Ellеn MOOSE, et al., Plaintiffs-Appellants, v. UNITED STATES of America, et al., Defendants-Appellees.
No. 80-4373
United States Court of Appeals, Ninth Circuit
April 19, 1982
Argued and Submitted Dec. 14, 1981.
REVERSED and REMANDED.
fendants are liable, and the extent of that liability.
Maria Iizuka, Washington, D. C., argued, for defendants-appellees; B. Mahlon Brown, U. S. Atty., Reno, Nev., on brief.
Before PREGERSON and BOOCHEVER, Circuit Judges, and HALBERT,* District Judge.
PREGERSON, Circuit Judge:
Appellants are Indian children, members of the Southern Paiute tribe, who assert that the federal government has misman-
FACTS
In January 1965, the Indian Claims Commission entered a judgment against the United States to compensate the Southern Paiute Tribe for the loss of its aboriginal homelands during the second half of the nineteenth century. Three months later, Congress appropriated some $7.2 million to pay this judgment.2 The money was turned over tо the Secretary of the Interior on May 12, 1965 and deposited in the federal Treasury.
In October 1968, Congress enacted the Southern Paiute Distribution Act [hereinafter Distribution Act], Pub.L. 90-584, 82 Stat. 1147. This statute required the Interior Secretary to prepare a roll of Southern Paiute tribal members, to apportion the judgment fund among specified groups of tribal members, and to deposit or distribute those groups’ portions of the fund in specified ways. In particular, section 6 of the Act—at issue here—specified that sums payable to Southern Paiute minors “shall be paid in accordance with such procedures as the Secretary determines will best protect their interests, including the establishment of trusts.”
The judgment fund was held in the United States Treasury from May 12, 1965 until March 28, 1966, earning 4% interest. From March 28, 1966 until March 5, 1971, the money was invested outside the Treasury. It was again deposited in the Treasury, at 4% interest, from March 5, 1971 until March 31, 1971. From April 1, 1971 until June 6, 1972, the fund earned no interest.
The adult tribal members received their shares (about $7500 each) on June 16, 1971. On June 6, 1972, the Secretary of the Interior entered into an agreement with the Valley Bank of Nevada, under which the bank was to hold as trustee the Southern Paiute minors’ portion of the judgment fund. About $1.2 million was thus deposited with Valley Bank. Appellants allege that the bank invested the funds in common stocks and bonds that decreased in value.
Appellants, several Southern Paiute minors, filed the instant class action on April 8, 1977, on behalf of all 160 Southern Paiute minor beneficiaries of the judgment fund. In essence, appellants alleged that the government breached both its fiduciary duties as the trustee of the minors’ portion of the judgment fund and duties imposed by statutes dealing with Indian trust
DISCUSSION
The Tucker Act, which appellants contend grants the district court jurisdiction over their damages claim, is “only a jurisdictional statute; it dоes not create any substantive right enforceable against the United States for money damages.” United States v. Testan, 424 U.S. 392, 398, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976).4 Appellants must rely on some other federal law to create the substantive right—“the asserted entitlement to money damages depends upon whether any federal statute ‘can fairly be interpreted as mandating compensation by the Federal Government for the damage sustained.‘” Id. at 400, 96 S.Ct. at 954, quoting Eastport Steamship Corp. v. United States, 372 F.2d 1002, 1009 (Ct.Cl.1967).
Appellants contend that several statutes mandate compensation for the alleged mishandling of their fund. One is section 6 of the Distribution Act itself. Appellants argue that under this statute the United States held their fund as a trustee, so that the statute implicitly mandates compensation for breаch of the trust obligations. Appellants also cite
We need not, and do not, reach the question whether section 159 has any application here.6 As for sections 161a and 162a, their
We believe that the United States does hold the minors’ portion of the Southern Paiute judgment fund in trust for the minors. Section 6 of the Distribution Act requires that the government deal with that fund so as to “best protect” the minors’ interests. This language manifests Congress‘s intent that the government hold the judgment fund for the benefit of the minors, which is precisely the intent necessary to create a trust.7 Explicit use of the word “trust,” or any other particular language, is not necessary.8 This general rule applies with perhaps greater than usual force to a situation where the United States holds funds for an Indian tribe, because of the traditional and repeated emphasis on the fiduciary nature of the United States-Indian relationship.9 Indeed, where the United States holds funds for Indian tribes, a trust relationship exists unless there is explicit language to the contrary:
[W]here the Federal Government takes on or has control or supervision over tribal monies or properties, the fiduciary relationship normally exists with respect to such monies or properties (unless Congress has provided otherwise) even though nothing is said expressly in the authorizing or underlying statute (or other fundamental document) about a trust fund, or a trust or fiduciary connection.
