trustee for individual Indians. The trust was to last
for 25 years or more, at which point a fee patent would issue
to the individual Indian allottee. During the trust period,
individual accounts were to be set up for each Indian with a
stake in the allotted lands, and the lands would be managed
for the benefit of the individual allottees. Indians could not
sell, lease, or otherwise burden their allotted lands without
government approval. Where tribes resisted allotment, it
could be imposed. See Act of June 28, 1898, ch. 517, 30 Stat.
495 ("Curtis Act"). While the Dawes Act may not have
achieved assimilation, it did result in the widespread transfer
of land from Indians to white settlers. As the district court
found, from 1887 to 1934, an estimated 90 million acres,
accounting for approximately two-thirds of all Indian lands,
left Indian ownership. Cobell v. Babbitt, 91 F. Supp. 2d 1, 8
(D.D.C. 1999) ("Cobell V").
Allotment of tribal lands ceased with enactment of the
Indian Reorganization Act of 1934 ("IRA"), 48 Stat. 984
(codified as amended at 25 U.S.C. s 461 et seq.). Lands
already allotted remained so, but the IRA provided that
unallotted surplus Indian lands would be returned to tribal
ownership. 25 U.S.C. s 463. Rather than undo the assimila-
tionist allotment polices, the 1934 Act extended the trust
period for allotted lands indefinitely. Id. s 462. The federal
government retained control of lands already allotted but not
yet fee-patented, and thereby retained its fiduciary obli-
gations to administer the trust lands and funds arising there-
from for the benefit of individual Indian beneficiaries. These
lands form the basis for the Individual Indian Money ("IIM")
accounts that are at the heart of this case.
After passage of the IRA, federal Indian policy changed yet
again. In the 1950s, Congress adopted a "termination poli-
cy," whereby it sought to release Indian tribes from federal
supervision and terminate the government-Indian relation-
ship. As Assistant Interior Secretary Gover testified at trial,
the policy was "specifically" aimed at "severing ... the trust
relationship." Cobell V, 91 F. Supp. 2d at 8. In some cases,
the U.S. withdrew recognition of Indian tribes altogether.
Id. at 9.
The termination policy was no more successful than earlier
assimilation efforts, and was soon replaced with the current
policy of "self-determination and self-governance." Id. at 9.
In 1975 Congress enacted the Indian Self-Determination and
Education Assistance Act, Pub. L. No. 93-638, 88 Stat. 2203
(1975), which, among other things, authorizes tribes to as-
sume some of the management functions currently imposed
on the Bureau of Indian Affairs ("BIA") and Office of Trust
Fund Management. In particular, a tribe may contract with
BIA to manage trust accounts, including IIM accounts, for
the tribe or its members. Such contracts must be approved
unless BIA determines that the tribe lacks the accounting or
management capabilities to fulfill the contract. See Cobell V,
91 F. Supp. 2d at 9. Where such capacity is lacking, BIA is
to assist tribes in developing the necessary capabilities to
manage IIM accounts themselves. See id. In sum, because
of BIA's own fiduciary obligations to IIM trust beneficiaries,
it must ensure that a tribe can fulfill the fiduciary obligations
attendant to trust management before transferring control.
B. Federal IIM Trust Responsibilities
Because the United States holds IIM lands in trust for
individual Indian beneficiaries, it assumes the fiduciary obli-
gations of a trustee. " '[W]here the Federal Government
takes on or has control or supervision over tribal monies or
properties, the fiduciary relationship normally exists with
respect to such monies or properties (unless Congress has
provided otherwise) even though nothing is said expressly in
the authorizing or underlying statute (or other fundamental
document) about a trust fund, or a trust or fiduciary connec-
tion.' " United States v. Mitchell ("Mitchell II"), 463 U.S.
206, 225 (1983) (quoting Navajo Tribe of Indians v. United
States, 224 Ct. Cl. 171, 183 (1980)). As a result of allotment,
individual Indians became beneficiaries of the trust lands, but
lost the right to sell, lease, or burden the property without
the federal government's approval. The federal government
also probates estates related to Indian trust lands and re-
ceives and distributes income from the lease of allotted lands.
Income generated from the trust lands is to be paid to the
individual beneficiaries.
Under current law, the Secretary of the Interior and the
Secretary of the Treasury are the designated trustee-
delegates for the IIM trust. Each Secretary, or his desig-
nates, has specific fiduciary responsibilities that must be
fulfilled lest the United States breach its fiduciary obligations.
Several governmental agencies have specific trust obligations.
These include, among others, BIA, Office of Trust Funds
Management ("OTFM"), and Office of the Special Trustee
("OST"). (Their responsibilities are extensively detailed in
the decision below. See Cobell V, 91 F. Supp. 2d at 9-12.)
BIA is responsible for trust land management, including
the approval of leases and land transfers, and income collec-
tion. See id. at 9. As noted above, BIA is also required to
contract with qualifying tribes for the management of IIM
accounts. OTFM, with the assistance of the Treasury De-
partment, deposits IIM land revenues, maintains the individu-
al IIM accounts, and ensures that money is distributed to
IIM account holders or special deposit accounts where money
cannot be distributed to the individual account holder. OST,
created in 1994 by the Indian Trust Fund Management
Reform Act, oversees IIM trust reform efforts. 25 U.S.C.
ss 4042-43.
While the Interior Department is responsible for executing
most of the federal government's trust duties, the Treasury
Department has substantial trust responsibilities as well. In
particular, Treasury holds and invests IIM funds at the
Interior Department's direction and provides accounting and
financial management services. See Cobell V, 91 F. Supp. 2d
at 11. The Treasury Department maintains only a single
"IIM account" for all IIM funds, rather than individuated
accounts for each individual IIM beneficiary, leaving the
maintenance of individualized accounting records to OTFM.
OTFM relies upon the Treasury Department's accounting
records to reconcile its own IIM records. Of note, when
OTFM issues a check to an IIM trust beneficiary, the amount
is deducted from the relevant fund, even though the money
remains in the Treasury's general account. Thus, the IIM
beneficiary loses any interest that would be accrued between
issuance and cashing of the check. The district court found
that while "this time lapse may be short in the private sector,
it can be much longer in the IIM trust context because
OTFM often has incorrect addresses for the recipients." Id.
at 12.
The federal government does not know the precise number
of IIM trust accounts that it is to administer and protect. At
present, the Interior Department's system contains over
300,000 accounts covering an estimated 11 million acres, but
the Department is unsure whether this is the proper number
of accounts. See id. at 10.1 Plaintiffs claim that the actual
number of accounts is far higher, exceeding 500,000 trust
accounts. See id.
Not only does the Interior Department not know the
proper number of accounts, it does not know the proper
balances for each IIM account, nor does Interior have suffi-
cient records to determine the value of IIM accounts. As the
district court found, "[a]lthough the United States freely
gives out 'balances' to plaintiffs, it admits that currently these
balances cannot be supported by adequate transactional docu-
mentation." Id. Current account reconciliation procedures
are insufficient to ensure that existing account records, re-
ported account balances, or payments to IIM beneficiaries are
accurate. As the Interior Secretary testified at trial, the
Department is presently unable to render an accounting for a
majority of the IIM trust beneficiaries. Trial Transcript at
3762. As a result, the government regularly issues payments
to trust beneficiaries "in erroneous amounts--from unrecon-
ciled accounts--some of which are known to have incorrect
balances." Cobell V, 91 F. Supp. 2d at 6. Thus, the district
court concluded, and the government does not deny, that "[i]t
is entirely possible that tens of thousands of IIM trust
beneficiaries should be receiving different amounts of mon-
ey--their own money--than they do today. Perhaps not.
But no one can say...." Id.
C. The Indian Trust Fund Management Reform Act
("1994 Act")
Concern over federal mismanagement of the IIM trust
funds is not new. The General Accounting Office, Interior
Department Inspector General, and Office of Management
and Budget, among others, have all condemned the misman-
agement of the IIM trust accounts over the past twenty
years. See, e.g., U.S. General Accounting Office, Financial
Management: BIA's Management of the Indian Trust Funds,
__________
1 Note that these figures are in addition to land and accounts held
in trust for tribes.
GAO/T-AIMD-93-4 (1993); U.S. General Accounting Office,
Financial Management: Status of BIA's Efforts to Reconcile
Indian Trust Fund Accounts and Implement Management
Improvements, GAO/T-AIMD-94-99 (1994); Misplaced Trust:
The Bureau of Indian Affairs' Mismanagement of the Indian
Trust Fund, H.R. Rep. No. 102-499, at 2-3 (1992) (citing
critiques of IIM trust management by Interior Department
IG, OMB, and others). Time and again Interior Department
officials pledged to address these concerns. Yet, as Interior
officials readily acknowledge, there has been little progress at
reforming the management of IIM trust accounts. See Cobell
V, 91 F. Supp. 2d at 32-33 (citing Interior Department's
factual stipulations); Trial Transcript at 3768 (testimony of
Interior Secretary Bruce Babbitt acknowledging that "[t]he
fiduciary obligation of the United States government is not
being fulfilled").
Beginning in 1988, Congress held oversight hearings on
Interior's management of the Indian trust accounts. These
hearings led to a report, Misplaced Trust: The Bureau of
Indian Affairs' Mismanagement of the Indian Trust Fund,
H.R. Rep. No. 102-499 (1992) [hereinafter "Misplaced Trust"],
which harshly criticized the Interior Department's mishan-
dling of the trust accounts. Consistent with prior analyses,
the report found, "significant, habitual problems in BIA's
ability to fully and accurately account for trust fund moneys,
to properly discharge its fiduciary responsibilities, and to
prudently manage the trust funds." Id. at 2. Interior's
persistent failure to meet its obligations led the congressional
investigators to conclude that top officials "have utterly failed
to grasp the human impact of its financial management of the
Indian trust fund." Id. at 5. To address these concerns,
Interior commissioned an independent study which deter-
mined that reconciling the IIM trust accounts could cost over
$200 million. See Cobell V, 91 F. Supp. 2d at 13. Yet "[e]ven
that expenditure would have yielded only a 'reconciliation' of
approximately eighty-five percent reliability." Id. Once
again the Interior Department pledged reforms; once again
there was little improvement.
