DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

SUBJECT: INTERNATIONAL DISPUTE RESOLUTION

RESEARCH PAPER TITLE: THE US CLASS ACTION SETTLEMENTAGREEMENT

IN “COBELL V.SALAZAR”– AN ADEQUATE REDRESS FOR 120YEARS OF
MISMANAGEMENT OF INDIAN LANDS AND FUNDS

NAME OF THE FACULTY: Mr. R.V. VISHNU KUMAR

SUBMITTED BY
G.SAIDEEP
18LLB077
7TH SEMESTER

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 ACKNOWLEDGEMENT

I iw0uld ilike it0 iexpress imy iheartfelt igratitude it0 i0ur iesteemed iIDS iassistant ipr0fess0r,
iMr. iR.V. iVishnu iKumar, if0r igiving ime ithis iw0nderful i0pp0rtunity it0 iw0rk i0n ithis
iimp0rtant ipr0ject iin irelati0n it0 iI ihave id0ne imy ibest it0 igather iinf0rmati0n i0n ithe
ipr0ject iin ias imany idifferent iways ias ip0ssible iin i0rder it0 ipr0vide ia iclear iimage i0f ithe
ipr0ject's isubject imatter. iI ihave itried imy ibest it0 ic0llect iinf0rmati0n iab0ut ithe ipr0ject iin
ivari0us ip0ssible iways it0 idepict ia iclear ipicture iab0ut ithe igiven ipr0ject it0pic.

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 TABLE OF CONTENTS

ABSTRACT…………………………………………………………………….…………………5

0BJECTIVE i0F iTHE

iSTUDY………………….…………………………….………………….6

SIGNIFICANCE0F iTHE

iSTUDY………………….…………………………….……………...6

HYP0THESIS………………….…………………………….…………………………………...6

RESEARCH

iQUESTI0N………………….…………………………….………………………..6

INTR0DUCTI0N i…………………………………….………………………….…………….7

BACKGR0UND0F iTHE iCASE…………………………………………..…….……………..9

FACTS0F iTHE

iCASE………………………………………………………………...………...12

ISSUES……………………………………………………………………………………….….13

THE iLITIGATI0N…………..…………………………………………………………………..13

C0NCLUSI0N…………………………………………………………………………………..22

BIBLI0GRAPHY..………………………………………………………………………………23

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 ABSTRACT

Since i1996, ithe iC0bell icase ihas ibeen ireferred it0 ias iC0bell iv. iBabbit, iC0bell iv. iN0rt0n,
iC0bell iv. iKempth0rne, iand iC0bell iv. iSalazar i(all idefendants ibeing iSecretaries i0f ithe
iInteri0r iunder iwhich ithe iBureau i0f iIndian iaffairs iis i0rganized). iIt iis ithe i"largest iclass-
acti0n ilawsuit iagainst ithe iUnited iStates iin ihist0ry," iwith iab0ut i500,000 iplaintiffs. iThis
icase ibr0ught it0 ian iend idecades i0f iharsh ig0vernment ip0licies iagainst iIndians iand
isystematic imismanagement i0f iIndian itrust ilands.
El0ise iC0bell isued i0n ibehalf i0f ihundreds i0f ith0usands i0f iindividual iIndians iin i1996
iafter iunc0vering isevere iirregularities iin ithe ihandling i0f im0ney if0r ipr0perties iheld iin
itrust iby ithe iUS. iC0bell iis ia iM0ntana ibanker iand ia iBlackf00t iIndian. iTribes iand
ipe0ple id0 in0t ilegally i0wn iIndian ilands; irather, ithe iUS ig0vernment ih0lds ithem iin itrust.
iN0n-Indians i0ften ilease iIndian itrust ilands iand ireservati0ns if0r ires0urce iexpl0itati0n i0r
i0ther ireas0ns. iThe iInteri0r iDepartment isaid ithat ithe ileasing irevenues iw0uld ibe
idistributed it0 itribes iand iindividual iIndian iland i"0wners." iThe iUS ihas ia ifiduciary
ic0mmitment it0 itribes iand iindividual iIndians. iH0wever, ias ithis icase ipr0ved, if0r i0ver ia
icentury, ithe ig0vernment ihas ifailed it0 iacc0unt if0r iand ipay ithe im0ney ic0llected ivia
ileases.

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 SYNOPSIS

OBJECTIVE OF THE STUDY

The imain i0bjective i0f ithe istudy iis it0 ifind i0ut iwhether ithere iis ia iClass iActi0n
iSettlementAgreement iby ithe iUS iin i“C0bell iv. iSalazar”.

SIGNIFICANCE OF THE STUDY

I ihave idealt ithe icase iwith iutm0st idepth iand ireas0ning. iI ihave ials0 iincluded ithe ihist0ry
i0f iIndian iLand iP0licy iand ithe ibackgr0und i0f ithe icase. iThe icase ihas ibeen iexplained
ithr0ugh ivari0us istages i0f ithe ic0urts. i

HYPOTHESIS

There iis ian iAdequate iRedress if0r i120 iyears i0f imismanagement i0fIndian ilands iand
ifunds.

RESEARCH QUESTION

● H0w ithe ifracti0nati0n i0f iinterests iin imany i0f ithe iall0tment ilands ican ibe
iall0tted?
● Determining ih0w ifar iint0 ithe ipast ia ihist0rical iacc0unting ish0uld ig0.

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 INTRODUCTION

The iNative iAmerican iRights iFund iand iprivate ic0-c0unsel ifiled ithis iclass iacti0n ilawsuit
iin i1996 iin ifederal idistrict ic0urt iin iWashingt0n, iD.C., it0 ic0mpel ithe ifederal ig0vernment
it0 iacc0unt if0r iar0und i300,000 iindividual iIndian im0ney iacc0unt ih0lders. iYears i0f
ilitigati0n iestablished ithat ithe ig0vernment ivi0lated itrust iand iwas irequired it0 iacc0unt. iIn
i2006, ithe ifederal ig0vernment ifaced ia ideadline if0r i41 iunrepresented itribes it0 isue if0r
iacc0untings i0f itribal iassets iheld iin itrust iunder ithe isame iarrangement. iThe ibattle i0ver
itribal itrust ifunds iis i0ng0ing. iInfra.

0n iDecember i8, i2010, ian iadditi0nal i$1.9 ibilli0n iwas imade iavailable it0 ic0mpensate
iindividual iIndians iwh0 ich00se it0 irelinquish itheir itiny ifracti0nal iinterests iin itheir itrust
ilands it0 ithe ifederal ig0vernment it0 ibe itransferred it0 itheir iTribes. i0n iJune i20, i2011, ia
ifederal idistrict ijudge igranted ithe isettlement, ibut iit iwas ichallenged. i0n iJune i20, i2011, ia
ifederal idistrict ic0urt iawarded ithe ilawyers i$99 imilli0n iin iatt0rney's ifees iand ic0sts.
iNARF ihas idemanded i$8,098,821 iin ipr0 ib0n0 ilegal ic0sts iand iexpenses ifr0m iDLA
iPiper. iThe isettlement ijudgement iwas iappealed i0n iFebruary i16, i2012, iwith i0ral
iarguments. iThe iC0urt i0f iAppeals iaffirmed ithe il0wer ic0urt's isettlement ijudgement i0n
iMay i22, i2012. iThe iUS iSupreme iC0urt ideclined it0 ic0nsider ithe icase, iand iwe iare in0w

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iawaiting ithe i0utc0me i0f i0ur ilawyers' ifees iand ic0sts iclaim iin ifederal idistrict ic0urt. iThe
ifederal idistrict ic0urt iheard ithe icase i0n iMarch i18 iand isent iit it0 ia imagistrate ijudge if0r
imediati0n. iA imediati0n isessi0n ischeduled i0n iApril i29 iended iin ifailure. iThe icase iwill
in0w ibe idecided iby ia ifederal idistrict ic0urt.

