Peoria Tribe of Indians v. United States

PETITIONER:Peoria Tribe of Indians
RESPONDENT:United States
LOCATION:Lafayette Diner

DOCKET NO.: 219
DECIDED BY: Warren Court (1967-1969)
LOWER COURT:

CITATION: 390 US 468 (1968)
ARGUED: Jan 15, 1968
DECIDED: Apr 01, 1968

Facts of the case

Question

Audio Transcription for Oral Argument – January 15, 1968 in Peoria Tribe of Indians v. United States

Earl Warren:

Number 219, The Peoria Tribe of Indians of Oklahoma et al., Petitioners, versus the United States.

Mr. Joseph.

Jack Joseph:

Mr. Chief Justice, and may it please the Court.

Peoria Indians the petitioners here recovered a judgment for approximately the amount of $172,000 before the Indian Claims Commissions by reason of the fact that the United States had failed to comply with provisions of Article 4 of the Treaty of May 30, 1854 to sell the petitioners’ lands at a public auctions and instead had sold them at fixed prices thus returning the Indians a smaller award.

The government did not appeal from this judgment, but the petitioners did appeal because we contend we are — that the petitioners are entitled to an additional award measured by interest by reason of the failure of the United States to comply with the provisions of Article 7 of that same treaty requiring that the $172,000 which should have been realized be invested.

The appeal that we took to the United States Court of Claims under the provisions of the Indian Claims Commission Act resulted in a decision adverse to us with three judges writing majority opinion, opinion by Chief Judge Cowen and there was a dissenting opinion of two judges, written by Judge Davis, taking the view that we were entitled to the relief which we sought.

Now the facts in this case are relatively simple and they have been established by the decision of the Indian Claims Commission as affirmed by the Court of Claims and they’re as follows.

On and prior to May 30, 1854 Peoria Indians owned a small tract of land on the eastern boundary of Kansas.

On that date, the Kansas-Nebraska Act became effective which opened up Kansas to settlement by non-Indians.

On that same day, this treaty with the petitioners was made wherein the Indians and the United States agreed that the Indians would convey their lands to the United States, the United States would sell them at a public auction for the benefit of the petitioners.

Earl Warren:

Did you say how many Indians there were in this group?

Jack Joseph:

No, I haven’t —

Earl Warren:

It’s alright I just thought you said something as to the number, it is important part?

Jack Joseph:

Upon the passage of the Kansas-Nebraska Act, the non-Indians moved over into Kansas and squatted on the lands including the lands of the petitioner.

The squatters pressured — put pressure upon the government to buy these lands under the Public Land Laws which entitled the first settler on a tract of land to purchase that land for a fixed price under the land laws prevailing at that time and the fixed price was a $1.25.

The Commissioner of Indian Affairs requested the Attorney General of the United States an opinion as to whether or not it would be proper to sell to the squatters on the Peoria lands, the tracts on which they had squatted under the preemption statutes, and the Attorney General of course answered that it would be a violation of the treaty, a breach of trust and a fraud upon the Indians because the bargain which the Indians had made was for a public auction.

Despite the Attorney General’s statement or opinion, official opinion, the Commissioner of Indian Affairs expressly instructed that the land be sold in a such a way as to give the squatters on it the right to buy it at fixed price, the equivalent of preemption rights.

The Indians Claims Commission found that had the lands been sold under a public auction, the way the Indians had agreed that a $172,000 approximately additional would have been realized than was actually realized and the judgment which was entered here was for that amount.

Now, it is our position that under Article 7 of this treaty, we should have had an additional award measured by interest.

Article 7 which is reprinted several times in the briefs among other places on page 2, says in part, “And as the amount of the annual receipts from the sale of the lands cannot now be ascertained, it is agreed that the President may from time to time and upon consultation with the Indians determine how much of the net proceeds of such sales shall be paid to them and how much shall be invested in safe and profitable stocks, the interest to be annually paid to them or expanded for their benefit and improvement.”

In two cases decided by this Court past Mille Lac and the Blackfeather cases which are cited on our brief, this Court held that provisions to return income from the Indians capital in land sales applied in a — to proceeds which should have been realized as well as those which were actually realized.

Petitioners believe that the decision of the Court in those cases is in accord with the traditional principle contract law and should have been applied by the Court of Claims in this case.

Potter Stewart:

Which were those two cases?

Jack Joseph:

The Mille Lacs Band of Chippewa case and the United States versus Blackfeather.

Potter Stewart:

Alright.

United States against Blackfeather and Mille?

Jack Joseph:

Mille Lac, M-I-L-L-E L-A-C.

Potter Stewart:

Thousand Lakes?

Jack Joseph:

That’s right.

Potter Stewart:

Thank you.

Jack Joseph:

We believe the principle at work is that the Indians are entitled to the benefit of the bargain they made that they are — that the purpose of a proceeding to enforce a contract is to put the Indians or any party who suffers by a breach of the contract in the position that he would have been had the contract been fulfilled.

Abe Fortas:

Well, do I correctly remember that the other two cases involved an obligation by the United States to pay interest.

