## United States Court of Appeals
FOR THE EIGHTH CIRCUIT

_____________ No. 95-3795SD

_____________ Joyce Loudner; Paul Harrison; * Ambrose McBride; Chauncey Long * Crow; Della Lytle; Hilda Long * Crow; Lisa Redwing; Horace * Gilbert Slow; Dorothy Slow; * Darlene Fallis Jones; Lyle * Medicine Crow; Ramona Estes; * Fay Jandreau; and * On Appeal from the United Norman V. Taylor, * States District Court * for the District of Appellants, * South Dakota. * v. * * * United States of America and * Bruce Babbitt, * * Appellees. *

___________ Submitted: October 23, 1996 Filed: March 13, 1997

___________ Before RICHARD S. ARNOLD, Chief Judge, FLOYD R. GIBSON and MORRIS SHEPPARD ARNOLD, Circuit Judges.

___________ RICHARD S. ARNOLD, Chief Judge.

Plaint iffs seek to claim their share of a judgment fun d created by Congress to satisfy the federal government's obli gations to the descendants of the Sisseton-Wahpeton Sioux Tribe. Th eDistrict Court held that their claims are barred by the six-yea r

statute of limitations in 28 U.S.C. § 2401(a) and dismissed their-3-

comp laint for want of subject-matter jurisdiction under Federa l Rule of Civil Procedure 12(b)(1). Because the plaintiff's claims did no t accrue until they had reason to know of the existence o f the j udgment fund and how it would be distributed, we hold tha t the ir claims are not time-barred, reverse the decision of th e District Court, and remand for further proceedings.

I.
In the mid-nineteenth century the United States took almost 30 millio nacres of land from the Sisseton-Wahpeton Sioux Trib e pur suant to treaties, the terms of which the government neve r satis fied. During the Civil War, the military put down a Siou x uprising in Minnesota and forc ed the dispersal of the Sioux bands, a majority of whom formed three successor tribes. A large number of the dispersed Sioux affiliated with other tribes. More than a century later, the government settled a class action brought by the thre e successor tribes of the Sisseton-Wahpetons. In 1968 , Congress appropriated money to satisfy the judgment, and then, in 1972, enacted a plan to distribute what was then a $6,000,00 0 judgment fund.

It is impo rtant to have in mind the precise terms of th e statute that provides for the distribution of this fund. W e therefore set out the statute in full at this point. The relevant provisions are §§ 201, 202, and 305 of the Act of October 25 , 1972, Pub. L. No. 92-555, 86 Stat. 1 169, 1170. These provisions are now codified as 25 U.S.C. §§ 1300d -3, 1300d-4, and 1300d-9. They read as follows:

§ 1300d-3. Up per Council Sioux; membership rolls ;

ap plications for enrollment; finality o f determinations-4- (a) Th e Devils Lake Sioux Tribe of North Dakota , and th e Sisseton and Wahpeton Sioux Tribe of Sout h Dakota, shall bring current their membership rolls of-5-

Oct ober 25, 1972. The Assiniboine and Sioux Tribes o f the Fort Peck Reservation, Montana, shall prepare rolls of the ir members who are lineal descendants of th e Sisseton and Wahpeton Mississippi Sioux Tribe, who were born on or prior to and are living on October 25, 1972, and wh o are entitled to enrollment on their respectiv e membership rolls in accordance with the applicable rules and regulations of the tribe or group involved, usin g available records and rolls at the local agency and area offices, and any other available records and rolls

. Applications for enrollment must be filed with each group named in this section and such rolls shall be subject to approval of the Secretary of the Interior. Th e Secretary's determination on all applications fo r enrollment shall be final. (b) The Secretary of the Interior shall prepare a roll o f the lineal descendants of the Sisseton an d Wa hpetonMississippi Sioux Tribe who were born on o r prior to and are living on Oct ober 25, 1972, whose names orthe name of a lineal ancestor appears on any availabl e record s and rolls acceptable to the Secretary, and wh o are not members of any of the organized groups listed in subse ction(a) of this section. Applications fo r enrollment must be filed with the Area Director, Bureau of Indian Affairs, Aberdeen, South Dakota. Th e Secretary's determination on all applications fo r enrollment shall be final.