In 1994, Congress enacted the Indian Trust Fund Manage-
ment Reform Act ("1994 Act"), Pub. L. No. 103-412 (1994).
This law recognized the federal government's preexisting
trust responsibilities.2 It further identified some of the Inte-
rior Secretary's duties to ensure "proper discharge of the
trust responsibilities of the United States." 25 U.S.C.
s 162a(d). These "include (but are not limited to) the follow-
ing":
t "Providing adequate systems for accounting for and
reporting trust fund balances";
t "Providing adequate controls over receipts and dis-
bursements";
t "Providing periodic, timely reconciliations to assure
the accuracy of accounts";
t "Preparing and supplying ... periodic statements of
... account performance" and balances to account
holders; and
t "Establishing consistent, written policies and proce-
dures for trust fund management and accounting."
Id.
There is no dispute that the federal government owes IIM
beneficiaries--the plaintiffs/appellees--these duties. The dis-
trict court so found and the Interior Department conceded as
much at trial. See, e.g., Cobell V, 91 F. Supp. 2d at 32-33.
While arguing that plaintiffs' claims should be evaluated on
the basis of what is contained in the Act alone, the Interior
Department did not dispute that these duties "must be inter-
preted in light of the common law of trusts and the United
States' Indian policy." Id. at 33. Most significantly, the
Interior Department stipulated that many of the duties owed
under the 1994 Act were not being fulfilled. See id. (listing
Interior Department stipulations). In other words, the feder-
__________
2 That the law recognized, rather than created, the government's
IIM trust duties is clear from the Act's text and structure. Indeed,
Title I of the Act is titled "Recognition of Trust Responsibility."
al government readily acknowledges that it is in breach of at
least some of the fiduciary duties owed to IIM beneficiaries.
The Office of the Special Trustee & the High Level Imple-
mentation Plan
The 1994 Act created the Office of the Special Trustee for
American Indians ("OST") "to provide for more effective
management of, and accountability for the proper discharge
of, the Secretary's trust responsibilities" and ensure proper
reform measures are implemented. 25 U.S.C. s 404(1). The
Special Trustee ("ST") is a sub-cabinet level officer appointed
by the President and confirmed by the Senate who reports
directly to the Interior Secretary. Id. s 4042(b). The ST is
required to develop a "comprehensive strategic plan" for trust
management reform and an appropriate reform timetable to
ensure "proper and efficient discharge of the Secretary's
trust responsibilities." Id. s 4043(a)(1). The ST is also to
oversee a "fair an accurate accounting" of the trust accounts
and submit annual reports to Congress. Id. s 4043(b)(2)(A)
and (f). Despite these responsibilities, the ST only has
"general oversight" responsibilities; decision-making authori-
ty for IIM trust management remains with the Secretary of
the Interior. Id. s 4043(b)(1).
The first ST under the Act was Paul Homan. In April
1997, Homan submitted a "strategic plan" to the Secretary
and Congress pursuant to the 1994 Act. Among other things,
the plan called for the reorganization of Indian trust fund
management and the centralization of record-keeping,
changes that may have required legislative authorization.
The Interior Secretary opted to implement portions of the
strategic plan, including the upgrade of computer systems,
the clean-up of trust records, and the elimination of process-
ing backlogs. The Secretary's plan, known as the High Level
Implementation Plan ("HLIP"), was issued in July 1998. As
drafted, the HLIP consisted of twelve "subprojects" which
focus on ensuring the accuracy of information regarding the
IIM trust accounts and developing uniform policies and pro-
cedures to guide trust management in the future. These
subprojects included data cleanup, clearing probate backlogs,
improving records management, and establishing internal
controls to prevent future mismanagement.
The HLIP is designed to overcome numerous gaps and
deficiencies in the Interior Department's record-keeping and
trust management. Those identified by the district court as
"central" to this case are the following:
t Data Cleanup--The records upon which the govern-
ment must rely to fulfill its trust duties are woefully
deficient. In particular, the Interior Department
does not have complete or accurate information on
the identities or whereabouts of all trust beneficia-
ries, nor does the Department have complete land
title records. For instance, as of 1998, there were
over 46,000 IIM trust accounts without current ad-
dresses for the beneficiary and over 123,000 ac-
counts without a Social Security or Tax Identifica-
tion number. To address these concerns, the HLIP
calls for the inventorying of existing documents from
IIM trust offices around the country and the recon-
ciliation of conflicting records. However, the trial
court found "no written plan" to obtain "missing
information" necessary for compiling complete land
title records. Cobell V, 91 F. Supp. 2d at 17.
t Probate Backlog--The Bureau of Indian Affairs has
a probate backlog of approximately 12,000 cases,
some or all of which could affect the payments owed
to individual trust beneficiaries. There is currently
"no formal plan" to address this backlog. There is,
however, a "reinvention team" that is to address
probate concerns and fractionated interests in land.
Id.
t Appraisal Program--The trial court found evidence
of an estimated 212,000 title defects. These defects
can impact the processing of leases which can, in
turn, impact the government's ability to render an
accounting for the trust beneficiaries. Under the
HLIP, the Interior Department plans to reduce the
backlog, at least in part, "by re-defining when ap-
praisals are required as a matter of Interior policy."
Id. at 18.
t Computer Systems--The Interior Department does
not have computer systems in place capable of track-
ing trust resources and relevant data. The current
system, known as the "legacy" system, is not capable
of performing this function. The HLIP calls for the
acquisition and implementation of two new computer
systems to replace the legacy system: the Trust
Fund Accounting System ("TFAS") and the Trust
Asset and Accounting Management System
("TAAMS"). Id.
t Records Management--The Interior Department
acknowledges that adequate record-keeping is es-
sential if the Department is to fulfill its fiduciary ob-
ligations to the IIM trust beneficiaries. Yet, as In-
terior stipulated at trial, the current record-keeping
system is woefully inadequate. To address this con-
cern, the HLIP establishes a "records management
group" to develop a plan for transferring financial
records from BIA to OST and maintaining trust
records into the future. Id. at 20-21.
Despite OST's substantial responsibilities, Congress did not
provide for funding of OST in the 1994 Act, nor has the
Interior Department sought funding for OST in its depart-
mental budget requests sufficient to meet the ST's estimated
costs. In January 1999, the Interior Secretary announced his
unilateral reorganization of OST, prompting Homan's resigna-
tion.3
__________
3 Thomas Thompson was acting ST at the time of trial. In
February 2000, then-President Clinton nominated Thomas N. Slo-
naker for the position, who at the time of briefing was awaiting
Senate confirmation.
There are also trust management problems at the Treasury
Department. In response to plaintiff's charges, the Treasury
Department stipulated to the following problems and reme-
dies:
t Illegal Document Policies--The Treasury Depart-
ment regularly allows the destruction of documents
over six years and seven months old in conformity
with the National Archives and Records Administra-
tion's document destruction schedule. At present,
no effort is made to ensure that IIM trust records or
other documents that could be needed to conduct an
adequate accounting are preserved. As a result,
IIM trust records necessary for an accounting of the
trust accounts have been irretrievably lost. The
Treasury Department has agreed to develop a rec-
ord retention schedule for trust documents for the
purposes of this litigation and into the future. Id. at
23.
t Time Lapse in Fund Availability--There can be a
time lapse between the deposit of funds with the
Treasury Department and the investment of those
funds by the Interior Department on behalf of IIM
trust beneficiaries. The Treasury Department has
agreed to facilitate investment when funds are ini-
tially deposited. Id. at 22.
t Lost Interest on IIM Checks--According to plain-
tiffs, some IIM beneficiaries lose interest during the
delay between the time a check is issued and when
that check can be presented for payment. Treasury
has agreed to conduct a study of the alleged time
lapse and resulting lost interest. Id. at 22-23.
The Treasury Department further stipulated to the devel-
opment of new systems and procedures that could potentially
fulfill the Department's fiduciary obligations. Id. at 22.
D. District Court Proceedings
On June 10, 1996, appellees filed this class-action suit "to
compel performance of trust obligations." They alleged that
the federal government's trustee-delegates, including the Sec-
retaries of the Interior and Treasury, breached the fiduciary
duties owed to plaintiffs by mismanaging the IIM trust
accounts. On February 4, 1997, the district court certified
the named plaintiffs under Federal Rule of Civil Procedure
23(b)(1)(A) and (b)(2) as class representatives for all present
and former IIM account beneficiaries. Cobell v. Babbitt (Co-
bell I), 30 F. Supp. 2d 24, 28 (D.D.C. 1998). On May 5, 1998,
the district court bifurcated the case for trial. Phase I would
address "fixing the system" or reforming the management
and accounting of the IIM trusts so as to meet the federal
government's fiduciary responsibilities. Phase II will address
historical accounting of the accounts.
On November 5, 1998, the district court rejected the gov-
ernment's motion to dismiss and for summary judgment.
The court found that the government waived sovereign immu-
nity pursuant to Section 702 of the Administrative Procedure
Act. Id. at 30-35. The court also dismissed some of plaintiffs'
claims for money damages and held that the government's
fiduciary duties to IIM trust beneficiaries were not ministeri-
al in nature and therefore could not be compelled by manda-
mus. Id. at 35-36.
