TRANSCRiPT OF PROCEEDINGS
                   IN THE UNITED STATES COURT OF APPEALS
                    FOR THE DISTRICT OF COLUMBIA CiRCUIT


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   [LOUISE PEPION CUBELL. ['F AL.               :

               Plaintiffs-Appdlecs.                                No.  03-5314


   GALE A. NORTON. SECRETARY OF TIlE            :
   INTERIOR. El AL..

               Defendants-Appellants.


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              Pages I through 76                        Washington, D.C.
                                                        Date: September 1 5, 2004


  1                   UNITED STATES COURT OF APPEALS
                   FOR THE DISTRICT OF COLUMBIA CIRCUIT
  2

  3

  4

      ELOUISE PEPION COBELL,  ET AL.
  5
                 Plaintiffs-Appellees,
  6
           v.                                       No.  03-5314
  7
      GALE A.  NORTON, SECRETARY OF THE
  a   INTERIOR,  ET AL.,

  9              Defendants-Appellants.

10
                                      Wednesday,     September 15,  2004
11
                                      Washington,      D.C.
12
               The above-entitled matter came on for oral
13
     argument pursuant to notice.
14
          BEFORE:
15             CIRCUIT JUDGES SENTELLE AND TATEL AND SENIOR

16             CIRCUIT JUDGE WILLIAMS

          APPEARANCES:
17

               ON BEHALF OF THE APPELLANTS:
18
               MARK B.  STERN, ESQ.
19

               ON BEHALF OF THE APPELLEES:
20

               ELLIOTT H.  LEVITAS, ESQ.
21

22

23

24

25

                           Deposition Services, Inc.                D
                               6245 Executive Bou(evcrrd

                                Rackville, MD 20852
                           Tel: (301) 8813344 . Fax: (301) 881-3338


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   CLS                                                                         2

                                        CONTENTS

              ORAL ARGUMENT OF:                                          PAGE

                    Mark B. Stern,  Flag.
                    On Behalf of the Appellants                             3

                    Elliott H.  Levitas, Flag.
                    On Behalf of the Appellees                             Si

                    Mark B. Stern,  Esg.
                    On Behalf of the Appellants -- Rebuttal                72


CLS                                                                         3

      1                          PROCEEDINGS

      2               THE CLERK:   Case number 03-5314,   Elcuise Pepion

      3    Cobell,  et aT., versus Gale A. Norton,   Secretary of the

      4    Interior,  et al., appellants; Alan Lee Balaran.    Mr.  Stern

      5    for  the appellants, Mr.  Levitas for appellees.

      6

      7                  ORAL ARGUMENT  OF MARK B.  STERN, ESQ.

      8                       ON BEHALF OF THE APPELLANTS

      9

     10               MR.  STERN:  May it please the Court.   The case

     11    before this Court now is in every respect transformed from

     12    the case that this Court reviewed in the year 2001.      On the

     13    one hand,  there's no longer any question of unreasonable

     14    delay in the performance ci accounting duties.     From the

     15    start of Secretary Norton's tenure,   the agency has devoted

     16    its resources to meeting the broadest possible construction

     17    of this Court's mandate.    ?!d on the other hand,  the 2001


     18    remand to the agency to conduct accounting activities has

     19    been inexplicably transformed into an unprecedented

     20    structural injunction encompassing every aspect of Indian

     21    Trust management at an estimated cost of between $6 and $12

     22    billion.

     23               JUDGE SENTELLE:   I wonder about that adjective,

     24    unprecedented.   I think that might have been   fairly

     25    accurate a few decades ago,   but you're familiar with the


    CLS                                                                          4

          1     Adams plaintiffs in this circuit,   for example?

          2                MR. STERN:  Not offhand,  Your Honor.

          3                JUDGE SENTELLE:  That was the welfare children

          4     that apparently weren't being tended to the way the Court

          5     thought the law intended,  and the District Court tcok over

          6     and entered a mandatory injunction.    I think of Swan v.

          7     Mecklenburq,  the Charlotte school busing plan.

          8                MR. STERN:  Well,  Your Honor,  I'm certainly

          9     familiar,  I don't know, I don't recall the Adams case,    but

          10    I'm certainly familiar with the idea

          11               JUDGE SENTELLE:  You would if you'd ever had to

          12    work in this circuit.

          13               MR. STERN:  Yes, well --

          14               JUDGE SENTELLE:  We all had a piece of that just

          15    as well have a piece of this one.

          16               MR. STERN:  Well,  Your Honor,  the, I mean,  I

          17    mean, I guess there are a couple,   you know,  points about
2

          18    that.  First,  you know, I mean,  you know,  as we note in our

          19    brief, you know,  there have been structural injunctions,

          20    and they probably were more popular about 20 years ago than

          21    they have become since,  since a lot of doubt's been cast on

          22    them in any context.   But they have not come up in the

          23    context --

          24               JUDGE TATEL:  What doubt has been cast on them?

          25               MR. STERN:  Well,  just in the scholarly


    CLS                                                                          5

           1    llterature.   There's really been,  I mean, there's --

           2               JUDGE TATEL:  Well,  what about the case law?

           3               MR. STERN:  Well,  I mean, I think that there are

           4    fewer of then,  but the real point,  Judge Tatel,  is that the

           5    structural injunctions of all involved orders to state

           6    governments that did not involve separation of powers

           7    concerns --

           8               JUDGE SENTELLE:  Adams was not a state

           9    government.

         10                JUDGE TATEL:  What about Adams v. Richardson,

         11     right.  Adams v.  Richardson was the defendant was the

         12     Secretary of Health,  Education,  and Welfare.

         13                MR. STERN:  As I say,  I'm sorry, Your Honor,  but

         14     I should be familiar with it.    I'm not.   But there are

         15     clear separation of powers concerns that arise here,    and

         16     what the Supreme Court has told us in no uncertain terms,

         17     and --

         18                JUDGE SENTELLE:  Why does that not make it a

         19     weaker case for your side than the state cases were?
0

         20     Because there you had not only separation of powers but

         21     also federalism concerns.

         22                MR. STERN:  Well --

         23                JUDGE SENTELLE:  Here you have only separation of

         24     powers concerns.

         25                MR. STERN:  Well,  there are no separation of


     CLS                                                                         6

          1     powers concerns in the state cases,   which also --

          2                JUDGE SENTELLE:   There aren't?

          3                MR. STERN:   No, there are federalism concerns.

          4                JUDGE SENTELLE:   Certainly there are,  but there's

          5     also the role of the executive involved there,    counsel.

          6     You have a judicial body taking over the role of the

          7     executive just as you do here.

          8                MR. STERN:   No, I understand.   I mean, there are

          9     questions of judicial competence that arise there.     They're

          10    just not the same as sort of various coequal branches of

          11    government that we have here.    But I think that

          12               JUDGE SENTELLE:   You have whole levels of

          13    government there.

          14               MR. STERN:   No, we do.  Your Honor,   I'm not here

          15    to defend structural injunctions against state entities.

          16               JUDGE SENTELLE:   Take the word "unprecedented"

 j        17    out of your sentence and start over,   then,  counsel.
 8

          18               MR. STERN:   I'm happy to take that word out and

          19    instead on that point go,   I would just prefer,  I think that
 C


          20    the relevant point on structural

          21               JUDGE TATEL:   Let me ask this -- well,  you finish

          22    your sentence.   Go ahead.

          23               MR. STERN:   No, Your Honor --

          24               JUDGE TATEL:   No, go ahead,  finish your sentence.

          25               MR. STERN:   1 was just going to say that I think


    OLS                                                                          7

          1     that the relevant questions really are what the claim in

          2     this case is about and what the Supreme Court in Southern

          3     Utah cases said about how we review claims and what the

          4     limits on judicial review are,   and for that matter what

          5     this Court said in its 2001 decision,    which quotes

          6     precisely the same language from !pjan in the context of

          7     this case that the Supreme Court recently reiterated,    and

          8     those are really the principles that we embrace.

          9                JUDGE TATEL:   Let me ask you this,  if I could.   I

         10     mean, setting aside these really fascinating constitutional

         11     questions you've raised,  if we were to agree with you about

         12     the appropriations rider and that it had the effect of

         13     barring the District Court from proceeding with at least

         14     the historical accounting part of his order,    that is,

         15     Section 3 of the District Court's order,   then we don't

         16     really have to address any of these broader constitutional

         17     arguments you're raising,   do we?


         18                MR. STERN:  Well,  Your Honor, I don't think that
         19     you need to address constitutional arguments to rule in our
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         20     favor at all.   I mean,  I don't, I mean, we're not --

         21                JUDGE TATEL:   Well, what about my question about

         22     the rider?   If we agree with you about the rider,   that the

         23     rider bars enforcement of Section 3 of the District Court's

         24     order, then the only question before us is what to do with

         25     Section 4, which is,  complies with fiduciary obligations.


    CLS                                                                          B

           1               MR. STERN:  Well,  I mean, you know,  at the time

           2    when this Court was contemplating hew to schedule this

           3    case, we did not oppose the request for a,    for expedited

           4    briefing,  but we pointed out to the Court that there were

           5    going to be some peculiarities because of the existence of

           6    this rider,  and the Court determined,  and we don't

           7    disagree,  that it was appropriate to go forth expeditiously

           8    anyway.   Now, what the legislative history indicates is

           9    that Congress expected this Court to,   expected the appeal

         10     in this case to go torward,   and although it is somewhat

         11     anomalous,  I think what that history indicates is that

         12     Congress is looking for this Court to resolve the

         13     underlying case in its entirety --

         14                JUDGE TATEL:  Really?

         15                MR. STERN:  -- on its,  to reach all the merits.

         16                JUDGE TATEL:  We're -!

         17                JUDGE WILLI?!S:  But the question is what,   I


         18     mean, we do what,  we resolve issues that are properly
         19     presented betore us.   I guess my question is there's no
0


         20     reading of l08!1O8 that removes the forward-looking
         21     managerial aspects of the District Court's remedy,    isn't

         22     that correct?

         23                MR. STERN:  That's correct.

         24                JUDGE WILLIAMS:  Okay.   So then what is your

         25     legal objection to that?


    CLS                                                                          9

          1                MR. STERN:  Well,  our legal objection,  I mean,

          2     our legal objections to our -- to the extent that there is

          3     language in the Court's opinion that purports to link

          4     directly to an accounting,  that is at least within the sort

          5     of generic heading of what this lawsuit was about.

          6                JUDGE WILLIAMS:  Well,  wouldn't there be a

          7     difference between backward-looking accounting and

           B    establishing procedures so that data as the trust

           9    management goes forward will yield material from which

          10    future accounting can be made?

          11               MR. STERN:  But Your Honor,   there's never --

          12               JUDGE WILLIAMS:  Accountings with respect to

          13    future management of the trust.

          14               MR. STERN:  Well,  Your Honor, there's no evidence

          15    of any kind of unreasonable delay in performing that part

          16    cf Interior's responsibilities.

          17               JUDGE WILLIAMS:  No,  but can we step back a

          18    moment?   In the 2001 opinion,  we allude to a stipulation by

          19    the Government in the District Court that there had been
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          20    very substantial managerial failures,    right?

          21               MR. STERN:  Yes.

          22               JUDGE WILLIAMS:  And at least one reason of what

          23    the district judge has done here with respect to them on a

          24    forward-locking basis is to say the Department come up with

          25    a comprehensive plan that will remedy all such problems,


    CLS                                                                          10

          1      and then there's a sort of a slightly,    certainly an

          2      innovative and perhaps peculiar procedure for doing battle

          3      over that plan.   Sc the questicn is why,   given the

          4      stipulation, why isn't something like that, it maybe goes

          5      too far in some respects,   but why isn't something like that

          6      entirely suitable?

          7                 MR. STERN:  Your Honor,  the fact that Interior

            8    would stipulate that there were problems in the context of

            9    a claim,  in the context of this case doesn't expand what

          10     this case is about and it doesn't expand the limits of the

          11     Court's jurisdiction.   This Court was very clear in 2001 to

          12     say the only actionable duty at issue here is the

          13     performance of an accounting.

