OCTOBER TERM, 2002
Syllabus
UNITED STATES
v. NAVAJO NATION
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL
CIRCUIT
No. 01-1375. Argued December 2, 2002-Decided March 4, 2003
The Indian Mineral Leasing Act of 1938 (IMLA) provides that
"[u]nallotted lands within any Indian reservation," or otherwise
under federal jurisdiction, "may, with the approval of the
Secretary [of the Interior (Secretary)] ... , be leased for mining
purposes, by authority of the tribal council or other authorized
spokesmen for such Indians." 25 U. S. C. § 396a. The 1M LA aims to
provide Indian tribes with a profitable source of revenue and to
foster tribal self-determination by giving Indians a greater say in
the use and disposition of the resources on their lands.
In 1964, the Navajo Nation (Tribe) permitted the predecessor of
Peabody Coal Company (Peabody) to mine coal on the Tribe's lands
pursuant to Lease 8580 (Lease or Lease 8580). The Lease established
a maximum royalty rate of 37.5 cents per ton of coal, but made that
figure subject to reasonable adjustment by the Secretary on the
20-year anniversary of the Lease and every ten years thereafter. As
Lease 8580's 20-year anniversary approached, its 37.5 cents per ton
rate yielded for the Tribe about 2 percent of gross proceeds. This
return was higher than the ten cents per ton minimum established by
then-applicable regulations implementing the IMLA. It was
substantially lower, however, than the rate Congress established in
1977 as the minimum permissible royalty for coal mined on federal
lands under the Mineral Leasing Act. In June 1984, the Area
Director of the Bureau of Indian Mfairs, acting pursuant to
authority delegated by the Secretary and at the Tribe's request,
sent Peabody an opinion letter raising the Lease 8580 rate to 20
percent of gross proceeds. While Peabody's administrative appeal
was pending before Deputy Assistant Secretary for Indian Mfairs
John Fritz, Peabody wrote to Secretary Hodel, asking him either to
postpone decision on the appeal or to rule in Peabody's favor.
Peabody representatives also met privately with Hodel during that
period. In July 1985, Hodel sent a memorandum to Fritz
"suggest[ing]" that he inform the parties that his decision was not
imminent and urging them to continue their efforts to resolve the
matter in a mutually agreeable fashion. The Tribe resumed
negotiations with Peabody. In November 1985, the parties agreed to
amend the Lease to provide, among other things, for a royalty rate
of 12J,,2 percent of monthly gross proceeds, which was the
489
then-customary rate for coal leases on federal and Indian lands.
Pursuant to 25 U. S. C. § 396a, Secretary Hodel approved the
amended Lease in December 1987.
In 1993, the Tribe brought this action for damages against the
United States, alleging,
inter alia, that the Secretary's
approval of the Lease amendments constituted a breach of trust.
Although granting summary judgment for the United States, the Court
of Federal Claims found that the Secretary had flagrantly
dishonored the Government's general fiduciary duties to the Tribe
by acting in Peabody's best interests rather than those of the
Tribe. The court nevertheless concluded that the Tribe had entirely
failed to link that breach of duty to any statutory or regulatory
obligation which could be fairly interpreted as mandating
compensation for the Government's actions. The Federal Circuit
reversed. Relying on 25 U. S. C. § 399 and regulations promulgated
thereunder, the appeals court determined that the measure of
control the Secretary exercised over the leasing of Indian lands
for mineral development sufficed to warrant a money judgment
against the United States. Agreeing with the Federal Claims Court
that the Secretary's actions regarding Peabody's administrative
appeal violated the Government's fiduciary obligations to the
Tribe, the Court of Appeals remanded for further proceedings,
including a determination of damages.
Held: United States v.
Mitchell, 445 U. S. 535
(Mitchell I), and
United States v.
Mitchell,
463 U. S. 206
(Mitchell II), control this case. The controversy here falls
within
Mitchell Fs domain, and the Tribe's claim for
compensation from the Government fails, for it does not derive from
any liability-imposing provision of the IMLA or its implementing
regulations. Pp. 502-514.
(a) To state a litigable claim, a tribal plaintiff must invoke a
rightscreating source of substantive law that "can fairly be
interpreted as mandating compensation by the Federal Government for
the damages sustained."
Mitchell II, 463 U. S., at 218.
Although the Indian Tucker Act, 28 U. S. C. § 1505, confers
jurisdiction upon the Court of Federal Claims in cases where this
requirement is met, the Act is not itself a source of substantive
rights.
E. g.,
Mitchell II, 463 U. S., at 216. Pp.
502-503.
(b)
Mitchell I and
Mitchell II are the pathmarking
precedents on the question whether a statute or regulation (or
combination thereof) "can fairly be interpreted as mandating
compensation by the Federal Government."
Mitchell II, 463 U.
S., at 218. In
Mitchell I, the Court held that the Indian
General Allotment Act of 1887 (GAA)-which authorized the President
to allot agricultural or grazing land to individual tribal members
residing on a reservation, 25 U. S. C. § 331, and provided that
490
Syllabus
the Government would hold land thus allotted in trust for the
sole use and benefit of the allottee, § 348-did not authorize an
award of money damages against the United States for alleged
mismanagement of forests located on allotted lands. The Court
concluded that the GAA created only a limited trust relationship
that did not impose any duty upon the Government to manage timber
resources.
Mitchell I, 445 U. S., at 542. In
Mitchell
II, however, the Court held that a network of other statutes
and regulations did impose judicially enforceable fiduciary duties
upon the United States in its management of forested allotted
lands, 463 U. S., at 222-224, and that the relevant prescriptions
could fairly be interpreted as mandating compensation by the
Federal Government when it breached those duties, id., at 226-227.
To state a claim cognizable under the Indian Tucker Act,
Mitchell I and
Mitchell II instruct, a tribe must
identify a substantive source of law that establishes specific
fiduciary or other duties, and allege that the Government has
failed faithfully to perform those duties. See
Mitchell II,
463 U. S., at 216217, 219. If that threshold is passed, the court
must then determine whether the relevant source of substantive law
"can fairly be interpreted as mandating compensation for damages
sustained as a result of a breach of the duties [the governing law]
impose[s]."
Id., at 219. Although "the undisputed existence
of a general trust relationship between the United States and the
Indian people" can "reinforc[e]" the conclusion that the relevant
statute or regulation imposes fiduciary duties, id., at 225, that
relationship alone is insufficient to support jurisdiction under
the Indian Tucker Act. Instead, the analysis must train on specific
rights-creating or duty-imposing statutory or regulatory
prescriptions. Those prescriptions, however, need not expressly
provide for money damages; the availability of such damages may be
inferred. See id., at 217, n. 16. Pp. 503-506.
(c) The statutes and regulations at issue cannot fairly be
interpreted as mandating compensation for the Government's alleged
breach of trust in this case. Pp. 506-514.
(1) The IMLA and its regulations do not provide the requisite
"substantive law" that "mandat[es] compensation by the Federal
Government."
Mitchell II, 463 U. S., at 218. They impose no
obligations resembling the detailed fiduciary responsibilities that
Mitchell II found adequate to support a claim for money
damages. The IMLA simply requires Secretarial approval before coal
mining leases negotiated between Tribes and third parties become
effective, § 396a, and authorizes the Secretary generally to
promulgate regulations governing mining operations, § 396d. Unlike
the "elaborate" provisions before the Court in
Mitchell II,
463 U. S., at 225, the IMLA and its regulations do not "give the
Federal Government full responsibility to manage Indian
491
resources ... for the benefit of the Indians," id., at 224. The
Secretary is neither assigned a comprehensive managerial role nor,
at the time relevant here, expressly invested with responsibility
to secure "the needs and best interests of the Indian owner and his
heirs."
Ibid. Instead, the Secretary's involvement in coal
leasing under the IMLA more closely resembles the role provided for
the Government by the GAA regarding allotted forest lands. See
Mitchell I, 445 U. S., at 540-544. Although the GAA required
the Government to hold allotted land in trust for allottees, that
Act did not "authoriz[e], much less requir[e], the Government to
manage timber resources for the benefit of Indian allottees."
Id., at 545. Similarly here, the IMLA and its regulations do
not assign to the Secretary managerial control over coal leasing.
Nor do they even establish the "limited trust relationship," id.,
at 542, existing under the GAA; no provision of the IMLA or its
regulations contains
any trust language with respect to coal
leasing. Moreover, as in
Mitchell I, imposing fiduciary
duties on the Government here would be out of line with one of the
statute's principal purposes, enhancing tribal self-determination.
See id., at 543. pp. 506-508.
