Fletcher v. United States , 730 F.3d 1206 ( 2013 )

FILED
United States Court of Appeals
Tenth Circuit
September 17, 2013
Elisabeth A. Shumaker
PUBLISH Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
WILLIAM S. FLETCHER,
individually, and as member of the
Osage Development Council, and on
behalf of himself and all others
similarly situated; CHARLES A.
PRATT, individually, and as member
of the Osage Development Council,
Plaintiffs-Appellants,
v.
UNITED STATES OF AMERICA;
DEPARTMENT OF THE INTERIOR;
BUREAU OF INDIAN AFFAIRS;
No. 12-5078
SALLY JEWELL, in her official
capacity as Secretary of the Interior;
KEVIN K. WASHBURN, in his
official capacity as Assistant Secretary
of the Interior-Indian Affairs, *
Defendants-Appellees,
and
SHRINERS HOSPITALS FOR
CHILDREN,
Defendant.
*
Pursuant to Fed. R. App. 43(c)(2) Kenneth Salazar is replaced by Sally
Jewell as Secretary of the U.S. Department of the Interior. Larry Echo Hawk is
replaced by Kevin K. Washburn as the Assistant Secretary of the Interior-Indian
Affairs.
Appeal from the United States District Court
for the Northern District of Oklahoma
(D.C. No. 4:02-CV-00427-GKF-PJC)
Jason B. Aamodt of the Aamodt Law Firm, Tulsa, Oklahoma (G. Steven Stidham,
Tulsa, Oklahoma; Krystina E. Hollarn and Dallas L.D. Strimple of the Aamodt
Law Firm, Tulsa, Oklahoma; and Amanda S. Proctor of the Shield Law Group
PLC, Tulsa, Oklahoma, with him on the briefs), for Plaintiffs-Appellants.
Katherine W. Hazard, Attorney, United Sates Department of Justice, Environment
and Natural Resources Division, Washington, D.C. (Alan Woodcock, Office of
the Solicitor, United States Department of the Interior, Tulsa, Oklahoma; Ignacia
S. Moreno, Assistant Attorney General, and Joseph H. Kim and John L. Smeltzer,
Attorneys, United States Department of Justice, Environment and Natural
Resources Division, Washington, D.C., with her on the brief), for Defendants-
Appellees.
Before TYMKOVICH, ANDERSON, and GORSUCH, Circuit Judges.
GORSUCH, Circuit Judge.
After settlers displaced the Osage Nation from its native lands, the federal
government shunted the tribe onto the open prairie in Indian Territory, part of
what later became the State of Oklahoma. At the time, the government had no
idea those grasslands were to prove a great deal more fertile than they appeared.
Only years later did the Osages’ mammoth reserves of oil and gas make
themselves known. When that happened, the federal government appropriated for
itself the role of trustee, overseeing the collection of royalty income and its
distribution to tribal members. That role continues to this day. In this lawsuit,
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tribal members seek an accounting to determine whether the federal government
has fulfilled the fiduciary obligations it chose to assume. The district court
dismissed the tribal members’ claims. We reverse.
The statutory story begins in 1906. It was then Congress devised a scheme
to deal with the Osages’ newfound wealth. See Act of June 28, 1906, Pub. L. No.
59-321, 34 Stat. 539. Congress severed the mineral estate underlying Osage lands
from the surface estate, placed the mineral estate in trust, directed the Secretary
of Interior to collect royalties, and told the Secretary to distribute the royalties
(along with interest income) every quarter on a pro rata basis to individual
members of the tribe. Id. § 4, 34 Stat. at 544. To determine who qualified as a
tribal member entitled to receive an interest in the mineral estate, Congress
provided for the creation of an official tribal roll. Id. § 1, 34 Stat. at 539-40.
This same statutory structure remains intact and in force today, though with some
amendment. As time passed, various tribal members sold — and others gave
away or bequeathed — their royalty interests (sometimes called “headrights”) or
portions of them (a process that resulted in “fractionalization”). Sometimes these
assignments went to other tribal members; other times they went to non-tribal
members. Displeased with the choice by some headright owners to convey their
interests to non-tribal members, Congress responded with a series of legislative
amendments placing ever increasing limits on the practice. See Felix S. Cohen,
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Cohen’s Handbook of Federal Indian Law § 4.07, at 304-08 (Nell Jessup Newton
ed., 2012).
