Navajo Nation v. United States , 347 F.3d 1327 ( 2003 )

Opinion of the court filed by Circuit Judge SCHALL, in which Circuit Judge LINN joins.

Opinion dissenting in part filed by Circuit Judge PAULINE NEWMAN.

SCHALL, Circuit Judge.

In Navajo Nation v. United States, 263 F.3d 1325 (Fed.Cir.2001), this court held that the Indian Mineral Leasing Act of 1938, codified at 25 U.S.C. § 396 et seq. (“IMLA”), imposes a fiduciary duty upon the United States, the breach of which could result in money damages. In United States v. Navajo Nation, 537 U.S. 488, 123 S.Ct. 1079, 155 L.Ed.2d 60 (2003), the Supreme Court reversed that ruling and remanded the case to us for further proceedings. 123 S.Ct. at 1095. We, in turn, now remand to the Court of Federal Claims for further proceedings as may be appropriate, as discussed below.

BACKGROUND

I.

The controversy in this case grows out of the 1987 amendments to a coal lease between the predecessor of Peabody Coal Company (“Peabody”) and the Navajo Nation (“Tribe”), a federally recognized Indian tribe. After the Secretary of the Interior (“Secretary”) approved the amendments to the lease, the Tribe brought suit against the United States (“government”) in the Court of Federal Claims under the Indian Tucker Act, 28 U.S.C. § 1505, alleging, inter alia, that the Secretary’s approval of the amendments constituted a breach of trust under IMLA.

The Court of Federal Claims granted summary judgment in favor of the government. Navajo Nation v. United States, 46 Fed. Cl. 217, 236 (2000). The court determined that the government owed general fiduciary duties to the Tribe, which, in its view, the Secretary had dishonored by acting in the best interests of Peabody rather than the Tribe. Id. Nevertheless, the court concluded that the Tribe had failed to link that breach of duty to any statutory or regulatory obligation which could “be fairly interpreted as mandating compensation for the government’s fiduciary wrongs.” Id. Accordingly, the court held that the government was entitled to judgment as a matter of law. Id.

The Tribe appealed to us. We reversed and remanded, holding that IMLA imposes a fiduciary duty upon the government, the breach of which could result in money damages. 263 F.3d at 1333. The Supreme Court granted certiorari. United States v. Navajo Nation, 535 U.S. 1111, 122 S.Ct. 2326, 153 L.Ed.2d 158 (2002). As noted, the Court reversed and remanded. 123 S.Ct. at 1084.

The Supreme Court noted that its decisions in United States v. Mitchell, 445 U.S. 535, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980) (“Mitchell I ”), and United States v. Mitchell, 463 U.S. 206, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) (‘Mitchell II”), controlled the case. 123 S.Ct. at 1084. It stated that “Mitchell I and Mitchell II are the path-marking precedents on the question of whether a statute or regulation (or combination thereof) ‘can fairly be interpreted as mandating compensation by the Federal Government.’ ” Id. at 1089-90 (quoting Mitchell II, 463 U.S. at 218, 103 S.Ct. 2961).

In Mitchell I, the Court held that the Indian General Allotment Act (“GAA”) established insufficient government control and supervision of timber resources to impose upon the government a fiduciary duty, the breach of which could result in money damages. 445 U.S. at 540-44. However, in Mitchell II, the Court considered statutes and regulations other than the GAA; the court held that the statutes and regulations at issue placed a sufficient fiduciary obligation upon the government to warrant money damages for breach of that duty with respect to timber resources. 463 U.S. at 228, 103 S.Ct. 2961. The Court observed that “[i]n contrast to the bare trust created by the [GAA], the statutes and regulations now before us clearly give the Federal Government full responsibility to manage Indian resources and land for the benefit of the Indians.” Id. at 224, 103 S.Ct. 2961. Having determined that the statutes and regulations “established] fiduciary obligations of the Government in the management and operation of Indian lands and resources,” the Court concluded that the relevant legislative and executive prescriptions could “fairly be interpreted as mandating compensation by the Federal Government for damages sustained.” Id. at 226, 103 S.Ct. 2961. A damages remedy, the Court explained, would “furthe[r] the purposes of the statutes and regulations, which clearly require that the Secretary manage Indian resources so as to generate proceeds for the Indians.” Id. at 226-27, 103 S.Ct. 2961. In Navajo Nation, the Court described what it did in Mitchell II: “In Mitchell II, we held that a network of other statutes and regulations did impose judicially enforceable fiduciary duties upon the United States in its management of forested allotted lands.” 123 S.Ct. at 1090. When the Court referred to “other statutes and regulations,” it was, of course, referring to statutes and regulations other than the GAA.