Jack Joseph:

It is true that —

Abe Fortas:

Is that right?

Jack Joseph:

Yes, that is correct.

Abe Fortas:

Now, this case does not involve an obligation by the United States to pay interest, but it does involve by your argument an obligation on the United States either to pay up money to the Indians or alternatively to invest in income producing stocks or bonds, is that correct?

Jack Joseph:

That is correct Mr. Justice Fortas, correct.

Abe Fortas:

So that — now let me ask you one further question.

If there were nothing here except a breach of trust by the United States in its failure to sell the lands properly so as to realize the full amount that it should have realized on those lands, if that’s all we had, you would not argue that the Indians were entitled to interest, would you?

Jack Joseph:

No, the argument we are making here is based on Article 7 of the treaty in context.

Abe Fortas:

That’s solely based upon on the language to which I referred mainly that the United States must either forthwith payout the money to the Indians or must invest the money, which you say is equivalent to an obligation on the United States to pay interest.

Jack Joseph:

Yes, Your Honor.

It is for that reason Mr. Justice Fortas and may it please the Court —

Earl Warren:

Are you willing to state it in the negative that way or you insist on the affirmative of it that, the government isn’t obliged to pay over all the money or isn’t obliged to pay over — to invest all of the money in bonds that it is necessary to do one or the other.

Jack Joseph:

Our position is that the Indians were entitled to have invested anything which was not paid over to them in 1857 by virtue of Article 7 of this treaty that consequently none of the $172,000 having been paid over in 1857 became subject to the provisions of this article.

Therefore the Indians suffered the loss of the income which should have been earned on it and therefore entitled to recover that amount.

Because this —

Hugo L. Black:

This is brought under a special act at the time?

Jack Joseph:

This suit was brought under the Indian Claims Commission Act which is a general jurisdictional act giving Indian tribes in general a right to bring actions of any kind, that law and equity, some of which and some additional kinds, those which violate a standard fair and honorable dealings before a tribunal which is created by the Act called the Indian Claims Commission.

The Act provides that all of the petitions which Indians might file before the Commission had to be filed before a date certain and that date has been passed.

It also provides that the United States waives the defenses of laches and the statue of limitations.

Under this Act some 800 or so claims have been filed, of which this was one.

It’s general jurisdictional Act.

We are not — we do not claim any special rights here before this Court by virtue of the Act, only the general doctrine that courts will enforce contractual obligations against the United States.

Now the chief defense that has been raised to our plea for return under this article is the doctrine of sovereign immunity in which the United States says that it is not liable for interest on claims.

And it points to two aspects about the treaty in support of its argument, one is the discretion of the President and the other the fact that a specific rate of interest is not mentioned in Article 7.

Potter Stewart:

Incidentally whole you are on that I notice really before you — in the conclusion of your brief you ask for interest at the rate of 6% from June 1857 through 1860 and the 5% from 1860 to 1934 and thereafter such rate of interest as the Court deems appropriate.

Well I really have two questions.

What is the basis for that specific prayer and secondly have you figured out how much money that would be?

Jack Joseph:

I have not — to answer you second question Mr. Justice Stewart, first I have not figured that count to the penny, but I believe that just for purposes of our discussion here that the judgment with principal plus interest would be in the magnitude of $1 million if the Court —

Hugo L. Black:

What did you say?

Jack Joseph:

I say it would be in the magnitude of $1 million.

The interest at 5% doubles the money in 20 years and we have approximately 110 or 111 years here.

To answer your first question Mr. Justice Stewart.

Potter Stewart:

If it doubles it in —

Jack Joseph:

20 years.

Potter Stewart:

Simple interest?

Jack Joseph:

The simple interest that is what we are asking for, simple interest.

Potter Stewart:

And it would therefore be something more than $1 million?

Jack Joseph:

As I say I have not calculated and I’ve made a rough calculation.

I think it is in the magnitude of $1 million.

It’s a simple arithmetical process.

Potter Stewart:

Well I thought you might have figured out –[Attempt to Laughter]

Jack Joseph:

The reason —

Potter Stewart:

I didn’t quite understand the — you gave the answer to my second question, why the differing rates here?

Jack Joseph:

Oh yes, I was about to answer that Mr. Justice Stewart.

The — in general from the middle of the 19th Century to date United States has paid 5% on obligations which it owes to the Indians.

I suggested two variations which the Court might consider in that rate in this case, one in favor of the Indians and one against the Indians.

The reason I suggest that 6% up to 1860 is because it appears that the — that, that part of the proceeds which were actually realized, those sales in 1857 were invested in securities which returned a minimum of 6%.

After 1860 it appears that the funds were replaced by a — the securities were replaced by a fund in the treasury which bore 5% interest.

The United States has paid 5% interest on Indian funds up until the 1930s when Congress in the statute enacted for the purpose of determining the amount of interest reduced the rate from 5% to 4%.

So that is the reason for these three rates.

