TRANSCRiPT OF PROCEEDINGS IN THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CiRCUIT *.uu.u..u..u..u.uuuu.!u_u..us...u..._uu..uu.ut U . [LOUISE PEPION CUBELL. ['F AL. : Plaintiffs-Appdlecs. No. 03-5314 GALE A. NORTON. SECRETARY OF TIlE : INTERIOR. El AL.. Defendants-Appellants. *UUUUUUI.UUUVUuU.UUuUuUU.uu U... *U..Uuuuuuuuu.u Pages I through 76 Washington, D.C. Date: September 1 5, 2004 1 UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT 2 3 4 ELOUISE PEPION COBELL, ET AL. 5 Plaintiffs-Appellees, 6 v. No. 03-5314 7 GALE A. NORTON, SECRETARY OF THE a INTERIOR, ET AL., 9 Defendants-Appellants. 10 Wednesday, September 15, 2004 11 Washington, D.C. 12 The above-entitled matter came on for oral 13 argument pursuant to notice. 14 BEFORE: 15 CIRCUIT JUDGES SENTELLE AND TATEL AND SENIOR 16 CIRCUIT JUDGE WILLIAMS APPEARANCES: 17 ON BEHALF OF THE APPELLANTS: 18 MARK B. STERN, ESQ. 19 ON BEHALF OF THE APPELLEES: 20 ELLIOTT H. LEVITAS, ESQ. 21 22 23 24 25 Deposition Services, Inc. D 6245 Executive Bou(evcrrd Rackville, MD 20852 Tel: (301) 8813344 . Fax: (301) 881-3338 C a z Li C a C CLS 2 CONTENTS ORAL ARGUMENT OF: PAGE Mark B. Stern, Flag. On Behalf of the Appellants 3 Elliott H. Levitas, Flag. On Behalf of the Appellees Si Mark B. Stern, Esg. On Behalf of the Appellants -- Rebuttal 72 CLS 3 1 PROCEEDINGS 2 THE CLERK: Case number 03-5314, Elcuise Pepion 3 Cobell, et aT., versus Gale A. Norton, Secretary of the 4 Interior, et al., appellants; Alan Lee Balaran. Mr. Stern 5 for the appellants, Mr. Levitas for appellees. 6 7 ORAL ARGUMENT OF MARK B. STERN, ESQ. 8 ON BEHALF OF THE APPELLANTS 9 10 MR. STERN: May it please the Court. The case 11 before this Court now is in every respect transformed from 12 the case that this Court reviewed in the year 2001. On the 13 one hand, there's no longer any question of unreasonable 14 delay in the performance ci accounting duties. From the 15 start of Secretary Norton's tenure, the agency has devoted 16 its resources to meeting the broadest possible construction 17 of this Court's mandate. ?!d on the other hand, the 2001 18 remand to the agency to conduct accounting activities has 19 been inexplicably transformed into an unprecedented 20 structural injunction encompassing every aspect of Indian 21 Trust management at an estimated cost of between $6 and $12 22 billion. 23 JUDGE SENTELLE: I wonder about that adjective, 24 unprecedented. I think that might have been fairly 25 accurate a few decades ago, but you're familiar with the CLS 4 1 Adams plaintiffs in this circuit, for example? 2 MR. STERN: Not offhand, Your Honor. 3 JUDGE SENTELLE: That was the welfare children 4 that apparently weren't being tended to the way the Court 5 thought the law intended, and the District Court tcok over 6 and entered a mandatory injunction. I think of Swan v. 7 Mecklenburq, the Charlotte school busing plan. 8 MR. STERN: Well, Your Honor, I'm certainly 9 familiar, I don't know, I don't recall the Adams case, but 10 I'm certainly familiar with the idea 11 JUDGE SENTELLE: You would if you'd ever had to 12 work in this circuit. 13 MR. STERN: Yes, well -- 14 JUDGE SENTELLE: We all had a piece of that just 15 as well have a piece of this one. 16 MR. STERN: Well, Your Honor, the, I mean, I 17 mean, I guess there are a couple, you know, points about 2 18 that. First, you know, I mean, you know, as we note in our 19 brief, you know, there have been structural injunctions, 20 and they probably were more popular about 20 years ago than 21 they have become since, since a lot of doubt's been cast on 22 them in any context. But they have not come up in the 23 context -- 24 JUDGE TATEL: What doubt has been cast on them? 25 MR. STERN: Well, just in the scholarly CLS 5 1 llterature. There's really been, I mean, there's -- 2 JUDGE TATEL: Well, what about the case law? 3 MR. STERN: Well, I mean, I think that there are 4 fewer of then, but the real point, Judge Tatel, is that the 5 structural injunctions of all involved orders to state 6 governments that did not involve separation of powers 7 concerns -- 8 JUDGE SENTELLE: Adams was not a state 9 government. 10 JUDGE TATEL: What about Adams v. Richardson, 11 right. Adams v. Richardson was the defendant was the 12 Secretary of Health, Education, and Welfare. 13 MR. STERN: As I say, I'm sorry, Your Honor, but 14 I should be familiar with it. I'm not. But there are 15 clear separation of powers concerns that arise here, and 16 what the Supreme Court has told us in no uncertain terms, 17 and -- 18 JUDGE SENTELLE: Why does that not make it a 19 weaker case for your side than the state cases were? 0 20 Because there you had not only separation of powers but 21 also federalism concerns. 22 MR. STERN: Well -- 23 JUDGE SENTELLE: Here you have only separation of 24 powers concerns. 25 MR. STERN: Well, there are no separation of CLS 6 1 powers concerns in the state cases, which also -- 2 JUDGE SENTELLE: There aren't? 3 MR. STERN: No, there are federalism concerns. 4 JUDGE SENTELLE: Certainly there are, but there's 5 also the role of the executive involved there, counsel. 6 You have a judicial body taking over the role of the 7 executive just as you do here. 8 MR. STERN: No, I understand. I mean, there are 9 questions of judicial competence that arise there. They're 10 just not the same as sort of various coequal branches of 11 government that we have here. But I think that 12 JUDGE SENTELLE: You have whole levels of 13 government there. 14 MR. STERN: No, we do. Your Honor, I'm not here 15 to defend structural injunctions against state entities. 16 JUDGE SENTELLE: Take the word "unprecedented" j 17 out of your sentence and start over, then, counsel. 8 18 MR. STERN: I'm happy to take that word out and 19 instead on that point go, I would just prefer, I think that C 20 the relevant point on structural 21 JUDGE TATEL: Let me ask this -- well, you finish 22 your sentence. Go ahead. 23 MR. STERN: No, Your Honor -- 24 JUDGE TATEL: No, go ahead, finish your sentence. 25 MR. STERN: 1 was just going to say that I think OLS 7 1 that the relevant questions really are what the claim in 2 this case is about and what the Supreme Court in Southern 3 Utah cases said about how we review claims and what the 4 limits on judicial review are, and for that matter what 5 this Court said in its 2001 decision, which quotes 6 precisely the same language from !pjan in the context of 7 this case that the Supreme Court recently reiterated, and 8 those are really the principles that we embrace. 9 JUDGE TATEL: Let me ask you this, if I could. I 10 mean, setting aside these really fascinating constitutional 11 questions you've raised, if we were to agree with you about 12 the appropriations rider and that it had the effect of 13 barring the District Court from proceeding with at least 14 the historical accounting part of his order, that is, 15 Section 3 of the District Court's order, then we don't 16 really have to address any of these broader constitutional 17 arguments you're raising, do we? 18 MR. STERN: Well, Your Honor, I don't think that 19 you need to address constitutional arguments to rule in our C 20 favor at all. I mean, I don't, I mean, we're not -- 21 JUDGE TATEL: Well, what about my question about 22 the rider? If we agree with you about the rider, that the 23 rider bars enforcement of Section 3 of the District Court's 24 order, then the only question before us is what to do with 25 Section 4, which is, complies with fiduciary obligations. CLS B 1 MR. STERN: Well, I mean, you know, at the time 2 when this Court was contemplating hew to schedule this 3 case, we did not oppose the request for a, for expedited 4 briefing, but we pointed out to the Court that there were 5 going to be some peculiarities because of the existence of 6 this rider, and the Court determined, and we don't 7 disagree, that it was appropriate to go forth expeditiously 8 anyway. Now, what the legislative history indicates is 9 that Congress expected this Court to, expected the appeal 10 in this case to go torward, and although it is somewhat 11 anomalous, I think what that history indicates is that 12 Congress is looking for this Court to resolve the 13 underlying case in its entirety -- 14 JUDGE TATEL: Really? 15 MR. STERN: -- on its, to reach all the merits. 16 JUDGE TATEL: We're -! 17 JUDGE WILLI?!S: But the question is what, I 18 mean, we do what, we resolve issues that are properly 19 presented betore us. I guess my question is there's no 0 20 reading of l08!1O8 that removes the forward-looking 21 managerial aspects of the District Court's remedy, isn't 22 that correct? 23 MR. STERN: That's correct. 24 JUDGE WILLIAMS: Okay. So then what is your 25 legal objection to that? CLS 9 1 MR. STERN: Well, our legal objection, I mean, 2 our legal objections to our -- to the extent that there is 3 language in the Court's opinion that purports to link 4 directly to an accounting, that is at least within the sort 5 of generic heading of what this lawsuit was about. 6 JUDGE WILLIAMS: Well, wouldn't there be a 7 difference between backward-looking accounting and B establishing procedures so that data as the trust 9 management goes forward will yield material from which 10 future accounting can be made? 11 MR. STERN: But Your Honor, there's never -- 12 JUDGE WILLIAMS: Accountings with respect to 13 future management of the trust. 14 MR. STERN: Well, Your Honor, there's no evidence 15 of any kind of unreasonable delay in performing that part 16 cf Interior's responsibilities. 17 JUDGE WILLIAMS: No, but can we step back a 18 moment? In the 2001 opinion, we allude to a stipulation by 19 the Government in the District Court that there had been C 20 very substantial managerial failures, right? 21 MR. STERN: Yes. 22 JUDGE WILLIAMS: And at least one reason of what 23 the district judge has done here with respect to them on a 24 forward-locking basis is to say the Department come up with 25 a comprehensive plan that will remedy all such problems, CLS 10 1 and then there's a sort of a slightly, certainly an 2 innovative and perhaps peculiar procedure for doing battle 3 over that plan. Sc the questicn is why, given the 4 stipulation, why isn't something like that, it maybe goes 5 too far in some respects, but why isn't something like that 6 entirely suitable? 7 MR. STERN: Your Honor, the fact that Interior 8 would stipulate that there were problems in the context of 9 a claim, in the context of this case doesn't expand what 10 this case is about and it doesn't expand the limits of the 11 Court's jurisdiction. This Court was very clear in 2001 to 12 say the only actionable duty at issue here is the 13 performance of an accounting. 14 JUDGE TATEL: Oh, I don't think that's what 15 Cobell VI says. 16 JUDGE WILLIAMS: I think you took a sentence 17 quite out of context there. S 18 JUDGE TATEL: Right. 19 JUDGE SENTELLE: Uh-huh. C 20 JUDGE WILLIAMS: That was relating to, as I read 21 it, what with respect to accounting, with respect to 22 historical accounting, what is the sort of behavior by the 23 Department of Interior that requires judicial interference. 24 But I don't read that passage, which you cite heavily in 25 your brief, I don't read that passage as focusing at all on CLS 11 I the problem of managerial issues going forward. 