Free Status Report - District Court of Federal Claims - federal

Case 1:03-cv-02684-CFL

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ____________________________________ SHELDON PETERS WOLFCHILD, et al., ) ) ) Plaintiffs, ) ) ) v. ) ) ) ) THE UNITED STATES OF AMERICA, ) ) Defendant. ) ) ____________________________________)

Case No. 03-2684L Hon. Charles F. Lettow Electronically filed on July 20, 2007

DEFENDANT'S PORTION OF STATUS REPORT Defendant, the United States, through its undersigned counsel, submits this portion of what it expected to be a joint status report, pursuant to this Court's April 27, 2007, Order. For reasons unknown to Defendant's counsel, as of later than 7:00 p.m. EDT on the due date, counsel had not received the integrated draft joint report from plaintiffs' counsel for Defendant's final review and approval, despite having requested only very limited edits to the draft joint report over six hours earlier and having repeatedly requested the integrated document be sent to undersigned counsel for final review and approval.1/

On the morning of July 20, plaintiffs' counsel refused to send the document to Defendants' counsel in an editable form so that Defendant could make its own, very limited, edits to its portions of the document, which it had originally sent to all counsel July 18 as a Word Perfect document. Most of the edits Defendant requested concerned Defendant's own portions of the report. The new material Defendant requested after getting the draft integrated report consisted of a three-sentence introductory paragraph in one section, and three new line items for the "matters the court should be aware of" section (#s 8, 9, and 10, below). Defendant accordingly typed out text and descriptions of those very limited edits and sent them to plaintiffs' counsel before 1 p.m. EDT.

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Especially since plaintiffs' portion of the joint report, and plaintiffs' attachments, are so voluminous, undersigned counsel concluded Friday evening, July 20, counsel would not have sufficient time to read the draft joint report, if it eventually arrived (nor to confer with agency counsel), to see if Defendant's edits were made or any party added new material requiring a response or revisions by Defendant. Defendant's counsel communicated that conclusion to plaintiffs. Accordingly, Defendant reluctantly files its portion of the report here as a stand-alone document, responding to those portions of the report it received the afternoon of July 11 and the morning of July 20 (the latter had been sent by Plaintiffs' counsel the evening of July 19). The text below is the same material sent to plaintiffs' and intervenors' counsel for inclusion in the draft joint report. DEFENDANT'S PREFATORY STATEMENT The Court directed the parties to address in their joint report "an identification of the substantive issues that should be addressed in the next several phases of the proceedings and those that should be deferred to later stages of the case." (April 27, 2007, Order, Dkt. No. 453, at 20). In Defendant's view, interlocutory review of the Court's October 2004, December 2005, and August 2006, Orders is the best and ultimately most efficient way to address the substantive issues before proceeding. (Defendant's motion for interlocutory appeal, filed July 16, 2007, is Dkt. No. 510 in this case.) As Defendant notes below in its specific responses, other proceedings should be deferred to later stages of the case.

(a) Does the Court have jurisdiction over the action? Defendant's position: No. Defendant's position is that the Court does not have jurisdiction over the action, because there is no money-mandating duty, as required by the Tucker Act; and because plaintiffs' claims are barred by the statute of limitations and the 1980 Act. (b) Should the case be consolidated with any other case and, if so, why? Defendant's position: No. This case is already consolidated with Cermak v. United States, Case No. 01-568L. Defendant is not aware of any other case with which the Wolfchild case should be consolidated. ( c ) Should trial of liability and damages be bifurcated and, if so, why?