This litigation’s story begins in 2002. It was then William Fletcher and
Charles Pratt, two Osage tribal members who receive payments under the 1906
Act, charged the federal government with breaching its trust responsibilities. A
decade-long blizzard of paper followed — no fewer than seven motions to
dismiss, three amended complaints, a first appeal and now this second. Yet even
still the case remains stunted at the motion to dismiss stage, never having
managed to progress past the pleadings to the facts.
All those years and all that paper have whittled this case down so much that
in this appeal we are asked to resolve only a single legal question: Do Osage
tribal member headright holders possess the legal right to seek an accounting
from the Secretary of the Interior? No one disputes that the plaintiffs’ allegations
are sufficient to invoke an accounting, only whether they have the right to
demand one. The district court ruled no such right could be found in positive
law, granted the government’s (latest) motion to dismiss, and entered a final
judgment.
We find ourselves unable to agree.
The district court was surely right in its general approach to the question.
The government’s relationship with and duties to Native American tribes are
generally defined in the first instance by “applicable statutes and regulations.”
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United States v. Jicarilla Apache Nation, 131 S. Ct. 2313, 2325 (2011). One
might be excused for thinking the relationship between the federal government
and Native American tribes resembles a traditional trust relationship bearing all
the usual attendant fiduciary responsibilities — responsibilities the government
seems to have taken up voluntarily and assumed for itself. But traditional trust
principles cannot displace what statutes and regulations mandate. Traditional
trust principles may help illuminate the meaning of a “specific, applicable, trust-
creating statute or regulation.” Id. Indeed, we normally assume Congress has
legislated against the background of traditional “adjudicatory principles” —
including traditional adjudicatory principles found in trust law. Astoria Fed. Sav.
& Loan Ass’n v. Solimino, 501 U.S. 104, 108 (1991). But those background
principles cannot be used to “override” the language of statutes and regulations
“defin[ing] the Government’s . . . obligation[s]” to a tribe or tribal members.
Jicarilla Apache Nation, 131 S. Ct. at 2329-30. Congress enjoys considerable
latitude in deciding how to organize and manage Native American trusts and it is
permitted to “structure the trust relationship to pursue its own policy goals” —
sometimes by establishing a full blown trust relationship with all the attendant
fiduciary duties we’re familiar with from the common law and equity, but
sometimes also by “establish[ing] only a limited trust relationship to serve a
narrow[er] purpose.” Id. at 2324-25. So, as the district court quite rightly
observed, to trigger a duty to account the plaintiffs in this case first had to
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identify some statute or regulation creating a trust relationship between them and
the government.
The district court also correctly held that just such a statute exists. The
1906 Act clearly creates a trust relationship — and not just a trust relationship
between the federal government and the Osage Nation, but also between the
federal government and the individual Osage headright owners who are plaintiffs
in this case. Though the language of the Act is both arcane and antiquated, after
laboring through it there’s no question about this much. The Act requires the
government to collect royalties, place them “to the credit of” each individual
headright owner, and then disburse them to each individual headright owner on a
quarterly basis, with interest. See 1906 Act § 4(1)-(2), 34 Stat. at 544. A small
slice of royalty income may be diverted to tribal operations, id. § 4(3), (4), but all
else is “placed . . . to the credit” of headright owners and distributed to them
personally. In short, the 1906 Act imposes an obligation on the federal
government to distribute funds to individual headright owners in a timely
(quarterly) and proper (pro rata, with interest) manner. Over the years both
Congress and this court have repeatedly recognized that, in this way, the 1906 Act
created a trust relationship between the government and individual headright
owners. 1
1
See, e.g., 1906 Act § 4(2), 34 Stat. at 544 (mandating that royalty
(continued...)
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On appeal the federal government contests none of this.
The only remaining question, then, is whether, attendant to the —
undisputed — trust relationship between government and individual tribal
members, the government must provide an accounting when asked. Everyone
acknowledges the government has many other duties as a result of its trust
relationship, like “supplying account holders with periodic statements of their
account performance.” See 25 U.S.C. § 162a(d)(5). But does the government
have a duty to provide an accounting?
The answer comes clear in 25 U.S.C. § 4011:
(a) Requirement to account
The Secretary [of the Interior] shall account for the daily and annual
balance of all funds held in trust by the United States for the benefit of an
Indian tribe or an individual Indian which are deposited or invested
pursuant to section 162a of this title.