Later in 1998, the court held Interior Secretary Bruce
Babbitt, Treasury Secretary Robert Rubin, and Assistant
Interior Secretary Kevin Gover in contempt of court for
failing to comply with the court's production orders and
imposed monetary sanctions. See Cobell v. Babbitt ("Cobell
II"), 37 F. Supp. 2d 6 (D.D.C. 1999) (holding defendants in
contempt of court for failing to make good faith effort to
comply with discovery order); Cobell v. Babbitt ("Cobell IV"),
188 F.R.D. 122 (D.D.C. 1999) (awarding sanctions). As trust-
ee delegates these officials had a clear obligation to maintain
trust records and furnish such records to beneficiaries upon
request, yet they were unable to provide such records and
related documents to the court in response to an Order of
Production. See Cobell II, 37 F. Supp. 2d at 23. The district
court found that these officials had failed to make a good faith
effort to produce such information. Indeed, the district court
found that the defendants "proposed a stipulated order to the
court and then immediately improperly instructed their field
personnel on what documents were required to be produced."
Id. at 28. The egregious nature of this conduct was only
compounded by the Treasury Department's contemporaneous
destruction of documents potentially responsive to the court's
production order, and the failure of government officials "to
apprise the court or the plaintiffs of the defendants' unwill-
ingness and self-inflicted inability to comply" with the produc-
tion orders. Id. at 28, 31.
On June 7, 1999, the district court denied the government's
motion for summary judgment on some of the plaintiffs'
claims. In addition, the court found that the federal govern-
ment waived its sovereign immunity against a suit for injunc-
tive and declaratory relief for the breach of trust duties. See
Cobell v. Babbitt ("Cobell III"), 52 F. Supp. 2d 11 (D.D.C.
1999).
The court held a six-week trial on the Indians' claims, and
issued its opinion on December 21, 1999. After satisfying
itself that it had jurisdiction over plaintiffs' claims, the district
court found that the federal government had breached some
of the fiduciary duties owed to plaintiffs. Among the district
court's specific conclusions were:
t under the 1994 Act defendants must provide IIM
trust beneficiaries with "an accurate accounting of
all money in the IIM trust held in trust for the
benefit of plaintiffs, without regard to when the
funds were deposited," Cobell V, 91 F. Supp. 2d at
58;
t under the 1994 Act defendants must "retrieve and
retain all information concerning the IIM trust that
is necessary to render an accurate accounting" for
the trust beneficiaries, id.;
t the Interior Secretary and Assistant Secretary must
"establish written policies and procedures" for: a)
"collecting from outside sources missing information
necessary to render an accurate accounting of the
IIM trust"; b) "the retention of IIM-related trust
documents necessary" for an accurate accounting; c)
"computer and business systems architecture neces-
sary" for an accurate accounting; and d) "the staff-
ing of trust management functions necessary" for an
accurate accounting, id.;
t the Treasury Secretary owes IIM trust beneficiaries
"the statutory trust duty to retain IIM trust docu-
ments" necessary for an accurate accounting, id.
The court further found that the defendants were in violation
of the above-mentioned fiduciary duties, ordered them to
come into compliance with their duties and remanded the
required actions to the defendants for further proceedings
"not inconsistent" with the court's opinion. Id. The court
rejected plaintiffs' plea for the appointment of a special
master to oversee the government's compliance with its fidu-
ciary duties. Id. at 49.
The court did not rule for the plaintiffs on all counts,
however. The court dismissed their pure common-law claims
as well as those claims alleging obstruction of the Special
Trustee. Id. at 28-31, 51-52. The court retained continuing
jurisdiction over the case for the next five years, during which
time the defendants are required to submit quarterly status
reports summarizing the government's progress in meeting
its fiduciary duties to the IIM trust beneficiaries. Id. at 58-
59.
The court certified its order for interlocutory appeal under
28 U.S.C. s 1292(b) "[t]o the extent that the court's order is
not 'otherwise appealable.' " Cobell V, 91 F. Supp. 2d at 57.
The defendants appealed, alleging that the district court
improperly construed the nature and extent of the govern-
ment's fiduciary duties to IIM trust beneficiaries. Specifical-
ly, appellants take issue with the district court's finding of
specific trust obligations, including a judicially enforceable
duty to account, and the district court's conclusion that trust
reforms have been unlawfully withheld or unreasonably de-
layed. Further, appellants allege that the district court
lacked sufficient basis to award equitable relief and that the
relief awarded was unwarranted.
II. Jurisdiction
A. Subject Matter Jurisdiction
Although appellants have not renewed their jurisdictional
challenge to plaintiffs' claims, we must assure ourselves that
we have jurisdiction. Plaintiffs' claims allege breach of trust
obligations grounded in federal law and plaintiffs seek en-
forcement of their federal rights. Plaintiffs' claims thus
"arise under" the laws of the United States, granting federal
court jurisdiction under 28 U.S.C. s 1331. See, e.g., Robbins
v. Reagan, 780 F.2d 37, 43 (D.C. Cir. 1985); Association of
National Advertisers, Inc. v. FTC, 617 F.2d 611, 619 (D.C.
Cir. 1979).
B. Sovereign Immunity
The federal government claimed sovereign immunity below,
but did not renew this claim on appeal. As the court below
noted, section 702 of the Administrative Procedure Act waives
federal officials' sovereign immunity for actions "seeking re-
lief other than money damages" involving a federal official's
action or failure to act. 5 U.S.C. s 702. Insofar as the
plaintiffs seek specific injunctive and declaratory relief--and,
in particular, seek the accounting to which they are entitled--
the government has waived its sovereign immunity under this
provision. See Bowen v. Massachusetts, 487 U.S. 879, 894-95
(1988). That plaintiffs rely upon common law trust principles
in pursuit of their claim is immaterial, as here they seek
specific relief other than money damages, and federal courts
have jurisdiction to hear such claims under the APA.
C. Final Agency Action
Whether there is a final agency action is also a jurisdiction-
al question. With a few exceptions, if there is no final agency
action, there is no basis for review of the government's
decision or policy. One exception occurs where plaintiffs
claim that a governmental action was unlawfully withheld or
unreasonably delayed.
When the district court rejected the government's motion
to dismiss in November 1998, it held that the HLIP itself
constitutes final agency action. Cobell I, 30 F. Supp. 2d at 33.
This conclusion was based on a concession made by govern-
ment counsel at oral argument on the motion. Id. At trial,
however, appellants argued that there was no final agency
action for the court to review. Cobell V, 91 F. Supp. 2d at
35-36. Appellants' new position was that the HLIP was not a
final agency action because it was (and continues to be) a
"work in progress." Id. at 36. The court rejected this
argument holding that the preexisting accounting system
used to administer the IIM trust constituted a final agency
action capable of review. Id.; see also Cobell I, 30 F. Supp.
2d at 33-34. It is the existing system, and not any proposed
reform or replacement that "aggrieves plaintiffs today." Co-
bell V, 91 F. Supp. 2d at 36.
Although the government does not press the issue, this
conclusion by the district court is questionable. While a
single step or measure is reviewable, an on-going program or
policy is not, in itself, a "final agency action" under the APA.
See Lujan v. National Wildlife Federation, 497 U.S. 871, 890
(1990). A plaintiff "cannot seek wholesale improvement of [a]
program by court decree, rather than in the offices of the
Department or the halls of Congress, where programmatic
improvements are normally made." Id. at 891.
This is not to say that the district court lacked jurisdiction
to hear plaintiffs' claims, however. Where a federal court has
jurisdiction to hear challenges to an agency action it also has
jurisdiction over claims of unreasonable delay. See Telecom-
munications Research and Action Center v. FCC, 750 F.2d
70, 75 (D.C. Cir. 1984). As this court has noted in the past,
where "an agency is under an unequivocal statutory duty to
act, failure so to act constitutes, in effect, an affirmative act
that triggers 'final agency action' review." Sierra Club v.
Thomas, 828 F.2d 783, 793 (D.C. Cir. 1987); see also Public
Citizen Health Research Group v. Commissioner, 740 F.2d
21, 32 (D.C. Cir. 1984). Were it otherwise, agencies could
effectively prevent judicial review of their policy determina-
tions by simply refusing to take final action.
In the case at bar, it is clear that the federal government
has been under an obligation to discharge the fiduciary duties
owed to IIM trust beneficiaries for decades. It is also clear
that refusing to hear plaintiffs' claims could unduly prejudice
their rights as trust beneficiaries. The district court's find-
ings of fact, largely unchallenged by the government, make
clear that insofar as the federal government owes trust
beneficiaries a duty to maintain records and provide an
accounting, delaying review is tantamount to denying review
altogether. The district court further concluded that appel-
lants' extensive delay in discharging their fiduciary duties was
unreasonable. In such circumstances, federal courts may
exercise jurisdiction to compel agency action "unlawfully
withheld or unreasonably denied." 5 U.S.C. s 706.
Even assuming, as appellants argue, that the 1994 Act
effectively reset the clock for a finding of unreasonable delay,
appellants' "reasonable time to discharge" its fiduciary obli-
gations "has expired." Cobell V, 91 F. Supp. 2d. at 48. The
district court's judgment came down over six years after
passage of the 1994 Act. During that time, deadlines were
missed, documents destroyed, and, in the words of the district
court, appellants had yet to progress much beyond planting
the "seed" for discharging their fiduciary obligations. See id.
at 20. Courts owe substantial deference to agency preroga-
tives in fulfilling their legal obligations, especially where
Congress intervenes to address longstanding problems, as it
did with the 1994 Act. But this does not require courts to
turn a blind eye when government officials fail to discharge
their duties.
