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Appeals court blocks Norton's appeal in trust case
Wednesday, September 10, 2003

A federal appeals court late Tuesday dismissed the Bush administration's second round of appeals in the Indian trust fund lawsuit, cutting short some of the federal government's options in the long-running case.

In a brief order, the D.C. Circuit Court of Appeals threw out the government's challenges with prejudice, meaning they cannot be filed again. Attorneys for Secretary of Interior Gale Norton asked to withdraw the arguments, but had wanted them preserved for a later date.

A three-judge panel also ordered Norton to show cause why a personal appeal, filed by a private law firm whose fees are being reimbursed at taxpayers' expense, should not be dismissed. The court gave her 30 days to respond "in light of the fact that the Department of the Interior's interests are fully represented" by government lawyers on the federal payroll.

The order, released after hours, means oral arguments that were scheduled for January 2004 are canceled. Norton was seeking to overturn two decisions from U.S. District Judge Royce Lamberth that force the government to act more like a private trustee when handling funds belonging to hundreds of thousands of American Indians.

Dennis Gingold, a Washington, D.C., attorney for the plaintiffs, said the move from the appeals court "reinforces the trust" by applying, to the government, what is known in trust law as a fiduciary exception. Normally, the department can cite the attorney-client privilege or the work product doctrine to keep certain matters private during litigation.

But under the fiduciary exception affirmed in the case, Interior can't hide behind lawyers to keep information from Indian beneficiaries, Gingold said. "The books are wide open," he said.

Gingold also said the move has implications for contempt charges that are in dispute. There are enough judges on the D.C. Circuit in disagreement about the case to warrant reconsideration of sanctions, he argued.

"So we think it's a good sign," he said.

In July, a three-judge panel cleared Norton and former Indian affairs aide Neal McCaleb of lying about failed efforts to reform the trust. Three Republican appointees -- Chief Judge Douglas H. Ginsburg, A. Raymond Randolph and Karen Lecraft Henderson -- handled the contempt appeal.

A different panel made of two Republican appointees -- Harry T. Edwards and David B. Sentelle -- and David S. Tatel, a Democrat appointee, was set to hear the fiduciary exception appeal. Sentelle wrote the February 2001 decision that upheld Lamberth's historic ruling in the case.

The split leaves just three active judges with the potential to tip the case against Norton. That can only happen if the court agrees to hear the plaintiffs' motion to rehear the contempt appeal. The court also has three senior judges who don't normally handle cases.

The makeup of the D.C. Circuit has been a key battleground for the Bush administration since early 2001. Democrats blocked a Senate vote on nominee Miguel Estrada, who decided to drop out of consideration last week.

Another nominee, John G. Roberts Jr., has not come up for a vote. Roberts defended the state of Alaska in the historic Venetie Supreme Court case that determined there was no Indian Country in the state.

The Cobell case has been to the appeals court twice since its inception, costing taxpayers millions in the process. According to a Department of Justice disclosure, Norton's lawyer, Herbert Fenster, and his law firm were reimbursed $491,538.63 to argue on her behalf to the D.C. Circuit. Fenster's work largely consisted of a brief that was filed late and didn't play a role in the court's decision.

A Department of Justice spokesperson had no immediate comment on yesterday's order, which was not faxed from the clerk's office until after 6 p.m. A message was left for a Department of Interior spokesperson.

Get the Decision:
Cobell v. Norton (September 9, 2003)

Relevant Links:
Indian Trust: Cobell v. Norton -
Cobell v. Norton, Department of Justice -
Indian Trust, Department of Interior -

Related Stories:
Cobell asks full panel to rehear contempt case (09/03)
Cobell: Taxpayers foot bill for private lawyers (09/01)
Cobell: Delay and deception in trust fund case (09/01)
Trust: 'At least someone is standing up for us' (09/01)
Tally for private attorney fees in Cobell case rises (07/24)
Contempt charges against Interior vacated (7/21)
Commentary: Critics of Cobell, Lamberth shortsighted (7/21)
Neal McCaleb happy court is off his back (7/21)
Editorial: DOI, Congress can't be trusted to do right (7/21)
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Norton cleared of contempt on trust fund (7/18)
Congress hacks Bush's accounting funds (7/16)
Trust fund provision stripped from House bill (7/15)
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Hearsay: House sending message to Lamberth (7/14)
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Editorial: Shame on Bush and Congress for rider (7/10)
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