(2) The Court rejects the Tribe's arguments that the Secretary's
actions in this case violated discrete statutory and regulatory
provisions whose breach is redressable in a damages action. The
Tribe misplaces reliance on 25 U. S. C. § 399, which is not part of
the IMLA and does not govern Lease 8580. Enacted almost 20 years
before the IMLA, § 399 authorizes
the Secretary to lease
certain unallotted Indian lands for mining purposes on terms she
sets, and does not provide for input from the Tribes concerned.
That authorization does not bear on the Secretary's more limited
approval role under the IMLA. Similarly unavailing is the
Tribe's reliance on the Indian Mineral Development Act of 1982
(IMDA), 25 U. S. C. § 2101
et seq. The IMDA governs the
Secretary's approval of agreements for the development of certain
Indian mineral resources through exploration and like activities.
It does not establish standards governing her approval of mining
leases negotiated by a Tribe and a third party, such as
Lease 8580. The Tribe's vigorously pressed arguments headlining §
396a, the IMLA's general prescription, fare no better. Asserting
that Secretary Hodel violated a § 396a duty to review and approve
proposed coal leases only to the extent they are in the Tribe's
best interests, the Tribe points to various Government reports
identifying 20 percent as the appropriate royalty, and to the
Secretary's decision, made after receiving
ex parte
communications from Peabody, to withhold departmental action. In
the circumstances presented, the Tribe maintains, Hodel's eventual
approval of the 121,,2 percent royalty rate violated § 396a in two
ways: (1) It was improvident because it allowed conveyance of the
Tribe's coal for what Hodel knew
492
Syllabus
to be about half of its value, and (2) it was unfair because
Hodel's intervention into the Lease adjustment process skewed the
bargaining by depriving the Tribe of the 20 percent rate. These
arguments fail, for they assume substantive prescriptions not found
in § 396a. As to the first argument, because neither the IMLA nor
any of its regulations establishes anything more than a bare
minimum royalty, there is no textual basis for concluding that the
Secretary's approval function includes a duty, enforceable in an
action for money damages, to ensure a higher rate of return for the
Tribe. Similarly, the Tribe's second argument is not grounded in
specific statutory or regulatory language. Nothing in § 396a or the
IMLA's implementing regulations proscribed the
ex parte
communications in this case, which occurred during an
administrative appeal process largely unconstrained by formal
requirements. Moreover, even if Deputy Assistant Secretary Fritz
had rendered an opinion affirming the 20 percent royalty approved
by the Area Director, the Secretary could have set aside or
modified his subordinate's decision in the exercise of his
authority as head of the Interior Department. Accordingly,
rejection of Peabody's appeal by Fritz would not necessarily have
yielded a higher royalty for the Tribe. Pp. 509-514.
263 F.3d
1325, reversed and remanded.
GINSBURG, J., delivered the opinion of the Court, in which
REHNQUIST, C. J., and SCALIA, KENNEDY, THOMAS, and BREYER, JJ.,
joined. SOUTER, J., filed a dissenting opinion, in which STEVENS
and O'CONNOR, JJ., joined,
post, p. 514.
Deputy Solicitor General Kneedler argued the cause for the
United States. With him on the brief were Solicitor General Olson,
Assistant Attorney General Sansonetti, Deputy Assistant Attorney
General Clark, Gregory G. Garre, Todd S. Aagaard, and R. Anthony
Rogers.
Paul E. Frye argued the cause for respondent. With him on the
brief were Richard W Hughes, David 0. Stewart, Samuel J. Buffone,
Levon B. Henry, and Richard B. Collins. *
*v.
Thomas Lankford and
Terrance G.
Reed
filed a brief for the Peabody Coal Co. et al. as
amici
curiae urging reversal.
Briefs of
amici curiae urging affirmance were filed for
the Jicarilla Apache Nation et al. by
Jill Elise Grant; for
the Mississippi Band of Choc-
493
JUSTICE GINSBURG delivered the opinion of the Court. This case
concerns the Indian Mineral Leasing Act of 1938 (IMLA), 52 Stat.
347, 25 U. S. C. § 396a
et seq., and the role it assigns to
the Secretary of the Interior (Secretary) with respect to coal
leases executed by an Indian Tribe and a private lessee. The
controversy centers on 1987 amendments to a 1964 coal lease entered
into by the predecessor of Peabody Coal Company (Peabody) and the
Navajo Nation (Tribe), a federally recognized Indian Tribe. The
Tribe seeks to recover money damages from the United States for an
alleged breach of trust in connection with the Secretary's approval
of coal lease amendments negotiated by the Tribe and Peabody. This
Court's decisions in
United States v.
Mitchell,
445 U. S. 535
(1980)
(Mitchell I), and
United States v.
Mitchell, 463
U. S. 206 (1983)
(Mitchell II), control this case.
Concluding that the controversy here falls within
Mitchell
Fs domain, we hold that the Tribe's claim for compensation from the
Federal Government fails, for it does not derive from any
liability-imposing provision of the IMLA or its implementing
regulations.
I A
The IMLA, which governs aspects of mineral leasing on Indian
tribal lands, states that "unallotted lands within any Indian
reservation," or otherwise under federal jurisdiction, "may, with
the approval of the Secretary ... , be leased for mining purposes,
by authority of the tribal councilor other authorized spokesmen for
such Indians, for terms not to exceed ten years and as long
thereafter as minerals are produced in paying quantities." § 396a.
In addition "to provid[ing] Indian tribes with a profitable source
of revenue,"
Cotton Petroleum Corp. v.
New Mexico,
490 U. S.
taw Indians by Charles A. Hobbs and Christopher T. Stearns; and
for the National Congress of American Indians by Jeffrey S. Sutton
and John E. Echohawk.
494
163, 179 (1989), the IMLA aimed to foster tribal
selfdetermination by "giv[ing] Indians a greater say in the use and
disposition of the resources found on Indian lands,"
BHP
Minerals Int'l Inc., 139 1. B. L. A. 269, 311 (1997).
Prior to enactment of the IMLA, decisions whether to grant
mineral leases on Indian land generally rested with the Government.
See,
e. g., Act of June 30, 1919, ch. 4, § 26, 41 Stat. 31,
as amended, 25 U. S. C. § 399; see also
infra, at 509
(describing § 399). Indian consent was not required, and leases
were sometimes granted over tribal objections. See H. R. Rep. No.
1872, 75th Cong., 3d Sess., 2 (1938); S. Rep. No. 985, 75th Cong.,
1st Sess., 2 (1937); 46 Fed. Cl. 217, 230 (2000). The IMLA,
designed to advance tribal independence, empowers Tribes to
negotiate mining leases themselves, and, as to coal leasing,
assigns primarily an approval role to the Secretary.
Although the IMLA covers mineral leasing generally, in a number
of discrete provisions it deals particularly with oil and gas
leases. See 25 U. S. C. § 396b (requirements for public auctions of
oil and gas leases); § 396d (oil and gas leases are "subject to the
terms of any reasonable cooperative unit or other plan approved or
prescribed by [the] Secretary"); § 396g ("[T]o avoid waste or to
promote the conservation of natural resources or the welfare of the
Indians," the Secretary may approve leases of Indian lands "for the
subsurface storage of oil and gas."). The IMLA contains no
similarly specific prescriptions for coal leases; it simply remits
coal leases, in common with all mineral leases, to the governance
of rules and regulations promulgated by the Secretary. § 396d.
During all times relevant here, the IMLA regulations provided
that "Indian tribes ... may, with the approval of the Secretary ...
or his authorized representative, lease their land for mining
purposes." 25 CFR § 211.2 (1985). In line with the IMLA itself, the
regulations treated oil and gas leases in more detail than coal
leases. The regulations re-
495
garding royalties, for example, specified procedures applicable
to oil and gas leases, including criteria for the Secretary to
employ in setting royalty rates. §§ 211.13, 211.16, 211.17. As to
coal royalties, in contrast, the regulations required only that the
rate be "not less than 10 cents per ton." § 211.15(c). No other
limitation was placed on the Tribe's negotiating capacity or the
Secretary's approval authority.1
B
The Tribe involved in this case occupies the largest Indian
reservation in the United States. Over the past century, large
deposits of coal have been discovered on the Tribe's reservation
lands, which are held for it in trust by the United States. Each
year, the Tribe receives millions of dollars in royalty payments
pursuant to mineral leases with private companies.
Peabody mines coal on the Tribe's lands pursuant to leases
covered by the IMLA. This case principally concerns Lease 8580
(Lease or Lease 8580), which took effect upon approval by the
Secretary in 1964. App. 188-220. The Lease established a maximum
royalty rate of 37.5 cents per ton of coal, id., at 191, but made
that figure "subject to reasonable adjustment by the Secretary of
the Interior or his authorized representative" on the 20-year
anniversary of the Lease and every ten years thereafter, id., at
194.
