UNITED STATES v. SIOUX NATION OF INDIANS
In the Fort Laramie Treaty of 1868, the United States granted the Sioux Indian Nation the Great Sioux Reservation, including the Black Hills of South Dakota. Congress reneged in 1877, passing an act that reclaimed the Black Hills. The Sioux Nation requested compensation in 1920. The United States Court of Claims ruled against the Sioux Nation in 1942. Congress then established the Indian Claims Commission in 1946. The Commission ruled that the Sioux Nation was not barred by the Court of Claims decision and ruled that Congress used its powers of eminent domain in 1877 and the Sioux were therefore entitled to compensation. The Court of Claims maintained that the Sioux were barred by their first case. Congress amended the Indian Claims Commission Act in 1978, removing the judicial bar. The Court of Claims then held that the Sioux were entitled to $17.1 million.
(1) Was Congress' 1978 amendment a violation of separation of powers?
(2) Was the reclamation of land in 1877 a taking of property requiring compensation under the Just Compensation Clause of the Fifth Amendment?
Legal provision: 25 U.S.C. 70
No and yes. In an 8-1 decision, the Court held that Congress did not violate the doctrine of separation of powers and affirmed the Court of Claims decision. Writing for the majority, Justice Harry A. Blackmun noted a similar situation in Nock v. United States, where a congressional exemption from a judicial bar was ruled not to be in violation of separation of powers and upheld by the Court. Additionally, since Congress "had not made a good-faith effort to give the Sioux the full value of the Black Hills," Congress' 1877 action qualified as use of its eminent domain power under Three Tribes of Fort Berthold Reservation v. United States. Therefore, the Sioux were entitled to compensation under the Just Compensation Clause of the Fifth Amendment. Justice Byron R. White wrote an opinion concurring in part and in the judgment.
Argument of Claiborne
Chief Justice Warren E. Burger: We'll hear arguments next in United States against The Sioux Nation of Indians.
Mr. Claiborne, I think you may proceed whenever you're ready.
Mr. Claiborne: Mr. Chief Justice and may it please the Court.
The case is here on our petition for certiorari to the Court of Claims which Court directed the entry of an award of more than some $105 million to the Sioux Nation in respect to the action of Congress a century ago, to be exact in February 1877, in severing some 7 million acres, the Black Hills area from what was then the Great Sioux Reservation.
Some $88 million of that sum of $105 million of this award is attributable to interest calculated at 5% over 103 years on the principle sum of $17.1 million which was found by the Commission, affirmed by the Court of Claims to have been the value of the 7 million acres in 1877.
Justice Potter Stewart: As I understand it there is no issue here about the -- about many things.
The only issue is the issue of interest.
Mr. Claiborne: That is exactly so Mr. Justice Stewart and that in turn, the issue of interest the only issue we bring here --
Justice Potter Stewart: Depends upon whether or not there was a taking of condemnation.
Mr. Claiborne: -- depends entirely on whether or not this amounts to a taking in the Fifth Amendment sense.
Justice Potter Stewart: May I ask just in passing then, what was -- what was the $17.1 million?
Mr. Claiborne: The $17.1 million is the value of the Black Hills area as found by the Indian Claims Commission, as affirmed by the Court of Claims and not disputed by the United States.
Justice Potter Stewart: Well, then doesn't that imply that there was a taking?
Mr. Claiborne: Not so.
It's simply that that was the value of the land.
The question before the Commission -- left open by the Commission in 1974, was whether there had been in effect payment to that extent or to a greater extent the consideration which was given, an undertaking to provide provisions for so long as the Sioux nation might need them.
Justice Potter Stewart: Now, it's been decided that there wasn't payment and that therefore, the Government owes the Sioux Nation $17.1 million for the value of the Black Hills that were -- of the Black Hills in -- in 1877 or whatever the date was.
Mr. Claiborne: Yes.
Justice Potter Stewart: But if you don't quarrel with that, why doesn't that imply that there was a taking?
Mr. Claiborne: Well, from -- from this principal reason, Mr. Justice Stewart.
We are, by special act of Congress passed in 1974, forbidden to offset any payments made with respect to this transaction that take the form of provisions for subsistence.
But that does not prevent us from taking into account that payment in order to determine whether or not there was a taking.
Moreover, the Court of Claims did not approach the question of taking as determined by whether or not the payment was or was not sufficient as it turned out, but rather on whether or not the Congress in 1877 was acting in good faith in attempting to provide a fair equivalent for the value of the Black Hills by making these undertakings, very substantial undertakings, to provide provisions which as we say ultimately cost the United States amounts in excess of $40 million.
Justice Potter Stewart: Yes.
But -- so what was the $17.1 million for?
Mr. Claiborne: The $17.1 million is simply the evaluation of the land that was severed from the reservation in 1877.
Justice Potter Stewart: That the Government now owes the Sioux Nation and --
Mr. Claiborne: The Government now owes it only because in the peculiar circumstances of the Special Act of Congress passed in 1974, the Government, hence forward is forbidden to consider for the purposes of the award, an offset which takes the form of a provision for food rations.
Justice Potter Stewart: Well, I -- I understand that but I -- what I have difficulty understanding is if it wasn't the taking, why the $17.1 million?
Now, I can understand your argument if you can say it was taken but paid for, but I don't understand why you can say it's -- wasn't taken at all if you don't quarrel with the $17 million.
Mr. Claiborne: Mr. Justice Stewart we say that it was an exercise of the power of Congress to deal with Indian affairs for the benefit of the tribes.
We say that such cases --
Justice Potter Stewart: Now, that -- that -- what was an exercise?
Mr. Claiborne: The Act of Congress of 1877.
Justice Potter Stewart: Yes.
Mr. Claiborne: Just as it was in Lone Wolf and in -- in the other case.
Justice Potter Stewart: Right.
Well, then they've been -- then they -- they wouldn't owe the Indians anything?
Mr. Claiborne: Except for the Indian Claims Commission Act which provided that notwithstanding that Congress was exercising its Indian power if it turns out that the consideration paid was inadequate, all that some duress was involved in the case of an agreement as a matter of moral claim, the Court shall allow whatever the deficiency be.
What is more as I have said before, Congress in 1974 provided with special reference to this case that here, exceptionally, the offset, the payment, if to the extent largely it was, paid in food rations, shall simply not be allowed as an offset.
And for those reasons, we are left unable to say for the purposes of the award, we pay for a value and accordingly, we must admit our liability plus the dispute evaluation which we do not.
Justice John Paul Stevens: Mr. Claiborne, perhaps this is just the same question my brother Stewart has asked, but what is the source of the Government's obligation to pay $17.1 million?
