A federal judge ruled yesterday that the government owes Native American plaintiffs $455 million for mismanaging and withholding mineral royalties, grazing fees, and other revenues overseen by the Department of Interior. The ruling was a setback for the plaintiffs, who were seeking $47 billion in a case that has dragged on for twelve long years.
In fact, the name of the case has changed through the years with each new Secretary of the Interior. When plaintiff Elouise Cobell, a Blackfoot Indian, filed the case in June 1996 as a class action on behalf of herself and half a million other Native Americans, it was Cobell v. Babbitt. By the time of the ruling of U.S. District Judge James Robertson yesterday, it was Cobell v. Kempthorne.
The legal saga has been nearly as astonishing as the story of government incompetence.
The origins of the case date back to 1887, when the federal government divided up millions of acres of reservation land and parceled it out to individual Native Americans. According to that 1887 law, known as the Dawes Act, the Indians were not considered capable of actual ownership. Thus the land was put into trusts for the individual Indians, with the U.S. government acting as trustee. Proceeds of the oil and mineral leasing rights were supposed to be paid into the Indian trusts, but the government accounting system was sloppy from the beginning, and it only got worse over the next 100 years.
Cobell's own story is almost mythic. At the age of 30, she became treasurer of the Blackfoot Nation, and immediately discovered the accounts were in total chaos. When she sought answers from the Interior Department's Bureau of Indian Affairs, they either insulted or ignored her. After more than a decade of banging her head into bureaucratic walls, she found an official who lent her a sympathetic ear, and introduced her to a banking lawyer named Dennis Gingold, known for his hard-charging style. He couldn't believe the kind of run-around Cobell had been getting.
Although she had little idea where the funds would come from, Cobell was persuaded to file one of the largest ever class-action lawsuits, on June 10, 1996. It was filed in Washington, D.C., and assigned to Judge Royce Lamberth. The following year, Cobell won a MacArthur Foundation "genius award" and plowed all of the funds into the litigation. Other foundations anteed up through the years.
Lamberth had worked for the Justice Department for years before becoming a judge. A native Texan, a big boot-wearing man who loves to laugh, and a staunch Republican, he also had no stomach for bureaucratic foot-dragging or for being misled. Over the course of dealing with the Cobell case, he gradually came to believe he had been badly dissed. In December 1999, he issued a 126-page opinion lambasting the government for "a shocking pattern of deception. I have never seen more egregious conduct by the federal government."
Other opinions followed, with Lamberth using increasingly more intemperate language as he held first one Secretary and then the next in contempt of court, along with the Justice Department lawyers representing them, for their failure to handle the trust funds properly, to respond to his queries truthfully, and to handle matters in a timely fashion. At one point, he found Interior computer records to be so insecure that he ordered all computers at the department to be disconnected from the internet.
After several more opinions in the case, including one in July 2005 when Lamberth wrote that the Interior Department was "a dinosaur--the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago," the Justice Department petitioned the D.C. appeals court for his removal from the case. In July 2006, a three-judge panel of that court agreed, and wrote: "We conclude, reluctantly, that this is one of those rare cases in which reassignment is necessary."
The case was reassigned to James Robertson, who, in April 2007, ordered a trial looking into the adequacy of the government's handling of the trust account records.
His ruling in favor of the plaintiffs could be called a Pyrrhic victory. At one time, a study commissioned by the Interior Department itself had warned that the government's liability could be as high as $40 billion. Last year the plaintiffs rejected a proposal by the government to settle the case for $7 billion.
Attorneys for the plaintiffs argued that the government has improperly benefited from its mismanagement of the trusts. But Judge Robertson took issue with the plaintiffs' methods for calculating the missing royalties and appeared to side with government lawyers, who argued that there were only several hundred million dollars in dispute.
A spokesman for the plaintiffs told the New York Times that the judge "basically accepted the government's argument that not that much money is missing."
The ruling did not address the question of how to award the money; hearings on that issue are scheduled for later this month. There is also the possibility of a settlement. Cobell said she is "disappointed" by the ruling, and is considering whether or not to appeal. "We believe we presented a strong, compelling case that individual Indian trust beneficiaries are entitled to much more than the government's admitted mismanagement of our trust monies over the past 120 years," she said.
-- Beverley Lumpkin