John G. Roberts, Jr.: We will hear argument today in case 10-382, United States v. Jicarilla Apache Nation. Mr. Shah.
Pratik A. Shah: Mr. Chief Justice, and may it please the Court: Relying on common law trust principles applicable to private fiduciaries, the Federal Circuit imposed on the United States a duty to disclose attorney-client privileged communications to an Indian tribe. That abrogation of the privilege should be reversed for at least three reasons. First, reflecting the sovereign nature of the United States function, the Indian trust context lacks the factors essential to recognition of a private trust fiduciary exception. Unlike in a private trust, government attorneys and other Federal officials owe an exclusive duty of loyalty to the United States, not to the beneficiary. The government pays the cost of trust administration out of appropriated funds, not out of the trust corpus. The government, not the trust, owns the resulting record, and the release of such governmental record, including to a tribe or individual Indian, is governed by specific statutes and regulations as well as the Freedom of Information Act, not the common law. Second, the decision below conflicts with this Court's precedents that distinguish the United States from a private trustee and that reject enforcement of duties governing the administration of Indian property that are not set forth by specific statute or regulation. The fiduciary exception to the attorney-client privilege is premised on a private trustee's general common law duty to disclose trust information, but no statute or regulation imposes such a duty on the United States.
Sonia Sotomayor: Counsel, all of the statutes relating to these funds use the word "trust". Not one statute defines trust and says in any way this is not a fiduciary relationship. To the contrary, in fact, most of the statutes require what would be consistent with fiduciary obligations, and at least one of them that you rely on says "but not limited to". So the issue before us doesn't involve a competing sovereign interest by the U.S. You've conceded that in your cert petition. The circuit below said this is not a case where there is an independent sovereign issue governing the U.S. activities. Just explain to me what's the rationale that would permit a trustee of a trust fund to withhold from the beneficiary the kinds of documents that relate to the management of the fund? If the funds exist for the benefit of the Indian tribe, why aren't they entitled to management documents?
Pratik A. Shah: Okay--
Sonia Sotomayor: That's the part that doesn't make -- that you're not explaining.
Ruth Bader Ginsburg: Mr. Shah, you might want to make your third point. You said you had three points preliminarily, so why don't you make your third point and then respond to the question.
Pratik A. Shah: --Sure, Your Honor. The third point is that the Federal Circuit's decision poses serious practical problems for the government because the general common law duty to disclose which undergirds the fiduciary exception extends to all trust information without regard to the existence of litigation; excepting it implies a broad and burdensome disclosure obligation. For example, there are over 300,000 individual account holders, individual Indian account holders on top of the tribal, tribal account holders. If this Court were to accept the fiduciary exception and thereby ratify the underlying rationale, presumably then any one of those or all of those 300-plus thousand individual account holders could simply call up the Interior Department and request all related trust records outside of the existing statutory and regulatory regime. Now, Justice Sotomayor, let me turn back to your set of questions, and let me start with the first point that you made, which is the statutes here use the term trust; why doesn't that connote some sort of broad fiduciary relationship? This Court has made clear in its precedents, and it dates back to the Mitchell 1, the first decision in Mitchell case, where Congress's use of the term "trust", the Court said, does not imply the full gamut of common law fiduciary obligations. The dissent made precisely -- the dissent in Mitchell made precisely the argument that you're sketching out here, which is when Congress uses a term like trust, we would naturally assume that it implies fiduciary obligations. The majority in Mitchell rejected that notion, and in fact in Mitchell 2 in the Navajo Nation decisions, the Court has continued to reject that proposition. But more -- more than as a matter of precedent I think that makes--
Sonia Sotomayor: But in both -- in all of those cases, counsel, it was a limitation related to competing interests, meaning it was recognizing that there are potentially moments in which an attorney is acting both in the interest of the government and in the interest of the tribe.
Pratik A. Shah: --Justice Sotomayor, with respect, there is no competing interest that I'm aware of that were mentioned in -- in the Mitchell decisions, Mitchell 1, Mitchell 2, or even the Navajo Nation decision. Those were simply -- in Mitchell 1 it was the Indian General Allotment Act, which said that the United States "shall hold in trust" land for the benefit of the Indians. The argument made by the tribe in that case and by the dissenters in the Court was when the Court said you shall hold the land in trust, that implies certain management and other responsibilities for resources related to that land. This Court said no, when Congress uses the term "trust" in the Indian context, that there must be specific statutory regulatory duties that the Court sets out. Let me explain--
Sonia Sotomayor: But that was a jurisdictional question, not a question with respect to -- to the -- to the obligation. You're not seriously suggesting that if you're a trustee of an Indian fund that you can breach your fiduciary duty by simply not exercising care in your investment strategies. So some form of -- of duty exists.
Pratik A. Shah: --Sure, and let me--
Sonia Sotomayor: --from the common law, and the common law has to define that.
Pratik A. Shah: --Well, Your Honor, I agree everything up to the point when you said we go to the common law. Of course there would be in this context some enforceable duties with respect to investment of the funds held in trust, and that's because the relevant statutes, section 161a and 162a, set forth specific investment duties that the government must comply with. Now, as to your other point, that Mitchell 1 and the Navajo Nation--
Sonia Sotomayor: And so why would, if it imposes those duties, protect you from disclosing items that might -- attorney confidences that go to that very act, the very act of investing in the way, even under your definition, that the trust requires you to?
