Sisseton Wahpeton Oyate of the Lake Traverse Reservation v. Jewell ( 2015 )

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
SISSETON WAHPETON OYATE OF
THE LAKE TRAVERSE
RESERVATION, et al.,
Civil Action No. 13-00601 (TFH)
Plaintiffs,
v.
THE HONORABLE SALLY JEWELL,
Secretary of the Interior, et al., »
Defendants.
MEMORANDUM OPINION
Pending before the Court is Defendants’ Motion to Dismiss [ECF No. 19], which seeks
dismissal of Plaintiff s Complaint pursuant to Federal Rule of Civil Procedure 12(b)(l) based on
lack of subject matter jurisdiction. Because the Court finds that it has jurisdiction over this
matter, the Defendants” Motion to Dismiss will be denied.
BACKGROUND AND PROCEDURAL POSTURE
On April 30, 2013, this lawsuit was filed by four federally—recognized American Indian
tribes seeking declaratory and injunctive relief against the Secretary of the Interior and the
Secretary of the Treasury (hereinafter “Defendants”) for their alleged breaches of fiduciary
duties relating to tribal trust accounts. See Compl. [ECF No. 1]. On November 15, 2013 and
November 19, 2013, Plaintiffs amended their Complaint to add additional American Indian
tribes, bringing the total number of Plaintiff-tribes to ten. See First Am. Compl. & Second Am.
Compl. [ECF Nos. 17 & 20]. On November 22, 2013, Defendants moved to dismiss the
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Plaintiffs’ Complaint based on lack of jurisdiction. Defs.’ Mot. to Dismiss [ECF No. 19].
Defendants contend that the Court lacks subject matter jurisdiction because the government has
not waived its sovereign immunity from the Plaintiffs’ claims. Id.
The underlying facts related to this case are not unfamiliar to the Court. The federal
government has held funds and assets in trust for American Indian tribe beneficiaries for well
over a century. Unfortunately, the federal government has failed to discharge its fiduciary duties
in its role as trustee for the tribes, and those trust accounts have been mismanaged for almost as
long as they have been in existence. See Cobell v. Norton, 240 F.3d 1081, 1086 (DC. Cir.
2001). Plaintiffs now seek declaratory relief that certain previous attempts to reconcile the trust
accounts did not satisfy the government’s responsibility to provide a complete and accurate
accounting of those accounts. Second Am. Compl. 11 62 [ECF No. 20]. Plaintiffs also seek
injunctive relief compelling Defendants to perform their duties to provide complete and accurate
accountings, preserve any and all documents concerning Plaintiffs” trust accounts, and make
their accounts whole. Id. 1111 67-69. Finally, Plaintiffs seek judicial review of the agencies’
actions under the Administrative Procedures Act (“APA”). Id. 1111 71—75.
Defendants argue that Plaintiffs’ claims are improperly based on the “inherent fiduciary
duty” between the federal government and Plaintiff-tribes, and that Plaintiffs have failed to
properly identify the statute or regulation on which their claims are based. Defs.’ Mot. to
Dismiss l3 [ECF No. 19]. Defendants also argue that Plaintiffs have not sufficiently alleged that
the “complete and accurate trust accounting” they seek is demanded by law, which means that
Plaintiffs have failed to properly invoke the APA’s waiver of sovereign immunity. Id. at 14.
Defendants further contend that (1) Plaintiffs seek broad structural relief which is not proper
under the APA, (2) Plaintiffs’ claims are impermissible programmatic challenges, (3) Plaintiffs’
claims related to recordkeeping should be dismissed because there is no private right of action,
and (4) Plaintiffs’ claims for injunctive relief are actually seeking monetary damages which is
outside the scope of the waiver of sovereign immunity and not within the Court’s jurisdiction.
1d. at 16-19, 22-23. Finally, Defendants argue that Plaintiffs’ claims are time—barred under the
applicable statute of limitations. Id. at 19-21.
LEGAL STANDARD
“Federal courts are courts of limited jurisdiction. They possess only that power
authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am, 511 US.
