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.

Plaintiffs seek to claim their share of a judgment fund

created by Congress to satisfy the federal government's obligations

to the descendants of the Sisseton-Wahpeton Sioux Tribe. The
District Court held that their claims are barred by the six-year

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

complaint for want of subject-matter jurisdiction under Federal

Rule of Civil Procedure 12(b)(1). Because the plaintiff's claims

did not accrue until they had reason to know of the existence of

the judgment fund and how it would be distributed, we hold that

their claims are not time-barred, reverse the decision of the

District Court, and remand for further proceedings.

I.

In the mid-nineteenth century the United States took almost 30

million acres of land from the Sisseton-Wahpeton Sioux Tribe

pursuant to treaties, the terms of which the government never

satisfied. During the Civil War, the military put down a Sioux

uprising in Minnesota and forced 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

three 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 $6,000,000

judgment fund.

It is important to have in mind the precise terms of the

statute that provides for the distribution of this fund. We

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. 1169, 1170. These provisions are now

codified as 25 U.S.C. §§ 1300d-3, 1300d-4, and 1300d-9. They read

as follows:

§ 1300d-3. Upper Council Sioux; membership rolls;

applications for enrollment; finality of

determinations
-4-

(a) The Devils Lake Sioux Tribe of North Dakota,

and the Sisseton and Wahpeton Sioux Tribe of South

Dakota, shall bring current their membership rolls of
-5-

October 25, 1972. The Assiniboine and Sioux Tribes of

the Fort Peck Reservation, Montana, shall prepare rolls

of their members who are lineal descendants of the

Sisseton and Wahpeton Mississippi Sioux Tribe, who were

born on or prior to and are living on October 25, 1972,

and who are entitled to enrollment on their respective

membership rolls in accordance with the applicable rules

and regulations of the tribe or group involved, using

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. The

Secretary's determination on all applications for

enrollment shall be final.

(b) The Secretary of the Interior shall prepare a

roll of the lineal descendants of the Sisseton and

Wahpeton Mississippi Sioux Tribe who were born on or

prior to and are living on October 25, 1972, whose names

or the name of a lineal ancestor appears on any available

records and rolls acceptable to the Secretary, and who

are not members of any of the organized groups listed in

subsection (a) of this section. Applications for

enrollment must be filed with the Area Director, Bureau

of Indian Affairs, Aberdeen, South Dakota. The

Secretary's determination on all applications for

enrollment shall be final.

§ 1300d-4. Apportionment of funds

(a) Basis of apportionment

After deducting the amount authorized in section

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 in

docket numbered 359, plus accrued interest, shall be

apportioned on the basis of reservation residence and

other residence shown on the 1909 McLaughlin annuity

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 fund allocated to all other Sisseton and

Wahpeton Sioux, . . . shall be distributed per capita to

the persons enrolled on the roll prepared by the

Secretary pursuant to section 1300d-3(b) of this title.

§ 1300d-9. Rules and regulations

The Secretary of the Interior is authorized to

prescribe rules and regulations to carry out the

provisions of this subchapter, including the

establishment of deadlines.

Certain aspects of this plan of distribution need to be kept

in mind. The fund was to be divided into four parts, three of

which were to go to three named organized tribes, or their members:

the Devils Lake Sioux Tribe of North Dakota, the Sisseton and

Wahpeton Sioux Tribe of South Dakota, and the Assiniboine and Sioux

Tribes of the Fort Peck Reservation, 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 to

"the lineal descendants of the Sisseton and Wahpeton Mississippi

Sioux Tribe who were born on or prior to and are living on

October 25, 1972, whose names or the name of a lineal ancestor

appears on any available record and rolls acceptable to the

Secretary, and who are not members of any of the organized groups

listed," § 1300d-3(b), as receiving the first three shares. The

plaintiffs in this case claim that they are members of this last

group, and that they have received nothing. In the case of this

last group, the responsibility of preparing a roll of eligible

persons is placed on the Secretary of the Interior, not on any

tribe. The statute further provides, however, that applications

for enrollment must be filed with the area director of the Bureau
-8-

of Indian Affairs in Aberdeen, South Dakota, and that the Secretary

is authorized to prescribe rules and regulations to carry out the
-9-

statute, "including the establishment of deadlines." Section

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 now

recodified at 25 C.F.R. § 61.4(s)(1995). The regulations

established a deadline of November 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 the

deadline fixed in the regulation. The Secretary took various steps

to notify possibly interested persons. These steps will be

detailed later in this opinion.