Now the doctrine of sovereign immunity which is the major issue raised by the — or perhaps the only issue if I read them correctly, that the government raises does not apply to contractual obligations of the United States and in that sense since we are claiming under a contractual obligation, if this contract says we are entitled to the allowance to the relief of which we seek, the doctrine of — we are without the doctrine of sovereign immunity.

On the other hand if the contract doesn’t provide for it, the Court doesn’t need the doctrine of sovereign immunity to deny us the interest because it is by virtue of this contract that we are claiming, so in that sense the whole discussion of sovereign immunity is in apposite.

Now we come to look at the words of Article 7 and I would — I think here even though the Court of Claims really agrees that this treaty says what we say it does, the Court below treated it as an interpretation problem and in doing so they considered it in the light of various rules which construe contracts strongly in favor of the United States and against claimants and they make no mention of the long line of cases which are cited by Judge Davis in his dissenting opinion which say that treaties within Indians should be interpreted favorably, in favor of the Indians, in the spirit of generosity.

But actually I don’t really think this is an interpretation problem, because the majority of the Court of Claims, the minority in the Court of Claims and I believe the government if I understand their position here, and we all agree that what this treaty meant was that the proceeds received from sales of these lands were either to be paid immediately over or were to be invested in safe and profitable stocks.

What we are arguing about is what the effect is of that provision, that there is no question about what the provision was intended to meet.

Now there are two things which the government looks at as I say and I think that they are — can be analyzed separately, one of those the discretion which the President had.

That is, point to the language, the President may from time to time and upon consultation with the Indians determine how much of the net proceeds of the sale shall be paid to them and how much shall be invested in safe and profitable stocks.

The government says in various ways that you cannot know how much you might have pay over to them and therefore how can we make any award.

Byron R. White:

Let me see how you understand the government’s argument.

If the contract or if the treaty had only said we will sell the lands and pay over to you the proceeds, that’s all they’ll say.

Now would you say that the government denies that the ability — it’s obligation for interest in that respect?

Jack Joseph:

Well I think if that’s all said, that I wouldn’t be here claiming it Your Honor.

Byron R. White:

You would say that the government could promise to pay over and then not pay over and be liable only —

Jack Joseph:

Well —

Byron R. White:

And be liable only for the principal?

Jack Joseph:

There are some cases —

Byron R. White:

Well how about — what is your position on that?

Jack Joseph:

I think the Indians would have — would still have a strong claim.

Under the Monomoy case decided by the Court of Claims, the delay in payment when it should have been paid does give rise to an obligation for interest.

However I think that —

Byron R. White:

But you have to take that position to win?

Jack Joseph:

Oh no, Mr. Justice White I don’t think that I have to take that position because —

Byron R. White:

Well no — let me get to the other part.

What if the contract or the treaty just said that government promised to sell the lands and to invest the proceeds?

Jack Joseph:

Yes, in that case I think that we would — that if the United States does not invest proceeds that the Indians would have a cause of action to recover what would have been received had the —

Byron R. White:

So that includes interest?

Jack Joseph:

And that —

Byron R. White:

Do you think the government concedes that much?

Jack Joseph:

Well, [Attempt to Laughter] no.

Perhaps they do not concede it because — no, I would say the government concedes it because in their brief, they make the argument that we wouldn’t know how much the investment would return, that is might have been a bad investment, the United States might have invested the Indians money in something very bad.

I wanted to get to that argument of course and I think that it is an argument unbecoming of the trustee and one which trustees have not been successful with anywhere and that the United States here assumed the duties of a trustee.

On this discretionary aspect, I think the first thing that militates against the government’s position are again Mille Lac and Blackfeather cases because in both of those cases we had an element in which the government had the option to pay over rather than invest.

In the Mille Lac case the statute which embodied the agreement provided that with respect to a portion of the fund, 5% not the whole fund as in our case, Congress could agree to appropriate — not to put the money in an interest bearing fund but could agree to take it out and spend it for the benefit of the Indians.

Later, in the lawsuit in which it was found that the United States breached its contract to the Indians by selling Mille Lac’s land under the government land laws instead of at a public auction and damages were awarded.

The fact of discretion, that there was discretion given to Congress in that case did not affect the result.

Similarly, in the Blackfeather case and an analysis of that appears in the next to last paragraph of Judge Davis’ opinion and I submit that his statement about it has not been answered.

The United States had the option to pay over the fund after consultation with the Indians and before the lawsuit was even brought, the fund which had been realized was paid over to the Indians.

When the lawsuit was brought after the fund had been completely paid over that is the fund that had been realized and the Court found that there should have been additional proceeds realized, the Court held that as to those additional proceeds since they were not paid over, interest would be allowed on them till the date of payment and the fact that they might have been paid, that the discretion might have been exercised had the money been realized earlier was irrelevant.

Jack Joseph:

Now I can see no difference between the Blackfeather case and the case we have at bar.

And when you come to look at it, the Blackfeather and the Mille Lac case and this case should be governed the same way because after all the money wasn’t realized not because there was an act — a discretionary decision by the President, but rather because there was a breach of the obligation of the United States.