As a general rule, Section 706 of the APA "leaves in the
courts the discretion to decide whether agency delay is unrea-
sonable." Forest Guardians v. Babbitt, 174 F.3d 1178, 1190
(10th Cir. 1999). The legal standard used to determine
whether agency delay is unreasonable is a question of law to
be reviewed de novo by this court. However, the factual
findings that underlie that determination are only to be
overturned if the district court's findings are clearly errone-
ous.
For good reason, courts are reluctant to upset existing
agency priorities, unless the delay is "egregious." See Tele-
communications Research and Action Center, 750 F.2d at 79.
An agency's own timetable for performing its duties in the
absence of a statutory deadline is due "considerable defer-
ence." Sierra Club v. Gorsuch, 715 F.2d 653, 658 (D.C. Cir.
1983). Moreover, "a finding that delay is unreasonable does
not, alone, justify judicial intervention." In re Barr Labs.,
Inc., 930 F.2d 72, 75 (D.C. Cir. 1991).4
In reviewing an unreasonable delay claim, this court consid-
ers four factors:
First, "the court should ascertain the length of time that
has elapsed since the agency came under a duty to
act".... Second, "the reasonableness of the delay must
be judged 'in the context of the statute' which authorizes
the agency's action."... Third, the court must examine
the consequences of the agency's delay.... Finally, the
court should give due consideration in the balance to
"any plea of administrative error, administrative conve-
nience, practical difficulty in carrying out a legislative
mandate, or need to prioritize in the face of limited
resources."
In re International Chemical Workers Union, 958 F.2d 1144,
1149 (D.C. Cir. 1992) (citations omitted).
Considering the first two factors, it is beyond question that
the government has delayed fulfilling its trust obligations for
many years. The district court specifically found that IIM
trust beneficiaries have been denied their rights--in particu-
lar their right to an accounting--for decades. See Cobell V,
91 F. Supp. 2d at 47 (noting that IIM beneficiaries have
waited "a century" for "an accurate accounting" which is the
__________
4 But see Forest Guardians, 174 F.3d at 1191 ("once a court
deems agency delay unreasonable, it must compel agency action.").
"most basic fiduciary duty"). That Congress enacted its own
remedial statute to address this unconscionable delay does
not mitigate the egregious amount of time plaintiffs have
waited for, as discussed below, the 1994 Act is not the source
of plaintiffs' rights. Rather, it is designed to help rectify the
government's longstanding failure. Given the record before
it, the district court reasonably concluded that absent court
intervention, discharge of the government's fiduciary obli-
gations may yet be far off.
Appellants note that the 1994 statute provides no deadlines
for the reforms at issue. Failure to provide a statutory
timetable may indicate that Congress sought to leave the
timing of reform to agency discretion. But the lack of a
timetable does not give government officials carte blanche to
ignore their legal obligations. This is particularly true where,
as here, the act of outlining specific steps toward reform was
enacted against a background of agency delay dating back
many years.
The district court noted that the consequences of further
agency delay are potentially quite severe. Documents neces-
sary for a proper accounting and reconciliation have been lost
or destroyed, and the district court found little reason to
believe that this would change in the near future. "The
longer defendants delay in creating the plans necessary to
render an accounting, the greater the chance that plaintiffs
will never receive an actual accounting of their own trust
money." Cobell V, 91 F. Supp. 2d at 47. Given that many
plaintiffs rely upon their IIM trust accounts for their financial
well-being, the injury from delay could cause irreparable
harm to plaintiffs' interests as IIM trust beneficiaries. Thus
it seems that "the interests at stake are not merely economic
interests in [an administrative scheme], but personal interests
in life and health." Public Interest Health Research Group v.
Auchter, 702 F.2d 1150, 1156 (D.C. Cir. 1983) (citation omit-
ted).
Concern for "administrative convenience" certainly coun-
sels against interfering with the government's reform priori-
ties. See Grand Canyon Air Tour Coalition v. FAA, 154
F.3d 455, 476 (D.C. Cir. 1998) ("Although the APA gives
courts the authority to 'compel agency action unlawfully
withheld or unreasonably delayed,' we are acutely aware of
the limits of our institutional competence in the highly techni-
cal area at issue in this case."(citations omitted)). Yet neither
a lack of sufficient funds nor administrative complexity, in
and of themselves, justify extensive delay, nor can the gov-
ernment claim that it has become subject to unreasonable
expectations. Federal officials were aware of their fiduciary
obligations long before the passage of the 1994 Act-let alone
the initiation of this action-and yet little progress has been
made in discharging those duties. What little progress the
government has made appears more due to the litigation than
diligence in discharging its fiduciary obligations. See Mis-
placed Trust H.R. Rep. No. 102-499, at 5 (noting that "the
only thing that seems to stimulate a flurry of activity at the
Bureau [of Indian Affairs] is an impending appearance ...
before a congressional committee"). See also Cobell V, 91
F. Supp. 2d at 20 n.15 (noting that the "positive steps taken
by defendants toward bringing themselves into compliance
with the law" have "not come easily"). For these reasons, we
find no basis for disturbing the district court's conclusion that
appellants unreasonably delayed the discharge of their fidu-
ciary obligations, nor for upsetting the district court's exer-
cise of jurisdiction under 5 U.S.C. s 706 on this basis.
III. Discussion
Appellants contend that the district court erred in finding
that the Secretary of the Interior committed "four statutory
breaches of IIM trust duties ... that warrant prospective
relief." Cobell V, 91 F. Supp. 2d at 40. They challenge both
the district court's conclusions that specific measures were
required under the 1994 Act for the government to fulfill its
fiduciary obligations and its provision of prospective equitable
relief awarded. Specifically, the government argues that the
1994 Act does not require the creation of written policies and
procedures covering the four areas identified by the district
court.
To the extent that appellants contest the district court's
conclusions defining the federal government's fiduciary obli-
gations to IIM trust beneficiaries, they raise questions of law
that we review de novo. Yet insofar as appellants challenge
factual findings, we will uphold the district court unless its
findings are clearly erroneous. Such findings include the
district court's determination whether the steps taken by
appellants in recent years toward fulfilling their legal obli-
gations have been sufficient, or whether there has been
unreasonable delay in discharging the government's fiduciary
duties.
Applying these standards, the government is incorrect to
the extent that it assumes that the 1994 Act forms the basis
for its fiduciary obligations. The 1994 Act did not create
these obligations any more than it created the IIM trust
accounts. As noted above, the 1994 Act was a remedial
statute designed to ensure more diligent fulfillment of the
government's obligations. It recognized and reaffirmed what
should be beyond dispute--that the government has long-
standing and substantial trust obligations to Indians, particu-
larly to IIM trust beneficiaries, not the least of which is a
duty to account. While the district court erred in character-
izing some specific actions as material breaches that were
themselves merely indicia of appellants' breach, there is
ample evidence in the record to support the district court's
broader conclusion that appellants' failure to take reasonable
steps toward the discharge of their trust obligations constitut-
ed a breach of their fiduciary duties. Once this conclusion
was reached, the district acted well within its power to
provide modest equitable relief, requiring appellants to do
little more than develop plans to ensure proper discharge of
their duties within a reasonable time. The district court did
not exceed its powers with this order, nor with its decision to
maintain jurisdiction over the case.
A. The Trust Relationship
There is no doubt that the federal government has a long-
standing fiduciary obligation to IIM trust beneficiaries.
"[T]he law is 'well established that the Government in its
dealings with Indian tribal property acts in a fiduciary capaci-
ty.' " Lincoln v. Vigil, 508 U.S. 182, 194 (1993) (quoting
United States v. Cherokee Nation of Oklahoma, 480 U.S. 700,
707 (1987)). In the leading case on Indian trust responsibili-
ties, United States v. Mitchell ("Mitchell II"), the Supreme
Court was clear:
A fiduciary relationship necessarily arises when the Gov-
ernment assumes such elaborate control over forests and
property belonging to Indians. All of the necessary
elements of a common-law trust are present: a trustee
(the United States), a beneficiary (the Indian allottees),
and a trust corpus (Indian timber, lands, and funds).
463 U.S. 206, 225 (1983) (citing Restatement (Second) of
Trusts s 2, cmt. h (1959)).
This rule operates as a presumption. See Loudner v.
United States, 108 F.3d 896, 900 (8th Cir. 1997) (" '[T]here is a
presumption that absent explicit language to the contrary, all
funds held by the United States for Indian tribes are held in
trust.' " (quoting Rogers v. United States, 697 F.2d 886, 890
(9th Cir. 1983))). Therefore, courts correctly recognize a
trust relationship even where it is not explicitly laid out by
statute. Specifically, " 'where the Federal Government takes
on or has control or supervision over tribal monies or proper-
ties, the fiduciary relationship normally exists with respect to
such monies or properties (unless Congress has provided
otherwise) even though nothing is said expressly in the
authorizing or underlying statute (or other fundamental docu-
ment) about a trust fund, or a trust or fiduciary connection.' "
Mitchell II, 463 U.S. at 225 (quoting Navajo Tribe of Indians
v. United States, 224 Ct. Cl. 171, 183 (1980)).
It is no doubt true that "the government's fiduciary respon-
sibilities necessarily depend on the substantive laws creating
those obligations." Shoshone-Bannock Tribes v. Reno, 56
F.3d 1476, 1482 (D.C. Cir. 1995); see also Mitchell II, 463
U.S. at 224 (the relevant statutes and regulations "define the
contours of the United States' fiduciary responsibilities.");
National Wildlife Federation v. Andrus, 642 F.2d 589, 611
(D.C. Cir. 1980) ("[A] trust responsibility can only arise from
a statute, treaty, or executive order." (citation omitted)).