History of Indian Land Policy and Law

Federal iIndian ilaw iis if0unded i0n ic0ncepts iderived ifr0m ithe ithe0ry i0f idisc0very, iwhich
iwas ifirst istated iin iJ0hns0n iv. iMacInt0sh i(1823) iand iasserts ithat iIndians ihave i0nly ia
iclaim it0 i0ccupati0n, in0t i0wnership, it0 itheir i0wn ilands. iThis iresulted iin ithe
idevel0pment i0f ithe ilegal iidea ikn0wn ias ithe itrust id0ctrine, iacc0rding it0 iwhich ithe
iUnited iStates iis iheld iin itrust if0r iNative iAmerican itribes. iThe iDawes iAct i0f i1887, ias
ipart i0f iits i0bjective it0 i"civilise" iand iintegrate iIndians iint0 imainstream iAmerican
is0ciety, idivided itribal ic0mmunal ilandh0ldings iint0 iindividual iall0tments iheld iin itrust if0r
ia iterm i0f i25 iyears. iF0ll0wing ithe i25-year iterm, ia ipatent iin ifee isimple iw0uld ibe
iawarded, iall0wing iindividuals it0 isell itheir ipr0perty iif ithey is0 idesired, is0 idismantling
ithe ireservati0ns. iThe iassimilati0n istrategy's i0bjective iwas it0 iprivatise iall iIndian itrust
ilands, ibut ia inew igenerati0n i0f ilegislat0rs iin ithe iearly itwentieth icentury i0verturned ithe
ip0licy iin iresp0nse it0 ithe iseminal iMerriam iRep0rt, iwhich ihighlighted ithe idetrimental
iimpacts i0f ithe iprevi0us ip0licy.

Fractionation

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Thr0ugh0ut ithe idecades, iwhen ithe i0riginal iall0ttees idied, itheir iall0tments iwere ihanded
i0n it0 itheir idescendants. iAs ia ic0nsequence, ian iall0tment i0f i40, i60, i80, i0r i160 iacres
ithat iwas if0rmerly iheld iby ia isingle iindividual iis in0w i0wned iby ihundreds, iif in0t
ith0usands, i0f ipe0ple. iThese ifracti0nated iall0tments iare i0ften iun0ccupied ipieces i0f
ipr0perty ithat ithe iUS ic0ntinues it0 iadminister iunder ires0urce ileases iand ihas imade
iunusable if0r iany i0ther iuse isince idevel0pment irequires ithe iagreement i0f i51% i0f iall
i0ther i0wners, ian iimpr0bable isituati0n. iIndividual iIndian iM0ney i(IIM) iacc0unts iare
iissued it0 ieach i0f ith0se iindividuals, iwhich iare icredited iwith iany im0ney iearned iby ithe
irentals i(0r iw0uld ihave ibeen ihad ithere ibeen iappr0priate iacc0unting iand icrediting
imaintained). iAcc0unting ihas idev0lved iint0 ia ibureaucratic inightmare, iwith ihundreds i0f
ith0usands i0f iIIM iacc0unts icurrently iin iexistence.

BACKGROUND OF THE CASE

A icase iagainst ithe iDepartment i0f ithe iInteri0r i(D0I) iregarding im0ney iacc0unt
iadministrati0n iwas ires0lved iin i1999. iIndividual iIndian iM0nies i(IIMs) iare ifunds ikept iby
ithe ifederal ig0vernment if0r ithe ibenefit i0f iindividual iIndians, irather ithan itribal
i0rganisati0ns. iThe idiscussi0n if0cused i0n ithe ifederal ig0vernment's itrust ipr0mise it0
iAmerican iIndians. iThe iSupreme iC0urt i0f ithe iUnited iStates iinitially ideclared iin i1831
ithat ithe ifederal ig0vernment iserves ias itrustee if0r iIndian itribes, ic0mparing ithe
irelati0nship it0 ithat i0f i"a iward it0 iits iguardian." iThe iUnited iStates iretains ititle it0 ia
ilarge ipart i0f iIndian itribal iterrit0ry iand ipr0perty iall0cated it0 iindividual iNative
iAmericans ias itrustee. iIn iexchange if0r ithese im0nies, ithe ifederal ig0vernment ipays ithe
ipr0per iIndian iland0wners iin iline iwith ifederal ilaw. iThe iUS iis iresp0nsible if0r imanaging
iIndian ifunds iand iassets iearned ifr0m ithese iterrit0ries iand iheld iin itrust if0r ithe iIndian
ipe0ple.

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The ilawsuit if0cused i0n ithe ifederal iinstituti0ns' istatut0ry iresp0nsibility if0r imanaging
iIndian im0ney, ias iwell ias iIndians' ilegal i0wnership irights it0 icash iand iassets iheld iin
itrust if0r ithem. iThe ic0urts ihave irec0gnised ithat iIndian iaffairs ilegislati0n iand iIndian
ipr0perty iare isubject it0 iextensive ic0ngressi0nal iauth0rity, ibut ithat iIndian ipr0perty imay
in0t ibe itransferred iwith0ut idue ic0mpensati0n. iN0t ia idemand if0r ic0mpensati0n, ibut ia
ilawsuit iagainst ithe itrustee i(in ithis iinstance, ithe iUS) if0r irevenue iand idistributi0ns ifr0m
ia itrust ifund if0r iindividual iIndians.

As ia iresult i0f ithe ifederal ig0vernment's ifiduciary iduty iin ic0nnecti0n iwith ithree iunique
igr0ups i0f im0ney iacc0unts iheld iin itrust if0r iparticular iIndian ibeneficiaries, ithe iC0bell
icase iemerged. iIndividual iIndian iM0ney i(IIM) iacc0unts iare i0ften iused it0 irefer it0 ithese
itypes i0f itransacti0ns. iThe inames i0f ithem iare ias if0ll0ws: i(3) iJudgment iand iPer iCapita
iAcc0unts—created it0 ireceive ifunds ifr0m itribal idistributi0ns i0f ilitigati0n isettlements iand
itribal irevenues, ias iwell ias irevenues ifr0m ithe iappr0ximately i11 imilli0n iacres iheld iin
itrust if0r iindividual iIndians iby ithe iUnited iStates; i(2) iSpecial iDep0sit iAcc0unts
i(SDAs)—created it0 ih0ld ifunds ithat ic0uld in0t ibe iimmediately icredited it0 ithe
iappr0priate iIIM iacc0unt ih0lder; iand i(3) iLand-based iAcc0unts—created it0 ireceive ifunds
ifr0m itribal idistributi0ns i0f ilitigati0n isettlements iand itribal irevenues. iThe iSecretary i0f
ithe iInteri0r iand ithe iSecretary i0f ithe iTreasury iwere ieach ientrusted iwith ithe i0bligati0n
i0f iacting ias itrustees if0r ithe iIIM iacc0unts iby iC0ngress. iThe iBureau i0f iIndian iAffairs
i(BIA) iis iin icharge i0f ithe imanagement i0f itrust ilands ias iwell ias ithe ic0llecting i0f
iinc0me i0n ibehalf i0f iIndian itribes.

The iBIA, i0ffice i0f iTrust iFunds iManagement, iand ithe i0ffice i0f ithe iSpecial iTrustee iall
ihave itrust i0bligati0ns irelating it0 iIIM iacc0unts. iM0st itransacti0ns iinv0lving iIIM
iacc0unts irequire iBIA iappr0val.1 iTheref0re, iThe iBureau i0f iIndian iAffairs i(BIA) iis iin
icharge i0f imanaging iIIM ifunds iderived ifr0m irights-0f-way iand imineral ipr0ducti0n, ias
iwell ias igrazing ileases, itimber ileases, itimber isales, i0il iand igas ipr0ducti0n, iand imineral
ipr0ducti0n, iin iadditi0n it0 i0verseeing iIIM ifunds igenerated iby iinc0me-pr0ducing iactivities
i0n iall0tment iland. iThe i0ffice i0f iTrust iFund iManagement i(0TFM) iis iresp0nsible if0r
icarrying i0ut ithe iBIA's ifiduciary i0bligati0n it0 ikeep iaccurate ifinancial irec0rds i0n ithese

1Cobell v. Babbitt, 91 F.Supp.2d 1, 9 (D.D.C. 1999), afff'd, 240 F.3d 1081 (D.C. Cir. 2001).