As the 20-year anniversary of Lease 8580 approached, its royalty
rate of 37.5 cents per ton yielded for the Tribe only "about 2% of
gross proceeds."
263 F.3d
1325, 1327 (CA Fed. 2001). This return was higher than the ten
cents per ton minimum established by the then-applicable IMLA
regula-
1 In 1996, well after the events at issue here, the minimum rate
on new coal leases was increased to
"12112 percent of the
value of production produced and sold from the lease." 61 Fed. Reg.
35658 (1996); 25 CFR §211.43(a)(2) (1997). The amended regulations
further state, however, that "[a] lower royalty rate shall be
allowed if it is determined to be in the best interest of the
Indian mineral owner." § 211.43(b).
496
tions. See 25 CFR § 211.15(c) (1985). It was substantially
lower, however, than the 12lf2 percent of gross proceeds rate
Congress established in 1977 as the minimum permissible royalty for
coal mined on federal lands under the Mineral Leasing Act. See Pub.
L. 94-377, § 6, 90 Stat. 1087, as amended, 30 U. S. C. § 207(a).
For some years starting in the 1970's, to gain a more favorable
return, the Tribe endeavored to renegotiate existing mineral leases
with private lessees, including Peabody. See App. 138-139,
143-144.
In March 1984, the Chairman of the Navajo Tribal Council wrote
to the Secretary asking him to exercise his contractually conferred
authority to adjust the royalty rate under Lease 8580. On June 18,
1984, the Director of the Bureau of Indian Affairs for the Navajo
Area, acting pursuant to authority delegated by the Secretary, sent
Peabody an opinion letter raising the rate to 20 percent of gross
proceeds.
Id., at 8-9.
Contesting the Area Director's rate determination, Peabody filed
an administrative appeal in July 1984, pursuant to 25 CFR § 2.3(a)
(1985). 46 Fed. Cl., at 222.2 The appeal was referred to the Deputy
Assistant Secretary for Indian Affairs, John Fritz, then acting as
both Commissioner of Indian Affairs and Assistant Secretary of
Indian Affairs, 263 F. 3d, at 1328. In March 1985, Fritz permitted
Peabody to supplement its brief and requested additional cost,
revenue, and investment data. 46 Fed. Cl., at 222. He thereafter
appeared ready to reject Peabody's appeal.
Ibid.; App. 89-97
(undated draft letter). By June 1985, both Peabody and the Tribe
anticipated that an announcement favorable to the Tribe was
imminent.
Id., at 98-99.3
2 As required by the regulations, see 25 CFR § 2.11 (1985),
Peabody served its notice of appeal on the Tribe, which exercised
its right to file a response, see § 2.12.
3 The regulations then in effect required the Deputy Assistant
Secretary to "[r]ender a written decision on the appeal" or
"[r]efer the appeal to the Board of Indian Appeals" (Board),
"[w]ithin 30 days after all time for
497
On July 5, 1985, a Peabody Vice President wrote to Interior
Secretary Donald Hodel, asking him either to postpone decision on
Peabody's appeal so the parties could seek a negotiated settlement,
or to rule in Peabody's favor.
Id., at 98-100. A copy of
Peabody's letter was sent to the Tribe, id., at 100, which then
submitted its own letter urging the Secretary to reject Peabody's
request and to secure the Department's prompt release of a decision
in the Tribe's favor, id., at 119-121. Peabody representatives met
privately with Secretary Hodel in July 1985, 46 Fed. Cl., at 222;
no representative of the Tribe was present at, or received notice
of, that meeting, id., at 219.
On July 17, 1985, Secretary Hodel sent a memorandum to Deputy
Assistant Secretary Fritz. App. 117-118. The memorandum
"suggest[ed]" that Fritz "inform the involved parties that a
decision on thee] appeal is not imminent and urge them to continue
with efforts to resolve this matter in a mutually agreeable
fashion."
Id., at 117. "Any royalty adjustment which is
imposed on those parties without their concurrence," the memorandum
stated, "will almost certainly be the subject of protracted and
costly appeals," and "could well impair the future of the
contractual relationship"
pleadings ... has expired." § 2.19(a). Because more than 30 days
had elapsed by June 1985, App. 12, either party would have been
entitled to have the matter transferred to the Board. 25 CFR
§2.19(b) (1985). Neither Peabody nor the Tribe chose to go that
route, which would have entailed a formalized (and possibly
protracted) additional administrative process. See § 2.3(c)
("Appeals to the Board of Indian Appeals shall be made in the
manner provided in Department Hearings and Appeals Procedures in 43
CFR Part 4, Subpart D."); 43 CFR §§ 4.310-4.317 (1985) (general
rules applicable to proceedings on appeal before the Board);
§§4.3304.340 (special rules applicable to appeals from
administrative actions of officials of the Bureau of Indian
Affairs). At the conclusion of proceedings before the Board, either
side could have sought reconsideration, § 4.315(a), or requested
further review by the Director of the Office of Hearings and
Appeals, § 4.5(b), or by the Secretary of the Interior, §
4.5(a).
498
between the parties.
Ibid.4 Secretary Hodel added,
however, that the memorandum was "not intended as a determination
of the merits of the arguments of the parties with respect to the
issues which are subject to the appeal."
Id., at 118.
The Tribe was not told of the Secretary's memorandum to Fritz,
but learned that "'someone from Washington' had urged a return to
the bargaining table." 46 Fed. Cl., at 223; see App. 342-344.
Facing "severe economic pressure," 263 F. 3d, at 1328; App.
355-356, the Tribe resumed negotiations with Peabody in August
1985, 46 Fed. Cl., at 223.
On September 23, 1985, the parties reached a tentative agreement
on a package of amendments to Lease 8580.
Ibid.5 They agreed
to raise the royalty rate to 12lh percent of monthly gross
proceeds, and to make the new rate retroactive to February 1, 1984.
App. 287. The 12lh percent rate was at the time customary for
leases to mine coal on federal lands and on Indian lands.6 The
amendments acknowledged
4 The Deputy Assistant Secretary's draft opinion letter stated
that the ruling "is based on the exercise of my discretionary
authority and is final for the Department." App. 97. Had the letter
issued, Peabody would not have been entitled to seek further review
by the Board. See 25 CFR § 2.19(c)(2) (1985) (the Board may review
decisions by the Commissioner of Indian Affairs only if the
decision states that it "is based on interpretation of law"); see
also
supra, at 496 (Deputy Assistant Secretary was acting as
the Commissioner of Indian Mfairs). But even if the opinion letter
had issued as drafted, Peabody could have asked Secretary Hodel to
exercise his "authority to review any decision of any employee or
employees of the Department." 43 CFR § 4.5(a)(2) (1985). The
Secretary could have "render[ed] the final decision" himself, §
4.5(a)(1), or "direct[ed the Deputy Assistant Secretary] to
reconsider [his] decision," § 4.5(a)(2).
5 The parties also agreed to raise the royalty rate under
another lease not in issue here, which covered coal located within
a former joint use area shared by the Navajo Nation and the Hopi
Tribe. 46 Fed. Cl. 217, 224 (2000). Unlike Lease 8580, that lease
did not contain a provision subjecting its rate to reasonable
adjustment by the Secretary.
Id., at 233.
6 Twelve and one-half percent is the minimum royalty rate set by
Congress for leases to mine coal on federal lands, see 30 U. S. C.
§ 207(a), and is also the customary rate found in most such leases
issued or readjusted after 1976, see Department of Interior,
Minerals Management Serv., Min-
499
the legitimacy of tribal taxation of coal production, but
stipulated that the tax rate would be capped at eight percent.
Id., at 295, 299.7 In addition, Peabody agreed to pay
the
erals Revenue Management, General Federal and American Indian
Mineral Lease Terms (Jan. 2, 2003),
http://www.mrm.mms.gov/Stats/pdfdocs/
lse_term.pdf (available in Clerk of Court's case file). The Tribe
identifies a single federal coal lease with a royalty rate of 17.08
percent, see Brief for Respondent 11, but, as the Government points
out, that lease was "part of an experimental leasing policy tried
by the Department for a short time," Reply Brief 12, n. 7 (quoting
Peabody Coal Co., 93 I. B. L. A. 317, 320 (1986)). Between
1984 and 1988, the Department of the Interior's practice was not to
approve IMLA leases with royalties less than the minimum rate for
federal coal, i.
e., 12Y2 percent. See App. in No. 00-5086
(CA Fed.), p. A1872. As late as 1996 the customary royalty rate for
coal leases on Indian lands issued or readjusted after 1976 did not
exceed 12Y2 percent. See Department of Interior, Minerals
Management Serv., Mineral Revenues 1996, Report on Receipts from
Federal and Indian Leases 128 (Table 47) (Jan. 2, 2003),
http://www.mrm.mms.gov/stats/
pdfdocs/mrr96fin.pdf (available in Clerk of Court's case file).