By its plain language this provision appears to impose on the federal
government a duty to “account for” — to render a reckoning, answer for, explain
1
(...continued)
payments be made the same way as “other moneys held in trust” (emphasis
added)); Act of Apr. 18, 1912, Pub. L. No. 62-125, § 5, 37 Stat. 86, 87 (referring
to Osage funds in the U.S. Treasury as “individual trust funds”); Act of Mar. 3,
1921, Pub. L. No. 66-360, § 4, 41 Stat. 1249, 1250 (also describing such funds as
“trust funds”); Globe Indem. Co. v. Bruce, 81 F.2d 143, 150 (10th Cir. 1935)
(“[T]he United States took the legal title to [Osage] funds and moneys in trust,
but . . . the beneficial title to the funds and moneys vested in the individual
members of the tribe.”); Chouteau v. Comm’r, 38 F.2d 976, 978 (10th Cir. 1930)
(“The mineral reserves under the lands are held in trust by the United States for
the tribe and its members . . . .”).
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or justify, see 1 The Oxford English Dictionary 85 (2d ed. 1989) — the daily and
annual balances of money it holds in trust. Of course, the government must
account, answer or explain itself to someone, and the plain language of the statute
seems to tell us who: to the tribe when the funds are held “for [its] benefit,” and
to individual tribal members when the funds are held “for [their] benefit.” As
we’ve seen, the trust funds at issue in this case — collected and disbursed under
the terms of the 1906 Act — are being held for the benefit of individual members
of the Osage Nation. So it would seem that — in our case at least — Congress
has chosen to afford individual tribal members the statutory right to seek and
obtain an accounting, just as plaintiffs contend.
Other evidence tends to confirm this understanding. Take the surrounding
statutory structure and its history. At the same time it enacted § 4011(a),
Congress created the Office of Special Trustee for American Indians and tasked it
with providing Native American account holders with fair and accurate
information about their accounts. See American Indian Trust Fund Management
Reform Act of 1994, Pub. L. No. 103-412, §§ 301, 303(b)(2)(A), 108 Stat. 4239,
4244, 4245 (codified at 25 U.S.C. §§ 4041, 4043(b)(2)(A)). Congress also
simultaneously ordered the Secretary of the Interior to file with Congress a
“report identifying for each tribal trust fund account . . . a balance reconciled as
of September 30, 1995.” Id. § 304, 108 Stat. at 4248 (codified at 25 U.S.C.
§ 4044). And Congress instructed the Secretary to institute “adequate controls
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over receipts and disbursements” and to supply trust fund beneficiaries with
“periodic statements.” Id. § 101, 108 Stat. at 4240 (codified at 25 U.S.C.
§ 162a(d)(2), (5)). The existence of these provisions tends to undercut any
suggestion that § 4011(a) fails to invest individual tribal members with an
enforceable right to an accounting. To read the statute as merely providing
administrative direction to the government would appear to leave it without any
independent work to do — a nullity — covering only the same ground already
covered by other contemporaneously enacted statutory provisions. To read it as
merely guaranteeing periodic reports to beneficiaries would invite the same result.
And we are always reluctant to assume a statute is so worthless that Congress was
up to — literally — nothing when it bothered to labor through the grueling
process of bicameralism and presentment. See, e.g., TRW Inc. v. Andrews, 534
U.S. 19, 31 (2001).
More evidence still points in the direction of an accounting right. While
the Supreme Court has said we may not employ traditional trust principles
inconsistent with Congress’s statutory directions, the Court has also said we may
refer to traditional trust principles when those principles are consistent with the
statute and help illuminate its meaning. Jicarilla Apache Nation, 131 S. Ct. at
2325. In the statute before us, Congress has chosen to invoke the concept of an
accounting. That concept has a long known and particular meaning in
background trust law. It means that “a beneficiary may initiate a proceeding to
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have the trustee’s account reviewed and settled by the court.” Alan Newman et
al., The Law of Trusts and Trustees § 966 (3d ed. 2010). Indeed, “[t]he
beneficiary of a trust can maintain a suit to compel the trustee to perform his
duties as trustee,” including his duty to account. See Restatement (Second) of
Trusts § 199 cmt. a; see also id. § 172. So when Congress says the government
may be called to account, we have some reason to think it means to allow the
relevant Native American beneficiaries to sue for an accounting, just as
traditional trust beneficiaries are permitted to do.
