I
105TH CONGRESS
2D SESSION
H. R. 4485
To provide for the restitution and compensation of federally held trust fund
accounts for Indian Tribes, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
AUGUST 6, 1998
Mr. MILLER of California (by request) introduced the following bill; which was
referred to the Committee on Resources
A BILL
To provide for the restitution and compensation of federally
held trust fund accounts for Indian Tribes, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Indian Trust Fund
Judicial Procedure Act’’.
SEC. 2. FINDINGS.
The Congress makes the following findings:
(1) The United States unilaterally assumed the
role of trustee for lands and the income earned from
such lands, owned by Indian tribes and individual
Indians, beginning in 1820 for lands owned by In-
dian tribes and beginning in 1887 with the enact-
ment of the General Allotment Act, for lands owned
by individual Indians.
(2) The Federal courts have held that the
United States, in assuming the role of trustee, is
subject to the same high fiduciary standards that
are applied to other trustees and that the United
States is liable in monetary damages for breach of
those trust responsibilities in the same manner as
are other trustees.
(3) Since the United States, acting through the
Department of the Interior, assumed this trust re-
sponsibility it has collected and disbursed billions of
dollars belonging to Indian tribes and individual In-
dians that was earned from the leasing of their trust
lands and the assets on and under those lands. This
is not money the United States has given to the
tribes and individual Indians; it is their money that
the United States unilaterally agreed to manage for
them as their trustee.
(4) However, based on numerous reports by
congressional committees, the General Accounting
Office and private accounting firms retained by the
United States Government, it is possible that many
additional dollars were never collected or were col-
lected and improperly managed because the United
States failed in significant ways to carry out its
trust responsibilities to Indian tribes and individual
Indians. In particular, these reports have found the
following:
(A) The United States failed to install the
basic trust management systems that are nec-
essary for fulfillment of its trust responsibility.
For example, it never installed an accounts re-
ceivable system, so that it is unable to verify
whether income due a tribe or individual Indian
from a lease of its trust land was in fact paid
by the lessee, paid in the correct amount, paid
in a timely manner or paid and deposited.
(B) The United States is unable to meet a
trustee’s most basic responsibility, that of pro-
viding the trust’s beneficiary with a full ac-
counting of all transactions involving the trust
assets and income.
(5) The United States one effort to reconstruct
the records in order to provide such an accounting,
the so-called ‘‘Arthur Andersen Reconciliation’’, cost
over $20,000,000 just for reconstructing the general
ledger, which is one small portion of the trust man-
agement system for one 20-year period. Yet even at
that cost, the work product has generally been con-
sidered to be inadequate because too many of the
records needed to perform a complete reconciliation
had been destroyed or were missing. As a result, it
would not be a prudent use of Federal monies to
carry out further efforts of this kind since the costs
will be prohibitive while such efforts would fail to
provide an accurate accounting.
(6) Under trust law principles, when a trustee
has lost or destroyed records so that it is unable to
provide the beneficiary with a full trust accounting,
the beneficiary’s remedy is to provide the court with
an estimate of the amount that the trustee lost. The
trustee is liable for that amount, unless it can dis-
prove the estimate, with the burden of proof on the
trustee for all matters. Further, a trustee who is un-
able to provide a trust accounting is liable for the
beneficiary’s attorney’s fees and costs.
(7) The individual Indians whose lands are held
in trust by the United States filed a class action
lawsuit against the Secretary of the Interior on June
9, 1996, in Federal District Court for the District
of Columbia, seeking restitution for all losses they
have suffered as a result of the United States breach
of its trust responsibility in regard to management
of their trust funds. Defending that suit will require
the United States to produce millions of pages of
records, such that the Department of Justice has es-
timated that the cost of gathering the records, pre-
paring for and litigating that one lawsuit could be
extremely costly and the litigation could be ex-
tremely lengthy.
(8) If each of the 200 Indian tribes who have
had funds managed in trust by the United States
filed a similar lawsuit, it would impose undue bur-
dens on the courts and significant costs on the
United States and the Tribes.
