Document Type
Article
Publication Date
1975
Publication Information
27 HASTINGS L.J. 519 (1975)
Abstract
The United States government has long managed most Indian tribal money. Frequently, however, the government's failure to make sound investment decisions has resulted in substantial losses to the tribes. Such losses have been difficult to redress, for there is still uncertainty concerning the standard of care to which the government must be held in managing these funds. Although the courts have borrowed terms from trust law in characterizing the government's position, its responsibilities have never been clearly delineated. Attempts by Indian tribes to clarify the relationship through litigation have been hindered by the fact that access to the courts was almost impossible before 1946. Although access has improved since then, it is still in the main provided by the Indian Claims Commission and the Court of Claims, both located in Washington, D.C., both distrusted and criticized by the tribes, and neither really serving as an effective forum for complaints of breach of trust.
Nonetheless, two alternative solutions to the problem of defining the government's responsibility in managing Indian funds have recently been proposed, one by a United States district court and one by the Indian Claims Commission. In Manchester Band of Pomo Indians, Inc. v. United States, a federal district court in California held that the duties of the government as trustee of Indian funds must be measured by private trust law principles. Two months later, the Indian Claims Commission in Te-Moak Bands of Western Shoshone Indians v. United States concluded that the government as trustee of tribal funds fulfills its fiduciary duty merely by complying with statutes governing the management of Indian money, even though the rate of interest provided by statute is as low as 4 percent per annum.
Manchester Band and Te-Moak thus represent conflicting approaches to the question of what duties attach to the government-tribal relationship. Although the court in Te-Moak afforded less protection for tribes whose money is held by the government, both decisions recognize that the government must be held to a high standard of care in dealing with Indian funds. This note will argue first, that the term "trustee" best characterizes the government's role as manager of tribal funds; second, that common law trust principles most accurately define the basic obligations arising from a fiduciary relationship and most effectively enable a trustee, even the United States government, to guide his investments prudently; and third, that since accounting claims and suits for breach of fiduciary duty involve both legal and equitable remedies they are best handled by the federal district courts which have more expertise in applying trust law than does the Court of Claims or the Indian Claims Commission.
Recommended Citation
Nell J. Newton,
Indian Tribal Trust Funds,
27 HASTINGS L.J. 519 (1975).
Available at:
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