Any residual doubt about § 4011(a)’s meaning falls away in the face of a
few further considerations. First, the government itself doesn’t dispute that
§ 4011(a) grants an accounting right, at least to Native American tribes like the
Osage Nation. Second, while we are always cautious about assuming a statute
grants a privately enforceable right, within the narrow field of Native American
trust relations statutory ambiguities must be “resolved in favor of the Indians.”
Bryan v. Itasca Cnty., 426 U.S. 373, 392 (1976); cf. Cnty. of Oneida v. Oneida
Indian Nation, 470 U.S. 226, 247 (1984) (“The canons of construction applicable
in Indian law are rooted in the unique trust relationship between the United States
and the Indians.”). Even more specifically, the Supreme Court has held that when
it comes to statutes involving Native Americans, they “need not explicitly
provide” a private right of action. United States v. Navajo Nation, 556 U.S. 287,
290 (2009). All that’s required for a private right of action to exist is a showing
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the statute at hand “can fairly be interpreted” to permit it. Id. No one in this case
has tried to suggest § 4011(a) isn’t “fairly interpreted” as granting individual
tribal members a right to compel an accounting. To the contrary, and finally, at
least one other circuit has already read § 4011(a) as requiring the government to
provide tribal members with an accounting when asked. See Cobell v. Salazar,
573 F.3d 808, 813 (D.C. Cir. 2009). 2
For its part, the district court accepted that § 4011(a) affords individual
Osage tribal members the right to compel an accounting from the government. It
held only — and very differently — that the accounting granted by § 4011(a)
would do the plaintiffs no good. The district court began by pointing to the fact
§ 4011(a) limits the government’s accounting responsibilities to funds “which are
deposited or invested pursuant to section 162a of this title.” Turning to that
provision, the district court noted that it authorizes the Secretary of Interior to
deposit Osage trust funds in banks. See 25 U.S.C. § 162a(a). Because § 162a(a)
speaks only of deposits, the district court reasoned that the government’s
2
Of course, to sue the government a waiver of sovereign immunity must
also be found somewhere in the federal code. But when the parties last visited
this court, we held that 5 U.S.C. § 702 provides the necessary waiver of sovereign
immunity for the plaintiffs’ breach-of-trust claims and no one before us disputes
that the same holds true for their accounting claim. See Fletcher v. United States,
160 F. App’x 792, 797 (10th Cir. 2005); see also Cobell v. Norton, 240 F.3d
1081, 1094 (D.C. Cir. 2001) (“Insofar as the plaintiffs seek specific injunctive
and declaratory relief — and, in particular, seek the accounting to which they are
entitled — the government has waived its sovereign immunity under this
provision [§ 702].”).
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fiduciary duties are limited to the act of depositing money. With this
understanding of § 162a(a) in hand, the district court flipped back to § 4011(a)
and implied a parallel limitation into the accounting duty it imposes — holding
that the government’s duty to account is limited to accounting for the trust fund
deposits it makes, not the withdrawals it effects. All this matters, the district
court held, because the plaintiffs’ primary concern seems to be that the
government may have mishandled trust fund distributions, not deposits, by
sending money to individuals who are not tribal members and who are not entitled
to share in the Osage trust fund under the various amendments Congress has
adopted since the 1906 Act.
This is where things went awry. The district court misread § 162a(a).
Nothing in that provision purports to limit the Secretary’s fiduciary obligations to
the Osages, let alone circumscribe the accounting promised by § 4011(a). Section
162a(a) is simply and all about granting the Secretary of the Interior authority to
invest monies belonging to Native American trust fund beneficiaries. It says the
Secretary generally may deposit trust funds in bank accounts or invest them in
public debt obligations. The specific language on which the district court relied
merely qualifies this general rule. When it comes to Osages “the foregoing”
investment options afforded the Secretary apply “only with respect to the deposit
of such funds in banks.” Awkwardly stated perhaps, but the meaning is plain:
while the Secretary generally may deposit Native American trust funds in banks
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or invest them in United States debt securities, when it comes specifically to the
Osages only a bank deposit is authorized. No doubt the Secretary must keep
Osage money so liquid because under the terms of the 1906 Act the funds must be
disbursed pro rata every quarter. See White Mountain Apache Tribe of Ariz. v.