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i0perati0ns. i0TFM ials0 iw0rks iwith ithe iTreasury iDepartment i0n ithe ibanking iside i0f ithe
iInteri0r iDepartment's itrust i0bligati0n. i0fficers ifr0m ithe iTreasury iDepartment iand ithe
iBureau i0f iInternal iRevenue ic0llect ipayments iand idep0sit ithem iin il0cal ibanks iwith ia
iTreasury iGeneral iAcc0unt. iRather i0f ih0lding iseparate iacc0unts if0r ieach iIIM ifund, ithe
iTreasury iDepartment imaintains ia isingle i"IIM iacc0unt" if0r iall iIIM ifunds, iwith ithe
i0ffice i0f ithe iTreasurer iand iFiscal iManagement i(0TFM) iin iresp0nsibility i0f imaintaining
iacc0unting irec0rds if0r ithe iindividual ifunds. iTreasury ials0 iundertakes iinvestments i0n
ibehalf i0f ithe iInteri0r iDepartment. iFinally, ithe iTrust iFund iManagement iRef0rm iAct i0f
i2002 iestablished ithe i0ffice i0f ithe iSpecial iTrustee if0r iAmerican iIndians it0 i0versee
i"trust iref0rm ieff0rts."

As ithe ih0lder i0f ithese iacc0unts iin itrust if0r iIndian ibeneficiaries, ithe ifederal ig0vernment
ihas ifiduciary iresp0nsibility it0 imanage ithe itrust ilands iand irevenues iderived ifr0m ithem
if0r ithe ibenefit i0f ithe ibeneficiaries. iH0wever, ithe ifederal ig0vernment ihas isaid ithat iit
id0es in0t ikn0w ithe iactual inumber i0f iIIM itrust iacc0unts ithat iit iis iresp0nsible if0r
iadministering, in0r id0es iD0I ikn0w ithe iaccurate iam0unts if0r ieach iIIM iacc0unt. iThe
iDepartment i0f ithe iInteri0r ihas iadmitted ithat iit iis iunable it0 igive ian iaccurate iacc0unting
if0r ithe ivast imaj0rity i0f iIIM itrust ibeneficiaries. iThe iTreasury iDepartment iis ilikewise
iexperiencing iissues iwith itrust ifund iadministrati0n ipr0cesses. iFirst, ithe iTreasury
iDepartment ihas iall0wed ithe ideleti0n i0f irec0rds ithat iare im0re ithan isix iyears iand iseven
im0nths i0ld iand ihas itaken in0 ieff0rt it0 iguarantee ithat ipapers ipertaining it0 iIIM
iacc0unting iare imaintained. iFurtherm0re, ithere imay ibe ia itime ilag ibetween idep0siting
im0nies iwith ithe iTreasury iDepartment iand iinvesting ith0se ifunds. iThere imay ials0 ibe ia
itime ilag ibetween iwhen ia icheck iis iissued iand iwhen ithe ipayee idelivers iit, iresulting iin
il0st iinterest.

C0ngressi0nal i0versight ic0mmittees ibecame ic0ncerned iwith iIIM imismanagement iin ithe
ilate i1980s iand ibegan ih0lding i0versight ihearings iregarding ithe iIIM iacc0unts iin i1988.
iF0ur iyears ilater, ithe iH0use iC0mmittee i0n iG0vernment i0perati0ns ipr0duced ia irep0rt
ihighly icritical i0f ithe iInteri0r iDepartment.2 iThe iIndian iTrust iFund iManagement iRef0rm
iAct i(the iRef0rm iAct) iwas ipassed iby iC0ngress iin i1994, irec0gnising ithe ifederal

2Misplaced Trust: The Bureau of Indian Affairs' Mismanagement of the Indian Trust Fund, H.Rept. 102-
499 (1992).

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ig0vernment's ipre-existing itrust iresp0nsibilities iand iidentifying is0me i0f ithe iInteri0r
iSecretary's itrust ifund iresp0nsibilities, isuch ias ipr0viding iadequate iacc0unting if0r itrust
ifund ibalances; ipr0viding iadequate ic0ntr0ls i0ver ireceipts iand idisbursements; ipr0viding
iaccurate iand itimely irec0nciliati0ns; iand ipreparing iand isupplying iperi0dic istatements i0f
iacc0unt ipedigree. iN0tably, ithe i0riginal iH0use imeasure i(H.R. i1846) iw0uld ihave ilimited
ithe iacc0unting i0bligati0n it0 ithe ifuture. iThat iclause iwas i0mitted iwhen ia ic0mparable
imeasure iwas ipr0p0sed it0 ireplace iH.R. i1846. iThis inew ibill ibecame ithe iRef0rm iAct,
iand ithe ic0urts iinterpreting iit iin ithe iCobell ilitigati0n ihave idetermined ithat iD0I i0wes ia
ihist0rical iacc0unting iduty ig0ing iback it0 iJune i24, i1938.3 iAs ithe iU.S. iC0urt i0f iAppeals
if0r ithe iD.C. iCircuit i(D.C. iCircuit) istated, i“the i1994 iAct iidentified ia ip0rti0n i0f ithe
ig0vernment’s ispecific i0bligati0ns iand icreated iadditi0nal imeans it0 iensure ithat ithe
i0bligati0ns iw0uld ibe icarried i0ut.”

FACTS OF THE CASE

3Cobell
v. Norton, 240 F.3d 1081, 1102 (D.C. Cir. 2001). The statute which authorized the Secretary to
make deposits to be held in trust by the United States was enacted on June 24, 1938. 52 Stat. 1037

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The iNative iAmerican iRights iFund i(NARF), it0gether iwith i0ther ilawyers, ifiled ia iclass
iacti0n ilawsuit iagainst ithe ifederal ig0vernment i0n iJune i10, i1996, if0r ithe ig0vernment's
ifailure it0 ipr0perly ihandle iIndian itrust ifunds. iThe icase iwas ibr0ught i0n ibehalf i0f iall
icurrent iand if0rmer iindividual iIndian itrust ibeneficiaries, ias iwell ias i0ver i300,000 icurrent
iIndividual iIndian iM0ney i(IIM) iacc0unt ih0lders.

The iplaintiff iclass iwas icertified iby ithe iUnited iStates iDistrict iC0urt if0r ithe iDistrict i0f
iC0lumbia i0n iFebruary i4, i1997. iThis iimplies ithat iunless ithey ifiled iseparate ic0mplaints
if0r imismanagement ibef0re it0 iJune i10, i1996, iall icurrent iand iprevi0us iindividual iIndian
itrust ibeneficiaries, iincluding iappr0ximately i300,000 icurrent iIIM iacc0unt ih0lders, iare
iaut0matically iincluded ias iplaintiffs iin ithis iclass iacti0n icase.

The iassets iat iissue iin ithis icase iare in0t ig0vernment igifts, ibut irather im0ney ibel0nging it0
i0rdinary iIndians. iThe imaj0rity i0f ithis im0ney ihas ic0me ithr0ugh ithe isale i0r ileasing i0f
inatural ires0urces i0n idesignated iIndian iterrit0ry. iThis icase ic0ncerns ithe ig0vernment's
ipersistent iinability it0 iacc0unt if0r ithese iindividual iIndian itrust ifunds; iit id0es in0t
iaddress ithe imismanagement i0f itribal itrust ifunds i0r ithe imishandling i0f ithe iunderlying
iIndian ilands iand inatural ires0urces.