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Defendant's position Yes, trial of liability and damages should be bifurcated, if the case proceeds to trial. Bifurcation and mini-trials concerning particular groups of plaintiffs/plaintiff-intervenors and/or particular theories of descendancy may be called for in this case because of the number of plaintiffs, the difficulty of some of the historical and factual questions, and because different groups of plaintiffs have different theories of descendancy. Similarly, the damages phase of trial, if any, will likely involve different calculations and theories relating to different individuals, not just the various intervenor and plaintiff groups identified so far in the party-identification phase of this case. (d) Should further proceedings in the case be deferred pending consideration of another case before this Court or any other tribunal and, if so, why? Defendant's position: The United States urges that all further proceedings in this Court be stayed pending an interlocutory appeal of the Court's October 2004, December 2005, and August 2006 Orders, because, as set forth in Defendant's motion seeking certification of those Orders for interlocutory appeal (Dkt No. 510), an appellate decision at this stage of the litigation, regarding certain controlling questions contained in those Orders, offers the strong possibility of materially advancing the ultimate termination of the litigation. Several complex factual and legal issues remain to be decided in this case before a final judgment may be reached in the trial court. They include whether casino proceeds are managed by the BIA as trust funds under statutory directives, and whether the proceeds fall within the ambit of the limited waiver of the statute of limitations set forth in the Appropriations Riders (referred to by this Court as "ITAS"); determining the scope of the trust; identifying and determining the nature and extent of the United States' alleged breaches of fiduciary duty; determining what criteria determine who is a "lineal descendant" and which of the plaintiffs and intervenors meet those criteria; determining whether an accounting in aid of judgment is necessary, and related issues; and sorting out who might be entitled to damages (if any), and if so, the amount of damages. The latter determination would entail, among others, proceedings to determine which of the plaintiffs received benefits as a member of one of the Communities and how that affects their claims of alleged injury arising from the alleged breach of duty. See, e.g., Wolfchild v. United States, 62 Fed. Cl. 521, at 551 (2004). Likewise, the consequences flowing from the alleged agency relationship between the United States and the three Communities, must be sorted out. That undertaking promises to be especially complex, because under the Court's interpretation of the 1980 Act, the Communities serve as trustees for themselves, yet also have fiduciary duties to the "lineal descendants" and to the United States, as their alleged principal. It would serve the interest of judicial economy to stay the proceedings in this court pending outcome of the interlocutory appeal, as the appeal may eliminate the need for proceedings in this

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Court to resolve some or all of those issues before final judgment. (e) In cases other than tax refund actions, will a remand or suspension be sought and, if so, why and for how long? At present, the United States does not expect to seek a remand. As it has noted elsewhere in its portions of this joint report (and in its motion docketed as paper no. 510 in this litigation), the United States seeks a stay of all proceedings in the trial court pending the outcome of an interlocutory appeal, for reasons of judicial economy. (f) Will additional parties be joined? Defendant's position: The United States does not presently intend to join any additional parties. (g) Does either party intend to file a motion pursuant to RCFC 12(b), 12 ( c ), or 56 and, if so, what is the schedule for the intended filing? Defendant's position Consistent with the Court's view that "delineation of the trust" is one of several "merits" issues to be determined in this lawsuit, if the case does not go to the Federal Circuit on interlocutory appeal but instead proceeds in the trial court, Defendant anticipates filing a dispositive motion relating to whether gaming revenues and, perhaps, revenues of other tribal businesses constitute "trust funds" or "trust proceeds." Defendant proposes to file that motion either after the resolution of any interlocutory appeal or after the requests to this Court and the Federal Circuit for interlocutory review are decided. If either this Court or the Federal Circuit denies the request for interlocutory review, Defendant would anticipate filing its initial brief in support of the "gaming proceeds" motion 60 days after the denial is issued. Plaintiffs' responsive brief would be due 30 days after service of Defendant's brief; Defendant's reply would be filed 15 days after service of Plaintiffs' brief. (Depending on the number of briefs filed by Plaintiffs (including intervenors), this proposed schedule might need to be adjusted.) With respect to dispositive motions, Defendant notes that during the telephonic meetand-confer amongst counsel on July 12, 2007, Plaintiffs' counsel stated that Plaintiffs do not intend to pursue their motion for partial summary judgment claiming breaches of trust relating to the United States' approval of the base roll and constitution for the Shakopee Mdewakanton Sioux Indian Community.

