UNITED STATES v. NAVAJO NATION
In 1964 the Navajo Nation entered into a contract with Sentry Royalty Company for the mining of coal on its land. The contract called for royalty payments to the Navajo Nation not to exceed 37.5 cents per ton of coal mined. However, the contract allowed for the Secretary of the Interior to adjust the royalty rate to a "reasonable" level after twenty years. At the end of twenty years, the Navajo Nation was being paid the equivalent of 2 percent of the proceeds from the mining operation. As stipulated by the contract, the Navajo Nation entered into discussions with Peabody Coal Company (formerly Sentry Royalty Company) to adjust the royalty rate. After discussions failed, the Navajo Nation asked the Secretary of the Interior to resolve the dispute. The Department of the Interior's Bureau of Indian Affairs reached an initial decision to set the royalty rate at 20 percent. This decision was delayed on the recommendation of the Secretary of the Interior. Unbeknownst to the Navajo Nation, the Secretary had been meeting with executives of the Peabody Coal Company who requested the delay. Facing dire economic circumstances, the Navajo Nation agreed to a royalty rate of 12.5 percent which was approved by the Secretary of the Interior.
In 1993, the Navajo Nation brought suit against the United States for violations of its statutory and fiduciary duties to the Nation. It sought damages of $600 million. This latest decision by the U.S. Court of Appeals for the Federal Circuit represents the fifth chapter in the long running saga over the original dispute. Its decision comes in the wake of the U.S. Court of Federal Claims holding, on instructions from the Supreme Court, that the Navajo Nation did not provide sufficient evidence to seek damages from the United States.
The Court of Appeals disagreed. It held that the Navajo Nation marshaled sufficient evidence to show that the United States "controls the leasing of the [Navajo's] coal resources and that the government is responsible for the liabilities arising thereunder." It reasoned that the body of regulations and statutes that governed the Nation's resources were "reasonably amenable" to an interpretation that imposed liability on the part of the government for breach of its duties.
Does the decision by the Supreme Court in Navajo Nation I, foreclose this most recent decision by the U.S. Court of Appeals for the Federal Circuit?
If the decision was not foreclosed, did the U.S. Court of Appeals for the Federal Circuit properly hold that the United States was liable based on its interpretation of statutes that do not address royalty rates in tribal leases?
Legal provision: Indian Mineral Leasing Act
No and No. In a unanimous opinion written by Justice Antonin G. Scalia, the Court held that its decision in Navajo I had not definitively terminated the Nation's claim. In Navajo I it reasoned that the Nation's only avenue to sue the United States was by finding "specific rights-creating or duty-imposing statutory or regulatory prescriptions." The Court reasoned that since only three statutes were analyzed, there might exist a relevant statute that could provide the Nation a basis for its lawsuit. However, the Supreme Court also held that none of the sources of law cited by the Nation provided such a basis and therefore its suit should be dismissed.
Justice David H. Souter, joined by Justice John Paul Stevens, wrote a separate concurring opinion. He admitted regretting that his dissenting opinion in Navajo I was not controlling authority, but recognized the Court must abide its precedent.
ORAL ARGUMENT OF GEN. EDWIN S. KNEEDLER ON BEHALF OF THE PETITIONER
Chief Justice Roberts: We will hear argument first today in Case 07-1410, United States v. Navajo Nation.
Mr. Kneedler: Mr. Chief Justice and may it please the Court: Six years ago this Court rejected the Navajo Nation's claim for damages in connection with the same action that is before the Court here, the Secretary's approval of amendments to the tribe's mineral lease in the mid-1980s.
The Court held there that in order for the United States to be held liable under the Tucker Act or the Indian Tucker Act, the claimant must identify at the threshold a specific rights-creating or duty-imposing statutory or regulatory prescription that the government has allegedly violated.
The Court found no warrant in any relevant statute or regulation to impose liability on the United States.
In particular, the Court concluded that the approval of the royalty rates in the tribe's lease was governed by the Indian Mineral Leasing Act of 1938, or IMLA.
Looking at IMLA's framework, the Court held that there was no, quote, "textual basis", close quote, in any pertinent statutory or regulatory provision that required the Secretary to insist that the tribe negotiate for a higher rate.
Chief Justice Roberts: Well, it said "pertinent or relevant", but surely that's limited to the statutory provisions that we examined in the case.
Mr. Kneedler: But I think the way to look at it is what the Court said, that it found no warrant in any relevant statute or regulation, and it discussed not just IMLA but several other statutes which -- which did have to do with the economic -- excuse me -- the economic terms of leases, but--
Justice Ginsburg: But the question--
Mr. Kneedler: --didn't govern.
Justice Ginsburg: --But the question presented, General Kneedler, was limited to IMLA, to the Mineral Leasing Act.
Mr. Kneedler: Well--
Justice Ginsburg: --That was the government's question presented.
Mr. Kneedler: Two things about that.
The government's question presented was that the Court could not find the United States liable or -- was whether the Court could find the United States liable without finding a violation of IMLA.
And therefore, the premise of the question was, without finding a violation of IMLA, the United States could not be liable, and the Court found no violation of IMLA.
But beyond that, the tribe's principal submission in this Court was that the United States had control through a network of statutes, including the ones they rely on here.
But the Court also itself on page 30 of its brief in that case identified the relevant statutes as being IMLA and the other two that this Court discussed and the general introduction to the Rehabilitation Act.
So I think the structure of the Court's opinion, looking at the way the tribe serves it up, the Court said there has to be a specific violation of a -- of a statutory regulatory prescription.
The Court found that the relevant one was IMLA, and it found no violation.
And therefore -- and the Court also said the tribe's claim, not simply arguments made in favor of the claim, must fail.
But if the Court concludes that its prior decision did not absolutely foreclose the litigation, we think it's clear that the framework that this Court announced in -- or reaffirmed in Navajo 1 itself does foreclose the claim here.
As I said, the Court concluded that IMLA is the statute that governs the approval of royalty terms in coal leases.
On remand, the Federal Circuit relied on two other statutes addressing other subjects, the Surface Mining Reclamation and Control Act, which has to do with the regulation of environmental issues, matters that may arise in connection with a coal lease, and the Hopi-Navajo Rehabilitation Act of 1950, which set in motion a general governmental program to rehabilitate and improve the economic life of the Navajo and Hopi Indians.
But neither of those statutes had anything to do with the approval of the economic terms of coal leases.
That was governed by IMLA.
So the fact that the Federal Circuit on remand held the United States liable on the basis of two statutes that have nothing to do with coal leasing, minus the statute that did have something to do with coal leasing, in our view shows how far the Federal Circuit has strayed from this Court's teachings.
But beyond that, we think it's a fortiori that the court of appeals erred in its alternative holding, which was that the United States could be held liable on the basis of general common law principles.