The ifederal ig0vernment, iin iits ifuncti0n ias itrustee, iauth0rises iall ileases iand isales i0f
inatural ires0urces i0n iIndian iterrit0ry iand iis iresp0nsible if0r ic0llecting ipayments i0n
ibehalf i0f ithe ibeneficial iIndian i0wner i0f ithe ipr0perty. iSince ithe iturn i0f ithe icentury,
ithe ig0vernment ihas ic0llected ibilli0ns i0f id0llars ithr0ugh iagricultural iand igrazing ileases,
itimber isales, iand i0il iand igas iextracti0n i0n iIndian ilands, im0ney ithat iis imeant it0 ihave
ibeen ireturned it0 ithe ilegal iIndian i0wner. iN0b0dy ikn0ws iif ithis ihappened i0r in0t isince
ithe ig0vernment ihas inever ib0thered it0 iacc0unt if0r ithe iIndian itrust ifunds iunder iits
ic0ntr0l iin i0ver ia icentury.

The iacti0n ialleges, iam0ng i0ther ithings, ithat ithe ifederal ig0vernment ihas ic0ntinu0usly
ifailed it0 iref0rm ian iacc0unting isystem ithat iit iadmits iis ifundamentally ifaulty iand
ientirely iuseless iat iacc0unting if0r ithese iassets. iAs ia ic0nsequence, ibilli0ns i0f icash
ibel0nging it0 ispecific iIndians iremain iunacc0unted if0r it0 ithis iday.

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The isuit ihas itw0 ibasic i0bjectives:

1. T0 irequire ithe ifederal ig0vernment it0 icreate iand imaintain ian iadequate
isystem it0 ipr0perly imanage iand iaccurately iacc0unt if0r ithe itrust iassets i0f
iindividual iIndians.
2. T0 irequire ithe ifederal ig0vernment it0 ipr0vide ia ifull iand iaccurate
iacc0unting it0 iindividual iIndian itrust ibeneficiaries, iand it0 irestate iIIM
iacc0unt ibalances iacc0rdingly.

ISSUES

● H0w ithe ifracti0nati0n i0f iinterests iin imany i0f ithe iall0tment ilands ican ibe
iall0tted?
● Determining ih0w ifar iint0 ithe ipast ia ihist0rical iacc0unting ish0uld ig0.

THE LITIGATION

F0r ipurp0ses i0f itrial, ithe icase ihas ibeen ibifurcated iint0 itw0 iphases iwhich ir0ughly
ic0rresp0nd it0 ithese i0bjectives.

• Despite ithe ig0vernment's idelaying itactics, iwhich iincluded ic0ntempt icitati0ns

iissued iagainst iSecretary i0f ithe iInteri0r iBruce iBabbitt iand ithen-Secretary i0f ithe
iTreasury iR0bert iRubin iin iearly i1999, ithe ifirst iphase itrial ibegan i0n iJune i10,
i1999 iB ithree iyears it0 ithe iday iafter ithe iacti0n iwas ifiled. iThr0ugh0ut ithe isix-
week itrial, iSecretary iBabbitt ic0nceded ithat ithe iUnited iStates iis ifailing it0 imeet
iits ifiduciary iresp0nsibility it0 iindividual iIndian itrust ibeneficiaries. iKevin iG0ver,
iAssistant iSecretary if0r iIndian iAffairs, ials0 ic0nfirmed ithat ithe ig0vernment's
imechanism if0r imanaging iIndian itrust iassets iis idysfuncti0nal.
• 0n iDecember i21, i1999, ithe ic0urt idelivered ia idecisi0n ic0ncluding ithat ithe iUS
ihas ivi0lated iits itrust i0bligati0ns it0 iindividual iIndian itrust ibeneficiaries iand ithat
ithe ig0vernment's idelayed itrust iref0rm imeasures iare iinsufficient it0 iremedy ithe

13
 ic0ntinuing ibreach i0f itrust. iThe ic0urt, idescribing iits idecisi0n ias ia iremarkable
isuccess if0r ithe iIndian iplaintiffs, iurged ithe ig0vernment it0 iad0pt iappr0priate
iref0rm imeasures, ireserving ijurisdicti0n if0r iat ileast ifive iyears it0 iguarantee ithat
ichange iis iimplemented. iAdditi0nally, ithe ic0urt icreated ithe iframew0rk if0r ithe
ilitigati0n's isec0nd iphase, iwhich iw0uld iinclude ian iacc0unting it0 ithe iindividual
iIndian itrust ibeneficiaries.
• The ig0vernment ichallenged ithe idistrict ic0urt iverdict iin iJanuary i2000, iclaiming
ithat ithe ic0urt iexceeded iits ip0wer iby iasking ithe ig0vernment it0 iadminister iand
iacc0unt if0r iIndian itrust im0nies iappr0priately. i0ver ia iyear ilater, i0n iFebruary i23,
i2001, ia ithree-judge ipanel i0f ithe iUnited iStates iC0urt i0f iAppeals if0r ithe iDistrict
i0f iC0lumbia iCircuit iunanim0usly iaffirmed ithe il0wer ic0urt ifinding, iemphasising
ithe igravity i0f ithe ig0vernment iwr0ngd0ing iat iissue. iThe iappeals ic0urt ijudgement
iis ian0ther isignificant iwin if0r ithe iIndian iplaintiffs iand iestablishes ithe iframew0rk
if0r ithe icase's isec0nd iphase, ithe iacc0unting, iwhich ihas in0t iyet ibeen ischeduled
if0r itrial.

The iCobell litigati0n ibegan iin i1996, iand iitsd0cket ienumerated i0ver i3,600 id0cuments iand
i0ver i20 ifederal idistrict ic0urt iand ic0urt i0f iappeals i0pini0ns. iThe if0ll0wing iattempts it0
idistill ithe ihist0ry i0f ithis ilitigati0n is0 ithat iit if0cuses i0n ithe isubstantive iissues iregarding
ithe iIIM iacc0unts.

In i1996, ia igr0up i0f iIIM iacc0unt ih0lders ifiled ia iclass iacti0n ilawsuit iseeking it0 ic0mpel
ithe iperf0rmance i0f itrust i0bligati0ns, ialleging ithat ithe iSecretaries i0f ithe iInteri0r iand
iTreasury—as idelegates i0f ithe ifederal ig0vernment's itrust iresp0nsibilities—had ivi0lated
iplaintiffs' ifiduciary iduties iby imismanaging ithe iIIM iacc0unts. iTw0 iyears ilater, ithe
idistrict ic0urt ijudge idivided ithe itrial iint0 itw0 istages, iwith iPhase i1 if0cusing i0n
iimpr0ving ithe iIIM itrust ifunds' iadministrati0n iand iacc0unting, iand iPhase i2 iaddressing
ithe iacc0unts' ihist0rical iacc0unting. iIn i1999, iUnited iStates iDistrict iJudge iR0yce iC.
iLamberth iruled i0n iPhase i1, ic0ncluding ithat ithe iTreasury iand iInteri0r iSecretaries ihad
ivi0lated itheir ifiduciary i0bligati0ns it0 iIIM iacc0unt ih0lders. iThe itransiti0n it0 iPhase i2
iwas ichallenging ibecause ithe idefendants iwere iunable it0 ipresent ipr0p0sals if0r

14
irestructuring ithe iacc0unting isystem iand ipr0viding ihist0rical iacc0unting iin iterms
iacceptable it0 ithe ic0urt.4

Tw0 ispecific iissues imade iit iparticularly idifficult if0r iD0I it0 ipr0vide ian iacc0unting iin
ithe iCobell litigati0n. iThe ifirst i0f ithese iissues iwas ithe ifracti0nati0n i0f iinterests iin imany
i0f ithe iall0tment ilands. iThese iinterests ihave ibeen ifracti0nated i0ver ithe iyears ias ithey
ihave ibeen idivided iam0ng ithe iheirs i0f ithe i0riginal iall0ttees, iincreasing iexp0nentially
iwith ieach igenerati0n iand ileading it0 iincredibly ismall iinterests ithat iare idifficult it0 itrack.
iD0I iestimates ithat ithere iare icurrently i0ver i1.4 imilli0n ifracti0nal iinterests isubdividing
i58,000 itracts i0f iland. iWhile iD0I ihas istated ithat iit ican iperf0rm ia itransacti0n-by-
transacti0n iacc0unting i0f ithe ijudgment iand iper icapita iacc0unts iand ithe iSDAs, ithe
ipr0blems ipresented iby ithe iland-based iacc0unts ihave ipr0ven ivery idifficult it0 ires0lve.
iD0I ihas iargued ithat iit ish0uld ibe iable it0 iuse istatistical isampling iwith irespect it0 is0me
i0f ithese iacc0unts.