Pratik A. Shah: --A couple responses, Your Honor. The -- the two statutes that you're talking about, 161a and 162a, set forth specific investment duties. They don't say anything about disclosure. The 1994 Act does set forth some disclosure obligations, but they are extremely discrete. There are essentially two disclosure obligations that all of these statutes together impose. The -- the United States must provide an account statement, a quarterly account statement; and the United States must provide the -- the Indian tribes and individual Indians an annual audit. That is the extent of disclosure obligations that Congress has set forth and that the Interior Department by regulation has implemented. Now, to the -- to the extent that your question suggests that the tribes may need more in order to enforce those enforcement duties, I think the -- the account statements and the annual audit goes a long way towards suggesting that if there is a problem, then the tribe may want to try to enforce those duties. The other point I would make is, although the legally enforceable duties under this Court's decisions in Mitchell and Navajo Nation are those set forth by statute and regulation, that doesn't mean the Interior Department doesn't have discretion to provide more information. And in fact, in practice, the Interior Department does provide a much broader swath of information to the Indian tribes regarding these accounts than the two discrete pieces of information that the statutes set forth.
Samuel A. Alito, Jr.: Do you agree that the -- do you agree that the fiduciary exception is well established as a general matter?
Pratik A. Shah: Your Honor, the United States does not contest the existence of a fiduciary exception in certain private trust contexts where the criteria for that exception are satisfied. So the answer is no, we don't, we don't dispute the existence in certain contexts under certain circumstances of a fiduciary exception.
Samuel A. Alito, Jr.: So if this cause arose in a different context with a different trustee, the position of the United States would be that under Rule 501 of the Federal Rules of Evidence there is a fiduciary exception to the attorney-client privilege?
Pratik A. Shah: Yes, Your Honor. It would depend on the circumstances. For example, if it were a private trust and the factors that -- in which the courts, the old English cases, for example, have recognized where the fiduciary exception applies, that is the information is sought solely for the benefit of the beneficiary, the expenses for that legal advice are paid out of the trust corpus, and as a result of that, the resulting legal advice and the resulting records belong to the trust corpus. All of those things give right, as the old English cases say, give right to a common law right of access for the beneficiary to access those.
Ruth Bader Ginsburg: Mr. Shah, you don't have to take a position on that, because you don't represent a private trustee. And the government can accept arguendo that there would be such a relationship, but I don't think you have to defend it.
Pratik A. Shah: Absolutely, the Court need not decide that question in order to reach the question. The Court can assume it arguendo and then go forward. I think the critical point here is, though, that all of the factors that underlie that -- that exception in the private trustee concept are absent here. Here the government is acting out of its own interest. It is paying for the legal advice out of congressional appropriations. The government owns the records at issue by virtue of the Federal Records Act, by virtue of Interior Department regulations, which are cited in the back of our brief make very clear that the government owns these records, and because they are governmental records their disclosure is not governed by the common law. There is a highly--
Samuel A. Alito, Jr.: The thrust of what -- my understanding of the thrust of what Justice Sotomayor was asking is something like the following: It's easy to understand how there can be competing government interests when you're talking about some, the management of lands, things of that nature. But when you're just talking about managing funds, what competing interests can there be in practical terms? If you assume arguendo that this exception applies to a private trustee, why should it not apply to the government in practical terms?
Pratik A. Shah: --Sure. Let me provide two responses, Justice Alito. First, I think as a formal position I don't think our position turns, as a formal matter, on the existence of a specific competing duty. I think such a rule would overlook the ways in which the U.S. inherently, United States inherently differs from a private trustee. And I think that's especially true in the light of the complex multifaceted ways in which the government interacts with Indians and Indian tribes. Those sovereign obligations extend to law -- providing law enforcement, educational duties, health services. One subset of those duties are the type of trust responsibilities at issue in this case. Now, to be more concrete, I think, even putting aside that larger framework which may create tensions between the United States and with -- and the Indian tribes in certain circumstances, I think even in the trust fund, purely in the trust fund context that we're talking about, there could be at least tensions that arise. For example, the D.C. Circuit in the Cobell case when it talked about the accounting obligation that it imposed on the government, it made clear that it's not the same accounting obligation that would apply at common law. And the reason the D.C. Circuit gave was because the United States would be taking that -- performing that obligation at the expense of taxpayers. There are budgetary constraints that the United States must take into consideration as a sovereign. Maybe that's not a specific competing obligation in the formal sense, but I think it's -- it's a factor that distinguishes the United States from a private fiduciary. Also, there are -- for example in our brief we discuss one of, just as an example, one of the documents at issue in this case, which involves a judgment by a tribal court seeking to attach funds from an individual Indian money account. The United States acts as a trustee with respect to that individual -- Indian account. It may be the case that the United States consistent with its fiduciary obligations in that sense could simply pay out the judgment, but I think there would be room for the United States to take a closer look at the judgment, to make sure that it complies with, for example, the Indian Civil Rights Act or basic due process--
Stephen G. Breyer: Suppose we have the Union Trust Company, a private company that has 5,000 trust accounts. One day the president of the company says to the lawyer: Mr. Smith's account is in a special situation. Will you please look into what we should do for him as trustee? There's no implication for any other account. There's no threat of litigation. I just want to know what we're supposed to do. Now, I take it the document that is subsequently written would be open for Mr. Smith to get; is that right?
Pratik A. Shah: --Yes, Your Honor. We do not--
Stephen G. Breyer: Yes, okay. Now, why should the government be treated differently were the situation identical to what I just proposed?
Pratik A. Shah: --I think the response is, Your Honor, is that the situation will never be identical to the hypothetical you posed because the government inherently differs, and let me set out--
Sonia Sotomayor: But this argument, frankly, would be -- we wouldn't have any need for 501, because if as an evidentiary rule the government is always different, then there is no situation in which fiduciary duties in common law would ever exist.
Pratik A. Shah: --To be clear, Justice Sotomayor, the government is not arguing that no common law exception to the attorney-client privilege can apply to the government or that Federal Rule 501, Federal Rule of Evidence 501 is otherwise inapplicable. We're making a much more limited argument that this particular common law fiduciary exception is not applicable to the government, and that is because the premise of that fiduciary exception does not apply.