The fund was not realized by a reason of a deliberate breach and therefore the money did not become subject to Article 7 and if the majority opinion of the Court of Claims is allowed to stand what the affect is to condone neither paying nor investing the amount, the $172,000 which should have been realized and depriving the Indians of the benefit of their bargain.

Now, another aspect of the discretion involved here is —

Abe Fortas:

Only in Blackfeather though isn’t it, the fact that there was an express agreement for interest?

Jack Joseph:

As Judge Davis points out, it was expressed in terms of paying the Indians an annuity and the Court looked through that and said yes what this means is that it is the equivalent of a covenant to pay interest.

Abe Fortas:

Yes, and your problem here on the brief is what I think you said a little while ago you got to persuade this Court that we have to reach a conclusion, that this provision that you rely on amounts to a covenant by the United States to pay interest and I take it that you agree that the mere breach of fiduciary duty will not result in an obligation or on part of the United States to pay interest.

Jack Joseph:

Yes, Your Honor.

I do agree with that, but I think — I cited some material which I believe shows that the United States actually treated this as a covenant to pay interest.

In the 1850s, there were a number of Indian treaties which provided that the Indians should get a return on safe and profitable stocks because says the Commissioner of Indian Affairs in the report cited by Judge Davis, that the embarrassed condition of the treasury and other causes, Congress did not see fit to appropriate the money to purchase the safe and profitable stocks and instead appropriated the interest annually at the rate of 5%.

So, Congress itself considered that the return of 5% interest was the equivalent of investing in safe and profitable stocks.

The other thing is that it is our position that the United States here assumed the duties of a trustee and specifically assumed the duty of a trustee to pay over or invest, and that we can look to trust law to determine what kind of damages are recoverable from a trustee.

Abe Fortas:

Well that, they make new law, it’s contrary to Indian heart to pay, isn’t it?

Jack Joseph:

I don’t believe that it is Your Honor.

I think when the United States expressly assumes a duty as a trustee that it should be treated as a trustee and I think that is in accord with the Indian laws as it is, I don’t — it is not that — that is when they expressly assume it by contract.

Now, not out of their mere existence of an obligation.

Abe Fortas:

Now that’s different matter.

That’s what I thought you are on – your argument that it is, but if there’s a breach of a fiduciary duty by the United States towards the Indians and no contract provision requiring the payment of interest, then there’s no liability on the United States to pay interest.

Jack Joseph:

Yes, Your Honor.

Abe Fortas:

Am I right?

Jack Joseph:

Yes, Your Honor, you are right.

But it is our position that Article 7 of this treaty is an explicit assumption of the kind of trust that a normal trustee assumes when he undertakes to manage somebody else’s money and that the Indians are entitled therefore to the kind of relief against the United States in this case because of this provision that would be obtainable against a private trustee in similar circumstances.

I respectfully submit that the Court of Claims was in error, that its decision should be reversed and that the case should be remanded to the Indian Claims Commission for — with instructions to enter an additional judgment equivalent to interest against United States, thank you.

Earl Warren:

Mr. Rifkind?

Robert S. Rifkind:

Mr. Chief Justice, may I please the Court.

Our starting point here is the historic and unchallenged rule that the United States is not liable for interest except where it affirmatively consents to such liability by statute or treaty or contract.

This Court has repeatedly held both in Indian cases and in non-Indian cases that no court has power to award interest against the United States in the absence of consent given in clear cut and unambiguous terms.

Now the only exception to that rule, if it is an exception, pertains to claims for just compensation under the Fifth Amendment taking of property, which can itself be viewed as a constitutional waiver of sovereign immunity.

In any event petitioners here have never suggested and do not now suggest that this is a Fifth Amendment claim that they are asserting.

This is fundamentally a breach of contract action.

Robert S. Rifkind:

The critical question here therefore is whether Article 7 of the treaty of 1854 supplies assent to the imposition of interest and I think I’m on common ground with the petitioners in that regard.

At least they advised the Court below whether or not appellants are entitled to interest depends on Article 7.

Conversely they have never suggested and they do not suggest today, that they are entitled to interest by virtue of anything in the Indian Claims Commission Act and any suggestion to that effect would be contrary to a long line of decisions to the Court of Claims and the Commission itself.

Accordingly if the requisite authority for an award of interest is to be found at all, it must be found in the language of Article 7 and the critical provision which has already been read to you, but I’d like to read again, says simply this.

“It is agreed that the President may from to time to time and upon consultation with said Indians determine how much of the net proceeds of said sales, shall be paid to them and how much shall be invested in safe and profitable stocks, the interest to be annually paid to them.”

Now the Indian Claims Commission studied that language carefully and could not find that it constituted an undertaking, an obligation of the United States to pay interest.

Potter Stewart:

Did the Claims Commission expressly deal with this?

Robert S. Rifkind:

Yes it did.

Potter Stewart:

You know where in the record?

Robert S. Rifkind:

Page 66, we find that petitioners are not entitled to interest on any award in this case.

The rule is well established and so forth.