Mr. Claiborne: Well, in our view, Mr. Justice Stevens, it is the Indian Claims Commission Act and the 1974 Act, 18 -- 1974 Act --
Justice John Paul Stevens: The Indian -- Indian Claims Commission Act, I mean --
Mr. Claiborne: The Indian Claims Commission Act provides that whenever there is a finding that the United States in its dealings with the tribe paid either in unconscionable consideration or was guilty of dealings less than honorable in the transaction --
Justice John Paul Stevens: Well, isn't it correct to --
Mr. Claiborne: -- notwithstand --
Justice John Paul Stevens: -- say that the -- the source of the obligation is a finding by the Commission pursuant to statute that there was dishonorable dealing by the United States.
Mr. Claiborne: Yes.
Well, it so happens here, Mr. Justice Stevens that the Commission made no such findings because instead, the Commission found that there had been a taking in the Fifth Amendment sense.
The first time around in -- the first time, the -- the most recent, but the last time the Court of Claims dealt with this case, it said, “No, the finding of a constitutional taking is barred by res judicata, but we, the Court, will substitute a finding that the dealings were less than honorable and on that basis we will make an award without interest for $17.1 million” and indeed the United States acquiesced in that determination.
In normal course judgment would have been entered and the matter would have ended then.
However, the Sioux Nation once again persuaded Congress to make an exceptional rule and in 1978, the Congress passed an act which directed the Court of Claims to ignore the objection of res judicata or collateral estoppel and to review on the merits, the earlier Commission determination that there had indeed been a Fifth Amendment taking.
Now, on this third round, the Court of Claims acquiesced and affirmed the Commission's earlier finding of the Constitution.
Justice Byron R. White: That there had been a taking.
Mr. Claiborne: That there had been a taking.
Justice Byron R. White: And I suppose it's their -- that I suppose that is -- well, that would have been one form of dealing with an Indian tribe unfairly.
Mr. Claiborne: Indeed.
Indeed the only cases in this Court or in the Court of Claims before this one in which this -- that Court has found a taking in the constitutional sense are cases in which this Court has found it appropriate to say that an act of confiscation is not an act guardianship.
All cases in which the Government gave no undertaking, made no payment whatever or the most derisory one very different from this case in which the Court of Claims assumed, though did not find that the Government had indeed undertaking -- undertaken an obligation which in the fullness of time not only equaled the value of Black Hills but perhaps exceeded it.
They found that however to be irrelevant.
Irrelevant, because they put themselves at the time of 1877 and said in effect, “Congress didn't know it was going to cost the United States that much.”
Justice William H. Rehnquist: In the Indian Claims Commission Act of our -- that is the language dishonorable dealing, in that sort of thing, the type of language that would apply between trustee and award or trustee and settee or whatever -- whatever you want to call it.
Mr. Claiborne: No doubt, there is some thought to that relationship of guardian award, in the terms of the Indian Claims Commission Act.
But at least one of those provisions, the one that deals with dishonorable dealings which is Subsection 5 of 25 U.S.C. 70a, expressly allows recovery for Claims that would not be recognized at law or inequity but which, as matter of morale obligation ought to be paid and the Commission is directed to making award if it finds that it as a morale matter, or as a legal matter, the dealings were less than honorable.
Chief Justice Warren E. Burger: This -- this proceeding commences the -- the Court of Claims case commences with the 1974 Act and rests on that, does it not?
That is --
Mr. Claiborne: The -- the Court of Claims decision rests on the 1974 Act and 1978 Act.
More recently the 1978 Act because --
Chief Justice Warren E. Burger: Now, did either of them -- did either -- could either of those Acts have said, "This shall be treated under the terms of the Fifth Amendment taking?"
Mr. Claiborne: Mr. Chief Justice, I think Congress could have of course simply awarded the summation of $100 million or whatever sum in the discretion of Congress that was sought to be fair.
I don't think that Congress could direct a court to -- to bend the rules of the Just Compensation Clause and hint that they were acquiescing in an award under the Fifth Amendment whether the Congress could've found a violation.
Chief Justice Warren E. Burger: Do you think Congress could not -- do you think the Congress could not have declared against the whole background that this was a taking and should be now evaluated on the basis of just compensation.
Mr. Claiborne: Now --
Chief Justice Warren E. Burger: (Inaudible) tinkering with the Fifth Amendment Taking Clause, would it?
Mr. Claiborne: Well, I -- I'm --
Chief Justice Warren E. Burger: -- to be declaring that it was a taking.
Mr. Claiborne: Mr. Chief Justice that may have been possible.
I have difficulties --
Justice William H. Rehnquist: That would have been a private bill, wouldn't --
Mr. Claiborne: Well, but -- I think the Chief Justice is suggesting that the Court still had a role to play and whether the Court of Claims, as an Article III Court, could be simply required to make evaluation, determination accepting as a legal matter directed by Congress that the Fifth Amendment have been violated, I'm not sure whether there'd be a separation of powers simply because --
Chief Justice Warren E. Burger: Well, because if the Indian Claims Commission and the Court of Claims, each of which is a creature of the Congress, couldn't declare this was a taking, why couldn't Congress have resolved that question in the 1974 and 1978 Act?
Mr. Claiborne: Well, Mr. Chief Justice, perhaps they could have. Clearly they did not.
Chief Justice Warren E. Burger: Well, is -- is that important that they did not?
Mr. Claiborne: It is important that they purported to leave it entirely to the Court to determine under the usual rules whether or not this amounted to a taking in the Fifth Amendment sense and any side hints thrown out, well, properly disregarded.
Chief Justice Warren E. Burger: And -- and in the -- in that process, it would not be taking as of a contemporary taking.
It would be a determination of whether there had been a taking back in 1868 or 1977 or approximately hundred years ago.
Mr. Claiborne: Indeed, Mr. Chief Justice.
I find it that my time has run to the point where I must very brief about the background facts of the case.
The difficultly in the case arises because in 1868 when the Sioux Nation severed or relinquished the large part of its territory, it was provided among other things that no further secession should be accomplished, should be valid except with the concurrence of three fourths of the adult male members.
That treaty in 1868 had made a number of provisions which were designed to make, to encourage, furnish incentives by way of money and -- and material aid to the Sioux to become farmers.
However, it had wholly failed in that respect and shortly after the 1868 Treaty, the background situation against which this transaction must be judged included these elements.
The first gold reports had come, that the Black Hills were rich in gold.
Those reports had begun as early as 1868 and indeed some miners had intruded that early.
Gradually, the invasion multiplied.
There were concededly serious governmental efforts to prevent the miners from intruding and indeed to remove them from that area.
Those efforts continued between the date of the Treaty in 1868 and the end of 1875.
They were however largely unsuccessful.