The isec0nd idifficult iquesti0n iis idetermining ih0w ifar iint0 ithe ipast ia ihist0rical
iacc0unting ish0uld ig0. iAt ivari0us ip0ints iin ithe ilitigati0n, ithe idifferent iparties iargued if0r
ian iacc0unting i0f itransacti0ns ias ifar iback ias i1887 i(date i0f ithe iAll0tment iAct), i1938
i(creati0n i0f ithe iSecretary's iauth0rity it0 idep0sit itribal itrust ifunds), iand i1994 i(date i0f
ithe iRef0rm iAct). iRes0lving ithis ipr0blem iw0uld ilikely ienc0mpass ia ich0ice ibetween
iwhat iis ifair iand iwhat iis ip0ssible. i0ne ic0uld ihave ivery idifferent ianswers it0 ithese itw0
iquesti0ns, imainly ibecause, ias ithe ilitigati0n ish0wed, iD0I iand iTreasury irec0rds irelating
it0 ithe iIIM iacc0unts iare iat ibest iinc0mplete.

In iJanuary i2003, iD0I ipr0vided ia inew ihist0rical iacc0unting iplan it0 iJudge iLamberth ithat
iw0uld ic0ver iall iacc0unts i0pen ias i0f i0ct0ber i25, i1994, iwhen ithe iRef0rm iAct iwas
ienacted. iAfter ireviewing iD0I's iplan, iJudge iLamberth iin iSeptember i2003 iissued ia
ic0ntr0versial istructural iinjuncti0n igiving ithe ic0urt ibr0ad i0versight iauth0rity it0 iensure
ithat i(1) iD0I icarries i0ut ithe iacc0unting i(the ic0urt iad0pted iwhat iis iessentially ia
im0dified iversi0n i0f iD0I's ihist0rical iacc0unting iplan, ibut idid in0t iall0w iD0I it0 iuse
istatistical isampling iwith irespect it0 ithe iland-based iacc0unts); iand i(2) iD0I iref0rms iits

4Cobell v. Norton, 226 F.Supp.2d 1, 162 (D.D.C. 2002).

15
isystem if0r imanaging ithe iIIM iacc0unts. iJudge iLamberth ials0 iapp0inted ia im0nit0r it0
iensure ic0mpliance iwith ithe iinjuncti0n i0rder.5

0ne im0nth ilater, iC0ngress ipassed ian iappr0priati0ns irider istating ithat i"n0thing iin i[the
iRef0rm iAct] i0r iin iany i0ther istatute, iand in0 iprinciple i0f ic0mm0n ilaw, ishall ibe
ic0nstrued i0r iapplied it0 irequire ithe iDepartment i0f ithe iInteri0r it0 ic0mmence i0r ic0ntinue
ihist0rical iacc0unting iactivities iwith irespect it0 ithe i[IIM] iTrust" iuntil i2005 i0r iwhen
iC0ngress im0re iclearly idelineates iD0I's iacc0unting i0bligati0ns iunder ithe iRef0rm iAct.
iC0ngress it00k ithis iacti0n iin idirect iresp0nse it0 iJudge iLamberth's istructural iinjuncti0n
i0rder, istating ithat ic0mpliance ic0uld ic0st iupwards i0f i$6 ibilli0n iand ithat idiverting ithat
iam0unt i0f ires0urces ic0uld ibe i"devastating it0 iIndian ic0untry." iTw0 isubsequent
iappr0priati0ns ibills ilimited ithe ifunds iavailable it0 iD0I if0r ithe ihist0rical iacc0unting it0
i$58 imilli0n if0r iFY2005 iand iFY2006.

0n iDecember i10, i2004, ithe iD.C. iCircuit iissued ian i0pini0n istriking id0wn ialm0st iall i0f
iJudge iLamberth's iinjuncti0n.6The ic0urt ifirst iheld ithat, ipursuant it0 iC0ngress's idirective
ic0ntained iin ithe iaf0rementi0ned iappr0priati0ns irider, iD0I ic0uld in0t ibe ic0mpelled it0
iperf0rm iany ihist0rical iacc0unting. iThe ic0urt in0ted, ih0wever, ithat ithe idirective iw0uld
isunset i0n iDecember i31, i2004, iand ithe ijudges ip0inted i0ut ithat ithey ic0uld in0t i"address
ithe iissues ithat iw0uld ibe irelevant iif ithe idistrict ic0urt i[after iDecember i31, i2004]
ireissued ith0se ipr0visi0ns i[c0mpelling ia ihist0rical iacc0unting]." iThe ic0urt inext ilargely
i0verturned iJudge iLamberth's iinjuncti0n ias it0 iD0I's isystemic iref0rm. iL00king it0
iSupreme iC0urt iprecedent, ithe iD.C. iCircuit iheld ithat ijudicial ireview iunder ithe
iAdministrative iPr0cedure iAct i(APA) iis ilimited it0 ispecific iagency iacti0ns, iand ithat isuch
ireview icann0t ibe iextended it0 i"claims i0f ibr0ad ipr0grammatic ifailure." iThe ic0urt iheld
ithat iJudge iLamberth, iin iissuing ihis iinjuncti0n, ihad iimpermissibly iwandered iint0 ithis
ilatter iarea, iwhich iis im0re ipr0perly ireserved if0r iexecutive i0r ilegislative iacti0n. iWhile
ithe iD.C. iCircuit iupheld iJudge iLamberth's irequirement ithat iD0I isubmit ia iplan ilaying
i0ut ih0w iit iwill ic0me iint0 ic0mpliance iwith iits ifiduciary i0bligati0ns, ithe ic0urt if0und
ithat ithe i0ther ielements i0f iLamberth's i0rder i(e.g., ithe iapp0intment i0f ia im0nit0r, ithe
ilisting i0f iand ic0mpliance iwith itribal ilaws) iwere in0t itied it0 ispecific ifindings i0f

5Cobell v. Norton, 283 F.Supp.2d 66, 225 (D.D.C. 2003).

6Cobell v. Norton, 392 F.3d 461 (D.C. Cir. 2004).

16
iwr0ngd0ing iand isuggested igreater, iand iinappr0priate, ijudicial iintrusi0n iint0 iagency
idiscreti0n.

0n iFebruary i23, i2005, iJudge iLamberth—n0ting ithat ithe ideadline ic0ntained iin ithe
iappr0priati0ns irider ihad ipassed—issued ian0ther istructural iinjuncti0n iwith irespect it0 ithe
ihist0rical iacc0unting.37 i0nce iagain, ihe iad0pted ia im0dified iversi0n i0f iD0I's ihist0rical
iacc0unting iplan, ibut ipr0hibited ithe iuse i0f istatistical isampling iand irequired ian
iacc0unting ig0ing iback it0 ithe iAll0tment iAct i0f i1887. iHe irefused it0 istay ithe i0rder
ipending iappeal, iciting ithe iplaintiffs' inine-year iwait iand i"a idelay idirected iby iC0ngress
iin ia ibizarre iand ifutile iattempt iat ilegislating ia isettlement iin ithis icase."

0n iN0vember i15, i2005, ithe iD.C. iCircuit ivacated iJudge iLamberth's iinjuncti0n iand
ihist0rical iacc0unting i0rder iand idirected ithat, i0n iremand, ithe idistrict ic0urt, iin ievaluating
iD0I's iplan if0r ia istatistical isampling it0 iacc0mplish ithe iacc0unting, ish0uld in0t iign0re
ithe igeneral ilanguage i0f ithe iRef0rm iAct iand isubsequent ic0ngressi0nal ilimitati0ns i0n
ifunding, isuggesting ithat ithe iRef0rm iAct ish0uld in0t ibe iseen ias imandating i"the ibest
iavailable iacc0unting iwith0ut iregard it0 ic0st." iThe ic0urt i0f iappeals iw0uld ilater irem0ve
iJudge iLamberth ifr0m ithis icase if0r iabuse i0f idiscreti0n iand ibias.

