U.S. Ordered to Account for Indian Land Royalties

(CN) - The D.C. Circuit threw out a $455.6 million award for American Indians based on the government's failure to account for land royalties, saying the lower court "erred in freeing the Department of the Interior from its burden to make an accounting."

In 1996, beneficiaries of the Individual Indian Money trust accounts filed a class action accusing government officials of failing to properly keep track of their assets, including profits from the sale of tribal lands.

The district court found the government in breach of its fiduciary duty as trustee, but determined that a full accounting would be impossible, because Congress would never appropriate the money needed to fund it.

Instead, the lower court awarded the plaintiffs $455.6 million in restitution.

The Washington, D.C.-based appeals court said the ruling essentially allowed the government to "throw up its hands and stop the accounting."

"It would indeed be 'nuts' to spend billions to recover millions," Judge Sentelle wrote. "A court sitting in equity may avoid reaching that absurdity."

The D.C. Circuit vacated the judgment and remanded, telling the lower court to determine the scope of the accounting.

Sentelle offered this guidance: "The overarching aim of the district court should be for Interior to provide the trust beneficiaries the best accounting possible, in a reasonable time, with the money that Congress is willing to appropriate."

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