No doubt, the greed for gold exceeded the fear of the soldiers and the invasion of the miners became in effect, unstoppable, at least without dedicating the entire army resources to that single purpose.
Justice Harry A. Blackmun: Certainly, they have exchanged in letters between General Sheridan and General Sherman were profound interest as to how serious the government attempt to prevent the miners' influx was.
Mr. Claiborne: Mr. Justice Blackmun, the reason for that exchange which suggests that in the view of one general, the President might wink at some invasions.
On the other hand, there are concededly instances in which the army did arrest, did remove, did incarcerate miners who had penetrated into the Black Hills.
It's a matter of timing.
Towards the end of 19 -- of 1875, the President had determined that this was an impossible policy and he eventually abandoned it by withdrawing his orders to the troops, though he did not publish them in November 1875.
Now, another aspect of the background of the case is the conceded dependence of the Sioux on governmental food rations.
As I have said, the Treaty of 1868 which it sought to make the Sioux self-sufficient farmers had entirely failed.
The Sioux in 1875 and 1876 and 1877 were still wholly dependent on the government for rations, the government expending something over a million dollars a year for that purpose alone.
The Sioux Treaty of 1868 had provided that rations should continue for four years, but gratuitously, without any legal obligation, the Congress continued those appropriations for two or three years more and the Congress was unhappy with the prospect that that situation might continue indefinitely.
After all, guardian, though it was, the guardian is not normally expected to put his hand in his own pocket for the sake of his ward.
Another consideration that is an important background of the case is the value of the Black Hills to the Sioux themselves.
They knew there was gold there, but they had no intention of removing it.
There was no large gain in the reservation.
This was not the haunting ground.
There was valuable grazing in agricultural land, but it appears that it had been put at this period to very little use by the Sioux.
And finally, because of the miners coming in, there had been clashes between the miners and the Indians and there was a prospect that that conflict between those two forces would escalate.
In these circumstances, Congress determined at a much patient consideration, that the only practical, the only realistic solution is to persuade the Sioux cede the hills and that determination in the mind of the executive and legislative branches of the United States had occurred by the beginning of 1875.
President had the area surveyed with the view determining its value so that a fair equivalent could be paid.
He invited the Sioux leaders to Washington.
He appointed a Commission.
That Commission, the Allison Commission failed and this is all in 1875.
Upon the failure of any agreement, Congress considered the matter and while it is not really relevant to determine precisely what threats were made about cutting off rations since this is not a case based on duress, it is nevertheless important to note that Congress at no time ever cut off the rations, and indeed never threatened to cut off the rations except a year hence.
In all events, a new Commission was formed, that Commission ultimately reached an agreement with the Sioux leaders albeit the requisite number of members did not sign.
That agreement, later ratified by Congress in the 1877 Act, provided relevantly in Section 5 that in consideration, and those of the words of the agreement and of the Act, in consideration of the cession of the Hills, several undertakings were made by the United States, the important one which was a promise to provide rations for so long as the Sioux might need them.
Congress was well aware that it had just appropriated in the preceding years over a million dollars.
It had deleted a provision that rations would continue for only ten years more.
This was entirely open ended.
Congress was obviously aware that it was undertaking a very substantial burden.
Chief Justice Warren E. Burger: What did it amount to over the period of years of this $50 million figure you have in the briefs?
Mr. Claiborne: There is a figure of $57 million which is based on General Accounting Office reports once upon a time conceded by a former counsel for the Sioux which we tell of it cannot say is any longer conceded.
There was a finding by the Court of Claims itself in 1942 when this case first reached that Court that as of 1942, the total amount had been some $43 million.
Even allowing for discount, considering that the payments in the first 20 years exceeded or averaged something over $1 million dollars a year, it is evident that the United States not only paid the interest but repaid the principal long before 1942 or the present.
There is one irony about this case which is that the question of taking would not be here at all if either the 1968 Act did not provide that the signature of the Sioux leaders was not sufficient in this, and therefore become a proper treaty or if they -- three quarters of the members had been persuaded to sign because no matter what duress, no matter how unconscionable were considerations, no matter how dishonorable the dealings, no court has ever found the taking when there was an agreement.
Compensation may be due because advantage was taken of the Indians and they're entitled to an award for the difference but not for the interest.
Had Congress been as high-handed and as callous as is suggested here, that result, no doubt, could have been accomplished.
After all, the dependence of the Sioux on their rations might have informed callous executives and a callous Congress to simply wait until such time as the Sioux having been cut off which they were was so desperate that they would indeed, sign.
There would then have been an agreement.
Indeed an irony here is the Sioux who in a companion case involving the 1868 Treaty have recovered subject to offsets, something over $40 million on the ground that they were grossly underpaid, that's more grossly than here, will not proceed interest on that reward -- on that award.
Justice Thurgood Marshall: Mr. Claiborne, on this $40 million and $20 million in all, how much of that was administration cost?
Mr. Claiborne: Mr. Justice Marshall.
Justice Thurgood Marshall: You know, we -- we know what happened back in those days.
Mr. Claiborne: The accounting reports are -- are exhibits before the Court but those figures were calculated as the amount attributable to the subsistence obligation undertaken in 1877 and quite independently, of the obligations which continued under the 1868 treaty.
Justice Thurgood Marshall: But was it -- was that the money that the Indians received, or was some of that administrative cost?
Mr. Claiborne: We know that the procedure with respect to the rations was to bring cattle on to the reservation and there be held until such time as they were slaughtered and distributed 1.5 pounds per person per day.
Beef was the, in gross of course, was the requirement of the treaty.
The treaty was not vague with respect to these provisions.
It specified exactly, a pound of flour, a pound and a half of beef and so forth per day per person.
To what extent, some of those supplies may have gone astray, I cannot testify.
Now, we believe that the Court of Claims went astray in two respects and I must be prompt.
First, we think the Court of Claims, applying its own good faith test, presumed the wrong way.
It should have accorded to Congress the presumption of good faith as the Lone Wolf case teaches us.
Rebuttable presumption, if the evidence is overwhelming at the contrary, of course.
But instead, the Court of Claims relied on the failure of Congress expressly to say, “We all hereby, granting a fair equivalent.”
They did say, this is in consideration of -- we must assume they meant a fair consideration.
Now, secondly, it seemed to me -- seem to us that the Court of Claims too narrowly focused on the question of monetary equivalents.
The United States as guardian is not merely a land manager.
It has broader duties and in the special exigent circumstances with which it was faced here, it may have been in the interest of the Sioux to acquire even for less than full value, this land relatively useless to them, in order to avoid all the dangers, including the danger that that land would be lost to the miners for nothing, including the danger that if they did not sell it, If it was not acquired, they would be without rations, Including the danger of that hostilities between them and the miners, would endanger the future of the Sioux Nation.