2 MR. STERN: Your Honor, there, it could not have 3 been an unreasonable delay case about managerial issues 4 going forward. I mean, this was a case, the way that this S Court, you know, (indiscernib1e! -- 6 JUDGE WILLIAMS: Well, for a historical 7 accounting, putting it in the slot of unreasonable delay 8 makes complete sense. 9 MR. STERN: But that was the only basis for the 10 Court's jurisdiction. 11 JUDGE WILLIRI'!S: But if one's talking about 12 ongoing management -- 13 MR. STERN: But -- 14 JUDGE WILLIAMS: -- and with the record 15 stipulated of past failures -- 16 MR. STERN: Your Honor -- 17 JUDGE WILLIAMS: -- it would seem to me at least 18 ordinary arbitrary and capricious review of the agency 19 would be suitable to make sure that this is not, that this C 20 is corrected. 0 21 MR. STERN: Your Honor, there has to be final 22 agency action, and with all respect, this Court really did 23 talk about those principles in 2001. It said we don't have 24 final agency action. Nevertheless, we can review under the 25 agency action that has been unreasonably or unlawfully CLS 12 1 delayed. The Court recognized that you can't have 2 programmatic reform, and it cautioned the District Court to 3 be mindful of the limits of its jurisdiction. It pointed 4 out that you can't have orders of injunctive relief 5 resembling mandamus in the absence of clear ministerial 6 duties to enforce. The Court said all of those things. If 7 it hadn't said them then, the Southern Utah decision has 8 said them since. And there -- 9 JUDGE SENTELLE: Right, in the intervening 10 contempt proceeding, the District Court made significant 11 findings of failures occurring after the 2001 stipulation, 12 right? 13 MR. STERN: Well, I'd like to address that if I 14 could, Your Honor. 15 JUDGE SENTELLE: Well, I just asked you to say 16 right or wrong about it. You can address it right now. 17 That's a good time. 18 MR. STERN: It's -- 19 JUDGE SENTELLE: It made such findings, right? 0 20 MR. STEP!: It made, it certainly made, the Court 21 among other things said that the Secretary failed to 22 undertake a historical accounting. 23 JUDGE SENTELLE: Yes. 24 MR. STERN: Yes, it did. 25 JUDGE SENTELLE: Right. So isn't there further CLS 13 1 default since the 2001 opinion? 2 MR. STERN: Well, you know, the, even, look, this 3 Court really did also review that decision, and -- 4 JUDGE SENTELLE: Yes. And set aside the contempt 5 order -- 6 MR. STERN: But 7 JUDGE SENTELLE: -- but I don't find in that 8 opinion a setting aside of the findings of fact, do you? 9 MR. STERN: No, what I see, Your Honor, is that 10 first of all the Court had no basis to reach lots of things 11 in the opinion, because what the Court said was that the 12 only thing you could properly in this proceeding have been 13 doing is to be having something along of the lines of 14 criminal contempt, and so it had to look at only certain 15 parts of the Court's opinion. It didn't mean that it 16 blessed the rest of it. However, those would be the 17 relevant parts of the Court's opinion, because those are 18 the only parts that deal with the agency as it was 19 constituted even in 2001 and 2002, and what this Court C 20 explicitly said was, no, of course the agency did not fail 21 to, didn't fail to undertake accounting duties, and it said 22 the record made precisely the opposite clear. 23 JUDGE SENTELLE: And I know we're jerking you in 24 lots of different directions, but to get back to the / 25 statute -- CLS In I JUDGE TATEL: Yes, let's talk about the statute, 2 could we? 3 JUDGE SENTELLE: --- appropriations rider that 4 Judge Tatel was asking you about, whatever that fixes, it 5 fixes it only for a year? 6 MR. STERN: Until December 31st of this year. 7 JUDGE TATEL: What is the status of that? Is 8 that a rider in the current Interior appropriations bill? 9 MR. STERN: Not to my knowledge. 10 JUDGE SENTELLE: Now, also, does that rider 11 itself not raise significant constitutional questions? 12 Separation of powers questions. Spendthrift Farms, 13 Hayburn's Case, Klein v. United States all speak in fairly 14 strong terms to the lack of power of Congress to redecide 15 cases that the judiciary has decided and also to dictate 16 the rules of decision where Congress has not changed the 17 substantive law. So under those cases, would not that S 18 rider be constitutionally suspect? 19 MR. STERN: Well, I think, Your Honor, that C 20 plaintiffs have not demonstrated any respect in which this 21 case is different from Robertsonv. Seattle Audubon 22 Society, which was also a provision in a rider, and in fact 23 that one actually talked about what would -- 24 JUDGE SENTELLE: Forget it's in a rider. I'm not 25 talking about the rider problem. CLS 15 1 MR. STERN: No, but it changed, it spoke -- 2 JUDGE SENTELLE: I'm talking about the ability of 3 the attempt of Congress to change the decision of a decided 4 case or to dictate a rule of decision without changing the 5 substantive law. 6 MR. STERN: Well, we think Congress did change 7 the substantive law. S JUDGE SENTELLE: All right, what substantive law 9 changed in that rider? 10 MR. STERN: The substantive law is that there 11 is -- 12 JUDGE SENTELLE: Substantive law. What changed 13 substantively as opposed to Congress simply saying we're 14 telling the Court how to decide this case? 15 MR. STERN: Well, 1 mean, the, I mean, what this, 16 I mean, I understand that the Court's question is because 17 the Congress said no provision of law shall be construed, a 18 hut, I mean, that's not a, I mean, that kind of language in 19 statutes is not unprecedented, and 20 JUDGE SENTELLE: In that context, it's 21 extraordinary. Perhaps not unprecedented, but I don't know 22 of any place -- that kind of thing was considered in Klein 23 v. U.S. well over 100 years ago, and I don't know of any 24 place since then where the law has changed to say that 25 Congress can dictate a rule of decision where they are not CLS 16 1 changing the substantive law. 2 MR. STERN: Well -- 3 JUDGE SENTELLE: I'm asking you for a change in 4 substantive law, and the best ycu do is come back at me and 5 say, well, Congress said no provision of law shall be 6 construed thus and so, which seems to be only dictating a 7 rule of, a decision for this case as opposed to saying the 8 duties of trustee when it's the federal Government do not 9 include X, Y, and Z, or the Indians are no longer 10 beneficiaries or something substantive. 11 MR. STERN: Well, look, in Seattle v., in the 12 Audubon case, the Congress had talked about what the 13 Government had been done being adequate for the purposes, 14 you know, of the particular situation everyone knew -- 15 JUDGE TATEL: Are you talking about Robertson? 16 MR. STERN: Yes. 17 JUDGE TATEL: Well, what exactly, did the rider 18 have language like this: Nothing in the '94 act or any 19 other statute nor principle of law shall be construed? C 20 MR. STERN: No, it didn't have that language, but 21 it had language that would be -- 22 JUDGE SENTELLE: That's what I'm asking you 23 about. 24 MR. STERN: Well, I mean, I guess that the 25 question -- CLS 1 JUDGE SENTELLE: So Robertson has nothing to do 2 with this. 3 MR. STERN: Your Honor, the, if the question is 4 can Congress with particular litigation in mind speak to 5 something that is connected with that litigation without 6 broadly changing the law, which is what it sort of in some 7 general way, you know, which is what it did in Robertson, 8 and that's why that case is relevant. And this is not a 9 case involving a final judgment, and Congress can always 10 amend what can be done -- 11 JUDGE SENTELLE: Congress can certainly amend the 12 law that governs situations. But I think as recently as 13 Spend!!rift Farms and as long ago as Havburn's Case, and 14 that spans us from John Marshall to Scalia, the Supreme 15 Court has recognized that the separation of powers includes 16 a niche for the courts. And that court niche includes 17 making decisions that Congress is not going to upset for a 18 case under adjudication. Now, Congress can change the law 19 that governs situations, but to come in and change the a 20 decision-making in a judicial case is something that over 21 that period of 200 years the courts have claimed this is 22 our own, and how is this different? 23 MR. STERN: Your Honor, I mean, I fear I'm going 24 to just repeat myself, because what, it!s easy to explain 25 why this case is different from lots of other cases that CLS 18 1 plaintiffs rely on, you know, generally, you know, which 2 generally involve like Plaut v. Spendthrift Farms, the 3 problem there was *its application to a closed case. All 4 the cases that were still pending, whether they were in the 5 Court of Appeals or anywhere else, you know, the 6 application of that statute was fine. That was strictly a 7 closed-case problem. 8 JUDGE SENTELLE: But here you're taking decided 9 questions decided by a court, as you were in 1-j!y!urn's, and 10 you were in Spendthrift, and instead of subjecting them to 11 appellate process and judiciary, Congress is changing the 12 decision of the Court. Now, Robertson, Congress came in 13 and said we're changing the substantive law as to the 14 circumstances under which a harvest is considered to take, 15 right? They were not saving in the case under adjudication 16 you shall not construe any provision of law in such a 17 fashion as to say there's a take there. 18 MR. STERN: Well, Your Honor -- 19 JUDGE SENTELLE: Then you're have a parallel C U, 20 case. C 21 MR. STERN: Well, Your Honor, I'd -- 22 JUDGE SENTELLE: But that's not what happened in 23 Robertson, was it? 24 MR. STERN: I'd suggest that if this statute had 25 been written in precisely the way it is before this case CLS 19 1 was ever filed that nobody would think that there was a 2 problem with it. Everybody would say, yes, Congress has 3 made absolutely clear that what it's just saying is that 4 there's 5 JUDGE SENTELLE: Well, you might then have a very 6 serious takings problem, but that would be a different 7 case. 8 MR. STERM: Well -- 9 JUDGE SENTELLE: If you -! or, and even 10 discrimination, probably. If you came in and said the 11 courts shall not construe any law so as to say that a 12 trustee has to, it doesn't have to perform the sante duties 13 toward the Indian Trust as they would in other trust 14 circumstances. 15 MR. STERN: Your Honor, Congress could -- 16 JUDGE SENTELLE: You'd have some other problems, 17 but it wouldn't be this problem. 