Opinion ID: 427584
Heading Depth: 2
Heading Rank: 2

Heading: Monetary Claim Against the Federal Defendants

Text: 18 The essence of plaintiff's claim is that the federal defendants deprived him of his property without the due process of law required by the fifth amendment, and in violation of their obligations as trustee of his IIM account, when the BIA transferred Kennerly's IIM account funds to the Tribe without giving him notice and an opportunity to be heard. Specifically, plaintiff points to the fact that there was no judgment either before or after these transfers concerning the validity of the debts claimed by the Tribe. He further argues that despite Kennerly's repeated requests to both federal and tribal officials for the opportunity to dispute the amounts of at least some of the claimed indebtedness, and to have his evidence considered, he received no hearing or other opportunity to present such evidence. 19 The government acknowledges that the district court's jurisdiction was properly based upon the Tucker Act, 28 U.S.C. Sec. 1346(a)(2) (Supp. V 1981). See, e.g., United States v. Mitchell, --- U.S. ----, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983). See also Angle v. United States, 709 F.2d 570 (9th Cir.1983) (holding that the Tucker Act confers jurisdiction upon the district court to consider Indians' money damage claims against the United States for breach of trust obligations). This is not a claim for loss of intangible tribal status or privileges for which we recently held the government retains immunity. Holloman v. Watt, 708 F.2d 1399 (9th Cir.1983). 20 In the district court, the government argued that the informal negotiations among Kennerly, the Blackfeet Tribal Credit Committee and the Blackfeet Agency Superintendent provided Kennerly with a meaningful opportunity to raise his objections. It further argued, citing Goldsmith v. United States Board of Tax Appeals, 270 U.S. 117, 46 S.Ct. 215, 70 L.Ed. 494 (1925), and P.F. Petersen Baking Co. v. Bryan, 290 U.S. 570, 54 S.Ct. 277, 78 L.Ed. 505 (1934), that due process may be satisfied by an opportunity for a hearing before an administrative, non-judicial officer or board. 21 We agree with the government that a due process hearing need not take the form of a judicial proceeding, that an administrative hearing with an impartial decisionmaker may suffice, and that such impartial decisionmaker may come from within the agency against which the claim is made. See Goldberg v. Kelly, 397 U.S. 254, 266-67, 90 S.Ct. 1011, 1019-20, 25 L.Ed.2d 287 (1970). We cannot, however, accept the argument that negotiations with the Tribe, the party to whom the debt is owed, could satisfy the essential due process right to a hearing. Id. at 271, 90 S.Ct. at 1022. See also Gibson v. Berryhill, 411 U.S. 564, 578, 93 S.Ct. 1689, 1698, 36 L.Ed.2d 488 (1973); Morrissey v. Brewer, 408 U.S. 471, 485-86, 92 S.Ct. 2593, 2602-03, 33 L.Ed.2d 484 (1972); Friendly, Some Kind of Hearing, 123 U.Pa.L.Rev. 1267, 1279-80 (1975). 22 In this appeal, the government does not even attempt to argue either that the negotiations, or the administrative procedures which followed, satisfy the requirements of due process. Rather, it interposes a procedural objection to our review and suggests that in lieu of addressing the constitutional question here, we remand the case to the district court for further proceedings. The government argues that since the district court merely held that the decision of the IBIA was not arbitrary or capricious, and did not expressly rest its decision upon the constitutional arguments of the parties, it is premature for this court to decide the constitutional question. 23 The difficulty with the government's position is that the constitutional issue was fully briefed to the district court by both parties. The district court acknowledged plaintiff's argument concerning the lack of due process in the administrative proceedings, yet concluded that the agency procedures were satisfactory because a hearing could be held if there was a material issue of fact concerning the attachment authorizations. The court thus considered the issue by accepting the notion that the validity of the attachment authorizations was the pivotal question. See 534 F.Supp. at 276 & n. 18. Cf. Scott v. Pacific Maritime Association, 695 F.2d 1199, 1203-04 (9th Cir.1983) (issue not considered unless mentioned by parties in pretrial statement or by district court in its disposition). Moreover, we have on other occasions addressed issues of law which were never even raised in the trial court, when our consideration did not require further development of the record by the parties. See, e.g., United States v. Gabriel, 625 F.2d 830, 832 (9th Cir.1980), cert. denied, 449 U.S. 1113, 101 S.Ct. 925, 66 L.Ed.2d 843 (1981); United States v. Patrin, 575 F.2d 708, 712 (9th Cir.1978). 