This does not mean that the failure to specify the precise
nature of the fiduciary obligation or to enumerate the trust-
ee's duties absolves the government of its responsibilities. It
is well understood that "[t]he extent of [a trustee's] duties
and powers is determined by the trust instrument and the
rules of law which are applicable." Restatement (Second) of
Trusts s 201, at 442 (1959). It is the nature of any instru-
ment that establishes a trust relationship that many of the
duties and powers are implied therein. They arise from the
nature of the relationship established.
While the government's obligations are rooted in and out-
lined by the relevant statutes and treaties, they are largely
defined in traditional equitable terms. "Where Congress
uses terms that have accumulated settled meaning under
either equity or the common law, a court must infer, unless
the statute otherwise dictates, that Congress means to incor-
porate the established meaning of these terms." NLRB v.
Amax Coal Co., 453 U.S. 322, 329 (1981). Courts "must infer
that Congress intended to impose on trustees traditional
fiduciary duties unless Congress has unequivocally expressed
an intent to the contrary." Id. at 330. Much as the Supreme
Court has regularly turned to the Restatement and other
authorities to construe trust responsibilities, it is appropriate
for the district court to consult similar sources.
Despite the imposition of fiduciary duties, federal officials
retain a substantial amount of discretion to order their priori-
ties. In Lincoln v. Vigil, for example, the Supreme Court
held that the government's fiduciary relationship with Indians
"could not limit" an agency's discretion "to reorder its priori-
ties" as among beneficiaries. 508 U.S. 182, 195 (1993). In
Lincoln, the Court rejected a challenge to the Indian Health
Service's decision to discontinue a health program for handi-
capped Indian children in one region of the country in order
to devote greater resources to a national program. Nonethe-
less, the Secretary "cannot escape his role as trustee by
donning the mantle of administrator" to claim that courts
must defer to his expertise and delegated authority. Jicaril-
la Apache Tribe v. Supron Energy Corp., 728 F.2d 1555, 1567
(10th Cir. 1984) (Seymour, J., concurring in part and dissent-
ing in part), adopted as majority opinion as modified en
banc, 782 F.2d 855 (10th Cir. 1986).
The Secretary has an "overriding duty ... to deal fairly
with Indians." Morton v. Ruiz, 415 U.S. 199, 236 (1974).
This duty necessarily constrains the Secretary's discretion.
When faced with several policy choices, an administrator is
generally allowed to select any reasonable option. Yet this is
not the case when acting as a fiduciary for Indian beneficia-
ries as "stricter standards apply to federal agencies when
administering Indian programs." Jicarilla, 728 F.2d at 1567.
Summarizing federal case law on fiduciary obligations owed to
Indian tribes, the Tenth Circuit concluded that where "the
Secretary is obligated to act as a fiduciary ... his actions
must not merely meet the minimal requirements of adminis-
trative law, but must also pass scrutiny under the more
stringent standards demanded of a fiduciary." Id. at 1563.
The federal government has "charged itself with moral obli-
gations of the highest responsibility and trust" in its relation-
ships with Indians, and its conduct "should therefore be
judged by the most exacting fiduciary standards." Seminole
Nation v. United States, 316 U.S. 286, 297 (1942); cf. Mus-
cogee (Creek) Nation v. Hodel, 851 F.2d 1439, 1445 n.8 (D.C.
Cir. 1988) (giving "careful consideration to Interior's interpre-
tation" of the Oklahoma Indian Welfare Act, but not deferring
to it).
B. The 1994 Act
The crux of appellants' argument is that there was no
material breach of their fiduciary obligations as defined by
the 1994 Act. Specifically, appellants contend that the dis-
trict court found obligations beyond those enumerated in the
Act, when Congress had intended that OST would determine
the proper content and timing of policies and procedures to
discharge appellants' fiduciary obligations. Therefore, inso-
far as this process has yet to be completed, appellants
contend that there is no basis for the district court to find
that appellants unlawfully withheld or unreasonably delayed
discharge of their obligations.
The fundamental problem with appellants' claims is the
premise that their duties are solely defined by the 1994 Act.
The Indian Trust Fund Management Reform Act reaffirmed
and clarified preexisting duties; it did not create them. It
further sought to remedy the government's long-standing
failure to discharge its trust obligations; it did not define and
limit the extent of appellants' obligations. While appellants
are right to quibble with some of the district court's specific
findings, the premise upon which much of their appeal rests is
unsustainable.
The trust nature of the federal government's IIM responsi-
bilities was recognized long before passage of the 1994 Act.
See Felix S. Cohen, Handbook of Federal Indian Law, 630-31
(1982 ed.). As early as 1831, the Supreme Court recognized
that the relationship between Indians and the federal govern-
ment was like "that of a ward to his guardian." Cherokee
Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1831) (Marshall,
C.J.). Half a century later, in upholding a statute placing
certain crimes between Indians under federal jurisdiction, the
Court again noted that "Indian tribes are the wards of the
nation" and reaffirmed that the federal government owes
Indians a "duty of protection." United States v. Kagama, 118
U.S. 375, 383, 384 (1886). The fiduciary nature of the govern-
ment's duty was made explicit in Seminole Nation v. United
States, 316 U.S. 286 (1942). In Seminole Nation the Court
applied the "most exacting fiduciary standards" of the com-
mon law in assessing the government's discharge of its duties.
Id. at 297. And in Mitchell II, the Court reiterated the
existence of a "general trust relationship" which imposes
"distinctive obligation[s]" in addition to those established by
statute. 463 U.S. at 225 (citation omitted).
Enactment of the Indian Trust Fund Management Reform
Act in 1994 did not alter the nature or scope of the fiduciary
duties owed by the government to IIM trust beneficiaries.
Rather, by its very terms the 1994 Act identified a portion of
the government's specific obligations and created additional
means to ensure that the obligations would be carried out.
Indeed, the 1994 Act explicitly reaffirmed the Interior Secre-
tary's obligation to fulfill the "trust responsibilities of the
United States." 25 U.S.C. s 1629(d). From this express
language, "we must infer that Congress intended to impose
on trustees traditional fiduciary duties unless Congress has
unequivocally expressed an intent to the contrary." NLRB v.
Amax Coal Co., 453 U.S. 322, 330 (1981).
Section 101 of the 1994 Act states that the Interior Secre-
tary's "proper discharge of the trust responsibilities shall
include (but are not limited to)" eight enumerated actions, 25
U.S.C. s 1629(d) (emphasis added). In other words, the
government has other trust responsibilities not enumerated in
the 1994 Act. See Puerto Rico Mari. Shipping Auth. v. ICC,
645 F.2d 1102, 1112 n.26 (D.C. Cir. 1981) ("It is hornbook law
that the use of the word 'including' indicates that the specified
list ... that follows is illustrative, not exclusive." (citation
omitted)). Moreover, applicable canons of statutory construc-
tion counsel against interpreting a statute creating a new
remedy to eliminate prior remedies and in favor of construing
a statute affecting Indians in a manner favorable to Indians.
See 2B s 50.05 Sutherland, Statutory Construction, at 109
(5th ed. Norman J. Singer ed. 1992); see also Rosebud Sioux
Tribe v. Kneip, 430 U.S. 584 (1977); United States v. Santa
Fe Pacific R.R. Co., 314 U.S. 339 (1941).
Section 101 of the 1994 Act does not create "trust responsi-
bilities of the United States." Rather it lists some of the
means through which the Secretary shall discharge these
preexisting duties. For instance, the first listed duty is
"[p]roviding adequate systems for accounting for and report-
ing trust fund balances." 25 U.S.C. s 162a(d)(1). This would
not be necessary to discharge the government's trust respon-
sibilities were not the government already obliged to account
for and report trust fund balances. Rather than exhaust the
list of duties owed by the federal government to IIM trust
beneficiaries, the 1994 Act clarified and augmented aspects of
the government's preexisting obligations to facilitate their
fulfillment.
This view of the federal government's fiduciary duties is
supported by Mitchell II which held that "a fiduciary rela-
tionship necessarily arises when the government assumes
such elaborate control over ... property belonging to Indi-
ans"--in particular where, as here, "[a]ll of the necessary
elements of a common-law trust are present." 463 U.S. at
225. The general "contours" of the government's obligations
may be defined by statute, but the interstices must be filled
in through reference to general trust law. While Mitchell II
involved a claim for damages, nothing in that decision or
other Indian cases would imply that appellants are not enti-
tled to declaratory or injunctive relief. Such remedies are
the traditional ones for violations of trust duties.
Appellants imply that the district court did not show suffi-
cient deference to their roles as administrative officials
charged with developing and implementing policies and proce-
dures to ensure the discharge of the federal government's
obligations. Appellants thus imply, but do not argue, that
their interpretation of the 1994 Act, and the obligations that it
imposes, is due deference under Chevron U.S.A. Inc. v.
NRDC, 467 U.S. 837 (1984). Assuming that the 1994 Act is
ambiguous, this does not enable the government to escape
liability by interpreting away its fiduciary obligations. While
ordinarily we defer to an agency's interpretations of ambigu-
ous statutes entrusted to it for administration, Chevron defer-
ence is not applicable in this case. The governing canon of
construction requires that "statutes are to be construed lib-
erally in favor of the Indians, with ambiguous provisions
interpreted to their benefit." Montana v. Blackfeet Tribe of
Indians, 471 U.S. 759, 766 (1985). Therefore, even where the
ambiguous statute is one entrusted to an agency, we give the
agency's interpretation "careful consideration" but "we do not
defer to it." Muscogee (Creek) Nation v. Hodel, 851 F.2d
1439, 1445 n.8 (D.C. Cir. 1988). This departure from the
Chevron norm arises from the fact that the rule of liberally
construing statutes to the benefit of the Indians arises not
from ordinary exegesis, but "from principles of equitable
obligations and normative rules of behavior," applicable to the
trust relationship between the United States and the Native
American people. Albuquerque Indian Rights v. Lujan, 930
F.2d 49, 59 (D.C. Cir. 1991); see also County of Oneida v.