The Tucker Act and the Indian Tucker Act provide that the United States may be liable only for a violation of an act of Congress or a regulation.
And it was for that reason that this Court stated in Navajo -- in the Navajo case that there has to be a violation of a specific statutory or regulatory provision.
Even as a general matter, under this Court's jurisprudence, there is only a very limited role for Federal common law, but that is especially so when what we are talking about here is liability for damages under a waiver of sovereign immunity, and the usual sovereign immunity principles have to cast considerable doubt on that.
Only an act of Congress or a regulation adopted pursuant to congressionally conferred authority can provide for the payment of money out of the Federal Treasury under our Constitution.
Justice Kennedy: Are there cases in the courts of appeals where Indian tribes litigate with the Secretary and claim an abuse of discretion for the way in which the Secretary performs the duties with respect to Indian lands?
Mr. Kneedler: Under the Administrative Procedure Act, there could be -- there could be claims brought, but those would not be for money damages.
Justice Kennedy: --I -- I recognize that, but I want to know, is there a body of law in the Federal Circuit that generally recognizes that the -- that the Secretary has a fiduciary obligation that's enforceable as a matter of administrative law?
Mr. Kneedler: Not in the Federal Circuit, to my knowledge, because -- because the Administrative Procedure Act--
Justice Kennedy: --I meant all of the circuits.
Mr. Kneedler: Yes.
No -- in the -- under the Administrative Procedure Act -- I'm not -- just like any party could claim -- could challenge what was done by the Department taking particular administrative action.
And I think there -- I think that was--
Justice Kennedy: --Well, what I was asking was whether there's some doctrine that the -- that the trustee -- that the Secretary acts in a capacity, a fiduciary capacity as a trustee.
If that doctrine were out there, then that might be the basis for saying that it's a sufficient foundation for money damages.
I was just asking, is that doctrine there?
Mr. Kneedler: No, not -- not in the way you put it.
But there are cases that certainly talk about the Secretary has trust responsibilities.
But there are a lot of ways in which that concept can be used.
It can be used in a political sense in that the United States Government, through treaties or a general sense of moral responsibility, should look out for the Indians, and in the day-to-day administration of Indian affairs to contemplate a trust responsibility is simply to mean that the United States has a special relationship and -- and should deal in that manner.
And under the Administrative Procedure Act, if there is -- if there is an action the United States takes under a statute that governs Indian affairs, that would be -- that would be subject to judicial review under the general principles, is it arbitrary and capricious under normal principles, does substantial evidence sustain the determination?
But, particularly in a suit for money damages under the -- under the Tucker Act and where Congress has said there has to be a violation of a money-mandating statute or -- or regulation, general common law principles do not suffice.
As I said, for money damages, only Congress or an executive agency under -- acting pursuant to congressional authority under the Constitution can provide for the payment of -- of money out of the Federal Treasury.
Chief Justice Roberts: --I -- this may be a purely academic distinction, but you talked in terms of liability.
Are you suggesting that the trust principles do not set a standard to which the Secretary is bound, or simply that they don't constitute a waiver of sovereign immunity?
Mr. Kneedler: I think it's really both.
The general trust principles, at least -- at least again under Tucker Act jurisprudence, general trust principles are not what establish the Secretary's duties.
It's the acts of Congress that impose duties on the Secretary in this area as in any others, or regulations the Secretary has prescribed under it.
Now, under this Court's jurisprudence, the Court has said that the notion of trust is relevant at the second stage of the analysis.
The first stage is the threshold requirement that there be a specific statute or regulation that imposes duties or rights.
If the Court finds that, then at the second stage, as this Court has held in Mitchell 2 and indicated in Navajo as well, that may be relevant to determine whether those specific duty-imposing statutes in turn also impose monetary liability on the United States for violation.
Justice Alito: Under both IMLA and the Rehabilitation Act, leases have to be approved by the Secretary.
Doesn't that impose a duty on the Secretary?
Mr. Kneedler: Well, what the Court said in -- in Navajo specifically with respect to IMLA, the Secretary, yes, does have to approve it, but the Court specifically rejected the proposition that there was any basis for liability stemming from the Secretary's approval of the lease.
Justice Alito: Well, under the Rehabilitation Act, if it applied to this lease, what would the Secretary's duty be?
Mr. Kneedler: It would be -- section 5 of the Rehabilitation Act for approval of leases is essentially the same as IMLA.
It provides for the Secretary to approve the lease.
But, as this Court held in IMLA -- or in Navajo 1, the theory of IMLA is not to have the Secretary be responsible or to take the lead in leasing tribal lands for coal purposes.
It's the tribe, subject to the approval, and the Court concluded it would be inconsistent with that arrangement for the Secretary to second-guess the determinations that the Secretary had made.
And the Court -- the argument was made there and expressly rejected that the Secretary was required to insist that the tribe negotiate a higher amount when it renegotiated the lease.
Justice Alito: The Secretary has to apply some standard, presumably.
What is it?
Mr. Kneedler: What -- what the Secretary has adopted -- has done is by regulation, is to say that -- that there is a minimum that the tribe cannot go below.
At the time -- at the time of the renegotiation of this lease in 1987, from 1984 to 1987, there was a minimum of 10 percent or 10 cents per ton.
The tribe was getting 37.5 cents per ton.
This lease was renegotiated in connection with a clause in the lease that allowed adjustments for reasonable rates, which is not the same thing as maximizing the tribe's -- the tribe's revenues, so the Secretary had a regulation at the time of 10 cents per ton.
The Secretary now has a regulation that says the minimum royalty rate will be 12.5 percent, which, as Court pointed out in Navajo 1, is the standard royalty rate for Federal and tribal leases throughout the United States.
Now, what is significant, in further response to your question, is that regulation states that that minimum rate is 12.5 percent unless the Secretary determines that a lower rate would be in the best interest of the Indians.
So the way this works then, the way the Secretary has implemented it, it's basically up to the tribe to negotiate something at or above the minimum.
If it's below the minimum that the Secretary's prescribed, the Secretary has to make a judgment that that going lower, maybe because of geological conditions or whatever, is in the best interest of the Indians.
And that is -- that is borne out--
Justice Scalia: Is that in IMLA or is that in the Rehabilitation Act?
Mr. Kneedler: That's in IMLA.
That's an IMLA regulation.
The general regulations that implement the Rehabilitation Act have a similar provision.
They don't talk about royalties, which I think is telling because royalties have to do with coal leases.
They talk about -- they require that there be a fair rental for -- for property, not a maximum rental but a fair rental.
And then it has the same sort of thing, that if it's going to be below the fair market value it has to be in the best interest of the Indians.