24 None of the parties contends that it needs an opportunity to introduce further evidence concerning the constitutional propriety of the administrative procedures at issue. In fact, the parties at all times in this case have treated the facts as essentially undisputed. 1 Thus, since the government suggests no purpose for a remand to the district court other than for reconsideration of the same issue of law which was fully presented to the court before and which the appellant has fully briefed to us on appeal, it is appropriate that we consider the merits of Kennerly's constitutional claim. A remand for this reason would serve no purpose other than delay. 25 As to the merits of that claim, there is no dispute that Kennerly's interest in his IIM account funds is a property interest subject to due process protection. See Board of Regents v. Roth, 408 U.S. 564, 576-77, 92 S.Ct. 2701, 2708-09, 33 L.Ed.2d 548 (1972); cf. Choate v. Trapp, 224 U.S. 665, 667, 32 S.Ct. 565, 570, 56 L.Ed. 941 (1912). There is also no question that as a result of the actions by the United States and its officials, which include the payment of account funds to the Tribe and the adverse determination of Kennerly's administrative challenges to such payments, plaintiff has been permanently deprived of this interest. A fundamental constitutional principle is that some form of hearing, with notice of its availability, must occur before a person is finally deprived of a property interest. Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 902, 47 L.Ed.2d 18 (1976), citing Wolff v. McDonnell, 418 U.S. 539, 557-58, 94 S.Ct. 2963, 2975-76, 41 L.Ed.2d 935 (1974). 26 The Supreme Court has held in situations analogous to the one in this case that the seizure of goods or the garnishment of wages to ensure debt repayment prior to judgment violates due process absent an opportunity for a hearing prior to the seizure or garnishment. Fuentes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556 (1972); Sniadach v. Family Finance Corp., 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969). As noted above, the negotiations which took place prior to the attachments of Kennerly's account funds clearly did not satisfy due process requirements. 27 Nevertheless, we recognize that in some cases due process may be satisfied by a prompt post-deprivation hearing if that opportunity is afforded prior to the final termination of a property interest and if the length or severity of the deprivation does not itself constitute a serious loss. See Mathews v. Eldridge, 424 U.S. at 340-47, 96 S.Ct. at 905-08; cf. Mitchell v. W.T. Grant Co., 416 U.S. 600, 94 S.Ct. 1895, 40 L.Ed.2d 406 (1974) (court ordered seizure prior to judgment upheld despite no notice or hearing because no final termination of interest until court judgment entered). It is therefore possible to argue that the government could validly have made the payments to the Tribe on a temporary basis pending a hearing or other proceeding to determine the validity of the underlying obligation. 28 We need not, however, decide whether such post-deprivation hearing procedures would be adequate in cases such as this. The defendants in this case never contemplated or held any hearing, either before or after drawing against Kennerly's IIM account, that aimed to determine even provisionally the validity of his debt to the tribe. Nor has there ever been any formal determination that the debt was, in fact, valid. In the administrative proceedings which followed the attachments, the BIA officials accepted the Tribe's unilateral decision on the issue of validity; the only question considered was whether the assignments themselves were approved as required by regulation. In this context, where assignments are executed as security for an underlying debt, due process requires some opportunity to be heard concerning the debt itself. See Sniadach v. Family Finance Corp., 395 U.S. at 343, 89 S.Ct. at 1823 (Harlan, J. concurring); Friendly, Some Kind of Hearing, supra at 1281 (fundamental aspect of due process is opportunity to present reasons why proposed action should not be taken). 2 29 The lack of any proper hearing in this case which would satisfy due process means that the question whether adequate notice was given is immaterial. Because Kennerly had no opportunity for a proper hearing at which he could have his objections considered, we need not decide whether the notice he received would have been sufficient otherwise. 30 The federal defendants in this case failed to provide or even seek on behalf of Kennerly, the beneficiary of the trust, the protections required by procedural due process. We therefore must remand for consideration of the appropriate remedy, including what damages may be assessed against the federal defendants for breach of trust. Because the attachment violated due process and is void, the district court should also consider whether any sums have been segregated by the government but unpaid to the Tribe which could be immediately credited to the IIM account. 31