18 MR. STERN: Well, maybe, but Congress clearly can 19 say what duties are or are not enforceable. It can create C 20 causes of actions for damages with regard to fiduciary 21 trust obligations, and if it doesn't, you don't have one. 22 You know, if you don't -- 23 JUDGE SENTELLE: But if you had a pre-existing 24 right under a trust relationship and Congress sought to 25 extinguish that right, are you saying there would be no CLS 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 takings problem there? MR. STERN: Well, Your Honor, you would have, if the, where did the -- JUDGE SENTELLE: Are you saying there would be no takings problem there? MR. STERN: Your Honor, I'm saying that there would be no takings problem if there was -- first of all, I mean, there's lots of case law about whether even taking away a real cause of action for something could constitute a taking, but the point in this context is that it is one thing to talk about fiduciary duties, and there are a lot of fiduciary duties and, you know, the Government has sometimes failed in it, sometimes horribly failed in it. JUDGE SENTELLE: Uh-huh. MR. STERN: This case, however, is not and cannot be a review of all historical failures or even all failures going forward. The Court does not sit to do that, and that is equally true in fiduciary cases. JUDGE TATEL: But that's not what bell VI says. Cobell V1 says it should. MR. STERN: No, it does not, Your Honor, with all respect, and it can't. It cites cases from this circuit that say you can't order in the context of an Indian Trust case. Unless there's a specific statute or treaty or regulation, you can't require the Government to do C C 2 C 2 C ) CLS 21 ' 1 anything. 2 JUDGE TATEL: You and I must be reading different 3 cases. Ccbell VI requires it. 4 JUDGE SENTELLE: I think I wrote it. 5 JUDGE TATEL: Yes. 6 JUDGE SENTELLE: And I don't remember precisely 7 what you're saying. 8 MR. STERN: Your Honor, it would be foolish for 9 me to quarrel with the author of an opinion about what it 10 meant. However, the other decisions, including the cases 11 that the Court quotes -- 12 JUDGE TATEL: Can we go back, can we just 13 continue with this rider for a minute? Because I'm 14 confused about your argument here. In view of your 15 responses to Judge Sentelle that this rider is 16 constitutional and limits a court from interpreting the 17 statute or the common law in any way to require an 18 historical accounting, right? 19 MR. STERN: Yes. C 20 JUDGE TATEL: Doesn't that apply? If you're 21 right that that's constitutional, doesn't that apply to 22 this Court as well? 23 MR. STERN: Yes, it does. 24 JUDGE TATEL: Okay, so if we can't interpret the 25 statute or the common law to require an historical CLS 22 1 accounting, whatever that means, then I don't understand 2 your argument that Congress passed this to give us time to 3 decide the constitutional case. Is that what you were 4 saying? 5 MR. STERN: No, what I think, and I agree that it 6 is somewhat anomalous, I think that Congress expected 7 JUDGE TATEL: What's anomalous? Where is there B any language in this rider so you think what happened 9 was Congress passed this to restrain the District Court's 10 order but to give this Court time to review it? 11 MR. STERN: I think in one sense, yes, that is -- 12 JUDGE TATEL: Where do you find that in this -- 13 MR. STERN: It's in, I mean, it's in the 14 legislative history, Your Honor, yes. 15 JUDGE TATEL: It is? Why don't you read me 16 something that says that. I mean, it's like a legislative 17 stay. Did the Government seek a stay pending appeal from 18 us? 19 MR. STERN: Yes, and we got one, Your Honor. C 20 JUDGE TATEL: So -- 21 MR. STERN: Otherwise, I mean -- 22 JUDGE TATEL: Well, then, what did the -- 23 MR. STERN: Well, the legislation came out 24 first -- 25 JUDGE TATEL: What did the rider do, then? CLS 23 1 MR. STERN: The legislation came -- 2 JUDGE TATEIJ: Why would Congress have passed a 3 law staying an order that we already stayed? 4 MR. STERN: You hadn't already stayed it, Your 5 Honor. We sought, the Congress acted very quickly and 6 passed the legislation and -- 7 JUDGE TATEL: Okay, so where does it say in here 8 that this is really stayed? 9 JUDGE SENTELLE: This is what happens when 10 Congress acts very quickly. 11 JUDGE TATEL: I mean, I may just have missed it. 12 MR. STERN: I mean -- 13 JUDGE TATEL: I just didntt see it, so. 14 MR. STERN: It says, I mean, Pm looking it, it 15 sort of says there will he further court proceedings in the 16 Cchefl case based on the likely appeal. Managers believe 17 it would be unwise to expend hundreds of millions of 18 dollars on further accounting while this case is under 19 appeal. Now, one can -- 0 20 JUDGE TATEL: Yes, but the only time limits, the 21 time limits the rider imposes include either action by the 22 Congress or December 31st, 2004. They don't say anything 23 about this Court. And it doesn't say no court shall 24 interpret the fiduciary obligations of the Department to 25 require an accounting until the D.C. Circuit so rules. CLS 24 1 MR. STERN: Your Honor1 that's why I found it to 2 be anomalous, because I do think that there is a bit of 3 mismatch between what Congress expected and what it wrote, 4 and-- 5 JUDGE TATEL: Uh-huh. 6 JUDGE !cILLIANS: isn't a sort of straight reading 7 of it that it imposed this delay so that it could 8 JUDGE TATEL: Right. 9 JUDGE WILLIAMS: -- address the matter? 10 JUDGE TATEL: Exactly. 11 JUDGE WILLIAMS: And I'm not sure why that's a 12 problem for you. 13 MR. STERN: Your Honor, I'm reading this, I'm not 14 really trying to sort of defend the logic of, I'm just 15 saying that I think -- 16 JUDGE WILLIAMS: I'm just saying, you seem to be 17 tying yourself in quite unnecessary knots. 18 MR. STERN: I just think -- 19 JUDGE WILLIAMS: You have a statute that seems to 1: 20 say nobody ought to make, and the Secretary of Interior 21 ought not to, and no one should make the Secretary of 22 Interior spend huge dollops of money on this accounting 23 while we are thinking of what the right remedy, and your 24 introduction of having this being some sort of stay for the 25 Court to think about it totally baffles me. CLS 25 I MR. STERN: Well, ITm sorry, Your Honor. I'm 2 only sort of trying to point up what I think Congress 3 thought was going to happen. As I said, I don't believe 4 the language of that rider is in the current appropriations 5 bills, and we did sort of point all this out -- 6 JUDGE WILLII\MS: And it creates a standstill 7 until the end of December 2004 or until Congress acts, 8 so-- 9 MR. STERN: Well -- 10 JUDGE WILLIN4S: -- there doesn't seem to be any 11 urgency about it until December approaches. 12 MR. STERN: That may well be, and the Court may, 13 you know -- 14 JUDGE SENTELLE: But in December we're back to 15 where we were without the rider, right? 16 MR. STERN: Well, that would be correct, yes, and 17 that's really why I'm sort of, I mean, trying to, however 18 the Court, whatever, however the Court chooses to come at 19 this, there is at least the possibility that these issues C 20 will be at some point presented. And the point also in our 21 lawsuit, I mean, in our appeal is this, is that, you know, 22 we do think, you know, and again, I don't want to quarrel 23 with anybody, not even the one that wrote the opinion, but 24 I think that the Supreme Court really has made clear in 25 principles that this Court embraced in its 2001 opinion OLS 26 1 that to bring in action for agency action unlawfully 2 withheld, and that's what this Court said that the case was 3 about, and it really did say, and we're sending it back to 4 the agency fcr a remand, and there is an absolute lack of S any evidence of unreasonable delay since then. That 6 contempt trial, even if you look at all of the findings 7 that are in that trial, if you leave out the parts that were reversed by this Court, that is, you couldn't get, on 9 its own terms you couldn't get unreasonable delay out of 10 that. There's a lot of statements -- 11 JUDGE WILLIAMS: Is delay the issue between the 12 parties here? I thought the issue really, and apart from 13 the question of judicial supervision, which is not a 14 trivial issue, but apart from that, the issue is the scale 15 and character of, insofar as we're talking about historical 16 accounting, the scale and character of that accounting, and 17 the Government argues forcefully that spending hundreds of 18 millions to catch errors worth 38 cents is not particularly 19 sensible, and particularly when Congress seems to have 20 doubts about the propriety of that. So that seems to me 21 not on the question of delay but the question of what kind 22 of an accounting is actually required. 23 MR. STERN: Well, I mean, I think one possible 24 way of looking at this is that to the extent that there was a) 25 specific action contemplated by this Court's decision and CLS 27 1 that whether this is reviewed now under the rubric of is 2 it, is there further delay or should I look at the 3 accounting plan and the accounts that have actually been 1 reconciled, which amount to, you know, about 60 billion, 60 S million of the total of the 100 million, has actually been 6 completed. But of course we're not even allowed to send 7 those out. The District Court has restrained us from doing 8 that. However, if you look at the progress -! 9 JUDGE SENTELLE: Well, you rather understand why 10 the Court is not allowing you to send that out when they 11 don't know how much you owe other people. 12 MR. STERN: Well, no, no, these are the ones -- 13 well, that's the problem, Your Honor, is that when a court 11 remands to an agency to complete accountings, an agency, to lb restrain an agency for a lot of these judgment denying on 16 the accounts, you know, which, where we didn't get bogged 17 down with orders telling us we couldn't use sampling and 18 having the Court tell the Secretary it was contemptuous to 19 even think about it, on those who were actually able to not C 20 only proceed with all, you know, getting the documents, 21 indexing them, and putting everything, you know, in order, 22 those were actually able to go ahead and finish them and 23 reconcile them. You know, and we still can't send it out. 24 We've got a motion that's been pending with the Court for 25 over a year to allow us to do that. But he says, no, you CLS 28 1 can't send out to, you can't send that because that would 2 be a contact with class beneficiaries. But the point would 3 be that if you take that and the accounting plan together, 4 and if you review those under an arbitrary and capricious S standard, we'd welcome the Court to review that under an 6 arbitrary and capricious standard; because we think it is 7 100 percent clear that it meets, that it would meet that 8 standard. And so we're not trying to avoid this Court's 9 review of anything that might actually be emerging here as 10 a relevant question in terms of an accounting, and -- 11 JUDGE SENTELLE: At the risk at unnecessarily 12 prolonging this, which we probably have already, if we were 13 to hold that the Court has the authority to enter some sort 14 of structural injunction, what parts of this one are the IS ones that you think are worst, I guess? I would say which 16 parts which would make it invalid anyway, but I'm not sure 17 that's a good statement, so. 18 MR. STERN: t0ell, I mean, they work in different 19 ways. First, there's half the injunction that simply says 0 20 that everything the Department of Interior is ever going to 21 do, whether it's reorganizing itself or whatever, is 22 really -- 23 JUDGE SENTELLE: That obviously is not what it 24 says, and you're not addressing the question I asked you. 25 MR. STERN: Excuse, Your Honor -- CLS 29 1 JUDGE SENTELLE: The parts of the order that it 2 was -- more a paraphrase than I'm going to let you get by 3 with. Tell me what parts of it it is that are genuinely 4 and obviously too intrusive on the Executive Branch? 5 MR. STERN: Well, Your Honor -- 6 JUDGE SENTELLE: We're back to concerns about 7 separation of powers now. 8 MR. STERN: Your Honor1 you know, I'll stand by 9 what this order actually says, because I think it really 10 does, what it's done is to take -- 11 JUDGE SENTELLE: No, you can't possibly contend 12 that it said what you just quoted. 