And I think it's instructive that I know there's been an argument that this lease is governed by the -- by the Rehabilitation Act rather than IMLA, notwithstanding what this Court held in Navajo 1 six years ago, but in 1999 when Secretary Babbitt, who joined the brief arguing that this is covered by the Rehabilitation Act, approved the amendments to the lease in 1999, he approved it under the IMLA regulations and he specifically said that because the minimum royalty rate is 12.5 percent -- he is quoting the applicable regulation --
"I do not have to decide whether the royalty rate is in the best interest of the Indians. "
He went on to say: "But I think it is".
So Secretary Babbitt's approval of those amendments really explains the way the Secretary has implemented the statutory scheme, and we think that's certainly well within the Secretary's discretion under a statute that did not impose any limitations.
With respect to the Rehabilitation Act, the general leasing provision of that act, as we've explained in our brief, does not apply to mineral leases.
That continued to be governed by IMLA after 1950.
But even if it did, there is nothing in section 5 that imposes any more specific duties with respect to royalty terms or any other terms than IMLA itself.
Section 5 has to do with surface -- leases for surface users, business purposes basically.
And that was put in there because at the time there was no provision for long-term leases if someone wanted to bring a surface commercial venture onto a reservation.
But the last -- the last sentence of section 5 of the -- of the act on page 171a of the petition appendix says that:
"Nothing contained in section 5 shall affect the authority -- shall be construed to repeal or affect the authority under any other act of Congress. "
So section -- and the other act of Congress here is IMLA.
I think it's also instructive to point out not only did this Court hold the last time around that the lease was governed by IMLA, that -- that was the tribe's position in this case.
Its proposed findings of fact indeed in the Court of Federal Claims, pages 524 and 525 of the joint appendix, said that the lease was governed by IMLA.
But the textual dispositive point is this lease couldn't have been entered into under the Rehabilitation Act.
The lease in this case provided that the lease would be for a term of 10 years and then subject to a further extension for as long as minerals are produced in paying quantities.
That precise language is repeated in the lease, which shows that it was under IMLA.
Under section 5 of the Rehabilitation Act, the lease could only be for an initial term of 25 years and then a further term of 25 more years.
It wouldn't have allowed for this sort of lease here and indeed, because the initial lease term here was 10 years and then could have only been 25 more years under -- under the Rehab Act, this lease would have had to expire in 1999, and yet it was amended at that time and continues in effect and mining continues under it.
Justice Scalia: The other side says that certain standard provisions in the IMLA leases did not exist in this lease.
Is that accurate?
Mr. Kneedler: No.
Well, they said -- I think -- the only thing I think they say along those lines is that -- has to do with the forms of the lease, if I'm--
Justice Scalia: --With the forms?
Mr. Kneedler: The form on which the lease is used.
I think what they said is there were several provisions that appear in regulations under general leasing statutes that are in these, are in these leases.
They aren't in these leases -- one has to do with the property can't be used for unlawful purposes, and I'm forgetting what the second one was.
But it wouldn't be unusual that the -- that the Secretary might borrow or a tribe might borrow provisions from other leases and put them in this lease.
This is -- again, IMLA provides for negotiation.
So the parties are free to put in particular provisions of lease.
So that the fact that there might be things that would parallel what were in the other leases we don't think is really dispositive.
Also, the other significant thing is that the lease itself incorporates or refers to by reference the IMLA regulations.
So even if somehow this lease were thought to be governed by section 5, even though that wasn't what it was issued under, the IMLA regulations would control, and this Court already held in Navajo 1 that those IMLA regulations, which are in the lease, do not impose any -- did not impose any duty on the Secretary with respect to the approval, approval of the lease.
I should also point out that when the -- we cite this in our -- in our brief, that at the time the lease amendments were approved in 1987 the Solicitor's Office did -- did a legal review of the propriety of the lease amendments and that legal review expressly says that the lease was entered into under -- under IMLA.
So I think the circumstances are really overwhelming that -- that it was entered into under IMLA and that the Rehabilitation Act lease provision does not have anything to do with this lease.
And the more general emanations from the Rehabilitation Act that the tribe seeks to rely on here are too general, in short.
The Rehabilitation Act was enacted in 1950 in recognition that the plight of the Navajo and Hopi was very serious, and Congress undertook to study resources and put in infrastructure and that sort of thing, and part of it was to have programs -- excuse me -- studies to determine what the tribe's coal resources were, and that was done, and this lease grew out of that.
But that doesn't mean that it was in any way governed by the Rehabilitation Act.
Justice Ginsburg: General Kneedler, the last time -- the last time around, we remanded for further proceedings consistent with our opinion.
Would you advocate a different bottom line this time?
Mr. Kneedler: Yes.
I would -- I would suggest that this case be reversed.
I mean, this -- this concerns a -- outright and with directions to dismiss the complaint.
This -- this controversy arose in the mid-1980's.
The litigation has been going on since 1993, and it's been -- this is now the second time that it's been -- that it's been to this Court.
And we think in doing so that the -- that the Court should reiterate the analytical framework that it put forward in -- in its decision the last time around so that there will be no mistaking the way these cases are to be handled in the Federal circuit in the future by requiring at the threshold, a -- as I said, a specific statutory or regulatory provision that imposes duties and not in particular looking at general notions of common law that -- that might arise out of -- out of some sort of -- some sort of factual control.
The last thing I wanted to say is that the Federal Circuit also relied on the Surface Mining Reclamation and Control Act.
And that -- and that, as I said, has to do with environmental issues in connection with -- with Indian leases.
The Federal Circuit relied on a provision that says that the -- that the Secretary should include in any Indian leases additional provisions that were proposed by the tribe.
But that's additional provisions in addition to other environmental provisions stemming from the statute that had to be in the lease.
It was -- it was just quite a stretch for the -- for the court to conclude that that somehow controlled economic terms of the leases.
If there are no further questions, I will reserve the balance of my time.
Chief Justice Roberts: Thank you, General.
ORAL ARGUMENT OF CARTER G. PHILLIPS ON BEHALF OF THE RESPONDENT
Mr. Phillips: Thank you, Mr. Chief Justice, and may it please the Court: I think I would like to start with Justice Alito's question because he said: Doesn't section 5 of the Rehabilitation Act specifically require the Secretary to approve this lease?
And Mr. Kneedler conceded that it does.
And so then the question is: Doesn't that create some kind of a duty?
And it seems to me clearly it does, just as the Court I think implicitly said in Navajo 1, the difference between Navajo 1 and Navajo 2 being that this Court then went on to examine IMLA, the Indian Mineral Leasing Act, and concluded that IMLA very specifically for the entirety of Native Americans and for the entirety of Indian mineral leasing had a preference to ensure that the Indian tribes themselves would -- would attain a certain self sufficiency; that it essentially abdicated the responsibility of having to deal with individual negotiations and allowed it for the tribes to take over.
Justice Ginsburg: But, Mr. Phillips, I'm looking at the last paragraph in the opinion.
"We have no warrant from any relevant statute or regulation. "
So it wasn't limited to IMLA.