          14                JUDGE TATEL:   Oh, I don't think that's what

          15     Cobell VI says.

          16                JUDGE WILLIAMS:   I think you took a sentence

          17     quite out of context there.
S

          18                JUDGE TATEL:   Right.

          19                JUDGE SENTELLE:   Uh-huh.
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          20                JUDGE WILLIAMS:   That was relating to, as I read

          21     it, what with respect to accounting, with respect to

          22     historical accounting, what is the sort of behavior by the

          23     Department of Interior that requires judicial interference.

          24     But I don't read that passage,   which you cite heavily in

          25     your brief,  I don't read that passage as focusing at all on


    CLS                                                                          11

          I    the problem of managerial issues going forward.

          2               MR.  STERN:  Your Honor,    there, it could not have

          3    been an unreasonable delay case about managerial issues

          4    going forward.    I mean,   this was a case,  the way that this

          S    Court, you know,   (indiscernib1e!   --

          6               JUDGE WILLIAMS:     Well, for a historical

          7    accounting,   putting it in the slot of unreasonable delay

          8    makes complete sense.

          9               MR.  STERN:  But that was the only basis for the

         10    Court's jurisdiction.

         11               JUDGE WILLIRI'!S:   But if one's talking about

         12    ongoing management --

         13               MR.  STERN:  But --

         14               JUDGE WILLIAMS:     -- and with the record

         15    stipulated of past failures --

         16               MR.  STERN:  Your Honor --

         17               JUDGE WILLIAMS:     -- it would seem to me at least


         18    ordinary arbitrary and capricious review of the agency
         19    would be suitable to make sure that this is not,      that this
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         20    is corrected.
0


         21               MR.  STERN:  Your Honor,    there has to be final

         22    agency action,   and with all respect,   this Court really did

         23    talk about those principles in 2001.      It said we don't have

         24    final agency action.    Nevertheless,   we can review under the

         25    agency action that has been unreasonably or unlawfully


    CLS                                                                         12

          1     delayed.   The Court recognized that you can't have

          2     programmatic reform,  and it cautioned the District Court to

          3     be mindful of the limits of its jurisdiction.     It pointed

          4     out that you can't have orders of injunctive relief

          5     resembling mandamus in the absence of clear ministerial

          6     duties to enforce.   The Court said all of those things.     If

          7     it hadn't said them then,   the Southern Utah decision has

          8     said them since.   And there --

          9                JUDGE SENTELLE:  Right,  in the intervening

         10     contempt proceeding,  the District Court made significant

         11     findings of failures occurring after the 2001 stipulation,

         12     right?

         13                MR. STERN:  Well,  I'd like to address that if I

         14     could, Your Honor.

         15                JUDGE SENTELLE:  Well,  I just asked you to say

         16     right or wrong about it.    You can address it right now.


         17     That's a good time.
         18                MR. STERN:  It's --

         19                JUDGE SENTELLE:  It made such findings,   right?
0

         20                MR. STEP!:  It made,  it certainly made,  the Court

         21     among other things said that the Secretary failed to

         22     undertake a historical accounting.

         23                JUDGE SENTELLE:  Yes.

         24                MR. STERN:  Yes, it did.

         25                JUDGE SENTELLE:  Right.   So isn't there further


    CLS                                                                         13

          1    default since the 2001 opinion?

          2                MR. STERN:  Well,  you know,  the, even, look,  this

          3    Court really did also review that decision,     and --

          4                JUDGE SENTELLE:   Yes.  And set aside the contempt

          5    order --

          6                MR. STERN:  But

          7                JUDGE SENTELLE:   -- but I don't find in that

          8    opinion a setting aside of the findings of fact,     do you?

          9                MR. STERN:  No,  what I see,  Your Honor, is that

         10    first of all the Court had no basis to reach lots of things

         11    in the opinion,   because what the Court said was that the

         12    only thing you could properly in this proceeding have been

         13    doing is to be having something along of the lines of

         14    criminal contempt,    and so it had to look at only certain

         15    parts of the Court's opinion.     It didn't mean that it

         16    blessed the rest of it.    However,  those would be the

         17    relevant parts of the Court's opinion,    because those are

         18    the only parts that deal with the agency as it was

         19    constituted even in 2001 and 2002,    and what this Court
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         20    explicitly said was,   no, of course the agency did not fail

         21    to,  didn't fail to undertake accounting duties,    and it said

         22    the record made precisely the opposite clear.

         23                JUDGE SENTELLE:   And I know we're jerking you in

         24    lots of different directions,    but to get back to the
 /

         25    statute --


    CLS                                                                         In

           I              JUDGE TATEL:   Yes,  let's talk about the statute,

           2    could we?

           3              JUDGE SENTELLE:    --- appropriations rider that

           4    Judge Tatel was asking you about,   whatever that fixes,  it

           5    fixes it only for a year?

           6              MR.  STERN:  Until December 31st of this year.

           7              JUDGE TATEL:   What is the status of that?     Is

           8    that a rider in the current Interior appropriations bill?

           9              MR.  STERN:  Not to my knowledge.

         10               JUDGE SENTELLE:    Now, also,  does that rider

         11     itself not raise significant constitutional questions?

         12     Separation of powers questions.    Spendthrift Farms,

         13     Hayburn's Case,  Klein v. United States all speak in fairly

         14     strong terms to the lack of power of Congress to redecide

         15     cases that the judiciary has decided and also to dictate

         16     the rules of decision where Congress has not changed the

         17     substantive law.   So under those cases,  would not that
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         18     rider be constitutionally suspect?

         19               MR.  STERN:  Well,  I think, Your Honor,  that
C

         20     plaintiffs have not demonstrated any respect in which this

         21     case is different from Robertsonv.     Seattle Audubon

         22     Society, which was also a provision in a rider,    and in fact

         23     that one actually talked about what would --

         24               JUDGE SENTELLE:    Forget it's in a rider.   I'm not

         25     talking about the rider problem.


     CLS                                                                         15

           1               MR. STERN:   No, but it changed,   it spoke --

           2               JUDGE SENTELLE:    I'm talking about the ability of

           3     the attempt of Congress to change the decision of a decided

           4     case or to dictate a rule of decision without changing the

           5     substantive law.

           6               MR.  STERN:  Well,  we think Congress did change

           7     the substantive law.

           S               JUDGE SENTELLE:    All right, what substantive law

           9     changed in that rider?

          10               MR.  STERN:  The substantive law is that there

          11     is --

          12               JUDGE SENTELLE:    Substantive law.   What changed

          13     substantively as opposed to Congress simply saying we're

          14     telling the Court how to decide this case?

          15               MR.  STERN:  Well,  1 mean,  the, I mean, what this,

          16     I mean,  I understand that the Court's question is because

          17     the Congress said no provision of law shall be construed,

a         18     hut, I mean,  that's not a,  I mean, that kind of language in
          19     statutes is not unprecedented,   and


          20               JUDGE SENTELLE:    In that context,  it's

          21     extraordinary.   Perhaps not unprecedented,  but I don't know

          22     of any place -- that kind of thing was considered in Klein

          23     v. U.S.  well over 100 years ago,   and I don't know of any

          24     place since then where the law has changed to say that

          25     Congress can dictate a rule of decision where they are not


    CLS                                                                        16

          1     changing the substantive law.

          2               MR.  STERN:  Well --

          3               JUDGE SENTELLE:   I'm asking you for a change in

          4     substantive law,  and the best ycu do is come back at me and

          5     say, well, Congress said no provision of law shall be

          6     construed thus and so,  which seems to be only dictating a

          7     rule of,  a decision for this case as opposed to saying the

           8    duties of trustee when it's the federal Government do not

           9    include X, Y,  and Z,  or the Indians are no longer

          10    beneficiaries or something substantive.

          11              MR.  STERN:  Well,  look, in Seattle v.,  in the

          12    Audubon case,  the Congress had talked about what the

          13    Government had been done being adequate for the purposes,

          14    you know, of the particular situation everyone knew --

          15              JUDGE TATEL:    Are you talking about Robertson?

          16              MR.  STERN:  Yes.

          17              JUDGE TATEL:    Well, what exactly, did the rider

          18    have language like this:    Nothing in the  '94 act or any

          19    other statute nor principle of law shall be construed?
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          20              MR.  STERN:  No,  it didn't have that language,  but

          21    it had language that would be --

          22              JUDGE SENTELLE:   That's what I'm asking you

          23    about.

          24              MR.  STERN:  Well,  I mean, I guess that the

          25    question --


    CLS

          1                 JUDGE SENTELLE:  So Robertson has nothing to do

          2     with this.

          3                MR.  STERN:  Your Honor,  the, if the question is

          4     can Congress with particular litigation in mind speak to

          5     something that is connected with that litigation without

          6     broadly changing the law,   which is what it sort of in some

          7     general way,   you know, which is what it did in Robertson,

            8   and that's why that case is relevant.     And this is not a

            9   case involving a final judgment,    and Congress can always

          10    amend what can be done --

          11                JUDGE SENTELLE:  Congress can certainly amend the

          12    law that governs situations.     But I think as recently as

          13    Spend!!rift Farms and as long ago as Havburn's Case,     and

          14    that spans us from John Marshall to Scalia,     the Supreme

          15    Court has recognized that the separation of powers includes

          16    a niche for the courts.    And that court niche includes

          17    making decisions that Congress is not going to upset for a

          18    case under adjudication.    Now,  Congress can change the law

          19    that governs situations,   but to come in and change the
a

          20    decision-making in a judicial case is something that over

          21    that period of 200 years the courts have claimed this is

          22    our own,   and how is this different?

          23               MR.  STERN:  Your Honor,  I mean,  I fear I'm going

          24    to just repeat myself,   because what,   it!s easy to explain

          25    why this case is different from lots of other cases that


    CLS                                                                         18

          1     plaintiffs rely on,  you know,  generally, you know,  which

          2     generally involve like Plaut v.   Spendthrift Farms,  the

          3     problem there was *its application to a closed case.    All

          4     the cases that were still pending,   whether they were in the

          5     Court of Appeals or anywhere else,   you know,  the

          6     application of that statute was fine.     That was strictly a

          7     closed-case problem.

          8                JUDGE SENTELLE:   But here you're taking decided

          9     questions decided by a court,   as you were in 1-j!y!urn's, and

         10     you were in Spendthrift,  and instead of subjecting them to

         11     appellate process and judiciary,   Congress is changing the

         12     decision of the Court.   Now,  Robertson, Congress came in

         13     and said we're changing the substantive law as to the

         14     circumstances under which a harvest is considered to take,

         15     right?  They were not saving in the case under adjudication

         16     you shall not construe any provision of law in such a

         17     fashion as to say there's a take there.

         18                MR. STERN:  Well,  Your Honor --

         19                JUDGE SENTELLE:   Then you're have a parallel
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U,

         20     case.
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         21                MR. STERN:  Well,  Your Honor, I'd --

         22                JUDGE SENTELLE:   But that's not what happened in

         23     Robertson,  was it?

         24                MR. STERN:  I'd suggest that if this statute had

         25     been written in precisely the way it is before this case


    CLS                                                                         19

           1    was ever filed that nobody would think that there was a

           2    problem with it.   Everybody would say,   yes, Congress has

           3    made absolutely clear that what it's just saying is that

           4    there's

           5               JUDGE SENTELLE:   Well, you might then have a very

           6    serious takings problem,  but that would be a different

           7    case.

           8               MR. STERM:  Well --

           9               JUDGE SENTELLE:   If you -! or, and even

         10     discrimination,  probably.   If you came in and said the

         11     courts shall not construe any law so as to say that a

         12     trustee has to,  it doesn't have to perform the sante duties

         13     toward the Indian Trust as they would in other trust

         14     circumstances.

         15                MR. STERN:  Your Honor,  Congress could --

         16                JUDGE SENTELLE:   You'd have some other problems,

         17     but it wouldn't be this problem.

         18                MR. STERN:  Well, maybe,  but Congress clearly can

         19     say what duties are or are not enforceable.     It can create
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         20     causes of actions for damages with regard to fiduciary

         21     trust obligations,  and if it doesn't,  you don't have one.

         22     You know,  if you don't --

         23                JUDGE SENTELLE:   But if you had a pre-existing

         24     right under a trust relationship and Congress sought to

         25     extinguish that right,  are you saying there would be no


    CLS

                                                                               20

          1

          2

          3

          4

          5

          6

          7

          8

           9

          10

          11

          12

          13

          14

          15

          16

          17

          18

          19

          20

          21

          22

          23

          24

          25

takings problem there?