Sonia Sotomayor: Is there -- is there any greater value to a fiduciary duty than to manage the account for the benefit of the beneficiary? That's the very essence of what a trust means, and so I'm having a hard time understanding not a competing interest situation where you're addressing a different statutory requirement, but merely -- and that's what this case was presented as, merely the management of the trust. So what you're, it seems to me, you're arguing is there is no duty. You're saying it's all defined by statute only, but you're rendering -- there's no need to use the word "trust" because it wouldn't be a trust.
Pratik A. Shah: Well, Your Honor, I don't think that those two things are inconsistent. The fact that we don't look to the common law to fill in all of the duties doesn't mean that the government doesn't have duties in this context. It has very specific duties, to invest the funds properly, to invest the funds as set forth in the statutes. What this Court has said could not be done is to look at the general common law to create obligations on the government.
Stephen G. Breyer: I would like to get an answer to my question.
Pratik A. Shah: Sure.
Stephen G. Breyer: My question, to go back to it, was imagine that the government has a thousand trust accounts for a thousand tribes.
Pratik A. Shah: Okay.
Stephen G. Breyer: And imagine that several of them consist of nothing more than $500,000 in cash.
Pratik A. Shah: Okay.
Stephen G. Breyer: And one day the Secretary of the Interior says to a lawyer: I fear there is kind of a difficult fiduciary problem arising into account number 302, which is owned by such and such tribe. There is no threat of litigation. As far as I can tell, the answer to this will have no implication for anything else in the government. Will you please look at it and give me a memo what to do? Now, why should that memo not be given to the lawyer for the tribe if in the identical case of the Union Trust Company you would give the lawyer -- the memo to the beneficiary?
Pratik A. Shah: A couple of reasons, Your Honor. First, as this Court recognized, starting back in 1912 in the Heckman case, and reiterated in the Candelaria and Minnesota cases after that, is that the United States is not acting simply out of the beneficiary's interests. So in the hypothetical, the original hypothetical that you posed in the corporation or the bank that was acting as a trustee, there the trustee is simply acting out of its fiduciary obligation solely to benefit the beneficiary. That is not how the governments work. As this Court made clear, the government is acting not out of the beneficiary's interests, it is acting out of its own sovereign interest in managing the statutes and regulations that govern the administration of Indian property. That's a fundamental difference.
Stephen G. Breyer: You're saying, one, we're not really a trustee totally?
Pratik A. Shah: Yes.
Stephen G. Breyer: Okay. Now, if we treated -- the courts treated you as a trustee really and totally--
Pratik A. Shah: Sure.
Stephen G. Breyer: --in this very limited situation I described, what harm would befall the government?
Pratik A. Shah: Well, Your Honor, we would still win, and here's why. The factors that -- even assuming a common law trustee, the fiduciary exception doesn't apply automatically at all common law trustees. There's several things that underlie that fiduciary exception. One, the -- the -- the advice sought is typically paid for out of the trust corpus, and as a result of that fact, the trust itself owns the records. Those are the principal two factors that the cases recognizing a fiduciary exception rely upon to create a common law right of access of the beneficiary to such records. None of those factors are present here. The government pays for these -- for -- for the cost of administration, including legal advice, out of congressionally appropriated funds. The records resulting from that advice belonged to the government. The government owns those records, both as a matter of statute and regulation. And the disclosure of those records is subject to a highly reticulated regime. There are statutes, there is regulations, there is the Freedom of Information Act. All of that would be bypassed if this Court were to accept the fiduciary exception in this context.
Ruth Bader Ginsburg: Mr. Shah--
Anthony M. Kennedy: Other than the time and expense of going through voluminous records, which is obvious, is there any other harm to the government in being required to show that there's a competing interest that makes disclosure unnecessary or improper?
Pratik A. Shah: Yes, Your Honor. As I said to Justice Alito, it may not always be that the government can point to a specific competing interest in the sense that Justice Sotomayor is talking about, a competing statutory interest. But there are inherently these tensions, budgetary concerns, other ways in which the United States interacts with Indian affairs.
Ruth Bader Ginsburg: --Is one -- is one of them shielding government actors? I mean, from what you said so far, on the one hand you recognize that it is what we call a guardian, the guardian-ward relationship between the United States and the tribe. But what you seem to be suggesting is that the government has a dual focus, and one is its guardianship relation to the tribe, but the other is these are government actors and the government is also interested in shielding its actors. Is that -- is that it or is it a more nebulous interest?
Pratik A. Shah: Well, Your Honor, I think it could be more nebulous -- but -- but there -- I think there is a real chilling concern. And I think this dovetails into Justice Kennedy's question, that the Interior Department, in order to properly administer, to carry out the statutory and regulatory duties, it often needs to seek the legal advice of -- of the lawyers in the Interior office or in the Department of Justice. In order to avoid the chilling the full and frank seeking of rendering of legal advice, the same purposes--
Antonin Scalia: Well, this is just the general purpose behind the exception to 301, right, the -- the exception for providing attorney's advice. The ordinary private litigant doesn't have to show, when he refuses to turn over attorney advice, that there's some conflict which would make it harmful for him to turn that over, does he?
Pratik A. Shah: --Not as a general matter, Your Honor. If -- if -- if we were in the private trustee context and a court were to decide that the fiduciary exception applied--
Antonin Scalia: Not in the trustee context. I'm just talking about the normal operation.
Pratik A. Shah: --Oh, absolutely, Your Honor. The justifications are general in nature and there isn't an obligation to--
Antonin Scalia: And -- and so, once you establish that this isn't the normal trust complex, we apply the normal Rule 301 law, and -- and that does not require the person who declines to turn over the information to show why it would really hurt him to turn it over, right?
Pratik A. Shah: --I think that's exactly correct, Justice Scalia.
Ruth Bader Ginsburg: How many -- how many of these mismanagement suits are there? Do you have any estimate?