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Defendant's position In Defendant's view, the factual and legal issues include those referred to in its portion of section (d), above. Additional legal and factual issues may emerge as the case proceeds. The answer to this question also will be informed by the outcome of the request for interlocutory review, and of the appeal itself. (l) What is the likelihood of settlement? Is alternative dispute resolution contemplated? Defendant's position: The United States believes there is a strong likelihood that interlocutory appeal will sharpen the focus of the case so that alternative dispute resolution may become a realistic possibility after such an appeal is resolved by the appellate court. The United States does not believe that settlement after trial, as suggested by Plaintiffs in their portion of this joint report, is a realistic scenario. Especially as one of the rationales for any settlement is to avoid litigation costs, the incentive for a negotiated resolution will have been eliminated after the parties have spent the time, money, and resources to prepare for and go through trial. Likewise, if the case proceeds to a point at which the United States must perform an accounting in aid of judgment, settlement may not be a realistic possibility.

(j) Do the parties anticipate proceeding to trial? Does either party, or do the parties jointly, request expedited trial scheduling and, if so, why? Defendant's position: Defendant anticipates that interlocutory appeal may eliminate any need for a trial. Furthermore, because of the complexity of discovery issues and descendancy-related issues in this case, the United States does not seek an expedited trial schedule. If the case does proceed to trial, Defendant notes that a group of mini-trials, rather than one trial session (as Plaintiffs suggest), would probably be the best way to structure the trial of this matter. As noted above, trial of liability and damages should be bifurcated. Defendant does not believe the legal or factual issues necessary to prepare for trial can be resolved for a September 2008 trial date, as Plaintiffs propose. Defendant suggests that, if interlocutory review is not granted, a status conference be set to schedule further proceedings in the case.

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(k) Are there special issues regarding electronic case management needs? Defendant's position: The United States has not yet been served with all parties' CDs containing the information the Court directed intervenors to provide, in the format specified in this Court's April 27, 2007, Order (Dkt. 453). Given the need for all parties to have the same party-related information, in the same format, that matter needs to be resolved. Specifically, the United States was not served with CDs by the groups represented by Philip Morgan, Esquire, and Scott Johnson, Esquire, respectively. Defendant hopes to obtain those CDs in the near future. Some of the CDs served on the United States appear to be in a format different from the format the Court requested; this has the potential to cause problems for all parties as the case proceeds. (l) Is there other information of which the court should be aware at this time? Defendant's position: A. The United States perceives some open issues regarding who is a party in the case, and who represents whom, and believes it is in all parties' interest to resolve those issues fully before proceeding. It is possible that some of these issues may be resolved without the Court's participation. 1. The CD provided by the Enyard group pursuant to the Court's April 27, 2007, Order docketed as paper no. 453 appears to contain the names of 295 parties, whereas the Court's count, set forth in its April 27, 2007, Order (and Defendant's count, based on the Enyard Group's pleadings), was 259. Based on recent communications with Sam Killinger, Esquire, counsel for the Enyard Group, Defendant understands that Mr. Killinger is looking into this matter. 2. With respect to the disclosure of John Does, it is not clear that any parties other than Plaintiffs represented by Erick Kaardal, Esquire, the Walker John Does represented by Elizabeth Walker, Esquire, and the Renaud Does (represented by James Blair, Esquire and Barry Hogan, Esquire) disclosed their John Does by May 25, 2007, as this Court directed; and therefore some John Does may be subject to dismissal. 3. Counsel of record for the Lafferty and Lowe groups, Wood Foster, Esquire, stated on the CD spreadsheet sent to Defendant's counsel in May 2007, that there are additional persons who would be the subject of a motion to intervene. No motions to intervene have been filed and the status of this matter, and whether additional motions will be filed, is unclear.