13 MR. STERN: No, what -- 14 JUDGE SENTELLE: If you do, tell me where it says 15 that. 16 MR. STERN: Well, Your Honor, what it does is it 17 takes the plan -- 18 JUDGE SENTELLE: No, I don't know what it does. 19 I want to know what it says that you say is the most 0 i 20 invasive of the executive power. 21 MR. STERN: Well, look -- 22 JUDGE TATEL: Are you talking about Section 3 of 23 the order? 24 MR. STERN: The fiduciary duty part. And with 25 respect to -- CbS 30 1 JUDGE TATEL: And you're talking about 2 subparagraph (a), which directs the implementation of the 3 comprehensive plan? 4 MR. STERN: Yes. 5 JUDGE TATEL: Is that what you're talking about? 6 MR. STERN: Yes. 7 JUDGE TATEL: Okay, and it's your objection to 8 that that the Court has ordered the Department to comply 9 with its own plan? I mean, it hasn't taken over the 10 Department. It's the Department's own plan. 11 MR. STERN: Your Honor, this is not, this is a 12 plan set out in the most general terms to guide the 13 Department in the future. Mo court has the authority to 14 say you are now subject to contempt if you don't do what 15 your plan is. 16 JUDGE TATEL: So that's Complaint No. 1. All 17 right, so -- 18 MR. STERN: That's Complaint No. 1. 19 JUDGE TATEL: Okay, that's No. 1. Now, what C 20 about (b)? Within 90 days, file a plan -- 21 MR. STERN: Well, this is 22 JUDGE TATEL: What's the matter with (b)? 23 MR. STERN: Well, Your Honor, it's essentially 24 telling the Department of the Interior, you know, I really, 25 you know, it's really too bad that you guys ever thought CLS 31, 1 that you were running an agency, because now I am. 2 JUDGE TATEL: Wait, wait, wait, wait. 3 JUDGE SENTELLE: It doesn't say that. 4 JUDGE TATEL: Now, come on. That's not what that 5 says. 6 JUDGE SENTELLE: We're talking about the real 7 order, not the one that you'd like to B MR. STERN: All right, the real order says -- 9 JUDGE TATEL: Read, why don't you read -- 10 JUDGE SENTELLE: -- the straw man that you'd kick 11 around. 12 JUDGE TATEL: Why don't read Kb) out loud? 13 MR. STERN: It said within 90 days the Interior 14 defendants shall file with the clerk of this Court, serve 15 upon plaintiffs a detailed plan identifying specific 16 measures that Interior defendants wiil take as a part of 17 their 2(b) plan. 18 JUDGE TATEL: Okay, so, I mean, technically you 19 could file a plan which says, Your Honor, there are no C 20 specific steps we need, and then you will have complied 21 with that. I mean, I don't see the Department as, the 22 Court as running the agency and that. What about identify 23 any portions of the plan that are inconsistent with the 24 fiduciary duties, so? 25 MR. STERN: Well, and of course we think that CLS 32 r 1 the, all the fiduciary duties and the Courtts understanding 2 of those fiduciary duties, and it sounds like this is all 3 premised on not only want of jurisdiction but on 4 fundamental legal error, too. 5 JUDGE TATEL: Well, but you lost that in Cobell 6 VI. 7 MR. STERN: Your Honor, we, I just have B JUDGE TATEL: You did. 9 JUDGE WILLIAMS: Isn't your argument 10 fundamentally -- 11 JUDGE TATEL: Cobell VI -- 12 JUDGE WILLIAMS: -- that the order taken as a 13 whole makes everything the Department does with respect to 14 these trusts subject to remedy, if that's the word, by 15 contempt. 16 MR. STERN: Yes, it does. 17 JUDGE WILLIAMS: Which is certainly unusual. 18 MR. STERN: It's very unusual. 19 JUDGE SENTELLE: And what I think I'm probing and 20 perhaps Judge Tatel is is does this have, the Government 21 have only an all or nothing case here? If you don't win on 22 the point that the Court cannot have entered any 23 injunction, you lose because you're not satisfied with us 24 saying there's something wrong with this particular 25 injunction? CLS 33 1 MR. STERN: No, Your Honor. I was going to say, 2 even assuming that a court had authority to enter a 3 structural judgment -- 4 JUDGE SENTELLE: That's what I asked you to do a S moment ago. 6 MR. STERN: -- leave the authority question out 7 of it, each of the parts is premised on errors of law and S is not supported by fact, and so, and we can go through 9 them one -- 10 JUDGE TATEL: Okay, yes, let's keep going. 11 Start, go to (0) 12 JUDGE SENTELLE: That's the kind of thing we've 13 been begging you to do. 14 JUDGE TATEL: Right, let's go to number (c) 15 Submit a list of tribal laws. 16 MR. STERN: It's again, Your Honor, where, there, 17 these are just requirements coming out of nowhere. I IS mean -- 19 JUDGE TATEL: It says, but he's not, you said C 20 this order is the Court running the Department. Courts 21 require agencies to submit reports all the time. Submit 22 lists of tribal laws. In fact, it even says submit lists 23 of tribal laws Interior believes are applicable. 24 MR. STERN: But Ycur Honor, these steps are all 25 have meaning only because they're linked up to things that CLS 34 I have to occur later. 2 JUDGE TATEL: Only because they're what? 3 MR. STERN: They're not sort of reporting 4 requirements like, you know, please send me a list, you 5 know, of, you know, tribal laws. I'm really interested. 6 It's because the Department, the Court says, you know, from 7 now on, among a million other things, everything you do has 8 to be governed by tribal laws, md that's where this comes 9 in. 10 JUDGE TATEL: No, no -- 11 JUDGE WILLIAMS: It hasn't exactly said that. 12 JUDGE TATEL: (c) says -- 13 JUDGE WILLIAMS: It said, it's asked you to 14 identify a list of tribal laws that the Department deems 15 controlling. 16 JUDGE SENTELLE: Deems applicable. 17 JUDGE TATEL: Right. 18 JUDGE WILLIAMS: So if the Department's view is 19 as I understand it to be, the correct, that could be 20 complied with by filing a paragraph that says we do not 21 believe any tribal laws govern whatsoever. Period. Full 22 stop. 23 MR. STERN: Sorry, I'm trying to find the 24 citation, but the District Court really does say in its 25 opinion that tribal laws will govern. We can't go to Judge CLS 35 1 Lamberth and -- 2 JUDGE SENTELLE: Right, we're not reviewing 3 opinions, though. We're reviewing the injunction. You 4 understand that? 5 MR. STERN: Yes, Your Honor, and, but I'm just 6 saying that it is, in a case where everybody has already 7 been sanctioned, to go hack to Judge Lamberth and say, by 8 the way, I read your opinion, and here's what, I'm 9 complying with this section by telling you that nothing's 10 controlling, and I really don't think that that would be a II (indiscernible) thing to do in any case, and it would 12 certainly not be a very wise one to do in this case. I j 13 mean 14 JUDGE TATEL: Why? I don't understand that. 15 MR. STERN: Because the Court really has 16 addressed these, and it's already declared its view that 17 tribal laws generally -- 18 3IJDGE TATEL: Well, look all we can do, all we 19 can do is read the order, and it says that the Department C 20 deems applicable. 21 JUDGE WILLIAMS: I guess you're pointing 2(d). 22 2(d) does say the defendants shall administer the trust in 23 compliance -- well, there's a fudge word -- with applicable 24 tribal law and ordinances, so one reading of it is that 25 none is applicable. CLS 36 1 JUDGE TATEL: Right. 2 JUDGE WILLIAMS: So the paragraph is meaningless. 3 The trouble is that runs into canons of construction, 4 saying that -- 5 JUDGE SENTELLE: Yes. 6 JUDGE WILLIAMS: -- people dontt say things that 7 are meaningless. 8 JUDGE SENTELLE: Nothingts supposed to be 9 meaningless. 10 JUDGE WILLIAMS: Which is a fiction, of course, 11 but. 12 MR. STERN: I mean, if I really could take a step 13 bac), the question was what trial was there ever held on 14 InteriorTs compliance with general fiduciary 15 responsibilities? What claim is it in this case that would 16 allow a court to be doing any of this? 17 JUDGE TATEL: Well, how about Cobell VI? 18 MR. STERN: Your Honor, if Cobell, I mean, we a z 19 really -- C 20 JUDGE TATEL: I mean, your theory of Cobell VI as 21 I, your theory is that the Government's fiduciary 22 responsibilities to the Indians extends only to the 23 historical accounting. Only to an accounting, excuse me, 24 right? That!s your theory. 25 MR. STERN: My theory is that the District Court CLS 37 I 1 dismissed the common law claims in this case 2 JUDGE TATED: Yes, but 3 MR. STERN: and that this Court reviewed that 4 order. 5 JUDGE TATEL: Yes, and listen to what Cobell, let 6 me just read you one sentence from CobellVI. The '94 act 7 recognized and reaffirmed what should be beyond dispute, 8 that the Government has a longstanding and substantial 9 trust obligation to Indians, particularly to IN Trust 10 beneficiaries, not the least of which is the duty to 11 account. And the statute itself refers to the accounting 12 obligations as only being part of the obligation. So it 13 really doesn!t make any difference what the district judge 14 did with the original complaint. The common law trust 15 allegations are almost the law of the case here. Now, I 16 don't know what the specific ones are, but I just don't 17 see, I can understand how you can argue about the elements 18 of the fiduciary obligation that extend beyond an 19 accounting. I don't understand how in view of Cobell VI 20 you can argue there are none. 21 MR. STERN: Your Honor, the question is not 22 whether there are common law obligations. The question is, 23 what is enforceable in what claim? How would you decide 24 it? And has there been a proceeding to decide it? 25 JUDGE TATEL: Okay, now that's a different CLS 39 1 question as to whether the District Court has jurisdiction 2 to even consider whether the violations of non-accounting 3 fiduoiary duties have occurred. Your argument is they 4 don't even have, the Distriot Court doesn't even have 5 jurisdiction to do that. 6 MR. STERN: Your Honor, this claim -- 7 JUDGE TATEL: You want us to order this oase 8 dismissed. 9 MR. STERN: That's right, Your Honor, beoause 10 this case out of all the things that it might have been, I 11 mean, we're not saying, look, you can file other cases 12 about other problems, but this case was -- 13 JUDGE TATEL: The complaint was obviously broad 14 enough to cover this, because the District Court originally 15 dismissed the common law claims. 16 MR. STERN: Nell, it didn't just originally 17 dismiss it. That was the, there was no oross-appeal on 18 that, and that was key to the jurisdiction of the Court, 19 because it went to whether this could -- 20 JUDGE TATED: Nhat about the sentence I just read 21 you from Cobell VI? 22 MR. STERN: Your Honor, what this said, what that 23 said -- 24 JUDGE TATEL: Do you want me to read it again? 25 MR. STERN: No, Your Honor. CLS 39 r 1 JUDGE TATEL: Okay. 2 MR. STERN: I fully recognize that what the Court 3 said, and, I mean, I've got a lot of quotes from the 4 opinion, too, you know, what 5 JUDGE TATEL: Well, do you have any that go the 6 other way? 7 MR. STERN: Okay, where -- I'll (indiscernible) B my last (indiscernible) 9 JUDGE TATEL: Yes, I'm trying to, you know, we're 10 all bound by Cobeli VI. 11 MR. STERN: I know, and I'm at somewhat of a 12 disadvantage because I'm talking to its author. 