United States v. Navajo Nation

PETITIONER: United States
RESPONDENT: Navajo Nation
LOCATION: United States Court of Appeals for the Ninth Circuit

DOCKET NO.: 01-1375
DECIDED BY: Rehnquist Court (1986-2005)
LOWER COURT: United States Court of Appeals for the Federal Circuit

CITATION: 537 US 488 (2003)
ARGUED: Dec 02, 2002
DECIDED: Mar 04, 2003

Edwin S. Kneedler - on behalf of the Petitioner
Paul E. Frye - on behalf of the Respondent
Terrance G. Reed - for the Peabody Coal Co. et al. as amici curiae urging reversal
V. Thomas Lankford - for the Peabody Coal Co. et al. as amici curiae urging reversal

Facts of the case

The Indian Mineral Leasing Act of 1938 (IMLA) allows Indian tribes, with the approval of the Secretary of the Interior, to lease the mining rights on their tribal lands to private companies. In 1964, Navajo Nation (tribe) entered into a lease with the predecessor of Peabody Coal Company, allowing Peabody to mine on the tribe's land in return for a royalty of 37.5 cents for every ton of coal mined. The agreement was subject to renegotiation after 20 years. By 1984, the tribe's royalty was only worth 2% of Peabody's gross proceeds. In 1977 Congress had required a minimum of 12.5%. The tribe requested that the Secretary set a new rate, and the Director of Bureau of Indian Affairs for the Navajo Area, as the Secretary's representative, made a preliminary decision to set the rate at 20%. Peabody's representatives urged the Secretary to reverse or delay the decision. The Secretary agreed, and urged the parties to resume negotiations. The tribe and Peabody agreed on a rate of 12.5%. In 1993, however, the tribe sued the government in the Court of Federal Claims, alleging a breach of trust and claiming $600 million in damages. The court ruled for the government, explaining that though the government may have betrayed the tribe's trust by acting in Peabody's interest rather than the tribe's, it had not violated any specific statutory or regulatory obligation. The tribe was therefore not entitled to monetary relief. On appeal, the tribe argued that the entirety of the IMLA imposes on the government a broad obligation to look after the wellbeing of the tribe. The Court of Appeals for the Federal Circuit agreed and reversed the lower court, finding that "the Secretary must act in the best interests of the Indian tribes."


Can the U.S. be held liable for a breach of trust with an Indian Tribe in connection with the negotiation of a mining lease, even when the U.S. has violated no specific statutory or regulatory duty established in the Indian Mineral Leasing Act of 1938?

Media for United States v. Navajo Nation

Audio Transcription for Oral Argument - December 02, 2002 in United States v. Navajo Nation

Audio Transcription for Opinion Announcement - March 04, 2003 in United States v. Navajo Nation

Ruth Bader Ginsburg:

The second case is United States againts Navajo Nation number 01-1375.

The Indian Mineral Leasing Act of 1938 which I will call it IMLA allows Indian Tribes to negotiate leases to mine coal on Indian land and assigns an approval role to the Secretary of the interior.

This case concerns a 1964 coal lease between the Navajo Nation and predecessor of the Peabody Coal Company and specifically a 1987 amendment raising the royalty under that lease.

The Navajo Nation sought compensation from the United States for an alleged breach of trust in connection with the Secretary’s approval of the 1987 rate increase.

Because no liability imposing provisions of the IMLA or its implementing regulations supports such a claim we reject the Tribe's suit.

The lease in question as drawn in 1964, provided for a royalty of 37.5 cents per ton of coal extracted and authorized the secretary to adjust that rate on the 20-year anniversary of the lease.

The 37.5 cents per ton rate was higher than the 10 cents per ton minimum set by then applicable in the regulation, but by the 1980’s, the 1964 lease rates had fallen well below to 12½% of gross proceeds rate prevailing for coal mined on federal lands.

When attempts by the Tribe and Peabody to re-negotiate, the lease bogged down, the Tribe asked the Secretary to ajust the royalty.

In June 1984, the Area Director of the Bureau of Indian Affairs, sent Peabody and the Tribe an opinion letter raising the rate to 20% of gross proceeds.

Peabody thought that rate exorbitant and pursued an administrative appeal.

Peabody also wrote to the Secretary with a copy to the Tribe asking him either to postpone decision on the appeal or to rule in Peabody's favor.

Further, and off the public record, Peabody representatives met privately with the Secretary.

In July 1985, the Secretary instructed a subordinates to tell Peabody and the Tribe that no decision was imminent and to encourage those parties to resolve their differences without government intervention.

Some months later the Tribe and Peabody agreed to an amended royalty of 12½% of gross proceeds.

In December 1987, the Navajo Tribal Council approved the amended lease and the Secretary did so too shortly thereafter.

Several years later, in 1993, the Tribe sued the United States in the Court of Federal Claims, under the Indian Tucker Act, an Act that waives the government's sovereign immunity from a suit by the Tribe for money damages.

By approving the lease amendment, the Tribe maintained the Secretary effectively deprived the tribe of the 20% royalty it would have received had the 1985 adjustment process ran its course without secretarial involvement.

The Court of Federal Claims found that the Secretary in meeting privately with Peabody officers had acted in a manner elaborately at odds with the government's general trust relationship to the Tribe.

Nevertheless, the Court held that the Tribe could not prevail for no law or regulation authorized compensations from the Federal Treasury for the Secretary's alleged breach of trust.

The Court of Appeals for the Federal Circuit reversed that determination, the measure of control the Secretary exercised of a coal leasing on Indian lands that Court house sufficed to warrant a money judgment for the Tribe.

We granted certiorari and now reverse.

Our decision is controlled by a pair of early 1980 cases both titled Unites States v. Mitchell.

The Mitchell cases instruct that to come within the Indian Tucker Act's waiver of the government's immunity from a money damages suit, the complaining Tribe must identify a substantive source of law that prescribes specific duties and then show that the government had failed faithfully to perform those duties.

If that threshold is passed, courts must next determine whether the specific duty imposing law can fairly be interpreted to mandate compensations for the Tribe.

The general trust relationship between the United States and an Indian Tribe, our precedent holds, does not in itself support relief under the Indian Tucker Act, instead, any toll on the US Treasury must be rooted in specific rights creating or duty-imposing statutory or regulatory prescriptions.

Here as the Court of Federal Claims reluctantly held, the Tribe did not and could not ground its claim againts the government in any concrete statury or regulatory imposition.

The IMLA assigns to the Secretary only a modest part in coal leasing, it gives him no comprehensive managerial role.

Furthermore, at the times relevant here, neither the IMLA nor its implementing regulations expressly directed the Secretary to pursue the best interest of the Tribe over those of the coal leasee.

A prime aim of the IMLA was to enhance tribal self determination by giving the Tribe not the government the lead role in negotiating mining leases with third parties, while the Act reserves a lease approval function for the Secretary, nothing in the statute's text or regulations describes a duty to ensure a particular rate of return above the bare minimum and we reiterate the rate ultimately negotiated between the Tribe an Peabody far exceeded the regulatory minimum.

It was on a par with the rate the United States itself recieves from its own leases to mine coal on Federal lands.