§ 1300d-4. Apportionment of funds

(a) Basis of apportionment After deducting the amount authorized in sectio n 1300d of this title, the funds derived from the judgment awarded in Indian Claims Commission docket numbered 142 and the one-half remaining from the amount awarded i n docket numbered 359, plus accrued interest, shall b e appo rtionedon the basis of reservation residence an d other residence shown on the 1909 McLaughlin annuit y roll, as follows: Tribe or group Percentage Devils Lake Sioux of North Dakota ------------- 21.6892 Sisseton-Wahpeton Sioux of South Dakota ------- 42.9730 Assiniboine and Sioux Tribe of the Fort Peck Reservation, Montana --------------------- 10.3153-6-

All other Sisseton and Wahpeton Sioux --------- 25.0225-7- * * * * * * * *

(c) Per capita distribution to enrollees The f und allocated to all other Sisseton an d Wahpeton Sioux, . . . shall be distributed per capita to th e persons enrolled on the roll prepared by th e Secretary pursuant to section 1300d-3(b) of this title. § 1300d-9. Rules and regulations The Secretary of the Interior is authorized t o prescribe rules and regulations to carry out th e provisions of this subchapter, including th e establishment of deadlines.
Certain aspects of this plan of distribution need to be kept in mind. Th e fund was to be divided into four parts, three o f which were to go to three named organized tribes, or their m embers: the Devils Lake Sioux Tribe of North Dakota, the Sisseton an d Wahpeton Sioux Tribe of South Dakota, and the Assiniboine and Sioux Tribes of the Fort Peck Reserv ation, Montana. Each of these three tribes was given the responsibility to prepare membership rolls

. The remainder of the fund, some 25.0225 per cent., was to go t o "the l ineal descendants of the Sisseton and Wahpeton Mississipp i Sioux Tribe who were born on or prior to and are living o n Oc tober 25, 1972, whose names or the name of a lineal ancesto r appears on any available record and rolls acceptable to th e Secretary, and who are not members of any of the organized groups listed," § 1300d-3(b), as receiving the first three shares. Th e plaintif fs in this case claim that they are members of this las t group, and that they have received nothing. In the case of thi s last group, the responsibility of preparing a roll of eligibl e pe rsons is placed on the Secretary of the Interior, not on any tribe. The statute further provides, however, that application s for enrollment must be filed with the area director of the Bureau-8-

of Indian Affairs in Aberdeen, South Dakota, and that the Se cretary is authorized to prescribe rules and regulations to carry out the-9-

statute, "including the establishment of deadlines." Sectio n 1300d-9.
The Secretary in fact did issue regulations on May 25, 1973. 38 Fed . Reg. 13737, codified at 25 C.F.R. § 41.1 (1973), and no w recodifiedat 25 C.F.R. § 61.4(s)(1995). The regulation s established a deadline of Nove mber 1, 1973, a period of about five months, for persons claiming to be eligible lineal descendants to file their applications.
The plaintiffs in this case did not file an application by t he deadline fixed in the regulation. The Secretary took variou s steps to notify possibly interested persons. These steps will b e detailed later in this opinion.

Many of the plaintiffs in this case live on the Crow Cree k Indian Reservation at Fort Thompson, South Dakota. They claim to be lineal descendants of the Sisseton-Wahpeton Sioux Tribe, but say that they knew nothing about the fund until late 1994, when a representative of the Bureau of Indian Affairs told them about it at a m eeting on the Crow Creek Reservation. (There may be othe r persons similarly situated. The named plaintiffs brought th is suit
on behalf of themselves and others similarly situated.) Whethe r the plaintiffs actually are eligible lineal descendants, an d whether any of them, individually, had actual knowledge of t he fund earlier than they claim, are questions of fact yet to b e determined. The government's defense of limitations is based upon its general assertion that it long ago took reasonable steps t o notify interested persons that they needed to file an application and, in fact, a number of peop le have so filed. The Secretary has found, prior to the filing of this case, that each of 1,969 lineal descendants is eligible to receive a $746.00 share of the fund