Do you think that was just carelessness on the Court's part?
Mr. Phillips: Oh, I would -- I would never assume that, Justice Ginsburg.
I -- I think -- I think the operative term here is "relevant".
And that is that the Court for purposes of analyzing the question presented and disposing of it evaluated not only IMLA, but the other two provisions that the -- that the -- that the Court felt needed to be disposed of at that point.
The Court didn't address the alternative arguments under either SMCRA or the Rehabilitation Act.
To be sure, they were argued.
But I -- I have seen many instances in which alternative arguments were made, and the--
Justice Scalia: I don't understand your answer.
You say that those were not relevant and, therefore, they were not covered by this.
Mr. Phillips: --Not relevant to the question presented, which is the proper interpretation of the -- the Indian Mineral Leasing Act.
And, indeed, if you look at the other two provisions, the opinion of the Court analyzes them through the -- through the prism of the Indian Mineral Leasing Act and just says those don't add to the Indian Mineral Leasing Act.
Our argument here is that section 5 of the Rehabilitation Act provides a wholly independent basis on which there is a duty imposed, but that duty is then implemented through the regulations that are identified in the -- in the Secretary's--
Justice Scalia: In the Rehabilitation Act, is the requirements for approval of lease, is -- is that applicable to mineral leases?
Mr. Phillips: --Is that applicable to mineral leases?
Justice Scalia: Yes.
Mr. Phillips: Absolutely, it's applicable to mineral leases.
The -- the language of the statute is
"business leases, including those for the development of mineral resources. "
So clearly it applies to mineral leases, but it does not include the Indian Mineral Leasing Act.
Chief Justice Roberts: I'm sorry.
Where is the specific reference to mineral leases, mineral resources, I guess?
Mr. Phillips: Mineral resources.
Chief Justice Roberts: I mean, it says "resources".
I don't remember it saying "mineral resources".
Mr. Phillips: Yes,
"the development of the resources of the Navajo and Hopi Indian. "
Chief Justice Roberts: That's a big difference, don't you think?
Mr. Phillips: I'm sorry.
"The development or utilization of natural resources. "
But the basic point there is that, at least as I read section 5, what it's saying is that it grants broad leasing authority.
The Solicitor General is absolutely right about that.
But that authority extends to certain kinds of mineral leasing.
And that's -- and that's an authority, and it's important to recognize this because, while it is true for the run-of-the-mill Native Americans who are -- who are engaged in mineral leasing it may make sense to say: Look, we -- we are going to take a hands-off approach for the most part.
We are going to set a minimum ceiling or a minimum floor and above that you negotiate as hard as you want.
But the Navajo were in a fundamentally different position in 1950 when this legislation was enacted.
The -- the median education on that -- on that reservation was less than one year of education.
The resources were $400 per year annual income.
This was a tribe in horrible condition.
And so it would make perfect sense for Congress to say: Look, for -- for most tribes we want to go ahead and have the approval be based with the -- with the Secretary taking a hands-off approach above a certain minimum, but when you deal with the Navajo--
Justice Alito: Is it your position -- is it your position that it would be -- that it -- it is not lawful for coal on the Navajo Reservation to be leased under IMLA; a lease would have to be solely under section 5 of the Rehabilitation Act.
Mr. Phillips: --No, I don't think it has to be solely under it.
I -- I think that's a -- a false dichotomy.
I don't think this is an either/or proposition.
I think there are parts of IMLA that can reasonably be applied here, and -- and section 5 specifically says no authority from other statutes, which would include IMLA, is meant to be superseded by the passage of section 5.
So I think there is a rule.
And I think that this lease -- if you read the lease on its face -- Justice Scalia asked the question: Does this lease conform to the form lease that you get under IMLA?
The answer is clearly not.
This is a mix and match between some provisions, it seems to me, that clearly provide additional protection for the Navajo and other provisions that--
Justice Alito: But the lease -- the lease doesn't follow the -- the requirements of section 5 of the Rehabilitation Act in -- in respect to its term.
But what is your -- is it your position that in entering into a lease the tribe has the authority to decide, we want this to be under IMLA, we want this to be under the Rehabilitation Act?
When it comes up to the Secretary for approval, does the Secretary have the authority to say, I'm going to approve this under IMLA; I'm going to approve it under--
Mr. Phillips: --I think the Secretary has to approve it under both of those provisions.
It is just that IMLA in this particular context would simply impose a 10-cent minimum per ton.
Justice Scalia: What do you do about the fact that the term of this lease would -- would not be permitted under the Rehabilitation Act?
Mr. Phillips: I think it would be permitted under the Rehabilitation Act because the last sentence of section 5 specifically says that this is not meant to limit any other authority provided under any other statute.
And since IMLA provides additional time and durational protections for the tribes under these circumstances, that provision would definitely allow you to use IMLA's time limits rather than the Rehabilitation Act.
Justice Souter: Okay.
Explain to me the -- the relative scope of IMLA and the Rehab Act.
The -- the argument that you made, that you just made, makes perfect sense if the Rehab Act applies to some kinds of -- of leases or contracts that the -- that IMLA does not.
And yet I -- I thought you were saying a little bit earlier that the Rehab Act applies to all mineral leasing, because that would be the development of a natural resource.
And if that is so, then there seems to be a pretty clear conflict, even on your own argument, between the term provisions in the Rehab Act and the term provisions of IMLA with respect to -- to mineral leases.
How do -- how do we get out of that problem for you?
Mr. Phillips: Yes.
I think the -- the key distinction is to look at the -- at who is being regulated, and under the Rehabilitation act it's the Navajo and the Hopi.
And -- and Congress said, look, we are going to take special care to protect and to try to put them into a position where they can even just catch up to other Native Americans.
And so it seems to me that there is -- that's a special protection with a special duty, and that duty is enforced through the 162 regulations.
Justice Souter: But it's a special protection and special duty that applies to every one of the mineral leases, including this one, that the Navajo may be involved in.
Mr. Phillips: Correct.
Justice Souter: So I -- what -- maybe -- maybe I missed the point, but would you go back to justice Scalia's question: How is it that there is not a conflict here between this lease and the Rehab Act?
Mr. Phillips: Because the last section of section 5 says that, notwithstanding anything else, this provision doesn't preclude -- doesn't -- doesn't limit authority that would otherwise exist.
Justice Souter: But that, in effect -- but that, in effect, is saying this -- this provision will never apply to a mineral lease with the Navajo or the Hopi.
I mean, you are reading it right out of the act with respect to these two tribes.
Justice Scalia: Which is all that the Rehabilitation Act--
Mr. Phillips: Oh, no.
It's because this provision applies to a lot of other leases, too.
Are you asking when the 20 or 10 and 10.
Justice Souter: With respect -- my point is with respect to every mineral lease of the Hopi and the Navajo--
Mr. Phillips: Right.
