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Wyoming tribes win appeal of breach of trust lawsuit
Thursday, April 8, 2004

A federal appeals court on Wednesday delivered victory to two Wyoming tribes seeking millions of dollars for mismanaged trust assets on their reservation.

The Eastern Shoshone Tribe and the Northern Arapaho Tribe sued the federal government in 1979, alleging numerous breaches of trust. In the part of the case at issue in the appeal, the tribes claim their sand and gravel resources were mishandled and that they didn't receive the best price for them.

The government responded by trying to bar the tribes from seeking money for any claims prior to 1973, citing a six-year statute of limitations based on the date the tribes sued. Government lawyers also sought to restrict the government's liability to trust funds actually collected -- rather than the funds the tribes say the government failed, or delayed, to collect under sand and gravel leases

Both defenses were rejected yesterday in a near-unanimous decision from the Federal Circuit Court of Appeals. A panel of three judges said it was "clear" that Congress intended to allow tribal and individual Indian beneficiaries more time to file mismanagement suits. Language in an appropriations act extends the statue of limitations until an accounting is provided, they concluded.

"This is simple logic - how can a beneficiary be aware of any claims unless and until an accounting has been rendered?" wrote Judge Arthur Gajarsa the majority.

On the issue of funds collected versus those delayed or never collected, the court also ruled for the tribes. Based on the appropriations act, the court identified three types of breaches for which the tribes could collect money, including the government's failure or delay in "(1) collecting payments under the sand and gravel contracts, (2) depositing the collected monies into the tribes' interest-bearing trust accounts, or (3) assessing penalties for late payment."

"[W]e conclude that the act covers any claims that allege the government mismanaged funds after they were collected, as well as any claims that allege the government failed to timely collect amounts due and owing to the tribes under its sand and gravel contracts," the court wrote.

And in yet another victory for the tribes, the court said the government owed the tribes interest on money they should have received under sand and gravel leases. However, one judge dissented on this part and said he did not agree that interest is warranted.

"[I]f funds have not been collected and deposited in a trust account even due to negligence, the United States is not liable for interest on the missing funds," Judge Randall R. Rader wrote. He also wrote that while he agreed with the majority on the statute of limitations issue, he did not agree with the way his colleagues described it

But on the issue of whether the tribes received the highest price for their assets, the judges were in agreement that the Supreme Court's March 2003 decision in the Navajo Nation case was applicable. Based on that decision, the judges said the government doesn't "have a fiduciary or statutory duty to maximize the prices obtained under the leases entered into between the tribes and third parties."

Yesterday's decision appears to be the first time an appeals-level court has ruled on the statute of limitations defense, which the government has raised in several cases. In the Cobell case, the Bush administration sought to limit an accounting based on the date the plaintiffs filed their lawsuit.

Citing the same precedents the Federal Circuit relied on, U.S. District Judge Royce Lamberth rejected the government's motion. The Bush administration is appealing that decision to the D.C. Circuit. Court papers were filed this week.

The Eastern Shoshone Tribe and the Northern Arapaho Tribe share the Wind River Reservation. They are the only federally-recognized tribes in the state.

The Federal Court of Claims continues to hear other parts of their case. Last October, Judge Emily C. Hewitt ruled that the government has a trust responsibility to ensure the timely collection and payment of oil and gas royalties even when tribes take greater control of their affairs.

The same judge also ruled last July that the there was no trust responsibility to "maximize" oil and gas revenues.

Get the Decision:

Relevant Links:
Eastern Shoshone Tribe -
Northern Arapaho Tribe -

Related Stories:
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Judge advances suit over royalty mismanagement (10/03)
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Bush strategy assumes no trust mismanagement (11/05)
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