The Indian Trust Fund Litigation: An Overview of Cobell v. Salazar

Todd Garvey
Legislative Attorney

Reportedly, if Congress does not authorize the settlement recently reached in Cobell v. Salazar without any material changes by August 6, 2010, it will be rendered null and void. In this settlement, signed on December 7, 2009, the government agreed to pay $1.4 billion to members of the class who sought to have a historical accounting of their IIM accounts (an abbreviation for Individual Indian Monies). An additional $2 billion is to be provided by the government for the purpose of consolidating fractionated trust and restricted lands.

First filed in 1996, Cobell v. Salazar involves the Department of the Interior's (DOI's) management of several money accounts. These money accounts, or IIMs, as distinguished from tribal trust funds, are monies which the federal government holds for the benefit of individual Indians. The conflict in the case traces to the federal government's trust responsibility with respect to American Indians. In the capacity of trustee, the United States holds title to much of Indian tribal land and land allotted to individual Indians. Receipts from leases, timber sales, or mineral royalties are paid to the federal government for disbursement to the appropriate Indian property owners. Flowing from the federal trusteeship of Indian lands and mineral resources are fiduciary responsibilities on the part of the United States to manage Indian monies and assets which have been derived from these lands and are held in trust. However, several of the beneficiaries of these trust funds have alleged that DOI has mismanaged these funds and filed suit in order to obtain a proper accounting of these funds and to receive damages if warranted.

In January 2008, the United States District Court for the District of Columbia reached the conclusion that DOI would be unable to produce the required accounting. Instead, in a later hearing on August 7, 2008, the district court imposed a remedy of $455.6 million in restitution, which differed greatly from what the plaintiffs had sought—approximately $47 billion. In its ruling, the court rejected the plaintiffs' methodology of computing the amount owed to the trust beneficiaries and their additional claims for "benefit to the government" for funds not credited to the accounts of the beneficiaries. However, on July 24, 2009, the United States Court of Appeals for the District of Columbia reversed the district court, ordering that DOI, in light of the limited appropriations provided by Congress, conduct the best accounting possible with the monies available. Plaintiffs filed a petition for certiorari to the U.S. Supreme Court to review the court of appeals decision.

The purpose of this report is to provide a brief background of the history leading up to the litigation and a review of the issues that have proven so difficult for the judiciary to resolve. The report will be updated as warranted by judicial decisions or legislative action.


Date of Report: July 13, 2010
Number of Pages: 14
Order Number: RL34628
Price: $29.95


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