IN THE UNITED STATES DISTRICT COURT I_IC_D TT-TI_' T_T_TOI/_T /'_12 /'_/-TT T )'_,,II_T A ,L" _._31X_ lu 111L-I l..,/JLk._ JL JLX..L'k_,, Jt "_jl _.,,_jJ.-_TL_;J_vj_j--/j_.L l ) ELOUISE PEPION COBELL, et al_____., ) ) No. 1:96CV01285 Plaintiffs, ) (Judge Lamberth) v. ) ) GALE A. NORTON, Secretary of ) the Interior, et al___., ) ) Defendants. ) ) DEFENDANTS' BRIEF IN RESPONSE TO ORDER OF FEBRUARY 23, 2005 D.. ('_A^_ An',-_A _'_1., ..... "1"1 ")l"_l_l: t-1.,_ f'_^,,,-.t- _,,_A t-1-,_ "I-I_t-_;_l A _Al1_._ '' DjV UIU_I UdLIK_U l'K/IdlUdl _' /..,j, z-ldU..)_ Llll3 K._t.)l.llt IUI33UUU UlU IIISLUIIL, dl I_UUUUlILII[_ portions of the September 25, 2003 Structural Injunction, as well as the Structural Injunction's "General Provisions." The Court further directed the parties to file briefs setting forth their positions concerning the effect of the D.C. Circuit's December 10, 2004, decision in Cobell v. Norton, 392 F.3d 461 (D.C. Cir. 2004), upon all provisions of this Court's :September 25, 2003 Structural Injunction other than the reissued provisions: As set out below, the Court of Appeals vacated the Structural Injunction with the exception of the requirement that the government complete and file its "To.-Be Plan." Defendants have now completed and filed the "To-Be Plan" as well as the Fiduciary Trust Model with the Court. Dkt. No. 2882. As the Court of Appeals explained, however, the plan cannot be used "as a device for indefinitely extended all-purpose supervision of the defendants' compliance with the sixteen general fiduciary duties listed." 392 F.3d at 474. The Court of Appeals also held that interior could not be required to implement its Comprehensive Plan, including the "To- m managing u_e u Ubtb. a_ _u. at ,, J _,. The Court of Appeals stated that this Court's authority "is limited to considering specific claims that Interior breached particular statutory trust duties, understood in light of the common law of trusts, and to ordering specific relief for those breaches." Id__= at 477. Thus, no basis exists for reissuing those aspects of the Structural Injunction vacated by the Court of Appeals. STATEMENT Although the Court is thoroughly familiar with the background of this case, a brief synopsis is provided below to place the most recent Court of Appeals decision in context. A. Background. In 1994, Congress enacted the American Indian Trust Fund Management Reform Act, Pub. L. No. 103-412, 108 Stat. 4239 ("1994 Act"). Section 102(a) provides that "[t]he Secretary 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 the Act of June 24, 1938 [25 U.S.C. § 162a]." 1994 Act, § 102, 25 U.S.C. § 401 l(a). In 1999, this Court issued a declaratory judgment holding that Interior had an enforceable duty to provide an accounting for money in the IIM trust. Because the agency had not yet provided such an accounting, the Court remanded the matter to allow Interior the opportunity to come into compliance. The Court retained jurisdiction for five years, and required Interior to file quarterly reports explaining the steps taken to rectify the breaches found. Cobell v. Babbitt, 91 F. Supp. 2d 1 (D.D.C. 1999), affd, Cobell v. Norton, 240 F.3d 1081 (D.C. Cir. 2001) (clarifying that the actual legal breach was failure to provide an accounting). 