Justice Souter: --you are saying the term provision never applies.
Isn't that correct--
Mr. Phillips: No, I understand.
I have the answer your question, which is this provision in section 5 applies not just to mineral leasing, it applies to all business site leasing.
Justice Souter: --But it only applies to those two tribes.
And there is something very, very strange, it seems to me, in saying that the -- that the kind of -- the saving sentence at the end of section 5 reads its very term limit provisions out of every -- out of every possible application for mineral lease by these two tribes.
And that's what you are saying.
Mr. Phillips: But -- but -- but the important distinction -- and I hope I can articulate this -- is that section 5 applies beyond mineral leases.
Justice Souter: I realize that.
Mr. Phillips: So that all -- so the time limitation of 10 years and 10 years, if you bring a barber shop, you want to build a barber shop on those lands, you want to lease the space in order to do that, you would be subject to the section 5 time limitations, unless for some reason there is another authorization somewhere.
Justice Souter: Okay.
But that, in effect, means that -- and I don't want to overdo your barber shop analysis or example, but that, in effect, says--
Mr. Phillips: I need a haircut.
Justice Souter: --on -- on trivial contracts, trivial lease contracts, there are term limits, but on the ones that really count, where the real money is, it doesn't apply at all.
Mr. Phillips: There is a--
Justice Souter: That's pretty strange.
Mr. Phillips: --Raytheon has an entire defense plant on the Navajo tribe -- on the Navajo Reservation right now, that would obviously be subject to precisely these same limitations.
So it's not just trivial.
It's all business lease citing that is covered by that.
So it seems to me not at all unreasonable to think that Congress, in its -- in its very protective effort here under section 5 would say, here are all the leases that you are allowed to enter into.
You have broad leasing authority.
We are going to protect you against overreaching by restricting how long you can go, but if there are other provisions of law that allow these to be modified in a particular area, we will allow those to be modified in that way.
And in this context, what that last sentence would, in my mind, say is there is no reason to try and -- to say IMLA or the Rehabilitation Act.
It seems to me much more sensible to say that Congress would have intended multiple protections for the Navajo.
Justice Souter: Let's assume that, and I -- I -- I think your argument is well taken.
But assuming that, don't we also have to assume that the stress in IMLA on placing primary responsibility on the tribes, not on the Secretary, should in fact also be imported to the application of the Rehab Act as you say it should be applied?
Mr. Phillips: Right.
But you see, I don't think that's an authority.
I would say -- I would not read--
Justice Souter: What's not an authority?
Mr. Phillips: --The notion that the Navajo tribe would be in a position to better -- to better -- to -- I'm sorry, to achieve self-sufficiency.
Justice Souter: Okay.
You made a good argument a few moments ago for the fact that it would have been at least at one time inappropriate to thrust that responsibility on the Navajo, but there was no Navajo exception in IMLA.
That responsibility was thrust on the Navajo--
Mr. Phillips: To be sure, there isn't--
Justice Souter: --and this Court recognized that.
Mr. Phillips: --Right.
But that's exactly why I think the Navajo Rehabilitation Act of 1950 does modify IMLA.
Justice Ginsburg: With respect to that--
Justice Scalia: --It expired--
Mr. Phillips: I'm sorry?
Justice Ginsburg: --the opinion in the last time around not only contained the statement that I read before, that is, "any relevant statute", but in the very beginning it says,
"We hold the tribe's claim for compensation from the Federal Government fails. "
and there is a well-known distinction between a claim and an issue and attributing to the Court that kind of carelessness for saying that the claim is barred as distinguished from an issue, the issue being IMLA -- I think the Court was conscious of that distinction when it used the words that the "claim" fails, not just the issue.
Mr. Phillips: Obviously, Justice Ginsburg, you are in a much better position to judge what was intended here.
On the other hand, my experience with the Court generally is that when you analyze a case you analyze it in terms of the specific question that is presented, and if you are proposing to go beyond the question presented you say so expressly, not simply by the use of the word "claim" or "argument".
So while I recognize that the Court -- that the government has an argument to be made that this has pre-decided that, I think, frankly, one, the Court didn't decide this issue; and two, the Court should decide the question that we've presented here as to the scope of section 5, because it's obviously of extraordinary importance to not only section 5 but also section 8 as well.
Justice Scalia: --Mr. Phillips, the government says that by the time this lease was executed the Rehabilitation Act was a dead letter, that it was meant to stimulate economic activity on the Navajo Reservation, and there were funds appropriated for that purpose, and that had all been played out by the time this lease was -- was entered into.
Is there something wrong with that?
Mr. Phillips: Yeah, the government's wrong about that.
I believe -- the program itself is for the overall rehabilitation of the Navajo and the Hopi.
There are a series of projects that the -- where the statute says
"Such program shall include the following projects. "
It doesn't say it's limited to the following projects, and those projects have been set out with a set of times.
But the program itself is not -- is not limited that way and more fundamentally, it is completely inconsistent with that kind of time limitation on the statute overall that Congress would have repealed certain sections of this act, sections 9 and 10, after the 10-year period that expired if the statute didn't have any continuing implication.
It also would have meant that the leasing protections in section 5 had expired after 10 years, which seems to me quite inconsistent with the overall purpose here to accomplish that.
So I think the temporal argument doesn't get the government particularly far.
I would like to take a second to talk about sort what I think is an important distinction between 635 and other provisions, which is that 635(a) imposes a duty that, as the Secretary's brief I think elegantly sets out, that duty means that you have to make sure there is fair market value, that these are reasonable rates, and that was not done.
So that's the violation that took place.
Then the question is, is there a money-generating, money-mandating obligation imposed here.
And there it seems to me the distinction between 635(a), which says nothing about liability, and 635(b) and (c), which expressly -- expressly excludes the possibility of liability, suggests clearly why 635(a) ought to be viewed by this Court as a sufficient -- as creating a fair inference, is what the Court said in Mitchell 2, a fair inference under these -- under these particular circumstances.
The other issue that we have put on the table that the government didn't actually address in its opening, although I suspect--
Justice Breyer: So you are saying that 635(a) creates an inference that 635(c) creates the fiduciary duty?
Mr. Phillips: --No, 635(a) creates the fiduciary duties.
The juxtaposition of (a) to (b) and (c) demonstrates that that duty is a money-mandating or rights-creating duty that's enforceable under the Indian Tucker Act, Justice Breyer.
The other duty, it seems to me, that the -- that the Secretary breached there is the duty embedded in section 8 of this statute, which requires him to make disclosures as part of this program.
And the one thing that is absolutely clear that the Court of Federal Claims judged--
Justice Breyer: That's the part I'm not getting.
You are saying -- the question, I guess, basically is, does the language of 635(a) which says
"with the approval of the Secretary-- "
Mr. Phillips: --Right.
