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Supreme Court Finds No Authority for Breach of Trust Claim

The United States Supreme Court ordered the dismissal of a claim involving a coal lease because none of the statutes cited by the Indian Tribe contractor provided a basis for a breach of trust action against the government. The contractor sought damages in connection with the government's approval of amendments to a 1964 coal lease affecting Indian lands. In a prior opinion (47 CCF 78,127), the Supreme Court reversed a decision of the Court of Appeals for the Federal Circuit that held the Indian Mineral Leasing Act of 1938 created a fiduciary duty enforceable through suits for monetary damages (47 CCF 78,077). After the Court of Federal Claims dismissed the complaint (50 CCF 78,512), the Federal Circuit reversed, finding the contractor had a cognizable money-mandating claim under Sections 635(a) and 638 of the Navajo-Hopi Rehabilitation Act of 1950 and Section 1300 of the Surface Mining Control and Reclamation Act of 1977, and the government breached its trust duties (53 CCF 79,097).

Dismissal Ordered

The Supreme Court reversed the Federal Circuit a second time and remanded with instructions to affirm the CFC's dismissal, holding neither statute provided a basis for a breach of trust suit against the government. First, the lease could not have been issued under Section 635(a) of the NHRA. That provision only authorizes lease terms of up to 25 years, and the lease term here was for an indefinite period, suggesting issuance under the IMLA. Second, the lease was not the type of "program" contemplated by Section 638 of the NHRA, so that provision did not apply. Third, Section 1300 of the SMCRA was irrelevant because it only covers leases issued after 1977, and the lease here was issued in 1964. Also, a governmental fiduciary duty could not be premised on "comprehensive control" over Indian lands, as suggested by the Federal Circuit. Since the contractor failed to identify a "specific, applicable, trust-creating statute or regulation that the [g]overnment violated," there was no basis for jurisdiction under the Indian Tucker Act (28 USC 1500). (U.S. v. Navajo Nation, US SCt, 53 CCF 79,086)

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )


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