The Tribe argues, in its presentation to this Court, that the
12112 percent provided in amended Lease 8580 is only a
"facial royalty rate," Brief for Respondent 11, and that the actual
rate is lower, see Tr. of Oral Arg. 33. That assertion is based in
part on the Tribe's agreement under the amended Lease to relinquish
its claim for $33 million in back taxes and $56 million in back
royalties, see 46 Fed. Cl., at 224, and in part on proposed
findings of fact the Tribe submitted to the Court of Federal
Claims, which the Government did not specifically dispute. See App.
in No.
00-5086 (CA Fed.), pp. A2703-A2727. The proposed
findings stated that a provision in the amended Lease "signifying a
non-standard method of calculating the royalty," App. 180 (Proposed
Findings ~ 314), "resulted in royalty payments lower than the
minimum allowable for federal coal," id., at 181 (Proposed Findings
~ 315). To the extent the Tribe here assails the Secretary's
approval of Lease 8580 as inconsistent with the thenprevailing
federal policy not to approve rates below
12112 percent, we
do not pursue the point, for the Tribe failed to rely on it below.
See 46 Fed. Cl., at 233 ("[T]here is no claim by the [Tribe] that
the [Secretary's] 1987 approval of Lease 8580 ... ran afoul of
thEe] [federal] policy" of not approving IMLA leases with royalty
rates of less than 12Y2 percent.).
7 Before this Court's decision in
Kerr-McGee Corp. v.
Navajo Tribe, 471 U. S. 195 (1985), it was unsettled whether
the Tribe could levy taxes without the approval of the Secretary of
the Interior. The imposition of a severance tax, of course,
augmented the amount payable by the lessee
500
Tribe $1.5 million when the amendments became effective, and
$7.5 million more when Peabody began mining additional coal, as
authorized by the Lease amendments.
Id., at 292293. The
agreement "also addressed ancillary matters such as provisions for
future royalty adjustments, arbitration procedures, rights of way,
the establishment of a tribal scholarship fund, and the payment by
Peabody of back royalties, bonuses, and water payments." 46 Fed.
Cl., at 224. "In consideration of the benefits associated with
these lease amendments," the parties agreed to move jointly to
vacate the Area Director's June 1984 decision, which had raised the
royalty to 20 percent. App. 286.
In August 1987, the Navajo Tribal Council approved the
amendments. 46 Fed. Cl., at 224. The parties signed a final
agreement in November 1987, App. 309, and Secretary Hodel approved
it on December 14, 1987, id., at 337-339. Shortly thereafter,
pursuant to the parties' stipulation, the Area Director's decision
was vacated. 46 Fed. Cl., at 224.
In 1993, the Tribe brought suit against the United States in the
Court of Federal Claims, alleging,
inter alia, that the
Secretary's approval of the amendments to the Lease constituted a
breach of trust. The Tribe sought $600 million in damages.8
to the Tribe. See 46 Fed. Cl., at 224 (royalties and taxes
combined "would ... permit the tribe to realize as much as 20.5
percent"). But see Tr. of Oral Arg. 43-44 ("[W]e can't tax 60
percent of the coal because it goes to the Navajo [G]enerating
[S]tation which has a tax waiver in the plant site lease.").
8 The Tribe has filed a separate action against Peabody,
claiming improper influence over the Government's actions with
respect to the Lease. See
Navajo Nation v.
Peabody
Holding Co., Civ. Action No. 99-469 (D.
C., June 24,
2002). The Tribe's complaint in that action alleges violations of
the federal Racketeer Influenced and Corrupt Organizations Act, 18
U. S. C. § 1961
et seq., and related wrongdoing,
inter
alia, breach of contract, interference with fiduciary
relationship, conspiracy, and fraudulent concealment. See
Navajo
Nation v.
Peabody Holding Co., 209 F. Supp. 2d 269, 272
(DC 2002) (ruling on pretrial motions).
501
The Court of Federal Claims granted summary judgment for the
United States. 46 Fed. Cl. 217 (2000). In no uncertain terms, that
court found that the Government owed general fiduciary duties to
the Tribe, which, in its view, the Secretary had flagrantly
dishonored by acting in the best interests of Peabody rather than
the Tribe. Nevertheless, the court concluded that the Tribe had
entirely failed to link that breach of duty to any statutory or
regulatory obligation which could "be fairly interpreted as
mandating compensation for the government's fiduciary wrongs."
Id., at 236. Accordingly, the court held that the United
States was entitled to judgment as a matter of law. 9
The Court of Appeals for the Federal Circuit reversed.
263 F.3d
1325 (2001). The Government's liability to the Tribe, it said,
turned on whether "the United States controls the Indian
resources."
Id., at 1329. Relying on 25 U. S. C. § 399 and
regulations promulgated thereunder, the Court of Appeals determined
that the measure of control the Secretary exercised over the
leasing of Indian lands for mineral development sufficed to warrant
a money judgment against the United States for breaches of
fiduciary duties connected to coal leasing. 263 F. 3d, at
1330-1332. But see
infra, at 509. The appeals court agreed
with the Federal Claims Court that the Secretary's actions
regarding Peabody's administrative appeal violated the Government's
fiduciary obligations to the Tribe, in that those actions
"suppress[ed] and conceal[ed]" the decision of the Deputy Assistant
Secretary, and "thereby favor[ed] Peabody interests to the
detriment of Navajo interests." 263 F. 3d, at 1332. Based on
these
9 The Court of Federal Claims also rejected the Tribe's claim
for breach of contract, determining that the Secretary was not a
party to the Lease and that his contractual authority to adjust the
Lease-specified royalty rate carried with it no obligation to do
so. 46 Fed. Cl., at 234-236. The Tribe did not appeal that
ruling.
502
determinations, the Court of Appeals remanded for further
proceedings, including a determination of damages.
Id., at
1333.
Judge Schall concurred in part and dissented in part.
Id., at 1333-1341. It was not enough, he maintained, for the
Tribe to show a violation of a general fiduciary relationship
stemming from federal involvement in a particular area of Indian
affairs. Rather, a Tribe "must show the breach of a specific
fiduciary obligation that falls within the contours of the statutes
and regulations that create the general fiduciary relationship at
issue."
Id., at 1341. In his view, "the only government
action in this case that implicated a specific fiduciary
responsibility" was the Secretary's 1987 approval of the Lease
amendments.
Id., at 1339. The Secretary had been deficient,
Judge Schall concluded, in approving the amendments without first
conducting an independent economic analysis of the amended
agreement.
Id., at 1339-1341.
The Court of Appeals denied rehearing. We granted certiorari,
535 U. S. 1111 (2002), and now reverse.
II A
"It is axiomatic that the United States may not be sued without
its consent and that the existence of consent is a prerequisite for
jurisdiction."
Mitchell II, 463 U. S., at 212. The Tribe
asserts federal subject-matter jurisdiction under 28 U. S. C. §
1505, known as the Indian Tucker Act. That Act provides:
"The United States Court of Federal Claims shall have
jurisdiction of any claim against the United States accruing after
August 13, 1946, in favor of any tribe ... whenever such claim is
one arising under the Constitution, laws or treaties of the United
States, or Executive orders of the President, or is one which
otherwise would
503
be cognizable in the Court of Federal Claims if the claimant
were not an Indian tribe, band, or group." 10
"If a claim falls within the terms of the [Indian] Tucker Act,
the United States has presumptively consented to suit."
Mitchell
II, 463 U. S., at 216.
Although the Indian Tucker Act confers jurisdiction upon the
Court of Federal Claims, it is not itself a source of substantive
rights.
Ibid.; see
Mitchell I, 445 U. S., at 538. To
state a litigable claim, a tribal plaintiff must invoke a
rightscreating source of substantive law that "can fairly be
interpreted as mandating compensation by the Federal Government for
the damages sustained."
Mitchell II, 463 U. S., at 218.
Because "[t]he [Indian] Tucker Act itself provides the necessary
consent" to suit,
ibid., however, the rightscreating statute
or regulation need not contain "a second waiver of sovereign
immunity," id., at 218-219.
B
Mitchell I and
Mitchell II are the pathmarking
precedents on the question whether a statute or regulation (or
combination thereof) "can fairly be interpreted as mandating
compensation by the Federal Government."