In Navajo Nation, relying on its decisions in Mitchell I and Mitchell II, the Court observed that to state a claim cognizable under the Indian Tucker Act, “a Tribe must identify a substantive source of law that establishes specific fiduciary or other duties, and allege that the Government has failed faithfully to perform those duties.” Id. at 1091 (citing Mitchell II, 463 U.S. at 216-17, 103 S.Ct. 2961). If that threshold is passed, stated the Court, “the court must then determine whether the relevant source of substantive law ‘can fairly be interpreted as mandating compensation for damages sustained as a result of a breach of the duties [the governing law] impose[s].’ ” Id. (quoting Mitchell II, 463 U.S. at 219, 103 S.Ct. 2961). The Court then considered “whether the IMLA and its implementing regulations can fairly be interpreted as mandating compensation for the Government’s alleged breach of trust in this case.” Id. It concluded that they could not. Id. It observed that “[t]he IMLA and its implementing regulations impose no obligations resembling the detailed fiduciary responsibilities that Mitchell II found adequate to support a claim for money damages.” Id. It further observed that “[i]nstead, the Secretary’s involvement in coal leasing under the IMLA more closely resembles the role provided for the Government by the GAA regarding allotted forest lands.” Id. at 1092 (citing Mitchell I, 445 U.S. at 540-44, 100 S.Ct. 1349).

The Court also rejected the Tribe’s argument that the actions of the Secretary violated certain other discrete statutory and regulatory provisions. Id. Specifically, the Court rejected the Tribe’s arguments that relied on 25 U.S.C. § 399 and the Indian Mineral Development Act of 1982, 25 U.S.C. § 2101 et seq. (“IMDA”). 123 S.Ct. at 1092-93. Concerning section 399, the Court explained that the statute is not part of IMLA and does not govern the Peabody lease. Id. at 1092. As far as IMDA was concerned, the Court stated that IMDA “does not establish standards governing the Secretary’s approval of mining leases negotiated by a Tribe and a third party,” and the Court added that “[t]he lease in this case ... falls outside the IMDA’s domain.” Id. at 1093. The Court concluded: “[W]e have no warrant from any relevant statute or regulation to conclude that [the Secretary’s] conduct implicated a duty enforceable in an action for damages under the Indian Tucker Act.” Id. at 1095. It thus reversed and remanded. Id.

II.

The Tribe has submitted a “suggestion for proceedings on remand.” In its submission, the Tribe states that the Court’s decision in Navajo Nation was based on IMLA, and that the decision left open consideration of the effect of the “network” of relevant statutes, treaties, and regulations. The Tribe urges us to remand to the Court of Federal Claims so that it can consider the effect of the “network” of relevant statutes, treaties, and regulations.

The government opposes the requested remand. It argues that the Supreme Court’s decision was not limited to IMLA. It also argues that the Tribe has waived any argument that “a network of other statutes and regulations” independently provides the basis for a viable breach of trust claim.

ANALYSIS

The parties’ arguments present two issues. First, we must determine if the Supreme Court decided the question of whether, apart from IMLA, “a network of other statutes and regulations,” Navajo Nation, 123 S.Ct. at 1090, imposes fiduciary duties upon the government, the breach of which could result in money damages. If we conclude that the Supreme Court has not decided that question, we must consider the government’s contention that the Tribe has waived any argument that its breach of trust claim is viable independent of IMLA.

I. Scope of the Supreme Court’s decision

The Tribe argues that the Court’s decision in Navajo Nation was based on IMLA and that the decision left open for future consideration the issue of what the Tribe calls the “network” of relevant statutes, treaties, and regulations. The Tribe points out that the question presented to the Court in the government’s petition for certiorari was directed only to IMLA, as was the question presented in the government’s brief before the Court. The Tribe states that although it raised the “network” issue in its brief as Respondent, it was not the question that was brought to the Court. The Tribe points to a similar progression in the Mitchell cases, and argues that this situation is directly analogous to the enlargement of decisional premises between Mitchell I and Mitchell II. It asserts that, in Navajo Nation, the Court explicitly stated that it was applying only the IMLA, drawing an analogy to Mitchell I, and that it did not consider whether the totality of statutes and regulations could bring coal leasing within the framework of Mitchell II. Thus, the Tribe requests remand and the opportunity for full exploration and determination of this issue. For its part, the government argues that the Supreme Court’s decision expressly addressed “any relevant statute or regulation,” not just IMLA, and the government points out that the Court specifically addressed two other statutes: 25 U.S.C. § 399 and the IMDA.

