Free Joint Status Report - District Court of Federal Claims - federal

Case 1:06-cv-00940-EJD

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IN THE UNITED STATES COURT OF FEDERAL CLAIMS ) ) Plaintiff, ) ) v. ) ) THE UNITED STATES OF AMERICA, ) ) Defendant. ) ____________________________________) COEUR D'ALENE TRIBE,

Case No. 06-cv-00940 Chief Judge Edward J. Damich

THIRD JOINT STATUS REPORT Pursuant to the Court's February 22, 2007 Order, Dkt. 7, Plaintiff Coeur d'Alene Tribe ("Plaintiff" or "Tribe") and Defendant United States respectfully submit this Third Joint Status Report ("JSR"). Relevant Procedural History 1. As this Court is aware, Plaintiff filed this case on December 29, 2006. See

Complaint, Doc. 1. Also on December 29, 2006, Plaintiff filed a companion case for declaratory and injunctive relief in the United States District Court for the District of Columbia. Coeur d'Alene Tribe v. Kempthorne, No. 1:06-cv-02242-JR (D.D.C.) (hereinafter, "Companion Case"). Plaintiff makes allegations in both cases relating to the trust accounting and other trust duties and responsibilities allegedly owed by Defendant to Plaintiff. 2. On February 20, 2007, the parties filed in this case a Joint Motion for Temporary

Stay of Litigation. See Dkt. No. 6. In that Joint Motion, the parties noted that their counsel had conferred and agreed that (a) the trust mismanagement issues and claims raised by Plaintiff in this case are secondary, at this particular juncture, to the trust accounting issues and claims asserted by Plaintiff in the Companion Case; (b) the disposition of the issues and claims in the

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Companion Case would likely have a significant influence and impact on the disposition of issues and claims in this case; and (c) the outcome of the Tribal Trust Fund Settlement Project ("TTFSP" or "Project") currently under way between the Inter-Tribal Monitoring Association ("ITMA") and the Office of Historical Trust Accounting ("OHTA") of the United States Department of the Interior ("Interior" or "DOI") (in which process Plaintiff and six other Indian Tribes are participating) might affect the issues and claims in this case. 3. The Court granted the Joint Motion on February 28, 2007. Dkt. 7. Pursuant to

the Court's Order, the third, and final, JSR is due February 15, 2008. Id. 4. In the Companion Case, Defendant filed on March 9, 2007, an Unopposed Motion

for Enlargement of Time Within Which to File Answer or Otherwise Respond to Complaint. See No. 1:06-cv-02242-JR (D.D.C.), Dkt. 6. The District Court granted Defendant's motion, and Defendant filed its answer in that case on June 11, 2007. See Dkt. 8. 5. At the direction of the District Court, Dkt. 9, Defendant filed a motion on August

10, 2007, in the Companion Case and in the 36 other tribal accounting cases on the District Court's docket for a remand of the plaintiff Tribes' trust accounting claims to the Department of the Interior, Dkt. 13. In addition to joining with the other plaintiff Tribes in a Principal Brief in opposition to Defendants' motion that was filed on October 1, 2007, Plaintiff filed its own supplemental opposition brief on October 22, 2007, Dkt. 17. 6. On December 19, 2007, the District Court denied Defendants' motion for a

remand, Dkt. 21, and ordered the plaintiff Tribes to file proposals to govern further proceedings in their respective cases within 30 days of the Order. On January 18, 2008, Plaintiff filed its Proposal for Further Proceedings, Dkt. 22 ("Proposal for Further Proceedings"). Citing the 2

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Plaintiffs' participation in the TTFSP, Plaintiff suggested to the District Court, among other things, that Plaintiff continue its participation in the TTFSP and that the parties file a joint report with the Court that details the status of Phase I of the Project by July 11, 2008. Id. Relevant Factual Background 7. As previously described in the parties' first and second joint status report, ITMA

is a national Tribal consortium, the membership of which consists of 65 federally recognized Indian Tribes, including Plaintiff. 8. In the 1990s, Defendant retained Arthur Andersen, LLP ("AA") to conduct a

Tribal trust fund account reconciliation project for each Indian tribe that had trust fund accounts open during the years 1972-1992. Plaintiff, among other Tribes, received various pieces of information as a result of the project, including (a) account statements listing the transactions in Tribal Trust Fund accounts for the 1972-1995 period (e.g., receipts, interest earnings, disbursements, balances, etc.) that related to Plaintiff; (b) a report describing the reconciliation procedures performed for certain of Plaintiff's account transactions during the 1972-1992 period and the results thereof; and (c) electronic images of source documents that supported certain 1972-1992 account transactions relating to Plaintiff. 9. Also as previously reported, ITMA and OHTA entered into a Cooperative