(9) The United States has both a legal and
moral obligation to provide these trust beneficiaries
with the same rights and compensation they would
be entitled to if their trustee were a private party
and had engaged in similar breaches of trust. Since
the United States is demanding that the Swiss Gov-
ernment provide a full accounting of the funds its
banks managed for victims of the Holocaust, the
United States must do the same when it is in the
capacity of trustee for money belonging to others.
(10) Because so many of the systems were
never installed and because so many of the records
are missing, it is impossible for Congress or the ex-
ecutive branch to produce any rational estimate of
the United States liability as a result of its long-
standing breach of trust, such that this problem can-
not be resolved through legislation that provides a
certain fixed amount of compensation.
(11) For these reasons, while the United States
has already been sued for breach of trust by the in-
dividual Indian trust account holders, it is in the
best interest of the United States for Congress to
avoid massive litigation by the tribal trust bene-
ficiaries by legislating a procedure that is com-
prehensive in its scope so that when completed, all
trust fund claims have been resolved and extin-
guished, and that will provide the tribal trust bene-
ficiaries with their full procedural and substantive
rights, while placing limits on the amount of time
and cost required to resolve this problem.
SEC. 3. PURPOSE.
It is the purpose of this Act to establish a procedure
that resolves all trust fund liability the United States may
have to Indian tribes in a manner that is consistent with
trust law principles, that provides the tribes with full pro-
cedural rights, that has reasonable time and cost restric-
tions, that consolidates issues and processes to the extent
possible in order to avoid multiple litigation to the extent
that can be accomplished consistent with the right of the
parties, that provides for the United States, as trustee in
breach, to pay all of the costs of such a proceeding, and
that is comprehensive in that it will address, provide com-
pensation for, and then extinguish, the United States li-
ability for breach of trust at all stages of the trust fund
process and for all of the years the United States has man-
aged Indian trust funds.
TITLE 
I—ESTABLISHMENT 
OF
THE TEMPORARY COURT FOR
TRIBAL 
TRUST 
FUND 
RES-
TITUTION
SEC. 101. ESTABLISHMENT OF THE COURT.
There is hereby established the Temporary Court for
Tribal Trust Fund Restitution. The Court shall, pursuant
to the provisions of this title, fully and expeditiously re-
solve all matters involving the management by the United
States, in its capacity as legal trustee, of moneys belong-
ing to Indian tribes.
SEC. 102. COMPOSITION OF THE COURT.
The Court shall consist of 3 judges designated by the
Chief Justice of the United States, 2 of whom shall be
Federal District Court judges and 1 of whom shall be a
Court of Federal Claims judge. The Chief Justice of the
United States shall designate 1 of such judges as the chief
judge of the court.
SEC. 103. RULES OF PROCEDURE.
Except as otherwise provided by this Act, proceedings
before the Court shall be subject to the Federal Rules of
Civil Procedure.
SEC. 104. FUNCTIONS OF THE COURT.
The Court shall be the legal forum within which shall
be carried out the 2-phased procedure set out in this Act
for resolving tribal trust fund breach of trust claims
against the United States. In phase I, the Court shall de-
cide which economic model(s) shall be used to estimate
the liability of the United States for breach of its trust
responsibility of the individual Indian tribes in light of the
fact that the United States is unable to provide an accept-
able trust accounting to the tribes because it never in-
stalled adequate trust management systems and has lost
or destroyed many of the trust records. In phase II, the
Court shall apply those economic model(s) to determine
the United States liability to each tribe that chooses to
be a party to these proceedings.
SEC. 105. SPECIAL MASTER.
(a) APPOINTMENT.—Within 30 days after the judges
are appointed, they shall appoint a special master, a per-
son with expertise in trust law, Indian law, and the appli-
cation of alternative methods for determining economic
loss when relevant documents have been lost or destroyed.
He or she shall be compensated at the same rate and from
the same source that is customary for court-appointed spe-
cial masters, subject to such limitations as are established
by the chief judge.
(b) STAFF AND CONSULTANTS.—The special master
shall, within 30 days of appointment, submit to the chief
judge, for his review and approval, a staffing plan and
a budget for his office. The chief judge shall act on said
submission within 30 days of receipt and shall authorize
the release of necessary funds.
