United States v. Navajo Nation
537 U.S. 488 (2003)

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OCTOBER TERM, 2002

Syllabus

UNITED STATES v. NAVAJO NATION

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

No. 01-1375. Argued December 2, 2002-Decided March 4, 2003

The Indian Mineral Leasing Act of 1938 (IMLA) provides that "[u]nallotted lands within any Indian reservation," or otherwise under federal jurisdiction, "may, with the approval of the Secretary [of the Interior (Secretary)] ... , be leased for mining purposes, by authority of the tribal council or other authorized spokesmen for such Indians." 25 U. S. C. § 396a. The 1M LA aims to provide Indian tribes with a profitable source of revenue and to foster tribal self-determination by giving Indians a greater say in the use and disposition of the resources on their lands.

In 1964, the Navajo Nation (Tribe) permitted the predecessor of Peabody Coal Company (Peabody) to mine coal on the Tribe's lands pursuant to Lease 8580 (Lease or Lease 8580). The Lease established a maximum royalty rate of 37.5 cents per ton of coal, but made that figure subject to reasonable adjustment by the Secretary on the 20-year anniversary of the Lease and every ten years thereafter. As Lease 8580's 20-year anniversary approached, its 37.5 cents per ton rate yielded for the Tribe about 2 percent of gross proceeds. This return was higher than the ten cents per ton minimum established by then-applicable regulations implementing the IMLA. It was substantially lower, however, than the rate Congress established in 1977 as the minimum permissible royalty for coal mined on federal lands under the Mineral Leasing Act. In June 1984, the Area Director of the Bureau of Indian Mfairs, acting pursuant to authority delegated by the Secretary and at the Tribe's request, sent Peabody an opinion letter raising the Lease 8580 rate to 20 percent of gross proceeds. While Peabody's administrative appeal was pending before Deputy Assistant Secretary for Indian Mfairs John Fritz, Peabody wrote to Secretary Hodel, asking him either to postpone decision on the appeal or to rule in Peabody's favor. Peabody representatives also met privately with Hodel during that period. In July 1985, Hodel sent a memorandum to Fritz "suggest[ing]" that he inform the parties that his decision was not imminent and urging them to continue their efforts to resolve the matter in a mutually agreeable fashion. The Tribe resumed negotiations with Peabody. In November 1985, the parties agreed to amend the Lease to provide, among other things, for a royalty rate of 12J,,2 percent of monthly gross proceeds, which was the


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then-customary rate for coal leases on federal and Indian lands. Pursuant to 25 U. S. C. § 396a, Secretary Hodel approved the amended Lease in December 1987.

In 1993, the Tribe brought this action for damages against the United States, alleging, inter alia, that the Secretary's approval of the Lease amendments constituted a breach of trust. Although granting summary judgment for the United States, the Court of Federal Claims found that the Secretary had flagrantly dishonored the Government's general fiduciary duties to the Tribe by acting in Peabody's best interests rather than those of the Tribe. The court nevertheless concluded that the Tribe had entirely failed to link that breach of duty to any statutory or regulatory obligation which could be fairly interpreted as mandating compensation for the Government's actions. The Federal Circuit reversed. Relying on 25 U. S. C. § 399 and regulations promulgated thereunder, the appeals court determined that the measure of control the Secretary exercised over the leasing of Indian lands for mineral development sufficed to warrant a money judgment against the United States. Agreeing with the Federal Claims Court that the Secretary's actions regarding Peabody's administrative appeal violated the Government's fiduciary obligations to the Tribe, the Court of Appeals remanded for further proceedings, including a determination of damages.

Held: United States v. Mitchell, 445 U. S. 535(Mitchell I), and United States v. Mitchell, 463 U. S. 206(Mitchell II), control this case. The controversy here falls within Mitchell Fs domain, and the Tribe's claim for compensation from the Government fails, for it does not derive from any liability-imposing provision of the IMLA or its implementing regulations. Pp. 502-514.

(a) To state a litigable claim, a tribal plaintiff must invoke a rightscreating source of substantive law that "can fairly be interpreted as mandating compensation by the Federal Government for the damages sustained." Mitchell II, 463 U. S., at 218. Although the Indian Tucker Act, 28 U. S. C. § 1505, confers jurisdiction upon the Court of Federal Claims in cases where this requirement is met, the Act is not itself a source of substantive rights. E. g., Mitchell II, 463 U. S., at 216. Pp. 502-503.

(b) Mitchell I and Mitchell II are the pathmarking precedents on the question whether a statute or regulation (or combination thereof) "can fairly be interpreted as mandating compensation by the Federal Government." Mitchell II, 463 U. S., at 218. In Mitchell I, the Court held that the Indian General Allotment Act of 1887 (GAA)-which authorized the President to allot agricultural or grazing land to individual tribal members residing on a reservation, 25 U. S. C. § 331, and provided that


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Full Text of Opinion

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