I may reserve the balance of my time for rebuttal.
Justice Harry A. Blackmun: Mr. Claiborne, could I ask you one question.
Focusing on the 1978 statute where the Congress enacted legislation, as I read it, effectively overruled the Court of Claims' earlier holding that the taking claim on the part of the Sioux is barred by res judicata.
Does that bother you at all?
You don't make the argument.
It's -- it's not conceivably a violation of the separation of powers doctrine?
Mr. Claiborne: I would have thought not, Mr. Justice Blackmun.
I hesitated to answer to the Chief Justice's question as to a congressional finding of taking, but that I think Congress is entitled to say, “You may -- you may have another opportunity to litigate your lawsuit.
Chief Justice Warren E. Burger: Mr. Lazarus.
Argument of Arthur Lazarus, Jr.
Mr. Arthur Lazarus, Jr.: Mr. Chief Justice and may it please the Court.
The issue in this case is whether the Act of February 28, 1877, effected a taking of the Sioux Black Hills Country in violation of the Fifth Amendment for which just compensation must be paid under the Constitution.
It is the Act of 1877 that affected the taking.
Government counsel has eluded to the possibility of an agreement or maybe the United States could've gotten an agreement or it could've forced an agreement, but it didn't.
It enacted the 1877 statute and it is the statute, not any agreement that took the Sioux land.
Chief Justice Warren E. Burger: Was it the 1974 or 1978 Act that said that there would be no setoff for the $50 odd million more or less that was paid.
Which of those Acts?
Mr. Arthur Lazarus, Jr.: It was the 1974 Act which said that food rations and provisions may not be deemed payments on the claim, but the Government gives less to the 1974 Act than the Act really encompasses because the Indian Claims Commission had determined that whatever the Government spent on rations was a payment on the claim and therefore, it was wiped out by the 1974 statute.
Congress has taken that whole claimed amount of money out of this case.
Chief Justice Warren E. Burger: Well, having done that could Congress also declared that the Court of Claims should proceed as though there had been a Fifth Amendment taking in -- back there 100 years ago?
Mr. Arthur Lazarus, Jr.: Congress could have done so, Your Honor, but when I testified before the Committee, I said the taking was so clear that Congress did not have to go that far.
All they had to do was waive res judicata and the Sioux were going to win this case.
Chief Justice Warren E. Burger: Well, a couple of lines in that statute and none of you would be here today?
Mr. Arthur Lazarus, Jr.: -- I think that's true, Your Honor, and I think if we weren't talking about $105 million, none of us would be here today either because this is a clear cut case of a taking.
Chief Justice Warren E. Burger: Then what was your objection to having the Act declare that?
Mr. Arthur Lazarus, Jr.: Oh, I'm not sure I could've gotten the Committee to go that far, Your Honor.
What that they did was waive res judicata and give us our day in Court and we told then if we got our day in Court --
Justice Byron R. White: Well, in your second -- your second day in Court on the question.
Mr. Arthur Lazarus, Jr.: Well, the -- the first day in Court was on food rations and provisions where Congress made a different kind of finding.
Congress said that --
Justice Byron R. White: Well, your second -- first day though on the taking issue was sometime ago.
Mr. Arthur Lazarus, Jr.: In 1942, the case was litigated under a special jurisdictional act and the case was then dismissed and the basis for the dismissal was a matter of dispute when we -- we were before the Court of Claims in 1975.
We said it was dismissed because it was not within the scope of the jurisdictional act, the majority of the Court said otherwise.
But in any event, even that majority described the 1942 decision as whether rightly or wrongly decided it's res judicata.
They had their doubts even then about the correctness of the 1942 case and of course, Congress in 1978 has told us that 1942 case is washed clean, we consider this case now on the merits.If --
Justice Byron R. White: If -- I take if -- if when Congress took this land as you say it did instead of promising to pay -- instead of promising to -- to provide rations and subsistence, it had established a trust fund of X million dollars that -- and said we -- out of the -- the income from this -- that we will use to pay rations.
Wouldn't the case be different, I suppose it would?
Mr. Arthur Lazarus, Jr.: Oh, yes, it would Your Honor.
If Congress had made a payment in 1877 --
Justice Byron R. White: Or established a fund.
Mr. Arthur Lazarus, Jr.: The fund could be the equivalent of a payment if it had because that's the way Indian money was treated.
Justice Byron R. White: Yes.
Mr. Arthur Lazarus, Jr.: It was -- never given directly to the Indians, it was put in the treasury to their credit.
And if --
Justice Byron R. White: And it's their promise to set up the fund and use that to buy rations and distribute them, you wouldn't be here, I take it?
Mr. Arthur Lazarus, Jr.: If Congress had in fact set up that fund, I would not be here.
If Congress had made an indefinite promise to say, “We'll give you $17.5 million at some indeterminate time in the future to some indeterminate number of Sioux that would not be just compensation.
Just compensation is payment.
Justice Byron R. White: Well, it might if -- it -- in amount it might be, but you say that would not have avoided being a taking then?
Mr. Arthur Lazarus, Jr.: That is correct.
That would mean the 1877 Act was a taking and --
Justice Byron R. White: Was the taking rather than a -- rather than an exercise of some other kind of congressional power?
Mr. Arthur Lazarus, Jr.: And that is exactly what happened in 1877.
Justice William H. Rehnquist: Now if -- Mr. Lazarus is the taking issue an open one in this present litigation?
Mr. Arthur Lazarus, Jr.: Well, it is if --
Justice William H. Rehnquist: I -- I don't mean how you feel about it, but I mean whether it's barred by some previous decision or barred by the jurisdictional acts of Congress in the (Voice Overlap) --
Mr. Arthur Lazarus, Jr.: Oh, no.
The taking -- the taking issue is the critical issue.
That is the one the 1877 -- it is -- the 1978 statute open for the Court.
That is the only issue before the Court, but when you say, is it an open issue, it is not open in this sense.
The Government will concede that under the circumstances of the 1877 Act, there would be a taking if that property were owned by a white man or may a -- saying is it's not a taking because it was owned by an Indian tribe.
Justice Byron R. White: Well, and -- and that that would be the same -- it would be the same thing I suppose in my example, that Congress couldn't do that to a white man?
Mr. Arthur Lazarus, Jr.: Congress could not do it to a white man.
Justice Byron R. White: And it would have be -- and it would have been a taking?
Mr. Arthur Lazarus, Jr.: It would have been a taking and it is a taking for an Indian.
Justice Byron R. White: Yes.
Well, the only reason it's a taking for an Indian here though is because they didn't put up the fund?