Pratik A. Shah: Yes. Currently there are about 90 such pending suits, counting all of the district courts as well as the Court of Federal Claims. And -- and -- and of course, this issue could arise in any of those cases. Let me get back to one of Justice Sotomayor's questions, the -- the initial question about the fact that the Congress has used the term "trust". I think as a matter of precedent, both the Mitchell decisions and the Navajo Nation decisions, I think those are binding, controlling precedent, and the Court should not deviate from those precedents that say a statute or regulation must define the duty. But beyond the binding nature of those precedents, I think they make sense from first principles as well, and let me try to explain why. The -- the -- the term "trust" has been used by both Congress and the courts in a variety of ways, often in a variety of imprecise ways, when it comes to the relationship between the United States and Indians and Indian tribes. Courts and Congress have used the term when it comes to providing law enforcement, when it comes to providing educational services, health services, none of which are really the type of private common law trust that we know. And even in scenarios where there is a discrete property interest that might bring us closer to the common law context, this Court has used -- this Court and Congress has recognized that "trust" can mean a lot of different things. It can mean the type of bare trust that was at issue in Mitchell 1, the Indian General Allotment Act, when the trust was really simply to avoid alienation of the land. It may mean specific investment duties, as we have here. But the point is that there is no "one size fits all" trust terminology, and so that's why it makes sense for this Court to require Congress to set forth the specific duties and statutes, and the Interior Department to set forth specific duties and regulations before it implies such a sweeping obligation on the United States. I think it also flows from a more general principle of a reluctance to hold the United States to common law duties when there's an existing statutory and regulatory regime. I think for all of those reasons, not only as a matter of precedent, but as -- as a matter of principle, I think the -- the -- the fiduciary exception would -- would not apply here.
Anthony M. Kennedy: I hadn't thought about your argument until this -- until you made it this morning, that if there -- if -- if the tribe is correct that it owns these documents and gets -- can get them anytime, but the -- the -- the trial court here divided the documents into five categories.
Pratik A. Shah: Yes, Your Honor.
Anthony M. Kennedy: As to some of those categories it -- it denied -- it denied production.
Pratik A. Shah: Yes, Your Honor, but those--
Anthony M. Kennedy: And I take it did that in the context of recognizing the attorney-client privilege, including work product, which were the accountant's records.
Pratik A. Shah: --Right. As I understand it, you're right, Justice Kennedy, that most of the documents that the -- the trial court said the government didn't have to produce were, as you stated, attorney work product privileges -- privileged documents, and those the trial -- the trial court said that no fiduciary exception would apply to the attorney work product privilege. And it was on that basis that it allowed the government to withhold the documents. If there are no further questions, I would like to reserve the remainder of my time.
John G. Roberts, Jr.: Thank you, Mr. Shah.
Pratik A. Shah: Thank you, Your Honor.
John G. Roberts, Jr.: Mr. Gordon.
Steven D. Gordon: Mr. Chief Justice, and may it please the Court: The Jicarilla Apache Nation has sued the government for mismanaging millions of dollars of its trust monies. No trustee in this situation, including the government, is entitled to withhold the legal advice that it has received about managing the beneficiary's money. The beneficiary is entitled to see that legal advice, so that it can determine whether the trustee followed the advice.
John G. Roberts, Jr.: It's -- you don't doubt that in this context sovereign commands would trump trustee obligations, do you? In other words, if Congress--
Steven D. Gordon: I -- I -- I do not -- I do not, Mr. Chief Justice.
John G. Roberts, Jr.: --Okay.
Steven D. Gordon: The -- the notion of -- the issue here is an issue of evidence, and it is controlled by Federal Rule 501, which specifies that Federal courts that resolve claims of privilege based on common law principles. Under the common law, a trustee cannot assert the attorney-client privilege to withhold from a fiduciary legal advice about management of the trust. That, I submit, is the end of the analysis.
Samuel A. Alito, Jr.: Well, what do you make of the fact that the Uniform Trust Code reserves decision on the question whether there is a fiduciary exception to the attorney-client privilege? That seems to suggest that as a general matter, this is not as well-established as you seem to argue.
Steven D. Gordon: Your Honor, there are very -- there are a handful of States that have not recognized the fiduciary exception, but there is no Federal circuit that has refused to recognize it. Indeed, all of the Federal circuits that have considered it have adopted it, and it is recognized in both, as we stated in our brief, the Restatement of Trusts and the Restatement of the law Governing Lawyers.
Ruth Bader Ginsburg: Mr. Gordon--
Antonin Scalia: Has it ever been applied, to your knowledge, where -- where it was not the case that the trust paid for the attorney's advice out of the trust funds and where the trust did -- where -- where the trust owned the papers that consisted of the attorney's advice? Is there any case where those two conditions or either one of them did not exist where the -- the trust was required to turn over the attorney's advice?
Steven D. Gordon: Justice Scalia, I -- I cannot cite a specific case--
Antonin Scalia: Yes, but, see, that's the argument of the government, that the exception, the trust exception to the extent that it exists, was based principally upon the fact that these papers belonged to the trust and that the attorney's advice had been paid for by the trust, so of course the trustee is entitled to get it.
Steven D. Gordon: --But that's not correct, if -- if I may, Mr. Justice. If you look at the seminal American decision, the Riggs Bank decision that's cited in both briefs, they talk about the rationales and they said that the first rationale is that the trustee acts as a proxy for the beneficiary in obtaining the advice. The second rationale is that the trustee has a general duty to disclose relevant information to the beneficiary. The Court mentioned that one factor that it would look at was who had paid for the legal advice, but it did not suggest that that was determinative, and indeed subsequent case law has made clear that it is not, and the Restatement says explicitly that who paid is not the controlling factor.
Antonin Scalia: But you don't have a single case?
Steven D. Gordon: Not that I can cite right now. But it would be--
Ruth Bader Ginsburg: --I thought Riggs -- you said Riggs was a case where the trust fund paid the lawyer, and the Court distinguished cases where that wasn't so, where the trustee was paying the lawyer for the trustee's own protection, and the Court went out of its way to say we are dealing with a case where the lawyer is paid out of trust funds. In Riggs, the -- seminal case, right?