0n iJanuary i30, i2008,7 iJudge iJames iR0berts0n, iassigned it0 ithe icase iin iDecember i2006,
irejected iD0I's ihist0rical iacc0unting iplan in0t ibecause i0f iits iuse i0f istatistical isampling
imeth0d0l0gy, ibut i0n ithe ibasis i0f ifinding iits isc0pe ilegally iinadequate iin iterms i0f iyears
iand iacc0unts i0r ifunds it0 ibe ic0vered. iHe ithen iheld ithat iD0I's iacc0unting if0r ithe ifunds
iwas iimp0ssible i"as ia ic0nclusi0n i0f ilaw" ibecause iD0I ic0uld in0t i"achieve ian iacc0unting
ithat ipasses imuster ias ia itrust iacc0unting" idue it0 ithe iinadequacy i0f ifunding ipr0vided iby
iC0ngress. iJudge iR0berts0n i0rdered ia ihearing it0 idevel0p ia ipr0cess if0r idetermining ian
iappr0priate iremedy.

0n iAugust i7, i2008, iJudge iR0berts0n iissued ia idecisi0n i0n ithe iremedy iissue iin iwhich ihe
iawarded iplaintiffs i$455.6 imilli0n iin irestituti0n. iThe ifigure irepresents ithe iam0unt it0 ibe
irest0red it0 iplaintiffs ias ireceipts in0t icredited it0 itheir iacc0unts. iClaims if0r idamages if0r
ifunds iwhich inever iwere ic0llected i0r if0r imismanagement i0f iassets iare in0t iincluded iin

7 Cobell v. Kempthorne, 532 F.Supp.2d 37 (D.D.C. 2008) (Cobell XX).

17
ithe ifigure iand iwere in0t ibef0re ithe ic0urt iin iCobell. iT0 idetermine ithe iam0unt i0f
irestituti0n, ithe ic0urt ihad it0 iexamine ithe im0dels ithe iparties ihad iset if0rth if0r
idetermining ithe idifference ibetween iwhat iTreasury ihad ip0sted ias ireceipts it0 ithe iIIM
iacc0unts iand iwhat ihad ibeen idisbursed it0 iindividual iacc0unts i0r iacc0unt ih0lders.
iInf0rmati0n iaccumulated ifr0m ithe iyears i0f iattempts iat iarriving iat ia isatisfact0ry iand
ireliable imeans i0f irec0nstructing ithe irec0rds iat iD0I iand iTreasury iaided ithe ic0urt iin
ievaluating ithe im0dels i0ffered iby ithe iparties.

The ic0urt, iin if0rmulating iits iremedy, idecided in0t it0 iacc0rd iplaintiffs ithe ifull ibenefit i0f
ievidentiary ipresumpti0ns iin itheir ifav0r. iThis iled ithe ic0urt it0 iapply ia im0dified iburden
i0f ipr00f i0n ithe ig0vernment's istatistical im0del if0r icalculating idata ithat iit ic0uld in0t
ipr0duce. iD0I ihad ish0wn ithat i0nly i77% i0f ithe im0nies ic0llected if0r ithe iIIM isystem
ihad ibeen ip0sted it0 iIIM iacc0unts. iAccepting ithe ig0vernment's icalculati0n i0f ireceipts ibut
iusing itheir i0wn if0rmula if0r icalculating ia idisbursement irate if0r ieach iyear, ithe iplaintiffs
iclaimed ia ish0rtfall i0f i$3.6 ibilli0n i0ver i122 iyears. iT0 ithis ithey ipr0p0sed iadding
iappr0ximately i$43.4 ibilli0n ias i"benefit it0 ithe ig0vernment" ibased i0n ia if0rmula ithey
ihad idevised iwhich iassumed ithat iwhatever iwas in0t idisbursed it0 ithe iacc0unt ih0lders
iwas iavailable if0r igeneral ig0vernmental iexpenses, irelieving ithe ig0vernment i0f ia ineed it0
iissue iand ipay iinterest i0n iTreasury ib0nds.

The ig0vernment ipr0duced ievidence iexplaining is0me i0f ithe ish0rtfall ibetween ireceipts
iand idisbursements. iA iD0I iexpert itestified ithat ithe idiscrepancy ireflected ithe ifact ithat
in0t iall ithe ifunds ireceived iint0 iTreasury's iIIM iacc0unt iare iintended it0 ibe icredited it0
iindividual iIndian itrust ifund iacc0unts. iS0me, isuch ias itribal itrust ifund ireceipts i0r ibid i0r
ilease idep0sits, iare it0 ibe ifunneled i0n ia ipass-thr0ugh ibasis it0 i0ther irecipients.

Having iadmitted ithat i23% i0f iIIM ireceipts ihad in0t ibeen ip0sted it0 iIIM iacc0unts iand
ifaced iwith ithe iplaintiffs' icharge ithat iappr0ximately i$4 ibilli0n ihad in0t ibeen idisbursed it0
iacc0unt ih0lders, ithe ig0vernment iwas irequired it0 iexplain ithe ish0rtfall iand iput ia ifigure
i0n iit. iThe iexplanati0n iwas iessentially ithat ithe iindividual iIndian itrust ibeneficiaries iwere
in0t ientitled it0 iall i0f ithe ifunds ithat iTreasury idep0sited iin ithe iIIM iacc0unt. iThe
ig0vernment iattempted it0 idem0nstrate ithis ip0int iby iusing ia istatistical im0del ithat

18
iempl0yed ia i"multiple iimputati0n" itechnique it0 iacc0unt if0r ithe imultiplicity i0f ivariables
iimputed it0 ithe ilarge irange i0f imissing idata iwith irespect it0 ithe iacc0unts.

With ib0th ithe iplaintiffs' iand idefendant's istatistical im0dels ibef0re ihim, iJudge iR0berts0n
in0t i0nly if0und ithe im0del i0ffered iby ithe iplaintiffs it0 ibe idefective, ihe ials0 icriticized
itheir ifailure it0 i0ffer ispecific ievidence it0 idiscredit ithe idefendant's im0del. iAcc0rding it0
ihis i0pini0n, ithe iplaintiffs' im0del ic0uld in0t ibe ic0nsidered, iam0ng i0ther ireas0ns, ibecause
iit iwas iinc0nsistent iin iaccepting ithe ig0vernment's iestimate i0f ireceipts, ibut in0t i0f
idisbursements, iwhich ireflected i"a isuper-str0ng iinterpretati0n i0f ithe ipresumpti0n iagainst
ithe ibreaching itrustee ithat icann0t ibe iequitably iapplied it0 ithe itrusts iat iissue ihere."

Acc0rdingly, iJudge iR0berts0n iaccepted ithe ig0vernment's im0del, ibut ipr0vided ia icertain
ievidentiary iadvantage it0 ithe iplaintiffs iby iselecting ithe i"maximally ic0nservative"
iestimate.50 iTheref0re, iusing ithe imaximally ic0nservative iestimate ias iestablished iby ithe
ig0vernment im0del, ithe ic0urt ic0ncluded ithat i$455.6 imilli0n iwas ithe iam0unt imissing iin
ithe iIIM itrust iand ithat i0nly ithat iam0unt iw0uld ibe iawarded iin irestituti0n.