Justice Breyer: --the Indians can, among other things, for business purposes lease the land.
That's what it says.
Mr. Phillips: Right.
Justice Breyer: And that doesn't seem much different from the IMLA, to tell you the truth, to me.
It doesn't seem different at all.
So now you are saying, no, it's really different because look at (b) and (c).
That's your basic argument?
Mr. Phillips: --Right.
Justice Breyer: So I look at (b) and (c) and it says, well, when you lease something under (b) and (c), which is not (a) -- it's (b) and (c) -- you have to have all this supervision and so forth, or it has to be at a fair value, something like that; is that right?
Mr. Phillips: Well, it doesn't -- it doesn't--
Justice Breyer: (B) and (c) say that land is owned in fee but, let's see -- what is -- sorry, I don't want to delay you on this.
I thought that (b) and (c) you were saying create an obligation -- create more of a trust obligation.
Mr. Phillips: --No, just to read (b), which unfortunately isn't reproduced I don't think in any of the papers, but it says:
"Notwithstanding any other provision of law, land owned in fee simple by the Navajo may be leased, sold or otherwise disposed of by the sole authority of the tribal council in any manner that similar land in the State it's situated may be leased, sold or otherwise disposed of by private landowners, and the -- such disposition shall create no liability on the part of the United States. "
Justice Breyer: So why does that -- why does that mean that this act creates a trust relationship?
Mr. Phillips: No, that -- the -- the trust relationship doesn't come out of the (b) and (c).
The money-creating component of it it seems to me comes out of (b) and (c).
The trust relationship comes from the fact that the entirety of the statute was enacted to implement the treaties, that these are all lands that are held in trust, and that -- and that there is a specific duty embedded in (a) that requires that the Secretary approve what is otherwise basically controlled as a trust arrangement, and that that is then implemented through regulations that require the Secretary to do this under a fair market value standard.
Justice Kennedy: Well, give me an -- and incidentally, the statute is in opposition brief, or the orange brief, at page 5.
Give me an example of why the last clause,
"and such disposition shall create no liability on the part of the United States. "
--what contingency was that directed to if not the one that is before us?
Mr. Phillips: Well, that's for the sale of fee simple lands, so it's dealing with a very different set of -- of circumstances, which is talking about -- it's aimed clearly at a different set of properties that are being held and therefore they said, when you engage in leases for that kind of property there is no liability.
Justice Souter: But your -- your argument is that simply because there isn't that kind of an exclusion in (a), there must have been an intent to permit liability.
Mr. Phillips: A fair inference I think is all that I have to demonstrate.
Justice Breyer: Thank you, but now what of course is at the back of my mind is I'm trying to see, is this -- is this statute stronger for you than the statute we already considered?
And I start with some suspicion, because I think if it was a stronger statute for you, you would have argued it the last time.
So I wonder why you didn't.
Mr. Phillips: I wasn't here the last time.
Justice Breyer: So somebody thought maybe it was a weaker statute, so -- but I will put that suspicion aside.
Mr. Phillips: Can I answer--
Justice Breyer: So that's the fundamental question in my mind.
I look at the language and so forth.
The language doesn't seem any stronger for you, at least at first blush.
Mr. Phillips: --Right.
There's two -- there are two answers; I was being facetious as to why we didn't push this argument the last time.
It was largely because the Federal Circuit the last time concluded based on IMLA alone that there was in fact a sufficient rights-creating provision.
And therefore we defended that part of the judgment.
Justice Ginsburg: So did you, Mr. Phillips.
Last time around you acknowledged that the Peabody lease was governed only by IMLA.
That -- those words were from your brief last time around.
Mr. Phillips: I don't know if those were from the brief.
I know there was a statement of undisputed facts in the first round of the litigation.
But there is no question that the Court -- if we are right, that the Court remanded to -- for consideration consistent with this.
We then went down upon remand from the Federal Circuit.
We took additional discovery and we obtained the information that we got.
And also, remember, the United States' brief in the Ninth Circuit specifically says that this was approved pursuant to the Rehabilitation Act and the trust responsibilities.
Justice Ginsburg: Well, you are really saying that you were wrong in make that concession.
Mr. Phillips: That was an overstatement, there's no question.
Based on what we knew at the time, we thought it was in fact an IMLA lease.
But the truth is--
Justice Ginsburg: In -- IMLA--
Mr. Phillips: --is it's not IMLA, anyway.
Justice Ginsburg: --But it is the statute that seems most closely on point, because it's the only one that talks about mineral leases exclusively.
Mr. Phillips: Yes, but this is the only one that deals specifically with the Navajo Reservation and deals with leasing for business purposes for the development of resources.
And so while I -- I agree with you in one sense, the other one has a -- has some superficial closeness here.
It seems to me that the closer one is actually the provision that deals with this specific reservation and this specific type of a lease arrangement.
I don't think it has to be either-or.
Chief Justice Roberts: But you knew all of that.
That's not -- that's not something you discovered on remand.
You knew all that before.
Mr. Phillips: Well, we -- we obtained additional information, certainly, you know.
We have the Udall declaration that specifically said that when he negotiated this lease he negotiated it as the centerpiece of the Navajo-Hopi Rehabilitation Act of 1950.
Chief Justice Roberts: And that affidavit was before or after our decision the first time around?
Mr. Phillips: It was after the first time around.
I mean, there is no question that if we had won the first time around, we would have stood by that statement.
But, having lost it ----
--there is a tendency to focus the mind elsewhere, and we did.
But the reality is that if you look at the parties, the -- Secretary Udall specifically says this was adopted pursuant to the Rehabilitation Act.
Peabody Coal Company in briefing in the Arizona courts has specifically said that this was approved under the Rehabilitation Act, and the United States Government itself in briefing in other courts has said that this was approved pursuant to the--
Justice Scalia: I don't know that you can bring in Federal officials to -- to testify years after the fact as to on what basis they acted earlier.
That's very strange to me.
I don't know what -- what motive Secretary Udall has today that might induce him to say that.
Mr. Phillips: --Obviously--
Justice Scalia: If there was some statement at the time, I could understand it.
But bringing him in how many years after, 40 years after?
Mr. Phillips: --He has a good memory, Justice Scalia.
No, Justice Scalia, I understand that.
But the -- the bottom line here is, the question is, is this, you know -- is it absolutely clear that this is exclusively an IMLA lease?
And the answer to that is there is a lot of evidence that suggests no.
It's not in the form of IMLA.
There are a lot from other statements that say yes.
And more fundamentally, it seems to me the Court ought not to view it as an either/or proposition.
It could be adopted under IMLA or it could be adopted separately.
So the section 8 argument--
Justice Alito: --I thought that your argument earlier was that all leases of mineral rights on the Navajo-Hopi land are governed by the Rehabilitation Act, and it's not a factual question as to which statute anybody chose at the time of the negotiation of the lease.