Many of the plaintiffs in this case live on the Crow Creek

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 meeting on the Crow Creek Reservation. (There may be other

persons similarly situated. The named plaintiffs brought this suit

on behalf of themselves and others similarly situated.) Whether

the plaintiffs actually are eligible lineal descendants, and

whether any of them, individually, had actual knowledge of the fund

earlier than they claim, are questions of fact yet to be

determined. The government's defense of limitations is based upon

its general assertion that it long ago took reasonable steps to

notify interested persons that they needed to file an application

and, in fact, a number of people 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 invalidate

altogether the share of the non-member lineal descendants).

After learning of the fund's existence at the meeting we have

described, the plaintiffs brought this case. They claim that the

procedures used by the Secretary to notify eligible descendants

were legally deficient and amounted to a breach of the government's

fiduciary duty as trustee. The basis of our jurisdiction is the

"Little" Tucker Act, 28 U.S.C. § 1346(a)(2), under which the United

States has waived sovereign immunity with respect to civil actions

founded upon any Act of Congress or any regulation of an executive

department. The jurisdiction of the district courts (as

distinguished from the United States Court of Federal Claims) under

this statute is limited to claims not exceeding $10,000.00, and

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 action

commenced against the United States shall be barred unless the

complaint is filed within six years after the right of action first

accrues." The crucial question, then, is when the plaintiffs'

claim first accrued. The parties agree that "accrual," for this

purpose, occurs when the plaintiffs either knew, or in the exercise

of reasonable diligence should have known, that they had a claim.

The District Court found that the claim accrued in 1972, when

Congress enacted its plan for distributing the settlement funds.

It therefore held the action barred by limitations and dismissed

for lack of subject-matter jurisdiction. (Filing within the

applicable statute of limitations is treated as a condition

precedent to the government's waiver of sovereign immunity, and

cases in which the government has not waived its immunity are
 Judge Fletcher 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 immunity

precludes suit against the United States

without the consent of Congress; the terms of

its consent define the extent of the court's

jurisdiction. The applicable statute of

limitations is a term of consent. The

plaintiff's failure to sue within the period

of limitations is not simply a waivable

defense; it deprives the court of jurisdiction

to entertain the action.

-12-

outside the subject-matter jurisdiction of the district courts.)1

The Court further found, as an aspect of its accrual analysis, that

the steps taken by the government to notify the plaintiff were

constitutionally adequate and not otherwise legally deficient.

This appeal followed.

II.

“[T]here is a presumption that absent explicit language to the

contrary, all funds held by the United States for Indian tribes are

held in trust.” Rogers v. United States, 697 F.2d 886, 890 (9th

Cir. 1983); see also United States v. Mitchell, 463 U.S. 206, 225

(1983). This obligation derives from “a humane and self imposed

policy which has found expression in many acts of Congress and

numerous decisions of [the Supreme] Court” under which the

Government “has charged itself with moral obligations of the

highest responsibility and trust” in carrying out its treaty

obligations with the Indian tribes. Seminole Nation v. United

States, 316 U.S. 286, 296-97 (1942)(footnote omitted). This

“trust relationship extends not only to Indian Tribes as

governmental units, but to tribal members living collectively or

individually, on or off the reservation.” Little Earth of United
-13-

Tribes, 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 this case,

the government points to no statutory language relieving it of

these long-established obligations with respect to the lineal

descendants of the Sisseton-Wahpeton Sioux. Accordingly, the

government had the obligation to act as a trustee in its management

of the judgment fund, and we must judge its conduct “by the most

exacting fiduciary standards.” Seminole Nation, 316 U.S. at 297.

The fact that plaintiffs are beneficiaries of a trust does not

mean that they are exempt from the running of the statute of

limitations. See Menominee Tribe of Indians v. United States, 726

F.2d 718 (Fed. Cir.), cert. denied, 469 U.S. 826 (1984). The

statute of limitations begins to run when a trust beneficiary 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 the trustee, the beneficiary’s duty to

discover 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

(5th Cir. 1967) (footnote omitted) (“The presence of a fiduciary

relationship . . . bears heavily on the issue of due diligence.”).