District iC0urt iInstructed it0 iEnf0rce ithe i"Best iAcc0unting" iD0I iCan iPr0vide iwith
i"Limited iG0vernment iRes0urces"

The iJuly i24, i2009,8 idecisi0n iissued iby ithe iU.S. iC0urt i0f iAppeals if0r ithe iDistrict i0f
iC0lumbia ivacated ithe ih0lding iin iJudge iR0berts0n's iJanuary i2008 idecisi0n ithat iD0I idid
in0t ihave it0 ic0nduct ian iacc0unting idue it0 iimp0ssibility iand iremanded ithe icase it0 ithe
idistrict ic0urt if0r ifurther ipr0ceedings.9 iThe ic0urt i0f iappeals ic0ncluded ithat ithe idistrict
ic0urt iwas ic0rrect it0 igrant ideference it0 iD0I's imeth0d0l0gy iin ic0nducting ithe iacc0unting
ibecause i"it i'a[r0se] i0ut i0f ian iadministrative ibalancing i0f ic0st, itime, iand iaccuracy.'"
iH0wever, ithe ic0urt i0f iappeals ials0 if0und ithat ithe idistrict ic0urt's ic0nclusi0n ithat i"the
ipr0per iscope 0f ithe iacc0unting i0bligati0n i… iis ithe iresult i… i0f ia ilegal interpretati0n i0f
ithe i1994 iAct iand i0ther istatutes ig0verning ithe iIIM itrust" iwas in0t ic0mpletely ic0rrect.
iAlth0ugh ithe idistrict ic0urt ic0rrectly ic0ncluded ithat ithe iextent i0f ithe isc0pe i0f ithe
iacc0unting iis iderived ifr0m istatut0ry ilaw, ithe ic0urt i0f iappeals ic0ncluded ithat i"the

8Cobell v. Salazar, 573 F.3d 808 (D.C. Cir. July 24, 2009) (cert. dismissed 2010 U.S. LEXIS 5260) (Cobell
XXII).
9Cobell XXII, 573 F.3d at 809.

19
iunique inature i0f ithis itrust irequires ithe idistrict ic0urt it0 iexercise iequitable ip0wers iin
ires0lving ithe iparad0x ibetween iclassical iacc0unting iand ilimited ig0vernment ires0urces."
iThus, ithe ic0urt i0f iappeals ic0ncluded ithat ithe idistrict ic0urt iwas iinc0rrect iin iassuming iit
ic0uld in0t iadjust ithe isc0pe i0f ithe iacc0unting iin i0rder it0 ipr0vide ithe ibest iacc0unting
ip0ssible iwith ithe ilimited ires0urces imade iavailable iby iC0ngress. iRather, i"the idistrict
ic0urt isitting iin iequity imust id0 ieverything iit ican it0 iensure ithat iInteri0r ipr0vides ithem
ian iequitable iacc0unting. iThe idistrict ic0urt's ih0lding i0f iimp0ssibility ic0ntradicts ithe
irequirement i0f ian iequitable iacc0unting—0ne ithat imakes im0st iefficient iuse i0f ilimited
ig0vernment ires0urces."

After ih0lding ithat iD0I imust ic0nduct ithe ibest iacc0unting ip0ssible iwith ithe im0ney
iC0ngress iappr0priated if0r ithe itask, ithe ic0urt i0f iappeals ithen ipr0vided is0me iguidance
it0 ithe idistrict ic0urt iin i0rder it0 ihelp iestablish ithe ipr0per isc0pe i0f ithe iacc0unting. iThe
ic0urt i0f iappeals ifirst in0ted ithat i"the idistrict ic0urt ish0uld iexercise iits iequitable ip0wer
it0 iensure ithat iInteri0r iall0cates iits ilimited ires0urces iin ir0ugh ipr0p0rti0n it0 ithe
iestimated id0llar ivalue i0f ipayments idue it0 iclass imembers." iThe ic0urt i0f iappeals ials0
irec0mmended ithat ithe idistrict ic0urt i"c0nsider il0w-c0st istatistical imeth0ds i0f iestimating
ibenefits iacr0ss iclass isub-gr0ups." iFinally, ithe ic0urt i0f iappeals ic0ncluded ithat ithe
idistrict ic0urt ierred iin i0rdering ian iacc0unting if0r iacc0unts icl0sed ibef0re ithe i1994
iRef0rm iAct iwas ipassed ibecause ithe iact i0nly ic0ntemplated ian iacc0unting i0f ifunds iheld
iin itrust iby ithe iUnited iStates iat ithe itime i0f ithe iact's ipassage.

December i7, i2009, iSettlement

0n iDecember i7, i2009, ithe iSecretaries i0f ithe iInteri0r iand iTreasury ireached ia isettlement
iagreement iwith ithe iplaintiffs' iclass. iH0wever, iunder iits i0wn iterms, ithe isettlement iw0uld
in0t ibe ieffective iuntil iauth0rized iby iC0ngress. iThe isettlement iagreement i0riginally icalled
if0r iC0ngress it0 iauth0rize iit ilegislatively iby iDecember i31, i2009. iThe ideadline, ih0wever,
iwas iextended ieight itimes it0 iFebruary i28, i2010, iApril i16, iMay i25, iJune i15, iJuly i9,
iAugust i6, i0ct0ber i15, iand ifinally it0 iJanuary i7, i2011. iAfter ia inumber i0f ifailed
iattempts it0 iappr0ve ithe isettlement, iC0ngress ifinally iauth0rized ithe isettlement ithr0ugh

20
ithe iClaims iRes0luti0n iAct i0f i2010 i(CRA), iwhich iwas isigned iby iPresident i0bama i0n
iDecember i8, i2010.

The isettlement iagreement iaddressed ithe iclaims i0f itw0 iseparate iclasses. i0ne iclass, ithe
i"Hist0rical iAcc0unting iClass," iis idefined ias ith0se iIndian ibeneficiaries iwh0 ihad ian i0pen
iIIM iacc0unt ibetween i0ct0ber i25, i1994, iand iSeptember i30, i2009, iin iwhich ithere iwas iat
ileast i0ne icash itransacti0n icredited it0 iit. iThe i"Trust iAdministrati0n iClass" iis idefined ias
ith0se iindividual iIndian ibeneficiaries ialive ias i0f iSeptember i30, i2009, iwh0 ihave i0r ihad
iIIM iacc0unts ibetween ir0ughly i1985 it0 ithe ipresent i(the itime iperi0d iwhen iIIM iacc0unts
iwere ikept iin ielectr0nic idatabases) iand iindividual iIndians iwh0, ias i0f iSeptember i30,
i2009, ihad irec0rded i0r i0ther idem0nstrable i0wnership iinterest iin iland iheld iin itrust i0r
irestricted istatus, iregardless i0f ithe iexistence i0f ian iIIM iacc0unt i0r ipr0ceeds igenerated
ifr0m ithe iland.

The isettlement iagreement ireleased ithe ifederal ig0vernment ifr0m iclaims irelated it0 ithe
imismanagement i0f ithe iIIM iacc0unts i0f ib0th ithe iHist0rical iAcc0unting iClass iand ithe
iTrust iAdministrati0n iClass. iH0wever, ithe isettlement ials0 ispecifically iexcluded ifr0m ithe
irelease i(1) iclaims irelated it0 ithe ipayment i0f ithe iacc0unt ibalances i0f iexisting iIIM
iacc0unts; i(2) iclaims irelated it0 ithe ipayment i0f iexisting iam0unts iin ispecial idep0sits
iacc0unts, itribal iacc0unts, i0r ijudgment ifund iacc0unts; i(3) iclaims irelated it0 ithe ibreaching
i0f itrust i0r ialleged iwr0ngs iafter iSeptember i30, i2009; i(4) iclaims if0r idamages it0 ithe
ienvir0nment i0ther ithan ith0se iclaims iexpressly iidentified ias iLand iAdministrati0n iClaims;
i(5) iclaims if0r itrespass; i(6) iclaims iagainst itribes, ic0ntract0rs, iand i0ther ithird iparties; i(7)
iequitable, iinjunctive, i0r in0n-m0netary iclaims if0r ib0undary ic0rrecti0n iand iappraisal
ierr0rs; i(8) im0ney idamages iarising ifr0m ib0undary i0r iappraisal ierr0rs ithat i0ccur iafter
iSeptember i30, i2009; i(9) iclaims iarising i0ut i0f ileases, ieasements, irights-0f-way, iand
isimilar iencumbrances iexisting ias i0f iSeptember i30, i2009; i(10) iclaims irelated it0 ifailure
it0 iassert iwater irights iand iquantificati0n; iand i(11) ihealth iand im0rtality iclaims. iThe
isettlement ials0 istated ithat in0 ifurther im0netary i0bligati0ns ishall iattach it0 ithe ifederal
ig0vernment iafter ithe ifunds iagreed iup0n iin ithe isettlement iare idispensed.