But recently, in the last few minutes, you seem to be arguing that it was a factual issue that was -- that was unearthed only through later discovery.
Mr. Phillips: --Well, I don't know that it's a factual question.
It is that, candidly, we obviously focused more on IMLA because the Federal Circuit sort of -- first of all, the Court of Federal Claims in the first go-around adopted IMLA as the test and just said you lose because you don't have an IMLA lease here.
And we had argued there that it's not just an IMLA lease.
Then we went to the Federal Circuit and we won on the grounds that it was -- that IMLA controlled here and we should prevail on that basis.
When it was sent back down and we obviously didn't have IMLA available, since the Federal Circuit specifically precluded us from any further reliance on IMLA, and looked at the other provisions, we tried to understand their context, and then that -- all I'm trying to do is explain why it is that we would suddenly focus more on the Navajo act, not to say that you couldn't read the statute and say it would necessarily apply in that circumstance.
Justice Breyer: But that isn't really my question, because I've tried to erase from my mind any suspicion about why you did or didn't argue it last time.
And looking at it straight afresh, I think when the Court of Claims got this back, as any judge would, the first thing they do is look at the words of the old statute, look at the words of the new statute, and try to figure out if the new statute that you cited is somehow more supportive of your claim than the old one was.
Mr. Phillips: Right.
Justice Breyer: Okay.
So what have we got here in that respect?
What we seem to have is two later provisions that say the government will have no liability when it enters into leases.
I mean, maybe that helps you, but at the moment I am slightly escaping it.
And then I guess there are some regs that were promulgated after the lease was entered into and seem on their face to deal with other matters.
Okay, now, what am I missing?
Mr. Phillips: I'm not sure I understand the last part about--
Justice Breyer: Well the regs you didn't emphasize, so forget them.
If you don't want to rely on them, we won't.
The -- but I've looked for everything I could find that would support you on this basis--
Mr. Phillips: --Right.
Justice Breyer: --and there you are, so I want you to add something to explain--
Mr. Phillips: Well, I would go back to Justice Alito's first question to Mr. Kneedler, which was, this provision has a duty, doesn't it, because it has an approval requirement?
And the answer is yes, this Court in Navajo 1 looked further at IMLA, at that specific statute, and concluded that that statute overall had a very significant limitation embedded in that duty; and the question is, is there anything in the Rehabilitation Act that has that same limitation?
Justice Breyer: --Okay.
Mr. Phillips: And my answer to that is no, there is nothing in it; and contrary to the overall intent of IMLA, which was to guarantee self-sufficiency, the overall intent of this statute was to allow the Navajo to come somewhere in the area of the standards.
In addition to that, I do think there are regulations that do require the Secretary to invoke a fair market value assessment of the rates that are embedded in this lease, and that he did not -- and he clearly did not do that.
Chief Justice Roberts: Even if you are right about the duty-creating aspect, what -- talk a little about the money-mandating aspect, the second stage of the analysis under Navajo 1.
Mr. Phillips: Well, I -- I think the key to that is -- is sort of two-fold.
One, I think when you -- in the absence of some clear statement in this statute akin to the one that existed in IMLA that reduces the duty of the United States, that the Court ought to then simply examine this against the background of the trust principles and say you have a duty, you ought to exercise your duty consistent with your role as a trustee, and you ought to -- you ought to be acting in the best interests of the Navajo Nation.
Chief Justice Roberts: Before we find a waiver of sovereign immunity opening up the Treasury of the United States, we usually insist on something a little more specific than general trust principles.
Mr. Phillips: And then the second -- I mean, if you are not prepared to accept the general trust principles, although again they go through the context of a specific imposed duty that -- that 635(a) has in the first instance.
But even if you want to go beyond that, then I go to 635(b) and (c), where Congress clearly seems to have in mind the possibility of not having liability imposed in certain circumstances and yet left 635(a) there without a similar protection for the United States, which, again, may not be the compelled inference, but it certainly seems to me to create a fair inference.
Chief Justice Roberts: Well, that's not how the Secretary reads 635.
Isn't he entitled to Chevron deference?
Mr. Phillips: Well, unless you are saying that -- I don't know in what context, Mr. Chief Justice, you're talking about.
I mean -- but to be sure, lawyers don't want to read it that way because they are in litigation right now.
But I don't see anything in the statutory scheme or in the regulatory scheme that would say that.
And certainly, if you go back and look at the Secretary's brief, in their analysis of the regulatory scheme, the -- let me see if I can find this -- page 25 to 26, where they point out that there was a gap where -- where the Secretary did not exclude mineral leasing from the 635--
Justice Scalia: What did Secretary Udall think about this?
Mr. Phillips: --He's totally on board with us, Justice Scalia.
That's out of the brief.
I'll just conclude with the section 8 argument, which is to recognize that the Secretary did owe a duty of candor and disclosure embedded in section 8.
That program did not end.
That disclosure responsibility did not end.
What the measure of damages for that breach of duty is a question that obviously is still open on remand.
But the notion that the Secretary can behave the way the Secretary did in this case, which is to know that he was not going to take personal jurisdiction over the final decision, command that no decision be made, leave the Navajo in a state of distress under those circumstances, force them to negotiate with one hand tied behind their back at a minimum, and then ended up an agreement that was half what the fair market value would have been for the quality of coal, is an outrage and the Court ought to allow the damages action to go forward.
If there are no further questions, I urge the Court to affirm.
Chief Justice Roberts: Thank you, Mr. Phillips.
Mr. Kneedler, you have nine minutes remaining.
REBUTTAL ARGUMENT OF GEN. EDWIN S. KNEEDLER ON BEHALF OF THE PETITIONER
Mr. Kneedler: First, Mr. Chief Justice, with respect to the text of section 5, it doesn't -- it doesn't by any means suggest that it covers mineral leases.
The pertinent phrase is that they -- that the tribe or members of the tribe "may lease" --
"with the approval of the Secretary, may lease for various religious, recreational, or business purposes, including the development. "
of utilization --
"or utilization of natural resources in connection with the operations under those leases. "
It's not a free-standing mineral lease or resource lease provision.
It says "including" and
"in connection with operations under such leases. "
referring back to business leases or the other -- the other things there.
So I think, on its face, it doesn't suggest it covers mineral leases.
Justice Kennedy: Well, that--
Mr. Kneedler: But--
Justice Kennedy: --But it says
"the development or utilization of natural resources. "
Mr. Kneedler: "In connection with operations under such leases. "
And -- and what's above are a recitation of things that don't include mineral leases.
It's educational, recreational, and business leases.
And as we explained, there are specific--
Justice Kennedy: --Well, why isn't it a public purpose to develop Indian minerals?
That benefits the Indians and the whole public.
Mr. Kneedler: Well, it says "business" purposes, "and as such"--
Justice Kennedy: --No, it says "public".