            MR. STERN:  Well, Your Honor,   you would have, if

the,  where did the --

            JUDGE SENTELLE:  Are you saying there would be no

takings problem there?

            MR. STERN:  Your Honor,  I'm saying that there

would be no takings problem if there was -- first of all,     I

mean,  there's lots of case law about whether even taking

away a real cause of action for something could constitute

a taking,   but the point in this context is that it is one

thing to talk about fiduciary duties,    and there are a lot

of fiduciary duties and,   you know,  the Government has

sometimes failed in it,    sometimes horribly failed in it.

            JUDGE SENTELLE:  Uh-huh.

            MR. STERN:  This case,  however, is not and cannot

be a review of all historical failures or even all failures

going forward.    The Court does not sit to do that,   and that

is equally true in fiduciary cases.

            JUDGE TATEL:   But that's not what    bell VI says.

Cobell V1 says it should.

            MR. STERN:  No,  it does not, Your Honor,  with all

respect,  and it can't.    It cites cases from this circuit

that say you can't order in the context of an Indian Trust

case.    Unless there's a specific statute or treaty or

regulation,   you can't require the Government to do

C
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2


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2
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)


      CLS                                                                         21

'          1      anything.

           2                JUDGE TATEL:   You and I must be reading different

           3      cases.  Ccbell VI requires it.

           4                JUDGE SENTELLE:    I think I wrote it.

           5                JUDGE TATEL:   Yes.

           6                JUDGE SENTELLE:    And I don't remember precisely

           7      what you're saying.

           8                MR.  STERN:  Your Honor,  it would be foolish for

             9    me to quarrel with the author of an opinion about what it

           10     meant.  However,  the other decisions,   including the cases

           11     that the Court quotes --

           12               JUDGE TATEL:   Can we go back,  can we just

           13     continue with this rider for a minute?    Because I'm

           14     confused about your argument here.    In view of your

           15     responses to Judge Sentelle that this rider is

           16     constitutional and limits a court from interpreting the

           17     statute or the common law in any way to require an

           18     historical accounting,  right?

           19               MR.  STERN:  Yes.
  C

           20               JUDGE TATEL:   Doesn't that apply?    If you're

           21     right that that's constitutional,   doesn't that apply to

           22     this Court as well?

           23               MR.  STERN:  Yes,  it does.

           24               JUDGE TATEL:   Okay,  so if we can't interpret the

           25     statute or the common law to require an historical


    CLS                                                                         22

         1      accounting,  whatever that means,  then I don't understand

         2      your argument that Congress passed this to give us time to

         3      decide the constitutional case.    Is that what you were

         4      saying?

         5                MR.  STERN:  No,  what I think, and I agree that it

         6      is somewhat anomalous,  I think that Congress expected

         7                JUDGE TATEL:    What's anomalous?  Where is there

         B      any language in this rider      so you think what happened

           9    was Congress passed this to restrain the District Court's

         10     order but to give this Court time to review it?

         11               MR.  STERN:  I think in one sense,  yes,  that is --

         12               JUDGE TATEL:    Where do you find that in this --

         13               MR.  STERN:  It's in,   I mean, it's in the

         14     legislative history,  Your Honor,  yes.

         15               JUDGE TATEL:    It is?  Why don't you read me

         16     something that says that.    I mean, it's like a legislative

         17     stay.  Did the Government seek a stay pending appeal from


         18     us?
         19               MR.  STERN:  Yes,  and we got one, Your Honor.
C

         20               JUDGE TATEL:    So --

         21               MR.  STERN:  Otherwise,  I mean --

         22               JUDGE TATEL:    Well, then, what did the --

         23               MR.  STERN:  Well,  the legislation came out

         24     first --

         25               JUDGE TATEL:    What did the rider do, then?


    CLS                                                                         23

          1                MR. STERN:  The legislation came --

          2                JUDGE TATEIJ: Why would Congress have passed a

          3     law staying an order that we already stayed?

          4                MR. STERN:  You hadn't already stayed it,   Your

          5     Honor.  We sought,   the Congress acted very quickly and

          6     passed the legislation and --

          7                JUDGE TATEL:  Okay,  so where does it say in here

          8     that this is really stayed?

          9                JUDGE SENTELLE:   This is what happens when

         10     Congress acts very quickly.

         11                JUDGE TATEL:  I mean,  I may just have missed it.

         12                MR. STERN:  I mean --

         13                JUDGE TATEL:  I just didntt see it,   so.

         14                MR. STERN:  It says,  I mean, Pm looking it,   it

         15     sort of says there will he further court proceedings in the

         16     Cchefl case based on the likely appeal.    Managers believe

         17     it would be unwise to expend hundreds of millions of

         18     dollars on further accounting while this case is under

         19     appeal.  Now,  one can --
0


         20                JUDGE TATEL:  Yes, but the only time limits,   the

         21     time limits the rider imposes include either action by the

         22     Congress or December 31st,   2004.  They don't say anything

         23     about this Court.    And it doesn't say no court shall

         24     interpret the fiduciary obligations of the Department to

         25     require an accounting until the D.C.   Circuit so rules.


    CLS

                                                                               24

            1               MR. STERN:  Your Honor1  that's why I found it to

            2    be anomalous,  because I do think that there is a bit of

            3    mismatch between what Congress expected and what it wrote,

            4    and--

            5               JUDGE TATEL:  Uh-huh.

            6               JUDGE !cILLIANS:  isn't a sort of straight reading

            7    of it that it imposed this delay so that it could

            8               JUDGE TATEL:  Right.

            9               JUDGE WILLIAMS:   -- address the matter?

           10               JUDGE TATEL:  Exactly.

           11               JUDGE WILLIAMS:   And I'm not sure why that's a

           12    problem for you.

           13               MR. STERN:  Your Honor,  I'm reading this,  I'm not

           14    really trying to sort of defend the logic of,    I'm just

           15    saying that I think --

           16               JUDGE WILLIAMS:   I'm just saying,  you seem to be

           17    tying yourself in quite unnecessary knots.

           18               MR. STERN:  I just think --

           19               JUDGE WILLIAMS:   You have a statute that seems to


1:         20    say nobody ought to make,  and the Secretary of Interior
           21    ought not to,  and no one should make the Secretary of

           22    Interior spend huge dollops of money on this accounting

           23    while we are thinking of what the right remedy,    and your

           24    introduction of having this being some sort of stay for the

           25    Court to think about it totally baffles me.


    CLS                                                                         25

           I              MR.  STERN:  Well,  ITm sorry, Your Honor.   I'm

           2    only sort of trying to point up what I think Congress

           3    thought was going to happen.    As I said,  I don't believe

           4    the language of that rider is in the current appropriations

           5    bills,  and we did sort of point all this out --

           6              JUDGE WILLII\MS:   And it creates a standstill

           7    until the end of December 2004 or until Congress acts,

           8    so--

           9              MR.  STERN:  Well --

         10               JUDGE WILLIN4S:    -- there doesn't seem to be any

         11     urgency about it until December approaches.

         12               MR.  STERN:  That may well be,  and the Court may,

         13     you know --

         14               JUDGE SENTELLE:    But in December we're back to

         15     where we were without the rider,   right?

         16               MR.  STERN:  Well,  that would be correct,  yes, and

         17     that's really why I'm sort of,   I mean, trying to,  however


         18     the Court, whatever,  however the Court chooses to come at

         19     this, there is at least the possibility that these issues
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         20     will be at some point presented.    And the point also in our

         21     lawsuit,  I mean, in our appeal is this,  is that,  you know,

         22     we do think,  you know, and again,  I don't want to quarrel

         23     with anybody,  not even the one that wrote the opinion,   but

         24     I think that the Supreme Court really has made clear in

         25     principles that this Court embraced in its 2001 opinion


     OLS                                                                       26

          1     that to bring in action for agency action unlawfully

          2     withheld, and that's what this Court said that the case was

          3     about, and it really did say,  and we're sending it back to

          4     the agency fcr a remand,  and there is an absolute lack of

          S     any evidence of unreasonable delay since then.     That

          6     contempt trial,  even if you look at all of the findings

          7     that are in that trial,  if you leave out the parts that

                were reversed by this Court,  that is,  you couldn't get,  on

          9     its own terms you couldn't get unreasonable delay out of

         10     that.  There's a lot of statements --

         11               JUDGE WILLIAMS:    Is delay the issue between the

         12     parties here?   I thought the issue really,  and apart from

         13     the question of judicial supervision,   which is not a

         14     trivial issue,  but apart from that,  the issue is the scale

         15     and character of,  insofar as we're talking about historical

         16     accounting,  the scale and character of that accounting,   and

         17     the Government argues forcefully that spending hundreds of

         18     millions to catch errors worth 38 cents is not particularly

         19     sensible, and particularly when Congress seems to have

         20     doubts about the propriety of that.    So that seems to me

         21     not on the question of delay but the question of what kind

         22     of an accounting is actually required.

         23               MR.  STERN:  Well,  I mean, I think one possible

         24     way of looking at this is that to the extent that there was
a)
         25     specific action contemplated by this Court's decision and


    CLS                                                                         27

           1    that whether this is reviewed now under the rubric of is

           2    it,  is there further delay or should I look at the

           3    accounting plan and the accounts that have actually been

           1    reconciled,  which amount to,  you know,  about 60 billion, 60

           S    million of the total of the 100 million,   has actually been

           6    completed.   But of course we're not even allowed to send

           7    those out.   The District Court has restrained us from doing

           8    that.  However,  if you look at the progress -!

           9              JUDGE SENTELLE:    Well, you rather understand why

         10     the Court is not allowing you to send that out when they

         11     don't know how much you owe other people.

         12               MR.  STERN:  Well,  no, no,  these are the ones --

         13     well, that's the problem,   Your Honor, is that when a court

         11     remands to an agency to complete accountings,    an agency, to

         lb     restrain an agency for a lot of these judgment denying on

         16     the accounts,  you know, which,  where we didn't get bogged

         17     down with orders telling us we couldn't use sampling and

         18     having the Court tell the Secretary it was contemptuous to

         19     even think about it,   on those who were actually able to not
C

         20     only proceed with all,  you know,  getting the documents,

         21     indexing them,  and putting everything,   you know, in order,

         22     those were actually able to go ahead and finish them and

         23     reconcile them.   You know,  and we still can't send it out.

         24     We've got a motion that's been pending with the Court for

         25     over a year to allow us to do that.     But he says, no,  you


    CLS                                                                        28

          1     can't send out to,  you can't send that because that would

          2     be a contact with class beneficiaries.    But the point would

          3     be that if you take that and the accounting plan together,

          4     and if you review those under an arbitrary and capricious

          S     standard,  we'd welcome the Court to review that under an

          6     arbitrary and capricious standard;   because we think it is

          7     100 percent clear that it meets,   that it would meet that

          8     standard.  And so we're not trying to avoid this Court's

           9    review of anything that might actually be emerging here as

          10    a relevant question in terms of an accounting,    and --

          11               JUDGE SENTELLE:   At the risk at unnecessarily

          12    prolonging this,  which we probably have already,   if we were

          13    to hold that the Court has the authority to enter some sort

          14    of structural injunction,  what parts of this one are the

          IS    ones that you think are worst,   I guess?  I would say which

          16    parts which would make it invalid anyway,   but I'm not sure

          17    that's a good statement,  so.

          18               MR. STERN:  t0ell, I mean, they work in different

          19    ways.  First,  there's half the injunction that simply says
0
          20    that everything the Department of Interior is ever going to

          21    do, whether it's reorganizing itself or whatever,    is

          22    really --

          23               JUDGE SENTELLE:   That obviously is not what it

          24    says, and you're not addressing the question I asked you.

          25               MR. STERN:  Excuse,  Your Honor --


     CLS                                                                       29

           1               JUDGE SENTELLE:  The parts of the order that it

           2    was -- more a paraphrase than I'm going to let you get by

           3    with.  Tell me what parts of it it is that are genuinely

           4    and obviously too intrusive on the Executive Branch?

           5               MR. STERN:  Well,  Your Honor --

           6               JUDGE SENTELLE:  We're back to concerns about

           7    separation of powers now.

           8               MR. STERN:  Your Honor1  you know,  I'll stand by

           9    what this order actually says,   because I think it really

          10    does, what it's done is to take --

          11               JUDGE SENTELLE:  No,  you can't possibly contend

          12    that it said what you just quoted.

