Court Opinion

ID: 2673294
Source: CourtListenerOpinion
Date Created: 2014-05-10 03:12:54.895965+00
Date Added: 2024-06-11T13:06:47.660167
License: Public Domain

In the United States Court of Federal Claims
                                    No. 06-919L
                                (Filed April 8, 2014)

*************************
                          *
WYANDOT NATION OF KANSAS, *                  Duties to manage tribal trust assets;
                          *                  pending district court accounting
             Plaintiff,   *                  claims; 28 U.S.C. § 1500; substantial
                          *                  overlap in operative facts; dismissed
         v.               *                  for lack of subject-matter jurisdiction.
                          *
THE UNITED STATES,        *
                          *
             Defendant.   *
                          *
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       Brian J. Leinbach, Engstrom, Lipscomb & Lack, Los Angeles, California, for
plaintiff.

       Stephen R. Terrell, Natural Resources Section, Environment and Natural
Resources Division, Department of Justice, with whom was Ignacia S. Moreno,
Assistant Attorney General, both of Washington, D.C., for defendant. Anthony P.
Hoang, Environment and Natural Resources Division, Natural Resources Section,
Department of Justice, Gladys Cojocari, Office of the Solicitor, Department of the
Interior, Rebecca Saltiel and Thomas Kearns, Financial Management Service, Office
of the Chief Counsel, Department of the Treasury, all of Washington, D.C., of
counsel.

                             OPINION AND ORDER

WOLSKI, Judge.

      This case is before the Court on defendant’s motion to dismiss for lack of
subject-matter jurisdiction, pursuant to Rule 12(b)(1) of the Rules of the United
States Court of Federal Claims. The government argues that the pendency of a
previously filed case in a United States district court precludes our jurisdiction
under 28 U.S.C. § 1500. The motion has been fully briefed and oral argument was
heard. For the reasons that follow, defendant’s motion is GRANTED.
                                I. BACKGROUND †

      On December 28, 2006, plaintiff, Wyandot Nation of Kansas (Wyandot
Nation), brought a claim here against the government. See Compl. Plaintiff seeks
money damages to compensate it for various breaches of fiduciary duty that it
claims the government committed as trustee of a trust holding assets for its benefit.
Compl. ¶¶ 1, 17–18. Plaintiff alleges jurisdiction in this Court is proper under the
Tucker Act and the Indian Tucker Act. Compl. ¶ 4 (citing 28 U.S.C. §§ 1505, 1491).

       Plaintiff is an Indian tribe that was removed by the United States from Ohio
to Kansas in the mid-nineteenth century. Compl. ¶ 2. Plaintiff continues to receive
federal recognition for the purpose of executing the provisions of, and securing the
benefits provided by, the Treaty of January 31, 1855. Id. ¶ 3. Under the 1855
Treaty and subsequent treaties, the United States government has held plaintiff’s
tribal land, and resources located on that land, in trust for the benefit of the tribe.
Id. ¶¶ 5–7. Pursuant to these treaties and subsequently enacted statutes, the
United States has assumed a trust responsibility toward plaintiff to protect its land,
compensate it for certain limited conveyances of land and any use of its land
resources, and deposit payments owed to the Wyandot Nation in interest-bearing
accounts. Id. ¶¶ 5–8 (citing 25 U.S.C. § 177). The government also has a statutory
duty to increase the productivity of funds that it holds in trust for Indian tribes.
Compl. ¶ 12 (citing 25 U.S.C. §§ 161a, 161b, 162a). Defendant also has a duty to
collect and invest any income generated from conveyances of trust property or any
use rights it has granted with respect to said property. Id. ¶¶ 10–11. In sum,
according to plaintiff, the United States has assumed the obligations of a trustee
with respect to Wyandot Nation’s lands and resources and has a duty to protect,
preserve, and manage the trust properly so as to ensure the “highest and best use of
those assets” and generate the highest possible revenue for plaintiff. Id. ¶¶ 11–13.

       Plaintiff’s complaint lists in great detail the many fiduciary duties that the
United States owes to it. Id. ¶¶ 14–16. According to plaintiff, the United States has
breached these duties repeatedly and in various ways over the past several decades,
and such breaches have been recognized by Congress, the General Accounting
Office, and the Office of Management and Budget. Id. ¶¶ 17–19. Specifically,
plaintiff alleges the United States has breached its fiduciary duties through poor
investment decision-making, the failure to keep proper records, the failure to
properly manage the trust property, and the failure to provide a proper accounting
of the trust’s assets and funds. Compl. ¶¶ 17–18. Plaintiff contends that these
breaches have caused it monetary losses and seeks compensation for this
malfeasance. Id. ¶ 1.