Steven D. Gordon: --Yes, Your Honor. But the issue -- this is, I submit, letting the tail wag the dog. What we are talking about is money that belongs to the beneficiary. We're talking about money. We're not talking about a bare trust. We're talking about a full-fledged trust under Mitchell 2. Indeed, this Court in Mitchell 2 said that trusts involving the management of Indian money were full-fledged trusts. And in that situation for the government to say that, while any private fiduciary would be obliged to show to the beneficiary the legal advice it's received when there's an issue about whether it's fulfilled its fiduciary duties, it's different because we've spent our hard-earned money on these lawyers and we own the records in issue. I mean, that doesn't make sense. And basically as a matter of discovery, which is where we are right now, the posture of the case, whenever you seek discovery, in virtually all of those circumstances the documents in issue are going to belong to the opposing party.
John G. Roberts, Jr.: Counsel, the attorney-client privilege is policy-based and I'm concerned about the policy implications of your position. Our system has concluded that it works best if people have candid advice from their lawyers, and my concern here is if you're a lawyer -- you are a lawyer -- and -- and you're asked for your advice by a trustee--
Steven D. Gordon: Right.
John G. Roberts, Jr.: --and if you know that that is going to be shared with the beneficiary, you're going to give bland, mushy, hedging advice rather than direct and candid advice to the trustee, because it's going to be shared more widely beyond the trustee. And that's -- that hurts not only the trustee, but also the beneficiaries, whose trustee does not have candid legal advice.
Steven D. Gordon: My response to that would be twofold, Your Honor. The first is that that same argument can be made for any private fiduciary, yet the courts have felt that the more important relationship is the relationship between the trustee and the beneficiary, that that trumps the need for or the desirability for private discussions between the--
John G. Roberts, Jr.: So how does -- I appreciate the point, but how does a trustee get candid legal advice? In every case, isn't the -- the lawyer -- concerning his dealings with the beneficiary, with the trust: I don't know if I have to do this or I have to do this.
Steven D. Gordon: --Right.
John G. Roberts, Jr.: And it seems to me if the -- if the information is always going to be shared with the beneficiary, the trustee is always going to get hedged advice.
Steven D. Gordon: Well, if it's never shared, Your Honor, then it leaves it at the option of the trustee to selectively waive the privilege when it's to its advantage in a breach of trust suit.
Antonin Scalia: No. Why can't the trustee say: I'm going to hire my own lawyer? I'm not going to pay this lawyer out of trust funds, so it will be my lawyer, and his advice is only to me and serving my interests? Why wouldn't -- why wouldn't that suffice?
Steven D. Gordon: I think the issue, Your Honor, is whether that, in fact, is what the trustee is seeking. If the trustee is seeking advice about personal liability, then I certainly agree that the trustee could do that. If the trustee instead is seeking advice, regardless of who pays for it, but is seeking legal advice about how the trustee should manage money belonging to the beneficiary--
John G. Roberts, Jr.: Well, that's always a question of liability. If he messes up and doesn't manage it the way he's supposed to, he will be liable. So the distinction you draw doesn't seem to me to be a workable one.
Steven D. Gordon: --Well, Your Honor, I -- I submit that the whole issue is if there is a suit for breach of trust, which is the precondition for all of this, whether in that circumstance the trustee is obliged to produce the legal advice that it has received so the beneficiary can be--
Antonin Scalia: The trustee cannot hire his own lawyer, you're saying. So long as he's a trustee, he cannot hire his own lawyer to get advice on how to manage the trust in a way that will avoid his liability. He just can't do it, right? Trustees can't--
Steven D. Gordon: --Yes, Your Honor, that's the position. And that puts the government in no different position than private beneficiaries or ERISA beneficiaries or any other sorts of beneficiaries.
Anthony M. Kennedy: What's your best case that you have on that in the private trustee context? I had thought your answer was going to be that in that case, the fact that the payment is made by the trustee out of the trustee's own funds and not out of the trust funds might be dispositive and might give him the privilege. But you -- you seem to say, in answer to the questions from the Court, that, other than this distinction you make between what the personal liability is and how he ought to manage the trust, which I think is a murky distinction, that the documents have to be disclosed. What's your best case for that?
Steven D. Gordon: Justice Kennedy, let me respond to that. And I agree that who is paying for it -- if the trustee is paying for it out of his own or her own pocket, that is a factor that certainly should be looked at and would be entitled to -- to some weight in terms of what the purpose of the advice was for; but ultimately the issue is whether the trustee is seeking to protect personal interests, protect against a claim of liability, for example, or whether is -- the trustee is looking for advice about how to manage the beneficiary's money.
John G. Roberts, Jr.: So I'm the trustee, and I say I would like legal advice as to whether I should renegotiate this lease with the government.
Steven D. Gordon: Yes, Your Honor.
John G. Roberts, Jr.: Now, I want that advice so I manage the trust correctly, and I'm concerned if I don't manage the trust correctly I'm going to be sued. Now is the document from the lawyer responding to that inquiry privileged or not?
Steven D. Gordon: I think, Your Honor, that if it focuses on how to manage it properly, then -- and it's prospective, then I think that the -- it -- it is not privileged. If, instead, you posit, you know, this is what I did and I'm concerned I may have screwed up, do you think I'm liable, then I think a different answer may obtain.
John G. Roberts, Jr.: So if he says this is what I did and I might be liable, it's privileged. If he says this is what I'm going to do--
Steven D. Gordon: Please tell me what to do, yes.
Anthony M. Kennedy: Which means you can't get preventative advice, which is one of the most important kinds of advice an attorney can give.
Steven D. Gordon: Well, Your Honor, I agree preventative advice is the most -- is among the most important one can give. But why should the government be in a different position with regard to this than the private beneficiary?