Oneida Indian Nation of New York State, 470 U.S. 226, 247-
48 (1985) (Court resolves ambiguity in favor of Indian claims);
Pueblo of Sandia v. Babbitt, 231 F.3d 878, 880 (D.C. Cir.
2000). Thus, even if the statutory language did not make
clear that the government's duties predate and extend beyond
those enumerated in the 1994 Act, the Interior Department
would retain its fiduciary obligations to IIM trust beneficia-
ries.
C. Duty to Account
Holding that appellants' fiduciary duties predate the 1994
Act does not dispose of all their claims. Having determined
the source of appellants' obligations, we must now consider
what those duties entail, at least with respect to the claims at
hand. Specifically, we must consider the nature and extent of
the fiduciary duty to account appellants owe to IIM trust
beneficiaries.
Appellants' challenge focuses on the district court's conclu-
sion that the IIM trust beneficiaries are entitled to a com-
plete historical accounting of their trust accounts. The gov-
ernment maintains that no such right is conferred by the 1994
Act. Rather, the Act delegates responsibility for determining
the nature and scope of an accounting to the Interior Depart-
ment. The accounting required by Section 102 of the Act is
merely a prospective right and, according to appellants, "does
not speak to the extent to which the Secretary must inquire
into the correctness of past transactions." Reply Brief for
Appellants at 17. While appellants concede that "some type
of review of past transactions may indeed be necessary to
accurately state opening balances," this does not mean that
the plaintiffs have a judicially enforceable right to a complete
historical accounting. Id. Even were the plaintiffs entitled
to such an accounting, appellants contend that the Interior
Department, and not the court, would have the authority to
determine the nature and scope of the accounting.
Contrary to appellants' claims, Section 102 of the 1994 Act
makes clear that the Interior Secretary owes IIM trust
beneficiaries an accounting for "all funds held in trust by the
United States for the benefit of an Indian tribe or an individ-
ual Indian which are deposited or invested pursuant to the
Act of June 24, 1938." 25 U.S.C. s 4011(a) (emphasis added).
"All funds" means all funds, irrespective of when they were
deposited (or at least so long as they were deposited after the
Act of June 24, 1938). Therefore, the 1994 Act reaffirms the
government's preexisting fiduciary duty to perform a com-
plete historical accounting of trust fund assets.
Appellants place substantial weight on the fact that Title
III of the 1994 Act instructs the ST to oversee any accounting
or account reconciliation conducted by Interior. Under Sec-
tion 303(b)(2)(A) the ST "shall monitor the reconciliation" of
trust accounts and ensure that there is "a fair and accurate
accounting of all trust accounts." Id. s 4043(b)(2)(A). Fur-
ther, Section 304 of the Act requires the Interior Secretary to
report on any account reconciliation that takes place and what
steps will be taken to resolve disputes over account balances.
Id. s 4044. Section 101 of the Act, on the other hand,
specifies numerous actions that must be taken by the govern-
ment, but does not dictate the nature or scope of any account-
ing. See id. s 162a(d).
Yet Title III of the 1994 Act does not vindicate the govern-
ment's position as these provisions merely detail the oversight
functions of the ST, not the fiduciary responsibilities of the
federal government. The language in Title III, if anything,
supports plaintiffs' claims, as it requires the ST to "ensure"
that BIA "provides the account holders, with a fair and
accurate accounting of all trust accounts." Id. s 4043(b)(2)(A)
(emphasis added). Appellants never explain how one can give
a fair and accurate accounting of all accounts without first
reconciling the accounts, taking into account past deposits,
withdrawals, and accruals. Indeed, the government's own
expert acknowledged that one could not determine an accu-
rate account balance without confirming historical account
balances.
Even were the language of the 1994 Act ambiguous, this
would not redeem appellants' position, as we follow the same
rules of construction with regard to Indian trust expectations
discussed above. Courts "must be guided by that 'eminently
sound and vital canon' that 'statutes passed for the benefit of
Indian tribes ... are to be liberally construed, doubtful
expressions being resolved in favor of the Indians.' " Bryan
v. Itasca County, 426 U.S. 373, 392 (1976) (citations omitted);
see also Alaska Pacific Fisheries v. United States, 248 U.S.
78, 89 (1918) ("[s]tatutes passed for the benefit of dependent
Indian tribes ... are to be liberally construed, doubtful
expressions being resolved in favor of the Indians."); Musco-
gee (Creek) Nation, 851 F.3d at 1445 n.8 (courts should
consider, but not defer, to agency interpretations of statutes
concerning the federal government's obligations to Indians);
Jicarilla, 728 F.2d at 1563 ("[W]henever doubt or ambiguity
exists in federal statutes or regulations, such doubt is re-
solved in favor of the tribes."). Again, as we noted above, the
canon of liberality of construction in favor of the Indians acts
with its "special strength" even where a federal agency would
in other cases enjoy the implied authority to implement
ambiguous statutory language supporting a competing inter-
pretation. Albuquerque Indian Rights, 930 F.2d at 59; see
also Montana v. Blackfeet Tribe of Indians, 471 U.S. 759, 766
(1985) (noting that "the standard principles of statutory con-
struction do not have their usual force in cases involving
Indian law").
Not only does the 1994 Act plainly reaffirm the govern-
ment's preexisting duty to provide an accounting to IIM trust
beneficiaries, but it is plain that such an obligation inheres in
the trust relationship itself. "The obligation of a trustee to
provide an accounting is a fundamental principle governing
the subject of trust administration." White Mountain
Apache Tribe of Arizona v. United States, 26 Cl. Ct. 446, 448
(1992) (citing G.T. Bogert, Trusts s 141, at 494 (6th ed.
1987)).
The 1994 Act requires that the Interior Department per-
form an "adequate" accounting. This indicates that the ac-
counting must be sufficient to serve the purposes for which a
trust accounting is typically conducted. By this standard, the
district court's conclusion that the management of a trust and
rendering of an adequate accounting requires the locating and
retention of records, operational computer systems, and ade-
quate staffing was, in plaintiffs' words, "self-evident." Any-
thing less would produce an inadequate accounting.
This conclusion is reinforced by basic common law trust
principles. It is black-letter trust law that "[a]n accounting
necessarily requires a full disclosure and description of each
item of property constituting the corpus of the trust at its
inception." Engelsmann v. Holekamp, 402 S.W.2d 382, 391
(Mo. 1966); see also Black's Law Dictionary (7th ed. 1999)
(defining accounting as "the report of all items of property,
income, and expenses" prepared by the trustee for the benefi-
ciary). Under traditional equitable trust principles, "[t]he
trustee's report must contain sufficient information for the
beneficiary readily to ascertain whether the trust has been
faithfully carried out." White Mountain Apache Tribe, 26 Cl.
Ct. at 449.
Appellants maintain that even if an accounting is required,
the district court overstepped its bounds by defining the
nature of the accounting required. This argument both mis-
represents the district court's opinion and misconstrues the
relevant trust law principles. The district court made clear
that it was "not ruling upon what specific form of accounting,
if any," is required by the 1994 Act or the government's
preexisting fiduciary obligation. Cobell V, 91 F. Supp. 2d at
40, n.32. Rather, it noted that an accounting is, in fact,
required, and that such an accounting must be "of all money
in the IIM trust held in trust for the benefit of plaintiffs,
without regard to when the funds were deposited." Id. at 58.
The district court explicitly left open the choice of how the
accounting would be conducted, and whether certain account-
ing methods, such as statistical sampling or something else,
would be appropriate. Such decisions are properly left in the
hands of administrative agencies.
Claiming the role of administrator, however, does not ab-
solve the government of its enforceable obligations to the IIM
trust beneficiaries. As noted above, appellants may not
escape from their fiduciary obligations by appealing to their
roles as administrators of a federal program. In those capac-
ities, they are trustee delegates of the federal government
who owe substantial fiduciary duties to IIM trust beneficia-
ries. "If the Secretary is obligated to act as a fiduciary ...
then his actions must not merely meet the minimal require-
ments of administrative law, but must also pass scrutiny
under the more stringent standards demanded of a fiduciary."
Jicarilla, 728 F.2d at 1563.
Appellants also argue that whatever right to an accounting
plaintiffs may have, the district court erred insofar as it
determined that such a right was judicially enforceable. The
only action for an accounting that could be judicially com-
pelled, according to the government, would be an accounting
accompanying an action for money damages in the court of
claims under the Tucker Act. According to appellants,
Mitchell II provides that plaintiffs can seek monetary dam-
ages in a Tucker Act claim, but not declaratory or injunctive
relief because these "prospective equitable remedies are total-
ly inadequate." 463 U.S. at 227. No common law claim for
an accounting is cognizable, and even if it were, such a claim
has been waived by the plaintiffs' failure to file a cross-appeal
on that claim.
Here again, appellants misconstrue the relevant case law.
We have already determined that there is federal jurisdiction
to hear plaintiffs' claims insofar as the federal government
has unreasonably delayed or unlawfully withheld performance
of its trust duties. Federal courts have repeatedly recog-
nized the right of Native Americans to seek relief for breach-
es of fiduciary obligations, including suits for monetary dam-
ages under the Tucker Act where prospective remedies would
be inadequate. Indeed, this is the clear import of Mitchell II.
See 463 U.S. at 226 n.31, 227. "It is fundamental that an
action for accounting is an equitable claim and that courts of
equity have original jurisdiction to compel an accounting."
Klamath and Modoc Tribes v. United States, 174 Ct. Cl. 483,
487 (1966).