Mr. Arthur Lazarus, Jr.: Well if --
Justice Byron R. White: They just made an indefinite promise rather than put up the fund, so it was a taking?
Mr. Arthur Lazarus, Jr.: That is correct.
Justice Byron R. White: But that isn't the reason why it would have been taken for a white man?
Mr. Arthur Lazarus, Jr.: Yes if -- if it had been a taking, if -- if that property were owned by a white man and Congress took it, and paid them --
Justice Byron R. White: That it had had to pay then?
Mr. Arthur Lazarus, Jr.: They would have to pay them.
Justice Byron R. White: It had to pay them.
It wouldn't -- wouldn't be enough to set up a fund?
Mr. Arthur Lazarus, Jr.: That is correct.
That is correct.
Chief Justice Warren E. Burger: Between them, right?
Justice William H. Rehnquist: What if -- what -- what if Congress had simply said instead of trying take back the 800 square miles consisting of a Black Hills, “We have a lot of demands on our resources and our army can't protect you Sioux tribes but we concede that it's your property and you fight off the individual white citizens that come in looking for gold as best you can.”
Mr. Arthur Lazarus, Jr.: Well that would've been -- that would've been allowable self-help except under the 1868 Treaty, the Sioux had promised to maintain peace and the Sioux did maintain peace and it was the United States that broke the peace.
It was the United States that sent caster on the reservation to publicize that there was gold.
As soon as the gold was publicized, the whites invaded the reservation.
That was a violation of Article II of the treaty.
Chief Justice Warren E. Burger: Well, but now -- what if the -- the invasion had been simply by white citizens having no connection with the Government?
Mr. Arthur Lazarus, Jr.: The Government had a treaty commitment to keep them out.
Under the 1868 Treaty, the United States promised to keep whites out of the Great Sioux Reservation and it had a military obligation to do so.
Now, it turned out that Government counsel says, “We have conceded that the United States made serious efforts to keep the whites out.”
We have conceded no such thing because the finding of the Indian Claims Commission was that the military forces, whether because of inability or unwillingness to keep the whites out, allowed them in.
Justice William H. Rehnquist: Do you -- do you say that the construction of the treaty made it an absolute obligation to keep the whites out no matter what the demands on the federal treasury or no matter what Congress would have appropriated?
Mr. Arthur Lazarus, Jr.: Yes, until the United States changed that treaty, that was its obligation and I would point out to you Your Honor that the United States always found enough troops to round up Indians.
It's only trouble was finding enough troops to wind -- round up white people.
Justice William H. Rehnquist: Well, let -- let's take -- take the situation of say, something completely divorced from Indians of locals -- local county or city government and if it were to devote -- to devote 90% of its tax dollars to increase in the police force, it could prevent any burglaries?
It -- instead, as any number of demands on those resources and so it only appropriates 20%.
Therefore, there are burglaries in the area which depreciate the value of the property and put pressure on people to sell perhaps.
Now, does that amount to a taking?
Mr. Arthur Lazarus, Jr.: Your -- Your Honor, let -- let us assume your hypothetical.
First, the United States created this crisis.
It wasn't the Indians who created it, it was the United States who created.
The United States took the bulk of the Sioux land under the 1868 Treaty and as Government counsel has already pointed out, paid them $40 million less than the land was worth.
As a result of that, they (Inaudible) impoverish.
That was the fault of the United States.
Then the United States kept them from their hunting grounds so they became dependent on the United States for food.
Then the United States first encouraged the miners to come in and then withdrew the troops.
Then the United States rounded up the Sioux and put them on them on the reservation and took their guns and horses so they couldn't hunt and there, we had this crisis that the United States created.
Now, let us assume the United States didn't have enough money to handle that crisis other than to take the Black Hills away from the Sioux which is exactly what it did.
All we say, “It is okay, pay us” and that is what the United States did not do.
All the United States had to do was to pay us the $17.5 million that the land was worth and it made absolutely no effort to do so and it hasn't done it yet.
And I think Mr. Justice Stewart, you put your finger on it right at the beginning because the Government concedes it hasn't paid us and it concedes it owes us under some theory, under the Indian Claims Commission Act.
That can either be for a breach of trust, for a failure to pay a conscionable consideration or through a violation of fair and honorable dealings.
The gravamen of each one of those causes of action is, you didn't pay us and if you didn't pay us for those causes of action, you didn't pay for a taking either.
Justice Byron R. White: Well, what -- suppose the Government had at the time that this -- the Black Hills were taken as you say, the -- the Government had said, “Well let's agree on a value and we'll pay it to you over a period of years” and they had agreed on a value say $20 million payable over 50 years.
Mr. Arthur Lazarus, Jr.: Their --
Justice Byron R. White: Would that have been a taking?
Mr. Arthur Lazarus, Jr.: No, sir.
That would have been an agreement.
If the Sioux had agreed to it even if the amount of money was not fair value, that would not have been a taking, that's --
Justice Byron R. White: Or if -- or if the Government had said -- what if the government had said, “We think the value of the land is $20 million and we'll pay it to you over 50 years?”
Mr. Arthur Lazarus, Jr.: If the Sioux had agreed to --
Justice Byron R. White: No, the guys -- they got -- Sioux didn't agree?
Mr. Arthur Lazarus, Jr.: The -- the rule in just compensation cases as I understand it was --
Justice Byron R. White: Well, what about the rule in fair compensation cases where the -- where the Government is saying they're not -- is -- is arguing this is not a taking -- we're taking the land under other -- with other head on that we're paying you fair compensation?
Mr. Arthur Lazarus, Jr.: This Court has already disposed of that argument in the Creek Nation case where the United States made the argument that we were not dealing with them in our sovereign capacity, we were dealing with them as a trustee and this Court made a very short swift of that argument.
It said, “You are responsible as a trustee and you are responsible under the Constitution, and your activity as a trustee must conform the constitutional standards.”
And the Court there found even though the Government argued that it was acting as a trustee that it was a taking because the United States --
Justice Byron R. White: Well, I thought you said a while ago that the United States had set up a trust fund of $20 million here and paid the income of it to the Sioux, it would've been all right?
Mr. Arthur Lazarus, Jr.: Well it --
Justice Byron R. White: It would not -- it would have been a taking?
Mr. Arthur Lazarus, Jr.: It would not have been a taking in the -- if the fund, if that $20 million fund had been equal to the value of the land.
Justice Byron R. White: And why do you assume that, are they --
Mr. Arthur Lazarus, Jr.: Worse, that I have thought you were assuming that and what I am saying is that that's the exact same situation as if the United States had paid the $20 million directly to (Inaudible)
Justice Byron R. White: And -- and then it wouldn't have been a taking even though the Sioux had not agreed to it?