The beneficiary’s duty to discover his or her claims against the

trust is further diminished when the beneficiary has no idea that

the trust even exists. One of the fundamental obligations of a

trustee is the identification and notification of trust

beneficiaries. See G. G. Bogert and G. T. Bogert, The Law of

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

trust . . . ”). See also Rogers v. United States, 697 F.2d 886,

890 (9th Cir. 1983). A beneficiary may reasonably expect that the

trustee will 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

expected to pursue a claim to the trust in a timely fashion. In

this case, the plaintiffs were wholly unaware that the trust
 The way that courts have historically applied the statute of 2

limitations to claims challenging so-called trust repudiations

provides support for our approach. Where the trustee repudiates

the trust by claiming to hold the trust corpus as the trustee’s

own, the cause of action does not accrue until the beneficiary “has

knowledge of the repudiation.” Sisseton-Wahpeton Sioux Tribe v.

United States, 895 F.2d 588, 593 (9th Cir.), cert. denied, 498 U.S.

824 (1990).

There is authority that where the trustee repudiates the

trust, the statute of limitations will apply “from the date when

the beneficiary . . . by the exercise of reasonable skill and

diligence 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 in

possession of some facts that would have put a reasonable person on

notice of the repudiation of the trust, and in none of them was the

beneficiary justifiably ignorant of the existence of the trust

itself, as is the case here. Cf. Manchester Band of Pomo Indians

v. United States, 363 F. Supp. 1238 (N.D. Cal. 1973) (since

government did not pay out income regularly to Band, a lack of

payments or information did not put Band on notice that government

was mismanaging funds).

-16-

existed. Moreover, they were not in possession of facts that would

naturally have led them to inquire about the existence of the

judgment fund, since neither they nor their tribal leaders were

participants in the original lawsuit. Because plaintiffs had no

reason to know of the existence of the judgment fund and,

consequently, of their possible claim to it, they have a strong

argument that the statute of limitations did not begin to run on

their claim until they received actual notice of the fund’s

existence in 1994. 

2

Though plaintiffs had no knowledge that should have prompted

them to pursue their claims against the fund, their claims still

might be time-barred if the government adequately performed its

duties as trustee. The government made some efforts to notify

beneficiaries of the fund of its existence. In addition to

publishing the regulations governing the fund’s distribution in the
-17-

Federal Register, the government sent notification packets and news

releases to various Indian organizations and newspapers around the
 All of the plaintiffs are members of the Crow Creek Sioux

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 specific

tribes and asked the superintendents of those agencies to post the

notice. The government was able to locate one press release dated

two weeks before the application deadline. The government and

plaintiffs also unearthed three articles from newspapers

distributed in South Dakota about the fund, though the articles in

two of the newspapers appeared less than a week before the

application deadline.

While attempting to notify the beneficiaries of the existence

of the trust and how they could claim their share of it, the

government was in possession of a 1909 annuity pay-roll listing 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 the

names on the list (14 per cent. of the total) were from the Crow

Creek or Lower Brule areas of South Dakota, the areas of South

Dakota where most of the plaintiffs live. As the plaintiffs

3

argue, “It would have been simple to . . . provide concentrated

notification procedures in those areas where the ancestors were

known to have resided. . . .” Appellants’ Reply Br. 15. Given the

high concentration of Sisseton-Wahpeton Sioux ancestors who lived

in the 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 to

them. The government never held such a meeting for any of the

descendants of the Sisseton-Wahpeton Sioux. We cannot say that the
-19-

plaintiffs should have known of their interest in the fund because

a notice was at some point tacked to a bulletin board in the local
 We also note that even if the statute of limitations bars

4

some plaintiffs’ claims, there may be beneficiaries in the group

who were young children or incompetent 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 were

lifted. 28 U.S.C. § 2401(a).

 For this reason 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 sufficient

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 address the plaintiffs’ argument that

the government’s notice procedures did not satisfy constitutional

standards. We are inclined to agree with the District Court on

this point. But efforts that satisfy constitutional standards may

nonetheless violate the government’s fiduciary obligations. A

trustee must do more than simply comply with the Constitution.