          13               MR. STERN:  No, what --

          14               JUDGE SENTELLE:  If you do,   tell me where it says

          15    that.

          16               MR. STERN:  Well,  Your Honor, what it does is it

          17    takes the plan --


          18               JUDGE SENTELLE:  No,  I don't know what it does.
          19    I want to know what it says that you say is the most
0

i         20    invasive of the executive power.

          21               MR. STERN:  Well,  look --

          22               JUDGE TATEL:  Are you talking about Section 3 of

          23    the order?

          24               MR. STERN:  The fiduciary duty part.    And with

          25    respect to --


    CbS                                                                         30

          1               JUDGE TATEL:    And you're talking about

          2    subparagraph    (a), which directs the implementation of the

          3    comprehensive plan?

          4               MR.  STERN:  Yes.

          5               JUDGE TATEL:    Is that what you're talking about?

          6               MR.  STERN:  Yes.

          7               JUDGE TATEL:    Okay, and it's your objection to

          8    that that the Court has ordered the Department to comply

          9    with its own plan?    I mean,  it hasn't taken over the

         10    Department.    It's the Department's own plan.

         11               MR.  STERN:  Your Honor,  this is not,  this is a

         12    plan set out in the most general terms to guide the

         13    Department in the future.     Mo court has the authority to

         14    say you are now subject to contempt if you don't do what

         15    your plan is.

         16               JUDGE TATEL:    So that's Complaint No.  1.  All

         17    right, so --

         18               MR.  STERN:  That's Complaint No.   1.

         19               JUDGE TATEL:    Okay, that's No.  1.  Now, what
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         20    about  (b)?  Within 90 days,   file a plan --

         21               MR.  STERN:  Well,  this is

         22               JUDGE TATEL:    What's the matter with  (b)?

         23               MR.  STERN:  Well,  Your Honor, it's essentially

         24    telling the Department of the Interior,    you know,  I really,

         25    you know,  it's really too bad that you guys ever thought


    CLS                                                                         31,

           1    that you were running an agency,   because now I am.

           2               JUDGE TATEL:  Wait,  wait,  wait, wait.

           3               JUDGE SENTELLE:   It doesn't say that.

           4               JUDGE TATEL:  Now,  come on.   That's not what that

           5    says.

           6               JUDGE SENTELLE:   We're talking about the real

           7    order, not the one that you'd like to

           B               MR. STERN:   All right, the real order says --

           9               JUDGE TATEL:  Read,  why don't you read --

         10                JUDGE SENTELLE:   -- the straw man that you'd kick

         11     around.

         12                JUDGE TATEL:  Why don't read   Kb) out loud?

         13                MR. STERN:   It said within 90 days the Interior

         14     defendants shall file with the clerk of this Court,    serve

         15     upon plaintiffs a detailed plan identifying specific

         16     measures that Interior defendants wiil take as a part of

         17     their 2(b)  plan.

         18                JUDGE TATEL:  Okay,  so, I mean, technically you

         19     could file a plan which says,   Your Honor, there are no
C


         20     specific steps we need,  and then you will have complied

         21     with that.   I mean, I don't see the Department as,   the

         22     Court as running the agency and that.     What about identify

         23     any portions of the plan that are inconsistent with the

         24     fiduciary duties,  so?

         25                MR. STERN:   Well, and of course we think that


      CLS                                                                        32

r          1    the,  all the fiduciary duties and the Courtts understanding

           2    of those fiduciary duties,   and it sounds like this is all

           3    premised on not only want of jurisdiction but on

           4    fundamental legal error,    too.

           5               JUDGE TATEL:   Well,  but you lost that in Cobell

           6    VI.

           7               MR. STERN:   Your Honor,  we, I just have

           B               JUDGE TATEL:   You did.

           9               JUDGE WILLIAMS:   Isn't your argument

          10    fundamentally --

          11               JUDGE TATEL:   Cobell VI --

          12               JUDGE WILLIAMS:   -- that the order taken as a

          13    whole makes everything the Department does with respect to

          14    these trusts subject to remedy,   if that's the word,  by

          15    contempt.

          16               MR. STERN:   Yes, it does.

          17               JUDGE WILLIAMS:   Which is certainly unusual.


          18               MR. STERN:   It's very unusual.
          19               JUDGE SENTELLE:   And what I think I'm probing and

          20    perhaps Judge Tatel is is does this have,    the Government

          21    have only an all or nothing case here?     If you don't win on

          22    the point that the Court cannot have entered any

          23    injunction,  you lose because you're not satisfied with us

          24    saying there's something wrong with this particular

          25    injunction?


    CLS                                                                         33

          1                MR. STERN:  No, Your Honor.   I was going to say,

          2     even assuming that a court had authority to enter a

          3     structural judgment --

          4                JUDGE SENTELLE:   That's what I asked you to do a

          S     moment ago.

          6                MR. STERN:  -- leave the authority question out

          7     of it, each of the parts is premised on errors of law and

          S     is not supported by fact,  and so,  and we can go through

          9     them one --

          10               JUDGE TATEL:   Okay, yes, let's keep going.

          11    Start, go to  (0)

          12               JUDGE SENTELLE:   That's the kind of thing we've

          13    been begging you to do.

          14               JUDGE TATEL:   Right, let's go to number  (c)

          15    Submit a list of tribal laws.

          16               MR. STERN:  It's again,  Your Honor,  where, there,

          17    these are just requirements coming out of nowhere.      I


          IS    mean --
          19               JUDGE TATEL:   It says, but he's not,  you said
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          20    this order is the Court running the Department.     Courts

          21    require agencies to submit reports all the time.     Submit

          22    lists of tribal laws.   In fact,  it even says submit lists

          23    of tribal laws Interior believes are applicable.

          24               MR. STERN:  But Ycur Honor,  these steps are all

          25    have meaning only because they're linked up to things that


CLS                                                                        34

      I    have to occur later.

      2               JUDGE TATEL:   Only because they're what?

      3               MR. STERN:   They're not sort of reporting

      4    requirements like,   you know, please send me a list,  you

      5    know,  of, you know, tribal laws.    I'm really interested.

      6    It's because the Department,   the Court says,  you know,  from

      7    now on,  among a million other things,   everything you do has

      8    to be governed by tribal laws,   md that's where this comes

      9    in.

     10               JUDGE TATEL:   No, no --

     11               JUDGE WILLIAMS:   It hasn't exactly said that.

     12               JUDGE TATEL:   (c) says --

     13               JUDGE WILLIAMS:   It said,  it's asked you to

     14    identify a list of tribal laws that the Department deems

     15    controlling.

     16               JUDGE SENTELLE:   Deems applicable.

     17               JUDGE TATEL:   Right.

     18               JUDGE WILLIAMS:   So if the Department's view is

     19    as I understand it to be,   the correct,  that could be

     20    complied with by filing a paragraph that says we do not

     21    believe any tribal laws govern whatsoever.     Period.   Full

     22    stop.

     23               MR. STERN:   Sorry, I'm trying to find the

     24    citation,  but the District Court really does say in its

     25    opinion that tribal laws will govern.     We can't go to Judge


    CLS                                                                          35

          1      Lamberth and --

          2                JUDGE SENTELLE:    Right,  we're not reviewing

          3      opinions, though.   We're reviewing the injunction.     You

          4      understand that?

          5                MR. STERN:    Yes, Your Honor,  and, but I'm just

            6    saying that it is,  in a case where everybody has already

          7      been sanctioned,  to go hack to Judge Lamberth and say,    by

            8    the way, I read your opinion,   and here's what,   I'm

            9    complying with this section by telling you that nothing's

          10     controlling, and I really don't think that that would be a

          II     (indiscernible) thing to do in any case,    and it would

          12     certainly not be a very wise one to do in this case.      I

j         13     mean

          14               JUDGE TATEL:    Why?  I don't understand that.

          15               MR. STERN:    Because the Court really has

          16     addressed these,  and it's already declared its view that

          17     tribal laws generally --

          18               3IJDGE TATEL:   Well, look all we can do,   all we

          19     can do is read the order,   and it says that the Department
C

          20     deems applicable.

          21               JUDGE WILLIAMS:    I guess you're pointing 2(d).

          22     2(d) does say the defendants shall administer the trust in

          23     compliance -- well,  there's a fudge word -- with applicable

          24     tribal law and ordinances,   so one reading of it is that

          25     none is applicable.


    CLS                                                                         36

          1                JUDGE TATEL:   Right.

          2                JUDGE WILLIAMS:   So the paragraph is meaningless.

          3     The trouble is that runs into canons of construction,

          4     saying that --

          5                JUDGE SENTELLE:   Yes.

          6                JUDGE WILLIAMS:   -- people dontt say things that

          7     are meaningless.

          8                JUDGE SENTELLE:   Nothingts supposed to be

          9     meaningless.

         10                JUDGE WILLIAMS:   Which is a fiction,  of course,

         11     but.

         12                MR. STERN:  I mean,  if I really could take a step

         13     bac), the question was what trial was there ever held on

         14     InteriorTs compliance with general fiduciary

         15     responsibilities?    What claim is it in this case that would

         16     allow a court to be doing any of this?

         17                JUDGE TATEL:   Well, how about Cobell VI?

         18                MR. STERN:  Your Honor,  if Cobell,  I mean, we
a
z

         19     really --
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         20                JUDGE TATEL:   I mean, your theory of Cobell VI as

         21     I, your theory is that the Government's fiduciary

         22     responsibilities to the Indians extends only to the

         23     historical accounting.    Only to an accounting,  excuse me,

         24     right?  That!s your theory.

         25                MR. STERN:  My theory is that the District Court


CLS                                                                        37 I

      1    dismissed the common law claims in this case

      2               JUDGE TATED:   Yes, but

      3               MR. STERN:      and that this Court reviewed that

      4    order.

      5               JUDGE TATEL:   Yes, and listen to what Cobell,  let

      6    me just read you one sentence from CobellVI.       The '94 act

      7    recognized and reaffirmed what should be beyond dispute,

      8    that the Government has a longstanding and substantial

      9    trust obligation to Indians,   particularly to IN Trust

     10    beneficiaries,  not the least of which is the duty to

     11    account.   And the statute itself refers to the accounting

     12    obligations as only being part of the obligation.      So it

     13    really doesn!t make any difference what the district judge

     14    did with the original complaint.    The common law trust

     15    allegations are almost the law of the case here.     Now,  I

     16    don't know what the specific ones are,    but I just don't

     17    see,  I can understand how you can argue about the elements


     18    of the fiduciary obligation that extend beyond an

     19    accounting.    I don't understand how in view of Cobell VI

     20    you can argue there are none.

     21               MR. STERN:   Your Honor, the question is not

     22    whether there are common law obligations.     The question is,

     23    what is enforceable in what claim?    How would you decide

     24    it?   And has there been a proceeding to decide it?

     25               JUDGE TATEL:   Okay, now that's a different


CLS                                                                        39

      1    question as to whether the District Court has jurisdiction

      2    to even consider whether the violations of non-accounting

      3    fiduoiary duties have occurred.    Your argument is they

      4    don't even have,  the Distriot Court doesn't even have

      5    jurisdiction to do that.

      6               MR. STERN:   Your Honor,  this claim --

      7               JUDGE TATEL:   You want us to order this oase

      8    dismissed.

      9               MR. STERN:   That's right,  Your Honor, beoause

     10    this case out of all the things that it might have been,     I

     11    mean,  we're not saying,  look, you can file other cases

     12    about other problems,   but this case was --

     13               JUDGE TATEL:   The complaint was obviously broad

     14    enough to cover this,   because the District Court originally

     15    dismissed the common law claims.

     16               MR. STERN:   Nell, it didn't just originally


     17    dismiss it.   That was the,  there was no oross-appeal on

     18    that,  and that was key to the jurisdiction of the Court,

     19    because it went to whether this could --


     20               JUDGE TATED:   Nhat about the sentence I just read
     21    you from Cobell VI?

     22               MR. STERN:   Your Honor,  what this said, what that

     23    said --

     24               JUDGE TATEL:   Do you want me to read it again?

     25               MR. STERN:   No, Your Honor.


     CLS                                                                         39

r          1                JUDGE TATEL:   Okay.

           2                MR. STERN:   I fully recognize that what the Court

           3     said,  and, I mean,  I've got a lot of quotes from the

           4     opinion,   too, you know, what

           5                JUDGE TATEL:   Well, do you have any that go the

           6     other way?