This position should not come as a surprise to appellants,
as it has been the official position of the federal government.
In 1996 (prior to the filing of the initial complaint in this case)
the Interior Department's Solicitor issued an opinion that
government trustees have an "affirmative duty ... to make a
full and proper accounting." Nothing in the 1994 Act, nor
any other federal statute, acts to limit or alter this right.
D. Breach
Based upon the foregoing facts and recognition of the
federal government's broad fiduciary obligations to IIM trust
beneficiaries, particularly a duty to render a complete and
accurate historical accounting, the district court found several
specific breaches on the part of appellants. Specifically, the
district court found that a) appellants failed to provide plain-
tiffs with "an accurate accounting of all money in the IIM
trust held in trust for the benefit of plaintiffs, without regard
to when the funds were deposited"; b) appellants in both the
Interior and Treasury Department failed to "retrieve and
retain all information concerning the IIM trust that is neces-
sary to render an accurate accounting" for the trust beneficia-
ries; c) the Interior Secretary and Assistant Secretary failed
to "establish written policies and procedures" for collecting
and retaining necessary documents and information, imple-
menting "computer and business systems architecture neces-
sary" and ensuring sufficient "staffing of trust management
functions" to fulfill such obligations. Cobell V, 91
F. Supp. 2d at 58. As discussed separately below, the court
also found that the Treasury Secretary failed to retain IIM
trust documents necessary for an accurate accounting. Id.
Appellants do not contest the district court's factual find-
ings; appellants have failed to do what the district court
concluded they failed to do. Nor do appellants forcefully
maintain that those steps which they have taken toward
discharging their fiduciary obligations come anywhere close
to those steps necessary to fulfill the obligation to provide an
accounting. Even were these findings challenged, there is
more than enough substantial evidence to support the district
court's findings in this regard.
Appellants do object to the district court's conclusions,
however. Specifically, appellants argue that the district court
found specific breaches of obligations that do not exist. Save
for the first breach listed--that of failing to render an ac-
counting--appellants have a point. While there is a specific
duty to provide a complete accounting, there is no specific
duty to, for example, implement particular policies or retrieve
information either in the 1994 Act or elsewhere. This does
not vindicate appellants' position, however, for while appel-
lants may not have breached a specific duty to perform the
particular tasks identified by the district court, such as imple-
menting a IIM trust management computer system, appel-
lants' failure to take such steps provides ample support for
the district court's ultimate conclusion that appellants have
unreasonably delayed the discharge of their fiduciary obli-
gations to IIM beneficiaries, and that there is little reason to
believe that, absent court intervention, these duties will be
discharged any time soon.
The government's broad duty to provide a complete histori-
cal accounting to IIM beneficiaries necessarily imposes sub-
stantial subsidiary duties on those government officials with
responsibility for ensuring that an accounting can and will
take place. In particular, it imposes obligations on those who
administer the IIM trust lands and funds to, among other
things, maintain and complete existing records, recover miss-
ing records where possible, and develop plans and procedures
sufficient to ensure that all aspects of the accounting process
are carried out. As the district court concluded, this may
well include an obligation to develop or obtain computer
software capable of tracking and reconciling fund data, hire
staff sufficient to execute management duties, and implement
specific plans to ensure that all reasonable efforts are made
to provide the most complete and accurate historical account-
ing of IIM trust funds that is possible. The failure to
implement a computer system is not itself the breach. Rath-
er it is indicative of appellants' failure to discharge their
fiduciary obligations in a reasonably prompt manner. It is
the latter which constitutes the breach.
There are similar problems with some of the district court's
other specific findings of breach. For instance, one provision
in Section 101 of the 1994 Act requires "[e]stablishing consis-
tent, written policies and procedures for trust fund manage-
ment and accounting." 25 U.S.C. s 162a(d)(6). Another
requires the Interior Secretary to provide "adequate staffing
... for trust fund management and accounting." Id.
s 162a(d)(7). The district court concluded that the Depart-
ment of Interior had breached a duty to have "written policies
and procedures for the staffing of trust management func-
tions." Cobell V, 91 F. Supp. 2d at 40. This may technically
overstate the case. There may not literally be a duty to have
such written policies and procedures. Were there a means of
ensuring discharge of appellants' fiduciary obligations absent
such steps, there would be no breach. Nonetheless, though
the failure to take such steps may not constitute a breach, it
surely provides substantial evidence that such a breach has
occurred.
In sum, there are numerous provisions of the 1994 Act
which appellants, by their own stipulation, are unable to meet.
Most significantly, the government cannot provide an ade-
quate accounting or reconciliation and does not provide the
required reports to IIM trust beneficiaries, nor did the
district court find any basis for believing that such obligations
would soon be met. Thus the district court's conclusions that
certain types of policies and plans would be necessary for the
government to discharge its fiduciary obligations are sustain-
able. It is clear that the federal government will be unable to
provide an adequate accounting without computer systems,
staffing, and document retention policies that are adequate
for the task. At the same time, defendants should be afford-
ed sufficient discretion in determining the precise route they
take, so long as this threshold is met. The actual legal
breach is the failure to provide an accounting, not its failure
to take the discrete individual steps that would facilitate an
accounting. Thus, while the district court must amend its
opinion on remand to account for this distinction, there is no
need to alter the district court's order, as the bottom line is
the same: By failing to take reasonable steps toward the
discharge of the federal government's fiduciary obligations to
IIM trust beneficiaries, appellants breached their duties.
E. The Treasury Department
Appellants specifically object to the district court's decision
to award relief against the Treasury Department. Treasury
stipulated it would take actions to preserve trust-related
documents, which the district court acknowledged might "sat-
isfactorily discharge" the Department's duties. Cobell V, 91
F. Supp. 2d at 51. Moreover, appellants argue, there is no
proof that the documents destroyed by the Treasury Depart-
ment included anything "necessary" to render an accounting
of the IIM trust accounts. At a more fundamental level, the
government challenges the court's finding of any breach by
the Treasury Department for failing to retain trust-related
documents. While the 1994 Act does impose obligations upon
the Treasury Department, there are no enumerated docu-
ment retention obligations in the Act. Congress gave no
indication that the government's trust responsibilities re-
quired it to alter the record destruction schedules set for the
Treasury Department by the National Archives and Records
Administration ("NARA").
Appellants have stipulated that the federal government is
the IIM beneficiaries' trustee and that the Treasury Secre-
tary is a trustee-delegate. A trustee is required to preserve
those documents necessary to fulfill the trustee's obligations
to trust beneficiaries. This includes maintaining those docu-
ments that are necessary for an accounting. Therefore,
insofar as the Treasury Department has records and docu-
ments that are necessary to perform an adequate accounting,
the district court was correct in holding that the Department
must maintain these records. The Treasury Department's
failure to maintain such documents is a breach of its fiduciary
duty. The destruction of potentially relevant IIM-related
trust documents that may have been necessary for a complete
accounting is clear evidence that the Department committed
such a breach. See id. at 50 n.35 (citing Pls. Ex. 152,
Treasury Declarations Re: Document Destruction, June 18,
1999).5 As noted above, in the context of Indian trust obli-
gations "the Government, in both its executive and legislative
branches, is held to a high standard of conduct, one consonant
with its 'moral obligations of the highest obligation and
__________
5 The Special Master's Report released after trial, but prior to the
court's decision, detailed additional cases in which Treasury failed
to safeguard documents potentially necessary for an accounting.
trust.' " Jicarilla, 728 F.2d at 1563 (quoting Seminole Na-
tion v. United States, 316 U.S. at 297).
Although the NARA guidelines direct the Treasury Depart-
ment to destroy check records more than six years and seven
months old, this cannot excuse the Treasury Department
from its fiduciary obligations under the 1994 Act. Another
agency's development, in consultation with the Treasury De-
partment, of document retention regulations which allow for
the destruction of trust-related documents cannot relieve the
Treasury Department of its responsibilities. Not only are
NARA's record retention schedules modified regularly to
account to each agency's particular needs at a given point in
time, but NARA typically approves the record retention
schedule proposed by the agency. Thus, there is no basis for
Treasury to contend that it was unable to maintain the
records under federal rules.
F. Relief
Upon concluding that appellants committed several sub-
stantial breaches of their fiduciary obligations to IIM benefi-
ciaries, the district court issued an order to compel those
actions which had been unlawfully withheld or unreasonably
delayed. Specifically, the district court remanded the required
actions to appellants so that they may begin to discharge the
duties found by the court. Furthermore, the court retained
jurisdiction over the matter in order to "ensure that defen-
dants are diligently taking steps to rectify the continuing
breaches of trust." Cobell V, 91 F. Supp. 2d at 58. Finally,
the court ordered that appellants prepare a revised HLIP
and file "quarterly status reports setting forth and explaining
the steps that defendants have taken to rectify the breaches
of trust declared by the court." Id. at 59.
There is no question that appellants have made significant
steps toward the discharge of the federal government's fidu-
ciary obligations. See, e.g., id. at 18 (noting acquisition of
Trust Fund Accounting System (TFAS) software); id. at 20
& n.15 (noting development of high-level records management
plan). The district court, however, as the finder of fact,
heard substantial evidence that these efforts were, at best, a
day late and a dollar short. Thus, while appellants acquired
new computer systems to track trust resources, inadequate
efforts were made to ensure that the data entered into the
new systems would be accurate. See id. at 18-19, 48-49.
The district court reasonably concluded that appellants had
unreasonably delayed the discharge of these duties by failing
to ensure the provision of a complete historical accounting.
As explained in detail above, this court is duly deferential to
the burdens under which administrative agencies must oper-
ate, and recognizes that courts should not disrupt their
timetables and priorities lightly. Nonetheless, there is ample
evidence that appellants unreasonably delayed their actions to
the detriment of IIM beneficiaries, to whom appellants owe
the highest fiduciary obligations.