Mitchell II, 463 U.
S., at 218.
In
Mitchell I, we considered whether the Indian General
Allotment Act of 1887 (GAA), 24 Stat. 388, as amended, 25 U. S. C.
§ 331
et seq. (1976 ed.) (§§ 331-333 repealed 2000),
authorized an award of money damages against the United
10 The reference to claims "which otherwise would be cognizable
in the Court of Federal Claims" incorporates the Tucker Act, 28 U.
S. C. § 1491. See
Mitchell II, 463 U. S., at 212, n. 8;
Mitchell I, 445 U. S. 535, 539
(1980). The Tucker Act grants the Court of Federal Claims
"jurisdiction to render judgment upon any claim against the United
States founded either upon 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." 28 U. S. C. §
1491(a)(1).
504
States for alleged mismanagement of forests located on lands
allotted to tribal members. The GAA authorized the President of the
United States to allot agricultural or grazing land to individual
tribal members residing on a reservation, § 331, and provided that
"the United States does and will hold the land thus allotted ... in
trust for the sole use and benefit of the Indian to whom such
allotment shall have been made," §348.
We held that the GAA did not create private rights enforceable
in a suit for money damages under the Indian Tucker Act. After
examining the GAA's language, history, and purpose, we concluded
that it "created only a limited trust relationship between the
United States and the allottee that does not impose any duty upon
the Government to manage timber resources."
Mitchell I, 445
U. S., at 542. In particular, we stressed that §§ 1 and 2 of the
GAA removed a standard element of a trust relationship by making
"the Indian allottee, and not a representative of the United
States, ... responsible for using the land for agricultural or
grazing purposes."
Id., at 542-543; see
id., at 543
("Under this scheme, ... the allottee, and not the United States,
was to manage the land."). We also determined that Congress decided
to have "the United States 'hold the land ... in trust' not because
it wished the Government to control use of the land ... , but
simply because it wished to prevent alienation of the land and to
ensure that allottees would be immune from state taxation."
Id., at 544. Because "the Act [did] not ... authoriz[e],
much less requir[e], the Government to manage timber resources for
the benefit of Indian allottees," id., at 545, we held that the GAA
established no right to recover money damages for mismanagement of
such resources. We left open, however, the possibility that other
sources of law might support the plaintiffs' claims for damages.
Id., at 546, and n. 7.
In
Mitchell II, we held that a network of other statutes
and regulations did impose judicially enforceable fiduciary
505
duties upon the United States in its management of forested
allotted lands. "In contrast to the bare trust created by the
[GAA]," we observed, "the statutes and regulations now before us
clearly give the Federal Government full responsibility to manage
Indian resources and land for the benefit of the Indians." 463 U.
S., at 224.
As to managing the forests and selling timber, we noted,
Congress instructed the Secretary to be mindful of "the needs and
best interests of the Indian owner and his heirs," 25 U. S. C. §
406(a), and specifically to take into account:
"(1) the state of growth of the timber and the need for
maintaining the productive capacity of the land for the benefit of
the owner and his heirs, (2) the highest and best use of the land,
including the advisability and practicality of devoting it to other
uses for the benefit of the owner and his heirs, and (3) the
present and future financial needs of the owner and his heirs."
Ibid.
Proceeds from timber sales were to be paid to landowners "or
disposed of for their benefit."
Ibid. Congress'
prescriptions, Interior Department regulations, and "daily
supervision over the harvesting and management of tribal timber" by
the Department's Bureau of Indian Affairs, we emphasized, combined
to place under federal control "[v]irtually every stage of the
process."
Mitchell II, 463 U. S., at 222 (internal quotation
marks omitted); see id., at 222-224 (describing comprehensive
timber management statutes and regulations promulgated
thereunder).
Having determined that the statutes and regulations
"establish[ed] fiduciary obligations of the Government in the
management and operation of Indian lands and resources," we
concluded that the relevant legislative and executive prescriptions
could "fairly be interpreted as mandating compensation by the
Federal Government for damages sustained."
Id., at 226. A
damages remedy, we explained, would "furthe[r] the purposes of the
statutes and regulations, which
506
clearly require that the Secretary manage Indian resources so as
to generate proceeds for the Indians."
Id., at 226-227.
To state a claim cognizable under the Indian Tucker Act,
Mitchell I and
Mitchell II thus instruct, a Tribe
must identify a substantive source of law that establishes specific
fiduciary or other duties, and allege that the Government has
failed faithfully to perform those duties. See 463 U. S., at
216-217, 219. If that threshold is passed, the court must then
determine whether the relevant source of substantive law "can
fairly be interpreted as mandating compensation for damages
sustained as a result of a breach of the duties [the governing law]
impose[s]."
Id., at 219. Although "the undisputed existence
of a general trust relationship between the United States and the
Indian people" can "reinforc[e]" the conclusion that the relevant
statute or regulation imposes fiduciary duties, id., at 225, that
relationship alone is insufficient to support jurisdiction under
the Indian Tucker Act. Instead, the analysis must train on specific
rightscreating or duty-imposing statutory or regulatory
prescriptions. Those prescriptions need not, however, expressly
provide for money damages; the availability of such damages may be
inferred. See id., at 217, n. 16 ("[T]he substantive source of law
may grant the claimant a right to recover damages either expressly
or by implication." (internal quotation marks and citation
omitted)).
C
We now consider whether the IMLA and its implementing
regulations can fairly be interpreted as mandating compensation for
the Government's alleged breach of trust in this case. We conclude
that they cannot.
1
The Tribe's principal contention is that the IMLA's statutory
and regulatory scheme, viewed in its entirety, attaches
507
fiduciary duties to each Government function under that scheme,
and that the Secretary acted in contravention of those duties by
approving the 12% percent royalty contained in the amended Lease.
See,
e. g., Brief for Respondent 20, 30-38. We read the IMLA
differently. As we see it, the statute and regulations at issue do
not provide the requisite "substantive law" that "mandat[es]
compensation by the Federal Government."
Mitchell II, 463 U.
S., at 218.
The IMLA and its implementing regulations impose no obligations
resembling the detailed fiduciary responsibilities that
Mitchell
II found adequate to support a claim for money damages.ll The
IMLA simply requires Secretarial approval before coal mining leases
negotiated between Tribes and third parties become effective, 25 U.
S. C. § 396a, and authorizes the Secretary generally to promulgate
regulations governing mining operations, § 396d. Yet the dissent
concludes that the IMLA imposes "one or more specific statutory
obligations, as in
Mitchell II, at the level of fiduciary
duty whose breach is compensable in damages."
Post, at 521.
The endeavor to align this case with
Mitchell II rather than
Mitchell I, however valiant, falls short of the mark. Unlike
the "elaborate" provisions before the Court in
Mitchell II,
463 U. S., at 225, the IMLA and its regulations do not "give
the Federal Government full responsibility to manage Indian
resources ... for the benefit of the Indians," id., at 224. The
Secretary is neither assigned a comprehensive managerial role nor,
at the time relevant here, expressly invested with responsibility
to secure "the needs and best interests of the
11 We rule only on the Government's role in the coal leasing
process under the IMLA. As earlier recounted, see
supra, at
494, both the IMLA and its implementing regulations address oil and
gas leases in considerably more detail than coal leases. Whether
the Secretary has fiduciary or other obligations, enforceable in an
action for money damages, with respect to oil and gas leases is not
before us.
508
Indian owner and his heirs."
Ibid. (internal quotation
marks omitted) (quoting 25 U. S. C. § 406(a))P
Instead, the Secretary's involvement in coal leasing under the
IMLA more closely resembles the role provided for the Government by
the GAA regarding allotted forest lands. See
Mitchell
I, 445 U. S., at 540-544. Although the GAA required the
Government to hold allotted land "in trust for the sole use and
benefit of the Indian to whom such allotment shall have been made,"
id., at 541 (quoting 25 U. S. C. § 348), that Act did not
"authoriz[e], much less requir[e], the Government to manage timber
resources for the benefit of Indian allottees,"
Mitchell
I, 445 U. S., at 545. Similarly here, the IMLA and its
regulations do not assign to the Secretary managerial control over
coal leasing. Nor do they even establish the "limited trust
relationship," id., at 542, existing under the GAA; no provision of
the IMLA or its regulations contains
any trust language with
respect to coal leasing.
Moreover, as in
Mitchell I, imposing fiduciary
duties on the Government here would be out of line with one of the
statute's principal purposes. The GAA was designed so that "the
allottee, and not the United States, ... [would] manage the land."