.-10-

See Sisseton-Wahpeton Sioux Tribe v. United States , 90 F.3d 351 , 355 (9th Cir.) (per curiam), cert. denied , 117 S. Ct. 516 (1996)-11-

(unsuccessful attempt of the three named tribes to invalidat e altogether the share of the non-member lineal descendants).
After learning of the fund's e xistence at the meeting we have described, the plaintiffs brought this case. They claim that the proc edures used by the Secretary to notify eligible descendant s were legally deficient and amounted to a breach of the gover nment's fiduciar yduty as trustee. The basis of our jurisdiction is th e "Little" Tucker Act, 28 U.S.C. § 1346(a)(2), under which the United States has waived sovereign im munity with respect to civil actions founded upon any Act of Congre ss or any regulation of an executive depart ment. The jurisdiction of the district courts (a s distinguished from the United States Court of Federal Claims ) under this s tatute is limited to claims not exceeding $10,000.00, an d each of the plaintiffs alleges that his or her individual claim is less than this amount.
The parties agree that the applicable statute of limitations is 28 U.S.C. § 2401(a), which provides that "every civil actio n commencedagainst the United States shall be barred unless th e complaint is filed within six years after the right of actio n first accrues." The crucial question, then, is when the plaintiffs ' claimfirst accrued. The parties agree that "accrual," for thi s purpose, occurs when the plaintiffs either knew, or in the e xercise of reasonable diligence should have known, that they had a claim. The District Court found that the claim accrued in 1972, whe n Congre ss enacted its plan for distributing the settlement funds

. It therefore held the action barred by limitations and dismisse d for la ck of subject-matter jurisdiction. (Filing within th e appl icable statute of limitations is treated as a conditio n prec edent to the government's waiver of sovereign immunity, an d cases in which the government has not waived its immunity areJudge Fletc her has elegantly summarized these jurisdictional 1 rules in Sisseton-Wahpeton Sioux Tribe v. United States , 895 F.2d 588, 592 (9th Cir.), cert. denied , 498 U.S. 824 (1990):

The doctrine of sovereign immunit y precludes suit against the United State s without the consent of Congress; the terms of it s consent define the extent of the court' s jurisdiction. The applicable statute o f limitations is a term of consent. Th e plaintiff's failure to sue within the perio d of limitations is not simply a waivabl e defense; it deprives the court of jurisdiction to entertain the action. -12- outsi de the subject-matter jurisdiction of the district courts.) 1 The Court further found, as an aspect of its accrual analysi s, that the steps taken by the government to notify the plaintiff wer e constitutionallyadequate and not otherwise legally deficient

. This appeal followed.

II.
“[T]here is a presumption that absent explicit language to t he contrary, all funds held by the United States for Indian tri bes are held i n trust.” Rogers v. United States , 697 F.2d 886, 890 (9t h Cir. 1983); see also United States v. Mitchell , 463 U.S. 206, 225 (1983). This obligation derives from “a humane and self impose d policywhich has found expression in many acts of Congress an d
nu merous decisions of [the Supreme] Court” under which th e Govern ment “has charged itself with moral obligations of th e highes t responsibility and trust” in carrying out its treat y obligations with the Indian tribes. Seminole Nation v. Unite d Sta tes , 316 U.S. 286, 296-97 (1942)(footnote omitted). Thi s “trust relationship extends not only to Indian Tribes a s govern mental units, but to tribal members living collectively o r individually, on or off the reservation.” Little Earth of United-13-

Trib es, Inc. v. HUD , 675 F. Supp. 497, 535 (D. Minn. 1987) , amended , 691 F. Supp. 1215 (D. Minn. 1988), aff’d , 878 F.2d 236-14-