Navajo Tribe v. United States, 624 F.2d 981, 987 (Ct.Cl.1980).10
It is noteworthy that Congress has explicitly referred to another one of the judgment funds appropriated by the Second Supplemental Appropriations Aсt of 1965—the Ute fund—as a “trust fund.”11 The Southern Paiute fund was appropriated by the same 1965 act. Nothing in that act differentiates the Ute judgment fund from
Furthermore, a statute enacted several years after the Distribution Act to establish a uniform procedure for distributing Indian judgment funds indicates a congressional understanding that all such funds are held in trust.13 Section 7 of that statute—now
It is clear from past opinions of this court and of the Supreme Court, and from the actions of both Congress and the Executive Branch, that funds appropriated to Indians to satisfy judgments of the Indian Claims Commission or of this court, as well as funds produced by tribal activities, are, when kept in the Treasury, held in trust for the Indians.
Cheyenne-Arapaho Tribes v. United States, 512 F.2d 1390, 1392 (Ct.Cl.1975).14
We are aware that the Tenth Circuit has recently concluded that the Distribution Act did not create a trust, because it nowhere “indicated that the judgment fund in question was to be held in trust pending distribution.” Whiskers v. United States, 600 F.2d 1332, 1335 (10th Cir. 1979), cert. denied, 444 U.S. 1078, 100 S.Ct. 1028, 62 L.Ed.2d 761 (1980). Whiskers, however, is clearly distinguishable because it involved a different portion of the Distribution Act. Appellants there contended that section 1 of the Distribution Act, which required the government to prepare a roll of members of thе Southern Paiute tribe, imposed a trust obligation that the government violated by making inadequate efforts to enroll eligible tribal members living in remote areas. Section 6 of the Act, which we find manifests Congress‘s intent to impose trust obligations on the government vis-a-vis the Southern Paiute minors, was not at issue in Whiskers.
The Whiskers court did state, however, that where Congress declares that the government holds funds in trust for Indians, it thereby waives sovereign immunity with respect to damage claims for breach of that trust. Whiskers, supra, 600 F.2d at 1335. We agree with this statement, which is simply an application of the general rule that a trustee can be held liable for losses caused by breach of trust
This conclusion in no way conflicts with United States v. Mitchell, 445 U.S. 535, 100 S.Ct. 1349, 63 L.Ed.2d 607 (1980), in which the Court rejected contentions that the government had breached fiduciary obligations owed to the Quinault Indian Tribe and individual Indians by improperly managing timber resources on reservation land. Mitchell left open the question whether the general rule that a trustee is liable for damages caused by breach of trust applies against the United States. The Court explicitly declined to “consider whether, had Congress actually intended [the statute in question] to impose upon the Government all fiduciary duties ordinarily placed by equity upon а trustee, the Act would constitute a waiver of sovereign immunity.” 445 U.S. at 542, 100 S.Ct. at 1354. Indeed, on remand, the Court of Claims specifically stated that the rule that “[a] trust normally entails the right to compensation for the trustee‘s breach” would be applied against the United States where the statute creating the trust “does not in any way suggest otherwise.” Mitchell v. United States, 664 F.2d 265, 271 (Ct.Cl.1981).