Stephen G. Breyer: I have a question on that particular point, and there may be an obvious answer to this which I just couldn't find. But if the lawyer is in the government and he writes a memo, then -- and if it's available to a litigant who litigates against the government, as it would be here, then why isn't it available to the entire world via the Freedom of Information Act?
Steven D. Gordon: Your Honor, the Court said in the Sears decision, which is the cited in our brief -- I believe it's in footnote 16 -- that citizens' access rights under FOIA are not necessarily coextensive with--
Stephen G. Breyer: That's certainly true, they're not. But I just wonder, what is it in FOIA that would make this not available to the world?
Steven D. Gordon: --That, Your Honor, and also the fundamental--
Stephen G. Breyer: Well, that just -- that just says it may or may not be coextensive. Reading the statute, it says you have to make all interagency or all memos available of a certain type, which I think this would fall into. Then exception 5 protects, among other things, attorney-client memos that are privileged because they're inter-agency or intra-agency memos that would not be available by law to a party other than an agency in litigation.
Steven D. Gordon: --Right.
Stephen G. Breyer: Now, they are available if you win. And so, if you win that exception doesn't seem to apply. And if it doesn't seem to apply, that's what was -- then the whole world can get this memo. And what I'm wondering is there must -- either there is a very obvious answer to that, which there could be, or there isn't. If there is an obvious answer, that's the end of it.
Steven D. Gordon: I would say--
Stephen G. Breyer: If there isn't an obvious answer, I'll have to go away and worry about it.
Steven D. Gordon: --I would say, Your Honor, that this Court's decision in Julian, where it said that different classes of persons may have different rights under FOIA -- the right we are talking about here is the right of the beneficiaries. We're not talking about the citizen's right to see how Indian trust monies have been managed.
Stephen G. Breyer: I know you don't want that, and what I'm looking is how you prevent that.
Steven D. Gordon: But I believe that under the precedent in Julian, that it would be that what we're talking about here is access to Indians whose money is being managed.
Samuel A. Alito, Jr.: If we assume for the sake of argument that a private trustee may, using the private trustee's own fund, hire an attorney to obtain prospective advice about liability, does that doom your argument here for the reason that the government claims it has no ability to set up a system like this, to have some attorneys in the solicitor's office provide advice regarding the management of the funds and other attorneys in the solicitor's office provide advice regarding -- regarding the possibility of prospective liability in light of all of these suits that you mentioned?
Steven D. Gordon: Well, Your Honor, again I come back that the trustee is entitled where the issue is liability, rather than how to manage the money. The -- that gets into an area that would not be subject to the fiduciary exceptions. So if that is the focus of the advice, a private beneficiary wouldn't have to give up that advice and we don't contend that the government should, either. But where, as here, all of the documents are general documents that deal generally with how to manage Indian trust funds--
Antonin Scalia: --Again, as the Chief Justice pointed out, that seems to me an artificial distinction. What I ask from -- for from the attorney is advice as to how I can manage the trust so as to avoid liability. I mean, the -- the two are connected. You can't separate out advice as to how to manage, how to manage the trust from advice as to how to avoid liability. In the -- in the context of asking, of a trustee's asking advice, the two are the same.
Steven D. Gordon: --Well, Your Honor, at -- at some logical level there is a link there that can never be severed, but I submit, respectfully, that the government, when it's getting advice about managing trust funds, is not really focused on its liability. The government's liability, after all, is much more circumscribed than private fiduciaries, in any number of ways. It is seeking legal advice about what is the proper way to invest, can we do this, can we pool funds, can we do -- you know, can we make a certain type of investment or is it prohibited to us. And advice of that nature is advice to which the beneficiary is entitled. A private beneficiary -- the beneficiaries of private trusts are entitled, and Indians, whose money is being managed because the government has taken on itself by statute and said, we are going to take control of your monies and we're going to manage them, have no lesser right to get access to this highly relevant information when they litigate for breach of trust.
Ruth Bader Ginsburg: You make a distinction, I -- I take it, between attorney-client privilege and work product. Initially, you were seeking both on the theory that the tribe is in fact the client, but apparently you are not pressing that point any more about work product?
Steven D. Gordon: In fact, Your Honor, there is some case law that says the fiduciary exception can be applied to -- to work product. We did not press that point in the Court of Federal Claims. We -- focused our request for documents on attorney-client, not on work product.
John G. Roberts, Jr.: --So under your theory if there's a claim of privilege on -- on -- on the government's behalf, presumably the district court would conduct an in-camera review to determine whether it was retrospective for liability or prospective for responsibility?
Steven D. Gordon: Yes, Your Honor, which is exactly what happened here. The Court of Federal Claims reviewed all of the documents in camera and made a document-by-document determination, which is, of course, the standard approach when you're talking about attorney-client privilege. It's done on a document by document basis.
Antonin Scalia: Did it do -- did it do on that basis, retrospective versus prospective?
Steven D. Gordon: It didn't come up, Your Honor, because there weren't any retrospective wants.
Sonia Sotomayor: There were no prospective, is that -- did you--
Steven D. Gordon: They're all prospective, Your Honor. They're all prospective. The--
John G. Roberts, Jr.: Well, they -- they could be retrospective, too, right? The government exposes itself to liability, obviously, in these areas as well. That's the basis for your suit, right?
Steven D. Gordon: --Yes, Your Honor. The -- I want to pick up, I believe it was on a comment that you made, Justice Sotomayor, when you said that under the government's theory there would be no need for Rule 501. And indeed, they say that it's not enough. 501 on its face says apply common law principles. And the government's argument is that's not enough unless there's some other statute that requires common law principles to be applied to this. Now, this is a neat trick. You just read 501 out of the Rules of Evidence when it comes to the government, notwithstanding that 501 itself says it's to be used to determine privilege claims by the government, and that's reinforced in Federal Rule of Evidence 1101, which specifically says that the Rules of Evidence are to apply in the Court of Federal Claims.