375, 377 (1994) (internal citations omitted). When the Court’s subject-matter jurisdiction is
challenged, the party asserting jurisdiction bears the burden of establishing that the court does, in
fact, have subject—matter jurisdiction over the dispute. Moms Against Mercury v. FDA, 483 F.3d
824, 828 (DC. Cir. 2007). Because sovereign immunity “is a jurisdictional issue” it “may be
raised in a Rule 12(b)(1) motion to dismiss . . . .” Royer v. Federal Bureau of Prisons, 933 F.
Supp. 2d 170, 180 (D.D.C. 2013). In deciding a motion to dismiss based on lack of jurisdiction,
the Court must construe all facts alleged in the complaint as true. Morrow v. United States, 723
F. Supp. 2d 71, 76 (D.D.C. 2010).
ANALYSIS
As a threshold matter, the Court notes that it has jurisdiction in this matter because the
prospective relief Plaintiffs seek is a “civil action[ ] arising under the Constitution, laws, or
treaties of the United States.” 28 U.S.C. § 1331. Because the government has challenged
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whether it has waived sovereign immunity for Plaintiffs’ claims, this does not end the
jurisdictional inquiry.
1. Waiver of Sovereign Immunity
Plaintiffs bring their lawsuit against federal officials, so they “must prove a clear waiver
of sovereign immunity that covers the substantive claims and remedies that they seek.” Cobell v.
Babbitt (Cobell V), 91 F. Supp. 2d 1, 24 (D.D.C. 1999). Here, the Plaintiffs’ claims are properly
within the waiver of sovereign immunity found in section 702 of the APA which provides:
An action in a court of the United States seeking relief other than money damages
and stating a claim that an agency or an officer or employee thereof acted or
failed to act in an official capacity or under color of legal authority shall not be
dismissed nor relief therein be denied on the ground that it is against the United
States.
5 U.S.C. § 702. There is a “strong presumption” of reviewability of agency decisions under the
APA. Bowen 1/. Mich. Acad. 0f Family Physicians, 476 U.S. 667, 670 (1986). While
Defendants have argued Plaintiffs’ claims for declaratory and injunctive relief are merely claims
for monetary damages in disguise (Defs.’ Mot. to Dismiss l7 [ECF No. 19]), this argument
carries no weight at the motion to dismiss stage because on the face of their Complaint, Plaintiffs
seek declaratory and injunctive relief, not monetary damages. And, as the Supreme Court has
made clear, the Court need only examine the nature of the action that Plaintiffs have brought to
determine whether there has been a waiver of sovereign immunity. Bowen v. Massachusetts, 487
US. 879, 893-96 (1988) (“Our cases have long recognized the distinction between an action at
law for damages . . . and an equitable action for specific relief . . . . The fact that a judicial
remedy may require one party to pay money to another is not a sufficient reason to characterize
the relief as money damages”) (internal quotation marks and citations omitted). Plaintiffs here,
just like the Plaintiffs in the Cobell litigation, “seek to enforce their statutory right to an
accounting as that phrase is meant under the provisions of 25 U.S.C. § l62a(d)(1)—(7) and 25
U.S.C. § 4011.” Cobell V, 91 F. Supp. 2d at 27.
Defendants argue that they owe no common law fiduciary duty to Plaintiffs, and
Plaintiffs have allegedly failed to identify a “rights-creating statute or regulation upon which to
base their claims.” Defs.’ Mot. to Dismiss 8 [ECF No. 19]. Defendants also contend that
Plaintiffs have not properly identified an agency action that may be compelled by the Court, but
this is incorrect because Plaintiffs rely upon the statutory obligations found in 25 U.S.C.