(8th Cir. 1989), cert. denied , 494 U.S. 1078 (1990). In thi s case, the government points to no statutory language relieving it o f these long-established obligations with respect to the linea l descendants of the Sisseton-Wahpeton Sioux. Accordingly, th e government had the obligation to act as a trustee in its man agement of the judgment fund, and we must judge its conduct “by the mos t exacting fiduciary standards.” Seminole Nation , 316 U.S. at 297.
The fact that plaintiffs are beneficiaries of a trust does n ot
mean th at they are exempt from the running of the statute o f limitations. See Menominee Tr ibe of Indians v. United States , 726 F.2d 718 ( Fed. Cir.), cert. denied , 469 U.S. 826 (1984). Th e statute of limitations begins to run when a trust beneficiar y knows
or should know of the beneficiary’s claim against the trustee

. Nonetheless, because the beneficiary is entitled to rely upon the good faith and expertise of th e trustee, the beneficiary’s duty to di scover claims against the trustee is somewhat lessened

. Manchester Band of Pomo Indians v. United States , 363 F. Supp. 1238 (N.D. Cal. 1973). See Azalea Meats, Inc. v. Muscat , 386 F.2d 5, 9 (5t hCir. 1967) (footnote omitted) (“The presence of a fiduciar y relationship . . . bears heavi ly on the issue of due diligence.”). The beneficiary’s duty to discover his or her claims against th e trust is further diminished when the beneficiary has no idea that the t rust even exists. One of the fundamental obligations of a truste e is the identification and notification of trus t beneficiaries. See G. G. Bogert and G. T. Bogert, The Law o f Trusts and Trustees § 961, at 3 (rev. 2d ed. 1984)(“[T]he trustee is under a duty to notify the beneficiary of the existence of the tr ust . . . ”). See also Rogers v. United States , 697 F.2d 886 , 890 (9th Cir. 1983). A benefi ciary may reasonably expect that the trustee w ill let the beneficiary know that he or she is a beneficiary. When the beneficiary hears nothing about the trust-15-

from the trustee (or any other source), the beneficiary cannot be expe ctedto pursue a claim to the trust in a timely fashion. I n this case, the plaintiffs were wholly unaware that the trustThe way tha t courts have historically applied the statute of 2 limitations to claims challenging so-called trust repudiation s pro vides support for our approach. Where the trustee repudiate s the t rust by claiming to hold the trust corpus as the trustee’ s own, the cause of action does not accrue until the beneficia ry “has knowle dge of the repudiation.” Sisseton-Wahpeton Sioux Tribe v

. United States , 895 F.2d 588, 593 (9th Cir.), cert. denied , 4 98 U.S. 824 (1990). There is authority that where the trustee repudiates th e trust, the statute of limitations will apply “from the date whe n the benefi ciary . . . by the exercise of reasonable skill an d dil igence could have learned of [the repudiation].” See Bogert , supra , § 951, at 630-34. In all of the cases cited in support of that proposition, however, the plaintiff/beneficiary was i n possession of some facts that would have put a reasonable pe rson on notice of the repudiation of the trust, and in none of them was the be neficiaryjustifiably ignorant of the existence of the trus t itself, as is the case here. Cf. Manchester Band of Pomo Indians v. United States , 363 F. Supp. 1238 (N.D. Cal. 1973) (sinc e go vernment did not pay out income regularly to Band, a lack o f payments or information did no t put Band on notice that government was mismanaging funds). -16- existed. Moreover, they were not in possession of facts tha t would naturallyhave led them to inquire about the existence of th e judgme nt fund, since neither they nor their tribal leaders wer e par ticipants in the original lawsuit. Because plaintiffs had n o
reasonto know of the existence of the judgment fund and , consequently, of their possible claim to it, they have a stron g argument that the statute of limitations did not begin to run o n their claim until they received actual notice of the fund’ s existence in 1994. 2
Though plaintiffs had no knowledge that should have prompted themto pursue their claims against the fund, their claims stil l migh t be time-barred if the government adequately performed it s duties as trustee. The government made some efforts to notif y beneficiaries of the fund of its existence. In addition t o publishing the regulations governing the fund’s distributionin the-17-