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4. The CD submitted by Erick Kaardal, Esquire, to Defendant's counsel contains the names of 7,550 Plaintiffs; whereas the Court's count, as set forth in its April 27, 2007, Order, is 7,588. 5. There appear to be unresolved questions regarding who represents some of the persons Fran Felix, pro se, attempted to represent ("extended family members."). As of the date of filing of the joint status report, there is an open motion on this issue (Dkt. No. 506). 6. It appears that the Renaud John Does, represented by James Blair, Esquire, and Barry Hogan, Esquire, submitted 24 sealed affidavits with their December 28, 2006 filing (Dkt. Nos. 381-386). A box containing only 15 affidavits from 15 family groups was served on the United States on June 21, 2007. It is not clear whether or not this is all or part of the material submitted to the Court in December. 7. In a filing by the Vassar Group (No. 451), it represented that all of its members were added to Plaintiffs' Fourth Amended Complaint filed by Mr. Kaardal; however, it is not clear whether that is the case. 8. In response to the information set forth in plaintiffs' portion of the report entitled, "Genealogical Document Dispute," Defendant's counsel was unaware that these documents were available, until receiving Plaintiffs' portion of the report, and on July 20, 2007, requested a copy of those documents from Plaintiffs' counsel." 9. The term "Wolfchild counsel" in this joint report should not be construed to include Defendant's counsel." 10. It appears that the status of intervenor Lower Sioux Indian Community's legal representation in this matter is unclear, and the person who apparently provided input for the report on Lower Sioux's behalf has not yet entered an appearance in the case for the Lower Sioux as of the time the report was being finalized for filing. In addition, Defendant did not see or receive the input attributed to the Lower Sioux until July 20. Accordingly, the United States is not in a position to comment on that material in this report. B. As a general matter, Defendant wishes to make the Court and the parties aware that it is handling about 102 Tribal trust accounting and trust mismanagement cases that have been brought in United States District Courts and the Court of Federal Claims. There are about 56 cases in this Court; nine in various United States District Courts in various United States District Courts in Oklahoma; and 37 cases in the United States District Court for the District of Columbia. Although the Wolfchild case is not a "Tribal trust" case and the United States denies that it has any trust duties to the plaintiffs in this case, the heavy docket of these complex cases bears on how quickly discovery and other expensive and time-consuming aspects of this litigation can proceed.

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Defendant's Position regarding a Initial Disclosures and a "Proposed Discovery Plan" Counsel for the United States received a voluminous draft report from plaintiffs, and a partial set of the attachments, on the afternoon of July 11. Counsel of record and agency counsel have not had time to review and consider, much less respond to, all of those attachments and their contents, before Defendant's portion of this report needed to be finalized. Its position regarding initial disclosures and a discovery plan generally, is set forth below. As Defendant stated during the July 12, 2007, meet-and-confer amongst counsel, given the request for certification for interlocutory appeal, initial disclosures pursuant to RCFC 26(a) and discovery, generally, should be deferred pending the outcome of any interlocutory appeal. Defendant's view is that initial disclosures are not appropriate at this time, given the circumstances of this case, and therefore objects to proceeding with initial disclosures at this stage. As Defendant explained in its motion for certification for interlocutory appeal, one of the compelling reasons for interlocutory review of certain Orders issued in this case is that the potential savings of time and expense for all parties are very significant, compared to the cost of going forward with initial disclosures, discovery, and other proceedings now, and proceeding to the appeal phase on key issues only after final judgment. Having noted its core position regarding deferring initial disclosures and discovery, the United States responds here generally to some of the issues raised by Plaintiffs' portion of the joint preliminary status report. Defendant notes that Plaintiffs' draft proposals for "initial disclosures" go far beyond what RCFC 26 requires for initial disclosures. Defendant does not agree that Plaintiffs' proposed forms for "Initial Disclosures" should govern the parties' respective disclosures in this action. With respect to an "accounting," the United States notes that, consistent with the narrow waiver of sovereign immunity for actions brought in this Court, the only type of accounting that this Court can require is an accounting collateral to and in aid of judgment, pursuant to 28 U.S. C. § 1491. E.g., Klamath and Modoc Tribes v. United States, 174 Ct. Cl. 483, 1966 WL 8850 (1966) (It is established law that the Court of Federal Claims does not have the requisite equitable jurisdiction necessary to order an accounting of Indian trust funds before a plaintiff has established government liability.) Such an accounting cannot be required until after a finding of liability on a particular claims within the jurisdiction of this Court, to determine the amount of damages, if any. The particulars of any such accounting would necessarily be limited and determined by the particular finding of liability. In this case, the nature and extent of any alleged breach of fiduciary duty, i.e., the nature and extent of any liability, has not yet been determined. Wolfchild v. United States, 62 Fed. Cl. 521, 551. (2004). Defendant notes particularly that the question of the scope of the alleged trust, including what types of assets lie within that "trust," has yet to be determined in this litigation. It would be premature under any circumstances to conduct an "accounting" before those questions are 8