Agreement in December, 2004, to establish the TTFSP, a cooperative undertaking funded by OHTA to develop a framework that could be used, among other things, to assist Defendant and the participating Tribes to reach agreement on the balances of the participating Tribes' trust fund accounts during the years covered by the Tribal trust fund account reconciliation reports. The main goals of the TTFSP are to provide Indian Tribes with a voluntary mechanism to determine 3

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the possibility of reaching settlement of certain Tribal trust fund-related issues and claims. Phase II is expected to incorporate the results of Phase I and commence individual Tribal negotiations or mediation to resolve the respective Tribal litigation, including the Coeur D'Alene Tribe. 10. The scope of the TTFSP is limited to the 1972-1992 period, i.e., the years covered

by the Tribal trust fund reconciliation project. Nevertheless, ITMA and OHTA have expressed openness and receptivity to the possibility that, if the Tribal participants were satisfied with the outcome of the TTFSP, they might be able to agree upon an extrapolation or some form of adaptation of the TTFSP framework and/or other Tribal specific information developed during the course of the Project to address other time periods or other types of trust-related claims. 11. Plaintiff and six other Indian Tribes from across the United States have become

the pilot Tribes for participating in the TTFSP. Under the Cooperative Agreement between ITMA and OHTA, the TTFSP has two phases. Phase I consists of developing a framework for addressing the results of the Tribal trust fund reconciliation project in a manner agreeable to ITMA, the seven participating Tribes, and OHTA. Phase II is expected to incorporate the results of Phase I and commence individual Tribal negotiations or mediation to resolve the respective Tribal litigation, including the Coeur D'Alene Tribe. 12. Under Phase I of the TTFSP, Defendant has provided ITMA, Plaintiff, and the

other participating Tribes with the requisite Tribal trust fund reconciliation reports and the supporting documents. Also, ITMA has contracted with various experts, including forensic accountants and other professionals with experience working with Indian trust records, to advise ITMA and the participating Tribes about the TTFSP and, in particular, about the development of 4

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the Phase I framework. Using the documents and data provided by OHTA, as well as other information from other sources, ITMA and OHTA have begun and are continuing the development of the Phase I framework. Their efforts have included numerous meetings, multiday work sessions, and other communications between ITMA, the participating Tribes (including Plaintiff), and OHTA. Further, ITMA and OHTA have been and continue to be formulating, reviewing and providing comments on draft approaches for examining receipts, disbursements, and investments, which are the major areas of inquiry proposed for the TTFSP. Additionally, ITMA and OHTA have extended the Cooperative Agreement into Fiscal Year 2008. 13. ITMA and OHTA have been and continue to be narrowing their differences and

addressing their issues and concerns with the proposed Phase I framework. The Tribe remains committed to the TTFSP, and the parties continue to be hopeful and optimistic that they will be able to reach agreement on all of the elements of the Project in the near future. As previously described, ITMA conducted a meeting on the TTFSP in Denver, Colorado, on May 31, 2007, to provide information about the TTFSP to interested Tribes, including Coeur D'Alene, with pending trust accounting and trust mismanagement lawsuits against Defendant. As this Court is aware, there are presently 102 such cases pending in various Courts, including 56 cases in this Court. Representatives of ITMA, OHTA, the Solicitor's Office of the Interior Department, the Department of Justice, and various Indian Tribes attended this meeting. Quanah Spencer, Plaintiff's designated representative to the TTFSP; Brian Gunn, Plaintiff's counsel; and Anthony P. Hoang, Defendant's counsel, were among those who attended the meeting. Immediately after

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the ITMA meeting on May 31, 2007, Mr. Spencer and Mr. Gunn met and conferred with Mr. Hoang on a number of matters related to the TTFSP, the Companion Case, and this case. 14. In follow-up to the May 31, 2007 meeting, the parties convened a meeting on

Plaintiff's reservation on October 8, 2007. Attending the meeting were members of Plaintiff's legislative and executive branches and Plaintiff's in-house and litigation counsel. Also attending the meeting were representatives of the Bureau of Indian Affairs, the Solicitor's Office, OHTA, OHTA's accounting consultants, and DOJ. One of the primary purposes of the meeting was for OHTA and its accounting consultants to conduct a detailed presentation to Plaintiff's officials and counsel about the analyses, findings, and results of the Tribal trust fund reconciliation report relating to Plaintiff. 15. After the presentation about the Tribal trust fund reconciliation project on