           7                MR. STERN:   Okay, where -- I'll  (indiscernible)

           B     my last  (indiscernible)

             9              JUDGE TATEL:   Yes,  I'm trying to, you know,  we're

           10    all bound by Cobeli VI.

           11               MR. STERN:   I know, and I'm at somewhat of a

           12    disadvantage because I'm talking to its author.

           13               JUDGE TATEL:   Cobell_ja -- no,  I didn't,  Judge

           14    Sentelle wrote it,   not me.

           15               MR. STERN:   No, I appreciate that,  Your Honor.

           16               JUDGE TATEL:   But we can all read it,   I think.

           17               MR. STERN:   I know, but look --

           lB               JUDGE TATEL:   No, you're right,  there are certain

           19    elements of Judge Lamberth's order that the Court said were
  C

           20    not required by fiduciary obligations,    such as the elements

           21    of the accounting.

           22               JUDGE SENTELLE:  And there may be some here.

           23               JUDGE TATEL:   Right.  Yes,  exactly, but Cobell VI

           24    nowhere says,  and the author can correct me if I'm wrong,

           25    that the fiduciary duty is limited to accounting.      In fact,


    CLS                                                                         40

          1    the statute doesn't even say that.

          2               MR.  STERN:  Your Honor,  we've never said the

          3    fiduciary duties are limited to the duties     (indiscernible)

          4    accountingS   The question is what is the fiduciary duty

          5    that is actionable and presented in this case,     which is a

          6    very different and much more discrete question.

          7               JUDGE WILLIAMS:    You weren't saying that the

          8    complaint didn't raise the issue of management going

          9    forward,  are you?

         10               MR.  STERN:  The complaint -- well,   first of all,

         11    a lot of stuff was stricken from the complaint by the

         12    District Court.

         13               JUDGE WILLIAMS:    Well, was that stricken?    Were

         14    those passages stricken?

         15               MR.  STERN:  To the extent that there was stuff

         16    about common law claims that was,    the District Court went

         17    out of its -!
2

         18               JUDGE WILLIAMS:    I really think the common law

         19    issue is a complete red herring.
C

         20               JUDGE SENTELLE:    The '94 statute.

         21               JUDGE WILLIAMS:    Section 101 (a)

         22               JUDGE SENTELLE:    Section 101.

         23               JUDGE WILLIAMS:    I'm sorry,  (d) (1) through (8), a

         24    lot of that has to do with non-accounting issues.

         25               MR.  STERN:  That's right,  but the question is


     CLS                                                                        41

           1    what is enforceable and what isn't?     If Congress sets out a

           2    series of general duties in a statute,   that doesn't mean

           3    that they can come in and all be enforced.    And it really

           4    is the case that this Court said,   no, of course you can't

           5    have wholesale reform,  and it really is the case that the

           6    Supreme Court said that in the      them  Utah case.   And

           7    we're not trying to limit the overall scope of the

           8    Government of fiduciary responsibilities.     But just as in

           9    aotions for damages,   the fact that you have a trust and a

          10    fiduciary relationship doesn't mean that you then come into

          11    sue about it,  and this Court has sort of over and over

          12    again in its opinion,  it sort of says,  look,  the

          13    Government's fiduciary responsibilities necessarily depend

          14    on the substantive law creating this obligation,     and it

          15    cites Shoshone Tribe --

          16               JUDGE WILLIAMS:   That's right.

          17               JUDGE SENTELLE:   Yes.
 S

 a        18               JUDGE WILLIJ!4S:  That doesn't help you any.

          19               JUDGE SENTELLE:   That doesn't help you any1
 C

          20               MR. STERN:  No,  it cites Shoshone Tribev.

          21    Bannock, which in turn sort of says,    look, an Indian can't

          22    force the Government to take specific action unless a

          23    treaty, statute,  or agreement imposes it.    I mean, those

          24    are the cases of this circuit.

          25               JUDGE WILLIAMS:   We're got the statute.


    CLS                                                                         42

          1                JUDGE SENTELLE:   We've got the statute here,   so

          2     that still doesn't help you any.

          3                JUDGE WILLIAMS:   We've got 101(d) (1) through  (8).

          4                MR. STERN:  Right,  but all the parts,  Your Honor,

          5     we really would argue that the general spelling out of

          6     duties in a statute,  which first of all are all forward-

          7     looking,  they aren't part of the historical accounting

          8     activity.

          9                JUDGE WILLIAMS:   Yes, but apart from the

         10     historical accounting,  what were talking about is forward-

         11     looking stuff.

         12                MR. STERN:  And then the question is under what

         13     jurisdictional basis is this before this Court,    because

         14     it's got to be either unreasonable delay or else it's got

         15     to be final agency action.    And if it's not one,  it's got

         16     to be the other.   And if there's final agency action here,

         17     we welcome the Court's review of it.

         18                JUDGE SENTELLE:   But I thought the Government had

         19     conceded back before Cobell VI that there had been
C

         20     unreasonable delay.

         21                MR. STERN:  Yes,  but that goes and can only be

         22     for a clear, where you have a clear,   unequivocal duty,

         23     which was,  had to be perform the accounting.

         24                JUDGE WILLIAMS:   I though the Government also

         25     stipulated that --


    CLS

          1               JUDGE SENTELLE:    Well, I'm correct that there had

          2     already been a stipulation that there's been an

          3     unreasonable delay.

          4               JUDGE WILLIAMS:       massive management failures.

          5               MR.  STERN:  No, but it's,  no, no,  no, but that's

          6     nOt the duty, *Your Honor.   The duty, to order unreasonable

          7     delay, and again,  that is crystal clear in the Southern

           8    Utah case,  there has got to be a clear,  it's got to be

           9    clear and discrete,  and this Court said fine.    You've got

          10    something just like that in this statute-     You've got to go

          11    ahead, and you've got to do this accounting.     And that's

          12    fine.  And we've been sort of knocking ourselves out for

          13    years trying to do what this Court said,    and in doing that

          14    we've come up with a plan that is a good plan,    and we've

          15    done, invested hundreds,   really, about, so much money and

          16    time and effort,  none of which gets reviewed.    You know,

          17    it's all dismissed out of hand.    There's no basis.   The 1.5
S
          18    trial isn't a trial about anything that the agency did

          19    wrong or failed to do.    It's just a consideration of what
C

          20    duties the District Court thinks it ought to impose.     The

          21    contempt trial was sort of about,    like sort of like alleged

          22    misstatements.

          23              JUDGE SENTELLE:    You know, when we --

          24              JUDGE TATEL:    It sounds like, you know what it

          25    sounds like?   It sounds like you're moving to -- are you


     OLS                                                                        44

           1    asking that we dismiss the injunction,   dismiss the action

           2    beoause of the behavior of the district judge?

           3              MR.  STERN:  No, Your Honor.

           4              JUDGE TATEL:    Oh.  That's what it sounds like

           S    you're saying.

           6              MR.  STERN:  No, we can't --

           7              JUDGE TATEL:    I mean, you haven't moved to recuse

           8    the district judge,  have you?

           9              MR.  STERN:  No, we have not moved to recuse the

          10    district judge.   We take strong issue with a lot of what

          11    the --

          12              JUDGE TATEL:    I thought you were winding up,   it

          13    sounded like you were winding up to do that right there.

          14              MR.  STERN:  No.

          15              JUDGE TATEL:    No?

          16              MR.  STERN:  Your Honor,  what we're saying is

          17    that --

I         18              JUDGE TATEL:    You said none of your,  none of the

          19    good stuff you do gets considered by the district judge.     I
0

          20    mean,  I thought you were saying that the problem here is

          21    that you can't convince him that you're oomplying with the

          22    law.

          23              MR.  STERN:  No, Your Honor,  we don't get -- look,

          24    here's what happens on remand.    You say remand to the

          25    agency, right?   Within months,  by the end of 2001,  the


     CLS

          1    District Court says I'm holding a contempt trial,     so the

          2    remand,  and at that point he says to the Secretary,   he

          3    says,  you know, statistical sampling,   that's so clearly

          4    contemptuous,  I don't even know if we're going to try.    So

          5    the period of a remand to the agency it concluded

          6    effectively in any meaningful sense by 2001.     In mid-2002

          7    on the basis of the contempt trial,    the District Court

          8    says,  that's it, I'm totally revoking the remand.    You're

          9    an unfit trustee-deiegee.    The fact that this Court then

         10    reversed the findings,   the only ones that could have been

         11    relevant to taking things over prospectively,    made no

         12    difference whatsoever.    There's no pointing,  there's no

J        13    showing of any factual matter,   even ones that were like in

         14    there that this Court didn't address that could possible

         15    support any injunction of any kind.    Plaintiffs'  brief

         16    can't point to any,  and the District Court doesn't.     I

         17    mean,  what those things about were --


         18               JUDGE SENTELLE:   I'm risking being repetitious,
         19    but I still am not sure that I've gotten the answer to the
0

         20    question I wanted answered,   and I think I heard it alluded

         21    to again.   Are you saying that the Court did not have

         22    jurisdiction to enter any injunction or are you saying that

         23    this injunction is flawed?

         24               MR. STERN:   I'm saying that except,  assuming --

         25               JUDGE SENTELLE:   You have to answer that with one


     CLS                                                                        46

          1      of those two --

          2                 MR. STERN:  I'm sayinci, at this point I'm saying

          3      the second one.   I'm saying that assuming that the Court

          4      had any jurisdiction,  assuming that it had any

          S      jurisdiction,  it could not have entered this injunction.

          6      There's, it's got multiple legal problems.

          7                 JUDGE SENTELLE:  Now,  are the particular sections

          8      that Judge Tatel alluded to the only cnes that are

          9      overstepping or are there other overstepping provisions in

          10     the injunction?

          11                MR. STERN:  Well, there,  there's some of it

          12     that's not a question of overstepping.    It's just wrong.   1

j         13     mean, sort of with the accounting provisions.    I mean,

          14     there, you know,  there are all sorts of things,   you know,

          15     we've got a $335 million plan.    That's very expensive to

          16     account for, you know,  a trust that has $400 million in it,

          17     and Congress back in 1992 sort of,   you know, was worried

          18     about that.
 C
 z

          19                JUDGE SENTELLE:  Counsel,  a lot of the problems

          20     that you're alluding to now are problems that arise not

          21     because of anything the District Court or any other court

          22     has done.   They arise because the Department not in the

          23     present administration or the one before it,   but over the

 *        24     term of deoades did not do what it was supposed to do.

          25     Now, necessarily that's going to result in a lot of extra


    CLS                                                                         47

          1     additional expense down the end of the road.     And I don't

          2     understand the relevance of that to the legal questions we

          3     have here.

          4                MR. STERN:  Well,  the legal question is that

          5     informs Congress's intent,  because it was Congress who said

          6     that, you know,  a point that repeated again last year,   they

          7     said that they had said this,   and it's true,  they had said

          8     this before the 1994 act.   But fine,  we've done this $335,

          9     we stand behind the $335 million plan.    That's fine.   What

         10     the District Court has said is I'm expanding the parameters

         11     of that plan so that you have to account not for open

         12     accounts,  even though this is a statute that is worded in

         13     terms of providing daily and annual balances.      You've

         14     got --

         15                JUDGE SENTELLE:  Are you objecting to the

         16     provision that says not to use statistical sampling?

         17                MR. STERN:  That's one of them.    I mean,  we've
E

         18     laid it out in our brief.
z

         19                JUDGE SENTELLE:  Are you objecting to the


         20     provision that says that you have to include a verification
         21     process by professional accountings?    That's sub  (a)  all

         22     under 3.

         23                MR. STERN:  In,  as the District Court,  in the way

         24     that the District Court like has said that,    yes.  I mean,

         25     the District Court says we've got a verification process


OLS

                                                                          48

     1    by,  that 'a there

     2               JUDGE SENTELLE:      So yes is the answer to that

     3    question,  right?

     4               MR.  STERN:    Yes,  it is.

     5               JUDGE SENTELLE:      Are you objecting to the 120

     6    days with reference to the industry production databases?

     7    That would be subparagraph      (p),  excuse me, (p)

     8               MR.  STERN:    Yes.

     9               JUDGE SENTELLE:      Okay.  Judge Tatel already

    10    covered 3 (b),  !c) /   and (d) . Are there other provisions

    11    that we should look to particularly as the provisions

    12    you're objecting to?