2 B. The Structural Injunction. In 2002, this Court held the Secretary of the Interior and the Assistant Secretary for Indian Affairs in contempt on the basis of Interior's purported failure to initiate an historical accounting and claimed inaccuracies in Interior's quarterly reports. Cobell v. Norton, 226 F. Supp. 2d 1 (D.D.C. 2002). Based on its contempt findings, the Court announced that it would not remand to the agency and ordered the government to submit a plan for an accounting as well as a plan for achieving compliance with specified fiduciary obligations to Indians, to be evaluated by the Court with a view to additional orders of structural relief. Id. at 148-49. In July 2003, the Court of Appeals vacated the contempt ruling. The Court of Appeals held that the contempt order did not fall within the civil contempt authority. The Court also held that, contrary to findings made by the district court, the record demonstrated that "in her first six months in office Secretary Norton took significant steps toward completing an accounting." Cobell v. Norton, 334 F.3d 1128, 1148 (D.C. Cir. 2003). Meanwhile, in January 2003, Interior complied with this Court's order to submit accounting and fiduciary obligations compliance plans. The Historical Accounting Plan for Individual Indian Money Accounts ("Accounting Plan") set out Interior's plan to complete an accounting. The Fiduciary_ Obligations Compliance Plan addressed in detail how Interior was complying and intended to comply with its fiduciary obligations as they related to accounting for trust funds. Interior later submitted, for the Court's information, its Comprehensive Trust Management Plan ("Comprehensive Plan"), which included the matters addressed in the Fiduciary_ Obligations Compliance Plan and addressed other reform efforts outside the scope of this case, such as the management of trust lands and tribal trusts. 3 This Court conducted a 44-day trial beginning in May 2003. Following the trial, the _ourt lssueu a _tructurai lnj UllCtlOll ill ocptcmuct _vu.3 Clll.;UlllpU_lllg UUtll talc pClliDlllli:lllt.;c ul an accounting and the implementation of a broad program of trust reform. Cobell v. Norton, 283 F. Supp. 2d 66 (D.D.C. 2003). The government appealed. Congress responded to the injunction with new legislation enacted as part of the FY 2004 Interior appropriations statute, Pub. L. No. 108-108. The Court of Annonl_ etn'_lod thle (_n.rt'q iniNnetlnn nonttino nnnonl ARGUMENT I. With The Exception Of The Requirement That Interior Complete and File the "To- Be Plan," The Court of Appeals Vacated The Structural Injunction In Its Entirety And Made Clear That The Injunction Exceeded This Court's Authority. The December 10, 2004 Court of Appeals decision vacated the September 25, 2003 Structural Injunction with only a single exception, the requirement that Interior complete and file its "To-Be Plan." The mandate provides that "the 'historical accounting' elements of the injunction are vacated and the remainder of the injunction, aside from the requirement that Interior complete its To-Be plan, is vacated and remanded to the district court for revisions, in accordance with the opinion" of December 10, 2004. Jan. 25, 2005 Mandate; see also 392 F.3d at 478. The Court of Appeals sustained the requirement that Interior complete and file its "To-Be l'Ji:tll, LIU[. Ullly LID tllU _2kLClIL LIIi:LL 1.11C /CltUILKJIIIK;ILL bUI VUb db d UUVIU_ I.kJ _dl.ll_I IIIIIDIIIIdLIIDII IUI 1.11_ court[.]" 392 F.3d at 474. In all other respects, the Court not only vacated the Structural Injunction but also clarified that the injunction exceeded this Court's authority. 4 _omprenenslv_ Vl_ll, lll_lUtllll_ tll_ IU-DF Fli:tll. IU__..a. i:lt "-I. I0. IIIF k.,,UUlt UI /-'_l./J./_ala _.,AJglalll_U that, in the absence of specific findings of unreasonable delay in Interior's performance of its government identify aspects of the "To-Be Plan" that might be deemed inconsistent with the cTn,,t_mm_nt'_ _dllei_r'_1 rlnllo_: oYnlnlnlna thnt thiq nrnvi_inn "tnrn_ the liii_mtinn nrneegg nn itg The Court of Appeals stressed that this Court may not use the plan "as a device for indefinitely extended all-purpose supervision" of Interior's compliance witlh its fiduciary duties. w that the plan will not satisfy defendants' legal obligation], it may decide to modify the Court of Appeals contrasted this declaration with the Supreme Court's holding in Norton v. Southern Utah Wilderness Alliance, 124 S. Ct. 2373 (2004), that a court is empowered "'only to dt H- I O _qUULIII_ I._H- _. k_,t, _t X..2 1 _'5;. I ll_ k._OUl t _aIJJalll_U. 