John G. Roberts, Jr.: I suppose the government as a whole has an obligation to act in the best interests of the citizenry, right? Why doesn't the same theory apply to any citizen? Look, government, you're supposed to -- you're acting in a fiduciary statute -- status with respect to me. You're supposed to be acting in my best interests. If you're getting advice from the, you know, Department of Justice about what to do, I'm entitled to get that.
Steven D. Gordon: Your Honor, it -- I think that that could pick up on the same distinction that the Court has already drawn in Mitchell 1 and Mitchell 2, between bare trust and a full-fledged trust. The government may have a general duty to act in the interests of all citizens. Indeed, I think we would all agree with that. But that does not mean that the government is engaging in the conduct of a full-fledged trust with respect to citizens. It's not. Its relationship to citizens day in and day out is akin to, in fact maybe even a level below, the bare trust relationship that was at issue in Mitchell 1. So, we're not proposing a -- a sweeping new rule here. It's the government that's proposing to transform this Court's jurisprudence about Indians, because the notion that the only enforceable obligations it has are those set forth in statute or regulation, were the Court to adopt that, it would be overruling its decision in White Mountain Apache.
John G. Roberts, Jr.: Are there any other -- are there any other areas in which the government's relationship to particular groups of citizens is that of fiduciary to beneficiary?
Steven D. Gordon: Yes, Your Honor.
John G. Roberts, Jr.: What are some of those?
Steven D. Gordon: Well, the -- the principal one we could find, which is cited in our brief, is with respect to government retirees who make voluntary contributions to their fund, and the government's argument here could be applied to them.
John G. Roberts, Jr.: And your argument could be applied to them?
Steven D. Gordon: Yes, Your Honor, and I'm happy for it to be. I believe it should be.
John G. Roberts, Jr.: So if I'm a government retiree, I have the ability to get the legal advice that whoever it is that runs that trust gets?
Steven D. Gordon: Yes. I might add, Your Honor, fortunately it's not the Bureau of Indian Affairs that runs that.
Stephen G. Breyer: Does that happen a lot? I mean, I -- I -- I'm not -- does that happen a lot? I mean, are there a lot of instances where the lawyers who work for all -- the retirement funds are huge. There must be cases coming up all the time. And all the advice of the lawyers is just available--
Steven D. Gordon: Your Honor, no, frankly it hasn't come up that much with -- in terms of Federal retirees. There's the Cavanaugh v. Wainstein case that we cite in our brief which is about the only published decision I've been able to find. The fact of the matter, I -- I was being humorous a moment ago, but the fact of the matter is that the government retirement funds have been, it appears, run quite well and there have been relatively few claims brought against them. There's a reason that there are a bunch of pending cases regarding Indian--
Stephen G. Breyer: --I know that. I'm just worried about the -- the attorney-client privilege is somewhat sacred, and suddenly making everything available to the whole public has got me worried. And I looked at that Sears case. I didn't see anything there that eases my concern. And then you referred to a different case, the name of which I forgot, and I could not find.
Steven D. Gordon: --That's the Julian case, Your Honor.
Stephen G. Breyer: Is that in the--
Steven D. Gordon: I'm sorry, it's not cited in our brief.
Stephen G. Breyer: --How am I going to find it? I couldn't get how you spell it.
Steven D. Gordon: I will -- it -- 486 U.S. 1, 1988, Your Honor. The -- there is another inconsistency in the government's position here that I would like to highlight for the Court, if I may. That is this: The government relies on the common law in the first place to say it has a privilege. There's no statute that gives the government attorney-client privilege. So it relies on common law saying: We have an attorney-client privilege. Now, that's fine under Federal Rule 501. But the government says, while it can rely on common law, Jicarilla cannot rely on that same common law to establish the limits on the privilege it's claiming. This Court described that sort of argument as "heads I win, tails you lose. " and said that it can't be right. And I submit that it can't be right here. The--
Ruth Bader Ginsburg: The government is maintaining throughout that it wears two hats. On the one hand it is a guardian or a trustee, and on the other hand it is the sovereign. So it's the latter, the government's claim that it is the sovereign, that makes the difference, it's not the--
Steven D. Gordon: --I agree, Your Honor, that that's their claim. But the government hasn't shown how the fact that it is the sovereign, which we certainly concede, makes any meaningful difference for purposes of the issue presented here. The cases it cites establish that the government, because it is sovereign, in some instances has broader authority than a private trustee would to help out the beneficiary. And I believe that that is--
Anthony M. Kennedy: But it also has broader authority, and that's just their point, I take it, for many other areas. The sovereign can't easily divest itself of its responsibilities. A trustee can so conform and shape its business that it doesn't have conflicts. A government just can't do that.
Steven D. Gordon: --Well, Your Honor, I agree, but the issue of conflicting, competing interests, first of all it arises in the private trust context and it arises frequently. Anytime you've got a life beneficiary and a remainderman, you've got a potential conflict between the beneficiaries; and this issue of conflict has led to the development of the duty of impartiality for private trustees; and it's discussed at length in section 79 of the Restatement. So the notion of competing interests is not unique to the government. The government may have some different competing interests than a private trustee might have. That's certainly conceivable. And if it does, the existence of a specific competing interest may affect whether the action that the government takes is or is not a breach of trust.
Antonin Scalia: We're not talking here about competing interests. I mean, the example you give of -- of the life beneficiary and the remainderman, those are interests of the beneficiaries that conflict.
Steven D. Gordon: That's correct, Your Honor.
Antonin Scalia: We're talking here about an interest of the trustee that conflicts with what he is supposed to do, with respect to the person who is the beneficiary of the trust. That -- that's a totally different situation.
Steven D. Gordon: Well, Your Honor, I submit that it's not totally--
Antonin Scalia: And ordinarily if there is that kind of a conflict where the trustee has a personal conflict, he has to step down as trustee. You can't continue to be trustee when you -- your own financial interests, for example, are against the financial interests of the beneficiary; right?