Id., at 543. Imposing upon the Government a fiduciary duty
to oversee the management of allotted lands would not have served
that purpose. So too here. The IMLA aims to enhance tribal
self-determination by giving Tribes, not the Government, the lead
role in negotiating mining leases with third parties. See
supra, at 494. As the Court of Federal Claims recognized,
"[t]he ideal of Indian self-determination is directly at odds with
Secretarial control over leasing." 46 Fed. Cl., at 230.
12 Both the Tribe and the dissent refer to portions of 25 CFR
pt. 211 that require administrative decisions affecting tribal
mineral interests to be made in the best interests of the tribal
mineral owner. See Brief for Respondent 27, 31;
post, at
516-517. We note, however, that the referenced regulatory
provisions were adopted more than a decade after the events at
issue in this case. See 61 Fed. Reg. 35653 (1996).
509
2
The Tribe nevertheless argues that the actions of the Secretary
targeted in this case violated discrete statutory and regulatory
provisions whose breach is redressable in an action for damages. In
this regard, the Tribe relies extensively on 25 U. S. C. § 399,
see,
e. g., Brief for Respondent 22-23, 30-31, upon which
the Court of Appeals placed considerable weight as well, see 263 F.
3d, at 1330-1331;
supra, at 501. That provision, however, is
not part of the IMLA and does not govern Lease 8580. Enacted almost
20 years before the IMLA, § 399 authorizes
the Secretary to
lease certain unallotted Indian lands for mining purposes on terms
she sets, and does not provide for input from the Tribes concerned.
See
supra, at 494. In exercising that authority, the
Secretary is authorized to "perform any and all acts ... as may be
necessary and proper for the protection of the interests of the
Indians and for the purpose of carrying the provisions of this
section into full force and effect." § 399. But that provision
describes the Secretary's
leasing authority under § 399; it
does not bear on the Secretary's more limited
approval role
under the IMLA.
Similarly unavailing is the Tribe's reliance on the Indian
Mineral Development Act of 1982 (IMDA), 25 U. S. C. § 2101
et
seq. See Brief for Respondent 23-24, 30. The IMDA governs the
Secretary's approval of agreements for the development of certain
Indian mineral resources through exploration and like activities.
It does not establish standards governing the Secretary's approval
of mining
leases negotiated by a Tribe and a third party.
The Lease in this case, in short, falls outside the IMDA's domain.
See Reply Brief 12-13.
Citing 25 U. S. C. § 396a, the IMLA's general prescription, see
supra, at 493, the Tribe next asserts that the Secretary
violated his "duty to review and approve any proposed coal lease
with care to promote IMLA's basic purpose and the [Tribe's] best
interests." Brief for Respondent 39. To sup-
510
port that assertion, the Tribe points to various Government
reports identifying 20 percent as the appropriate royalty, see id.,
at 5-7, 15, and to the Secretary's decision, made after receiving
ex parte communications from Peabody, to withhold
departmental action, see id., at 9-10, 15.
In the circumstances presented, the Tribe maintains, the
Secretary's eventual approval of the 12lf2 percent royalty violated
his duties under § 396a in two ways. First, the Secretary's
approval was "improvident," Tr. of Oral Arg. 48, because it allowed
the Tribe's coal "to be conveyed for what [the Secretary] knew to
be about half of its value," id., at 49. Second, Secretary Hodel's
intervention into the Lease adjustment process "skewed the
bargaining" by depriving the Tribe of the 20 percent rate,
rendering the Secretary's subsequent approval of the 12lf2 percent
rate "unfair."
Id., at 50.
The Tribe's vigorously pressed arguments headlining § 396a fare
no better than its arguments tied to § 399 and the IMDA; the § 396a
arguments fail, for they assume substantive prescriptions not found
in that provision.13 As to the "improviden[ce]" of the Secretary's
approval, the Tribe can point to no guides or standards
circumscribing the Secretary's affirmation of coal mining leases
negotiated between a Tribe and a private lessee. Regulations under
the IMLA in effect in 1987 established a minimum royalty of ten
cents per ton. See 25 CFR § 211.15(c) (1985). But the royalty
contained in Lease 8580 well exceeded that regulatory floor.
13 The Lease itself authorized the Secretary to make "reasonable
[royalty] adjustment[s]." App. 194. As noted above, however, see
supra, at 501, n. 9, the Court of Federal Claims determined,
and the Tribe does not here dispute, that the Secretary is not a
signatory to the Lease and that the Lease is not contractually
binding on him. See 46 Fed. Cl., at 234236. We thus perceive no
basis for infusing the Secretary's
approval function under §
396a with substantive standards that might be derived from his
adjustment authority under the Lease, and certainly no basis
for concluding that an alleged "breach" of those standards is
cognizable in an action for money damages under the Indian Tucker
Act.
511
See
supra, at 495-496.14 At the time the Secretary
approved the amended Lease, it bears repetition, 12lf2 percent was
the rate the United States itself customarily received from leases
to mine coal on federal lands. Similarly, the customary rate for
coal leases on Indian lands issued or readjusted after 1976 did not
exceed 12lf2 percent. See
supra, at 498-499, n. 6.15
In sum, neither the IMLA nor any of its regulations establishes
anything more than a bare minimum royalty. Hence, there is no
textual basis for concluding that the Secretary's approval function
includes a duty, enforceable in an action for money damages, to
ensure a higher rate of return for the Tribe concerned. Similarly,
no pertinent statutory or regulatory provision requires the
Secretary, on pain of damages, to conduct an independent "economic
analysis" of the reasonableness of the royalty to which a Tribe and
third party have agreed. 263 F. 3d, at 1340 (concurring opinion
below, finding such a duty).16
14 Because the Tribe does not contend that the amended Lease
failed to meet the minimum royalty under the regulations then in
effect, we need not decide whether the Secretary's approval of such
a lease would trigger money damages. See Reply Brief 15 ("The Court
may ... assume for present purposes that a failure by the Secretary
to ensure, prior to approving a proposed lease, that its terms (or
amendments) comply with the regulation specifying the minimum
royalty rate to which the parties may agree would support a claim
under the Tucker Act.").
15 Under 30 U. S. C. § 207(a), that customary rate was also a
statutorily defined minimum for federal coal leases. See
supra, at 498-499, n. 6. Section 207(a), which applies to
federal lands in general, did not apply to leases of Indian lands
until 1996, when 25 CFR §211.43(a)(2) was promulgated. See Reply
Brief 13-14. At the pre-1996 times relevant here, the sole specific
provision governing Tribe-private lessee coal leases was the ten
cents per ton minimum prescribed in 25 CFR §211.15(c) (1985).
16 Citing language from the legislative history, the dissent
stresses that the IMLA aimed in part to "give the Indians the
greatest return from their property,"
post, at 516 (quoting
S. Rep. No. 985, 75th Cong., 1st Sess., 2 (1937)), and suggests
that the Secretary's approval role encompasses an enforceable duty
to further that objective, see
post, at 517. We have
cautioned against according "talismanic effect" to the Senate
Report's "reference to 'the greatest return from [Indian]
property,'" and have observed
512
The Tribe's second argument under § 396a concentrates on the
"skew[ingJ" effect of Secretary Hodel's 1985 intervention, i.
e., his direction to Deputy Assistant Secretary Fritz to
withhold action on Peabody's appeal from the Area Director's
decision setting a royalty rate of 20 percent. Tr. of Oral Arg. 50;
see
supra, at 497-498. The Secretary's actions, both in
intervening in the administrative appeal process, and in approving
the amended Lease, the Tribe urges, were not based upon an
assessment of the merits of the royalty issue; instead, the Tribe
maintains, they were attributable entirely to the undue influence
Peabody exerted through
ex parte communications with the
Secretary. See Brief for Respondent 40-42. Underscoring that the
Tribe had no knowledge of those communications or of Secretary
Hodel's direction to Fritz, see
supra, at 498, the Tribe
asserts that its bargaining position was seriously compromised when
it resumed negotiations with Peabody in 1985. See,
e. g.,
Tr. of
that it "overstates" Congress' aim to attribute to the
Legislature a purpose "to guarantee Indian tribes the maximum
profit available."
Cotton Petroleum Corp. v.
New
Mexico, 490 U. S.
163, 179 (1989). Beyond doubt, the IMLA was designed "to
provide Indian tribes with a profitable source of revenue."