13 JUDGE TATEL: Cobell_ja -- no, I didn't, Judge 14 Sentelle wrote it, not me. 15 MR. STERN: No, I appreciate that, Your Honor. 16 JUDGE TATEL: But we can all read it, I think. 17 MR. STERN: I know, but look -- lB JUDGE TATEL: No, you're right, there are certain 19 elements of Judge Lamberth's order that the Court said were C 20 not required by fiduciary obligations, such as the elements 21 of the accounting. 22 JUDGE SENTELLE: And there may be some here. 23 JUDGE TATEL: Right. Yes, exactly, but Cobell VI 24 nowhere says, and the author can correct me if I'm wrong, 25 that the fiduciary duty is limited to accounting. In fact, CLS 40 1 the statute doesn't even say that. 2 MR. STERN: Your Honor, we've never said the 3 fiduciary duties are limited to the duties (indiscernible) 4 accountingS The question is what is the fiduciary duty 5 that is actionable and presented in this case, which is a 6 very different and much more discrete question. 7 JUDGE WILLIAMS: You weren't saying that the 8 complaint didn't raise the issue of management going 9 forward, are you? 10 MR. STERN: The complaint -- well, first of all, 11 a lot of stuff was stricken from the complaint by the 12 District Court. 13 JUDGE WILLIAMS: Well, was that stricken? Were 14 those passages stricken? 15 MR. STERN: To the extent that there was stuff 16 about common law claims that was, the District Court went 17 out of its -! 2 18 JUDGE WILLIAMS: I really think the common law 19 issue is a complete red herring. C 20 JUDGE SENTELLE: The '94 statute. 21 JUDGE WILLIAMS: Section 101 (a) 22 JUDGE SENTELLE: Section 101. 23 JUDGE WILLIAMS: I'm sorry, (d) (1) through (8), a 24 lot of that has to do with non-accounting issues. 25 MR. STERN: That's right, but the question is CLS 41 1 what is enforceable and what isn't? If Congress sets out a 2 series of general duties in a statute, that doesn't mean 3 that they can come in and all be enforced. And it really 4 is the case that this Court said, no, of course you can't 5 have wholesale reform, and it really is the case that the 6 Supreme Court said that in the them Utah case. And 7 we're not trying to limit the overall scope of the 8 Government of fiduciary responsibilities. But just as in 9 aotions for damages, the fact that you have a trust and a 10 fiduciary relationship doesn't mean that you then come into 11 sue about it, and this Court has sort of over and over 12 again in its opinion, it sort of says, look, the 13 Government's fiduciary responsibilities necessarily depend 14 on the substantive law creating this obligation, and it 15 cites Shoshone Tribe -- 16 JUDGE WILLIAMS: That's right. 17 JUDGE SENTELLE: Yes. S a 18 JUDGE WILLIJ!4S: That doesn't help you any. 19 JUDGE SENTELLE: That doesn't help you any1 C 20 MR. STERN: No, it cites Shoshone Tribev. 21 Bannock, which in turn sort of says, look, an Indian can't 22 force the Government to take specific action unless a 23 treaty, statute, or agreement imposes it. I mean, those 24 are the cases of this circuit. 25 JUDGE WILLIAMS: We're got the statute. CLS 42 1 JUDGE SENTELLE: We've got the statute here, so 2 that still doesn't help you any. 3 JUDGE WILLIAMS: We've got 101(d) (1) through (8). 4 MR. STERN: Right, but all the parts, Your Honor, 5 we really would argue that the general spelling out of 6 duties in a statute, which first of all are all forward- 7 looking, they aren't part of the historical accounting 8 activity. 9 JUDGE WILLIAMS: Yes, but apart from the 10 historical accounting, what were talking about is forward- 11 looking stuff. 12 MR. STERN: And then the question is under what 13 jurisdictional basis is this before this Court, because 14 it's got to be either unreasonable delay or else it's got 15 to be final agency action. And if it's not one, it's got 16 to be the other. And if there's final agency action here, 17 we welcome the Court's review of it. 18 JUDGE SENTELLE: But I thought the Government had 19 conceded back before Cobell VI that there had been C 20 unreasonable delay. 21 MR. STERN: Yes, but that goes and can only be 22 for a clear, where you have a clear, unequivocal duty, 23 which was, had to be perform the accounting. 24 JUDGE WILLIAMS: I though the Government also 25 stipulated that -- CLS 1 JUDGE SENTELLE: Well, I'm correct that there had 2 already been a stipulation that there's been an 3 unreasonable delay. 4 JUDGE WILLIAMS: massive management failures. 5 MR. STERN: No, but it's, no, no, no, but that's 6 nOt the duty, *Your Honor. The duty, to order unreasonable 7 delay, and again, that is crystal clear in the Southern 8 Utah case, there has got to be a clear, it's got to be 9 clear and discrete, and this Court said fine. You've got 10 something just like that in this statute- You've got to go 11 ahead, and you've got to do this accounting. And that's 12 fine. And we've been sort of knocking ourselves out for 13 years trying to do what this Court said, and in doing that 14 we've come up with a plan that is a good plan, and we've 15 done, invested hundreds, really, about, so much money and 16 time and effort, none of which gets reviewed. You know, 17 it's all dismissed out of hand. There's no basis. The 1.5 S 18 trial isn't a trial about anything that the agency did 19 wrong or failed to do. It's just a consideration of what C 20 duties the District Court thinks it ought to impose. The 21 contempt trial was sort of about, like sort of like alleged 22 misstatements. 23 JUDGE SENTELLE: You know, when we -- 24 JUDGE TATEL: It sounds like, you know what it 25 sounds like? It sounds like you're moving to -- are you OLS 44 1 asking that we dismiss the injunction, dismiss the action 2 beoause of the behavior of the district judge? 3 MR. STERN: No, Your Honor. 4 JUDGE TATEL: Oh. That's what it sounds like S you're saying. 6 MR. STERN: No, we can't -- 7 JUDGE TATEL: I mean, you haven't moved to recuse 8 the district judge, have you? 9 MR. STERN: No, we have not moved to recuse the 10 district judge. We take strong issue with a lot of what 11 the -- 12 JUDGE TATEL: I thought you were winding up, it 13 sounded like you were winding up to do that right there. 14 MR. STERN: No. 15 JUDGE TATEL: No? 16 MR. STERN: Your Honor, what we're saying is 17 that -- I 18 JUDGE TATEL: You said none of your, none of the 19 good stuff you do gets considered by the district judge. I 0 20 mean, I thought you were saying that the problem here is 21 that you can't convince him that you're oomplying with the 22 law. 23 MR. STERN: No, Your Honor, we don't get -- look, 24 here's what happens on remand. You say remand to the 25 agency, right? Within months, by the end of 2001, the CLS 1 District Court says I'm holding a contempt trial, so the 2 remand, and at that point he says to the Secretary, he 3 says, you know, statistical sampling, that's so clearly 4 contemptuous, I don't even know if we're going to try. So 5 the period of a remand to the agency it concluded 6 effectively in any meaningful sense by 2001. In mid-2002 7 on the basis of the contempt trial, the District Court 8 says, that's it, I'm totally revoking the remand. You're 9 an unfit trustee-deiegee. The fact that this Court then 10 reversed the findings, the only ones that could have been 11 relevant to taking things over prospectively, made no 12 difference whatsoever. There's no pointing, there's no J 13 showing of any factual matter, even ones that were like in 14 there that this Court didn't address that could possible 15 support any injunction of any kind. Plaintiffs' brief 16 can't point to any, and the District Court doesn't. I 17 mean, what those things about were -- 18 JUDGE SENTELLE: I'm risking being repetitious, 19 but I still am not sure that I've gotten the answer to the 0 20 question I wanted answered, and I think I heard it alluded 21 to again. Are you saying that the Court did not have 22 jurisdiction to enter any injunction or are you saying that 23 this injunction is flawed? 24 MR. STERN: I'm saying that except, assuming -- 25 JUDGE SENTELLE: You have to answer that with one CLS 46 1 of those two -- 2 MR. STERN: I'm sayinci, at this point I'm saying 3 the second one. I'm saying that assuming that the Court 4 had any jurisdiction, assuming that it had any S jurisdiction, it could not have entered this injunction. 6 There's, it's got multiple legal problems. 7 JUDGE SENTELLE: Now, are the particular sections 8 that Judge Tatel alluded to the only cnes that are 9 overstepping or are there other overstepping provisions in 10 the injunction? 11 MR. STERN: Well, there, there's some of it 12 that's not a question of overstepping. It's just wrong. 1 j 13 mean, sort of with the accounting provisions. I mean, 14 there, you know, there are all sorts of things, you know, 15 we've got a $335 million plan. That's very expensive to 16 account for, you know, a trust that has $400 million in it, 17 and Congress back in 1992 sort of, you know, was worried 18 about that. C z 19 JUDGE SENTELLE: Counsel, a lot of the problems 20 that you're alluding to now are problems that arise not 21 because of anything the District Court or any other court 22 has done. They arise because the Department not in the 23 present administration or the one before it, but over the * 24 term of deoades did not do what it was supposed to do. 25 Now, necessarily that's going to result in a lot of extra CLS 47 1 additional expense down the end of the road. And I don't 2 understand the relevance of that to the legal questions we 3 have here. 4 MR. STERN: Well, the legal question is that 5 informs Congress's intent, because it was Congress who said 6 that, you know, a point that repeated again last year, they 7 said that they had said this, and it's true, they had said 8 this before the 1994 act. But fine, we've done this $335, 9 we stand behind the $335 million plan. That's fine. What 10 the District Court has said is I'm expanding the parameters 11 of that plan so that you have to account not for open 12 accounts, even though this is a statute that is worded in 13 terms of providing daily and annual balances. You've 14 got -- 15 JUDGE SENTELLE: Are you objecting to the 16 provision that says not to use statistical sampling? 17 MR. STERN: That's one of them. I mean, we've E 18 laid it out in our brief. z 19 JUDGE SENTELLE: Are you objecting to the 20 provision that says that you have to include a verification 21 process by professional accountings? That's sub (a) all 22 under 3. 23 MR. STERN: In, as the District Court, in the way 24 that the District Court like has said that, yes. I mean, 25 the District Court says we've got a verification process OLS 48 1 by, that 'a there 2 JUDGE SENTELLE: So yes is the answer to that 3 question, right? 4 MR. STERN: Yes, it is. 5 JUDGE SENTELLE: Are you objecting to the 120 6 days with reference to the industry production databases? 