Potter Stewart:

Well, that’s not all dealing with this?

Robert S. Rifkind:

Well, the last judgment —

Potter Stewart:

Stating the general rule that you began with that doesn’t have very much to do with this case if I may say so.

Robert S. Rifkind:

But they say —

Potter Stewart:

Interest doesn’t run on a judgment against the government, everybody believes it.

Robert S. Rifkind:

There is no contract or statutory requirement for the payment of interest in this case and I take it that, that can only be a construction of Section 7 because that is the context it was asserted, I am sorry.

Byron R. White:

[Inaudible] that if the money was paid out it was to be invested?

Robert S. Rifkind:

The commission didn’t address itself to that as far as I can recall.

I think the Court of Claims assumed that the President didn’t have the right to do nothing with the money, and he had to exercise the discretion.

Byron R. White:

I gather that your brief concede that, you had pay on —

Robert S. Rifkind:

I think that right.

I think that’s right.

But it is our submission that the language that I’ve just read from Article 7, no matter what cannon of construction could be applied and no matter how liberally it might be construed that, that language does not constitute an undertaking to pay interest within the meaning of the general principle that we’ve discussed, that the Congress must assent.

It doesn’t — that language is not we submit undertaking by the United States to obligate the treasury of the United States for instance.

Byron R. White:

It is in this case a promise by the United States to invest this money.

It wasn’t paid out, we know it wasn’t paid out.

Robert S. Rifkind:

That’s right.

Byron R. White:

So if it wasn’t paid out it supposed to be invested.

Robert S. Rifkind:

That’s right.

Robert S. Rifkind:

It was never received.

Byron R. White:

Alright.

So we should take this case as though the United States promised to invest a $172,000 that they didn’t invest?

Robert S. Rifkind:

Well, my first —

Byron R. White:

Isn’t that right?

The person paid out, therefore it should have been invested.

Robert S. Rifkind:

Well —

Potter Stewart:

And the interest needed to be annually paid to the Indians?

Robert S. Rifkind:

That’s right.

Of course Article 7 of the Treaty says that the proceeds shall be invested or paid out.

Now we are not talking about — I just want to make it clear although I don’t think it’s dispositive that we are not talking about money that came into the treasury.

I mean Some one ran off with it.

Byron R. White:

I understand that, but the point is against you that —

Robert S. Rifkind:

It should have been received.

Byron R. White:

The government should have handed $172,000 to invest, but it didn’t.

Robert S. Rifkind:

That’s right.

Byron R. White:

And so it didn’t invest it.

Robert S. Rifkind:

And obviously didn’t invest what it had to invest.

Byron R. White:

In breach of its promise.

Robert S. Rifkind:

The sale was in breach of its promise.

We maintain that it complied to the letter with Article 7 that is what it had, it invested.

There is no dispute however that it should have raised more money than it did.

We haven’t an appeal —

Byron R. White:

$172,000 more which it didn’t?

Robert S. Rifkind:

That’s right, but the critical point we think is that there is a world of difference between a promise to invest money for someone and a promise to pay interest to someone.

It’s the different between being a debtor and being an agent.

Potter Stewart:

This Article 7 says the interest to be annually paid to them, the Indians?

Robert S. Rifkind:

But it seems to me perfectly clear in the context to that language it means the interest received from the investment.

Potter Stewart:

Right.

Robert S. Rifkind:

That could a lot of money, it could be a little money, it’s not a bond of the treasury.

Robert S. Rifkind:

It says what we receive after investing it for you, we’ll pay over to you.

It’s an undertaking to manage a portfolio; it’s what any mutual fund would do for you.

Earl Warren:

This is what a mutual fund will do for — [Laughter]

Robert S. Rifkind:

It’s the sort of undertaking.

Earl Warren:

I beg your pardon.

Robert S. Rifkind:

It’s the sort of undertaking that I think Merrill Lynch or some investment broker would undertake.

We will take your money and we’ll invest it.

We don’t tell you how much you are going to earn on it.

What we do earn on it we’ll pay you.

Earl Warren:

Do you consider what the government has done here is doing equity to these Indians?

Robert S. Rifkind:

Well, I think it’s certainly equitable that we should pay them back the $172,000 for land that was taken.

Earl Warren:

And after holding it for over 100 years?

Robert S. Rifkind:

All I can answer Mr. Chief Justice is that is the problem in every case that involves sovereign immunity.

Congress has the right to decide how far it’s going to go until 1946 when it put in covenant in tort claims?

Earl Warren:

Claims given some rights to adjudicate the rights of individuals when the government made an agreement to do something and then broke it.

Robert S. Rifkind:

That’s right.

Earl Warren:

Do you think the government has lived up its obligation under this treaty unless —

Robert S. Rifkind:

No I think that the government had made restoration to the extent that it has bound itself to provide a remedy.

That is that Congress has undertaken to remedy, an ancient and grievous wrong.

It has not undertaken to pay for its delay in providing that remedy.

Earl Warren:

Even though it delays over a 100 years.

Robert S. Rifkind:

I think so.

