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1 U. S. Department of Justice Office of the Associate Attorney General The Associate Attorney General Washington, D.C May 17, 2010 Mr. John E. Echohawk Ms. Melody L. McCoy Native American Rights Fund 1506 Broadway Boulder, CO Mr. Keith M. Harper Kilpatrick Stockton, LLP th St., N.W., Suite 900 Washington, DC Mr. Wilson K. Pipestem Pipestem Law Firm, P.C New Hampshire Ave., NW Washington, DC Mr. Thomas P. Schlosser Morisset, Schlosser & Jozwiak nd Ave., Suite Seattle, WA Ms. Jeanne S. Whiteing Whiteing & Smith 1136 Pearl St, Suite 203 Boulder, CO Re: Tribal Trust Cases Brought by SPOA Tribes Dear Mr. Echohawk, Mr. Harper, Ms. McCoy, Mr. Pipestem, Mr. Schlosser, and Ms. Whiteing: This letter is to follow up on the April 21,2010 meeting between the counsel representing the Settlement Proposal to the Obama Administration group (SPOA) and the Assistant Attorney General for the Environment and Natural Resources Division (ENRD), the Solicitor of the Department of the Interior, the General Counsel of the Department of the Treasury, and me to discuss potential approaches to settlement of your clients7 Tribal trust cases. Ms. Moreno, Ms. Tompkins, Mr. Madison, and I appreciated the opportunity to meet with you to begin discussion of this important issue, and we believe this meeting was a significant first step.
2 We look forward to making real progress in future meetings to resolve your clients' claims and to bring this difficult and protracted litigation to a close. We are hopeful that, by working with SPOA, we can move toward turning a new page in the history of government-to-government relations with Tribal governments and set the Federal-Tribal partnership on a sound new footing. At the April 2 1 meeting, you distributed a list of six "Principles for Settlement of the Tribal Trust Cases." As we discuss in Part I below, we believe that your suggested principles generally provide a good basis for moving forward with the settlement discussions, with some caveats. In Part 11, we propose some additional principles that we think would benefit the parties collectively, if adopted for the course of negotiations. Finally, in Part 111, we suggest some next steps and other considerations for moving the settlement negotiation process forward expeditiously, efficiently, and fairly. I. Response to Tribes' Proposed Principles "The United States should demonstrate the political will to reach a settlement of the tribal trust cases by establishing and maintaining a federal team of high levelpolitical officials from the appropriate departments and agencies." We embrace this principle. The United States is committed to exploring a fair resolution of these cases through settlement, and has already established a high-level negotiation team led by me, the Assistant Attorney General for ENRD, the Solicitor of the Department of the Interior, and the General Counsel of the Department of the Treasury. Among other things, this high-level team will work with you to define the contours of the settlement negotiation process, launch that negotiation process, conduct periodic meetings with you and SPOA, as needed or appropriate, and otherwise stay active and involved in the process. Further, the high-level team will designate a group of key experienced attorneys and program staffers who have talent, expertise, and time to address the complex factual and legal issues raised by the Tribal trust cases. Bob Dreher, Principal Deputy Assistant Attorney General (ENRD), will head this group, which will include attorneys from ENRD, the Solicitor's Office of the Interior Department, and the Office of the General Counsel of the Treasury Department. The Solicitor of the Interior Department has designated her Principal Deputy, Rachel Jacobson, as her primary contact for the group. Mr. Dreher and his group will be responsible for conducting the day-to-day settlement discussions and other dealings with SPOA, including but not limited to the research, analysis, and issue development of the Federal position on factual and legal issues, and any other work necessary to support and advance the discussions. Mr. Dreher and his group will meet, brief, and consult with the high-level Federal negotiating team as the settlement negotiation process unfolds, with meetings and face-to-face discussions with the high-level team, as warranted. "Participation in this settlement process must be voluntary on the part of tribal participants, with each tribe having the power to decide whether or not to accept a proposed settlement. " The United States agrees filly with this important principle.
