Ramona Two Shields v. United States

Ramona Two Shields v. United States
820 F.3d 1324 (Fed. Cir. 2016)
Authored by Cem Islikci

Statement of Facts: The appellants Ms. Two Shields and Ms. Defender Wilson held interests in an Indian Allotment in Fort Berthold, located in North Dakota. Under the General Allotment Act of 1887 and the Indian Reorganization Act of 1934, the United States was the trustee of millions of acres of Indian allotment land, including the appellants’ land. Additionally, pursuant to the Fort Berthold Act of 1998, Fort Berthold allottees could not lease their oil-and-gas interests without the Secretary of State’s approval of the lease as “in the best interest of the Indian owners of the Indian Land”. Pub. L. No. 105-188, 122 Stat. 620 (1998) (“Fort Berthold Act”) (amending 25 U.S.C. § 396).

Between 2006 and 2009, a company named Dakota-3 acquired leases on thousands of acres of allotment land in Fort Berthold at below-market rate. In 2010, Dakota-3 made a $900 million profit on the sale of this land to the Williamson Companies. The appellants alleged that the Bureau of Indian Affairs (the “BIA”) knew that this deal was not in the best interest of the Indian landowners, but approved it nonetheless.

The claims and reasoning in Ramona Two Shield v. United States is heavily connected to another lawsuit named Cobell v. Salazar, No. 96-1285, 2011 WL10676927 (D.D.C. July 27, 2011). Cobell was filed on behalf of more than 300,000 Native Americans. The plaintiffs alleged that the Government had mishandled their Individual Indian Money accounts by not accounting “for billions of dollars relating to leases of allotment land for oil extractions and logging.” Ramona Two Shields v. United States, 820 F.3d 1324, 1327 (Fed. Cir. 2016). Eventually the lawsuit was settled and Congress ratified the result via the Claims Resolution Act of 2010, which funded the settlement with $3.4 billion. The settlement had an opt-out option, which the appellants in this suit have failed to exercise.

The complaint here included three counts. Count I alleged that BIA breached its fiduciary duty under the Fort Berthold Act because it failed to ensure that the leases were in the best interests of the Indian owners. Count II alleged that the Government breached a different type of fiduciary duty because it failed to disclose information relating to the Fort Berthold claims during the Cobell settlement proceedings. Finally, Count III alleged that the Claims Resolution Act of 2010 violated the Fifth Amendment because it was a legislative taking of their property interests in the claims of Counts I and II.

Procedural History: In 2013, Ramona Two Shield and Mary Louise Defender Wilson sued the Government for violating its obligations. On February 6, 2015, the Court of Federal Claims (“COFC”) released its opinion. The COFC held that the Government prevailed on all counts. It granted summary judgment on Count I because the appellants had failed to opt out of the settlement. The COFC dismissed Count II for lack of subject-matter jurisdiction because it found that there was no federal law that stated the specific fiduciary duty allegedly breached. Finally, the COFC dismissed Count III for failing to identify a cognizable property interest in the claims. Appellants appealed to the Federal Circuit on all three counts.

Questions Presented: (1) Count I: Did the Cobell settlement bar the appellants from asserting their Count I claim against the Government? (2) Count II: Under the Fort Berthold Act, during the Cobell Settlement proceedings, did the Government have a fiduciary duty to disclose information relating to the claims asserted? (3) Count III: Was the Claims Resolution Act of 2010 a taking of Counts I and II in violation of the Fifth Amendment?

Holdings: Affirmed on all counts. (1) On Count I, the Federal Circuit affirmed the COFC’s grant of summary judgment finding that the settlement barred the appellants from asserting their Count I Claim against the government. (2) On Count II, the Federal Circuit affirmed the COFC’s dismissal of the claim due to lack of subject matter jurisdiction because the Government did not have a fiduciary duty to disclose information relating to the claims asserted. (3) On Count III, the Federal Circuit affirmed the COFC’s dismissal of the claim because it found that even though the appellants had a cognizable property interest, they have forfeited their rights by not opting out of the settlement.

Reasoning: Count I: The appellants made four arguments, which the Federal Circuit addressed. First, the appellants argued that the settlement did not cover their claim. The Federal Circuit found that this assumption was wrong. Count I was a “land administration claim” that Cobbell settled because the settlement’s scope included known and unknown claims that have been or could have been asserted through the Record Date of September 30, 2009. The current claims satisfied this date requirement because, even though the sale to Williams Companies was after 2009, this sale was just the final link. These claims had accrued back when BIA first approved the below-market Dakota 3 leases in 2006, which was before the Record Date. Second, the appellants argued that the settlement’s payment schedule under-compensated the appellants and therefore did not cover the current claims. The Federal Circuit rejected this argument. It reasoned that the appellants accepted the under-compensated settlement offer by not opting out of the settlement when they had the chance.

Third, the appellants argued that the Government had failed to provide “full information” about appellant’s claims during the Cobell settlement. The Federal Circuit rejected this argument by finding that a general trust relationship between the United States and its beneficiary does not impose an information-disclosure requirement to the United States. Fourth, the appellants argued that the Cobell plaintiffs lacked standing to assert the appellants’ Count I claim because the alignment of interest and the injury in between the class representatives and the other class members were not exact. The Federal Circuit emphasized the fact that the alignment of injury does not necessarily have to be exact. It found that the Cobbell settlement covered the current claims because the class members in the two different lawsuits do not “implicate a significantly different set of concerns.” Gratz v. Bollinger, 539 U.S. 244, 265 (2003). The Federal Circuit also found that the fact that the named Cobell plaintiff’s oil-and-gas interests may have been tied to a different location or the fact that the Cobell complaint did not specifically reference the Fort Berthold Act is insufficient to implicate a different set of concerns. Lastly, the Court stated because the statute was clear on the matter, no extrinsic evidence was required.

Count II: The Federal Circuit made a Tucker Act inquiry and found that there was no subject-matter jurisdiction. Under both the Tucker Act, 28 U.S.C. § 1491, and the Indian Tucker Act, 28 U.S.C. § 1505, two obstacles must be cleared to have subject-matter jurisdiction. The tribe “must identify a substantive source of law that establishes specific fiduciary or other duties, and allege that the Government has failed faithfully to perform those duties.” United States v. Navajo Nation, 556 U.S. 287, 291 (2009) (quoting United States v. Navajo Nation, 537 U.S. 488, 490 (2003) (Navajo Nation I)). If the appellant can show this, then, the court must decide “whether the relevant source of substantive law can be fairly interpreted as a money-mandating.” Ramona Two Shields, 820 F.3d at 1332.

The Federal Circuit found that Count II failed at the first step of the test. “The United States is only subject to those fiduciary duties that it specifically accepts by statute or regulation.” Hopi Tribe v. United States, 782 F.3d 662, 667 (Fed. Cir. 2015). Because the statute in question, 25 U.S.C. § 396, did not impose a specific fiduciary duty to disclose litigation-related documents and because the appellants did not include any other source providing one, the Federal Circuit found that the COFC was correct to dismiss Count II based on lack of subject-matter jurisdiction.

Count III: Unlike the COFC, the Federal Circuit assumed that Counts I and II had cognizable property interests. Nevertheless, it dismissed the complaint because the appellants have chosen to forfeit their rights to bring claims against the Government, by not opting out of the Cobell settlement in time. “In other words, as the district court in that case put it, ‘[t]here is not a taking’ when ‘those affected are afforded a reasonable opportunity to bring suit.” Ramona Two Shields, 820 F.3d at 1334 (citing Littlewolf v. Hodel, 681 F. Supp. 929, 944 (D.D.C. 1988)).

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