Appellants maintain that there is no basis in law for the
district court to provide the relief granted in its decision, even
if legal violations of appellants' fiduciary obligations occurred.
Specifically, insofar as plaintiffs sought relief under the APA,
the district court exceeded its power by ordering the Interior
and Treasury Departments to take the specific actions toward
fulfilling their fiduciary obligations. Moreover, insofar as the
court's injunctive commands resemble mandamus, they are
precluded given the lack of a "clear, ministerial duty" that
could be enforced in such a fashion. Appellants' arguments
are unavailing.
Federal courts have repeatedly recognized the right of
Native Americans to seek relief for breaches of fiduciary
obligations, including suits for monetary damages under the
Tucker Act where prospective remedies would be inadequate.
See United States v. Mitchell ("Mitchell II"), 463 U.S. 206,
226 n.31, 227 (1983). "It is fundamental that an action for
accounting is an equitable claim and that courts of equity
have original jurisdiction to compel an accounting." Klamath
and Modoc Tribes v. United States, 174 Ct. Cl. 483, 487
(1966).6
In Mitchell II, the Supreme Court (and the federal govern-
ment) simply assumed that Indian beneficiaries could pursue
__________
6 This is distinct from the question whether the district court can
itself perform the required accounting, as we discuss below.
equitable relief against the government for its breach of
fiduciary duties. At issue was whether beneficiaries could
seek monetary damages where injunctive or declaratory re-
lief would be insufficient. Mitchell II, 463 U.S. at 227.
Indeed, the district court only considered such relief. There-
fore, there is no basis for concluding that plaintiffs are
somehow precluded from seeking an historical accounting,
provided that they can overcome the relevant jurisdictional
requirements discussed below.
More importantly, the district court acted well within its
broad equitable powers in ordering specific relief. "[I]f a
right of action exists to enforce a federal right and Congress
is silent on the question of remedies, a federal court may
order any appropriate relief." Franklin v. Gwinnett County
Public Schools, 503 U.S. 60, 69 (1992) (emphasis added). As
this court has concluded in other contexts, "courts are pre-
sumed to possess the full range of remedial powers--legal as
well as equitable--unless Congress has expressly restricted
their exercise." Crocker v. Piedmont Aviation, Inc., 49 F.3d
735, 749 (D.C. Cir. 1995). This means that the district court
has substantial ability to order that relief which is necessary
to cure the appellants' legal transgressions:
The essence of equity jurisdiction has been the power of
the Chancellor to do equity and to mould each decree to
the necessities of the particular case. Flexibility rather
than rigidity has distinguished it. The qualities of mercy
and practicality have made equity the instrument for nice
adjustment and reconciliation between the public interest
and private needs as well as between competing private
claims.
Hecht Co. v. Bowles, 321 U.S. 321, 329-30 (1944); see also
Brown v. Board of Education ("Brown II"), 349 U.S. 294, 300
(1955) ("Traditionally, equity has been characterized by a
practical flexibility in shaping its remedies and by a facility
for adjusting and reconciling public and private needs."
(footnote omitted)).
"Once a right and a violation have been shown, the scope of
a district court's equitable powers to remedy past wrongs is
broad, for breadth and flexibility are inherent in equitable
remedies." Swann v. Charlotte-Mecklenburg Bd. of Educ.,
402 U.S. 1, 15 (1971). Because the agencies involved delayed
performance of their legal obligations, the court was justified
in fashioning equitable relief that would ensure the vindica-
tion of plaintiffs' rights. That this case involves decades-old
Indian trust funds rather than segregated schools does not
change the nature of the court's remedial powers.
One factor the district court cites in support of its ordered
relief is the government's "historical record of recalcitrance"
in performing its trust duties. Cobell V, 91 F. Supp. 2d at 54.
Additionally, the APA confers authority on the court to order
agency action that has been unlawfully withheld or unreason-
ably delayed. At the same time, the court properly notes
that it "cannot 'become ... enmeshed in the minutiae' of
agency administration." Id. (quoting Bell v. Wolfish, 441
U.S. 520, 562 (1979)). It is proper for a court to allow the
government "the opportunity to cure the breaches of trust
declared" by the court. Id.
The federal government characterizes the ordered relief--
the promulgation of regular reports and updates to the court
while it retains jurisdiction--as excessive interference in the
federal government's administration of the IIM trust. Be-
cause there are no clear, specific "ministerial" duties, the
government contends, there should not be mandatory injunc-
tive relief akin to that provided in a writ of mandamus.
These are sound legal principles. However, the district
court's ordered relief is relatively modest. The government
must develop written policies and procedures, but the court
does not tell the government what these procedures must
entail. This seems consonant with the judicial policy of
granting agencies that have acted in an unlawful manner
"discretion to determine in the first instance," how to bring
themselves into compliance. Global Van Lines, Inc. v. ICC,
804 F.2d 1293, 1305 n.95 (D.C. Cir. 1986). As the district
court noted, in such cases "the proper course is to remand the
case for further agency consideration in harmony with the
court's holding." Cobell V, 91 F. Supp. 2d at 54-55 n.36
(citation omitted).
The level of oversight proposed by the district court may
well be in excess of that countenanced in the typical delay
case, but so too is the magnitude of government malfeasance
and potential prejudice to the plaintiffs' class. Given the
history of destruction of documents and loss of information
necessary to conduct an historical accounting, the failure of
the government to act could place anything approaching an
adequate accounting beyond plaintiffs' reach. This fact, com-
bined with the longstanding inability or unwillingness of
government officials to discharge their fiduciary obligations,
excuse court oversight that might be excessive in an ordinary
case.
The government is correct that the court imposed continual
reporting requirements that may be in excess of that which
would be minimally required to discharge the government's
duties. However, it does not seem that the district court's
remedies are disproportionate to the nature of the govern-
ment's breach. Moreover, while the court should (and did)
remand to the agency for the proper discharge of its obli-
gations, the court should not abdicate its responsibility to
ensure that its instructions are followed. This would seem
particularly appropriate where, as here, there is a record of
agency recalcitrance and resistance to the fulfillment of its
legal duties. See In re Center for Auto Safety, 793 F.2d 1346,
1354 (D.C. Cir. 1986). While a court's retaining of jurisdic-
tion of five years may be unusual, federal courts regularly
retain jurisdiction until a federal agency has complied with its
legal obligations, and have the authority to compel regular
progress reports in the meantime. See, e.g., In re United
Mine Workers of Amer. Int'l Union, 190 F.3d 545, 546 (D.C.
Cir. 1999) (retaining jurisdiction and requiring status reports
pending completion of agency action); Northern States Power
Co. v. U.S. Dep't of Energy, 128 F.3d 754, 760 (D.C. Cir. 1997)
(retaining jurisdiction pending agency's compliance with
court's mandate); Air Line Pilots Ass'n, Int'l v. CAB, 750
F.2d 81, 88-89 (D.C. Cir. 1984) (retaining jurisdiction and
ordering periodic progress reports). Of course, nothing pro-
hibits the appellants from moving for reconsideration should
they be able to demonstrate at some time in the future that
adequate compliance has been achieved.
G. Future Proceedings
This case is on appeal from the first of two trial phases. In
its initial scheduling order of May, 5, 1998, the district court
announced its intention to hold a second phase of the trial for
the purpose of "correcting the accounts." In its opinion, the
district court explained what this entails: "In general terms,
[the second phase] will involve the government bringing
forward its proof on IIM trust balances and then plaintiffs
making exceptions to that proof." Cobell V, 91 F. Supp. 2d at
31. The district court also identified "significant legal issues"
to be resolved in the second phase, such as whether relevant
statutes of limitations preclude some of plaintiffs' claims, the
use of statistical sampling, and the precise scope of the
certified class. Id. at 31 n.22. Presumably, the district court
plans to wait until a proper accounting can be performed, at
which point it will assess appellants' compliance with their
fiduciary obligations.
Although appellants object to the second phase of the trial,
they do so largely on the grounds that IIM beneficiaries have
no judicially enforceable right to an accounting at all--a claim
with which we dispose above. Until the district court has
undertaken the second phase of the trial, and specific objec-
tions to its actions or jurisdiction are brought, it is premature
for this court to rule on the precise scope of the district
court's planned proceedings. Nonetheless, we expect the
district court to be mindful of the limits of its jurisdiction. It
remains to be seen whether in preparing to do an accounting
the Department takes steps so defective that they would
necessarily delay rather than accelerate the ultimate provi-
sion of an adequate accounting, and the detection of such
steps would fit within the court's jurisdiction to monitor the
Department's remedying of the delay; beyond that, supervi-
sion of the Department's conduct in preparing an accounting
may well be beyond the district court's jurisdiction. Again,
however, until these proceedings have begun, and specific
objections are brought, these are questions we cannot ad-
dress.
IV. Conclusion
The Interior Department has failed to discharge the fidu-
ciary duties it owes to IIM beneficiaries for decades. Despite
passage of the 1994 Act, the Department is still unable to
execute the most fundamental of trust duties--an accurate
accounting. While the district court may have mischaracter-
ized some of the government's specific obligations, its broader
conclusion that government officials breached their obli-
gations to IIM beneficiaries is in accordance with the law and
well-supported by the evidentiary record. Therefore, we
affirm the order of the district court and remand the case to
that court for further proceedings.
Cobell, Elouise v. Norton, Gale A.
Court: Court of Appeals for the D.C. Circuit
Date filed: 2001-02-23
Citations: 240 F.3d 1081, 345 U.S. App. D.C. 141
Copy CitationsCombined Opinion