Ibid., quoted
supra, at 493. But Congress had as a
concrete objective in that regard the removal of certain
impediments that had applied particularly to mineral leases on
Indian land. See
Cotton, 490 U. S., at 179 ("Congress was
... concerned ... with matters such as the unavailability of
extralateral mineral rights on Indian land."); S. Rep. No. 985, at
2 ("[O]n the public domain the discoverer of a mineral deposit gets
extralateral rights and can follow the ore beyond the side lines
indefinitely, while on the Indian lands under the act of June 30,
1919, he is limited to the confines of the survey markers not to
exceed 600 feet by 1,500 feet in anyone claim. The draft of the
bill herewith would permit the obtaining of sufficient acreage to
remove the necessity for extralateral rights with all its attending
controversies."); H. R. Rep. No. 1872, 75th Cong., 3d Sess., 2
(1938) (same). That impediment-removing objective is discrete from
the Secretary's lease approval role under the IMLA. Again, we find
no solid basis in the IMLA, its regulations, or lofty statements in
legislative history for a legally enforceable command that the
Secretary disapprove Indian coal leases unless they survive "an
independent market study,"
post, at 519, or satisfy some
other extratextual criterion of tribal profitability.
513
Oral Arg. 50-52. The Secretary's ultimate approval of the 12lf2
percent royalty, the Tribe concludes, was thus an outcome
fundamentally unfair to the Tribe.
Here again, as the Court of Federal Claims ultimately
determined, see
supra, at 501, the Tribe's assertions are
not grounded in a specific statutory or regulatory provision that
can fairly be interpreted as mandating money damages. Nothing in §
396a, the IMLA's basic provision, or in the IMLA's implementing
regulations proscribed the
ex parte communications in this
case, which occurred during an administrative appeal process
largely unconstrained by formal requirements. See 25 CFR § 2.20
(1985) (Commissioner may rely on "any information available to
[him] ... whether formally part of the record or not.");
supra, at 496-497, n. 3. Either party could have effected a
transfer of Peabody's appeal to the Board. See 25 CFR § 2.19(b)
(1985);
supra, at 496-497, n. 3. Exercise of that option
would have triggered review of a more formal character, in which
ex parte communications would have been prohibited. See 43
CFR § 4.27(b) (1985). But the Tribe did not elect to transfer the
matter to the Board, and the regulatory proscription on
ex
parte contacts applicable in Board proceedings thus did not
govern.
We note, moreover, that even if Deputy Assistant Secretary Fritz
had rendered an opinion affirming the 20 percent royalty approved
by the Area Director, it would have been open to the Secretary to
set aside or modify his subordinate's decision. See
supra,
at 498, n. 4. As head of the Department of the Interior, the
Secretary had "authority to review any decision of any employee or
employees of the Department." 43 CFR § 4.5(a)(2) (1985); cf.
Michigan Citizens for Independent Press v.
Thornburgh, 868 F.2d
1285 (CAD C) (upholding Attorney General's approval, over the
contrary conclusions of an administrative law judge and the Justice
Department's Antitrust Division, of a joint operating agreement
under the Newspaper Preservation Act), aff'd by an equally divided
Court,
493 U. S.
38 (1989)
(per curiam). Ac-
514
cordingly, rejection of Peabody's appeal by the Deputy Assistant
Secretary would not necessarily have yielded a higher royalty for
the Tribe.
***
However one might appraise the Secretary's intervention in this
case, we have no warrant from any relevant statute or regulation to
conclude that his conduct implicated a duty enforceable in an
action for damages under the Indian Tucker Act. The judgment of the
United States Court of Appeals for the Federal Circuit is
accordingly reversed, and the case is remanded for further
proceedings consistent with this opinion.
It is so ordered.
JUSTICE SOUTER, with whom JUSTICE STEVENS and JUSTICE O'CONNOR
join, dissenting.
The issue in this case is whether the Indian Mineral Leasing Act
(IMLA) and its regulations imply a specific duty on the Secretary
of the Interior's part, with a cause of action for damages in case
of breach. The Court and I recognize that if IMLA indicates that a
fiduciary duty was intended, it need not provide a damages remedy
explicitly; once a statutory or regulatory provision is found to
create a specific fiduciary obligation, the right to damages can be
inferred from general trust principles, and amenability to suit
under the Indian Tucker Act. See
United States v.
White
Mountain Apache Tribe, ante, at 472-473;
United States
v.
Mitchell, 463 U. S. 206, 226 (1983)
(Mitchell II). I part from the majority because I take the
Secretary's obligation to approve mineral leases under 25 U. S. C.
§ 396a as raising a substantial fiduciary obligation to the Navajo
Nation (Tribe), which has pleaded and shown enough to survive the
Government's motion for summary judgment. I would affirm the
judgment of the Federal Circuit.
515
IMLA requires the Secretary's approval for the effectiveness of
any lease negotiated by the Tribe with a third party. § 396a; see
also 25 CFR § 211.2 (1985). The Court accepts the Government's
position, see Brief for United States 38, that the IMLA approval
responsibility places no substantive obligation on the Secretary,
save for a minimal duty to withhold assent from leases calling for
less than the minimum royalty rate set by IMLA regulations,
whatever that may be.
Ante, at 511. Since that rate is
merely a general standard, which may be a bargain rate when applied
to extractable material of high quality, the obligation to demand
it may not amount to much. The legislative history and purposes of
IMLA, however, illuminated by the Secretary's historical role in
reviewing conveyances of Indian lands, point to a fiduciary
responsibility to make a more ambitious assessment of the best
interest of the Tribe before signing off.
The protective purpose of the Secretary's approval power has
appeared in our discussions of other statutes governing Indian
lands over the years. In
Tiger v.
Western Investment
Co., 221 U. S.
286 (1911), for example, we upheld the constitutionality of the
Act of Apr. 26, 1906, ch. 1876, § 22, 34 Stat. 145, which made
alienation of certain allotted lands by citizen Indians "subject to
the approval of the Secretary of the Interior." Although allotment
and conferral of citizenship had given tribal members greater
responsibility for their own interest, see,
e. g., Choteau
v.
Burnet, 283
U. S. 691, 694 (1931), we nevertheless understood that the
requirement of prior approval was supposed to satisfy the National
Government's trust responsibility to the Indians,
Tiger,
supra, at 310-311; accord,
Sunderland v.
United
States, 266 U. S.
226, 233 (1924) (restraints on alienation of Indian property
are enacted "in fulfillment of [Congress's] duty to protect the
Indians"). Shortly after
Tiger, in
Anicker v.
Gunsburg, 246 U. S. 110 (1918), we held that the Secretary's
authority to approve leases of allotted lands under the Act of May
27,
516
1908, ch. 199, § 2, 35 Stat. 312, was "unquestionably ... given
to him for the protection of Indians against their own improvidence
and the designs of those who would obtain their property for
inadequate compensation." 246 U. S., at 119. The Secretary's
approval power was understood to be a significant component of the
Government's general trust responsibility. See Clinton, Isolated in
Their Own Country:
A Defense of Federal Protection of Indian Autonomy and
Self-Government, 33 Stan. L. Rev. 979, 1002-1003 (1981); Chambers
& Price, Regulating Sovereignty: Secretarial Discretion and the
Leasing of Indian Lands, 26 Stan. L. Rev. 1061, 1061-1068
(1974).
Congress's decision in IMLA to give the Secretary an approval
authority is well understood in terms of this background, for in
the enactment of IMLA, Congress devised a scheme of divided
responsibility reminiscent of the old allotment legislation. While
it changed the prior law by transferring negotiating authority from
the Government to the tribes, it hedged that augmentation of tribal
authority in leaving the Secretary with certain powers of
oversight, including the authority to approve or reject leases once
the tribes negotiated them. 25 U. S. C. §§ 396a-g. The Secretary's
signature was the final step in a scheme of "uniform leasing
procedures designed to protect the Indians,"
Montana v.
Blackfeet Tribe, 471 U. S. 759, 764
(1985), and imposed out of a concern that existing laws were not
"adequate to give the Indians the greatest return from their
property," S. Rep. No. 985, 75th Cong., 1st Sess., 2 (1937); H. R.
Rep. No. 1872, 75th Cong., 3d Sess., 2 (1938). The "basic purpose"
of the Secretary's powers under IMLA is thus to "maximize tribal
revenues from reservation lands."
Kerr-McGee Corp. v.
Navajo Tribe, 471 U. S. 195, 200
(1985); see
Blackfeet Tribe, supra, at 767, n. 5. Consistent
with this aim, the Secretary's own IMLA regulations (now in effect)
provide that administrative actions, including lease approvals, are
to be taken "[i]n the best interest of the Indian mineral
owner."