†The allegations in the complaint are taken as true for purposes of the
government’s motion to dismiss.
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       On December 30, 2005, before filing its action in this court, plaintiff filed a
case in the United States District Court for the District of Columbia seeking relief
for the government’s alleged breach of fiduciary duty in connection with the same
trust. See Complaint ¶¶ 17–19, Wyandot Nation of Kansas v. Kempthorne, No.1:05-
CV-02491 (D.D.C. 2005); Compl. ¶ 25. On July 13, 2006, plaintiff filed an amended
complaint in the district court alleging defective trust accounting. Amended
Complaint ¶ 15, Wyandot Nation of Kansas, No.1:05-CV-02491 (D.D.C. 2006). In
the district court, plaintiff seeks declaratory and injunctive relief to compel a proper
accounting, and injunctive relief to compel proper management of its trust accounts.
Id. at 11–12. Several months later, plaintiff brought its claim against the United
States for money damages in this court. See Compl. Plaintiff seeks consequential
damages, incidental damages, compound interest, pre-judgment interest, court
costs, and attorneys’ fees --- all related to defendant’s breach of the fiduciary duties
outlined above. Id. at 14–15.

                                  II. DISCUSSION

       The parties do not contest that, but-for the currently pending district court
action, our court would clearly have jurisdiction over this matter. A limitation on
our jurisdiction, 28 U.S.C. § 1500 (“Section 1500”), prevents us from entertaining
“any claim for or in respect to which the plaintiff . . . has pending in any other court
any suit . . . against the United States.” 28 U.S.C § 1500 (2012). The purpose of the
Section 1500 bar is to prevent the government from having to defend
simultaneously against two different actions in two different fora concerning the
same matters. See United States v. Tohono O'Odham Nation, 131 S. Ct. 1723, 1730
(2011); Trusted Integration, Inc. v. United States, 659 F.3d 1159, 1163 (Fed. Cir.
2011). As Federal Circuit has explained, courts should “not view § 1500 narrowly.”
Trusted Integration, 659 F.3d at 1164.

       The dispute in this case concerns the definition of “claim” within the meaning
of Section 1500. The Supreme Court has concluded that two claims are the same for
Section 1500 purposes if they are based on “substantially the same operative facts.”
Tohono, 131 S. Ct. at 1731. Until Tohono, it appeared there also had to be “some
overlap in the relief requested” for two actions to be considered to include the same
claim. See Keene Corp. v. United States, 508 U.S. 200, 212 (1993). It is uncontested
that plaintiff’s district court claims were pending at the time it filed its complaint in
our court; thus, the only question is whether the two cases contain claims that are
based on “substantially the same operative facts.”

       In Keene Corp., the Supreme Court looked to an opinion from our (and the
Federal Circuit’s) predecessor, the Court of Claims, which dealt with the prior
incarnation of Section 1500 --- Section 154 of the old Judicial Code (“Section 154”).
Id. at 211–12 (citing British Am. Tobacco Co. v. United States, 89 Ct. Cl. 438
(1939)). In the Court of Claims case, the court concluded that two claims, one

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sounding in tort and one styled as a takings claim, were the same “claim” for
purposes of Section 154. British Am. Tobacco Co., 89 Ct. Cl. at 440. The court
reasoned that they were the same claim because “claim,” as used in Section 154,
“has no reference to the legal theory upon which a claimant seeks to enforce his
demand,” but rather is focused on whether the two cases are based on the same
“subject matter or property.” Id. Thus, since both claims concerned the confiscation
of the same gold, they were the same claim, even though they each offered a
different reason why the taking of the gold was unlawful. In short then, two claims
are the same if they address the same dispute, without regard to the legal theories
involved. As the Federal Circuit later explained: “Claims are the same where they
arise from the same operative facts even if the operative facts support different
legal theories which cannot all be brought in one court.” Harbuck v. United States,
378 F.3d 1324, 1329 (Fed. Cir. 2004) (quoting Johns-Manville Corp. v. United
States, 855 F.2d 1556, 1567 (Fed. Cir. 1988)).