October 8, 2007, Plaintiff's representatives informed Defendant's representatives that Plaintiff would evaluate and determine about whether and how to proceed in light of the Tribal trust fund reconciliation project results. Thereafter, Plaintiff and Defendant discussed and agreed upon several matters, including the fact that the TTFSP represented a unique and beneficial opportunity for the parties to develop jointly and cooperatively a mutually acceptable mechanism for the possible resolution of the trust accounting and trust mismanagement issues and claims in the instant case and the Companion Case, without the need for protracted litigation. 16. Further, the parties discussed and agreed at the October 8 meeting that they would

aim to execute a joint stipulation and proposed order to address such issues as the parties' participation in the TTFSP and the treatment of documents or communications generated as part of the TTFSP. The parties negotiated a "Joint Stipulation and [Proposed] Order Regarding 6

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Communication, Report, and Work Product Pursuant to Certain Cooperative Agreement and Any Amendments Thereto." The parties filed the Joint Stipulation, together with a joint motion to temporarily lift the stay for the limited purpose of entering the Joint Stipulation, Dkt. 10, on November 9, 2007. The Court granted the parties' motion and approved the Joint Stipulation on November 27, 2007, Dkt. 11. 17. In addition to the Joint Stipulation, the parties are currently working to develop a The

separate joint stipulation and proposed order regarding document and data confidentiality. attorneys expect that, upon the successful completion of their negotiations in the Companion Case, they will be able to adapt that document for use and proposal to the Court in this case. 18. Phase I of the TTFSP is nearing completion. ITMA and its consultants and

OHTA continue to formulate, review and provide comments on draft approaches for examining receipts, disbursements, completeness, and investments, which are the major areas of inquiry proposed for the TTFSP. 19. The last meeting between ITMA and its consultants and OHTA occurred on

January 8, 2008, in Albuquerque, New Mexico. Since that meeting, ITMA and OHTA have agreed that the Phase I framework would be presented to Plaintiff and the other participating Tribes for their review during a two day meeting on April 21 and 22, 2008. ITMA and OHTA further tentatively agreed that, in order to allow the participating Tribes adequate time to review and consider this framework, the subsequent meeting for the ITMA Board to consider the Phase I framework would be held on June 17 and 18, 2008. 20. Once the Phase I framework is completed and approved, Plaintiff anticipates

engaging in further discussions with OHTA to explore the feasibility of applying the Phase I 7

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framework, or a portion thereof, to Plaintiff's trust accounts as a means to facilitate settlement of Plaintiff's claims in the Companion Case and in this action. 21. The parties believe that they have made substantial progress thus far but that more

work needs to be done in order to advance the possible resolution, ideally through the TTFSP, of Plaintiff's trust accounting and trust mismanagement issues and claims, without the need for extended litigation. To that end, the parties agree that a continuation of the temporary stay of litigation in this case is warranted, especially given the parties' past, current, and projected future commitment of human and financial resources to the TTFSP and the pendency of 102 trust accounting and trust mismanagement cases in various courts, including 56 cases in this Court. 22. Based on the foregoing, the parties respectfully propose the following: (a) That Plaintiff continues its participation in the TTFSP through the

completion of Phase I of the Project; (b) That the Court continues the stay of proceedings in this case through July

25, 2008, or until further Order of the Court; (c) That the parties file, by July 11, 2008, a fourth joint status report with the

Court that details the status of the Project and the Companion Case and sets forth, in light of the status of the Project, any additional proposals for further proceedings and, if appropriate, why a continuation of the stay is still warranted in this case. Respectfully submitted this 22d day of February, 2008, RONALD J. TENPAS Acting Assistant Attorney General s/John P. Racin by s/E. Kenneth Stegeby JOHN P. RACIN 1721 Lamont Street, N.W. 8 s/E. Kenneth Stegeby E. KENNETH STEGEBY United States Department of Justice

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Washington, D.C. 20010 Tel: (202) 265-2516 Fax: (202) 483-7895

Environment and Natural Resources Division P.O. Box 663 Washington, D.C. 20044-0663 Tel: (202) 616-4119 Fax: (202) 353-2021 Attorney of Record for Defendant OF COUNSEL: ANTHONY P. HOANG JODY SCHWARZ United States Department of Justice Environment and Natural Resources Division P.O. Box 663 Washington, D.C. 20044-0663 Tel: (202) 305-0241 Fax: (202) 353-2021 MICHAEL BIANCO Office of the Solicitor United States Department of the Interior Washington, D.C. 20240 TERESA E. DAWSON Office of the Chief Counsel Financial Management Service United States Department of the Treasury Washington, D.C. 20227

Attorney of Record for Plaintiff OF COUNSEL: BRIAN L. GUNN Drinker Biddle & Reath LLP 1500 K Street, N.W. Washington, D.C. 20005-1209 Tel: (202) 230-5172 Fax: (202) 230-5300

ERIC R. VAN ORDEN Office of Legal Counsel The Coeur d'Alene Tribe 850 A Street Plummer, ID 83851 Tel: (208) 686-1800 Fax: (208) 686-1182

DC01/ 536994.2

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