3 "Settlement of tribal trust cases should focus on pending tribal legal and equitable claims and not involve issues of non-litigating tribes or the Cobell claims." The United States agrees that any proposed Tribal trust case settlements should resolve with finality any and all pending or potential legal or equitable Tribal trust accounting, Tribal trust fund mismanagement, and non-monetary Tribal trust asset mismanagement claims, for all time periods to and including the dates of the settlements. The United States intends through this settlement process to resolve all historical trust accounting and trust mismanagement claims and re-start its relationship with the settling Tribes anew. Accordingly, all Tribes that have filed trust accounting and trust mismanagement claims against the United States and that resolve those claims successfully through this settlement process will be expected to dismiss with prejudice all such claims, regardless of whether the claims are filed or unfiled, actual or potential. Thus, those Tribes that have filed only trust accounting claims in Federal district court should raise any potential claims related to the alleged mismanagement of the Tribe's trust funds and nonmonetary trust assets or resources in this settlement process, and will be expected to waive or release the United States from liability for all such potential claims as part of any settlement. The United States agrees with the Tribes that this settlement discussion process should not involve or include issues or claims of Tribes that have not filed trust accounting or trust mismanagement claims against the United States. As for impacts on the Cobell settlement, the United States generally agrees that the Tribal cases are an entirely distinct matter and that any settlement that may arise from the proposed settlement discussions between the United States and the Tribes should not involve Cobell or the proposed settlement of that case, to the extent possible. At the same time, however, the United States notes that a settlement with the Osage Nation regarding its trust accounting and trust mismanagement claims may intersect with the Cobell settlement to the extent that the Osage Nation head-right owners are part of the Cobell class of plaintiffs and their trust accounting and trust mismanagement claims are also part of the claims asserted by the Osage Nation. 'Any federal funds for the settlement of tribal trust cases should not be scored against any agency or diminish any agency appropriations for tribal or Indian programs. Accordingly, payments for settlement of tribal trust cases should come from the Judgment Fund." We agree that settlement of tribal trust cases should not diminish funding for tribal or Indian programs. The source of funding of a monetary settlement is a matter governed by Federal law, however, and is not a policy decision that can be made by the settling parties. Nevertheless, based on past experience, we anticipate that most, if not all Tribal trust case settlements, will be paid out of the permanent judgment appropriation, 3 1 U.S.C. fj 1304, commonly known as the Judgment Fund. Ultimately, however, the determination about whether a particular Tribal trust case settlement will be paid from the Judgment Fund will have to be made on a settlement-by-settlement basis, depending on the applicable facts of the settlement, and it cannot be pre-judged. If a particular settlement were to require appropriated funds, we
4 4 agree that the settling parties should work to ensure that the settlement funds will not diminish any agency appropriations for tribal or Indian programs. 'Y settlement of the tribal trust cases should adopt a general 'turnkey' approach based upon a common formula that is applied to each tribe using data that is currently or readily available." The United States understands the appeal of a general "turnkey" approach "based on a common formula that is applied to each tribe" using data that are currently or readily available in enabling an expedited or "fast-track" settlement discussion process and in ensuring cohesiveness and parity among the Tribes in the settlement process. Developing a common "turnkey" methodology for resolving the varied claims and circumstances of the Tribes will be difficult, however, and it may ultimately be impracticable to define a single general formula that can be applied fairly and responsibly. The United States is nonetheless willing to explore the possibility of negotiating such an approach with SPOA, with the understanding that we cannot commit, at this time, to adopt a "turnkey" approach without more analysis and discussion of the contours, components, data elements, and other specifics of the concept. The United States believes that the analysis must take into account, among other things, litigation risk, past waivers or releases of certain claims, and amounts that lessees and others may have paid directly to the Tribes. "Any settlement of the tribal trust cases should be made with the Administration and the appropriate courts and should avoid a requirement of congressional approval. " The United States agrees that the settlements should not unnecessarily seek Congressional legislation or authorization. Based on historical practice and currently available information, the United States believes that most, if not all, of the monetary settlements of Tribal trust accounting and trust mismanagement claims will not require Congressional approval. Nevertheless, given the unique factual circumstances of each Tribe, it is possible that some settlements could require implementing legislation. 11. Principles Proposed by the United States We suggest the following additional principles to govern our settlement discussions as they move forward. Some of these additional principles track typical settlement provisions in individual cases - such as notions of confidentiality and repose - but others are directed to the unique circumstance of a large multi-case settlement initiative and the persistence of breach-oftrust litigation. In our view, these principles, in concert with our responses to the principles proposed by SPOA, will advance a fair, efficient, and expeditious settlement process. "Settlement discussions should be confidential." The settlement discussion process should be kept confidential through protective orders issued by the various courts, or some equivalent means. The negotiating parties should firther agree to protect the confidentiality of documents and data to be provided for settlement analysis and evaluation purposes, including information pertaining to an individual Tribe, but being