In ireturn if0r ithis irelease i0f iliability, ithe isettlement iestablished itw0 ifunds. iThe ifirst ifund
iw0uld ireceive i$1.412 ibilli0n ifr0m ithe iJudgment iFund iand iwill ibe icalled ithe

21
i"Acc0unting/Trust iAdministrati0n iFund." iFr0m ithis ifund, ieach imember i0f ithe iHist0rical
iAcc0unting iClass ishall ireceive i$1,000. iAfter ithis ipayment iis imade, ithe inext istage
iinv0lves iestablishing ithe iidentities i0f ithe imembers i0f ithe iTrust iAdministrati0n iClass
iand ipaying ieach imember ia ipr0 irata iam0unt. iThis iam0unt iinv0lves ia i$500 ibase
ipayment. iIn iadditi0n, ieach imember i0f ithe iclass iwill ireceive ia ipr0 irata iam0unt i0f ithe
iremaining im0nies iin ithe iAcc0unting/Trust iAdministrati0n iFund. iAny im0ney iremaining
iin ithis ifund iwill ibe iused it0 ifinance ia ipr0gram icalled i"Funds if0r iIndian iEducati0n
iSch0larships," iwhich ipr0vides if0r ithe ic0st i0f ip0st-sec0ndary ieducati0n if0r iIndian
istudents.

The isec0nd ifund, icalled ithe i"Trust iLand iC0ns0lidati0n iFund," iw0uld ireceive i$2 ibilli0n.
iThis ifund, iwhich iwill iterminate iin i10 iyears, iwill ibe iused it0 iacquire ifracti0nal iinterests
iin itrust i0r irestricted iland ipursuant it0 i25 iU.S.C. i§2201 iet iseq., iwhich iauth0rizes ithe
iLand iC0ns0lidati0n ipr0gram. iThis ipr0gram iis ithe iprincipal ivehicle iby iwhich ithe ifederal
ig0vernment ic0ns0lidates ifracti0nated itrust iand irestricted ilands. iM0nies ifr0m ithis iacc0unt
iwill ials0 ibe imade iavailable if0r ithe i"Funds if0r iIndian iEducati0n iSch0larships."

The iCRA iexcludes iam0unts ireceived iby iindividual iIndians ipursuant it0 ithe isettlement
ifr0m iinclusi0n ias igr0ss iinc0me if0r ifederal itax ipurp0ses. iThe isettlement iand iCRA ials0
ileft if0r ithe idistrict ic0urt's ic0nsiderati0n ithe iam0unt i0f iatt0rneys' ifees iand ithe iam0unt
i0f ithe iincentive iaward if0r ithe inamed iplaintiffs i0f ithe iclass.

The idistrict ic0urt iappr0ved ithe isettlement i0n iJuly i27, i2012. iA ifew imembers i0f ithe
iclass iappealed ithe isettlement it0 ithe iU.S. iC0urt i0f iAppeals if0r ithe iD.C. iCircuit, iwhich
iupheld ithe ifairness i0f ithe isettlement. iAfter ithe iSupreme iC0urt idenied ia ipetiti0n if0r
icertiorari10 iand ithe iappeal iperi0d iexpired, ithe isettlement ibecame ifinal i0n iN0vember i24,
i2012.

CONCLUSION

10Craven v. Cobell, 2012 U.S. LEXIS 8318 (October 29, 2012).

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The isettlement ireached iin iCobell v. Salazar iwas iauth0rized iby ithe iClaims iRes0luti0n iAct
i0f i2010 i0n iDecember i8, i2010. iUnder ithe iterms i0f ithe isettlement, ithe iUnited iStates
ig0vernment iwill ipay i$1.4 ibilli0n it0 imembers i0f ithe iclass iwh0 is0ught it0 ihave ia
ihist0rical iacc0unting i0f itheir iIIM iacc0unts i(an iabbreviati0n if0r iIndividual iIndian
iM0nies). iAn iadditi0nal i$2 ibilli0n iwill ibe ipr0vided iby ithe ig0vernment if0r ithe ipurp0se
i0f ic0ns0lidating ifracti0nated itrust iand irestricted ilands. i

First ifiled iin i1996, iCobell v. Salazar iinv0lved ithe iDepartment i0f ithe iInteri0r's i(D0I's)
imanagement i0f iseveral im0ney iacc0unts. iThese im0ney iacc0unts, i0r iIIMs, ias
idistinguished ifr0m itribal itrust ifunds, iare im0nies iwhich ithe ifederal ig0vernment ih0lds if0r
ithe ibenefit i0f iindividual iIndians. iThe ic0nflict iin ithe icase itraced it0 ithe ifederal
ig0vernment's itrust iresp0nsibility iwith irespect it0 iAmerican iIndians. iIn ithe icapacity i0f
itrustee, ithe iUnited iStates ih0lds ititle it0 imuch i0f iIndian itribal iland iand iland iall0tted it0
iindividual iIndians. iReceipts ifr0m ileases, itimber isales, i0r imineral ir0yalties iare ipaid it0
ithe ifederal ig0vernment if0r idisbursement it0 ithe iappr0priate iIndian ipr0perty i0wners. iThe
iUnited iStates ihas ifiduciary iresp0nsibilities it0 imanage iIndian im0nies iand iassets iwhich
ihave ibeen iderived ifr0m ithese ilands iand iare iheld iin itrust. iH0wever, iseveral i0f ithe
ibeneficiaries i0f ithese itrust ifunds ialleged ithat iD0I imismanaged ithese ifunds iand ifiled
isuit iin i0rder it0 i0btain ia ipr0per iacc0unting i0f ithese ifunds iand it0 ireceive idamages iif
iwarranted.

After im0re ithan ia idecade i0f ilitigati0n i0ver i0bligati0ns iass0ciated iwith ithe imanagement
i0f ithe iIIM iacc0unts—c0nsisting i0f i0ver i3,600 id0cuments iand i0ver i20 ifederal idistrict
ic0urt iand ic0urt i0f iappeals i0pini0ns—the iparties iultimately ireached ia isettlement i0n
iDecember i7, i2009. iH0wever, ithe isettlement, iwhich iby iits iterms iw0uld icreate ia iTrust
iAdministrati0n iFund iand ia iLand iC0ns0lidati0n iFund, irequired ic0ngressi0nal
iauth0rizati0n ibef0re iit ic0uld ig0 iint0 ieffect. iA iyear ilater, iC0ngress iauth0rized ithe
isettlement ithr0ugh ithe iClaims iRes0luti0n iAct i0f i2010 i(CRA), iwhich iwas isigned iby
iPresident i0bama i0n iDecember i8, i2010.

23
The idistrict ic0urt iappr0ved ithe isettlement i0n iJuly i27, i2011. iAfter iappeals it0 ithe iU.S.
iC0urt i0f iAppeals if0r ithe iD.C. iCircuit iand ipetiti0ns if0r icertiorari it0 ithe iSupreme iC0urt
iwere idenied, ithe isettlement ibecame ifinal i0n iN0vember i24, i2012.

BIBLIOGRAPHY

● Br00ke iCampbell, iC0bell iSettlement iFinalized iAfter iYears i0f iLitigati0n: iVict0ry
iat iLast?, i37 iAm. iIndian iL. iRev. i629 i(2016)
● Mary iC. iCurtis, i"0bama iHails iPassage i0f iSettlement if0r iNative iAmericans, iBlack
iFarmers", iHuffington Post, i30 iN0vember i2010, iaccessed i1 iDecember i2011
● James iWarren, i"A iVict0ry if0r iNative iAmericans?", iThe Atlantic, i7 iJune i2010

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