    13               MR.  STERN:    Your Honor,  we --

    14               JUDGE SENTELLE:      And don't tell me this decree

    15    says,  tell me the provisions,     if there are any.

    16               MR.  STERN:    Your Honor,  I mean,  I, you know, we


    17    have laid this out in our brief.       I can sort of,  sort of go

    18    back,  you know.     I mean,   and, you know, I mean, and I just

    19    want to make clear that aside for particular problems on a

    20    provision!by-provision basis,      since we think that they

    21    reflect,  all reflect errors of law and absence of fact,       so

    22    in the end I'm going to say we object to everything.        Some

    23    of them are more problematic as a practical matter than

    24    others.   None of them has a basis in law.       But, you know,

    25    to the extent that this Court wants to talk about,       you


015                                                                        49

       i    know, have you, what have you done in the accounting, what

       2    about your accounting plan

       3              JUDGE SENTELLE:   Unless my oolleagues have --

       4              JUDGE TATEL:   I have one.

       5              JUDGE SENTELLE:   Okay,  Judge Tatel has a

       6    question.

       7              JUDGE TATEL:   I just have one question.    I want

       8    to be sure I understand the Government's position about the

       9    impact of the rider,  the appropriations rider.    Is it the

     10     Government's position that it does not dictate the decision

     11     in this case by this Court with respect to Section 3 of

     12     Judge Lamberth's order?

     13               MR. STERN:   No, we, what we think is that the,

     14     what, I mean, I think that properly understood that since

     15     this is a claim,  since the claim in this case was about a

     16     historical accounting,  and that's what this Court had said,

     17     we think that what Congress meant was that you can't go and


     18     order a huge array of,  a huge array of actions based on the
     19     accounting claim,  and the fact that the District Court,


     20     because, then said,  well, you know,  in fact, this doesn't
     21     even have anything to do with the accounting.

     22               JUDGE TATEL:   Okay, so then is the answer to my

     23     question yes, that it knocks out Section 3

     24               MR. STERN:   Yes.

     25               JUDGE TATEL:      of the District Court's order?


CLS                                                                          50

        3.             MR.  STERN:   Yes, that's the position we've taken

        2   in our brief,   Your Honor.   That is covers everything.

        3              JUDGE TATEL:   Okay.   Sc assuming it's

        4   constitutional,   right,  then I go back to the very first

        .5  question I asked you.     Assuming it's constitutional,  your

        6   view is that Section 3 is barred by the appropriations

        7   rider,  and therefore,   and I know you argue that Section 3,

        8   that the appropriations rider is actually broader than

        9   historical accounting,    but if we don't agree with you about

     10     that,  then the only thing,   then we still have to decide

     11     what to do with the fiduciary obligation section of the

     12     court order.    It's labeled 3,  but I think he meant 4 and 5

     13     monitoring,   right?  That's it.

     14                MR.  STERN:   Yes.  If you disagree,  that's right.

     15                JUDGE TATEL:   And how,  I hate,  I hate to risk

     16     losing a clear answer,    but just one follow-up question.

     17     How is that consistent with your argument that all Congress


     18     was doing was preserving the status quo for us to decide
     19     the case?


     20                MR.  STERN:   You are risking kind of losing a
     21     clear answer,   but I just plead that --

     22                JUDGE TATEL:   Strike it.   No, go ahead,  answer

     23     the question.    I really, I don't understand.    It can't be

     24     both ways,  right

     25                MR.  STERN:   I agree with you.   I'm only referring


     CLE                                                                        51

           I     to what Congress itself said,  Your Honor,  but I'm not

           2     disagreeing.  However,  the point would be that --

           3               JUDGE TATEL:   The plain language of the rider,   if

           4     I just read the plain language of the rider,   you agree,

           5     then, that if it's oonstitutional,   it knocks out the

           6     historioal aooounting provision of the Distriot Court's

           7     order, right?

           B               MR. STERN:   Yes,

           9               JUDGE TATEL:   Okay, thank you.

          10               JUDGE SENTELLE:   Okay.   We'll hear from the

          11     appellee.

          12

          13                   ORAL ARGUMENT OF ELLIOTT H.   LEVITAS

          14                       ON EEHALF OF THE APPELLEES

          15

          16               MR. LEVITAS:   May it please the Court.   My name

          17     is Elliott Levitas.   I represent the plaintiffs-appellees

          18     in this matter, and I'm acoompanied today by my oolleague,

          19     Mr. Austin, Mr. Gingold,  and Mr.  Harper.


          20          The appellees are here today to seek this Court's
          21     affirmanoe of the Distriot Court's motion and order

          22     struotural injunotion,  and this Court should affirm unless

          23     it finds that the Distriot Court was olearly erroneous.

          24     And the same is true as to the faots found by the Distriot
a)
          25     Court.


OLS                                                                        52!

     1                JUDGE WILLIAMS:   Well,  that standard obviously

     2      has no application to the interpretation or validity of

     3      108-108, right?

     4                MR.  LEVITAS:  I'm sorry,  Your Honor.

     5                JUDGE WILLIAMS:   That standard has nothing at all

     6      to do with the validity or application of 108-108.     That's

     7      a pure question of law,  right?

     8                MR.  LEVITAS:  Oh, that is correct,  Your Honor.

       9              JUDGE WILLIAMS:   Right,  right.

     10               MR.  LEVITAS:  And I'll address the midnight rider

     11     issue.

     12               JUDGE WILLIAMS:   There's nothing that invalidates

     13     legislation adopted between 11 p.m.   and midnight,  is there?

     14               MR.  LEVITAS:  Cr thereabouts.

     15               JUDGE SENTELLE:   Sometimes we nay wish there was,

     16     but --

     17               MR.  LEVITAS:  It implies the last-minute effort


     18     to put this provision in.   But the rider is egregiously
     19     unconstittational for many reasons.   In the first instance,

     20     if it is in fact a timeout,  a legislative stay,   if you

     21     will, the courts have held that that is unconstitutional

     22     going as far back as 1792 in ffay!urn's Case.

     23               JUDGE TATEL:   But on its face,  it's only staying

     24     it to give Congress time to act.

     25               JUDGE WILLIAMS:   It's staying an obligation.


    CLS                                                                        53

           1              JUDGE TATEL:   Right.

           2              JUDGE WILLIAMS:   Cr something that had been found

           3    to be an obligation of a particular party for a particular

           4    period, right?

           5              MR. LEVITAS:   Yes.  Yes.

           6              JUDGE WILLIAMS:   What's the case that says

           7    Congress can't stay obligations?

           8              MR. LEVITAS:   In the, if,  if the midnight rider

           9    addresses the duty to account,  which this Court has found

        10      is a right of the plaintiffs,  any effort to take that right

        11      away --

        12                JUDGE WILLIAMS:   We're shifting,  we're shifting

        13      now to a taking theory,  is that --

        14                MR. LEVITAS:   Yes.  Yes, Your Honor.

        15                JUDGE WILLIAMS:   Why is it a taking when you have

        16      presumably accrued interest as a result of any delay in

        17      giving a remedy to say that a particular remedy will be

        18      delayed for, let's say a year to simplify,   with the,

        19      incidentally, of course,  with the statute of limitations


        20      for unmade claims suspended for that period.    Why is that a
        21      taking?

        22                MR. LEVITAS:   If,  if my client --

        23                JUDGE WILLIAMS:   The compensation by means of

        24      interest is inadequate?
d/
        25                MR. LEVITAS:   Well, I think,  I think that the


     CLS                                                                        54

           1    right to an accounting of one's own property,    if that is

           2    abrogated after it has been found,   as it was by this Court

           3    in Cobell VI,  that is the taking of a very valuable

           4    property right.

           5               JUDGE WILLIAMS:   I don't understand the taking.

               It's a delay in provision of the remedy.    T0hat's the

           7    taking?

           8               MR. LEVITAS:   No, if the, Your Honor --

           9               JUDGE WILLIAMS:   Equity laws, trust management

          10    law is famous for the delays that occur.    Are every one of

          11    those a taking?

          12               MR. LEVITAS:   The Court is absolutely correct.

          13    But if this rider is construed to change the substantive

          14    law as opposed to simply being a timeout or a legislative

          15    stay, if it is changing the substantive law,    the

          16    substantive law at issue is the right of the plaintiffs to

          17    have an accounting of their property.


1         18               JUDGE WILLIAMS:   It seems to me you're creating a
          19    completely false dichotomy.    The substantive law that 108-

          20    108 appears to amend is the proposition that the    '94 act

          21    compels this immediate process of the full-dress District

          22    Court-approved type of accounting,   right?

          23               MR. LEVITAS:   I think it goes beyond that.

          24               JUDGE WILLIAMS:   That's a substantive timeout,

          25    right?


    CLS                                                                         55

            1              ML. LEVITAS:   I think that this rider and its

            2   effort,  if it is an effort to change substantive law,    which

            3   we suggest it is not,   but if it is an effort to change

            4   substantive law,   the substantive law that they are

            5   attempting to change is not just the    '94 act, but the  '94

            6   act as construed by this Court in Cobell VI.

            7              JUDGE WILLIAMS:   Well, so what?   I mean, how is

            8   that different from the bridge in the Wheeling Bridq!. case?

            9              MR. LEVITAS:   Because at this point,  without any

         10     change in the law,   our client --

         11                JUDGE WILLIAMS:   There is a change in the law.

         12     The change in the law is that the duty to go forward with

J        13     an accounting for this particular period of time is

         14     suspended.

         15                MR. LEVITAS:   If it is suspended,  then I suggest

         16     to you that that is a legislative timeout.     It's a


         17     legislative stay.    It's not a change in the law.   It just

         18     says we're going to post,   as you suggest,  Your Honor,  a

         19     postponement of the day at which that occurs.

         20                JUDGE WILLIAMS:   And why is that bad?

         21                MR. LEVITAS:   But the, but the --

         22                JUDGE WILLIAMS:   Excuse me,  why is that bad?

         23     Suppose in the Wheeling case Congress had said,    well,  we

J        24     don't really know about this bridge.     Maybe, maybe it

         25     should stay,  maybe it shouldn't.   Nothing should happen on


    CLS                                                                         56!

           1    the mandated removal of the bridge for one year.     Bad?

           2    Why?

           3               MR. LEVITAS:   Well, first of all,  in that case,

           4    you dontt have an individual property right at issue.     In

           5    this case,  you do have an individual --

           6               JUDGE WILLIAMS:   Yes, but now weTre on takings

           7    again.   But, again, I fail to see why so long as they have

           6    a right of reimbursement of interest accrued during this

           9    period there's any taking.

         10                MR. LEVITAS:   The change in the substantive law

         11     that Your Honor has just described results in having the

         12     plaintiffs'  right for a period of time deprived.    If I have

         13     a right to an accounting -!

         14                JUDGE WILLIAMS:   The process of remedy always

         Is     involves delay by definition.    And here the,  what seems to

         16     make it comparably easy is built into the system is

         17     provision for interest,   right?
2

         18                MR. LEVITAS:   If, but in that instance,  Your

         19     Honor, what the Court has now defined the delay to be,    that


         20     is no more than a legislative timeout until the issue is
         21     actually visited.   What is the purpose of delaying --

         22                JUDGE SENTELLE:   That's not actually what

         23     Hayburn's Case was about.    In Hayburn you actually had a

         24     decision,  did you not, which the Court,  I mean,  which the

         25     Congress purported to change.    It wasn't a stay order.   It


     CLS                                                                        57

           1     was a final judgment in Hai!urn,   wasn't it?

           2               MR.  LEVITAS:   Yes.

           3               JUDGE SENTELLE:    So this is, perhaps Hayburn

           4     suggests this.   In fact, I think it does.   But it isn't

           5     squarely on point,  is it?

           6               MR.  LEVITAS:   Well, but what Hayburn said,  and

           7     the other cases related to this,   is that an Article III

           8     court cannot be told what to do once it has entered a

           9     judgment with respect to delaying its enforcement.     That's

          10     a right of an Article III court.    It is not the right of

          11     Congress to tell the ccurts when to decide the case and how

          12     to decide the case.   That's up to the Article III court.

J         13     And that's why this decision or this legislative effort is

          14     a direct interference with the most fundamental and

          15     eariiest defined responsibilities and duties of Article III

          16     courts.