Mr. Arthur Lazarus, Jr.: That is correct because just compensation would have been paid.
Justice Byron R. White: Well --
Mr. Arthur Lazarus, Jr.: But in this case, just compensation was not paid.
Justice Byron R. White: And if the United States have said, “Well, we were thinking of setting up a $20 million and paying the interest to you but -- but instead of doing that, we're going to pay you a what'll undoubtedly be more than that in the form of food and shelter.
That's -- then it's a taking.
Mr. Arthur Lazarus, Jr.: Then it is a taking because the cases are quite clear that a -- that just compensation is payment, not promises.
The Government's --
Justice Potter Stewart: But it's also quite clear that in ordinary takings case that the -- what compensation is just cannot be unilaterally determined by the taker.
And in my brother White's questions to you, you would've -- you conceded that had the United States simply unilaterally determined the $20 million is the -- is the right price, we'll set up a trust fund for that, that that would not have been a taking.
Mr. Arthur Lazarus, Jr.: Oh, if -- if that is how my remark is being interpreted it goes too far.
Justice Potter Stewart: That's what I understood your answer.
Mr. Arthur Lazarus, Jr.: Oh, no.
My answer is that if that $20 million were determined by a court to be just compensation --
Justice Byron R. White: Well, even though you --
Mr. Arthur Lazarus, Jr.: -- as the Commission has determined that that $17.5 was just compensation, then just compensation would be paid.
But if the value of that property were $25 million and Congress said, “We'll set up a trust fund of $20 million,” that is not just compensation and that no matter how much good faith is involved, that is not just compensation.
Justice Byron R. White: Well, that --
Mr. Arthur Lazarus, Jr.: This Court in -- in Monongahela -- in Monongahela Navigation, 90 years ago said, “It's not up to Congress to say what just compensation is, the Court say what just compensation is.”
Justice Byron R. White: I agree.
I -- I don't -- I didn't -- I think you said that if -- that if the Government set up a fund that it -- itself determined was a fair compensation and paid the interest, that would not be a taking as long a some -- as long as whenever the question came up it was determined that that was fair compensation.
Mr. Arthur Lazarus, Jr.: That's correct.
That is correct.
Justice Byron R. White: Although it -- although the Sioux might at the time have objected to it violently?
Mr. Arthur Lazarus, Jr.: Now I --
Chief Justice Warren E. Burger: Mr. Lazarus, how many Sioux are there now, to this day?
Mr. Arthur Lazarus, Jr.: You Honor, there are 60,000 or more Sioux now.
They are at the very bottom of the economic ladder even compared to other Indians.
The Sioux are among the most depressed in the entire United States.
And they are so depressed not in least part because the United States in 1877, took their most valuable asset, the Black Hills and it hasn't paid for it yet.
Now, that land which the United States acquired and turned over it to its assigns, $1.4 billion in gold, has been taken out of the Home State Mine alone, that's just one mine among many.
Justice William H. Rehnquist: But the Sioux never wanted it to mine, did they?
Mr. Arthur Lazarus, Jr.: It was the Sioux to do with as they wished, Your Honor.
Under recognized title which they possessed, they had a title as sacred as a fee.
They could use it or not use it.
They might not have wanted to use it in 1877.
They may have wanted to use it in 1910.
The standard value is not the value to the Indians, it is fair market value.
And if they wanted to use their property for hunting at that time and for gold at a later time, that was to be their choice, not the Government's choice.
The Government had no right to take it away from them just because the government didn't like the way they were using it.
Now, I would like to point out, Your Honor, because we have talked a great deal today about money.
So I would like to address the $47 million offer, $43 million or $57 million that the Government repeatedly raises in its -- in its presentation both in its brief and on argument here today.
I regret to say that what Government counsel has told you about that money is just plain inaccurate.
He has not accurately described what is before the Court.
What is in the record in the Court is a general accounting office report that lumps as, Mr. Justice Marshall recognized, that lumps a whole series of expenditures under a label “1877 Act” and it doesn't tell us whether it was for provisions and it doesn't tell us whether those provisions were ever delivered and it doesn't tell us if those provisions were delivered.
Did it go to people who weren't entitled to them because the Act says that children between the age of six and 14 don't get rations if they're not in school and it didn't -- doesn't tell you whether those rations were delivered to people living on lands susceptible of cultivation and their families because they weren't entitled to rations either, so none of those things could be counted in the $43 million.
The $43 million includes money that was spent in 1875 and 1876.
There couldn't possibly be consideration under the 1977 Act.
There is not, and our brief shows a bit of credible evidence that the Government spent five cents for rations on the Sioux, but even if it had, even if it could prove that it spent every dime of that $43 million, it would be irrelevant for purposes of this case because whether there was a taking, depends upon what the 1877 Act said and it has nothing to do with what may have happened 10, 20, or 50 years later.
The 1877 Act makes no payment to the Sioux.
All it does is make them a conditional promise, “We'll provide rations for you until you can support yourselves subject to these various conditions about children not getting and -- then labor is not getting” and that kind of indefinite promise is not just compensation and the Government concedes that is not just compensation.
Justice Byron R. White: Mr. Lazarus, in pursuant to a treaty a reservation is set up for an Indian tribe and sometime later the Government -- the Congress just says, “Well, we think the reservation is too big.
We're just going to cut it in half and open the rest of 10 soldiers and just -- cuts in half and leave -- redraws the reservation” and the -- now is that a -- is that a -- both a breach you the treaty -- is that a breach of the treaty or is it a taking or both?
Mr. Arthur Lazarus, Jr.: It is a breach of the treaty and the United States has the power to breach the treaty.
Justice Potter Stewart: That's Lone Wolf.
Mr. Arthur Lazarus, Jr.: That -- that's Lone Wolf.
Justice Potter Stewart: Right.
Mr. Arthur Lazarus, Jr.: Lone Wolf tells us that Congress -- if Congress determines that that reservation should be cut into half, Congress can come in and do it.
It can do it without the consent of the Indians and it can do it in violation of the treaty.
It is also a taking and when Congress does it, it has to pay for it.
There is no reason --
Justice Byron R. White: Now what case is that?
Mr. Arthur Lazarus, Jr.: That's Shoshone case, that's Klamath, that's Creek Nation, that's every case this Court has had where we have dealt with just compensation and recognized title.
Justice William H. Rehnquist: But those were -- those were cases just involving whether interest should be paid?
Mr. Arthur Lazarus, Jr.: Well, that's what this case involves, Your Honor.
Justice William H. Rehnquist: Well, I thought this involved a taking to, that those expressly involved the question of whether Justice White's hypothesis was or was not a taking.
Mr. Arthur Lazarus, Jr.: Those -- those cases all involved taking.