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resolved. Moreover, Plaintiffs, in their portion of the joint report, describe an "accounting" that encompasses gaming proceeds, despite the fact that there has been no determination that gaming proceeds (or any other revenues of tribal businesses) form a part of the alleged trust corpus, much less that there has been any breach of trust with respect to gaming proceeds. Plaintiffs' request for an "accounting" encompassing gaming revenues (or any "accounting" as part of RCFC 26 "initial disclosures") is ill-founded for both of these reasons. Likewise, the United States does not control any of the three Communities, all of which are federally-recognized Communities with independent governments. Gaming proceeds are not collected by the United States, held in trust by the United States, or distributed by the United States. The United States does not have the information on which Plaintiffs seem to base their proposed "accounting forms,"such as the amounts and recipients of the per capita distributions by the Communities of their respective gaming revenues. Moreover, as a practical matter, the United States notes that it is the defendant in about 102 lawsuits alleging breaches of trust owed to various Indian Tribes. In many of those cases, the Tribe or Community concerned seeks a form of accounting, either as equitable relief (in an appropriate forum) or in connection with a negotiated resolution of its claims. Given the work already undertaken to support either agreed-upon accountings in a settlement context, or litigation relating to claims for accountings as equitable relief, it is not realistic to expect any accounting relating to this litigation could be generated in a period of a few months, as Plaintiffs' portion of the joint status report contemplates. But most importantly, as Defendant has noted elsewhere in this report, Plaintiffs' proposals for an accounting are premature and the type of "accounting" Plaintiffs appear to seek is not one that this Court may order. Defendant proposes that the matter of a specific discovery plan and schedule be deferred until after the interlocutory appeal is decided by the Federal Circuit or, if interlocutory review is not granted, until after that decision is made by the court in question. When discovery does commence (at an appropriate time), Defendant proposes that a period for written discovery take place first. Given the number of plaintiffs, the time periods covered by the case, and the number of locations in which documents pertinent to genealogy and severance of tribal relations, may be located, an extended period of time for fact discovery may be necessary. After fact discovery concludes, a period and plan for depositions of fact witnesses would then be scheduled. 2/ Expert discovery would then follow that period of fact discovery. Defendant reserves its objections to the specific proposed discovery set forth in Plaintiffs' portion of the status report (which Defendant received, in part, on July 11), because to respond specifically to each of those proposals in this joint report is not necessary at this time,

In any event, Defendant objects to any proposal that depositions may be taken of its witnesses while it is prohibited from deposing any Plaintiffs or Plaintiffs' witnesses, which seems to be the import of a portion of Plaintiffs' proposals. 9

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and would consume too much time and too many pages.

Dated: July 20, 2007

RONALD J. TENPAS Acting Assistant Attorney General Environment and Natural Resources Division

s/Laura Maroldy LAURA MAROLDY Natural Resources Section Environment and Natural Resources Division United States Department of Justice Benjamin Franklin Station, P.O. Box 663 Washington, D.C. 20044-0663 Telephone: (202) 514-4565 Facsimile: (202) 305-0506 Email: [email protected] THOMAS ZIA SARA CULLEY Trial Attorneys Natural Resources Section Environment and Natural Resources Division United States Department of Justice Washington, D.C. 20044 Attorneys for the Defendant

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