Federal Register, the government sent notification packets a nd news releases to various Indian org anizations and newspapers around theAll o f the plaintiffs are members of the Crow Creek Siou x 3 Tribe. See Appellants’ Br. 8. -18- country. It also sent notice to the twelve area Bureau of Indian Affairs offices as well as the agencies that serve the specifi c tribes and asked the superinte ndents of those agencies to post the notice. The government was ab le to locate one press release dated two weeks before the application deadline. The government an d plaintiffs also unearthed three articles from newspaper s distributed in South Dakota ab out the fund, though the articles in two of the newspapers appeared less than a week before th e application deadline.
While attempting to notify the beneficiaries of the existence of the trust and how they could claim their share of it, th e government was in possession of a 1909 annuity pay-roll list ing the names of over 1900 Sisseton-Wahpeton Sioux. It is this list that the government is now using to determine the eligibility of applicants for a share of the judgment fund. Almost 300 of th e
name s on the list (14 per cent. of the total) were from the Cro w Cr eekor Lower Brule areas of South Dakota, the areas of Sout h Da kota where most of the plaintiffs live. As the plaintiff s 3 argue , “It would have been simple to . . . provide concentrate d noti ficationprocedures in those areas where the ancestors wer e known to have resided. . . .” Appellants’ Reply Br. 15. Given the high concentration of Sisseton-Wahpeton Sioux ancestors who lived in th e Crow Creek area of South Dakota in 1909, the government , acting in its role as trustee, should at least have held a meeting on the Crow Creek reservation to inform potential beneficiaries of the fund’s existence and to explain the application procedure t o them. The government never held such a meeting for any of th e descendants of the Sisseton-Wahpeton Sioux. We cannot say t hat the-19-

plaintiffs should have known o f their interest in the fund because a notice was at some point tac ked to a bulletin board in the localWe al so note that even if the statute of limitations bar s 4 som e plaintiffs’ claims, there may be beneficiaries in the group who were young children or inc ompetent at the time of the original application deadline. If so, the statute of limitations would not bar their claims until three years after their disabilities wer e lifted. 28 U.S.C. § 2401(a). For this re ason and the reasons given by the District Court, 5 we also reject the government’s argument that under 44 U.S.C

. § 1507 notice by publication in the Federal Register was suf ficient to notify beneficiaries of their share of the Fund.
Because we hold that the government failed to live up to its 6 trust obligations, we do not a ddress the plaintiffs’ argument that the government’s notice procedures did not satisfy constitutional stand ards. We are inclined to agree with the District Court o n this point. But efforts that satisfy constitutional standards may noneth eless violate the government’s fiduciary obligations. A trustee must do more than simply comply with the Constitution. -20- reservationoffice. We think that notice by publication i s 4 insuff icient to begin the running of the statute of limitation s against a beneficiary who is unaware of the trust’s existence , unless there is no reasonable alternative. Be cause the steps that 5 the government actually took w ere insufficient to put a reasonably dilige nt beneficiary on notice of the trust’s existence, th e plaintiffs’ claims are not time-barred. 6

III.
The fact that plaintiffs’ clai ms are not time-barred does not automatically entitle them to their share of the fund. They still must contend with the fact that the Secretary of the Interio r established an application deadline that plaintiffs failed t o meet. We note at the outset that it would seem somewhat anomalous t o
ex cuse plaintiffs from the six-year statute of limitations bu t allow the Secretary to bar their claims with a deadline that gave beneficiaries approximately five months to apply for their s hare of the f und. We hold that by providing an unreasonably short tim e-21-

period to allow beneficiaries to apply for their share of the fund and failing to provide beneficiaries with adequate notice, theWe agree with the plaintiffs that the government may no t 7 avoid its trust duties on the grounds that the budget and staff of the Department of Interior are inadequate. This circumstance may well exc use any delay on the part of individual employees of th e Bureau of Indian Affairs. But the United States may not evade the lawsimply by failing to appropriate enough money to comply wit h it. -22- Secretary acted contrary to hi s common-law obligations as trustee. Ac cordingly, the Secretary’s deadline is invalid, and plaintiff s should have the right to apply for their share of the fund.