Those -- the -- the circumstances were different.
In the Shoshone case, the Shoshone had a reservation, the United States settled the Araphoes on part of the reservation, the Shoshone never agreed to it.
Question, “Did the United States have the power to do it?
Did the United States have to pay for doing it?
Did it have to pay just compensation?
That's what --.
Justice Byron R. White: So that the treaty -- a treaty created property right, it is a property right that -- it's taken by the United States, they got to pay for it.
Mr. Arthur Lazarus, Jr.: That's right, a treaty protector.
We're only talking about recognized treaty title, not aboriginal title, but recognized treaty title is Fifth Amendment property under the Constitution, that's what this Court held in Shoshone.
Justice Potter Stewart: Well, that's a little different than -- that's a little different in this, you tell me if I'm mistaken, from -- from an Indian reservation in which title remains in the United States Government?
Mr. Arthur Lazarus, Jr.: Well --
Justice Potter Stewart: And the question such as in the DeCoteau case and others as to whether or not the reservation has been terminated, has been a -- is a question of congressional intent.
But here, this was not Indian reservation, this was -- this belonged to the Sioux Nation, didn't it?
Mr. Arthur Lazarus, Jr.: Well, this was all reservations.
The -- the beneficial ownership and all the incidence of ownership are in the Indian tribe, the bare legal title is in the United States.
Justice Byron R. White: But this was more than that.
Justice Potter Stewart: And that was true here too?
Mr. Arthur Lazarus, Jr.: Yes.
Justice Potter Stewart: It was?
Mr. Arthur Lazarus, Jr.: Yes.
Justice Byron R. White: This was more than aboriginal title, even -- even if originally it been aboriginal title that was recognized by treaty and it constituted a reservation.
Mr. Arthur Lazarus, Jr.: That -- that is correct.
It was recognized by a treaty twice over.
Justice Potter Stewart: It was federal land.
Mr. Arthur Lazarus, Jr.: It was fed -- it was a federal Indian reservation, recognized title and that is --
Justice Potter Stewart: I thought the title was in the Sioux Nation, not in the federal government?
Mr. Arthur Lazarus, Jr.: Well, all of the incidence of ownership I -- if -- if you want to say who has all the incidence of ownership, it is the Sioux Nation.
Where does the bare legal title rest?
It is in the United States as it is with respect to all Indian lands, that's part of what establishes the trust, but when the United States takes it and Shoshone made this quite clear, when the United States takes it, the Indians have a 100% interest for purposes of determining just compensation.
You evaluate at full value.
Justice Potter Stewart: Has there been any question of compensation in the cases before this Court where the question was, “Was the reservation terminated?”
Mr. Arthur Lazarus, Jr.: No, I don't think -- I don't think we get the just compensation cases in that situation unless you have a -- a statute, what we call the surplus land statute that was DeCoteau and -- and Rosebud and Mattz against Arnett.
Where there is a surplus land statute that the Indians have agreed to that terminates part of the reservation, there's no just compensation claim.
There may be a just compensation claim if it is a unilateral surplus land statute and the United States takes these surplus lands and disposes them to -- of them to settlers, to white settlers for $2.5 an acre when there's really a value of $10.
Justice Byron R. White: But -- but if all the land in the reservation is either allotted land and held in trust by the United States or it has been entered and it's in the -- it's in fee ownership of whites.
If all the land in the reservation is either allotted land or fee-owned by whites terminating the reservation created is -- is not a taking?
Mr. Arthur Lazarus, Jr.: That is correct.
Justice Byron R. White: Yes.
Mr. Arthur Lazarus, Jr.: That is correct.
Just -- just changing the jurisdiction is not a taking.
It is acquiring the land which what happened in this case that creates the taking.
Now, Your Honors, I see my time is almost up and so all I can say is that if the precedence of this Court are followed, then the decision of the Court of Claims must be affirmed because the precedence of this Court say that the Sioux had recognized to a treaty title that that tile is Fifth Amendment property.
That the United States acquired the land under circumstances that constitute a taking and my client has never been paid just compensation.
And I suggest to you Your Honors that you should not think of the amount of money involved.
The Constitution is not only color blind, it is dollar blind and we are entitled to just compensation under every single ruling of this Court and the Court of Claims should be affirmed.
Justice Byron R. White: So if the United States at the time had said look we were taking the Black Hill, “We're going to pay you $100,000 a year for as long as we want to but we wont tell you for how long and they had paid them a $100 million, you would still be making your very argument before us?
Mr. Arthur Lazarus, Jr.: Absolutely, Your Honor because that was not just compensation.
Justice John Paul Stevens: May I ask this one question?
So as was your position as I understand it, your basic position does not require us to consider the issue that the Court of Claims devoted most of its attention to.
Mr. Arthur Lazarus, Jr.: Your Honor, our basic position is that you do not have to reach the rationale of the Court of Claims because there is -- good -- the good faith test in our opinion is not a valid test.
If you apply the good faith -- faith test as the Court of Claims did, we win anyway because they said there was no good faith.
Chief Justice Warren E. Burger: We'll resume there at 1 o'clock counsel.
Argument of Claiborne
Chief Justice Warren E. Burger: Mr. Claiborne, you may proceed.
Mr. Claiborne: Mr. Chief Justice, it ill behoves the Sioux Nation who have, at least since 1920 have been very much the special favorites of the laws, to put themselves in the shoes of a white claimant who would not be here having been barred by limitations, res judicata or estoppeled by the admission of counsel set off --
Justice William J. Brennan: I'm sorry. I -- I have a difficulty hearing you.
Mr. Claiborne: A white person in the same shoes would not be here having been barred by limitations by res judicata.
Justice Potter Stewart: Well, unless here were the beneficiary of this same Act of Congress?
Mr. Claiborne: Yes sir, but most important, he would have been able to plead payment as indeed we are free to do though not to defeat the award of $17 million, but to determine whether there was a -- a taking.
The Court of Claims in this case was very clear about that.
They held that although the gratu -- the provisions supplied were not allowable as an offset against the award, they were to be taken into account in determining whether there was fair dealing or whether Congress acted in good faith.
Now, whether Congress acted in good faith depends on whether at the time the value of the provisions was sought to be somewhat equivalent to the value of the Black Hills.
The value of the Black Hills is a matter which a century later gave rise to enormous controversy where the Commission experts varied between less than $5 million to more than $25 million.
The Commission after months of hearings and with years to ponder came up with the figure of $17.1 million, but Congress cannot be faulted if in 1877 it did not accurately know that value.
It would still have been acting in good faith if it had somewhat undervalued the value of that territory.
It certainly cannot be faulted because in fact its promise was over generous and as to that promise and its implementation, my learned friend has suggested that the figure of $43 million is confected.