'If courts were empowered to enter general orders compelling compliance with broad statutory mandates, they would necessarily compliance with the broad statutory mandate, injecting the judge into day-to-day agency management .... The prospect of pervasive Id. at 472 (quoting Southern Utah, 124 S. Ct. at 2381). The Court of Appeals stressed that this Court "may not micromanage court-ordered reform efforts undertaken to comply with general ............. Jr" ............................ The Court of Appeals also addressed the manner in which common law trust duties may incorporated into federal law in this manner. Instead, a statutory obligation must first be identified. Id____. at 472. ao not provlae a Dasls Ior me vacatea lnjuncHon. I ne _our_ oI Appeals ooservea mat While the expenditures that plaintiffs seek are to be made out of appropriated funds, trust expenses for at 473. In addition, the Court explained that even private trustees, though "held to high fiduciary his discretion." Id..__. (internal quotation marks and citations omitted). As the Court of Appeals explained in summary, this Court's authority "is limited to • 1 " !z_" _ _1_-' .... a.l___ T._a._____=. 1 ...... 1-_J .-_.._-.'_..1_ _-_-.._-_..d-_._4- _l..+-" ..... A_4-_.4 _ As this Court has acknowledged, Plaintiffs' "single 'live' cause of action seeks a remedy for [failure to provide an accounting]," and the remedy available is "limited to ensuring that the As noted, the government has filed the "To-Be Plan" as well as the Fiduciary Trust Model flawed and no basis exists for its reinstatement. Dated: March 15, 2005 Respectfully submitted, PEIER 19. I_EI_LEK Assistant Attorney General STUART E. SCHIFFER 1-)onNtv A_i_tnnt Attnmev _enernl k_/-_ _- i _--L v_,x_--_ A J. CHRII_TOPHER KOHN D.C. Bar No. 212357 Trial Attorney Commercial Litigation Branch Civil Division P.O. Box 875 Ben Franklin Station CERTIFICATE OF SERVICE I hereby certify that, on March 15, 2005 the foregoing Defendants' Brief in Response to Order of February 23, 2005 was served by Electronic Case Filing, and on the following who is not registered for Electronic Case Filing, by facsimile: Earl Old Person (Pro se) Blackfeet Tribe P.O. Box 850 Browning, MT 59417 Fax (406) 338-7530 District of Columbia live database https://ecf.dcd.uscourts.gov/cgi-bin/Dispatch.pl?9006254818 Oppositions and Replies 1:96-cv-01285-RCL COBELL, et al v. NORTON, et al U.S. District Court UI_[I 1_1, UI IL, UIUlIllAII_II Notice of Electronic Filing The following transaction was received from Alexander, Cynthia entered on 3/i 5/2005 at 6:27 PM EDT and filed on 3/15/2005 Case Name: COBELL, et al v. NORTON, et al Case Number: 1:96-cv-1285 Filer: ALL FEDERAL DEFENDANTS Document Number: 2885 Docket Text: RESPONSE to [2847] Defendants' Brief in Response to Order of February 23, 2005 filed by ALL FEDERAL DEFENDANTS. (Alexander, Cynthia) The following document(s) are associated with this transaction: Document description:Main Document Original filename:J:\C-Financial\Cobell\Current Filing\01_Response 96cv1285 03152005.pdf Electronic document Stamp: [STAMP dcecfStamp_ID=973800458 [Date=3/15/2005] [FileNumber=702225-0] [6d391698ff09ecfa0a092 fa52d8d2 t 548fl 0ce01315c9fd45 aa6b8935aff68b882232 e6 ! 63d7dc20324c20fdc06 ! 