Appeals Court Demands Accounting for Indian Trusts

Published: July 24, 2009
Filed at 12:21 p.m. ET

WASHINGTON (AP) -- A federal appeals court ruled Friday that the Interior Department must account for century-old land royalties owed to American Indians, reversing a lower court's ruling that the task is impossible.

A 2008 decision by U.S. District Judge James Robertson said Interior had unreasonably delayed an accounting but added that the complicated task was ultimately impossible. He later ruled the Indian plaintiffs are entitled to $455 million, a fraction of the $47 billion or more they have said they are owed.

The appeals court said Friday that that court erred in freeing the government from the accounting burden. Chief Judge David B. Sentelle of the U.S. Court of Appeals for the D.C. Circuit said the decision essentially allowed the Interior Department ''to throw up its hands and stop the accounting.''

''Without an accounting, it is impossible to know who is owed what,'' Sentelle wrote. ''The best any trust beneficiary could hope for would be a government check in an arbitrary amount.''

The long-running suit, first filed 13 years ago, claims the Indians were swindled out of royalties overseen by the Interior Department since 1887 for things like oil, gas, grazing and timber.

The three-judge panel acknowledged that the task is a complicated one and said the Interior Department should focus on the ''low-hanging fruit'' and not muddy the process by spending time and money to account for closed accounts or those in probate, for example.

''We must not allow the theoretically perfect to render impossible the achievable good,'' Sentelle wrote.

Indian plaintiffs, led by Elouise Cobell, a member of the Blackfeet Tribe from Montana, have argued that the government has for a long time improperly accounted for the money and should pay it back with some form of interest.

The government appeal contended that the court does not have the jurisdiction to award money at all, pointing to the ruling that the accounting was ultimately impossible. They also pointed to Robertson's comments that Congress has not given the Interior Department enough money to do a full accounting.

In 1994, Congress demanded that the department fulfill an obligation to account for money received and distributed. Two years later, when account statements still had not been reconciled, Cobell joined with others in suing.

Because many of the records have been lost, it has since been up to the court to decide how to best estimate how much individual should be paid, or how the money should be accounted for. Many of them are nearing the end of their lives.

Robertson originally intended to begin a new phase of the trial that would determine how and to whom the government should award the money. But he allowed the two parties to take the case immediately to the appeals court so the process would not be delayed further.

The class-action suit deals with individual Indians' lands and covers about 500,000 Indians and their heirs. Several tribes have sued separately, claiming mismanagement of their lands.