       The plain meaning of “operative facts” is also instructive. Black’s Law
Dictionary defines “operative,” inter alia, as “having principal relevance.” Black's
Law Dictionary 1201 (9th ed. 2009). Thus, as has been observed in other cases,
facts are operative if they are relevant to establishing a claim. See, e.g., Lower
Brule Sioux Tribe v. United States, 102 Fed. Cl. 421, 424 (2011). That is, if a fact
satisfies, or helps to satisfy, an element of a legal claim, it is an “operative fact”
within the meaning of Section 1500. Put another way, the meaning of the term
“operative” is very close that of “material,” in that both terms act to isolate that
class of facts that impact the determination of legal claims from those which do not.
Id. In sum then, two actions would be based on “substantially the same material
facts” if the same facts would be relevant to some theory of liability in both cases.
Id.
       A number of Indian tribes have attempted to simultaneously maintain
actions in both the district court and our court alleging mismanagement of trust
assets. When the district court actions were filed first, our judges have dismissed
the cases filed here, concluding that two complaints alleging the breach of the
government’s fiduciary duties were based on “substantially the same operative
facts” and thus barred by Section 1500. See Yankton Sioux Tribe v. United States,
84 Fed. Cl. 225 (2008) aff'd sub nom.; Tribe v. United States, 437 F. App'x 938 (Fed.
Cir. 2011); Omaha Tribe of Nebraska v. United States, 102 Fed. Cl. 377 (2011);
Winnebago Tribe of Nebraska v. United States, 101 Fed. Cl. 229 (2011); Iowa Tribe
of Kansas and Nebraska v. United States, 101 Fed. Cl. 481 (2011); Prairie Band of
Potawatomi Indians v. United States, 101 Fed. Cl. 632 (2011); Eastern Shawnee
Tribe of Oklahoma v. United States, 82 Fed. Cl. 322 (2008) rev'd, 582 F.3d 1306
(Fed. Cir. 2009) cert. granted, judgment vacated, 131 S. Ct. 2872, 179 L. Ed. 2d 1184
(2011) and aff'd, 438 F. App'x 896 (Fed. Cir. 2011); Lower Brule Sioux Tribe 102
Fed. Cl. at 421; Muscogee (Creek) Nation of Oklahoma v. United States, 103 Fed. Cl.
210 (2011); Rosebud Sioux Tribe v. United States, 102 Fed. Cl. 429 (2011);
Northwestern Band of Shoshone v. United States, 102 Fed. Cl. 427 (2011).

                                         -4-
       Defendant, pressing the same argument here, contends that plaintiff’s claims
are barred by Section 1500 because Wyandot Nation had previously filed a case in
the district court and the claims in that case were based on “substantially the same
operative facts.” Def.’s Mem. In Supp. of Mot. to Dismiss at 2. It grounds this
argument on the fact that both claims involve the same trust relationship, the same
trust corpus, and the same trust transactions. Id. at 11–13. In short, the
government contends that there is no meaningful difference between this case and
Tohono or the numerous Indian trust cases cited above.

       Plaintiff, on the other hand, argues that our jurisdiction is not precluded by
Section 1500, and attempts to distinguish its circumstances from Tohono. Pl.’s
Opp’n to Mot. to Dismiss 3–4 (Pl.’s Opp’n). Wyandot Nation contends that its two
complaints are not based on the same set of operative facts because the two suits
concern breaches of separate and distinct fiduciary duties: the duty to maintain
records in the district court action, and duties of competence and loyalty in this
court. Id. at 4–7. According to plaintiff, the court in Tohono focused on how nearly
identical the two complaints were, but the two complaints in the present case “are
far from identical.” Id. at 4. Wyandot Nation contends that the district court
complaint focuses on the government’s breach of the duty to maintain records and
provide the required trust accounting, and seeks to compel the government to
provide the accounting as well as to require proper management of accounts until
an adequate accounting has been rendered. Id. at 5. The complaint filed in this
court, however, alleges that the government has breached its fiduciary duties
through mismanagement of plaintiff’s trust, and focuses on specific trust
transactions to establish that the government’s management fell below the
applicable standard of care for a prudent trustee. Id. at 4. According to plaintiff,
the two complaints are therefore fundamentally different because of the focus on
different trust duties for which different facts are required to establish breach. Id.
at 5.

