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Bush administration challenges trust fund ruling
Thursday, September 16, 2004

A panel of federal judges pressed a Bush administration lawyer on Wednesday to explain why they should allow the Interior Department to carry out trust reform absent court oversight.

Mark Stern, a Department of Justice lawyer representing Secretary Gale Norton, sought to raise doubts about a court order requiring an historical accounting of billions in Indian trust funds and an overhaul of the trust system. He charged that U.S. District Judge Royce Lamberth has "transformed" the eight-year-old case beyond its original intent.

"This case cannot be a review of all historical failings," Stern told three judges of the D.C. Circuit Court of Appeals.

But the panel was openly skeptical of Norton's defense on two fronts. First, on a controversial appropriations rider that put a one-year halt to the accounting, and second, on the impact of Lamberth's structural injunction, which is also on hold.

Stern argued that the rider, adopted at the last minute a year ago to give Congress more time to act, was actually designed to give the courts more time. All three judges -- David S. Tatel, David B. Sentelle and Stephen F. Williams -- scoffed at this notion, with Williams saying it "totally baffles me."

Sentelle went further and called the measure "constitutionally suspect" because it purports to tell the courts what to do in an ongoing case. Stern told him the language changed the underlying trust relationship in a way the courts must respect.

"In that context, it's extraordinary," Sentelle responded. In essence, the rider says "the Indians are no longer beneficiaries," he observed.

Sentelle and Tatel also hammered Stern on the injunction, pushing him to explain exactly what was wrong with it. Stern said Lamberth overstepped his jurisdiction by telling the department what to do on a day-to-day basis.

The judges suggested that certain provisions of the injunction, such as providing a list of tribal laws that may be applicable to the trust, weren't as bad as the government has characterized. Sentelle said the reason Lamberth imposed so many requirements was simple.

"They are because the department ... over the term of decades did not do what it was supposed to do," he told Stern.

But Stern said the language in the order showed that Lamberth has already made up his mind about the trust, including how to conduct the accounting. "In the end, I'm going to say we object to everything," he argued.

"You want us to order this case dismissed," Tatel said at another point.

Although they had only allotted 20 minutes for the government's part of the hearing, the judges lobbed questions at Stern for nearly an hour in the packed courtroom. They seemed exhausted by the time they got to the plaintiffs, who were represented by Elliot Levitas, a former U.S. Congressman.

Levitas attacked the rider as "egregiously unconstitutional" because it affects rights already affirmed by the courts. "The right to an accounting is abrogated," he said. "That is a taking of a very valuable property right."

The judges raised their own concerns about the structural injunction with Levitas. They questioned whether allowing the court unfettered access to department documents or barring the use of statistical sampling "interfered" with the Interior Department's management of the trust.

Tatel also noted that Lamberth required compliance with a host of fiduciary duties but didn't make a finding that the department has violated any of them. Sentelle suggested the injunction goes too far in certain aspects.

Levitas responded that Lamberth was within his right to impose reform on the government. "This is a trust case," he said.

The judges gave no indication when they would rule on the matter. The rider expires on December 31 and Stern said he wasn't aware if new language was being considered by lawmakers.

The House passed a version of the Interior appropriations bill that made no mention of the case but the Senate has not yet acted on its version. It is possible the Bush administration may revive the issue before the end of the year. Associate Deputy Secretary Jim Cason attended the hearing yesterday.

Two of the judges on the panel, Sentelle and Williams, were responsible for the February 2001 ruling that upheld the first part of the Cobell case: the right to an accounting. Sentelle wrote the opinion and at times sparred with Stern over the exact wording and meaning.

Relevant Links:
Indian Trust: Cobell v. Norton - http://www.indiantrust.com
Cobell v. Norton, Department of Justice - http://www.usdoj.gov/civil/cases/cobell/index.htm
Indian Trust, Department of Interior - http://www.doi.gov/indiantrust

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