United States, 20 Cl. Ct. 371, 379 (1990) (explaining that “Congress directed that
the [Osage] accounts be accessible” so that “it was possible to credit each
member of the tribe a pro rata share”).
Statutory structure and history again confirm our understanding.
Subsections (a) through (c) of § 162a all speak to the various investment options
available to the Secretary with respect to various tribal funds. See Cohen, supra,
§ 5.03, at 400-01. These provisions were enacted between 1918 and 1990 as
Congress sought to refine and qualify the Secretary’s options. 3 Only when we
come to § 162a(d) are traditional trust responsibilities expressly discussed and
delineated. And Congress enacted § 162a(d) at the same time and in the same act
it imposed the accounting trust obligation found in § 4011(a), many years after it
adopted § 162a(a)-(c). See American Indian Trust Fund Management Reform Act
§ 101, 108 Stat. at 4240. All these clues point to the conclusion that § 162a(a)
through (c) are of a piece and speak to the Secretary’s investment options, not to
3
See Act of May 25, 1918, Pub. L. No. 65-159, § 28, 40 Stat. 561, 591-92;
Act of June 24, 1938, Pub. L. No. 75-714, § 1, 52 Stat. 1037, 1037; Act of Nov.
4, 1983, Pub. L. No. 98-146, 97 Stat. 919, 929; Indian Arts and Crafts Act of
1990, Pub. L. No. 101-644, § 302, 104 Stat. 4662, 4667.
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the nature or scope of Secretary’s accounting obligations — while § 162a(d) and
§ 4011(a) are of a (separate and distinct) piece and speak directly to traditional
trust duties, including the duty to account. 4
If any doubt remains (and we harbor none), we would still reach the same
conclusion because, again, statutory ambiguities in the field of trust relations
must be construed for, not against, Native Americans. We would reach the same
result, too, because the district court’s alternative interpretation invites a strange,
maybe even absurd, result. Under the district court’s reading, the government’s
accounting obligations extend only to trust fund deposits but not withdrawals.
The Secretary has to account to headright owners for what goes into their trust
fund, but not what comes out. But what could possibly be the point of that? Half
of an accounting may be closer to no accounting at all — an assurance deposits
are properly handled seems pretty nearly pointless without a corresponding
assurance disbursements are too. Under the district court’s reading of the law,
even the Nation must be denied a full accounting of its funds — the court’s
interpretation, after all, applies to all Native American trust funds, tribal as well
4
The parties contest whether § 162a(d) might itself give rise to a duty to
account to individual tribal members. Cobell thought not, suggesting that only
§ 4011(a) gave rise to an accounting duty enforceable by individual tribal
members. See Cobell, 240 F.3d at 1105-06. Given that we agree § 4011(a)
provides what the plaintiffs seek, we have no reason to address whether § 162a(d)
might as well. The same goes for § 4044, also cited by the plaintiffs as a
potential source of authority for an accounting duty.
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as individual. Yet, even the government itself has never taken so bold a position.
To the contrary, the government boasts in its briefs that it recently provided the
Nation with a full accounting, if after being sued to provide one. We can well
imagine Congress choosing either to grant or deny the right to request an
accounting, but no one has advanced any reason why it might adopt an almost
useless halfway measure for tribes and individual tribal members alike. Indeed,
the government does next to nothing to defend the district court’s reading of
§ 162a(a) — two sentences in a 49-page brief say the district court was right, no
more.
The government invests more energy — though still only a paragraph —
pursuing an alternative ground for affirmance. It asks us to hold that § 4011(a)’s
accounting obligations run only to the Osage Nation, not individual tribal
members like the plaintiffs before us. The government doesn’t dispute that
§ 4011(a), properly read, does require it to provide an accounting. But it
contends only a tribe may demand one.
We are at a loss to see how we reach that interpretive destination. Even on
a first approach, the government’s position appears more than a little anomalous.
The government recognizes that the 1906 Act creates a trust relationship running
directly between the government and individual Osage headright owners, but it
suggests one of the usual fiduciary duties attendant to a typical trust relationship
here belongs only to someone else (the tribe). Of course, it’s not impossible
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Congress could have chosen to rearrange normal trust principles in this way, but
the government identifies nothing in the text or structure of the relevant laws
suggesting such a design. To the contrary, § 4011(a) indicates that the
government’s accounting duty applies to all funds “held in trust . . . for the
benefit of an Indian tribe or an individual Indian.” In turn, the 1906 Act requires
the Secretary to hold Osage mineral wealth in trust for individual Osage headright
owners. Taken together, these provisions suggest a trust relationship and an
attendant accounting duty running directly between the government and
individual Osage headright owners like the plaintiffs before us. We cannot detect
so much as a whiff suggesting they grant accounting privileges only to the tribe.