474a5cd5aag0fc37482623de65fd04f569cg]] 1:96-cv-1285 Notice will be electronically mailed to: k...,yllLllli:l. I_. z'_l_2_.O.llU_l b_tlII.IIIO.,dI_2;AO-IIU_,,I[_._U3LIUJ._UV _ Donald Michael Barnes dbarnes@porterwright.com, Alan i. Baron Aian.Baron@hkiaw.com Howard Christopher Bartolomucci hcbartolomucci@hhlaw.com, Michael James Bearman mbearman@mckennalong.com, David Booth Beers dbeers@sheagardner.com, Steven F. Benz sbenz@khhte.com, Kenneth Lee Blalack, II lblalack@omm.com, L. Barrett Boss bboss@cozen.com, ahenry@cozen.com;bhall@cozen.com Dwight Phillip Bostwick dwight.bostwick@baachrobinson.com, 1 of 8 03/15/2005 6:2 District of Columbia live database https://ecf.dcd.uscourts.gov/cgi-bin/Dispatch.pl?9006254818 Stanley M. Brand sbrand@brand-frulla.com, William H. Briggs, Jr bbriggs@rdbiaw.com, Mark Kester Brown mkesterbrown@attglobal.net, Stephen M. Byers sbyers@crowell.com, Plato Cacheris pcacheris@troutrichards.com Christina M. Carroll ccarroll@mckennalong.com, Robert Christopher Cook ccook@jonesday.com, John Charles Cruden john.cruden@usdoj.gov, Timothy Edward Curley timothy.curley@usdoj.gov, Richard Lee Cys rickcys@dwt.com, carolkaltenbaugh@dwt.com William Aaron Dobrovir dobrovirpc@aol.com, Herbert Lawrence Fenster hfenster@mckennalong.com, Eugene R. Fidell efidell@feldesmantucker.com, Lisa Freiman Fishberg lfishberg@coburnandschertler.com Hamilton Phillips Fox, III phil.fox@sablaw.com William Leonard Gardner wgardner@morganlewis.com, lahn Alhort _,ihhnn_ _ihhnn_i(b-)d_ma cnm Dennis M. Gingold dennismgingold@aol.com, grempel@earthlink.net Jill Elise Grant jgrant@nordhauslaw.com, dgrove@nordhauslaw.com;sj oshi@nordhauslaw.com;kdunlop@nordhauslaw.com Richard A. Guest richardg@narf.org, jeremy@narf.org Keith M. Harper harper@narf.org, hargrow@narf.org;apaige@narf.org Andrew Dewald Herman aherman@brand-frulla.com, jcohen@brand-frulla.com Tracy Lyle Hilmer tracy.hilmer@usdoj.gov, Charles Allen Hobbs chobbs@hsdwdc.com, judan@hsdwdc.com 2 of 8 03/15/2005 6:2 District of Columbia live database https://ecf.dcd.uscourts.gov/cgi-bin/Dispatch.pl?9006254818 John F. Hundley jhundley@troutcacheris.com Douglas B. Huron huron@hellerhuron.com, Michael X. Imbroscio mimbroscio@cov.com, Amy B. Jackson ajackson@troutcacheris.com Daniel Gordon Jarcho djarcho@mckennalong.com, Julie B. Kaplan julie.kaplan@reslawgrp.com, Fredrick Ryan Keith frkeith@crowell.com Lisa BondareffKemler lisa@zwerlingkemler.com, J. Christopher Kohn chris.kohn@usdoj.gov, David Sidney Krakoff dkrakoff@mayerbrownrowe.com, John R. Kresse john.kresse@usdoj.gov, Elliott H Levitas elevitas@kilpatrickstockton.com, Bradley S. Lui blui@mofo.com, Robert D. Luskin rluskin@pattonboggs.com, Christopher B. Mead cmead@londonandmead.com, Mark E. Nagle mnagle@sheppardmullin.com, Larry Allen Nathans nathans@nathanslaw.com Jonathan Brian New jonathan.new@usdoj.gov, Anne Doris Noto anoto@sonosky.com, Nathaniel D. Owens wwlwms@aol.com, Terry M. Petrie terry.petrie@usdoj.gov, Brian Michael Privor bprivor@morganlewis.com Michael John Quinn michael.quinn3@usdoj.gov, B. Michael Rauh rauh@blankrome.com John T. Richards, Jr jtr@troutrichards.com, Marc Evan Rindner mrindner@rdblaw.com, 3 of 8 03/15/2005 6:2 District of Columbia live database https://ecf.dcd.uscourts.gov/cgi-birv'Dispatch.pl?9006254818 Steven John Roman romans@dsmo.com, Henry Rose henryrose@mac.com, rdean@74erisa.com Phillip Martin Seligman phillip.seligman@usdoj.gov, John Joseph Siemietkowski john.siemietkowski@usdoj.gov Gregory S. Smith greg.smith@sablaw.com 1¥1_1.1 y bKYk( O_ll1_,,,l IIIOUIL_I_ILIIL%FII_ ¥ *_/IlX_ Sandra Peavler Spooner sandra.spooner@usdoj.gov, John Thomas Stempiewicz john.stemplewicz@usdoj.gov, j ohn. o'connor2 @usdoj. gov; sandra, spooner@usdoj, gov;kevin, king