Earl Warren:

Fulfill the exact agreement that it made with the Indians?

Robert S. Rifkind:

All I can conclude — all I can suggest Mr. Chief Justice is that, if what you are suggesting is sound, then in every case wherever there has been a dereliction by the government on a contract with or without Indian, it’s obliged to pay interest during the delay in providing a remedy and Congress at least has never gone that far.

Byron R. White:

But you say then it would been error of Indian Claims Commission to have said that in order to do equity to the Indians under our statutory authority, in order to do that we will pay interest on this claim you said that would be error.

Robert S. Rifkind:

Well, I would assume that this action was really under the more usual provisions of the Indian Claims Commissions’ statue which provides for recovery on a contract or treaty.

And I don’t think that the language about equitable has ever been construed by this Court to embrace an allowance of interest where Congress has not waived sovereign immunity as to interest.

Byron R. White:

Yes, but it had already said that the Indian Claims Commission may grant equitable compensation, to that extent it has authorized it to do equity as the Chief Justice suggests?

Robert S. Rifkind:

Yes, but there are substantial number of cases of private — before the — even Tucker Act was passed, private bills, which said that the Court of Claim shall provide equitable relief in this situation and this Court in number of cases said that means according to the traditional rules of law fairly construed, but it has never been thought to mean an assent to the imposition of liability for interest.

Byron R. White:

Well, it’s one thing to say the United States wouldn’t have been liable to pay interest if it had actually gotten the money invested and hadn’t received any return on it then if the Indians have sued perhaps United States would say, well all we have to do is to invest, but isn’t it something else again when they didn’t even invest the money?

Byron R. White:

Didn’t have it to invest when they should had it to invest and the Indian never have a chance to earn any interest on it?

Robert S. Rifkind:

We can’t — I can’t distinguish the situation in which the United States says we’ll invest the money and the situation in which the United States says we’ll build you a blacksmith’s shop with the proceeds, that will be a value to you or we’ll build you a school house with the money that will be of use to you, or we’ll buy you fertilizer for your farms that will of value to you.

In all of those cases the proceeds would have been a value to the Indians but I take it, maybe I am wrong, I take it the petitioners concede that in those situations they would not now be entitled to the value that the blacksmith shop or the fertilizer or the school house would have been to them over a 110 years.

Byron R. White:

Because of sovereign immunity.

Robert S. Rifkind:

I think that’s right.

I think that’s right because there is no dispute but there is no undertaking.

Byron R. White:

Except for this Act sovereign immunity would protect the government from any action for the value of the blacksmith’s shop, except for this Act the Indians couldn’t sue for this $1,72,000, could they?

Robert S. Rifkind:

That’s right, but this Act while remedying the principle wrong does not remedy the delay that it took Congress to get around to passing the Act.

Byron R. White:

Well that depends on what you think the extent the waiver was in term of using equitable and that kind of —

Robert S. Rifkind:

Well, at least I take it that the petitioners don’t suggest that the Claims Commission Act provides their remedy.

The position is there has be that Article 7 provides the predecessor for their remedy and that Article 7 is a obligation on the treasury to pay interest and we see it as different than undertaking to build a blacksmith’s shop.

Byron R. White:

Except for sovereign immunity though, a contract like this would normally result in type litigation and the recovery of interest.

Robert S. Rifkind:

Absolutely.

Even if it was — I should qualify that if it was deemed that the amount was sufficiently determined but I suppose you know –-

Hugo L. Black:

Or the contract between private parties, authorized private parties to wait a 110 years and then sue and get the hold of it.

Robert S. Rifkind:

Well I’d suppose you’d have a statute of limitations which we — which the government has –-

Hugo L. Black:

What I say is —

Robert S. Rifkind:

Or laches that’s right.

Abe Fortas:

Mr. Rifkind there have been a number of cases in which various Indian Tribes have alleged under the Indian Claims Act that the United States has wrongfully taken their land and haven’t there been awards made to those Indian tribes some of them very large amount, relating to takings back in the 19th Century, is that right?

Robert S. Rifkind:

That’s correct.

Abe Fortas:

And in any of those cases has interest been allowed?

Robert S. Rifkind:

Except for the two cases that have been given –-

Abe Fortas:

I’m sorry, that’s not the kind of case I am putting here.

Robert S. Rifkind:

Yes, I understand, in the general case no.

Abe Fortas:

Despite the fact that those are in the sense of the way cases where land has been taken from the Indians in breach of sort a fiduciary duty, is it right?

Robert S. Rifkind:

Unless the claim could be squeezed into the Fifth Amendment interest has been denied?

Abe Fortas:

Well at least —

Robert S. Rifkind:

They were Fifth Amendment.

Abe Fortas:

Is Indian cases Fifth Amendment cases?

Robert S. Rifkind:

No.

Abe Fortas:

Alright so taking case from that I put, kind of case that I put to you, the law has grown up so that the Indians are given a sum of money under this Act, but they are not given interest dating back to the time of taking despite the fact that there is at least something resembling breach of fiduciary duty and that’s part of this whole what I may refer to as sort of a package deal enacted by the Congress to — in an attempt to alleviate the wrong that’s been done to the Indians in the past, is that right?