§§ 162a(d), 4011. Further, the DC. Circuit has consistently interpreted Defendants’ duties
regarding Indian trust accounts “in light of the common law of trusts and the United States’
Indian policy.” Cobell v. Norton (Cobell VI), 240 F.3d 1081, 1090 (DC. Cir. 2001). “The
federal government has ‘charged itself with the moral obligations of the highest responsibility
and trust’ in its relationships with Indians, and its conduct ‘should therefore be judged by the
most exacting fiduciary standards.” Id. at 1099 (quoting Seminole Nation v. United States, 316
US. 286, 297 (1942)). Furthermore, the DC. Circuit has held that the Indian Trust Fund
Management Reform Act (“1994 Act”), upon which Plaintiffs base their statutory claims, did not
create these duties to Indians, but rather “reaffirmed and clarified preexisting duties.” Id. at
1100. Therefore, Defendants’ arguments that Plaintiffs” claims are improperly based on an
inherent fiduciary duty owed by the government to the Plaintiffs are misguided. Plaintiffs are
entitled to seek enforcement of their statutory rights provided for in the 1994 Act. 1
1 Defendants also contend that plaintiffs’ cause of action seeking an injunction to maintain
records related to the trust accounts should be dismissed because they cannot maintain an
independent cause of action for record retention. Defs.’ Reply 16 [ECF No. 23]. And,
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Defendants allege that Plaintiffs seek broad structural relief by requesting a “judicial
determination of Interior’s accounting obligations, a court—ordered and supervised accounting,
and restatement of trust fund account balances.” Defs.’ Mot. to Dismiss 11 [ECF No. 19].
Defendants also argue that Plaintiffs” claims are an impermissible programmatic challenge. Id.
at 12. It is true that the Court cannot order “wholesale programmatic changes or prescribe
particular tasks for Interior to perform based on policies developed by the district court.” Cobell
v. Kempthome, 455 F.3d 301, 305 (DC. Cir. 2006). However, what Plaintiffs seek here is a
judicial determination that the Department of the Interior has not complied with its statutory
directives and related relief, which is entirely within the Court’s jurisdiction. Whether Plaintiffs
will be successful on the merits of their claim is for another day, but the relief sought by
Plaintiffs is distinguishable from impermissible programmatic challenges, at least on the face of
the Complaint.2
Defendants claim that their record retention obligations are governed by the Federal Records Act
of 1950 and the Federal Records Disposal Act. Id. This argument is somewhat puzzling to the
Court, given that the DC. Circuit has previously stated that it is self—evident that “rendering of
an adequate accounting requires the locating and retention of records . . . . Anything less would
produce an inadequate accounting.” Cobell V, 240 F.3d at 1103. The Court reads Plaintiffs’
Complaint to include recordkeeping as part of the injunction sought for accounting. Second Am.
Compl. 11 68 [ECF No. 20] (“Ancillary to this demand for complete and accurate accountings,
Plaintiffs are entitled to mandatory injunctive relief directing Defendants to preserve any and all
documents concerning Plaintiffs” trust accounts . . . .”); see also ‘11 74. Therefore, there appears
to be no separate claim for recordkeeping to dismiss.
2 Indeed, the district court previously rejected this argument regarding whether Lujan v. National
Wildlife Fed ’n, 497 US. 871 (1990) precluded the district court from reviewing the Defendants’
actions:
In this case, the defendants have enacted a concrete accounting system which it
currently administers and which the plaintiffs claim, under its APA allegations,
constitutes arbitrary and capricious action. The plaintiffs do not seek to
generically challenge the defendants’ actions . . . . These agency actions are final,
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Defendants argue at length that the statutory provisions upon which Plaintiffs rely do not
provide the relief Plaintiffs seek. Defendants construe Plaintiffs’ Complaint as seeking an
additional accounting in addition to the reconciliation reports provided in 1996.3 Defs.’ Mot. to
Dismiss 9 [ECF No. 19]. It is clear that the gravamen of the Plaintiffs’ Complaint is that the
reconciliation reports provided to Plaintiffs in 1996 did not comply with the statutory
requirements, not that Plaintiffs are entitled to some additional accounting as Defendants allege.
Second Am. Compl. W 47-51 [ECF No. 20]. In addition, Plaintiffs seek judicial review under
Section 706 of the APA, on the basis that the agency has failed to perform an accounting as
required by law and that such action (or inaction) is arbitrary and capricious. See, e. g., Ikon
Global Mkts. v. CF T C, 859 F. Supp. 2d 162, 169 (D.D.C. 2012) (“‘agency action” encompasses a
“failure to act’ . . . [therefore] courts in this district have said that if a failure to act amounts to a
‘consummated agency action’ that APA views as final, notwithstanding the fact that the agency
‘did nothing,’ a party can seek relief under Section 706(2) of the APA”). The arguments
advanced by the Defendants regarding whether or not Plaintiffs are entitled to the relief they seek
are really arguments about the merits of the case, not jurisdiction, which the Court plainly has.
ripe, and allegedly adversely affect the plaintiffs. For these reasons, Lujan does
not contemplate a different result.