ston2 @us doj. gov ;j ames. st.j ohn@usdoj, gov William M. Sullivan, Jr wsullivan@winston.com Ilana Z. Sultan isultan@mayerbrownrowe.com Jonathan Turley jturley@law.gwu.edu, Jonathan K. Yycko jtycko@tzslaw.com Barbara Ann Van Gelder bvangeld@wrf.com, Gino D. Vissicchio gino.vissicchio@usdoj.gov, Jonn W arsnawsKy jonn.warsnawsKy/._usaoj.gov, jonn.o connorzt.W_usuoj.gov Dodge Wells dodge.wells@usdoj.gov, Roger Eric Zuckerman rzuckerman@zuckerman.com, John Kenneth Zwerling jz@zwerlingkemler.com, 4 of 8 03/15/2005 6:2 District of Columbia live database https://ecf.dcd.uscourts.gov/cgi-biwDispateh.pl?9006254818 1:96-ev-1285 Notice will be delivered by other means to: Jason B. Aamodt WRIGHTSMAN MANSION 1645 South Cheyenne Avenue Tulsa, OK 74119 Henry A. Azar, Jr U.S. DEPARTMENT OF JUSTICE Federal Programs Branch 901 E Street, NW Suite 1056 Washington, DC 20530 ALBERT LEE BYNUM 492-2948 504 Brewton Street Bruce Allen Baird COVINGTON & BURLING i 20 i Pennsylvania Avenue, NW Washington, DC 20004-2401 E. Lawrence Barcella, Jr PAUL, HASTINGS, JANOFSKY & WALKER, L.L.P. 1299 Pennsylvania Avenue, NW 10th Floor Washington, DC 20004-2400 Robert W. Biddle BENNETT & NATHANS, L.L.P. 1 :?a East Baltimore Street Baltimore, MD 21202 Edith R. Blackwell I OAK'_ _ C+_- l_._T_Xf I O"t7 _., JLI_L tN ¥¥ Washington, DC 20240 Michael R. Bromwich PKILI.), £KALNI_, HAKI_I_, bHKIVI_K 6_ JA_U_bUIN 1001 Pennsylvania Avenue, NW Suite 800 Washington, DC 20004 Tom C. Clark U.S. DEPARTMENT OF JUSTICE Land & Natural Resources Division Ben Franklin Station P.O. Box 7611 Washington, DC 20044-1420 5 of 8 03/15/2005 6:2 District of Columbia live database https://ecf.dcd.uscourts.gov/cgi-birgDispatch.pl?9006254818 ENKL_, e_en PranKlln _tatlon P.O. Box 663 Washington, DC 20044-0663 Washington, DC 20044-0663 Charles Walter Findlay, III l INIITF, I) _qTATEN DEPARTMENT OF Jl ISTICE Vy 13.311111_Lk/ll, l.Jk-, Z, Vv'-r'-t Timothy Patrick Garren U.S. DEPARTMENT OF JUSTICE Sarah D. Himmelhoch UNITED STATES DEPARTMENT OF JUSTICE Environment and Natural Resources THE LAW OFFICES OF PLATO CACHERIS 1100 Connecticut Avenue, NW Suite 730 100 / N btreet, N w Suite 520 Washington, DC 20006 Amalia D. Kessler U.S. DEPARTMENT OF JUSTICE Commercial Litigation Branch District of Columbia live database https://ecf.dcd.uscourts.gov/cgi-birv'Dispatch.pl?9006254818 LeSlie 13. Nleman ZUCKERMAN SPAEDER, LLP 1201 Connecticut Avenue, NW Suite 600 1330 Connecticut Avenue, NW Washington, DC 20036 Robert Crai_ Lawrence Ikt/UIII 1 v--r • / Washington, DC 20530 Christopher J. Lovrien Pamela J. Marple CHADBOURNE & PARKE 1200 New Hampshire Avenue, NW 1400 16th Street, NW Suite 400 Washington, DC 20036-2220 _ulte 3uo Washington, DC 20004 Nicole Jo Moss EARL OLD PERSON P.O. Box 486 Browning, MT 59486 District of Columbia live database https://ecfdcd.uscourts.gov/cgi-bin/Dispatch.pl?9006254818 Jeffrey D. Robinson BAACH ROBINSON & LEWIS PLLC 1201 F Street, NW Suite 500 Washington, DC 20004 Neil James Ruther 29 West Susquehanna Avenue Suite 610 Towson, MD 21204 Sandra Marguerite Schraibman U.S. DEPARTMENT OF JUSTICE Federal Programs Branch 901 E Street, NW Suite 976 Washington, DC 20530 Seth Brandon Shapiro U.S. DEPARTMENT OF JUSTICE Civil Division/Ben Franklin Station P.O. Box 875 Washington, DC 20044 Geoffrey D. Strommer HOBBS, SRAUS, DEAN & WALKER 851 South West Sixth Avenue Portland, OR 97204 Lawrence H. Wechsler JANIS, SCHUELKE & WECHSLER 1728 Massachusetts Avenue, NW Washington, DC 20036 Thomas Edward Wilson BERL1NER, CORCORAN & ROWE, L.L.P. 1101 17th Street, NW Suite 1100 Washington, DC 20036-4798 Laura C. Zimmitti ROSS, DIXON & BELL, LLP 2001 K Street, NW Suite 400 Washington, DC 20006-2688 8 of 8 03/15/2005 6:2