Opinion ID: 185354
Heading Depth: 2
Heading Rank: 1

Heading: The Trust Relationship

Text: 75 There is no doubt that the federal government has a longstanding fiduciary obligation to IIM trust beneficiaries. [T]he law is 'well established that the Government in its dealings with Indian tribal property acts in a fiduciary capacity.'  Lincoln v. Vigil, 508 U.S. 182, 194 (1993) (quoting United States v. Cherokee Nation of Oklahoma, 480 U.S. 700, 707 (1987)). In the leading case on Indian trust responsibilities, United States v. Mitchell (Mitchell II), the Supreme Court was clear: 76 A fiduciary relationship necessarily arises when the Government assumes such elaborate control over forests and property belonging to Indians. All of the necessary elements of a common-law trust are present: a trustee (the United States), a beneficiary (the Indian allottees), and a trust corpus (Indian timber, lands, and funds). 77 463 U.S. 206, 225 (1983) (citing Restatement (Second) of Trusts S 2, cmt. h (1959)). 78 This rule operates as a presumption. See Loudner v. United States, 108 F.3d 896, 900 (8th Cir. 1997) ( '[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.'  (quoting Rogers v. United States, 697 F.2d 886, 890 (9th Cir. 1983))). Therefore, courts correctly recognize a trust relationship even where it is not explicitly laid out by statute. Specifically,  'where the Federal Government takes on or has control or supervision over tribal monies or properties, the fiduciary relationship normally exists with respect to such monies or properties (unless Congress has provided otherwise) even though nothing is said expressly in the authorizing or underlying statute (or other fundamental document) about a trust fund, or a trust or fiduciary connection.'  Mitchell II, 463 U.S. at 225 (quoting Navajo Tribe of Indians v. United States, 224 Ct. Cl. 171, 183 (1980)). 79 It is no doubt true that the government's fiduciary responsibilities necessarily depend on the substantive laws creating those obligations. Shoshone-Bannock Tribes v. Reno, 56 F.3d 1476, 1482 (D.C. Cir. 1995); see also Mitchell II, 463 U.S. at 224 (the relevant statutes and regulations define the contours of the United States' fiduciary responsibilities.); National Wildlife Federation v. Andrus, 642 F.2d 589, 611 (D.C. Cir. 1980) ([A] trust responsibilitycan only arise from a statute, treaty, or executive order. (citation omitted)). This does not mean that the failure to specify the precise nature of the fiduciary obligation or to enumerate the trustee's duties absolves the government of its responsibilities. It is well understood that [t]he extent of [a trustee's] duties and powers is determined by the trust instrument and the rules of law which are applicable. Restatement (Second) of Trusts § 201, at 442 (1959). It is the nature of any instrument that establishes a trust relationship that many of the duties and powers are implied therein. They arise from the nature of the relationship established. 80 While the government's obligations are rooted in and outlined by the relevant statutes and treaties, they are largely defined in traditional equitable terms. Where Congress uses terms that have accumulated settled meaning under either equity or the common law, a court must infer, unless the statute otherwise dictates, that Congress means to incorporate the established meaning of these terms. NLRB v. Amax Coal Co., 453 U.S. 322, 329 (1981). Courts must infer that Congress intended to impose on trustees traditional fiduciary duties unless Congress has unequivocally expressed an intent to the contrary. Id. at 330. Much as the Supreme Court has regularly turned to the Restatement and other authorities to construe trust responsibilities, it is appropriate for the district court to consult similar sources. 81 Despite the imposition of fiduciary duties, federal officials retain a substantial amount of discretion to order their priorities. In Lincoln v. Vigil, for example, the Supreme Court held that the government's fiduciary relationship with Indians could not limit an agency's discretion to reorder its priorities as among beneficiaries. 508 U.S. 182, 195 (1993). In Lincoln, the Court rejected a challenge to the Indian Health Service's decision to discontinue a health program for handicapped Indian children in one region of the country in order to devote greater resources to a national program. Nonetheless, the Secretary cannot escape his role as trustee by donning the mantle of administrator to claim that courts must defer to his expertise and delegated authority. Jicarilla Apache Tribe v. Supron Energy Corp., 728 F.2d 1555, 1567 (10th Cir. 1984) (Seymour, J., concurring in part and dissenting in part), adopted as majority opinion as modified en banc, 782 F.2d 855 (10th Cir. 1986). 82 The Secretary has an overriding duty ... to deal fairly with Indians. Morton v. Ruiz, 415 U.S. 199, 236 (1974). This duty necessarily constrains the Secretary's discretion. When faced with several policy choices, an administrator is generally allowed to select any reasonable option. Yet this is not the case when acting as a fiduciary for Indian beneficiaries as stricter standards apply to federal agencies when administering Indian programs. Jicarilla, 728 F.2d at 1567. Summarizing federal case law on fiduciary obligations owed to Indian tribes, the Tenth Circuit concluded that where the Secretary is obligated to act as a fiduciary ... his actions must not merely meet the minimal requirements of administrative law, but must also pass scrutiny under the more stringent standards demanded of a fiduciary. Id. at 1563. The federal government has charged itself with moral obligations of the highest responsibility and trust in its relationships with Indians, and its conduct should therefore be judged by the most exacting fiduciary standards. Seminole Nation v. United States, 316 U.S. 286, 297 (1942); cf. Muscogee (Creek) Nation v. Hodel, 851 F.2d 1439, 1445 n.8 (D.C. Cir. 1988) (giving careful consideration to Interior's interpretation of the Oklahoma Indian Welfare Act, but not deferring to it).