While (again) we see no ambiguity in the relevant statutory language about all
this, and while (again) the government has not even attempted to identify
statutory language or features that might give rise to an ambiguity, even if we
could somehow conjure up the sort of ambiguity the government seems to assume
but never identifies, it would still have to be resolved in the plaintiffs’ favor. 5
The government briefly trots out a second alternative ground for affirming
the district court — only to trot it back in just as quickly. The government points
to its settlement of the Osage Nation’s recently litigated accounting claim and
5
We do not purport to resolve whether non-Osage headright owners who
received their interests lawfully under applicable congressional statutes might
also have a right to seek an accounting.
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notes that, as part of the deal, the tribe agreed to waive “on behalf of . . . any
Headright Holders” any claims they might have to seek an accounting. Given this
waiver, the government says “it is questionable whether” the plaintiffs can pursue
their claim. Gov’t Br. at 38 n.5. But this discussion appears only in a footnote.
The footnote itself — notably — stops short of claiming that the tribe has the
power to waive individual tribal members’ claims. Indeed, the footnote cites no
authority one way or the other on the “question” it highlights. And when we
asked the government at oral argument to clarify its position on the “question” its
footnote posed it retreated still further, disclaiming any suggestion that the Osage
Nation’s waiver might bind the individual plaintiffs in this case. Given these
strange circumstances, we hold any argument in this direction doubly waived —
first for a lack of adequate development in briefing, then for being intentionally
abandoned at oral argument. See Wood v. Milyard, 132 S. Ct. 1826, 1835 (2012);
United States v. Wooten, 377 F.3d 1134, 1145 (10th Cir. 2004).
Neither does the government give us any other basis for affirming the
district court’s judgment. With the district court’s rationale unsustainable on its
own terms and the government’s two alternatives unmoored from the relevant
statutes or withdrawn, we are left with no choice but to reverse.
Having come this far, we find another line of questions impossible to avoid.
What must the government do to discharge its accounting duty provided under
§ 4011(a)? Apparently the government has satisfied the Nation’s accounting
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demands: what must it do to satisfy the individual tribal members before us?
Strictly speaking, we may not have to reach questions like these. The district
court dismissed the case on the basis that no accounting duty existed and to
reverse we need only find the rationales it and the government have offered for
that conclusion lacking. Surely, as well, the exact contours of the accounting
have to be decided by the district court on remand with the assistance of the
parties. See Cobell, 573 F.3d at 813 (“[T]he proper scope of the accounting
ultimately remains a question for the district court . . . .”). But after so many
years fighting over pleadings and now facing the prospect the case might at last
progress beyond the motion to dismiss stage, we don’t doubt the district court and
parties would appreciate some guidance and we will “provide as much guidance
as we can.” Id.We can say this much. Section 4011(a) holds the government to “account
for the daily and annual balance of all funds . . . deposited or invested pursuant to
section 162a of this title.” No one before us disputes that the plaintiffs’ current
complaint adequately alleges that their trust funds are deposited in a bank
pursuant to section 162a(a), though this question may of course be the subject of
factual exploration on remand. Assuming that hurdle is overcome, the statutory
language doesn’t spell out how the promised accounting must be conducted. But,
as we have seen, in § 4011(a) Congress chose to reference a traditional equitable
remedy from trust law. And in a traditional equitable accounting, the trial court
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possesses considerable discretion “to mould” the nature and scope of the
accounting “to the necessities of the particular case.” Cobell, 573 F.3d at 813
(citing Hecht Co. v. Bowles, 321 U.S. 321, 329 (1944)). A green eye-shade death
march through every line of every account over the last one hundred years isn’t
inevitable: the trial court may focus the inquiry in ways designed to get the
plaintiffs what they need most without imposing gratuitous costs on the
government. While the necessities of each case may be particular and for the trial
court to determine in the first instance, any case seeking to do equity must seek to
balance the often warring (and admittedly incommensurate) considerations of
completeness and transparency, on the one hand, and speed, practicality, and cost,
on the other.