7 That would be subparagraph (p), excuse me, (p) 8 MR. STERN: Yes. 9 JUDGE SENTELLE: Okay. Judge Tatel already 10 covered 3 (b), !c) / and (d) . Are there other provisions 11 that we should look to particularly as the provisions 12 you're objecting to? 13 MR. STERN: Your Honor, we -- 14 JUDGE SENTELLE: And don't tell me this decree 15 says, tell me the provisions, if there are any. 16 MR. STERN: Your Honor, I mean, I, you know, we 17 have laid this out in our brief. I can sort of, sort of go 18 back, you know. I mean, and, you know, I mean, and I just 19 want to make clear that aside for particular problems on a 20 provision!by-provision basis, since we think that they 21 reflect, all reflect errors of law and absence of fact, so 22 in the end I'm going to say we object to everything. Some 23 of them are more problematic as a practical matter than 24 others. None of them has a basis in law. But, you know, 25 to the extent that this Court wants to talk about, you 015 49 i know, have you, what have you done in the accounting, what 2 about your accounting plan 3 JUDGE SENTELLE: Unless my oolleagues have -- 4 JUDGE TATEL: I have one. 5 JUDGE SENTELLE: Okay, Judge Tatel has a 6 question. 7 JUDGE TATEL: I just have one question. I want 8 to be sure I understand the Government's position about the 9 impact of the rider, the appropriations rider. Is it the 10 Government's position that it does not dictate the decision 11 in this case by this Court with respect to Section 3 of 12 Judge Lamberth's order? 13 MR. STERN: No, we, what we think is that the, 14 what, I mean, I think that properly understood that since 15 this is a claim, since the claim in this case was about a 16 historical accounting, and that's what this Court had said, 17 we think that what Congress meant was that you can't go and 18 order a huge array of, a huge array of actions based on the 19 accounting claim, and the fact that the District Court, 20 because, then said, well, you know, in fact, this doesn't 21 even have anything to do with the accounting. 22 JUDGE TATEL: Okay, so then is the answer to my 23 question yes, that it knocks out Section 3 24 MR. STERN: Yes. 25 JUDGE TATEL: of the District Court's order? CLS 50 3. MR. STERN: Yes, that's the position we've taken 2 in our brief, Your Honor. That is covers everything. 3 JUDGE TATEL: Okay. Sc assuming it's 4 constitutional, right, then I go back to the very first .5 question I asked you. Assuming it's constitutional, your 6 view is that Section 3 is barred by the appropriations 7 rider, and therefore, and I know you argue that Section 3, 8 that the appropriations rider is actually broader than 9 historical accounting, but if we don't agree with you about 10 that, then the only thing, then we still have to decide 11 what to do with the fiduciary obligation section of the 12 court order. It's labeled 3, but I think he meant 4 and 5 13 monitoring, right? That's it. 14 MR. STERN: Yes. If you disagree, that's right. 15 JUDGE TATEL: And how, I hate, I hate to risk 16 losing a clear answer, but just one follow-up question. 17 How is that consistent with your argument that all Congress 18 was doing was preserving the status quo for us to decide 19 the case? 20 MR. STERN: You are risking kind of losing a 21 clear answer, but I just plead that -- 22 JUDGE TATEL: Strike it. No, go ahead, answer 23 the question. I really, I don't understand. It can't be 24 both ways, right 25 MR. STERN: I agree with you. I'm only referring CLE 51 I to what Congress itself said, Your Honor, but I'm not 2 disagreeing. However, the point would be that -- 3 JUDGE TATEL: The plain language of the rider, if 4 I just read the plain language of the rider, you agree, 5 then, that if it's oonstitutional, it knocks out the 6 historioal aooounting provision of the Distriot Court's 7 order, right? B MR. STERN: Yes, 9 JUDGE TATEL: Okay, thank you. 10 JUDGE SENTELLE: Okay. We'll hear from the 11 appellee. 12 13 ORAL ARGUMENT OF ELLIOTT H. LEVITAS 14 ON EEHALF OF THE APPELLEES 15 16 MR. LEVITAS: May it please the Court. My name 17 is Elliott Levitas. I represent the plaintiffs-appellees 18 in this matter, and I'm acoompanied today by my oolleague, 19 Mr. Austin, Mr. Gingold, and Mr. Harper. 20 The appellees are here today to seek this Court's 21 affirmanoe of the Distriot Court's motion and order 22 struotural injunotion, and this Court should affirm unless 23 it finds that the Distriot Court was olearly erroneous. 24 And the same is true as to the faots found by the Distriot a) 25 Court. OLS 52! 1 JUDGE WILLIAMS: Well, that standard obviously 2 has no application to the interpretation or validity of 3 108-108, right? 4 MR. LEVITAS: I'm sorry, Your Honor. 5 JUDGE WILLIAMS: That standard has nothing at all 6 to do with the validity or application of 108-108. That's 7 a pure question of law, right? 8 MR. LEVITAS: Oh, that is correct, Your Honor. 9 JUDGE WILLIAMS: Right, right. 10 MR. LEVITAS: And I'll address the midnight rider 11 issue. 12 JUDGE WILLIAMS: There's nothing that invalidates 13 legislation adopted between 11 p.m. and midnight, is there? 14 MR. LEVITAS: Cr thereabouts. 15 JUDGE SENTELLE: Sometimes we nay wish there was, 16 but -- 17 MR. LEVITAS: It implies the last-minute effort 18 to put this provision in. But the rider is egregiously 19 unconstittational for many reasons. In the first instance, 20 if it is in fact a timeout, a legislative stay, if you 21 will, the courts have held that that is unconstitutional 22 going as far back as 1792 in ffay!urn's Case. 23 JUDGE TATEL: But on its face, it's only staying 24 it to give Congress time to act. 25 JUDGE WILLIAMS: It's staying an obligation. CLS 53 1 JUDGE TATEL: Right. 2 JUDGE WILLIAMS: Cr something that had been found 3 to be an obligation of a particular party for a particular 4 period, right? 5 MR. LEVITAS: Yes. Yes. 6 JUDGE WILLIAMS: What's the case that says 7 Congress can't stay obligations? 8 MR. LEVITAS: In the, if, if the midnight rider 9 addresses the duty to account, which this Court has found 10 is a right of the plaintiffs, any effort to take that right 11 away -- 12 JUDGE WILLIAMS: We're shifting, we're shifting 13 now to a taking theory, is that -- 14 MR. LEVITAS: Yes. Yes, Your Honor. 15 JUDGE WILLIAMS: Why is it a taking when you have 16 presumably accrued interest as a result of any delay in 17 giving a remedy to say that a particular remedy will be 18 delayed for, let's say a year to simplify, with the, 19 incidentally, of course, with the statute of limitations 20 for unmade claims suspended for that period. Why is that a 21 taking? 22 MR. LEVITAS: If, if my client -- 23 JUDGE WILLIAMS: The compensation by means of 24 interest is inadequate? d/ 25 MR. LEVITAS: Well, I think, I think that the CLS 54 1 right to an accounting of one's own property, if that is 2 abrogated after it has been found, as it was by this Court 3 in Cobell VI, that is the taking of a very valuable 4 property right. 5 JUDGE WILLIAMS: I don't understand the taking. It's a delay in provision of the remedy. T0hat's the 7 taking? 8 MR. LEVITAS: No, if the, Your Honor -- 9 JUDGE WILLIAMS: Equity laws, trust management 10 law is famous for the delays that occur. Are every one of 11 those a taking? 12 MR. LEVITAS: The Court is absolutely correct. 13 But if this rider is construed to change the substantive 14 law as opposed to simply being a timeout or a legislative 15 stay, if it is changing the substantive law, the 16 substantive law at issue is the right of the plaintiffs to 17 have an accounting of their property. 1 18 JUDGE WILLIAMS: It seems to me you're creating a 19 completely false dichotomy. The substantive law that 108- 20 108 appears to amend is the proposition that the '94 act 21 compels this immediate process of the full-dress District 22 Court-approved type of accounting, right? 23 MR. LEVITAS: I think it goes beyond that. 24 JUDGE WILLIAMS: That's a substantive timeout, 25 right? CLS 55 1 ML. LEVITAS: I think that this rider and its 2 effort, if it is an effort to change substantive law, which 3 we suggest it is not, but if it is an effort to change 4 substantive law, the substantive law that they are 5 attempting to change is not just the '94 act, but the '94 6 act as construed by this Court in Cobell VI. 7 JUDGE WILLIAMS: Well, so what? I mean, how is 8 that different from the bridge in the Wheeling Bridq!. case? 9 MR. LEVITAS: Because at this point, without any 10 change in the law, our client -- 11 JUDGE WILLIAMS: There is a change in the law. 12 The change in the law is that the duty to go forward with J 13 an accounting for this particular period of time is 14 suspended. 15 MR. LEVITAS: If it is suspended, then I suggest 16 to you that that is a legislative timeout. It's a 17 legislative stay. It's not a change in the law. It just 18 says we're going to post, as you suggest, Your Honor, a 19 postponement of the day at which that occurs. 20 JUDGE WILLIAMS: And why is that bad? 21 MR. LEVITAS: But the, but the -- 22 JUDGE WILLIAMS: Excuse me, why is that bad? 23 Suppose in the Wheeling case Congress had said, well, we J 24 don't really know about this bridge. Maybe, maybe it 25 should stay, maybe it shouldn't. Nothing should happen on CLS 56! 1 the mandated removal of the bridge for one year. Bad? 2 Why? 3 MR. LEVITAS: Well, first of all, in that case, 4 you dontt have an individual property right at issue. In 5 this case, you do have an individual -- 6 JUDGE WILLIAMS: Yes, but now weTre on takings 7 again. But, again, I fail to see why so long as they have 6 a right of reimbursement of interest accrued during this 9 period there's any taking. 10 MR. LEVITAS: The change in the substantive law 11 that Your Honor has just described results in having the 12 plaintiffs' right for a period of time deprived. If I have 13 a right to an accounting -! 14 JUDGE WILLIAMS: The process of remedy always Is involves delay by definition. And here the, what seems to 16 make it comparably easy is built into the system is 17 provision for interest, right? 2 18 MR. LEVITAS: If, but in that instance, Your 19 Honor, what the Court has now defined the delay to be, that 20 is no more than a legislative timeout until the issue is 21 actually visited. What is the purpose of delaying -- 22 JUDGE SENTELLE: That's not actually what 23 Hayburn's Case was about. In Hayburn you actually had a 24 decision, did you not, which the Court, I mean, which the 25 Congress purported to change. It wasn't a stay order. It CLS 57 1 was a final judgment in Hai!urn, wasn't it? 2 MR. LEVITAS: Yes. 3 JUDGE SENTELLE: So this is, perhaps Hayburn 4 suggests this. In fact, I think it does. But it isn't 5 squarely on point, is it? 6 MR. LEVITAS: Well, but what Hayburn said, and 7 the other cases related to this, is that an Article III 8 court cannot be told what to do once it has entered a 9 judgment with respect to delaying its enforcement. That's 10 a right of an Article III court. It is not the right of 11 Congress to tell the ccurts when to decide the case and how 12 to decide the case. That's up to the Article III court. J 13 And that's why this decision or this legislative effort is 14 a direct interference with the most fundamental and 15 eariiest defined responsibilities and duties of Article III 16 courts. 17 And even in the situation presented by Your Honor 2 18 about if it's simply a delay of the accounting, no, Your 19 Honor, it goes beyond that. It goes beyond that because 20 what it attempts to do is tell this Court or tell the 21 courts how to decide and interpret the '94 act. 22 JUDGE WILLLRNS: Well, let's go back on that. 23 That argument interested me. It is true that the statute 24 is worded, the '94 act, any other statute, principle of 25 common law, shall not be construed or implied to require. CLS 58 1 suppose Congress had chosen slightly different wording and 2 said to the extent that the !94 act, any other statute, any 3 principle of common law requires, and the rest of the 4 sentenca! it is hereby repealed, but the repeal will be 5 canceled if the year 2004 passes without further action. 