Moreover, Mitchell is distinguishable on its facts from the instant case. The actual holding in Mitchell was that the particular statute plaintiffs there relied upon created only a limited trust that did not include any duty to manage timber resources. Although the United States held the Indians’ land in trust, Congress intended that the Indians, rather than the government, were to be responsible for managing that land. 445 U.S. at 542-43, 100 S.Ct. at 1354. No analogous holding is рossible here. The United States held the minors’ judgment fund, and it was never contemplated that the minors, rather than the government, take charge of the investment of that fund.16
Thus, we conclude that the United States holds the minors’ portion of the Southern Paiute judgment fund in trust for the minors, and consequently that the United States has waived sovereign immunity with respect to claims for damages for breach of that trust.17 On remand, the district court will have to determine whether the government‘s handling of the minors’ judgment fund breached either the general standards to which trustees are held18 or the more
In addition to damages, appellants seek to compel the defendant government officials to calculate what each minor‘s shаre would be worth had the most advantageous allowable investments been made, and to replace the Valley Bank trust with a new trust containing the corrected value of each minor‘s share. Appellants rely on
Mandamus, however, is proper only where the claim its proponent seeks to enforce is clear and certain and the duty of the government official is ministerial and “so plainly prescribed as to be free from doubt.” Lee Pharmaceuticals v. Kreps, 577 F.2d 610, 618 (9th Cir. 1978), cert. denied, 439 U.S. 1073, 99 S.Ct. 847, 59 L.Ed.2d 40 (1979); Jarrett v. Resor, 426 F.2d 213, 216 (9th Cir. 1970). That is not the situatiоn here. If the government is held to have breached its trust responsibilities, it will be for the district court, in the first instance, to determine the corrected value of the minors’ shares of the judgment fund. Moreover, we cannot say that the defendant government officials owe a “clear and certain” duty to terminate the trust with the Valley Bank and set up a new one. Even if the Valley Bank trust was administered under improper safeguards, it would seem that government officials have discretion to decide how to remedy the situation (e.g., they could revise the trust agreement but keep the bank as trustee). Therefore, we affirm that portion of the district court‘s judgment dismissing appellants’ request for injunctive and mаndamus relief.
AFFIRMED IN PART, REVERSED IN PART, and REMANDED.
HALBERT, District Judge, concurring and dissenting:
While I concur fully in the majority‘s conclusion that the dismissal of plaintiffs’ requests for mandamus and injunctive relief was appropriate, I dissent from its conclusion that Tucker Act jurisdiction is present in this case.
The sole issue on this appeal is whether the United States has waived sovereign immunity to suit. Since the Tucker Act, upon which this suit is based, is “only a jurisdictional statute,” and “does not create any substantive right enforceable against the United States for money damages,” United States v. Testan, 424 U.S. 392, 398, 96 S.Ct. 948, 953, 47 L.Ed.2d 114 (1976), it is necessary to look beyond the Tucker Act‘s grant of jurisdiction to find a separate statute that “can fairly be interpreted as mandating compensation by the Federal Government for the damage sustainеd.” Id. at 400, 96 S.Ct. at 954 (quoting Eastport S.S. Corp. v. United States, 372 F.2d 1002, 1009 [Ct.Cl.1967]). It is that statute that provides the necessary waiver of sovereign immunity. See United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1352, 63 L.Ed.2d 607 (1980).
I am in full agreement with the proposition that “a legislative declaration of trust status for a particular fund is itself a congressional mandate, fully consistent with the Testan-Eastport standard discussed above, that the United States assume financial responsibility for its failure adequately to perform its fiduciary obligations.” Whiskers v. United States, 600 F.2d 1332, 1335 (10th Cir. 1979), cert. denied 444 U.S. 1078, 100 S.Ct. 1028, 62 L.Ed.2d 761 (1980). Because that declaration of trust status is, ipso facto, a waiver of sovereign immunity,
I find no such unequivocal declaration that the Southern Paiute minors’ share of the judgment fund was to be held in trust in this case. The conclusion of the majority to the contrary is based upon an unconvincing patchwork of analogy and implicatiоn. Even if each portion of the majority‘s analysis were persuasive, however, it could not support the finding that sovereign immunity is waived. See id. Nowhere does the majority profess to find the type of conclusive, unequivocal legislative declaration of trust that would justify its conclusion. This is not surprising, for no such declaration appears to exist.
The Tenth Circuit found that to be true in the case of Whiskers v. United States, supra, which is clear authority for the proposition that the Southern Paiute judgment fund is not held in trust. Whiskers v. United States, supra, at 1335. The plaintiffs in Whiskers sought damages for the government‘s alleged failure to enroll them as eligible recipients of the judgment fund under Section 1 of the Distribution Act. In holding that there was no jurisdiction to review the alleged breach of duty, the Whiskers court squarely held that neither the Appropriations Act nor the Distribution Act created a trust. Id. at 1335, 1336. The fact that the Whiskers court did not expressly discuss Section 6 of the Distribution Act, the section at issue in the instant case, is unimportant. Its conclusion that a violation of Section 1 was not actionable was based entirely on its finding that the Distribution Act did not create a trust. That holding therefore applies here to indicate that a violation of Section 6 is likewise not actionable because the allotted funds were not held in trust.