(c) ACCESS TO DOCUMENTS.—Without a subpoena or
other action by the Court, the Special Master shall be pro-
vided full and immediate access to all documents in the
possession of the United States regarding its management
of the trust funds and assets of those tribes that have cho-
sen to participate in the proceedings authorized by this
title. The Special Master shall initiate contempt of court
proceedings against any Federal employee or official who
fails to provide such access or otherwise cooperate with
the Special Master.
SEC. 106. THE PHASE I PROCEDURE.
(a) PLAINTIFF AND DEFENDANT.—During Phase I,
the plaintiff shall be a class consisting of all Indian tribes
that have had funds managed in trust by the United
States. The defendant shall be the United States of Amer-
ica.
(b) PLAINTIFFS’ COUNSEL.—The class of tribal
plaintiffs shall be represented in the Phase I proceeding
by 1 attorney named by each tribe that the court deter-
mines, pursuant to appropriate criteria, is a major stake-
holder on the trust fund issue plus no more than 5 attor-
neys selected by the chief judge from nominees submitted
by tribes that are members of the class of plaintiffs in
Phase I but are not major stakeholders. The selection
shall be conducted in a manner that provides that plain-
tiffs with legal expertise in Indian trust law that reflects
the diverse nature of the different sources of trust income,
such as oil and gas, timber, agricultural leasing, and in-
vestments. Plaintiffs’ counsel shall be compensated at
their usual and accustomed hourly rates and for cus-
tomary expenses, except that the chief judge shall impose
such limitations on the number of hours and the amount
of expenses for which the attorneys may receive compensa-
tion for their work on Phase I. The plaintiffs’ attorneys
shall be compensated from the same source of funds the
Department of Justice uses to compensate attorneys of
parties that are awarded fees and expenses under the
Equal Access to Justice Act when such fees and expenses
are not passed back to the particular agency that was the
defendant in that case.
(c) DEVELOPMENT OF ECONOMIC MODELS FOR ES-
TIMATING UNITED STATES LIABILITY.—The Special Mas-
ter, staff and experts, with full participation of plaintiffs’
and defendants’ counsel and their experts shall, within 18
months from the date of the appointment of the Special
Master, prepare and submit to the court, a set of economic
models that can be used to estimate how much of the bene-
ficiaries’ money the trustee lost as a result of breach of
its trust responsibilities, beginning on the first day that
the United States began acting as trustee. The economic
models shall be based on applicable principles of trust law
and shall use comparative analysis or such other forensic
accounting techniques as the Special Master determines
are appropriate. The models will be used in Phase II to
determine the amount of compensation each plaintiff tribe
is entitled to as a result of the United States breach of
its trust responsibility in its management of that tribe’s
trust funds, beginning at the point at which the trustee
was responsible for the management of the trust assets
for that tribe, but excluding those years for which the
United States provided a trust accounting to that Tribe
that satisfies trust law requirements and excluding those
losses for which the Tribe has been otherwise com-
pensated. The submission to the Court shall consist of 1
or more economic models as the Special Master determines
are needed, in light of the diversity among the tribal situa-
tions and the different kinds of trust assets (e.g., timber,
agricultural land, minerals, investments) that are at issue
in this proceeding, to determine the losses incurred by
tribes as a result of the United States failure to meet its
legal trust responsibility.
(d) OBJECTIONS TO THE SPECIAL MASTER’S SUB-
MISSION.—Within 45 days after the Special Master sub-
mits his or her recommended set of economic models to
the Court, either party may file objections to those rec-
ommendations. The Court, after providing the parties an
opportunity to submit written briefs and to present oral
argument, shall issue its decision on such objections within
90 days after they were filed with the Court. There shall
be no appeal from the decision of the Court.
(e) APPLICABLE TRUST LAW PRINCIPLES.—In deter-
mining the applicable principles of trust law to apply in
developing the economic models and in deciding objections
to those models, the Special Master and the Court shall
first be guided by principles of trust law established by
Federal Indian trust law cases. If there are no applicable
Federal cases on a particular matter, the Court shall apply
trust law principles established by other Federal court de-
cisions on trust law. If there are no applicable Federal
trust law cases, the Court shall apply general principles
of trust law as established by State court decisions. If
there are inconsistencies among the States on a particular
issue, the Court, after giving the parties an opportunity
to be heard, shall select the principle of trust law that
it concludes best reflects the purposes of this Act.