As we discussed above, the Secretary’s minimal efforts t o notifybeneficiaries of the existence of the trust corpu s demonstrate that he was not fulfilling his trust obligations when he formulated the distribution plan. No meetings were held o n 7 tri bal reservations even though the new tribal identities of th e beneficiaries’ Sisseton-Wahpeton ancestors were a matter o f histor ical record. Even if the Secretary did not have a duty t o discover the identity of every lineal descendant and notify him or her personally, he should have used the best means of notic e
rea sonablypracticable to try to notify as many beneficiaries a s possible.

The Secretary makes much of the fact that there were 11,00 0 timely applications, 190 of wh ich were from the Fort Thompson area of South Dakota, where many of the named plaintiffs now live. The fa ct that many managed to find out about the fund, however, i s irr elevant if many whom the Secretary could easily have notifie d did not. The record contains the testimony of several plaintiffs
an dthe affidavit of another that they were living in the Cro w Creek/Lower Brule area in 1972 and had no notice of thei r eligibilityfor a share of the fund. Seventy-four other peopl e signeda list saying that they believed themselves to be linea l desc endants of Sisseton-Wahpeton tribal members but received n o-23-

notic e of the availability of the fund until 1994. One witnes s estimated that there were at least 500 descendants who would notThe Secretary may blame part of the delay (about ten years) 8 on the lawsuit filed by the successor tribes, as well as th e current lawsuit. According to the government, part of the t ime was sp ent finishing the processing of applications for a differen t judgme nt fund before the government could turn to the Sisseton

Wahpetonfund. A BIA official who worked on distributing th e Sisseton-Wahpeton settlement indicated that the other judgme nt fund delayed distribution by as much as five years. There was no reason for th e Secretary to establish a deadline before the governmen t even had people who had time to process the fund’s applications. It is not a legitimate respons e, given the government’s trust obligations, to say that the p urpose of the deadline was to reduce the numb er of applicants to a manageable level. As trustee, th e government has no interest in keeping people from applying fo r their share of the fund. The only legitimate purpose of a d eadline in this context is to prevent applications from continuing t o trickle in after the Secretary is ready to distribute the fund

. Sin ce the deadline set by the Secretary bore absolutely n o relationship to a realistic date of distribution, it was arb itrary.

-24- receive their share of the fund under the Secretary’s distribution scheme.
The Secretary purported to require that beneficiaries of the fund s end in their applications within five months of th e promul gationof the regulations establishing the deadline. Thi s deadline was unreasonably short, especially given the fact t hat the lineal descendants of the Sisseton-Wahpetons who were not members of the three successor tribes did not participate in the lawsui t that led to the creation of the settlement fund and thus had n o special reason to follow the proceeding. They also did not hav e tribal leaders who had reason to follow the proceeding and wh o
cou ldtherefore notify them of its outcome. Moreover, th e Se cretarycould not plausibly argue that this deadline wa s
necess ary(or even reasonably calculated) to distribute the fun d quick lybecause to this day, more than 23 years later, the fun d remains undistributed. 8-25--26-

Accordingly, we hold that the distribution scheme adopted by the Secretary was contrary to his common-law trust obligations and that the deadline cannot serve to bar plaintiffs’ claims to th e fund.

IV.
We reverse the District Court’s determination that plaintiff s’ claims are barred by limitatio ns, and also hold that the Secretary mayno t use the 1973 deadline to bar the plaintiffs’ claims. W e remand to the District Court for proceedings consistent with this opinion.

It is so ordered.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.