Independent examination of the language of Section 6 in an effort to find Congressional intent to create a trust reveals that the Tenth Circuit‘s conclusion was correct. Reading that section of the enactment “with that cоnservatism which is appropriate in the case of a waiver of sovereign immunity,” Mitchell v. United States, 664 F.2d 265, 268 (Ct.Cl.1981) (quoting United States v. Sherwood, 312 U.S. 584, 590, 61 S.Ct. 767, 771, 85 L.Ed. 1058 [1940]), no clear intent to create a trust is apparent. Section 6 merely provides that the sums due the Southern Paiute minors “shall be paid in accordance with such procedures as the Secretary determines will best protect their interests, including the establishment of trusts.” (Emphasis added). It is significant that Congress named “the establishment of trusts” as one method by which the Secretary could “best protect” the minors’ interests. If Congress itself had intended to create a trust by enacting Section 6, the inclusion of language allowing the Secretary to establish trusts would be redundant.
The fact that the language regarding the establishment of trusts is couched in permissive terms is significant for another reason as well. The Secretary has been given unfettered discretion in the handling of the minors’ share of the judgment fund. There is no clear indication what shall constitute proper management of the fund; similarly, it is difficult to tell what shall constitute mismanagement. Had Congress intended to create a trust, the Secretary‘s discretion would have been limited by
Although it is thus clear that the Distribution Act was not intеnded to create a trust, but merely to confer discretion upon the Secretary to handle and distribute the funds as he saw fit, the majority has proceeded to examine several other statutes and principles of law in the apparent quest for an implication or analogy that would
It has often been said that the relationship of the United States to the Indians resembles that of a guardian to his ward, which is admittedly a fiduciary relationship. In the words of the Whiskers court: “This point is not without some appeal and, indeed, it is entirely accurate as a general proposition.” Whiskers v. United States, supra, at 1337. Recognition of this truism is insufficient to imply the existence of fiduciary duties owed by the United States to the Indians in the absence of a clear legislative mandate to that effect, however. The Testan-Eastport requirement that a specific statute granting a substantive right to compensation in damages be found before sovereign immunity is waived cannot be satisfied by taking note of the protection afforded Indians by the United States. Id. As a panel of this court has stated:
The Federal-Indian relationship has many times been said to resemble that of a guardian and ward. However, in the absence of some specific language to the effect in a treaty, the legal obligations of a true guardianship do not prevail. We are therefore of the view that the consent of the United States to be sued ... cannot be predicated on the guardian and ward concept.
Skokomish Indian Tribe v. France, 269 F.2d 555, 560 (9th Cir. 1959) (footnotes omitted).1
Another general proposition relied on by the majority is the idea that Indian funds held or controlled by the federal government are always held in trust absent language to the contrary, and even if no mention of a trust or fiduciary relationship is made in underlying statutes. In this context, a presumption in favor of the existence of a trust relationship is tantamount to a presumption in favor of a waiver of sovereign immunity. Such a presumption derogates the long-established rule that such a waiver be clear and unequivocal, in that no affirmative statement of Congress would be required to subject the government to suit.2 If the trust status of Indian funds is to be interpreted as granting a substantive right to damages for breach of fiduciary duties under Testan, it is necessary that there be a clear indication that Congress intended that status. No such indication is present in the
case before us. The silence of Congress on the question cannot be read as granting the Southern Paiute minors the substantive right to recover damages on a breach of trust theory.
Nor is any clear indication of Congressional intent to create a trust present in the allegedly analogous statutes сited by the majority. As stated above, analogous authority does not provide the unequivocal language necessary for a waiver of sovereign immunity. Furthermore, neither of the statutes cited by the majority can be applied to the Southern Paiute judgment fund.
Similarly, the enactment of
In conclusion, it is apparent that nowhere in the language of the Distribution Act did Congress indicate that it intended a trust to be created, whiсh would have, by definition, included the right to recover for breach of fiduciary duty. The general principal that the Indians are wards of the government and entitled to protection, while accurate in a broad sense, does not compel a finding that Congress intends to create a substantive right each time it enacts a piece of legislation dealing with the Indians. The rule in United States v. Testan, supra, constituting as it does a standard by which to judge potential waivers of sovereign immunity, requires strict construction. Analogy and implication have no place in its application. See United States v. Mitchell, 445 U.S. 535, 538, 100 S.Ct. 1349, 1352, 63 L.Ed.2d 607 (1980).