SEC. 107. PHASE II PROCEEDINGS.
(a) INITIATION OF NEGOTIATIONS.—Within 45 days
after the completion of Phase I, the Special master and
his or her staff shall, in the capacity as mediator, begin
to initiate negotiations between each plaintiff tribe and the
United States for the purpose of seeking agreement on
the application of the economic models to that tribe and
then to produce an estimate of the trustee’s liability to
that tribe. The tribe and the United States may introduce
additional evidence to demonstrate why the trustee’s liabil-
ity to that tribe should deviate from that estimate pro-
duced by application of the economic models developed in
Phase I: Provided, That the evidence that may be intro-
duced by the United States is limited to documents it had
previously produced in the course of carrying out its trust
management responsibility.
(b) STIPULATED
SETTLEMENT
PERMITTED.—If,
through the negotiation process, the parties are able to
reach agreement, they shall submit a stipulated settlement
to that effect to the Court, which shall issue an order ap-
proving the settlement, unless the Court determines it is
arbitrary or unconscionable.
(c) EFFECT OF INABILITY TO REACH AGREEMENT—
If, within 18 months from the initiation of such negotia-
tions with a particular tribe, the parties are unable to
reach agreement on the amount of the trustee’s liability,
the Special Master shall terminate the process and shall,
within 45 days thereof, submit to the Court his or her
recommendation for the amount of the liability. The par-
ties shall have an opportunity to submit memoranda of
law and for oral argument before the Court to oppose or
support the Special Master’s recommendation. The Court
shall issue a final order establishing the amount of the
liability within 6 months after the Special Master submits
his or her recommendation to it. There shall be no appeal
from that decision.
(d) FEES AND EXPENSES.—During Phase II, legal
counsel for each tribe shall be paid at his or her usual
and customary fee, plus expenses, from the fund used by
the Department of Justice to pay attorneys for parties
pursuant to the Equal Access to Justice Act, subject to
such limitations on each attorney’s hours and expenses as
are established by the Court. The Court shall also provide
each tribe and the United States with a budget for the
hiring of experts for use during this stage of the proceed-
ings.
SEC. 108. STATUTE OF LIMITATIONS.
The statute of limitations shall not be a defense to
any claim under this Act for any year in which the United
States acted in the capacity as trustee for a tribe unless
the United States can demonstrate that, prior to the date
of the enactment of this Act, it had provided the tribe with
a full and complete trust accounting, as that term is de-
fined by applicable trust law principles, for the year at
issue.
SEC. 109. PAYMENT.
Within 60 days after entry of the Court’s final deci-
sion for a particular tribe, the United States shall pay to
that tribe, from the Judgment Fund Account of the
United States in the Department of the Treasury, the
amount determined to be the United States liability to
that tribe as provided for in the Court’s order. At the
tribe’s option, the payment may be deposited in the tribe’s
account in the Office of Trust Fund Management, Depart-
ment of the Interior, or may be deposited in such other
account as is requested by the tribe.
SEC. 110. EXTINGUISHMENT OF CLAIMS.
Upon receipt of payment by a tribe pursuant to the
procedures established by this Act, all claims that a tribe
may have against the United States for breach of the
United States trust responsibility for management of trust
funds of such tribe, beginning with that stage in the trust
management process at which the trustee is required to
lease the trust asset, shall be completely and permanently
extinguished for the years that were subject to the proce-
dures set out in this title.
SEC. 111. OPTING OUT.
A tribe may, on an account-by-account basis, choose
to opt out of the procedure established by this Act by,
within 1 year of the effective date of this Act, submitting
a motion, accompanied by a resolution from the tribe to
that effect, to the Court. If a tribe opts out of the proce-
dure established by this Act, it may pursue its claims
through direct settlement negotiations with the Secretary
and mediation procedures provided in title II of this Act,
or through litigation under the established legal proce-
dures for bringing claims against the United States, ex-
cept that none of the rights provided tribes by this Act
shall be available to such a tribe, unless the court hearing
that tribe’s claims finds an independent source for such
rights. A tribe that is presently in litigation on a matter
subject to this Act may, at its option, request that the