Robert S. Rifkind:

I think that’s right sir, indeed I think there was a fairly careful appraisal of what the likely costs of legislation regarding the case —

Abe Fortas:

Well that’s why, as I understand it both you and your advisory agree that in this case if there is nothing that you can’t just define or spell out the specific language of this treaty, an obligation to pay interest there is no obligation?

Robert S. Rifkind:

That’s exactly right.

Abe Fortas:

To pay interest.

Robert S. Rifkind:

Thank you sir.

Hugo L. Black:

What would be an affect on the [Inaudible]

Robert S. Rifkind:

I suppose that that the past cases are water over the dam.

Hugo L. Black:

So there would be [Inaudible]

Robert S. Rifkind:

Well I am not sure whether it would involve splitting a cause of action, that’s just the breaks in civil ligations usually.

There are great many cases of course.

Hugo L. Black:

[Inaudible] allowed by the Congress?

Robert S. Rifkind:

Yes I suppose the special legislation.

Now a great reliance has been placed by the petitioners on two particular cases which I think serve to dramatize the different situation we have now.

I refer to both Blackfeather and the Mille Lac case.

I think the language in Blackfeather shows what a real obligation to pay interest is.

There the treaty expressly provided that the United States agreed to pay the Chiefs for the use and benefit of their people annually 5% as an annuity.

Now whatever the words as an annuity may have meant this Court had little trouble in finding that that treaty contained a contract expressly stipulating for inference.

Potter Stewart:

I just have this case that Justice Brown’s opinion in this case before me, it wasn’t all that clear.

You correctly fore stated it but it was to do so doing the pleasure of Congress and the actual money was paid over in 1852 and they gave them interest till what 1884.

Robert S. Rifkind:

Something like that.

Potter Stewart:

I think this case would cause you considerable trouble?

Robert S. Rifkind:

But there — I don’t think so, the critical difference is that there everyone knew when the treaty was entered into that the treasury was going to pay out 5% per annum.

Potter Stewart:

During the pleasure of Congress.

Robert S. Rifkind:

During the pleasure of course everything is sir, it ends up that way.

Potter Stewart:

No, not as a contract.

Robert S. Rifkind:

That’s true.

Potter Stewart:

Something on [Inaudible] I guess that’s not the correct word, but it is hardly an absolute right to receive 5% that the Chief’s had, wasn’t it?

Robert S. Rifkind:

Right, I suppose there is a condition or something to point that never occurred.

Potter Stewart:

Yeah and yet the Court said nonetheless it was a right?

Robert S. Rifkind:

That’s right.

But maybe its minimal but at least there is a language that sounds like a bond, that sounds like an obligation of the treasury.

Even more so in Mille Lac which they — which petitioner’s cite.

There all money accruing from the disposal of said land shall be placed in the treasury of the United States to the credit of the Chippewa Indians as a permanent fund which shall draw interest at the rate of 5% per annum.

Now that we submit is the sort of language that meets the test or it meets the standard of an express consent to pay interest.

Article 7 contains no undertaking that anyway resembles that.

Moreover and this is particularly important thing, it’s quite clear that the language of the Peoria treaty is not some accident or fluke of draftsmanship.

The treaty in 1854 followed upon reports by the Commissioner of Indian Affairs which were transmitted to Congress by the President in 1852 and 1853 urging the discontinuance of the practice of holding Indian funds in the treasury and appropriating annual interest payments.

It was urged that the investment of such funds in marketable securities would reduce the treasury’s surplus, would benefit the national economy and most important would relieve the government from the payment of the immense sums which the annual interest must eventually amount to.

That would seem to make it very clear that there was no purpose to assume a liability for interest.

That the purpose was the very opposite to relieve the treasury of that burden.

Under these circumstances we submit that the Court of Claims was entirely right in concluding that it would be judicial treaty writing to read into that agreement an express promise by the government to pay interest and I think it’s clear that judicial treaty writing is what petitioners really have in mind.

In the language that was referred to earlier they asked for an award of 6% from 1857 to 1860 and 5% from 1860 to 1934 and at such rate as this Court deems appropriate thereafter.

Now its perfectly clear that Article 7 nothing about 5%.

It says nothing about 6% and it certainly says nothing about such rate as this Court deems appropriate.

Now perhaps by way of confession and avoidance petitioners seek to escape from the government’s immunity to liability for interest by urging in their reply brief that the government has misrepresented the nature of their claim.

They do not they say seek interest on a claim but rather damages measured by interest for the failure to invest under the express provisions of Article 7.

Now this distinction between interest on a claim and damages measured by interest is a distinction without a difference, the two are Tweedledee and Tweedledum.

Their brief — at least the distinction is so illusive that it eluded petitioners until now, because in their brief in the Court of Claims they clearly said that this appeal seeks the recovery of interest on an award of damages and that is how the Court of Claims understood it and that’s how the Indian Claims Commission understood it.