       What the plaintiff’s argument overlooks is that the allegedly different
breaches of fiduciary duty all spring from the same set of facts. This becomes clear
when one examines the two complaints. All of those facts which are arguably
operative are the same in both cases --- both concern the same trusteeship, the same
trust assets, and the same allegedly unlawful conduct. On the creation and
existence of the trust relationship, paragraphs 5–12 of the complaint filed in this
court and paragraphs 9–14 of the district court complaint allege essentially the
same facts, with only minor differences in how the history of the tribe and its
relationship to the federal government are described. Regarding the substantive
duties of the trust relationship, the complaints are also very similar. See Compl.
¶¶ 8–16; Amended Complaint ¶¶12–17, Wyandot Nation of Kansas, No.1:05-CV-
02491 (D.D.C. 2006). Both complaints also allege that the government has been
derelict in performing its duties as trustee. See Compl. ¶¶17–19; Amended

                                          -5-
Complaint ¶¶ 17–25, Wyandot Nation of Kansas, No.1:05-CV-02491 (D.D.C. 2006).
The primary focus of the district court complaint is on the allegedly defective
accounting, including “fail[ing] to provide the Nation with a full, and complete
accounting of the source of its trust funds,” and “fail[ing] to provide the Nation with
a comprehensive statement of the use and investment of its trust funds and the
interest earned on those dollars.” Amended Complaint ¶ 20, Wyandot Nation of
Kansas, No.1:05-CV-02491 (D.D.C. 2006). The complaint filed in our court also
focuses on the particulars of individual transactions, detailing defendant’s alleged
failure to “obtain the highest available rates of interest and earnings on the
[p]laintiff's trust funds,” its failure “to properly invest the [p]laintiff[‘]s trust monies
in a timely manner,” and other similar breaches. Compl. ¶ 31. In short, not only
do the two complaints address themselves to the same trust relationship and
concern the same trust corpus, but both actions would require each court to
evaluate the same transactions. In one case the purpose would be to construct
records of the transaction, and in the other it would be to determine if the
transaction at issue was executed in accordance with the government’s duties as a
trustee. Ultimately, however, both courts would need to consider the substance of
the trust transactions. Thus as defendant notes, while there are some differences in
the two complaints, it is not possible to separate defendant’s alleged conduct as
neatly as plaintiff suggests. Def.'s Reply in Supp. of Mot. to Dismiss at 4–7.

        Additionally, before us the plaintiff has also alleged that the government
violated its obligations under 25 U.S.C § 162a(d), which mandates an adequate
system for accounting for trust fund balances. See Compl. ¶ 30(P); Tr. (Dec. 18,
2012) at 30–31 (“Tr.”); 25 U.S.C. § 162a(d)(1). Thus, both of plaintiff’s complaints
allege improprieties in the government’s trust accounting itself. Therefore, even if
plaintiff were correct that an evaluation of the substance of the trust’s transactions
could be divorced from the provision of an accounting which would cover those
transactions, both actions would still require an inquiry into the government’s
accounting for said transactions and thus both claims would still be based on
“substantially the same operative facts.”

       Plaintiff is certainly correct that a mere commonality of “background facts” is
insufficient to trigger the Section 1500 jurisdiction bar. Pl.’s Opp’n at 6. A review
of the cases cited by Wyandot Nation for this proposition, however, makes it quite
clear that the overlap in facts between plaintiff’s two complaints go far beyond mere
background. In the first case, Cooke v. United States, a plaintiff sued in the United
States Court of Federal Claims asserting a violation of the Equal Pay Act (EPA) in
connection with her employment at the National Transportation Safety Board,
while at the same time maintaining an action in a district court for unlawful
retaliation in violation of the Fair Labor Standards Act (FLSA). Cooke v. United
States, 77 Fed. Cl. 173, 175 (2007). The judge in Cooke concluded that Section 1500
did not prevent our court from exercising jurisdiction because the two claims were
based on different operative facts. Id. at 177. The court reasoned that the two

                                            -6-
claims were different because the EPA claim was based on an allegedly lower rate of
pay due to Ms. Cooke’s gender, while her FSLA claim was based on the allegedly
improper action taken against her in response to her having reported the alleged
gender discrimination. Id. As the court put it, “[t]he EPA and FLSA claims involve
distinct time periods and distinct Government conduct, with different material facts
relevant to one claim and not the other.” Id. at 178. In our case, by contrast,
plaintiff’s two complaints are both based on the same allegedly improper
government behavior in connection with its duties as a trustee. Though plaintiff
seeks money damages for these errors in this court, and in the district court seeks
an accounting to determine the exact nature of all of the relevant transactions, in
both cases plaintiff contests the same government conduct, and that is sufficient to
divest our court of jurisdiction.