Mr. Kneedler: "For public, religious" -- "public" would be like for a school, if a State was going to put a school on or something.
But -- but the -- but as we explain in our brief, there was a specific reason why Congress enacted this.
There was a gap in the authority to lease for these types of purposes at the time this was enacted.
Justice Souter: And why did business purpose--
Justice Kennedy: Well, even if -- if I may have just one minute, Justice Souter.
If you get revenue from the natural resources, why isn't that a public, religious, educational purpose?
They get revenue from leasing.
Mr. Kneedler: The -- the example would be--
Justice Kennedy: --I just -- I just think you give too cramped a reading to section 5.
Mr. Kneedler: Well, the example would be, if you -- for example, if you were going to use water -- this is a Navajo reservation -- if you needed water for a business and sink a well, you would be utilizing or developing the natural resources in connection with a surface lease.
But -- but the last section of -- the last sentence of section 5 says,
"Nothing in this section shall be construed to repeal or affect the authority under other provisions. "
And it's the other provision that is IMLA.
Justice Souter: --May I just supplement Justice Kennedy's question?
Why can't the development of the mineral leases be regarded as an adjunct to a business enterprise?
Mr. Kneedler: Well--
Justice Souter: --I mean, business purposes are included.
Mr. Kneedler: I -- I suppose they could, but in -- in the terminology, mineral leasing, as we explain in our brief -- that the categories of leasing that are -- have always been handled differently.
"Mineral leasing" is the term that is used for minerals.
Business, grazing, farming, we explain this in our brief, that those are different.
The regulations that were utilized to implement section 5 have never included specific provisions for mineral leases.
They have always been under other -- other provisions.
Justice Souter: Do the regs specifically address the scope of business purposes?
Mr. Kneedler: They -- they -- not beyond basically repeating them, but the -- but they, for example, talk about rental value, which is not the way you describe mineral leases, which are -- which are royalties, not rental value.
If I could also address the argument about sections (b) and (c), sections (b) and (c) of this act provide -- first of all, were enacted after section (a), so I don't think much of an inference could be drawn.
But they were situations, special types of conveyances that the tribe was going to make.
One was for fee land that it was -- that it was transferring.
There would be no reason to think the United States should be liable for that, for what the tribe did with its own fee land, and Congress just wanted to make sure of that.
The other was that the tribe could convey trust land to municipalities and that sort of thing, and what the statute says, thereafter the United States won't be liable.
The United States was just making sure it was washing its hands of it.
Under section (a), we aren't saying that there could be no lease under which it could conceivably be for a business purpose in which the United States could be liable.
If there was a regulation establishing a minimum floor and the lease terms went below that, then that might be a circumstance in which liability could be imposed.
But otherwise, Justice Breyer is completely correct: This statute on its face imposes no more of a duty on the Secretary with respect to the approval of whatever leases are covered than IMLA imposed on the Secretary with respect to -- with respect to mineral leases.
And -- and another important point is, as this Court pointed out in the Cotton Petroleum and Montana v. Blackfeet Tribe, the IMLA was enacted to bring uniformity to mineral leasing.
And the notion that Congress would have implicitly wanted to carve the Navajo and Hopi out of that general authorization and that preexisting set of regulations and cover it by -- by a provision like this, we think is just not consistent with the way Congress has dealt with mineral leases over the -- over the years.
I also just wanted to come back to this idea of -- of imposing liability on the basis of the common law, because the example of what the Federal Circuit did in this case, with all respect to that court, we think strayed so far from what this Court laid down in Navajo that it's important for this Court, however it thinks it disposed of the case before, to make clear that liability cannot be imposed unless, as this Court said in Navajo, there is -- there is a specific rights-creating or duty-imposing language in the statute itself.
The theory that has been adopted in some lower court -- Federal Circuit decisions, is you can look at a hodgepodge of statutes, one dealing with environmental concerns, one dealing with rights-of-way, one dealing with this, add them all up and say the United States has control and, therefore, out of that sort of bucket of statutes, you can impose trust responsibilities.
That's fundamentally inconsistent with the Tucker Act, which requires that the liability be based on the statutes themselves, and you have to look at each statute and each regulation that governs the United States in Indian affairs in the same way, under the Tucker Act, you would look at--
Justice Stevens: General Kneedler -- GEN.
Mr. Kneedler: --what governs the United States elsewhere to decide whether there is liability.
Justice Stevens: Can I ask one question?
I probably should have asked earlier.
But there is no dispute as the case comes to us.
I know the government has taken the position that there was no breach of trust.
But do we -- we do have to decide it on the assumption that there was a breach of trust that caused all this damage?
Mr. Kneedler: No, no.
I think that's not at all correct.
With respect to the approval of the lease terms in 1987 -- under a provision that provided for 12.5 percent.
The tribe entered into two other leases at the very same time that are not the subject of this case, for 12.5 percent.
That's the standard royalty rate.
And the tribe got other benefits from this as a package.
With respect to the arguments about what the Secretary did on -- on appeal, it's even clearer that all this information about the Secretary meeting with Peabody's lobbyist was before the Court before, and the Court found no violation of any statute or regulation.
But it's even clearer on remand, as we point out on page 22 of our reply brief, that the tribe was fully aware that the Secretary was not going to -- had -- had said the appeal was not going to be acted on and had sent the parties back to negotiations.
In fact, when Chairman Zah of the tribe opened the negotiations on August 30 of 1985, he said,
"It appears that the Secretary wants us to take another shot at negotiating the lease. "
He knew what had happened.
Chief Justice Roberts: I'm not sure that's responsive to Justice Stevens's question.
I mean, you are arguing the merits, but those haven't been decided.
Mr. Kneedler: Well, what the -- what the Court of Federal Claims said along those lines was a legal conclusion, not a factual conclusion.
And the -- the facts as describe were what they were before and the court found no violation.
And -- and as we say, it's clear factually on remand that the tribe knew.
But again, that was just -- it's not a factual determination that has to be taken as true.
For one thing, it was summary judgment, not factual findings.
But it does -- it was just a legal conclusion.
And at that, it was the sort of legal conclusion drawn from general notions of fiduciary responsibility, nothing that has been channeled or embodied or codified in a statute or regulation.
And we think to unleash the common law to regulate the day-to-day operations of a vast agency like the Interior Department, which has to operate by statutes and regulations, would be -- under Vermont Yankee and this Court's other jurisprudence, would be -- would be unwarranted for the courts to do and especially in a waiver of sovereign immunity under the -- under the Tucker Act, to impose damages liability for the violation of a procedural regulation.
And, of course, the Court pointed out the last time that there was no prohibition against ex parte contacts for this sort of informal adjudication, as there isn't across -- across the board for government -- government activities.
If there are no further questions--
Chief Justice Roberts: --Thank you, General.
The case is submitted.