Court Opinion

ID: 8408754
Source: CourtListenerOpinion
Date Created: 2022-11-02 16:47:28.897788+00
Date Added: 2024-06-11T16:47:36.488345
License: Public Domain

RADER, Circuit Judge,
dissenting-in-part.
Although I agree with the court on the statute of limitations and the liability for mismanagement of trust funds but not assets, I respectfully disagree with its construction of 25 U.S.C. § 612. As a general proposition, 28 U.S.C. § 2516 relieves the United States of any liability for prejudgment interest, except where Congress has expressly authorized that payment. See Library of Congress v. Shaw, 478 U.S. 310, 318, 106 S.Ct. 2957, 92 L.Ed.2d 250 (1986) (“The consent necessary to waive the traditional immunity [against liability for prejudgment interest] must be express, and it must be strictly construed.”) (quoting United States v. N.Y. Rayon Importing Co., 329 U.S. 654, 659, 67 S.Ct. 601, 91 L.Ed. 577 (1947)). Section 612, to my eyes, does not expressly authorize awarding prejudgment interest as a part of the damages.
That section places “all revenues and receipts derived from the Wind River Reservation under any and all laws” in a trust account where interest would accrue on the principal at four percent per year. See 25 U.S.C. § 612. Section 612 thus makes the United States responsible only for interest on funds actually collected and deposited in the trust account. This language does not obligate interest on funds that the United States should have collected or should have deposited. Accordingly, I do not read § 612 to overcome the general proscription against prejudgment interest.
For the same reason, the Court of Claims’ en banc decision in Mitchell v. United States, 229 Ct.Cl. 1, 664 F.2d 265 (1981), aff'd, 463 U.S. 206, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983) (Mitchell II), governs this case. In Mitchell II, the court read Indian trust fund statutes of general applicability — 25 U.S.C. §§ 161a, 161b, and 162 (similar in many respects to § 612) — to deny the Indian tribes interest on claims stemming from mismanagement of trust assets. The court stated unequivocally that the tribes “are not entitled, however, to such interest on any unpaid amounts they may now recover in the present suit.... Those [unpaid] sums or their equivalent were never held by the Government for plaintiffs, were not subject to the specific interest provisions ... and there is no statute awarding back-interest on such unpaid compensation now awarded by the court in this suit.” Mitchell II, 664 F.2d at 275. Accordingly, the Mitchell II court denied those tribes, very similarly situated to the tribes in this case, interest on uncollected funds.
The court today distinguishes Mitchell II because it reads § 612 to create a definitive requirement that the United States deposit proceeds in an interest-bearing trust. The court observes that Mitchell II evinces no requirement to deposit proceeds into an interest-bearing account. To the contrary, Mitchell II makes clear that *1356“tribal trust funds and proceeds of the sale of Indian lands must be held in the Treasury at interest under 25 U.S.C. §§ 161a and 161b (1976), but an alternative under § 162a is deposit in banks” and that the United States “must as trustee exercise reasonable management zeal to get for the Indians the best rate, the statutory 4% being but a floor, not a ceiling.” Mitchell II, 664 F.2d at 274. Thus, the statutes in Mitchell II, like section 612 in this case, required deposit and interest on the trust proceeds. On such compellingly similar facts, Mitchell II governs this case.
Moreover, Peoria Tribe of Indians of Oklahoma v. United States, 390 U.S. 468, 88 S.Ct. 1137, 20 L.Ed.2d 39 (1968), does not change the holding in Mitchell II. The Supreme Court in Peoria Tribe awarded interest on damages for malfeasance because the United States violated a treaty by selling some of the land ceded by the Indians to the United States “not by public auction, but by private sales at appraised prices lower than would have prevailed at public auction.” Peoria Tribe, 390 U.S. at 469-70, 88 S.Ct. 1137. Peona Tribe thus remedies the breach of a very specific duty, not negligence in general administration of a trust. In this case, on the other hand, the United States’ liability stems from nonfeasance or negligence.
Similarly, Short v. United States, 50 F.3d 994 (Fed.Cir.1995), does not (and could not) override the holding of Mitchell II. In Short, this court held the government liable for interest on funds actually held but wrongfully disbursed. That, like Peoria, is malfeasance. In this case, the United States never collected the monies and, thus, never placed them in any account to bear interest. Accordingly, Short does not apply. Indeed, the proper reconciliation of the binding precedent of Short and Mitchell II yields the following: If funds are wrongfully disbursed after deposit, the United States is liable for interest on the missing funds. But if funds have not been collected and deposited in a trust account even due to negligence, the United States is not liable for interest on the missing funds. Accordingly, the United States should not be liable for prejudgment interest in the present case.