Steven D. Gordon: --Well, Your Honor, you're positing that the trustee has a personal interest that's adverse to the beneficiary.
Antonin Scalia: That's what the government asserts: I have other duties as government besides my duties to the -- to these Indians.
Steven D. Gordon: That's correct.
Antonin Scalia: And sometimes those duties conflict with my duties to the Indians.
Steven D. Gordon: Those are competing responsibilities. I agree that the government may have that, and that may affect whether the decision that they ultimately make is or is not an appropriate decision. But it does not affect their duty to disclose as a matter of evidence the legal advice that they use to make that judgment. The beneficiary, when the beneficiary's money is at stake, is entitled to see what advice the government acted on in dealing with its money.
Anthony M. Kennedy: Is this true regardless of the fact that the government may have a very powerful interest in seeking neutral, independent advice from an attorney, and that were you to prevail that advice would become watered down?
Steven D. Gordon: Yes, Your Honor. I don't -- I submit that the ultimate balancing of interests here is the same as it is for a private fiduciary. There is no -- the Court -- we urge the Court to affirm that under Rule 501 Indian tribes are entitled to the same evidence as other trust beneficiaries about how their money was managed. That is our request of this Court.
John G. Roberts, Jr.: The trustee I guess is -- is broadly conceived of as the government?
Steven D. Gordon: Yes, Your Honor.
John G. Roberts, Jr.: Well, isn't the lawyer working for the trustee then a trustee too, an employee of the trustee?
Steven D. Gordon: I think that may in a theoretical sense be true, Your Honor. But practically speaking, there's a difference between the BIA officials who are acting as the trustee and the attorneys who are advising the trustee. Our claim is against the trustee. It's not against the attorneys. We are not seeking to impose any professional responsibilities on the government attorneys.
John G. Roberts, Jr.: Thank you, Mr. Gordon.
Steven D. Gordon: Thank you.
John G. Roberts, Jr.: Mr. Shah, you have 4 minutes remaining.
Pratik A. Shah: Your Honor, if I can just make three -- three points on rebuttal. The first is with respect to Federal Rule of Evidence 501. The government is not implementing any trick here. This is not a "heads you win, tails you lose. " type situation. Our argument is simple. We look to -- we invoke a valid attorney-client privilege. The other side invokes a common law exception to that privilege. Our argument is not that no common law exception is applicable to the government. It's simply that the basis for this common law exception is not applicable, so the exception should not be applicable. It's a very straightforward argument. The second point I would like to make is in response to the contention that we have a full-fledged trust here as opposed to a bare trust in Mitchell. I'm not quite sure what "a full-fledged trust" means in the Indian trust context. Certainly there's specific investment-related duties that the statute sets forth with respect to trust funds, but this Court has made clear in -- in Mitchell and reiterated in the Navajo Nation decision that it's not enough for the statute to simply set forth the statutory duties, but it must define, and this is a quote, "define the contours of those duties. " The statutes at issue, section 161a, 162a, do nothing of the sort. They don't even set out a general disclosure obligation, let alone the contours of any such disclosure obligation. But even if we were to disregard this Court's precedents in Mitchell and in Navajo Nation, and we were to resort to the common law to flesh out the nature of the responsibilities, again there's nothing from the discrete investment obligations that are set forth in those statutes that would lead to a general disclosure obligation, let alone an intrusive obligation to disclose the government's attorney-client communications. And there's good reasons to think that Congress did not apply such an obligation when it has set forth a fairly reticulated statutory and regulatory regime governing disclosures, and with respect to other statutes. For example, the 1982 Indian Claims Limitation Act specifically addressed privileged versus nonprivileged information. The last point I would make goes to the general duty to disclose. Whether that's contingent simply on payment, ownership or other factors. While it may not be the case that the payment is the sole factor, it's certainly an important factor, and I think as my friend responded in response to Justice Kennedy, if in fact the private trustee is paying for the legal advice on their own, that's going to be a significant consideration as to whether the beneficiary can get it. And as Justice Scalia pointed out, the lines are not always going to be clear between trust administration advice and liability advice. In fact, they're often going to run into one another. Beyond payment, I think the even more important factor here is the ownership of the records. While payment is indicative of ownership, when we're talking about the government context, payment is not the only reason why we say that the government owns the records that result from legal advice or any other trust administration facet. That's set forth by statute and regulation, the Federal Records Act, and the Interior Department regulations that are set forth in the appendix of the brief. The reason why I think--
John G. Roberts, Jr.: If I -- if I pay -- if I pay a lawyer to prepare a document for me, is that -- I do own that document or does the lawyer?
Pratik A. Shah: --I think as a general -- I think as a general matter, one would think that the client would -- it would belong to the client, at least in the sense that the client would have full access to that document. And I think that's a fundamental distinction here, that we're not -- because the -- these are governmental records, they're subject to the statutory and regulatory regime that governs disclosure of government documents, either specific disclosure obligations set forth by Congress, Interior Department regulation or the more general Freedom of Information Act.
Sonia Sotomayor: But aren't you confusing, just following up on the Chief Justice's, ownership with access? FOIA itself doesn't make these records less -- the government doesn't own them less merely because FOIA requires them to share it with other people. So the ownership interest is not the defining legal obligation.
Pratik A. Shah: You're absolutely correct. The fact that they're accessible by FOIA does not -- does not change the government's ownership of those records, but the fact that Congress is able to set forth a scheme like FOIA is turned on the fact that these are government records that are owned by the government. Because they're government records, it's Congress and it's the Interior Department that decides when to disclose them and under what circumstances to disclose them. The tribe's rule here would eviscerate that very reticulated statutory and regulatory regime. Thank you, Your Honor.
John G. Roberts, Jr.: Thank you, Mr. Shah, and Mr. Gordon. The case is submitted.