-20-

reservation office. We think that notice by publication is

4

insufficient to begin the running of the statute of limitations

against a beneficiary who is unaware of the trust’s existence,

unless there is no reasonable alternative. Because the steps that 5

the government actually took were insufficient to put a reasonably

diligent beneficiary on notice of the trust’s existence, the

plaintiffs’ claims are not time-barred. 

6

III.

The fact that plaintiffs’ claims 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 Interior

established an application deadline that plaintiffs failed to meet.

We note at the outset that it would seem somewhat anomalous to

excuse plaintiffs from the six-year statute of limitations but

allow the Secretary to bar their claims with a deadline that gave

beneficiaries approximately five months to apply for their share of

the fund. We hold that by providing an unreasonably short time
-21-

period to allow beneficiaries to apply for their share of the fund

and failing to provide beneficiaries with adequate notice, the
 We agree with the plaintiffs that the government may not

7

avoid its trust duties on the grounds that the budget and staff of

the Department of Interior are inadequate. This circumstance may

well excuse any delay on the part of individual employees of the

Bureau of Indian Affairs. But the United States may not evade the

law simply by failing to appropriate enough money to comply with

it.

-22-

Secretary acted contrary to his common-law obligations as trustee.

Accordingly, the Secretary’s deadline is invalid, and plaintiffs

should have the right to apply for their share of the fund.

As we discussed above, the Secretary’s minimal efforts to

notify beneficiaries of the existence of the trust corpus

demonstrate that he was not fulfilling his trust obligations when

he formulated the distribution plan. No meetings were held on

7

tribal reservations even though the new tribal identities of the

beneficiaries’ Sisseton-Wahpeton ancestors were a matter of

historical record. Even if the Secretary did not have a duty to

discover the identity of every lineal descendant and notify him or

her personally, he should have used the best means of notice

reasonably practicable to try to notify as many beneficiaries as

possible.

The Secretary makes much of the fact that there were 11,000

timely applications, 190 of which were from the Fort Thompson area

of South Dakota, where many of the named plaintiffs now live. The

fact that many managed to find out about the fund, however, is

irrelevant if many whom the Secretary could easily have notified

did not. The record contains the testimony of several plaintiffs

and the affidavit of another that they were living in the Crow

Creek/Lower Brule area in 1972 and had no notice of their

eligibility for a share of the fund. Seventy-four other people

signed a list saying that they believed themselves to be lineal

descendants of Sisseton-Wahpeton tribal members but received no
-23-

notice of the availability of the fund until 1994. One witness

estimated that there were at least 500 descendants who would not
 The Secretary may blame part of the delay (about ten years) 8

on the lawsuit filed by the successor tribes, as well as the

current lawsuit. According to the government, part of the time was

spent finishing the processing of applications for a different

judgment fund before the government could turn to the SissetonWahpeton fund. A BIA official who worked on distributing the

Sisseton-Wahpeton settlement indicated that the other judgment fund

delayed distribution by as much as five years. There was no reason

for the Secretary to establish a deadline before the government

even had people who had time to process the fund’s applications.

It is not a legitimate response, given the government’s trust

obligations, to say that the purpose of the deadline was to reduce

the number of applicants to a manageable level. As trustee, the

government has no interest in keeping people from applying for

their share of the fund. The only legitimate purpose of a deadline

in this context is to prevent applications from continuing to

trickle in after the Secretary is ready to distribute the fund.

Since the deadline set by the Secretary bore absolutely no

relationship to a realistic date of distribution, it was arbitrary.

-24-

receive their share of the fund under the Secretary’s distribution

scheme. 

The Secretary purported to require that beneficiaries of the

fund send in their applications within five months of the

promulgation of the regulations establishing the deadline. This

deadline was unreasonably short, especially given the fact that the

lineal descendants of the Sisseton-Wahpetons who were not members

of the three successor tribes did not participate in the lawsuit

that led to the creation of the settlement fund and thus had no

special reason to follow the proceeding. They also did not have

tribal leaders who had reason to follow the proceeding and who

could therefore notify them of its outcome. Moreover, the

Secretary could not plausibly argue that this deadline was

necessary (or even reasonably calculated) to distribute the fund

quickly because to this day, more than 23 years later, the fund

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 the

fund.

IV.

We reverse the District Court’s determination that plaintiffs’

claims are barred by limitations, and also hold that the Secretary

may not use the 1973 deadline to bar the plaintiffs’ claims. We

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.