It comes out of the Government Accounting Office reports.
It is a finding of the Court of Claims in 1942.
It was increased by an admission of former counsel in the 1950s.
It is not a figure taken out of the air.
It is well-known and was then well-known that this obligation would exceed some million dollars a year.
Congress had deleted the limitation to 10 years obviously anticipating that it might need to be continued longer.
At the very least, Congress undertook a very serious substantial obligation which was fully fulfilled and it ought not now to be said to be to have been acting in such bad faith as to constitute an unconstitutional taking.
Justice Byron R. White: Then -- you -- you say that if the Government took -- takes the Black Hills and says our, we promise to pay you a $100,000 a year forever for the Black Hills.
Obviously, you -- you say there's no taking.
Mr. Claiborne: Exactly so, Mr. Justice White.
Justice Byron R. White: And -- so you don't -- you don't -- you don't think that necessary -- unnecessary precondition is that at the time the property is taken, that a total value be set and paid over.
Mr. Claiborne: Not in such a case as this.
To delay for evaluation would have simply invited the Hills from being stolen for the Sioux and perhaps later required when the Government had gone for far les --
Justice Byron R. White: Well, it would've been -- it would've been a taking vis-à-vis a white.
Mr. Claiborne: In the case of a white man, that perhaps the amount must be qualified.
Justice Byron R. White: I mean if a white -- if white -- as if a group white people had owned the White Hills and the Government had done this to them, that would have been a taking.
Mr. Claiborne: I think not in light of the actual payment that was made --
Justice Byron R. White: Oh really?
Mr. Claiborne: -- in subsequent --
Justice Byron R. White: Or you could take the -- you could just -- the Government can take a property and say -- say, “We don't need to pay you over the present value of it.
We can just” --
Mr. Claiborne: It may have been a taking.
It would have been --
Justice Byron R. White: Pay you $100 a year, sooner or later we'll get to the value?
Mr. Claiborne: I should correct myself, Mr. Justice White.
In a case of a white person in which the obligations are different, this might have been a taking but there would have been no recovery because the payments made in respect of that taking properly discounted would have eliminated the principle and therefore, no interest would have been precluded.
Justice Byron R. White: By the time they -- the money they paid out equaled the principle plus the interest up to that date.
Mr. Claiborne: Indeed, as by my computations, that had occurred at about 1915, certainly by 1926.
Chief Justice Warren E. Burger: I'm not entirely clear on this, Mr. Claiborne.
Is there any relationship of sovereign to sovereign between the United States and any group of white people within our boundaries?
Mr. Claiborne: I think --
Chief Justice Warren E. Burger: And -- and the United States is not and never has been a trustee for any category of white people, have they --
Mr. Claiborne: That is so.
Chief Justice Warren E. Burger: -- with the people to the Indian relationship.
Mr. Claiborne: But that trustee relationship, Mr. Chief Justice, carries both obligations, but also unusual powers, the power to dispose against the will and without exercising the power of eminent domain.
Chief Justice Warren E. Burger: There is no such power, comparable power over any white category.
Mr. Claiborne: Well, that -- that is so.
That is so.
Chief Justice Warren E. Burger: At least there was -- and these were all results of treaties in the first instance, were they not, these rights and duties and powers?
Mr. Claiborne: Well, this Court has held that independently of treaties, the inherent situation of the Indians place them within the protection of the United States.
Chief Justice Warren E. Burger: Well, the Constitution itself recognizes Indian tribes as sovereigns, does it not?
Mr. Claiborne: Yes, but the Constitution perhaps also recognizes the dependent status of Indian tribes, their inability to alienate their land which accordingly, if it must be done in their interest, may occasionally have to be done against their will by their guardian.
Justice John Paul Stevens: Mr. Claiborne.
There's one -- one question, I guess perhaps we've covered but I just want to be sure.
Going back to Mr. Justice Stewart's very first line of inquiry when you -- you first started your argument, I'm not clear in my own mind why, if there is the good faith or what -- of its equivalent that on which your position ultimately rests, what is the justification for this $17 million principal award?
How can the two be consistent?
Mr. Claiborne: Well, Mr. Justice Stevens the Court of Claims has not taken its mandate defined a recovery only when the dealings were less than dishonorable literally.
They have found that in every circumstance in which the amount paid was less than substantial equivalent even though in good faith the bargain was made, there will be an award under the Indian Claims Commission Act.
In this case, the Court of Claims determined on its own without benefit of any finding from the Commission that the dealings had been less than honorable.
The United States at this point could not in any event make any offsets.
Accordingly, perhaps we could have contested that finding but we were content as we then thought to pay the $17 million and have done with this protracted litigation.
Had we known that at the end of the day, Congress would reopen the matter of interest in 1978, perhaps we would have contested the finding that the dealings had been less than honorable, but it was not seemingly necessary to do so then.
Justice John Paul Stevens: But -- but is it not correct that the acceptance of your position requires us to -- to adopt a view of the case which would be inconsistent with the $17 million principal award if that were still open.
Mr. Claiborne: I think not Mr. Justice Stevens.
I think the Court can find that the dealings were not wholly honorable and that results in a moral claim which would not bare interest and yet find because that is judged from hindsight and yet find that Congress was in good faith seeking to benefit the Sioux tribe at the time and accordingly, there was an exercise of the Indian power and not of the eminent domain power and accordingly, no taking within the meaning of the Fifth Amendment.
Justice Potter Stewart: My -- my basic concern which prompted me to ask you a question or those questions at the outset was that I had difficulty in constructing any theory.
If one begins with a proposition that the United States own -- owes the Sioux Nation $17 plus million, I'd had difficulty constructing any theory to support the view that the United States didn't also own -- owe interest on that amount, but I think I now understand your answer which is that the $17 million resulted from the action of Congress that disallowed any offsets.
Mr. Claiborne: Exactly so, indeed.
Justice Potter Stewart: And that that is inapplicable to the question of interest.
Mr. Claiborne: When -- when the Court of Claims made its decision in 1974 saying the value of the Black Hills is $17.1 million, it then said in stage two the United States may prove its offsets including these provisions.
Justice Potter Stewart: Right.
Mr. Claiborne: At that point, the Sioux realizing that the offsets wipe out the award came to Congress and said -- forbid that which Congress did --
Justice Potter Stewart: Did in 1978.
Mr. Claiborne: And that -- that produced this peculiar situation that would --
Justice Potter Stewart: And -- and that produced this $17 million.
Mr. Claiborne: That produced the $17 million which we could no longer contest.
Justice Potter Stewart: I understand your argument.
Chief Justice Warren E. Burger: Thank you gentlemen.
The case is submitted.