5 - disclosed to multiple Tribes, which is covered by statutory confidentiality provisions. The United States notes that, while such protective orders are already in place for many of the cases brought by the 80 Tribes, the parties in a number of Tribal trust cases still need to complete their negotiations and agree upon proposed settlement protective orders for review, approval, and entry by the courts. "The settlement process should be marked by open exchanges of information between and among theparties. " The parties should commit to multilateral exchanges of information with close consideration being given to the party that has greater ease of access to the "currently or readily available" information that is suitable to the task of fashioning fair and reasonable settlements in expedited time frames. The Interior Department's Office of Historical Trust Accounting (OHTA) has been informed of our preliminary discussion on April 21 and is compiling a list of currently available revenue data for account types, time periods, resource types, and Tribes. In addition, OHTA will provide information on the anticipated costs to obtain additional increments of data with respect to earlier time periods and the overall completeness of data sets. "Settled cases will bring finality. " The settlements should resolve with finality, through appropriate release and dismissal provisions, all existing Tribal trust accounting, trust fund mismanagement, and non-monetary trust asset mismanagement claims, for all time periods up to and including the date of the settlements. The settlements should embrace opportunities for a Tribe to consider, to the extent possible, alternative options for managing the settlement proceeds (e.g., the settling Tribe may agree to withdraw the settlement proceeds from trust altogether or withdraw them from trust after a period of limited duration from the date of the electronic transfer and release of the funds to the Tribe). "Account balances and the nature of future periodic statements ofperformance should be established." To ensure a "fresh start" in financial dealings, the settlements should include provisions in which the settling Tribe acknowledges and accepts (1) the Interior Department's statements of their trust account balances as of the date of settlement as accurate and (2) the Interior Department's periodic statements of performance as the accountings required by law. "Settlements should be designed to minimize breach-of-trust litigation in the future and should promote Tribal self-governance and self-determination." In acknowledgement and expansion upon Tribal self-governance and self-determination, the settlements should provide opportunities for greater cooperative Tribal management, or enhanced Tribal input or guidance in the management, of Tribal trust funds and non-monetary trust assets, in partnership with the United States.
6 To the extent possible, the settlements should draw brighter lines for presentation and resolution of future issues, including reasonable "notice and bar" provisions to be negotiated by the parties. "Settled cases will be fair, consistent, and in parity across Tribes. " We want to make sure that the end result of this collaborative process is fair both to the Tribes that are seeking redress and the American public. The settlements should be fashioned to ensure that notions of parity among similarly situated Tribes are evident. The monetary amount of an individual settlement should be consistent with other settlements made with Tribes with similar types of claims, and with settlements already accomplished. Prospective terms of individual settlements should be relatively uniform across Tribes. Recognizing that Tribes differ considerably in terms of claims, natural resources, and fiscal circumstances, the parties should nonetheless strive to develop tools to assure reasonable consistency and an equitable basis for the differing amounts that different Tribes may receive. Litigation risk needs to be acknowledged as an appropriate element in the course of reaching tentative settlement terms Proposed Next Steps We would like to schedule a next meeting with SPOA in the next three weeks, and Mr. Dreher will be in touch with you to do so. As a tentative agenda and road map, we would recommend that the following items be discussed and, we hope, resolved at that time: A. The principles proposed by SPOA and the United States. B. More substance to SPOA7s "turnkey" formula principle. In general, we would like to know what SPOA is contemplating with regard to its reach and operation. Would it apply to all 80 Tribes? Would it generate a lump sum payment for all 80 Tribes, or would it operate to generate settlement figures for each Tribe individually? What data or other input needs does SPOA think the "turnkey" formula is likely to require? C. The Tribes' expectations concerning how fast this process can or should proceed. While the United States has a strong interest in a truly streamlined process, we think it is important to realistically evaluate expectations about the pace of the process, so we do not get derailed or demoralized later. D. A possible stay of litigation, if sufficient progress is being made. We will commit to an expeditious yet feasible and realistic schedule, but we also believe that it is important to ascertain quickly if the settlement process is viable in order that we may put appropriate stays in place and devote our resources to settlement rather than to litigation. E. A schedule for mutual exchanges of "readily available" information. Prior to the next meeting, the Interior Department component of our team will prepare a partial list of "currently or readily available" data that can be used in the settlement analysis, evaluation, and negotiation process. We believe some information (i. e., a compilation of trust revenue amounts, by Tribe, trust resource type, and time periods, roughly what you referenced in the April 21 meeting) is
7 readily available for relatively recent time periods (after approximately 1985) but is not readily available for earlier time periods. We would propose to discuss providing information on a quasi-rolling basis, targeted to early provision of information that is broadly useful, summarylevel, or reasonably capable of extrapolation or interpolation, as appropriate. We still have work to do on our side to develop a robust partial list or compilation of sources, but we would hope to have sufficient source information in hand by the time of the meeting to make a discussion useful. We would ask that SPOA do the same and be prepared to provide its compilation or listing and discuss it in connection with the meeting. In closing, let me reiterate our appreciation for your taking the initiative to engage with us in this process, and for your meeting with us last month. We see great promise in these discussions, and. look forward to working with you to explore a potential settlement approach that can put this difficult litigation behind us. Sincerely, Thomas J. Perrelli Associate Attorney General cc: Hilary Tompkins, Solicitor, Interior Department George Madison, General Counsel, Treasury Department Ignacia Moreno, Assistant Attorney General, ENRD
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