       The second case plaintiff relies upon, Heritage Minerals, Inc., v. United
States, 71 Fed. Cl. 710 (2006), is similarly inapposite. In Heritage Minerals, the
plaintiff had sued the government in a district court, under the Federal Tort Claims
Act, for discharging chemical waste onto its property. Id. at 711. While that suit
was pending, plaintiff also filed suit in our court alleging that the government had
taken its property by placing monitoring wells on the property to assess the extent
of the pollution. Id. at 710–711. The court concluded that the claim was not barred
by Section 1500. Id. at 711. This conclusion was based on the fact that the takings
claim, which concerned the placement of the monitoring wells, “challenge[d] later
and different conduct.” Id. In our case, by contrast, both complaints concern the
same conduct that occurred over the same time period --- one seeks a record of
transactions that happened or should have happened, and the other seeks damages
based on these transactions.

       At oral argument, plaintiff contended the two complaints concerned different
conduct, as in the district court the primary focus would be on the duty to record
and report trust transactions and in our court the focus would be on those
transactions themselves. Tr. at 21–24. But the same transactions are scrutinized
in each case. This contrasts with the circumstances in Cooke and Heritage
Minerals, in which different conduct was the subject of the claims in the different
courts. In Cooke there would have been no need for the district court to determine,
or even consider, whether Ms. Cooke had actually been the victim of gender
discrimination. The case instead turned on whether she was retaliated against
because of her claims of discrimination. Such a case requires no examination of the
underlying claims of gender discrimination. Similarly, in Heritage Minerals our
court did not need to consider at all the spraying of chemicals on plaintiff’s property.
Rather, it only needed to determine if placing a monitoring well on the property
constituted a taking. That claim is logically unconnected from the claim that the
spraying of the chemicals was itself tortious.

                                          -7-
       The Court does not find that Wyandot Nation’s claims can be separated in
the same manner. In the district court, plaintiff is asking for an accounting of the
transactions entered into by the trust. In this court, plaintiff attacks the substance
of those transactions, claiming that many of them were violative of the
government’s fiduciary duties. In both cases a central focus of the inquiry would be
the same transactions, and thus both complaints concern “substantially the same
operative facts.” As another judge on this court remarked in dismissing a similar
argument, “it is of no consequence that plaintiff styles its suits to focus on different
trust duties, when the proof of breach of each of those purportedly distinct duties
will necessarily require review of the same facts.” Passamaquoddy Tribe v. United
States, 82 Fed. Cl. 256, 285–86 (2008).

       To accept plaintiff’s contention that the fact that the two actions are based on
different trust duties renders them not based “on substantially the same operative
facts” would be to violate the clear instruction of the Federal Circuit that two claims
based on different legal theories may nevertheless be based on the same operative
facts. See Harbuck v. United States, 378 F.3d 1324, 1329 (Fed. Cir. 2004). Plaintiff
attempts to evade this problem by styling the common facts of the two cases as mere
“background facts.” Pl.'s Opp’n at 4–8. But as was already noted, the overlap
concerns the very heart of both cases --- namely the government’s alleged failure to
properly manage (and account for) trust assets.

       Plaintiff’s assertion that it intends to put on different evidence in the two
cases is beside the point. Wyandot Nation explains that the case before the district
court will consist of accounting evidence, whereas the case before our court will
concern evidence related to various poor investment decisions or other
mismanagement of the trust assets. Pl.'s Opp’n at 6–8. But the operative facts test
turns not on the case as it will be tried, but on the pleadings. See Dico, Inc. v.
United States, 48 F.3d 1199, 1204 (Fed. Cir. 1995). And as we have seen, a
comparison of the claims in the two complaints makes it clear that the claims as
pled have a substantial overlap of their operative facts. Thus, even were plaintiff
correct that the two cases will have no evidence in common at trial, this fails to
alter the analysis --- as the Section 1500 determination is made with regards to the
complaints in the two cases, not how the cases actually unfold. Indeed, the
Supreme Court in Tohono explained that the purpose of Section 1500 --- “to save the
Government from burdens of redundant litigation” --- aims to spare defendant of the
costs of “[d]eveloping a factual record” and of “the preparation and examination of
witnesses at trial.” Tohono, 131 S. Ct. at 1730. It would make little sense to
require the government to bear such costs in order to determine that they may be
avoided.

      The Court concludes that plaintiff’s previously-filed district court complaint
contains operative facts which substantially overlap those of the above-captioned

                                          -8-
case. Accordingly, Section 1500 precludes our jurisdiction, and the government’s
motion to dismiss this case for lack of subject-matter jurisdiction is GRANTED.

                               III. CONCLUSION

    For the reasons stated above, the government’s motion to dismiss is
GRANTED. The Clerk shall close the case. No costs shall be awarded.

IT IS SO ORDERED.

                                      s/ Victor J. Wolski
                                      VICTOR J. WOLSKI
                                      Judge

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