6 So? That would be okay, I take it, because that's not 7 speaking in terms of interpretation, that just says the 8 obligation is repealed for a period, right? 9 MR. LEVITAS: If the -- 10 JUDGE WILLIAMS: So your quarrel with Congress 11 turns on apparently an incredibly subtle problem of word 12 choice, not substantive meaning. 13 MR. LEVITAS: That, my quarrel with Congress is 14 that they, Congress has no right to tell an Article III 15 court that its judgment must be delayed to some later 16 point. A legislative stay is impermissible, and 17 JUDGE WILLIAMS: I guess I find that concept odd, 18 because if Congress can tell an Article III court that its 19 judgment will be completely reversed, as in the Wheeling 20 Bridge case -- 21 MR. LEVITAS: Yes. 22 JUDGE WILLIAMS; it!s hard for me to see why 23 it can't say we're not sure about reversal. We may do 24 that. We just don't want a lot of waste of resources while 25 we think about it. That's bad? CLS 59 1 MR. LEVITAS: Well, I think that's a different 2 issue, Your Honor. 3 JUDGE WILLIAMS: Well, I'm trying to figure out 4 what your contention is as to why -- 5 MR. LEVITAS: My contention 6 JUDGE WILLIAMS: -- this timeout, as you choose 7 to call it, is constitutionally more vulnerable than the 8 simple reversal in the Wheeling Endue oase. 9 MR. LEVITAS: Well, in the -- two points, Your 10 Honor. First of all, in this case, what the author of the 11 legislation himself oalled a legislative timeout is no more 12 than a legislative stay. 13 JUDGE SENTELLE: Who was that? Who was that? 14 MR. LEVITAS: The gentleman from North Carolina, 15 Your Honor, Mr. Taylor. 16 JUDGE SENTELLE: It rather surprised me. 17 MR. LEVITAS: I would have to agree with Your 18 Honor. 0 C 19 JUDGE SENTELLE: There are several thousand 20 Cherokee voting in that district. 21 MR. LEVITAS: That's what I am informed, and I 22 trust they've communicated with Mr. Taylor by this time, in 23 any event. But the point is, Your Honor, that a ) 24 legislative stay, postponing a right that the Court has 25 already decided is inappropriate, and it has been found to CLS 60 1 be a violation of separation of powers going back to the 2 first -- 3 JUDGE WILLIAMS: You haven't explained to me why 4 it's worse than completely canceling the right found by the 5 Court. 6 MR. LEVITAS: I don't think -- 7 JUDGE WILLIAMS: Terminating. 8 MR. DEVITAS: I don't think -- 9 JUDGE WILLIAMS: Reversing. 10 MR. LEVITAS: Excuse me, Your Honor. 11 JUDGE WILLIAMS: Deep-sixing, Why is a year's 12 delay worse than that? 13 MR. LEVITAS: I don't think the Court, I don't 14 think Congress -- 15 JUDGE WILLIAMS: Constitutionally. 16 MR. LEVITAS: can cancel the right that the 17 plaintiffs have to an accounting. 18 JUDGE WILLIAMS: In Wheeling Bridge it canceled z 19 the right of the people to have the bridge removed, right? 20 MR. LEVITAS: In the spotted owl case, the 21 Robertson case, the Audubon Society case, what was done 22 there prospectively, not retroactively, also did not 23 involve -- 24 JUDGE WILLIAMS: This is prospective. A 25 suspension of ongoing activities is prospective. CLS 61 1 MR. LEVITAS: But it did not involve the rights 2 of any individuals. They were public rights that were 3 involved. It was a program for dealing with protecting 4 endangered species. Here we have property rights of 5 individuals at issue, and they cannot be dealt with as 6 cavalierly as that, and the historical accounting that has 7 been provided by Cobell VI and the '94 act is not 8 prospective, It is a right that already exists and is 9 retrospective. And there is nothing that Congress can do 10 constitutionally to take away that right, which has already 11 been found by this Court. And so for that reason, the 12 midnight rider or the rider is egregiously unconstitutional 13 even if it tries to amend a substantive law. 14 JUDGE SENTELLE: If we could move, change some 15 gears for a moment to specific provisions, are there not 16 specific provisions in this particular injunction that 17 might arguably invade the province of the executive? 8 18 MR. LEVITAS: Let me address that. No, I don't 19 believe so. 20 JUDGE SENTELLE: I'm asking you to address that! 21 actually. 22 MR. LEVITAS: Okay. Let me address it, Your 23 Honor. And that question was brought up earlier by the 24 court when you were talking about structural injunctions. 25 JUDGE SENTELLE: Yes. CLS 62 1 MR. LEVITAS: Structural injunctions, the 2 jurisprudence of structural injunctions, which was 3 carefully addressed by the District Court in its opinion, 4 provides a mechanism for the reform of political or social 5 institutions if they take into account and balance the 6 specific needs of the judiciary to see that its orders are 7 enforced with the general need -- 8 JUDGE SENTELLE: Counsel, let me interrupt you, 9 because time is dragging here. We do have another case to 10 here, actually, and I have a great sympathy for those 11 people. Paragraph, subparagraph (k! of Part 3 forbidding 12 the use of statistical sampling, does that not seem to 13 operate on a level of specificity that normally would be 14 executive rather than judicial when you're talking about an lb Executive Branch? 16 MR. LEVITAS: I'm glad Your Honor brought up that 17 specific matter, because what the District Court did, it 10 adopted the defendants' plan except where, as this Court 19 had advised, where it, the adoption of that plan would 20 serve to further delay, and what the Court found with 21 respect to the statistical sampling, a specific finding 22 that if you adopted statistical sampling for purposes of 23 achieving an accounting, you would only delay further, ) 24 because a statistical sample cannot produce an accounting. 25 And that evidence in the trial was provided by the CLS 63' 1 defendantsT expert witness. A statistical sampling is 2 incapable cf prcviding an accounting. It can be used to 3 verify or test, but to use statistical sampling for the 4 purpose of creating an account which shows how much money 5 was deposited, what changes were made, what disbursements 6 occurred, that cannot be done by a statistical sampling 7 method, and therefore to adopt that, Your Honor, would have 8 no result except to further delay the accounting that will 9 ultimately have to be provided. 10 JUDGE WILLIAMS: But that's not a delay issue. 11 That's a substantive notion of what is required by way of 12 accounting. 13 JUDGE SENTELLE: Yes. 14 JUDGE WILLIAMS: That's, the driving force of 15 that argument ccmes entirely from that. 16 MR. DEVIIAS: It would be a delay in this sense, 17 Your Honor. 18 JUDGE WILLIAMS: It's completely independent of 19 delay. Mmml 20 MR. LEVITAS: It would be a delay in this sense, 21 that if you -- 22 JUDGE WILLIAMS: It would be a delay only if that 23 notion of what is legally required is correct, right? 24 MR. LEVITAS: Well, but if the Court, the 25 District Court in effect said we're telling you this now so OLE 64 1 you don't proceed with it, because if you proceed with it, 2 all you're going to end up is having us reject it later on, 3 because a statistical sampling cannot provide an account, 4 which is what the expert witness brought forth by the 5 defendants in this case testified in the court. 6 JUDGE SENTELLE: Again, doesn't that sound like 7 an administrative decision or an executive decision rather 8 than adjudication, when you're saying that method of 9 enumeration cannot produce the kind of accounting we have 10 to have at the end? 11 MR. LEVITAS: Yes. Yes. 12 JUDGE SENTELLE: Okay- Let me ask one other -- 13 MR. LEVITAS: Let me make a -- 14 JUDGE SENTELLE: -- before I -- 15 JUDGE TATEL: I have just one question. Oh, you 16 gc ahead. 17 JUDGE SENTELLE: Let me ask you one other while 18 I've got you here. Under paragraph 5, sub 3, the Court 19 required that the defendants shall provide the judicial C 20 monitor and the agents of the same with unlimited access to 0 21 the defendant's facilities and to all information relevant 22 to the implementation of the order. Given the breadth of 23 this order, doesn't that paragraph arguably take over the 24 Department in the way that the Government is arguing? 25 MR. LEVITAS: I think providing access does not CLS 65 1 in and of itself take over the running of a department. 2 And particularly so, Your Honor, when the District Court 3 goes to great pains to spell out in this injunction that 4 this judicial monitor can do nothing to direct actions to 5 be taken or to direct actions to be refrained from being 6 taken. It is a fact-finding monitoring to assist the 7 District Court in determining whether this structural 8 injunction is being complied with. And one of the -- 9 JUDGE SENTELLE: I'll get out of Judge Tatel's 10 way now and let him ask his question. 11 JUDGE TATEL: Just one, I just want to ask you 12 about a different part of the order. Section 3, which is 13 labeled compliance with fiduciary obligations, sub (a) 14 directs implementation of the Department's comprehensive 15 plan, right? 16 MR. LEVITAS: I'm trying to locate it 17 (indiscernible) 18 JUDGE SENTELLE: It's on page 744 of the Joint 19 Appendix. C 20 JUDGE TATEL: Do you have it there? 21 JUDGE SENTELLE: I think he's being handed it. 22 MR. LEVITAS: Oh, I have it now, Your Honor. 23 JUDGE TATEL: Okay. Now, this part of the order 24 goes beyond the accounting elements of the Government's 25 fiduciary obligation, right? This covers the second of the CLS 66 1 District Court's orders? 2 MR. LEVITAS: If it's the compliance with 3 fiduciary duties. 4 JUDGE TATEL: Yes. 5 MR. LEVITAS: Not, it goes beyond the accounting. 6 JUDGE TATEL: Right. Now, for the accounting 7 part of the order, there were findings by the District 8 Court that the Interior Department had violated its 9 fiduciary obligation with respect to accounting, and the 10 order, the historical accounting order, rested on those 11 findings. I didn't see in the District Court's order any 12 findings that the Interior Department had violated the 13 other elements of its fiduciary obligations. So what does 14 this order rest on? 15 MR. LEVITAS: Let me address that, because the 16 appellees, the appellants have raised the question as to 17 whether or not the trust reform aspects are even in 18 these -- 19 JUDGE TATEL: No, I'm willing to accept your O 20 argument that they are. 21 MR. LEVITAS: Okay. 22 JUDGE TATEL: Just for purposes of discussion 23 here. I mean, I think that's what Cobell VI says, but -- 24 MR. LEVITAS: The -- 25 JUDGE TATEL: But my question for you is assuming CLS 67 1 they are properly in the case, that the Government's 2 fiduciary obligations extend beyond an accounting to other 3 elements of the relationship, the Government is saying, 4 well, there were no, the District Court can't order relief 5 until it first finds a violation of those obligations, 6 which it hasn't found, at least I don't see them in the 7 order, so. 8 MR. LEVITAS: What is wrong with that is two 9 things, Your Honor. First of all, this Court in Jobell VI 10 said that we're making a decision about an accounting 11 breach, but the breach of an accounting duty carries with 12 it substantial, significant subsidiary duties. 