          17          And even in the situation presented by Your Honor
 2


          18     about if it's simply a delay of the accounting,    no, Your

          19     Honor, it goes beyond that.    It goes beyond that because


          20     what it attempts to do is tell this Court or tell the
          21     courts how to decide and interpret the   '94 act.

          22               JUDGE WILLLRNS:    Well, let's go back on that.

          23     That argument interested me.    It is true that the statute

          24     is worded, the  '94 act,  any other statute, principle of

          25     common law, shall not be construed or implied to require.


CLS                                                                        58

       1    suppose Congress had chosen slightly different wording and

       2    said to the extent that the   !94 act, any other statute,  any

       3    principle of common law requires,   and the rest of the

       4    sentenca! it is hereby repealed,  but the repeal will be

       5    canceled if the year 2004 passes without further action.

       6    So?  That would be okay,  I take it,  because that's not

       7    speaking in terms of interpretation,   that just says the

       8    obligation is repealed for a period,   right?

       9              MR. LEVITAS:    If the --

      10              JUDGE WILLIAMS:    So your quarrel with Congress

      11    turns on apparently an incredibly subtle problem of word

      12    choice, not substantive meaning.

      13              MR. LEVITAS:    That, my quarrel with Congress is

      14    that they, Congress has no right to tell an Article III

      15    court that its judgment must be delayed to some later

      16    point.  A legislative stay is impermissible,   and

      17              JUDGE WILLIAMS:    I guess I find that concept odd,

      18    because if Congress can tell an Article III court that its

      19    judgment will be completely reversed,   as in the Wheeling


      20    Bridge case --
      21              MR. LEVITAS:    Yes.

      22              JUDGE WILLIAMS;      it!s hard for me to see why

      23    it can't say we're not sure about reversal.    We may do

      24    that.  We just don't want a lot of waste of resources while

      25    we think about it.   That's bad?


    CLS                                                                        59

         1                 MR. LEVITAS:  Well,  I think that's a different

         2      issue, Your Honor.

         3                 JUDGE WILLIAMS:   Well, I'm trying to figure out

         4      what your contention is as to why --

         5                 MR. LEVITAS:  My contention

           6               JUDGE WILLIAMS:   -- this timeout, as you choose

         7      to call it,  is constitutionally more vulnerable than the

           8    simple reversal in the Wheeling Endue oase.

           9               MR. LEVITAS:  Well,  in the -- two points,  Your

         10     Honor.  First of all,  in this case,  what the author of the

         11     legislation himself oalled a legislative timeout is no more

         12     than a legislative stay.

         13                JUDGE SENTELLE:   Who was that?   Who was that?

         14                MR. LEVITAS:  The gentleman from North Carolina,

         15     Your Honor, Mr.  Taylor.

         16                JUDGE SENTELLE:   It rather surprised me.

         17                MR. LEVITAS:  I would have to agree with Your

         18     Honor.
0
C


         19                JUDGE SENTELLE:   There are several thousand

         20     Cherokee voting in that district.

         21                MR. LEVITAS:  That's what I am informed,   and I

         22     trust they've communicated with Mr.   Taylor by this time,   in

         23     any event.   But the point is,  Your Honor,  that a

)        24     legislative stay,  postponing a right that the Court has

         25     already decided is inappropriate,    and it has been found to


     CLS                                                                         60

            1   be a violation of separation of powers going back to the

            2   first --

            3              JUDGE WILLIAMS:    You haven't explained to me why

            4   it's worse than completely canceling the right found by the

            5   Court.

            6              MR. LEVITAS:    I don't think --

            7              JUDGE WILLIAMS:    Terminating.

            8              MR.  DEVITAS:   I don't think --

            9              JUDGE WILLIAMS:    Reversing.

          10               MR.  LEVITAS:   Excuse me, Your Honor.

          11               JUDGE WILLIAMS:    Deep-sixing,   Why is a year's

          12    delay worse than that?

          13               MR.  LEVITAS:   I don't think the Court,  I don't

          14    think Congress --

          15               JUDGE WILLIAMS:    Constitutionally.

          16               MR.  LEVITAS:      can cancel the right that the

          17    plaintiffs have to an accounting.

          18               JUDGE WILLIAMS:    In Wheeling Bridge it canceled
z

          19    the right of the people to have the bridge removed,     right?

          20               MR.  LEVITAS:   In the spotted owl case,  the

          21    Robertson case,   the Audubon Society case,  what was done

          22    there prospectively,   not retroactively,   also did not

          23    involve --

          24               JUDGE WILLIAMS:    This is prospective.   A

          25    suspension of ongoing activities is prospective.


    CLS                                                                        61

          1               MR.  LEVITAS:   But it did not involve the rights

          2     of any individuals.   They were public  rights  that were

          3     involved.  It was  a program for  dealing with protecting

          4     endangered species.   Here we have property rights of

          5     individuals at issue,  and they cannot be dealt with as

          6     cavalierly as that,  and the historical accounting that has

          7     been provided by Cobell VI and the   '94 act is not

          8     prospective,   It is a right that already exists and is

          9     retrospective.  And there is nothing that Congress can do

          10    constitutionally to take away that right,   which has already

          11    been found by this Court.    And so for that reason,  the

          12    midnight rider or the rider is egregiously unconstitutional

          13    even if it tries to amend a substantive law.

          14              JUDGE SENTELLE:    If we could move,  change some

          15    gears for a moment to specific provisions,    are there not

          16    specific provisions in this particular injunction that

          17    might arguably invade the province of the executive?
8

          18              MR.  LEVITAS:   Let me address that.   No, I don't

          19    believe so.

          20              JUDGE SENTELLE:    I'm asking you to address that!

          21    actually.

          22              MR. LEVITAS:    Okay.  Let me address it,  Your

          23    Honor.   And that question was brought up earlier by the

          24    court when you were talking about structural injunctions.

          25              JUDGE SENTELLE:    Yes.


   CLS                                                                        62

         1               MR. LEVITAS:    Structural injunctions, the

         2    jurisprudence of structural injunctions,    which was

         3    carefully addressed by the District Court in its opinion,

         4    provides a mechanism for the reform of political or social

         5    institutions if they take into account and balance the

         6    specific needs of the judiciary to see that its orders are

         7    enforced with   the general need --

         8               JUDGE SENTELLE:   Counsel,  let me interrupt  you,

         9    because  time is dragging here.   We  do have another case  to

        10    here,  actually, and  I have a great  sympathy for those

        11    people.   Paragraph,  subparagraph  (k! of Part 3 forbidding

        12    the use of  statistical  sampling, does  that not seem to

        13    operate  on a level  of specificity that normally would be

        14    executive rather than judicial when you're talking about an

        lb    Executive Branch?

        16               MR.  LEVITAS:   I'm glad Your Honor brought up that

        17    specific matter,  because what the District Court did,   it

        10    adopted the defendants'    plan except where, as this Court

        19    had advised,  where it,  the adoption of that plan would


        20    serve to further delay,    and what the Court found with
        21    respect to the statistical sampling,   a specific finding

        22    that if you adopted statistical sampling for purposes of

        23    achieving an accounting,   you would only delay further,

)       24    because a statistical sample cannot produce an accounting.

        25    And that evidence in the trial was provided by the


CLS                                                                        63'

       1   defendantsT   expert witness.  A statistical sampling is

       2   incapable cf prcviding an accounting.     It can be used to

       3   verify or test,  but to use statistical sampling for the

       4   purpose of creating an account which shows how much money

       5   was deposited,  what changes were made,   what disbursements

       6   occurred,  that cannot be done by a statistical sampling

       7   method,  and therefore to adopt that,   Your Honor, would have

       8   no result except to further delay the accounting that will

       9   ultimately have to be provided.

     10               JUDGE WILLIAMS:   But that's not a delay issue.

     11    That's a substantive notion of what is required by way of

     12    accounting.

     13               JUDGE SENTELLE:   Yes.

     14               JUDGE WILLIAMS:   That's,  the driving force of

     15    that argument ccmes entirely from that.

     16               MR. DEVIIAS:   It would be a delay in this sense,

     17    Your Honor.

     18               JUDGE WILLIAMS:   It's completely independent of

     19    delay.   Mmml

     20               MR. LEVITAS:   It would be a delay in this sense,

     21    that if you --

     22               JUDGE WILLIAMS:   It would be a delay only if that

     23    notion of what is legally required is correct,     right?

     24               MR. LEVITAS:   Well, but if the Court,  the

     25    District Court in effect said we're telling you this now so


    OLE                                                                          64

           1     you don't proceed with it,   because if you proceed with it,

           2     all you're going to end up is having us reject it later on,

           3     because a statistical sampling cannot provide an account,

           4     which is what the expert witness brought forth by the

           5     defendants in this case testified in the court.

           6                JUDGE SENTELLE:   Again, doesn't that sound like

           7     an administrative decision or an executive decision rather

           8     than adjudication,  when you're saying that method of

           9     enumeration cannot produce the kind of accounting we have

         10      to have at the end?

         11                 MR. LEVITAS:   Yes.  Yes.

         12                 JUDGE SENTELLE:   Okay-  Let me ask one other --

         13                 MR. LEVITAS:   Let me make a --

         14                 JUDGE SENTELLE:   -- before I --

         15                 JUDGE TATEL:   I have just one question.   Oh, you

         16      gc ahead.

         17                 JUDGE SENTELLE:   Let me ask you one other while

         18      I've got you here.   Under paragraph 5,  sub 3,  the Court

         19      required that the defendants shall provide the judicial
C

         20      monitor and the agents of the same with unlimited access to
0


         21      the defendant's facilities and to all information relevant

         22      to the implementation of the order.     Given the breadth of

         23      this order,  doesn't that paragraph arguably take over the

         24      Department in the way that the Government is arguing?

         25                 MR. LEVITAS:   I think providing access does not


    CLS                                                                         65

          1    in and of itself take over the running of a department.

          2    And particularly so,  Your Honor,   when the District Court

          3    goes to great pains to spell out in this injunction that

          4    this judicial monitor can do nothing to direct actions to

          5    be taken or to direct actions to be refrained from being

          6    taken.   It is a fact-finding monitoring to assist the

          7    District Court in determining whether this structural

          8    injunction is being complied with.     And one of the --

          9               JUDGE SENTELLE:    I'll get out of Judge Tatel's

         10    way now and let him ask his question.

         11               JUDGE TATEL:   Just one,    I just want to ask you

         12    about a different part of the order.     Section 3,  which is

         13    labeled compliance with fiduciary obligations,     sub  (a)

         14    directs implementation of the Department's comprehensive

         15    plan, right?

         16               MR. LEVITAS:   I'm trying to locate it

         17    (indiscernible)

         18               JUDGE SENTELLE:    It's on page 744 of the Joint

         19    Appendix.
C

         20               JUDGE TATEL:   Do you have it there?

         21               JUDGE SENTELLE:    I think he's being handed it.

         22               MR. LEVITAS:   Oh,  I have it now,  Your Honor.

         23               JUDGE TATEL:   Okay.   Now, this part of the order

         24    goes beyond the accounting elements of the Government's

         25    fiduciary obligation,  right?    This covers the second of the


    CLS                                                                        66

         1      District Court's orders?

         2                MR.  LEVITAS:  If it's the compliance with

         3      fiduciary duties.

         4                JUDGE TATEL:   Yes.

         5                MR.  LEVITAS:  Not, it goes beyond the accounting.

         6                JUDGE TATEL:   Right.   Now, for the accounting

         7      part of the order,  there were findings by the District

           8    Court that the Interior Department had violated its

           9    fiduciary obligation with respect to accounting,    and the

         10     order, the historical accounting order,   rested on those

         11     findings.   I didn't see in the District Court's order any

         12     findings that the Interior Department had violated the

         13     other elements of its fiduciary obligations.     So what does

         14     this order rest on?

         15               MR. LEVITAS:   Let me address that,  because the

         16     appellees,  the appellants have raised the question as to

         17     whether or not the trust reform aspects are even in

         18     these --

         19               JUDGE TATEL:   No,  I'm willing to accept your
O

         20     argument that they are.