517
25 CFR § 211.3 (2002); see also § 211.1 (stating that the
overarching purpose of IMLA regulations is to ensure that Indians'
mineral resources "will be developed in a manner that maximizes
their best economic interests").l Thus, viewed in light of IMLA's
legislative history and the general trust relationship between the
United States and the Indians, see
Mitchell II, 463 U. S.,
at 224-225, § 396a supports the existence of a fiduciary
responsibility to review mineral leases for substance to safeguard
the Indians' interest.2
I do not mean to suggest that devising a specific standard of
responsibility is any simple matter, for we cannot ignore the
tension between IMLA's two objectives. If we thought solely in
terms of the aim to ensure that negotiated leases "maximize tribal
revenues,"
Kerr-McGee, supra, at 200, we would ignore the
object of IMLA to provide greater tribal responsibility, against
which the Secretary's oversight is act-
1 In addition, the Interior Department at all times relevant to
this case had in place an internal policy providing that mineral
leases would be approved only if "the terms and conditions of the
lease are in the best interest of the Indian landowner." App. 2,
133-134.
2 The majority seeks to distinguish
Mitchell II, saying
that the timber management statutes at issue there gave the
Secretary a "comprehensive managerial role" and stated explicitly
that timber sales had to be made in consideration of "'the needs
and best interests of the Indian owner and his heirs.' "
Ante, at 507-508. The comprehensiveness of the Secretary's
role just described is what made
Mitchell II an easy case.
Mitchell II did not say, however, that fiduciary duties can
only be found where the Government has "elaborate control." 463 U.
S., at 225. Nor does
Mitchell Irs reference to the statute's
explicit "best interests" language foreclose the use of standard
interpretive tools like legislative history to determine whether a
statute establishes a fiduciary duty.
The majority proceeds to discount IMLA's legislative history,
suggesting that Congress's concern for Indian revenues was limited
to the elimination of certain constraints peculiar to Indian
mineral leases.
Ante, at 511-512, n. 16. But the cited IMLA
legislative reports do not indicate that Congress's aims were
restricted to curing these specific deficiencies of prior law, and
they do nothing to detract from the consistent recognition in our
precedents that IMLA's leasing procedures were designed to protect
Indian interests in mineral resources.
518
ing as a hedge. See Royster, Mineral Development in Indian
Country: The Evolution of Tribal Control Over Mineral Resources, 29
Tulsa L. Rev. 541, 558-580 (1994) (noting the twin aims of IMLA).
The more stringent the substantive obligation of the Secretary, the
less the scope of tribal responsibility. The Court, however, errs
in the opposite direction, giving overriding weight to the interest
of tribal autonomy to the point of concluding that the Secretary's
approval obligation cannot be an onerous one,
ante, at 508,
thus losing sight of the mixture of congressional objectives. The
standard of responsibility simply cannot give the whole hog to the
one congressional policy or the other.
While this is not the case to essay any ultimate formulation of
a balanced standard, even a reticent formulation of the fiduciary
obligation would require the Secretary to withhold approval if he
had good reason to doubt that the negotiated rate was within the
range of reasonable market rates for the coal in question, or if he
had reason to know that the Tribe had been placed under an unfair
disadvantage at the negotiating table by his very own acts. See
Restatement (Second) of Trusts §§ 170, 173, 174, 176 (1957). And
those modest standards are enough to keep the present suit in
court, for the Tribe has pleaded a breach of trust in each respect
and has submitted evidence to get past summary judgment on either
alternative.
The record discloses serious indications that the 12lf2 percent
royalty rate in the lease amendments was substantially less than
fair market value for the Tribe's high quality coal. In the course
of deciding that 20 percent would be a reasonable adjustment under
the terms of the lease, the Area Director of the Board of Indian
Affairs (BIA) considered several independent economic studies, each
one of them recommending rates around 20 percent, and one
specifically rejecting 12lf2 percent as "inadequate." App. 6-7
(internal
519
quotation marks omitted).3 These conclusions were confirmed by
the expert from the BIA's Energy and Mineral Division, in a
supplemental report submitted after Peabody appealed the Area
Director's decision. That report not only endorsed the 20 percent
rate, but expressly found that the royalty rate "should be much
higher than the 12.5% that the Federal Government receives for
surface-mined coal" because the Navajo coal is "extremely
valuable."
Id., at 22. No federal study ever recommended a
royalty rate under 20 percent, and yet the Secretary approved a
rate little more than half that.
Id., at 134. When this case
was before the Federal Circuit, Judge Schall took the sensible
position that the Secretary was obligated to obtain an independent
market study to assess the rate in these circumstances, see
263 F.3d
1325, 1340 (2001) (opinion concurring in part and dissenting in
part), and the record as it stands shows the Secretary to be
clearly open to the claim of fiduciary breach for approving the
rate on the information he is said to have had. Of course I
recognize that the Secretary's obligation is to approve leases, not
royalty rates in isolation, but an allegation that he approved an
otherwise unjustified rate apparently well below market for the
particular resource deposit certainly raises a claim of breach.
3 The United States Bureau of Mines recommended an adjusted
royalty rate of 20 percent, while the BIA's Division of Energy and
Mineral Resources recommended 24.44 percent in a separate report.
Several private studies also endorsed rates in the 20 percent
range: one, conducted by the Council of Energy Resource Tribes,
concluded that the rate should be between 15 and 20 percent, and
another, prepared by a private management consultant firm at the
request of the Navajo, advocated a rate of between 17.08 and 22.77
percent. The only report with a significantly lower rate was the
report submitted by Peabody, which recommended a rate of 5.57 to
7.16 percent. This figure was based not on current fair value but
rather on what rate would "restore the benefits that were
originally contemplated when the 1964 lease was signed by both
parties." App.16-18.
520
What is more, the Tribe has made a powerful showing that the
Secretary knew perfectly well how his own intervention on behalf of
Peabody had derailed the lease adjustment proceeding that would in
all probability have yielded the 20 percent rate. After his
ex
parte meeting with Peabody's representatives, the Secretary put
his name on the memorandum, drafted by Peabody, directing Deputy
Assistant Secretary Fritz to withhold his decision affirming the 20
percent rate; directing him to mislead the Tribe by telling it that
no decision on the merits of the adjustment was imminent, when in
fact the affirmance had been prepared for Fritz's signature; and
directing him to encourage the Tribe to shift its attention from
the Area Director's appealed award of 20 percent and return to the
negotiating table, where 20 percent was never even a possibility.
App. 117-118. The purpose and predictable effect of these actions
was to induce the Tribe to take a deep discount in the royalty rate
in the face of what the Tribe feared would otherwise be prolonged
revenue loss and uncertainty. The point of this evidence is not
that the Secretary violated some rule of procedure for
administrative appeals,
ante, at 512-513, or some statutory
duty regarding royalty adjustments under the terms of the earlier
lease. What these facts support is the Tribe's claim that the
Secretary defaulted on his fiduciary responsibility to withhold
approval of an inadequate lease accepted by the Tribe while under a
disadvantage the Secretary himself had intentionally imposed.4
4 The possibility that the Secretary could have set aside
Fritz's rejection of Peabody's appeal does not, despite the Court's
suggestion,
ante, at 513514, defeat the Tribe's claim under
§ 396a. As an initial matter, whatever formal authority the
Secretary may have had, nothing cited by the parties suggests that
the Secretary was considering such action, which would have painted
him plainly as catering to Peabody. Hence the cautious
qualification in the memorandum to Fritz, emphasizing that his
intervention was "not intended as a determination of the merits" of
the 20 percent rate adjustment. App. 118. Given that the federal
economic surveys unanimously endorsed 20 percent, it is unclear
what basis the Secretary
521
All of this is not to say that the Tribe would end up with a
recovery at the end of the day. Disputed facts have not been tried;
the negotiations affected not only the 1964 lease that was subject
to adjustment on demand, but also other leases apparently not
subject to the same option for the Tribe's benefit; and the
renegotiated terms affected lease provisions other than royalties
(including tax terms). For all we can say now, the net of all these
changes may have been an overall bargain in the Tribe's interest,
despite the smaller royalty figure in the lease as approved. But
the only issue here is whether the Tribe's claims address one or
more specific statutory obligations, as in
Mitchell II, at
the level of fiduciary duty whose breach is compensable in damages.
The Tribe has pleaded such duty, the record shows that the Tribe
has a case to try, and I respectfully dissent.
would have had to reject the rate on the merits. More
importantly, the gravamen of the Tribe's claim is not that it is
entitled to the 20 percent rate adjustment under the lease. Rather,
it is that the Secretary's actions in deceiving the Tribe about the
status of Peabody's appeal skewed the subsequent bargaining
process, and the resulting royalty rate, in Peabody's favor. On
that issue, whether the Secretary might have ultimately favored
Peabody's appeal, while perhaps a subject of relevant evidence, is
not dispositive.
Comments
Be the first to comment
Leave a Comment