High Court Nixes Tribe’s $600M Claim Against U.S.

(CN) - The U.S. Supreme Court on Monday again struck down the Navajo Nation's attempt to collect $600 million from the government for allegedly pressuring the tribe into accepting lower royalties on a 1964 coal lease.

The government had approved a coal lease granted to the predecessor of Peabody Coal Co., allowing the company to mine coal from tribal land in the Southwest.

The lease stated that the royalty rates were "subject to reasonable adjustment by the Secretary of the Interior" after 20 years. The tribe asked the secretary to increase the royalty rate to 20 percent of gross profits, a move Peabody tried to block. The tribe accused the government of deliberately delaying action on the appeal, forcing the economically desperate tribe to renegotiate the lease with Peabody. They settled on a royalty rate at 12.5 percent of profits, which the government approved.

The tribe filed suit in 1993, claiming government inaction had forced it back to the bargaining table to accept lower royalty payments. This constituted a breach of trust, the tribe argued.

Six years ago, the high court reversed a judgment for the tribe and remanded. The Court of Federal Claims dismissed the case, but the Federal Circuit reversed, finding the government in violation of the Navajo-Hopi Rehabilitation Act and the Surface Mining Control and Reclamation Act of 1977.

In Monday's decision, the justices unanimously overturned the Federal Circuit's decision and again dismissed the tribe's claim for compensation.

Justice Scalia explained that a tribe can invoke jurisdiction under the Indian Tucker Act only if the tribe clears two hurdles: it must identify a source law identifying a specific fiduciary duty that the government allegedly breached, and a court must determine if that breach warrants compensation.

"None of the sources of law cited by the Federal Circuit and relied upon by the Tribe provides any more sound a basis for its breach-of-trust lawsuit against the Federal Government than those we analyzed in Navajo I," Scalia wrote, referring to the case the Supreme Court decided six years ago.

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