Cobell v. Babbitt, 30 F. Supp. 2d at 34, n.10.
3 According to the Second Am. Compl., in the 19905, the Interior Department contracted with the
accounting firm Arthur Andersen to examine transactions for limited and selected tribal trust
accounts for a limited time period. Second Am. Compl. 'fl 7. These reports were provided to the
tribes for this time period. Id. However, the Bureau of Indian Affairs allegedly admitted that the
Arthur Anderson Reports were not complete and accurate accountings. Id.
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II. Statute of Limitations
Satisfied that the Court has jurisdiction over the Plaintiffs’ claims, the Court now turns to
Defendants’ contention that Plaintiffs’ claims are time-barred. In suits against the United States,
the action must be brought within six years of when the right of action first accrues. 28 U.S.C.
§ 2401(a). Here, the question for the Court is when the cause of action accrued for these
Plaintiffs. Defendants contend that the accrual date was set by Congress as December 31, 2000:
Notwithstanding any other provision of law, for purposes of determining the date
on which an Indian tribe received a reconciliation report for purposes of applying
a statute of limitations, any such report provided to or received by an Indian tribe
in response to section 304 of the American Indian Trust Fund Management
Reform Act of 1994 (25 U.S.C. 4044) shall be deemed to have been received by
the Indian tribe on December 31, 2000.
Encourage the Negotiated Settlement of Trial Claims, Pub. L. No. 107-153, 116 Stat. 79 § 1(a)
(2002) (hereinafter referred to as “S. 1857”), as amended by Settlement of Tribal Claims—
Amendment, Pub. L. No. 109—158, 119 Stat. 2954 (2005). If receipt of the 1996 reconciliation
reports, which Plaintiffs admit they received, triggers the running of the statute of limitations,
then Defendants’ assertions are correct. If the cause of action accrued six years after the date set
by Congress, then the statute of limitations passed on December 31, 2006, and this action was
not filed until 2013. Plaintiffs would clearly be time barred.
However, the Court’s inquiry does not end there. The legislative history related to the
statute upon which Defendants rely indicates that it is not at all clear that “the receipt of the
reconciliation reports does in fact commence the running of a statute of limitations on tribal
claims against the United States related to the United States’ management of tribal trust funds.”
Committee on Indian Affairs, S. Rep. No. 107—138, at 5 (2002). The stated purpose of S. 1857
was to encourage settlement of the claims with Indians related to management of the trusts, and
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the bill was meant to address the possibility that the statute of limitations was running or had run.
Id. at 1.
On the contrary, Plaintiffs contend that the proper inquiry for accrual of the cause of
action is the repudiation of the trust by the trustee. See Cobell v. Norton, 260 F. Supp. 2d 98,
104 (D.D.C. 2003) (“[W]here, as here, there is a fiduciary relationship between the parties, the
universal rule is that a statute of limitations does not begin to run . . . until the relationship is
repudiated”). Plaintiffs point out that Defendants have not argued that the trust has been
repudiated, and therefore the cause of action still has not accrued. Pl.’s Mem. in Opp. 37-38
[ECF No. 22].
In fact, the Committee on Indian Affairs took no position on whether receipt of the
reconciliation reports did, in fact, trigger the statute of limitations. Committee on Indian Affairs,
S. Rep. No. 107-138, at 5. Similarly, at this juncture, the Court takes no position on that issue.
The parties have not yet had the opportunity to develop a record through discovery on when
Plaintiffs’ claims accrued, and the factual issues related to accrual preclude deciding the issue of
the statute of limitations at the motion to dismiss stage. See Richards v. Mileski, 662 F.2d 65, 73
(DC. Cir. 1981) (“There is an inherent problem in using a motion to dismiss for purposes of
raising a statute of limitations defense”). Therefore, the Court reserves this issue for a later
stage of the proceedings after the parties have had the opportunity for discovery and
development of the issues.
CONCLUSION
For the foregoing reasons, the Court will deny the Defendants’ Motion to Dismiss [ECF
No. 19]. An appropriate order will accompany this memorandum opinion.
September /7%015
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