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Class Action Defense Cases: D.C. Circuit Grants Federal Government’s Defense Motion To Reassign Class Action

Class Action District Court Judge’s Hostility to Interior Department Makes Him Incapable of Rendering Fair and Impartial Rulings

Federal and state courts are understandably loathe to recuse judges for claims of bias, but on July 11, 2006, in a class action that has been pending for a decade, the United States Court of Appeals for the District of Columbia “reluctantly” granted a federal defense motion to do just that. Cobell v. Kempthorne, ___ F.3d ___, 2006 WL 1889150 (D.C. Cir. 2006). The class action originated in 1996, when five Indians sued the federal government for breach of fiduciary duties in its capacity as trustee of Indian lands by “destroy[ing] critical records, fail[ing] to account to trust beneficiaries, and either los[ing] trust assets or convert[ing] them to government use.” Slip Opn., at 2. By the lawsuit, plaintiffs sought “‘to force the government to abide by its duty to render an accurate accounting’ of the assets held in Individual Indian Money (IIM) trust accounts.” Slip Opn., at 2-3 (quoting Cobell v. Babbitt, 91 F.Supp.2d 1, 6-7 (D.D.C. 1999) (“Cobell V“)). The case was certified as a class action in 1997, plaintiffs prevailed at trial, and in 1999 the district court ordered the federal government to “come into compliance with their duties.” Slip Opn., at 3 (quoting Cobell v. Norton, 240 F.3d 1081,1094 (D.C. Cir. 2001) (“Cobell VI“)). The lower court retained jurisdiction over the action and required status reports from the federal government quarterly summarizing its progress. Id. In 2001, the D.C. Circuit “generally affirm[ed] the judgment, but cautioned the district court “‘to be mindful of the limits of its jurisdiction’ and therefore to refrain from unduly interfering with Interior’s ‘conduct in preparing an accounting.'” Slip Opn., at 3 (quoting Cobell VI, at 1110).

By July 11, 2006, the D.C. Circuit had resolved 8 more appeals and had ruled in favor of the federal government each time. Slip Opn., at 23. The D.C. Circuit granted the defense motion to have the case reassigned based on the combination of the appellate track record and the district court’s July 12, 2005, order against the government that, in part, required the government to include the following written notice in all communications with Indian trust beneficiaries, regardless of the subject matter of the communication:

Evidence introduced in the Cobell case shows that any information related to the IIM Trust, IIM Trust lands, or other IIM Trust assets that current and former IIM Trust account holders receive from the Department of the Interior may be unreliable. Current and former IIM Trust account holders should keep in mind the questionable reliability of IIM Trust information received from the Department of the Interior if and when they use such information to make decisions affecting their IIM Trust assets.

Slip Opn., at 5. More troubling still, however, were statements made by the district court in July 12 order. We begin – as the D.C. Circuit did – with the July 12 order, and then discuss the history of appeals.

After determining that the order was an appealable injunction under 28 U.S.C. § 1292(a)(1), Slip Opn., at 5-9, and after concluding that the July 12 order was improper as unauthorized by Rule 23, Slip Opn., at 10-13, the Circuit Court quoted extensively from the July 12 order. We quote only small portions of it here: the reader is encouraged to download the opinion from the link below, and to review the opinion in its entirety.

Alas, our “modern” Interior department has time and again demonstrated that it is a dinosaur-the morally and culturally oblivious hand-me-down of a disgracefully racist and imperialist government that should have been buried a century ago, the last pathetic outpost of the indifference and anglocentrism we thought we had left behind.

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On numerous occasions over the last nine years, the Court has wanted to simply wash its hands of Interior and its iniquities once and for all. The plaintiffs have invited the Court to declare that Interior has repudiated the Indian trust, appoint a receiver to liquidate the trust assets, and finally relieve the Indians of the heavy yoke of government stewardship. The Court may eventually do all these things-but not yet. Giving up on rehabilitating Interior would signal more than the downfall of a single administrative agency. It would constitute an announcement that negligence and incompetence in government are beyond judicial remedy, that bureaucratic recalcitrance has outpaced and rendered obsolete our vaunted system of checks and balances, and that people are simply at the mercy of governmental whim with no chance for salvation. The Court clings to a slim and quickly receding hope that future progress may vitiate the need for such a grim declaration.

Slip Opn., at 15-16 and 21-22.

In other portions of the order, the district court “all but accuses current Interior officials of racism.” Slip Opn., at 29. And while the Circuit Court understood that certain strong language may be justified, it expressed concern that the focus of the attacks had nothing to do with the matter before the district court, and that the district court “has condemned not just Interior’s particular failures as trustee, but the Department as an institution.” Slip Opn., at 30:

We have little doubt that this parade of serious charges, all unconnected to the issue before the district court, could contribute to a reasonable observer’s belief that Interior stands no chance of prevailing whatever the merits of its position. Id.

But as noted above, the D.C. Circuit did not rely solely upon the July 12 order in granting the defense motion for reassignment to another judge. By July 11, 2006, the D.C. Circuit had resolved 8 more appeals and had ruled in favor of the federal government each time. Slip Opn., at 23. Thus, the statements in the July 12 order “follow an unbroken string of reversed district court orders, all directed against Interior.” Id., at 30. The Court summarized those decisions at page 31 as follows:

In two, the district court imposed an inappropriate evidentiary burden on Interior . . . . In three, it underestimated the harmful effects its orders would have on the government . . . . And in three others, it both assumed the mantle of a prosecutor and authorized biased investigations . . . . In four cases, we found abuses of discretion . . ., in three (the mandamus actions) we found Interior had a clear and indisputable right to relief . . ., and in one we found the district court had used a procedural rule to accomplish a substantive goal (this case). We set aside contempt citations against the Secretary and other senior Interior officials . . ., and twice found that the district court awarded injunctive relief without the required evidentiary hearing . . . .

More remarkably, the D.C. Circuit noted that ten (10) Circuit Court judges had heard at least one of these appeals, but not one of them cast a dissenting vote. Id., at 31. “In short, in case after case the district court granted extensive relief against Interior, and in case after case we reversed, even under highly deferential standards of review. ” Id., at 32.

From all of this the D.C. Circuit concluded, “‘an objective observer is left with the overall impression’ . . . that the district court’s professed hostility to Interior has become ‘so extreme as to display clear inability to render fair judgment.'” Slip Opn., at 33 (citations omitted).

NOTE: The D.C. Circuit clearly was not happy with the parties, and expressly believed that much of the criticism against the federal government was warranted.

Download PDF file of Cobell v. Kempthorne