         21               MR.  LEVITAS:  Okay.

         22               JUDGE TATEL:   Just for purposes of discussion

         23     here.  I mean,  I think that's what Cobell VI says,   but --

         24               MR.  LEVITAS:  The --

         25               JUDGE TATEL:   But my question for you is assuming


    CLS                                                                         67

           1    they are properly in the case,   that the Government's

           2    fiduciary obligations extend beyond an accounting to other

           3    elements of the relationship,   the Government is saying,

           4    well,  there were no,  the District Court can't order relief

           5    until it first finds a violation of those obligations,

           6    which it hasn't found,  at least I don't see them in the

           7    order, so.

           8               MR. LEVITAS:  What is wrong with that is two

           9    things, Your Honor.    First of all, this Court in Jobell VI

         10     said that we're making a decision about an accounting

         11     breach, but the breach of an accounting duty carries with

         12     it substantial,  significant subsidiary duties.

         13                JUDGE TATEL:  I understand that,  but I'm going

         14     beyond the accounting to the provisions of Section 3,    which

         15     deal with other elements of the fiduciary responsibility,

         16     not the subsidiary obligations for the accounting process.

         17                MR. LEVITAS:  The,  well, I'm, I just need to

         18     conclude one point,  though,  Your Honor.  What the Court,

         19     this Court said is that that,   in order to provide for an
C

         20     accounting,  you've got to make it possible for there to be

         21     an appropriate software for a comprehensive system to track

         22     the money.   You've got to have adequate personnel.    All of

         23     that is necessary to do the accounting,   but to address

         24     specifically your concern concerning these other

         25     obligations,  the trial 1.5 and the contempt trial addressed


     CLS

            1   these issues.   The trust reform that Your Honor is

            2   inquiring about has been part and parcel of this case from

            3   the very beginning.    When the HLIP, the high-level

            4   implementation plan,   was revised,  it had, if I remember

            5   correctly,  13 elements to it.   Twelve of the 13 elements

            6   related to trust reform.    The reason the Court required

            7   reports of progress was to determine whether or not the

            8   duties of trust reform were being met.     When the District

            9   Court said what are you doing as far as trust reform,     the

         10     TAN  !phonetic spj   system, adequate personnel,   data

         11     cleanup,  those all related to the trust reform duties.    And

         12     it's interesting to me that the defendants now say, well,
Th
         13     this case had nothing to do with trust reform,     when in fact

         14     according to the defendants,   they didn't challenge the

         15     activities of the District Court with regard to trust

         16     reform.   They only challenged in the appeal the accounting

         17     duties.   And therefore the trust reform duties,   where the

         18     Court had held time and again there was an inadequacy as

         19     well as a delay in compliance were seemingly conceded by
C

         20     the defendants,  because they never challenged the District

         21     Court's conclusions of noncompliance.     Remember, Your

         22     Honor --

         23                JUDGE WILLINIS:   I'm sorry,  so, I mean, your

         24     answer1  then,  to Judge Tatel is not that there's no problem

         25     about going forward with a remedy in the absence of


     CLS                                                                        69

           1    findings of breach on the non-accounting aspects.     Your

           2    answer is there have been findings of breach.

           3               MR. LEVITAS:   Yes.

           4               JUDGE WILLIAMS:   And we'll find them clearly in

           5    the record.

           6               MR. LEVITAS:   Let me make this point --

           7               JUDGE WILLIAMS:   I mean, I noted that stipulation

           6    that we referred to in the 2001 opinion,    but I don't recall

           9    us alluding to any findings of this sort.

          10               ML. LEVITAS:   There's an important point that I

          11    would like to be able to make,   Your Honor,  at this, before

          12    I conclude,  and that is this:   We talked about --

 )        13               JUDGE SENTELLE:   First, I'm not sure I'm hearing

          14    you answer Judge Williams's question.     Is this going to be

          15    an answer to that guestion?

          16               MR. LEVITAS:   Sorry, Your Honor.   I'm sorry, I --

          17               JUDGE SENTELLE:   He asked you,  as I understand

          18    it, if your point is not that there can't be remedies
 a        19    unrelated to the accounting duties but related to other

 0

          20    fiduciary duties without finding a breach of those duties

          21    or your point is there has been such a finding.     Which is

          22    your position on that?    Does that accurately state --

          23               JUDGE WILLIAMS:   That's exactly my question.

 )        24               MR. LEVITAS:   It's the latter.   It's the latter,

          25    and in fact


OLD                                                                        70

       1              JUDGE SENTELLE:   The latter,  okay.

       2              JUDGE WILLIAMS:   Okay,  and we'll find them.

       3              MR. LEVITAS:   It's the latter.   AMd let me also

       4    point out this, this Court citing Franklin v.   Gwinnett

       5    County pointed out that once the breach has been found,

       6    once the duty, the violation of the duty has been found,    a

       7    court of equity has broad powers in fashioning the type of

       8    relief and remedy that is necessary to,   in this case,  to

       9    satisfy compliance with the trust duties.    So my argument

     10     would be, Your Honor --

     11               JUDGE WILLIAMS:   Is it your view that the proper

     12     relationship between the Court and the Department of

     13     Interior is the relationship between a court of chancery

     14     and a common law trustee?

     15               MR. LEVITAS:   The common law --

     16               JUDGE WILLIAMS:   In other words,  there's no

     17     account taken of the proposition that this trustee is an

     lB     executive department of the United States?

     19               MR. LEVITAS:   Well, of course,  Your Honor,  that

     20     has to be taken into account,  but --

     21               JUDGE WILLIAMS:   Well,  I mean, the chancellor --

     22               JUDGE SENTELLE:   It does make a difference.

     23               JUDGE WILLIAMS:   -- exercising jurisdiction over

     24     a common law trust has very wide-ranging powers.     But those

     25     are not, those don't involve a great department of a great


    CLS                                                                        71

          1    government.

          2               MR. LEVITAS:   But Your Honor,  in this case,  the

          3    United States is the trustee.

          4               JUDGE WILLIRMS:   I understand.

          5               MR.  LEVITAS:  The Interior Department or the

          6    Secretary of Interior and the Secretary of Treasury are

          7    trustee-delegates.    And the chancellor has broad power to

          8    make certain that the trust fiduciary duties which are not

          9    being carried out by the trustee-delegates can be enforced.

         10    That's -!

         11               JUDGE NILLIAMS:   But anyway,   then it is your

         12    contention sort of none of the language,    for example,  for

         13    the APA relating to the things that justify a court setting

         14    aside agency action,   none of those things is applicable?

         15    We are straight in the straight court of chancery model?

         16               MR.  LEVITAS:  I don't think it's a straight

         17    model, Your Honor,    but I think the, this is a trust case.

         18    This Court itself has pointed out,    for example,  that

         19    Chevron deference doesn't apply.     This Court has -- in this
0

         20    case.  The Court has pointed out that the trustee-delegates

         21    cannot willy-nilly take off the hat of the trustee to don

         22    the mantle of the administrator.     The fact that the common

         23    law principles are imposed upon the duties of the trustee

         24    make it clearly a trust case.     And that does give within,

         25    there are bounds,   within bounds of equity and within bounds


CLS                                                                        72

      1    of the Constitution limitations.    But by and large,  once

      2    the Court has found,  the court of equity has found the

      3    breach of the trust duty,   it can impose and select a broad

      4    range of remedies in order to bring about compliance.

      5         And it is for that reason,   Your Honor,  that we believe

      6    in this instance the chancery has exercised that option

      7    appropriately,  and unless it is found that in some way he

      6    has acted clearly erroneously,   this Court should affirm

      9    that exercise.

     10               JUDGE SENTELLE:   Unless there's further

     11    questions,  then I know the time was long since used up,    but

     12    in the spirit of eternal optimism,   I'll give the Government

     13    two minutes for rebuttal.

     14               JUDGE WILLIRNS:   Khich it's not obliged to take.

     15

     16                REBUTTAL ARGUMENT CF MARK B.   STERN, ESQ.

     17                       UN BEHALF CF THE APPELLANTS

     18

     19               MR. STERN:  Thank you for that,   Your Honor.  A

     20    couple of very brief points.    There's a lot of,  of course,

     21    this is all set out in a lot of detail on our briefs.

     22         Just to sort of come in,   and we were at the end on

     23    (indiscernible)  with opposing --

     24               JUDGE SENTELLE:   I'm going to ask you to try to

     25    speak a little more clearly,   if you would,  please, counsel.


     CLS                                                                       73

           1               MR. STERN:   Absolutely, Your Honor.   Without in

           2    any way trying to take common law trust duties out of the

           3    case, assuming that they're in the case,   there's a lot of

           4    discussion,  I'm going to refer the Court to the testimony

           5    of Professor Lanqbine   (phonetic sp.) and others in this

           6    case about the difference,   assuming that you were going to

           7    draw analogies and that you could inform duties by

           8    reference to trust duties,   you cannot transpose those

           9    duties wholesale for many reasons,   including the fact that

          10    when the chancellor would direct a trustee to spend money,

          11    he's directing that money to basically come out of the

          12    corpus of the trust.    Now, as Professor Langbine points out

          13    in his report,  you can't cherry-pick among the way,    about

          14    which you like and what you don't like about the way common

          15    law trusts operate,  and all this money is coming out of

          16    federal appropriations,  not out of the trust.    And I'm not

          17    saying that doesn't mean that trust principles apply,    but

          18    it certainly makes things awfully different.     And I'd also

          19    submit that this Court --
 C


 j        20               JUDGE SENTELLE:   I'm not sure that I understand

          21    your position that you can't cherry-pick.    Are you saying

          22    we have to accept all of the law of chancellorship,     equity,

          23    or none?

          24               MR. STERN:   No, Your Honor, I think that what

          25    this Court,  I mean, I think that,  I know that,  I think that


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            1   this Court got it right in Cobell,     in the 2001 Cobell

            2   decision when it said,    look, you're telling me that there's

            3   been no unreasonable delay.     When I think about whether

            4   there's been unreasonable delay here,     I've got to consider

            5   the fact that you had obligations to Indians for a long

            6   time that predated --

            7              JUDGE SENTELLE:    You know,  I have no idea what

            8   your answer has to do with my question.

            9              MR.  STERN:  I'm sorry,  Your Honor,  the --

          10               JUDGE SENTELLE:    You said we can't cherry-pick.

          11               JUDGE WILLIAMS:    Isn't it absolutely clear that

          12    there's got to be cherry-picking?

          13               JTJDGE SENTELLE:   Yes, there has to be,  doesn't

          14    there have to be cherry-picking?

          15               MR.  STERN:  Well,  it's got to be --

          16               JUDGE SENTELLE:    Are you saying that either none

          17    of the duties of common law or chancellor equity

          18    trusteeship apply or all of them apply?

          19               MR.  STERN:  I'm saying that this Court got it
S

          20    right when it said that you look to --

          21               JUDGE SENTELLE:    Whoa.  Don't say we ever did

          22    anything before.    Take it as if we never acted before.

          23               MR.  STERN:  All right.   Yes, you have to cherry-

          24    pick, but the way that that is done,     and this Court had it

          25    absolutely right,   it says you fill in the interstices.


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            1   When you've got a statute,   you try to understand what's

            2   going on.   Yes, you can look to fill in the interstices by

            3   reference to background presumptions.     However, when

            4   Congress actually acts and does things,    including the

            5   amount of money it appropriates and everything else,     I

            6   mean,  Congress is the settler of this trust.     I mean, so

            7   what Congress wants and what Congress does,    and Professor

            8   Langbine talks about this at great length,    what Congress

            9   wants and what Congress does,   even by just a straight out

         10     analogy to common law trust prinoiples is entirely

         11     relevant.

         12           So that, and that also brings us back into why this

         13     Court was also correct in 2001 when it analyzed this within

         14     the framework of the ADA.    And you've got to have final

         15     agency aotion or else you've got to have action

         16     unreasonably delayed,  and whatever this Court said in 2001,

         17     we think it's oonsistent with what the Supreme Court later


         18     said in Southern Utah,  but if it wasn't,   then it has to

         19     give way to what the Supreme Court said in Southern Utah.
C

         20                JUDGE SENTELLE:   Okay.  I think the time is up

         21     and the oase is submitted.

         22                MR. STERN:  Thank you very much,   Your Honor.

         23                (Recess.)

         24

         25


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    OLE                                                                       76

                                          OERTI FICATE

                         I certify that the foregoing is a correct

               transcription of the electronic sound recording of the

               proceedings in the above-entitled matter.


                       Carol Schlenker                      Date

                  DEPOSITION SERVICES,  INC.