We agree with the Tribe that the Court directed primary, if not exclusive, attention to IMLA. In its opening statement, the Court stated: “This case concerns the Indian Mineral Leasing Act of 1938 (IMLA), 52 Stat. 347, 25 U.S.C. § 386a et seq., and the role it assigns to the Secretary of the Interior (Secretary) with respect to coal leases executed by an Indian Tribe and a private lessee.” 123 S.Ct. at 1084. The Court later stated: “We now consider whether IMLA and its implementing regulations can fairly be interpreted as mandating compensation for the Government’s breach of trust in this case.” Id. at 1091. As noted, however, the Court also addressed the Tribe’s arguments relating to 25 U.S.C. § 399 and IMDA. Under these circumstances, we conclude that the Supreme Court did not address the question of whether, apart from IMLA, “a network of other statutes and regulations,” 123 S.Ct. at 1090, imposes “judicially enforceable fiduciary duties upon the United States,” id., in connection with the Peabody lease, although the Court did state that section 399 does not govern the lease at issue and that the lease “falls outside the IMDA’s domain.” Id. at 1093.

The government states that dispositive weight should be placed on the Court’s closing statement that “[hjowever one might appraise the Secretary’s intervention in this case, we have no warrant from any relevant statute or regulation to conclude that his conduct implicated a duty enforceable in an action for damages under the Indian Tucker Act.” Id. at 1095. The government argues that this shows that the Court considered all statutes and regulations that might contribute to the asserted “network,” and thus rejected a “network” argument. We do not agree. While it is true that the Court did give some attention to several statutes besides IMLA, it was IMLA that was extensively discussed and was the focus of the Court’s holding: “we hold that the Tribe’s claim for compensation from the Federal Government fails, for it does not derive from any liability-imposing provision of the IMLA or its implementing regulations.” Id. at 1084. The statement to which the government refers should be read in that context.

II. The question of waiver

As noted above, the government argues that the Tribe has waived any argument that its breach-of-trust claim is viable independent of IMLA. The government contends that the Tribe did not argue in the Court of Federal Claims, this court, or the Supreme Court that, in the words of the Court, “a network of other statutes and regulations ... impose judicially enforceable duties upon the United States” in connection with the Peabody lease. Id. at 1090. The Tribe responds that it did preserve this argument, both in the Court of Federal Claims and before us. The critical question, of course, is whether the argument was preserved in the Court of Federal Claims. That issue, we believe, should be decided in the first instance by that court. If the Court of Federal Claims concludes that the issue was properly raised, it should then determine whether any of these statutes can fairly be read as money-mandating in light of the Supreme Court’s decisions in Navajo Nation and United States v. White Mountain Apache Tribe, 537 U.S. 465, 123 S.Ct. 1126, 155 L.Ed.2d 40 (2003), and in light of out own previous decisions in related areas, see, e.g., White Mountain Apache Tribe v. United States, 249 F.3d 1364, 1372-73 (Fed.Cir.2001), aff'd, 537 U.S. 465, 123 S.Ct. 1126, 155 L.Ed.2d 40 (2003).

CONCLUSION

The decision of the Supreme Court in this case was limited to the question of whether IMLA imposes judicially enforceable duties upon the United States in connection with the Peabody lease. However, in deciding that issue, the Court stated that 25 U.S.C. § 399 does not govern the lease and that the lease “falls outside IMDA’s domain.” The Court did not decide whether, apart from IMLA, section 399, and IMDA, “a network of other statutes and regulations” imposes judicially enforceable duties upon the United States in connection with the lease. The case is remanded to the Court of Federal Claims for further proceedings. In the first instance, the court should determine whether, as the government asserts, the Tribe waived a claim with respect to “a network of other statutes and regulations.” If the court determines that such a claim was not waived, it should decide whether, apart from IMLA, section 399, and IMDA, a “network of other statutes and regulations” imposes “judicially enforceable fiduciary duties upon the United States” in connection with the Peabody lease and, if so, whether such duties were breached.

REMANDED.