13 JUDGE TATEL: I understand that, but I'm going 14 beyond the accounting to the provisions of Section 3, which 15 deal with other elements of the fiduciary responsibility, 16 not the subsidiary obligations for the accounting process. 17 MR. LEVITAS: The, well, I'm, I just need to 18 conclude one point, though, Your Honor. What the Court, 19 this Court said is that that, in order to provide for an C 20 accounting, you've got to make it possible for there to be 21 an appropriate software for a comprehensive system to track 22 the money. You've got to have adequate personnel. All of 23 that is necessary to do the accounting, but to address 24 specifically your concern concerning these other 25 obligations, the trial 1.5 and the contempt trial addressed CLS 1 these issues. The trust reform that Your Honor is 2 inquiring about has been part and parcel of this case from 3 the very beginning. When the HLIP, the high-level 4 implementation plan, was revised, it had, if I remember 5 correctly, 13 elements to it. Twelve of the 13 elements 6 related to trust reform. The reason the Court required 7 reports of progress was to determine whether or not the 8 duties of trust reform were being met. When the District 9 Court said what are you doing as far as trust reform, the 10 TAN !phonetic spj system, adequate personnel, data 11 cleanup, those all related to the trust reform duties. And 12 it's interesting to me that the defendants now say, well, Th 13 this case had nothing to do with trust reform, when in fact 14 according to the defendants, they didn't challenge the 15 activities of the District Court with regard to trust 16 reform. They only challenged in the appeal the accounting 17 duties. And therefore the trust reform duties, where the 18 Court had held time and again there was an inadequacy as 19 well as a delay in compliance were seemingly conceded by C 20 the defendants, because they never challenged the District 21 Court's conclusions of noncompliance. Remember, Your 22 Honor -- 23 JUDGE WILLINIS: I'm sorry, so, I mean, your 24 answer1 then, to Judge Tatel is not that there's no problem 25 about going forward with a remedy in the absence of CLS 69 1 findings of breach on the non-accounting aspects. Your 2 answer is there have been findings of breach. 3 MR. LEVITAS: Yes. 4 JUDGE WILLIAMS: And we'll find them clearly in 5 the record. 6 MR. LEVITAS: Let me make this point -- 7 JUDGE WILLIAMS: I mean, I noted that stipulation 6 that we referred to in the 2001 opinion, but I don't recall 9 us alluding to any findings of this sort. 10 ML. LEVITAS: There's an important point that I 11 would like to be able to make, Your Honor, at this, before 12 I conclude, and that is this: We talked about -- ) 13 JUDGE SENTELLE: First, I'm not sure I'm hearing 14 you answer Judge Williams's question. Is this going to be 15 an answer to that guestion? 16 MR. LEVITAS: Sorry, Your Honor. I'm sorry, I -- 17 JUDGE SENTELLE: He asked you, as I understand 18 it, if your point is not that there can't be remedies a 19 unrelated to the accounting duties but related to other 0 20 fiduciary duties without finding a breach of those duties 21 or your point is there has been such a finding. Which is 22 your position on that? Does that accurately state -- 23 JUDGE WILLIAMS: That's exactly my question. ) 24 MR. LEVITAS: It's the latter. It's the latter, 25 and in fact OLD 70 1 JUDGE SENTELLE: The latter, okay. 2 JUDGE WILLIAMS: Okay, and we'll find them. 3 MR. LEVITAS: It's the latter. AMd let me also 4 point out this, this Court citing Franklin v. Gwinnett 5 County pointed out that once the breach has been found, 6 once the duty, the violation of the duty has been found, a 7 court of equity has broad powers in fashioning the type of 8 relief and remedy that is necessary to, in this case, to 9 satisfy compliance with the trust duties. So my argument 10 would be, Your Honor -- 11 JUDGE WILLIAMS: Is it your view that the proper 12 relationship between the Court and the Department of 13 Interior is the relationship between a court of chancery 14 and a common law trustee? 15 MR. LEVITAS: The common law -- 16 JUDGE WILLIAMS: In other words, there's no 17 account taken of the proposition that this trustee is an lB executive department of the United States? 19 MR. LEVITAS: Well, of course, Your Honor, that 20 has to be taken into account, but -- 21 JUDGE WILLIAMS: Well, I mean, the chancellor -- 22 JUDGE SENTELLE: It does make a difference. 23 JUDGE WILLIAMS: -- exercising jurisdiction over 24 a common law trust has very wide-ranging powers. But those 25 are not, those don't involve a great department of a great CLS 71 1 government. 2 MR. LEVITAS: But Your Honor, in this case, the 3 United States is the trustee. 4 JUDGE WILLIRMS: I understand. 5 MR. LEVITAS: The Interior Department or the 6 Secretary of Interior and the Secretary of Treasury are 7 trustee-delegates. And the chancellor has broad power to 8 make certain that the trust fiduciary duties which are not 9 being carried out by the trustee-delegates can be enforced. 10 That's -! 11 JUDGE NILLIAMS: But anyway, then it is your 12 contention sort of none of the language, for example, for 13 the APA relating to the things that justify a court setting 14 aside agency action, none of those things is applicable? 15 We are straight in the straight court of chancery model? 16 MR. LEVITAS: I don't think it's a straight 17 model, Your Honor, but I think the, this is a trust case. 18 This Court itself has pointed out, for example, that 19 Chevron deference doesn't apply. This Court has -- in this 0 20 case. The Court has pointed out that the trustee-delegates 21 cannot willy-nilly take off the hat of the trustee to don 22 the mantle of the administrator. The fact that the common 23 law principles are imposed upon the duties of the trustee 24 make it clearly a trust case. And that does give within, 25 there are bounds, within bounds of equity and within bounds CLS 72 1 of the Constitution limitations. But by and large, once 2 the Court has found, the court of equity has found the 3 breach of the trust duty, it can impose and select a broad 4 range of remedies in order to bring about compliance. 5 And it is for that reason, Your Honor, that we believe 6 in this instance the chancery has exercised that option 7 appropriately, and unless it is found that in some way he 6 has acted clearly erroneously, this Court should affirm 9 that exercise. 10 JUDGE SENTELLE: Unless there's further 11 questions, then I know the time was long since used up, but 12 in the spirit of eternal optimism, I'll give the Government 13 two minutes for rebuttal. 14 JUDGE WILLIRNS: Khich it's not obliged to take. 15 16 REBUTTAL ARGUMENT CF MARK B. STERN, ESQ. 17 UN BEHALF CF THE APPELLANTS 18 19 MR. STERN: Thank you for that, Your Honor. A 20 couple of very brief points. There's a lot of, of course, 21 this is all set out in a lot of detail on our briefs. 22 Just to sort of come in, and we were at the end on 23 (indiscernible) with opposing -- 24 JUDGE SENTELLE: I'm going to ask you to try to 25 speak a little more clearly, if you would, please, counsel. CLS 73 1 MR. STERN: Absolutely, Your Honor. Without in 2 any way trying to take common law trust duties out of the 3 case, assuming that they're in the case, there's a lot of 4 discussion, I'm going to refer the Court to the testimony 5 of Professor Lanqbine (phonetic sp.) and others in this 6 case about the difference, assuming that you were going to 7 draw analogies and that you could inform duties by 8 reference to trust duties, you cannot transpose those 9 duties wholesale for many reasons, including the fact that 10 when the chancellor would direct a trustee to spend money, 11 he's directing that money to basically come out of the 12 corpus of the trust. Now, as Professor Langbine points out 13 in his report, you can't cherry-pick among the way, about 14 which you like and what you don't like about the way common 15 law trusts operate, and all this money is coming out of 16 federal appropriations, not out of the trust. And I'm not 17 saying that doesn't mean that trust principles apply, but 18 it certainly makes things awfully different. And I'd also 19 submit that this Court -- C j 20 JUDGE SENTELLE: I'm not sure that I understand 21 your position that you can't cherry-pick. Are you saying 22 we have to accept all of the law of chancellorship, equity, 23 or none? 24 MR. STERN: No, Your Honor, I think that what 25 this Court, I mean, I think that, I know that, I think that CLS 74 1 this Court got it right in Cobell, in the 2001 Cobell 2 decision when it said, look, you're telling me that there's 3 been no unreasonable delay. When I think about whether 4 there's been unreasonable delay here, I've got to consider 5 the fact that you had obligations to Indians for a long 6 time that predated -- 7 JUDGE SENTELLE: You know, I have no idea what 8 your answer has to do with my question. 9 MR. STERN: I'm sorry, Your Honor, the -- 10 JUDGE SENTELLE: You said we can't cherry-pick. 11 JUDGE WILLIAMS: Isn't it absolutely clear that 12 there's got to be cherry-picking? 13 JTJDGE SENTELLE: Yes, there has to be, doesn't 14 there have to be cherry-picking? 15 MR. STERN: Well, it's got to be -- 16 JUDGE SENTELLE: Are you saying that either none 17 of the duties of common law or chancellor equity 18 trusteeship apply or all of them apply? 19 MR. STERN: I'm saying that this Court got it S 20 right when it said that you look to -- 21 JUDGE SENTELLE: Whoa. Don't say we ever did 22 anything before. Take it as if we never acted before. 23 MR. STERN: All right. Yes, you have to cherry- 24 pick, but the way that that is done, and this Court had it 25 absolutely right, it says you fill in the interstices. CLS 75 1 When you've got a statute, you try to understand what's 2 going on. Yes, you can look to fill in the interstices by 3 reference to background presumptions. However, when 4 Congress actually acts and does things, including the 5 amount of money it appropriates and everything else, I 6 mean, Congress is the settler of this trust. I mean, so 7 what Congress wants and what Congress does, and Professor 8 Langbine talks about this at great length, what Congress 9 wants and what Congress does, even by just a straight out 10 analogy to common law trust prinoiples is entirely 11 relevant. 12 So that, and that also brings us back into why this 13 Court was also correct in 2001 when it analyzed this within 14 the framework of the ADA. And you've got to have final 15 agency aotion or else you've got to have action 16 unreasonably delayed, and whatever this Court said in 2001, 17 we think it's oonsistent with what the Supreme Court later 18 said in Southern Utah, but if it wasn't, then it has to 19 give way to what the Supreme Court said in Southern Utah. C 20 JUDGE SENTELLE: Okay. I think the time is up 21 and the oase is submitted. 22 MR. STERN: Thank you very much, Your Honor. 23 (Recess.) 24 25 6 z 0! 6 0 ) OLE 76 OERTI FICATE I certify that the foregoing is a correct transcription of the electronic sound recording of the proceedings in the above-entitled matter. Carol Schlenker Date DEPOSITION SERVICES, INC.