On that first hand, we can add that the plaintiffs are entitled not only to
some measure of information about the government’s handling of deposits, as the
district court thought, but also to some measure of information about
disbursements. The scope of a traditional equitable accounting includes, after all,
some degree of information about both receipts and disbursements. See, e.g., 2
Joseph Story, Commentaries on Equity Jurisprudence, as Administered in
England and America § 1275, at 506-07 (1866). And as we’ve seen, § 4011(a)
guarantees an accounting, not half of one.
On the other hand, equity does not require an accounting so punctilious, so
expensive, and so laboriously long in coming that the final volume is released
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with great fanfare only after generations of beneficiaries have come in and gone
out, the Bureau of Indian Affairs has been forced to turn a blind eye to other
pressing needs in the Native American community, the public fisc has been
thirstily drained, and only the lawyers have grown fat. This case may be like
Cobell in the sense that it involves a claim for an accounting, but no one should
aspire to see the case grow so old and the number of appeals mount so high that
we have to resort to double digit Roman numerals to describe them (Fletcher X,
XI, . . . XIX) as the litigants did in Cobell. The plaintiffs before us have expressly
acknowledged that no one will benefit by prolonging this litigation needlessly and
that the government is entitled to a degree of discretion in choosing an
appropriate accounting methodology. See Aplt. Br. at 27 (citing Cobell, 240 F.3d
at 1104); see also Cobell, 573 F.3d at 814 (noting that the district court may use
statistical sampling rather than force a complete historical accounting). About
this, they are right again.
Even more particularly, we can say this. We don’t doubt that the plaintiffs
ultimately hope to prove that the government has sent money to persons ineligible
to receive headright shares under the various amendments to the 1906 Act — and,
in this way, improperly diminished their pro rata share. But in an accounting
action, trust beneficiaries are entitled only to information that is “reasonably
necessary to enable [them] to enforce [their] rights under the trust.” Restatement
(Second) of Trusts § 173 cmt. c. They are not entitled to information that only
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loosely relates to their own personal beneficial interests, or to information that is
unlikely (because it is so old, or so de minimis, say) to have a meaningful effect
on their beneficial interests. Newman et al., supra, § 962 & n.8. And in any
subsequent litigation it will be their burden to prove a breach of trust, not the
government’s burden to disprove it. See id. §§ 968, 971. To say that the
plaintiffs have a right to an accounting, then, is to say that it must give some
sense of where money has come from and gone to — not to say it must disprove
through a title search or otherwise any breach of trust theory the plaintiffs may
later choose to posit. Neither does the plaintiffs’ accounting right necessarily
mean that they will even be able to attack through collateral litigation headright
transfers long ago approved according to statutorily prescribed processes —
processes that already have in place means for objectors to challenge proposed
headright transfers. See, e.g., Act of Oct. 21, 1978, Pub. L. No. 95-496, § 5(a),
92 Stat. 1660, 1661 (discussing notice and hearing required before Secretary can
approve transfer of headright interest by will). Put simply, a duty to account is a
duty to account, not a duty to respond to and disprove any and all potential
breaches of fiduciary duty a beneficiary might wish to pursue once the accounting
information is in hand.
It may be too much to hope, but in the end it may be the government can
satisfy its accounting duty very simply. The government has suggested that in its
settlement with the Osage Nation it has discharged its accounting duty to the
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Nation. If this is true, this lawsuit, already about to reach its teenage years,
might come to a speedy end at last. It may very well be within the district court’s
considerable discretion simply to order the government to share with the plaintiffs
something like it has already shared with the Nation. Indeed, one can’t help but
wonder why the government hasn’t already offered to give the plaintiffs what it
has given the Nation. The government says it is worried about privacy concerns
associated with handing over to the plaintiffs information about other headright
owners. But the government leaves that issue undeveloped before us and never
suggests it is insurmountable. So it is we must ask the district court to work
through the matter — though with much hope it can be worked through promptly
and perhaps bring this case to rest. 6
The plaintiffs’ motion to file a supplemental appendix is denied and the
judgment of the district court is reversed. The case is remanded for further
proceedings consistent with this opinion.
6
Besides their accounting claim, the district court also dismissed without
prejudice the plaintiffs’ separate claim charging the government with improper
trust fund distributions. The plaintiffs informed us at oral argument that they do
not seek a ruling from us now on that claim. Accordingly, we decline to reach it.
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