Furthermore I think it’s helpful to keep in mind that this case involves the breach of one provision, not two provisions of the treaty.

Unquestionably the land was not sold in the manner provided in Article 4.

But there’s no claim or at least there wasn’t until today, that the United States was guilty of any default under Article 7.

That is to say the money that was actually received from the sale and was allocated by the President for investment was in fact invested and the income was scrupulously applied to the petitioner’s benefit.

Abe Fortas:

Well, there weren’t [Inaudible] There is of course is a default in duty under 7 because they didn’t realize the proceeds that were supposed to be administered under and in accordance with Article 7, of course it is a breach of the —

Robert S. Rifkind:

There was no independent misconduct is what I’m suggesting under Section 7, no independent —

Earl Warren:

What misconduct over the years and not giving the Indians any benefit to alter the provision with the treaty, isn’t that misconduct?

What do you call it?

A 100 years to defy people of their rights under a solemn treaty made by the President and affirmed by Congress.

Robert S. Rifkind:

All I’m saying is I don’t mean to —

Earl Warren:

All you are saying is a question, what is it if it is any misconduct?

Robert S. Rifkind:

I don’t mean to suggest for a minute that these Indians were not badly treated, they were.

All I’m saying is that in analyzing the language of the treaty there was — it’s not a point worth pressing.

There was not an independent breach under Article 7.

No one took proceeds which he did not pay over pay over to the Indians and failed to invest this.

No one ran off with the income from those investments.

When it came to Article 7 what came under the purview of Article 7 was properly dealt with.

Now more should have come in I agree.

Earl Warren:

As to that —

Robert S. Rifkind:

That’s what this case is about.

Earl Warren:

Wasn’t it misconduct there?

Robert S. Rifkind:

Well I can’t — I don’t know what it means to say that it’s a misconduct of Congress not to have passed the Indian claims.

Earl Warren:

But you chose the word misconduct and said there was no misconduct, what do you call it?

Robert S. Rifkind:

I suppose that we can say that Congress ought to have to passed this Act a long time ago, but I don’t find that illuminating as to —

Earl Warren:

Or the President could have sold the land then and invested the money?

Robert S. Rifkind:

The land had long since been sold.

The land was sold when it was supposed to be sold, the problem was the price at which it was sold.

The President of course had a very difficult problem in 1857, there were people who had built homes on this land.

Earl Warren:

There have been a lot of Presidents in 100 years.

Robert S. Rifkind:

I beg your pardon sir.

Earl Warren:

There have been a lot of Presidents in 100 years who could have remedied that situation?

Robert S. Rifkind:

Yes, I suppose that the critical thing is that Congress could have appropriated the money that was the difference long ago and it didn’t, and no doubt about it.

All I meant to suggest is that there are really two categories of injury flowing from the original fair and it was grievance fair, no doubt about it.

One is the Indians didn’t have the full value of their land in 1857 and were aggrieved about that.

The judgment has been entered for that for $172,000.

The second category of injury and it’s one common in all litigation is that they did have the use of that money over 110 years.

Now is the sort of injury, the sort of damage that under any of the waivers of sovereign immunity Congress has generally declined to provide a remedy for it.

It has generally declined to pay for it’s own delay in providing a remedy.

As Justice Holmes said in a non-Indian case for the Court, Boston Sand & Gravel v. United States in 278 U.S. Congress distinguishes between the underlying damages and the later loss caused by delay in paying for the first, between damages and the allowance of interest on damages.

Earl Warren:

Are you talking about the rights arising under the treaties?

Robert S. Rifkind:

No, that was rights arising under an Act of Congress undertaken to pay for a ship that it has destroyed. He said Congress undertook to have a Court find the value of the ship that was destroyed, but the fact that you haven’t had that ship for the last decade is not what Congress undertook to pay for.

Robert S. Rifkind:

I also think it’s worth noting in this connection very briefly that petitioners claim for damages measured by interest is in it’s nature a claim that accrues over time, year-by-year, yet the Indian Claims Commission Act expressly provides that commission shall not consider any claim accruing after 1946.

Now at very least that means, I suppose that the Commission isn’t entitled to award interest for the last 20 odd years, an amount greater than the underlying claim in fact.

But I also suggest that it reflects a congressional intention or expectation that generally they were not dealing with claims, the sort of interest that accrue over time.

Petitioners urge finally in their applied brief that the purpose of these proceedings is to put the Indians in the position they would have enjoyed had the government complied with the treaty.

That view we submit would require the payment of interest in every case, for every claim against the United States is based on some dereliction and in every case there is a period of delay before payment is made, during which some value is denied.

We submit that in waiving one or another aspect of the government’s sovereign immunity in the Tucker Act and the Tort Claims Act or the Indian Claims Act, Congress has not gone that far and we urge that in this area where Congress has slowly but progressively liberalized the law, where Congress has not gone, this Court ought not follow.

Thank you.

Jack Joseph:

I don’t think I have a reply unless the Court is interested —

Earl Warren:

Very well.