I would affirm the decision of the District Court in toto.
Notes
This statute gives the district courts concurrent jurisdiction with the Court of Claims over any:
Skokomish was a trespass and quiet-title action brought by Indians who had acquired treaty rights to certain tidelands in the State of Washington. The tribe alleged that the State of Washington had conveyed certain rights in the land to defendants in violation of the treaty. The language quoted above is contained in the appellate court‘s affirmance of the district court‘s decision not to require the United States to join as a party plaintiff.civil action or claim against the United States, not exceeding $10,000 in amount, founded upon either the Constitution, or any Act of Congress, or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.
I have examined with care the decisions relied upon by the majority for this proposition, and I do not feel that they apply to this case in light of the position I have taken. Not only would application of those decisions to these facts constitute a presumption in favor of a waiver of sovereign immunity, it would represent an attempt to judicially legislate the creation of a trust relationship.
The courts must use great care when Congressional intent is sought to be derived from other than the specific language of a statute, lest what professes to be mere rendering becomes creation. Where that language expresses a reasonably clear intent, or lack thereof, to create a certain result, that language must be accepted without modification by resort to construction or conjecture. It is not within the judicial function of a court to supply omissions in a statute even though that which was omitted may have been omitted by oversight or inadvertence. Judicial conjecture as to what Congress may have intended by its omission of certain language is necessarily based on the result the court wishes to achieve.
What the majority apparently wishes to achieve in this case is a waiver of sovereign immunity through the existence of a trust relationship. I am in sympathy with Judge Nichols of the United States Court of Claims when he states that such a finding is often nothing more than a “strong and clear wish on the judge‘s part.” See Mitchell v. United States, 664 F.2d 265, 277 (Ct.Cl.1981) (Nichols, J. concurring and dissenting). The advisability or desirability of a liberal construction of sovereign immunity in the context of Indian judgment funds is not for the courts to determine. Along with Judge Nichols, “I cannot join in efforts to achieve this result by judicial fiat.” Id.
Two of the previous decisions on which the Court of Claims relied imposed trust obligations on the government‘s handling of Indian funds, despite the absence of any explicit trust language in the statutes creating the funds. In Seminole Nation v. United States, 316 U.S. 286, 293-300, 62 S.Ct. 1049, 1053-1056, 86 L.Ed. 1480 (1942), the Court held that the government‘s payment of funds owed to the Seminoles to the tribal council rather than to individual Indians could constitute a breach of trust. In reaching this decision the Court explicitly treated the funds as a “trust fund,” id. at 293-94, 62 S.Ct. at 1053, although the treaty that mandated the payments nowhere used trust language. Treaty with the Creeks and Seminoles, August 7, 1856, 11 Stat. 699, art. VIII. In Menominee Tribe v. United States, 102 Ct.Cl. 555, 59 F.Supp. 137 (1945), the United States was held to have acted improperly in withdrawing money from a tribal Treasury account bearing 5% interest and replacing it by money in another tribal account bearing only 4% interest. The holding rested partly on the argument that the United States stood in a fiduciary relationship to the tribe, id. at 140-41, although the statutes at issue contained no explicit trust language. (The principal statute was the Act of June 12, 1890, ch. 418, 26 Stat. 146, § 3, which set up the 5% account.)
See, e.g., Hughes Tool Co. v. Trans World Airlines, Inc., 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973) (when agency (CAB) had power to approve monopolistic practice and did in fact approve the practice, no antitrust action would lie); Far East Conference v. United States, 342 U.S. 570, 72 S.Ct. 492, 96 L.Ed. 576 (1952) (when challenged conference agreement had been approved by U.S. Shipping Board under authority of
See Keogh v. Chicago & N. W. Ry. Co., 260 U.S. 156, 43 S.Ct. 47, 67 L.Ed. 183 (1922) (ICC vested with pervasive rate setting power; court cannot intervene if it would upset rate structure); Georgia v. Penn. R.R. Co., 324 U.S. 439, 65 S.Ct. 716, 89 L.Ed. 1051 (1945) (ICC has pervasive power over rate setting; court interference would result in unjust discrimination contrary to Congressional intent; Court noted that ICA does not provide remedies for the correction of all of the abuses of rate-making which might constitute violations of antitrust laws.